That they get lucky with a handful of companies as well is a nice to have but liquidity events provided by acqui-hires can't be ignored as their bread n butter surely.
The way this thread reads, he's not so much taking issue with YC as with the idea of seed capital. Some of us have the experience of operating in a startup marketplace without routine, standardized seed funding. That's how funding worked in the 1990s and early 2000s. It's not great!
The remainder is mostly gonna be regulatory arbitrage or low margin niche fields that a large company can't exploit.
The neighborhood liquor store, or the grey market handyman. That's the remaining low cap fronts.
The Mobile wave and SaaS wave are gone, it's possible that AI will open up a lot of small applications or AI Bot economy, but we will see.
The low capitalization means that you are mostly writing gluecode and winning on UX, not really doing breakthrough technology innovation that has no revenue for 5-7 years.
Back on the early days; YouTube co-founder Jawed Karim said in 2006 [0] that perhaps any CS undergrad could've coded any of the internet's early killer apps in a few weeks but the scaling them would be whole another problem, scaling in this context meaning acquiring users.
My opinion is that you can still spin an amazing website relatively fast but then you need to improve UX, create your mobile presence(make mobile apps) etc. etc. Whole lot more hassle than it was in the early days when mobile phone internet and mobile apps were irrelevant.
Good example is also Instagram which was natively and exclusively mobile app which allowed them to improve their product faster and scale the app faster.
Is my impression correct? I recall YC Research was pitched a few years ago but I think it politely imploded into a small nonprofit.
Let's ignore LLMs, where tens of billions of dollars are being competitively poured into models and platforms on top of which presumably value can be built and focus on their secondary effects. Ever-more powerful GPUs being pushed out to the periphery, upgrading the parallel-processing power of every phone, laptop and server. Semiconductor manufacturing building hundreds of billions of dollars worth of de novo fabrication capacity. And I'm not even touching the platform advances in space travel and bioengineering we're in the midst of.
If you're looking to build the next website or iPhone app, yes, the ship has sailed. The rinse-and-repeat "put a subscrpition on it" playbook has played out. But I can't say history has had this much variety in scalable tinkering territory before.
Our batch (W19) has produced several great software companies that are growing incredibly fast, you just haven't heard of them ... yet!
But if we wanted to offer constructive criticism to YC, mine would be:
1. Stop downplaying the importance of craftsmanship.
2. Stop downplaying the contributions of batchmates and overplaying the impact of YC partners/office hours.
3. Stop mooching off public domain without contributing much back.
4. Learn to understand the speed benefits of public domain development/build in public.
5. Stop it with the secrecy; an outdated model. Speed >> secrecy.
6. Stop the censorship!
Or in humorous form:
Recommend something like an NSF Activate grant instead. Commercialization of hardware takes an average of 15 years. If you can't get dilution free funding for the first 5 or so, you'll end up giving up so much equity that you'll be an employee of your own company.
Most successful hardware founders have deep pockets or huge grant supports.
- unprofitable startups that can be sold to the highest bidder within a few years
- unprofitable startups that can be subsidized to the tune of billions of dollars a year in hopes of capturing the market through price dumping and borderline illegal practices
There are one or two that break the mould and become, you know, actual businesses.
The takeaway from many folks successfully capitalizing on many tech commoditization trends isn't that old one being mined out means game over...
... but this pattern keeps happening, so go and identify the current wave and ride it
the most obvious commoditization breakthrough right now is LLMs, but there are a bunch of other 10X's happening too
https://news.ycombinator.com/item?id=41562321
YC isn’t to blame here. It’s a microcosm of the incentives that have been set up. Unfortunately most of the game-changing tech isn’t going to be low capex moving forward. We are moving past the “Airbnb for dogs” era and into the “build a better quantum computer” era.