Your success and the success of YC doesn't make your friends wrong. YC has improved over time, both in valuations and processes. Even today, it is not perfect, and there is a significant survivorship bias used to describe its success as the unicorns are called out, but I don't hear much talk about how all the founders do - what is the median result of all YC companies, for example? (I honestly don't know that answer... I would love to see it because don't see such overall stats.)
YC absolutely has accomplished something, as have some of its companies. I don't want to be dismissive of that. But we should acknowledge that it embraces and encourages the high-risk/high-reward model, which should be entered into with open eyes.
What? The entire industry of venture capital is based on a tiny percentage of companies absolutely exploding. The point is, compared to everyone else, YC does it much better - the gulf between YC (which is on track to have multiple $100b portfolio companies) and second place accelerators like Techstars (who have, at best, a couple of single digit unicorns) is astronomical.
> The entire industry of venture capital is based on a tiny percentage of companies absolutely exploding.
Exactly. Which means the risk level to founders is high. Because it is a roulette wheel where the VCs are the house, and the founders are the gamblers. With TechStars vs. YC being akin to the difference of the wheel having one zero or two. Founders are still gambling... even if YC gives better odds than others.
Again, VC has it place, as does YC. I'm not saying nobody should do it - I'm saying they should do it as a fully informed decision.
>> I got into the fifth batch (s07) and remember my other startup friends staging an intervention to dissuade me from accepting because "the valuation is really bad."
> Your success and the success of YC doesn't make your friends wrong
His friends weren't telling him to leave the startup world. His friends were in the startup world themselves, and felt that there were better options out there compared to YC. In this context, his friends were absolutely wrong
This is very wrong. VCs don’t control the game at all and their economics come from the few huge outcomes where founders also have a life changing outcome. Also, gambling has a negative expected value, while a good team starting a company has a positive expected value.
Startups are a high risk game but no one says you have to play it.
> [VC] economics come from the few huge outcomes where founders also have a life changing outcome. Also, gambling has a negative expected value,
VCs get more shots on goal, so the typical outcome of a VC could approach that of the average of the industry. (It doesn't, but that's for other reasons.)
Founders can't because they have too few shots on goal.
Suppose that I'll give you a 10% chance at $100k if you pay me $1k.
If you can take that offer "enough" times, you have reasonable odds of making 5-12x on your money.
However, if 100 people take that offer once each, around 90% of them will lose their $1k. (They should pool.)
> we should acknowledge that it embraces and encourages the high-risk/high-reward model, which should be entered into with open eyes
We were W21. I would argue one of YC's main goals is to reduce the risk to founders, and enable starting startup more accessible to those with the right skills, regardless of circumstance.
Getting into YC guarantees a certain minimum amount of funding and essential support, which not everyone outside SV has access to. It's commonplace to see people quit high paying jobs, and start businesses whilst married with children (the old narrative of 20-something male dropout is no longer the norm). This all happens because YC creates a platform that reduces risk for founders.
YC absolutely has accomplished something, as have some of its companies. I don't want to be dismissive of that. But we should acknowledge that it embraces and encourages the high-risk/high-reward model, which should be entered into with open eyes.