There was an article a month or two ago about the problems with tech accelerators gaining popularity.
I can't find the link but it basically said the accelerator bubble is going to happen when the secondary groups get the 'B' talent startups, and then the next groups get the 'C' talent...
While I have no idea about the quality of YC Reject groups, this does kinda have that same feel to it.
Talent and potential are very subjective metrics -- I'm not sure YC gets the best candidates. They only get the best as judged by the pool accessible to them, and by their selection criteria.
That said, yc reject groups probably will suffer from a smaller talent pool (since they are indeed option B), and from a lack of experienced people to make a reasonably good selection.
Even YC has always said that there were promising groups from those that did not make the cut. They've admitted that they aren't the best at picking winners. So you can't say that the A groups were better than the B groups. Many of the B groups (and even single co-founders) were just a victim of YC's rules and capacity.
I'd still settle for meeting up with a group of intelligent and determined entrepreneurs who I can bounce ideas off of and perhaps get a little advice.
A group of "B" talent or "C" talent startups get funded - so what?
The only people who lose out are the investors, who have plenty of chance to evaluate their investment before making a decision (I imagine), so they can only blame themselves for making a bad investment.
Seconded. The economics probably make sense even if 90% are "Cs." One or two winners per batch is enough given the relatively small investment for the relatively large stake. Keep in mind that these investments typically result in an initial valuation of somewhere around $300 - $500k. 6% of something that size for relatively low cost makes room for quite a few losers. My only advice is to make sure that there's a lot of focus on getting great advisors and mentors for the program. That piece is easily as important as the funding.
This. The OP makes the assumption that all grade "A" startups that apply for a class will get into that class. It seems to me that it's starting to reach a point where it won't scale to keep including more and more people into a class. I'm sure some will be because the ideas or founders aren't the best but in the case of ones that make it to the interview, that's already stating they're ahead of the pack in that sense.
I applied for Summer 2011. I'm a single founder - point against. I'm not working on a social networking project or something with mass consumer appeal - point against. It's a fairly trivial product (though a great demand exists) - point against. I'm also older (29) which might not be favorable to YC.
Admittedly I was a little intimidated by a few questions on the application and my video sucked. I've been in real estate for the last few years and am now getting back into software development. Being in real estate though is what gives me tremendous insight into the niche market I'm targeting with my startup. It's impossible to know for sure why I wasn't invited for an interview considering they don't give any feedback. I'd assume they were just more interested in other founders/projects. That doesn't make me a "B" grade startup, I just don't fit the YC criteria (at least right now).
Point being that it benefits YC to bet on projects with huge upside potential. Fewer big hits compensates for massive misses. Isn't that the same strategy that nearly all VC's use?
All in all I'm learning as I go and moving forward regardlessly.
Similar situation - single founder, not doing social or green, niche B2B market (ediscovery), older (48), out of practice on software engineering, and deep insight into target market.
I applied to YC knowing that I wasn't a good fit. Going through the application process helped me hone my message and also helped me to better organize my priorities.
It's like writing a business plan - you may never really use it (you may not be accepted into YC) but going through the exercise has real benefit.
Theoretically, this makes complete sense. But in practice, math matters. If you believe that the number of promising startups is within the range of those that are accepted by top accelerators, then you are right. But if you believe that current accelerators serve a minor percentage of promising startups, then it means a large part of the market (ie. promising startups) is not being served.
I'm actually inclined to believe it's the latter considering the supply and demand. The demand for accelerators is extremely high and the supply of open spots is very low. I think current accelerators are just scratching the surface with respect to promising startups which is why we're seeing many more sprout up.
I can't find the link but it basically said the accelerator bubble is going to happen when the secondary groups get the 'B' talent startups, and then the next groups get the 'C' talent...
While I have no idea about the quality of YC Reject groups, this does kinda have that same feel to it.