What’s ironic is that Michael Seibel has discussed many times on the YC podcast that you should avoid building whatever’s hot for VCs because their attention tends to change every year but you’ll be stuck building for a decade.
2020 was remote work, 2021 was web3, now we have the big LLM boom.
Honestly it seems there’s a lot of advantages to “riding a wave” and a lot of advantages to being contrarian. But if raising money is your priority I do think you should ride the wave. Being contrarian sounds romantic, but don’t expect funding from people who disagree with you.
The most charitable thing I’d say about YCs AI focus is it’s hard to think of a startup idea that couldn’t benefit from AI in some way.
Honestly, I think any person or organization that bought in to the blockchain hype should be barred from making any financial decisions of consequence. If they bought into a scam as obvious as the blockchain crap, they're clearly not capable of holding any real responsibilities.
Tbf I feel remote work really improved significantly in the past years, though I don't know if the contribution from those startups matters or not. Web3 and blockchain is a moot, there's little to no practical reason to have them.
AI though, will be very useful, at least a good one. Theoretically, AI can swim in a good ocean of company documentations and save time searching. They can help doctors diagnose a ct scan faster (if not already).
Definitely not, there are several other topical areas that currently have significant VC appetite.
If anything, the enormous amount of social media attention on AI has made it easier to raise VC in other trending areas because all of the low-quality "me too" startups have gotten pulled into the fashionable AI orbit. This has significantly improved the signal-to-noise ratio in these non-AI areas because the legions of trend-jumping founders are all doing AI, the startups that remain tend to be founded by people with substantial investment and expertise in their domain without regard for fashion. This is good for VCs and for founders.
> made it easier to raise VC in other trending areas because all of the low-quality "me too" startups have gotten pulled into the fashionable AI orbit
You are trying to say "adding IA to the pitch won't improve a founder's chances", but what you are saying is "granting money to founders that didn't add AI to their pitch improves a smart VC's chances".
Filling the form wasn't too hard. It's probably the kind of thing every founder should know and be able to answer. It's easier than most job applications. Definitely easier than college applications... if you wanted to compare it to college, getting financial aid has a tiny acceptance rate as well. YC is bundling the education and the financial aid.
Rejection isn't hard either. If you're a founder, you'll be rejected by VCs all the time, and many early stage investors offer far lower amounts and far worse advice. You'll be rejected by your product - MVPs often have to be reworked and pivoted. And then you'll face some more rejection when doing sales and product interviews.
I think it's important to be transparent about the rate though, but also important to make it clear that the low rate doesn't mean they're trying to push people away.
It's the same as selective universities telling every student that they should apply regardless of their chance. It makes sense they would do this since it's completely open.
It's not really a lottery, more like a messy matching algorithm for supply and demand. They give everyone a shot since they look at everything, but getting in is not evenly distributed :)
> I love the constant flex of their tiny acceptance rate. "We only accept 1% of applicants. Btw everyone should apply!"
I've seen this mindset among people promoting open positions at desirable companies that don't hire often. In most cases, applying is a waste of time because the company already made its decision to fill the position with an internal candidate.
For us, the application process was a big help in getting focus and better defining what we propose to build. And not getting in has led us to find some other, potentially much better programs which we will apply to. We don’t regret the effort at all.
My only complaint is that keeping everyone hanging on until May 29, ready to clear our plates in June, and then giving absolutely zero feedback for the rejection, was the sort of blatantly self-interested and founder-unfriendly move that, I suppose, it’s good to remember happens a lot in VC Land.
Out of curiosity, would you mind sharing some of those potentially better programs? I've also been trying to compile a thourough list, but the options don't seem better (in fact, all are plan B..Z)
e.g. Entrepreneur First ( especially their EU and UK offering), Founders Factory, Haatch, Seqouia Surge, ...
PearX is probably more selective than YC but at least if you're in the SF area, seems to be more of a real accelerator. (And not just for "get more money before demo day.")
There are others but these are the things that really stood out. We will go directly to investors too, hopefully someone in our network sees the potential and is willing to throw us some pre-seed to get it started.
I don't think the YC Standard Deal is bad, and I might try again next time, but there are things about the program that I think are not worth the time/money, and I'm not at all sure "access to their network" is any better than (even as good as) the same access from a different set of VCs.
He's not just out of touch he's actively pushing pretty horrific shit like the abolition of the state. He also agrees with Balaji about everything and therefore should not be trusted.
"Abolition of the state"? In the very article this thread is about he pushes for regulation against big tech, that does not sound like it could be achieved by abolition of the state
Well really think about the mindset of someone who collectively hates “the state” do you think that person is going to be honest about their actions? Of course not everything is about yourself over everyone else. This is free speech and not a personal attack.
It makes sense that startup folks will gravitate to where there's VC interest as they always have (including the fakers and scammers). But regardless of the current hype cycle the same rules still apply: the reasons why you're doing the startup, if you're an expert in the space, whether you can build a 10x solution, your access to early adopters, your unique point of view on the market. AI is just a new set of tools to generate more value for your specific users, if applied in a unique way that makes a significant difference.
Season 9 Erlich: "Oh my god. It's an AI play. That's the frothiest space in the Valley right now. Nobody understands it but everyone wants in. Any idiot could walk into a fucking room, utter the letters A and I, and VCs would hurl bricks of cash at them.”.
Didn't stop YC from funding almost 100 of them[0] including signal boosting[1] this obvious scam that blatantly ripped off another's website and company too.[2]
I remember people saying the same about blockchain and, a little later, "the metaverse". A prominent, large tech company even changed its name to show its commitment to this promising technology!
Sure, but it was fairly obvious to the critical eye that neither blockchain nor VR/metaverse were likely to have much impact beyond a few niches. Neither solves problems many people actually have. And a lot of the tech world rightly scoffed at the whole Facebook/Meta "transformation".
But machine learning has been used for years behind the scenes in things like recommendations and clarification. And LLMs specifically, even in their current infancy, have shown immediate value in some cases (e.g. coding assistants) and obvious potential across a vast number of domains.
I mean there is absolutely no reason to think that AI (broadly) and blockchain are going to follow similar trajectories.
I agree that every company becoming an "AI company" is not in the cards. However, I think there is going to be a slow ramp where every startup just throws a few annoying problems at a LLM instead of hiring ML people.
And kinda like the internet it's just a tool that you use when appropriate, but the things where it's appropriate will continue to expand.
"Apple Computer CEO Steve Jobs, who got a sneak preview, said Kamen's creation was as big a deal as the PC, and that it would change the ways cities were designed. Renowned Silicon Valley venture capitalist John Doerr said it might be "bigger than the Internet" and invested millions in it."
I mean, small LiPo vehicles did take over the world, it’s just that they’re flying cameras instead. They even have some that can carry humans, so the jury’s still out on this one being false I think.
The current tech environment is very different from 6 months ago.
Now most VCs are actually somewhat cautious about AI largely because they over-invested in companies at ridiculous high valuations and aren't seeing the ROI. Especially with many companies simply not seeing the promised benefits from deploying AI.
YC is actually the one that is out of touch with reality.
So, what this means: that in 2024, if you want to get VC capital, your startup must be related to AI.