I find the “demoting” term amusing / inaccurate. He’s in a career position to do basically whatever he wants and is doing just that. That seems like the ultimate role / achievement that’s far higher than any position on an org chart. Like a startup founder that realizes being CEO isn’t all it’s cracked up to be and they just want to go back to building, which is what they truly enjoy in life. Congrats and more power to you.
Exactly. These people are centi-millionaires and beyond employment, promotions, bonuses and all that usual drudgery. I guess the article is funded purely not to injure egos. But, hey, what is all that downscaling of YC? The article is clearly official press release and paid for.
Hecto- is the Greek root for 100, centi- is the Latin root for 100.
The metric prefixes up to 1000 use Greek roots for the large prefixes (10^+n) and Latin for the small (10^-n), but there are also words that are derived directly from the respective Latin roots and therefore don't necessarily carry the metric system's fractional meaning.
Someone already linked to the definition of centimillionaire, but here are a few more:
* centipede (100 legs, not 1/100 of a leg)
* centenarian (100 years old, not 1/100 of a year old)
Reminds me of how financial newspapers often use a small "m" when describing millions of something. "$500m", or even worse "500m USD"... The engineer in me says that's 50 cents!
I know it is a word people use, and "centi-" is ambiguous without no context, but it's extremely unambiguous in the context of units of measure, and the word "hundred-millionaire" already existed and had the same number of syllables, so it's a really awkward choice.
It's a gem. What I'm curious about is how these two ended up at YC as partners and not founding another company. I think I know the answer but always interested to know other people's journeys.
As Michael has said in one of the shows getting to PMF is a miracle. If you’re already set for life it’s less risky to play the odds by investing in hundreds of startups rather than starting one. Also there’s altruistic motives in giving back to the community etc.
> If you’re already set for life it’s less risky to play the odds by investing in hundreds of startups rather than starting one.
Risky is not the word I would use to phrase that, at least not in the financial sense. There's little such risk there, "if you're already set for life" as you said.
More comfortable, for sure. Easier. PG has said as much himself on X several times when asked whether starting a company or investing was harder.
I agree with you I meant reputational risk and the amount of output per level of input. It's hard to be as hungry once you've 'made it' or at least, your drive changes. Arguably at that level you can have more impact as a mentor of a large number of domain experts doing great work rather than trying to becoming one yourself.
I think pg said it best in one of his tweets/essays ?? not sure.
Essentially starting a startup is super hard. You can't just chill/half ass and still do well even if you had already succeeded before.
Correct, and to add - It is infinitely harder to force yourself through the start-up meat grinder if you know that if that start-up fails it does not materially impact you financially.
Everyone at YC knows exploiting naive founders is more profitable and less risky than doing a startup. The key is to perpetuate a mythical cult around the startup and convince huge swaths of kids to give you equity for almost nothing. The chumps are the founders, not the investors.
"The key is to perpetuate a mythical cult around the startup and convince huge swaths of kids to give you equity for almost nothing"
I found that amusing seeing as the second most recent video in their series, "Should Your Startup Bootstrap or Raise Venture Capital?", spends most of its time making a strong case for why VC isn't right for the vast majority of founders: https://www.youtube.com/watch?v=D81y-kh11oI
IMHE as part of multiple YC-backed founding teams, this is a new tone from YC.
In the past they have been very condescending of anything that doesn't involve trying to be a unicorn as fast as possible. There's even a video in their catalog deriding 'lifestyle' (ie - non-vc, non-unicorn, non-blitz-scaling) startups.
It makes sense given their business model, but I found it distasteful that they were advising young, impressionable entrepreneurs to take on more risk and to move away from their core competencies: greatly reducing the entrepreneurs' own chances of success in order to give YC and their associates another lottery ticket for a billion dollar payoff.
As a bootstrapped founder I am biased but given everything I have seen and heard in the last couple of decades I think the tone has shifted from success at any cost to creating sustainable/profitable businesses.
It also helps that in many ways creating a startup has been commoditized. Specifically, it's now cheaper and easier to use various online tools to get a new business up and running with little upfront cash/time than ever before. This trend will continue.
That's not to say this is true for all startups but it is true for the majority of them.
The good old days of being able to exploit starry eyed kids for their ideas in return for taking the majority of their equity is hopefully behind us.
Tbf that video came pretty late (post the ZIRP era). Before that, YC was one of the strongest proponents for raising VC because that's ingrained in their business model. I've heard that YC before would be quite disappointed at founders choosing not to raise money, because that meant a lower upside for them via the SAFE model.
