How Y Combinator changed the world

This month a A successful entertainment newsletter written by an influential journalist teamed up with publishing legend Janice Min to form a news startup. One fascinating detail was buried in the story: The co-founders had signed up to take the three-month Y Combinator accelerator program.

If you haven’t paid attention, this news might have startled you. Why would a magazine diva join a horde of hooded nerds, handing over 7% of her business for the $ 125,000 stake YC is offering its startups? But after almost 17 years and 3,200 companies, Y Combinator has grown into something far beyond a tech training camp.

In its most recent batch, YC selected 401 companies from a pool of over 16,000 applicants to receive its imprimatur as well as coaching from seasoned founders on product building, business plan formulation and fundraising. . On August 31 and September 1, 377 of them presented their companies – remotely, of course – to the investment community in the biannual ritual called Demo Day. The founders of each company had a minute to explain themselves – just enough time to plant a seed in the mind of a potential donor.

Their ideas reflected YC’s implicit view that for every problem in the world there is a starter solution, although some solutions might sound familiar. There was ghost cooking in the Philippines. A “band for the countries of the former Soviet Union”. An “avant-garde for India”. A founder pledged to increase dental practice revenue by using deep learning to identify cavities. Another founder said, “We are building a better search engine than Google! “

At the end of each 60 second pitch came a Spartacus-like battle cry with the company name.

We are… Whalesync!

We are… Try to Pay!

We are… Yemaachi Biotechnology!

There is nothing safe when it comes to starting a business, and most fail. But inclusion in the Y Combinator program is definitely one thing; YC has launched companies with total valuations exceeding $ 400 billion; its alumni include such luminaries as Dropbox, Airbnb, Stripe, CoinBase and DoorDash. There are other names you might recognize: Substack, Instacart, Scribd, OpenSea. In most cases, companies entered the program with a zero valuation, but many YC founders have more lucrative options and understand that what may look like a bad deal on paper is actually a good deal. . Even experienced founders decided to follow the program, some for multiple stays. And then there’s the lost post icon like Ms. Min.

So what do you get when you join? Of course, there is the mentoring. YC has also dramatically simplified tasks that previously took weeks – incorporating, trademarking, setting up web services, and most importantly connecting with the right investors – largely through software, of course. “We’re a bit like Crispr for startups,” says Geoff Ralston, president of YC since 2019. “Startups come into YC with raw DNA. We modify DNA so that they have the alleles that make them more likely to be successful. These techniques have been widely disseminated – hundreds of thousands have attended the program’s open Startup Schools – and have been adopted by hundreds of accelerators, incubators and boot camps, even some indoors. companies like Google’s 120 zone. Y Combinator has hosted more than 3,500 companies, but countless more have used its plans.