Not to mention, most YC exits are usually via acquisitions, and often between YC companies.
Strategic self-anticonformity is the technical term for reverse psychology.
By making raising VC seem specific and exclusive, they make it seem high-value and make people want it more.
It is telling people that the object at the top end of the price sheet is not really for them, vs saying “yes, everyone should buy this.” The former increases interest, the latter increases suspicion.
Effort and result are not synonyms. YC investors take a big risk - a lot of these startups will have well intentioned and hard working founders and they will fail anyway. VCs provide a valid service. They make money (if they are good guessers and are also lucky) and founders make money (if they work hard and smart and are also lucky). Everyone wins.
YC tag teams to VCs who definitely game the system.
YC sells a good founder friendly story and it seems believable and YC is a repeat player so they care about their reputation: however the financial incentives of YC are not well aligned with founders (for example YC gets preferential shares, and founders get common stock).
The issues of control only really matter for the few unicorn winner companies. YC can afford to be very founder friendly to loser companies or to founders before the company becomes a clear winner. Founders of winning companies are not going to publicly complain if YC is less than fair.
If vc doesn’t get preferred shares, someone can just turn around and immediately sell the company for $400k and keep 90% of the money so that would seem like a silly thing to complain about
If you have a great team going to YC helps lower your downside. The most successful companies in your cohort are likely to acquihire you when they need to grow quickly.
Selection bias. The median return for a founder is about $0.
If you want to be a billion+ market cap company, sure, use capital to get there. But chances are that the startup will fail. VC investing is diversified - a founder is not.
Founders are free to make agreements to swap equities of their companies with each other.
For simplicity assume that there exist three startups with a similar estimated company value. Each founders gives two 10 % equities (and keeps 80 %) of his startup to each of the two founders of the other two startups. This way, the risk of founding a startup becomes a little more diversified.
> Founders are free to make agreements to swap equities of their companies with each other.
Only in theory.
Firstly it depends on the shareholders agreement, and other contracts with the VC. Co-Sale rights, First Refusal rights, drag-along etcetera etcetera can easily effectively prevent selling common shares. Or clauses just put the idea into the too hard basket.
Secondly: nobody wants to give away voting rights. Small investors don't care about voting rights in public companies so they forget just how important voting is in private companies
Thirdly: the necessary diversification would need to swap more than 50% of shares to get effective diversification. Good luck with that!!
Forthly: the dynamic would be that everyone would want to swap their shares with the perceived best startup in the cohort. It just wouldn't work. The only way it could work would be if founders got some ownership of a VC fund.
> little more diversified.
Exactly: not diversified enough. VCs often own significant percentages of the companies they invest in. And they own preferential shares. Common shares have a completely different risk profile than preferential shares.
I don’t know anything about either of these people or the nuance of their professional qualifications, and I think that probably also holds true for 99% of other people who will see your comment.
"For an institution that had historically promoted from within, first with Sam Altman, now CEO of OpenAI, then Ralston, the Tan era came as a shock. Within YC, many staff had wanted Michael Seibel, the cofounder of Twitch and YC’s longtime batch leader, to get the job. Multiple sources remembered longtime partner Dalton Caldwell vocalizing what others were feeling, too: we’re all just employees who work here, message received. Seibel, meanwhile, wrote a letter to YC’s board to explain his disappointment at being passed over, despite broad internal support. He vowed to support Tan moving forward, anyway. Caldwell and Seibel declined to comment on those incidents through a YC spokesperson."
PG has thrown his weight behind boosting questionable builders (50% supportive tweets were about Austen Allred's Lambda School and Suhail's Mighty). Now Tan, who is throwing tantrums on Twitter ("die slow motherfucker"), while passing on someone like Seibel?
I suppose all of them were still sadly supportive of the SVB bailout, "government cronyism for me, capitalism for thee". So much for any illusion of libertarian ethos.
If Garry Tan stays long as YC CEO, I'm betting we have a mutiny and a fork form. It looks like Seibel isn't going to do all the work of leading the batch while Tan reaps the larger share of rewards.
Wasn't he the CEO in the past? I see him referred to as "CEO" in some places, like [1], but I can't find any announcement or news article about when this changed.
This is how it should be to be honest, and in tech everything gets compressed because of how fast it moves.
- Energy of the young -- doers
- Leadership of the middle aged -- management
- Wisdom of the elderly -- advisors
It feels like so often we put the elderly in this executive roles, when really they should have a seat at the table, but not be the preeminent decision makers.
Sounds like an exercise in futility -- why would the young "doers" listen to the elder "advisors"? History shows they'll roll their eyes at the (supposed) outdated advice from the advisors and ignore their wisdom.
Wisdom of the elders usually comes in the form of reasons not to do X. If the young doers heeded all of our elders' advice all of the time, we would be cautioned and red-taped into not accomplishing anything in a meaningful timeframe. As a young doer, I politely listen to the advice of my elders, accept about half of it as truth, and privately roll my eyes at the other half. As an elder, the best you can do is try to deliver your advice effectively so it lands in the first half.
If the focus is on doing what’s best for founders, and doing a job that’s closer to founders helps them more than a high prestige but less effective position, that’s what you do. Hats off to him. He’s living by principle and acting like the absolute gem of a human being he is.
A site moderator just told you and I linked you a bunch of previous comments to that effect, so it's stated there.
It's 'decided' by the community of HN participants - generated comments are some of the fastest flagged comments around. Few things on HN reach that kind of hive mindmeld that quickly.
You do realize dang is the moderator for this website, right? You're getting a universal negative reaction to your comment, and it has been flagged to dead. Maybe reflect on that and consider that you might be in the wrong here. If you disagree with this rule, and the opinion of the community at large, you do not have to participate.
Please don't do that, it's no-effort posting. If everyone started posting AI generated comments, this site would become worthless really quickly. Part of why I come here is to avoid the AI and botspam junk that's taking over everywhere else.
Meh… I don't know why I would care about this. Apologies for being dismissive, but if this wasn't HN, a subdomain of YC, I don't think this would be here. It's not tech or science or any of the other pursuits of knowledge that drive this site. This is better suited to the Financial Times.
HN has regularly featured startup news since the beginning, and Ycombinator is probably the most newsworthy player in the space on a significance-to-spammyness scale. I don't love this article but something about the news should be here.
Business news especially start up news has always been here. I'd like to make a wider point that tech workers should embrace business and the understanding of how business works and make it a central part of their worldview, it is essentially the technology of civilization. Otherwise you abdicate leadership to the exact type of people that make a lot of other people rightly irritated or downright spiteful at the business side of tech in the first place. It doesn't actually have to be so bad.
It's a fair point, but I actually wish we had a hacker community like this without the business/startup side at all. It's just not that interesting to me.
As for abdicating leadership, I don't know that simply following in their footsteps is going to make better organizations either. That's just "if you can't beat em, join em" thinking... but that's a separate discussion, I suppose.
Well, I can just skip the topics I'm not interested in. It's just that there's a pretty clear bias here for startup-capitalist mentality (which is fine, just not really for me), and it's harder to find people discuss the things that challenge that status quo system (politics, socialism, tech coops, etc.).
I think the moderators here do a great job, but at the end of the day it's still a service of YCombinator, and that draws a certain crowd. I prefer to gently step away from the financial side of that Venn diagram, personally, but there are also many people here who come here specifically FOR that, which I have no problem with.
I just miss the old Slashdot, probably, with high-quality tech discussions but less of an emphasis on the business side of things and the startup hustle culture.
Hey mcint, I appreciate it, but I don't think I trust myself to be well-behaved enough for an invite-only community, lol. I can barely stay within the rules here :) Thanks, though!
Even if this weren’t somehow tech news - which it is - I get a lot of value out of reading things posted here. If YC, the org paying the bills so I can read this for free, wanted to talk about themselves on occasion, I wouldn’t begrudge them. They definitely haven’t abused it.
That's interesting. I wonder how the current population of HN splits between people who heard of HN because of YC (that describes me), and people who heard of YC because of HN.
I'm in the latter camp. I'm largely uninterested in startup culture etc., but HN is one of the better sources of "interesting tech and associated discussion". Given that, I'm not sure why I clicked on this article...
I'm definitely in the latter bucket, though I've been here a long time now. I found HN as technical subreddits started to no longer satisfy my curiosity about tech, and fell in love. I originally learned about the startup ecosystem from lurking around here.
I’ve had my account here since 2012 and I only know about YC because of HN. That also seemed to be in YC’s golden years as well as far as I can tell. At this point YC is a bit of a nothing burger best I can tell so HN is, I would imagine, far and away the bigger brand.
Companies from the 2010s cohort though, he's got a point. Stripe is a $100B chunk, Airbnb is another $100B chunk, Doordash is a $50B chunk, Instacart is a $10B chunk...
I only know of YC because of HN. I know nothing about YC except it seems to be one of the many incubators where you pay them handsomely one way or the other in the hopes they can get you off the ground. I guess like the self help section of an old bookstore.
