Ask YC: Attack of the clones; would you take your start-up to a YC Clone?

https://news.ycombinator.com/item?id=315796

by lemonysnicket • 18 years ago

11 20 18 years ago

news.ycombinator.com

There's the original, YC

Techstars

DreamItVentures in Philly

Launchbox Digital in DC

It seems like a lot of founders from the other YC-knockoffs participate on HN -- care to share your experiences?

Hackers, would you take your start-ups to one of the clones? Why or why not?

walesmd• 18 years ago

Depends on the company - some of the others out there offer very comparitive, if not better, benefits than YC.

In terms of money: a YC dollar is worth no more than a dollar found on the street.

I guess my answer is yes.

gscott2• 18 years ago

The primary purpose is to lend credibility. As long as the others doing similiar things have credibility to lend, they seem acceptable.

Once you have your product and their credibility then you need to wield it carefully to get to your destination.

SwellJoe5• 18 years ago

Yes, it lends credibility, but it's not necessarily the primary purpose...at least not of YC. There are a lot of good benefits to YC...it's an educational experience, a community-building experience, and more. Of course, it doesn't hurt that dropping the YC bomb in a discussion with an investor is an automatic upgrade to "vetted" in the investors mind (works with valley press, as well, apparently).

gscott2• 18 years ago

I was thinking more along the lines can these people starting a "YC Clone" bring real investors who might invest on "demo day". I should have said that, but it all comes down to credibility (on many different levels, the process, the people running the process, the founders, etc).

It seems to me, and I may be wrong, that the YC system has an extra bit of credibility that can be spent even if a person isn't successful with what they built in YC they can build something new and still have a better then average chance.

DabAsteroid• 18 years ago

The primary purpose is to lend credibility.

I thought the primary purpose of YC was to instill morale.

http://www.google.com/search?q=+site:www.paulgraham.com+%22y...

Morale is tremendously important to a startup—so important that morale alone is almost enough to determine success.

trapper4• 18 years ago

Its like asking whether you would go to a VC instead of sequoia. Of course you would.

SwellJoe5• 18 years ago

Really? I don't think I understand how this follows.

Alternatives to YC include Sequoia, angels, other VCs, etc. and not just YC clones. It's an expensive source of money, and if the company isn't delivering a lot of extra value (which YC has consistently been shown to do, and none of the others, with the possible exception of TechStars, has shown that) it's probably a bad deal.

And, as for "would you go to a VC instead of Sequoia"...yes, but I wouldn't go to a VC that I have no knowledge of, and that has no track record. I'd accept money from a top ten VC (assuming reasonable terms and consonance of vision), but I'd rather build a company on its own revenues than take money from an investor I don't believe in, or I don't believe is capable of grokking our long term vision for the company.

bigbang• 18 years ago

The comparision maybe more like a top school like MIT to say something still very good like UIUC or UMich. Im pretty sure most applicants apply to both YC and Techstars, just like school if they dont "get into" thier first choice, they most probably might take second choice. I wouldn't dismiss these as clones. Techstars have shown pretty good track record so far(though thier sample size is small and if Im right thier entire first batch recieved some form of funding). I dont know about others, maybe something might come out since they just started and YC has been around for few years. As an entrepreneur defnitely community of other hackers matters, which no doubt YC wins, but still I wouldn't dismiss others as clones.

PS:I neither did YC nor Techstars, just my opinion

wheels• 18 years ago

That's a really valid point. One thing to note is that most of the clones are started by VCs or people with strong VC connections. In my book that's a pretty notable difference. Entrepreneurs and VCs seem to often look at businesses very differently, and this, in some ways, seems to be a way to just get a stupidly cheap slice out of a big pool of startups.

One thing to remember when looking at all of these things:

The value they give is not in the money. $10-20k is laughable in investment terms. In my opinion YC is more like a ready-made board of advisors than a seed investor. The question really boils down to, for all of these accelerators, "Are they good enough advisors to give up 5-ish percent of your equity for?"

I think YC's proven itself there. I'd be interested to see what some TechStars alums have to say.

trapper4• 18 years ago

Honestly, has YC actually been shown to consistently add value? I thought the jury was out on that, until we get stats about success rates. Given how many companies they fund, how much time do they actually spend with each company? How do they scale the model without diluting experience?

Most VC's, even poor ones bank on 2/10 paying for the failures, otherwise they go out of business. Has YC provided > 20% success rate - I don't know, I'm asking? How does YC even define success?

Sequoia and YC do not have a monopoly on technology success, far from it. There are many thousands of excellent, proven technology investors around the world available to work with. Pretending your idea is better than all but the "top 10" is laughable really.

PS: Mentioning YC in the same sentence as Sequoia isn't really fair to Sequoia given their success.

SwellJoe5• 18 years ago

TechStars, as bizarrely and counter-productively obsessed with YC as they seem to be, has actually produced a couple of winners now. It's not the kind of hit rate that YC has exhibited...or had exhibited at this stage in YC's life. But it, at least, has some measurable success.

Given that there are cheaper sources of funding, and most of them have no track record and extremely limited credibility, I would look much deeper...and consider other alternatives. Charles River has an early stage arm that does a lot of deals, for example, and has a good reputation. Angels are another option. While this "new model" of investing is compelling for its high success rate, when executed by YC, it's not necessarily the best way to raise money. We took money from YC and have never had any regrets about it...but I can't think of any other situation where we'd give up that much equity for that little money. But, you'd have to decide that for yourself.

mattmaroon• 18 years ago

I would avoid TechStars due to that obsession, which is a nice word for it BTW. They really do consistently act like ass-clowns.

They do seem to have the second most well-attended demo days though. I don't know about how their connections compare to the others on that list. That might be the deciding factor for me.

wehriam• 18 years ago

What is YC's hit rate? What is TechStar's hit rate?

SwellJoe5• 18 years ago

I already mentioned TechStars hit rate, as far as I know it: "has actually produced a couple of winners now", in the form of two small acquisitions.

YC has had a couple of pretty big acquisitions and five (I believe) small acquisitions. More importantly, I think there are at least three or four still on-going companies that will be very large successes for YC. I won't name them, as it might imply that I think others won't be big successes or it might start a flame war over "no way that blah blah idea can generate significant revenue, no matter how many million hits they get", or whatever.

And the "at this stage" bit was in reference to the fact that about 50% of the first batch of YC founders are now rich, by a reasonable definition of "rich". Each batch since then rolls off a bit, in percentages, but the bets are getting bigger and take longer to play out (our company, for example, would not be for sale for a low millions acquisition offer...but the vast majority of the exits for YC and TS companies have been in that range...and I know that a few other YC companies are also looking to build larger companies than that).

Anyway, by any metric YC has a lot of successful companies in their stable. Traffic for a few YC companies is just through the roof (Scribd, Justin.TV, Weebly, Reddit, Disqus, probably others). A couple of others have really impressive reach outside of the usual Web 2.0 set and into the "real world" (Loopt, in particular, though Inkling Markets is everywhere, too...my dad has used Inkling's product, and he just got broadband for the first time last week).

wayne• 18 years ago

As a Silicon Valley person, moving to Colorado, Philly, or DC for even a few months doesn't seem very logical.

animalcrackers• 18 years ago

went to one of the YC clones.

the biggest problem with these YC clones is two-fold.

first, most of the clones' founders have a)either not founded a start-up b)founded a start-up in a completely different field.

second, the lack of technical ability isn't the most conducive, to, ya know, doing a start-up in the early stages based entirely on code. ideas from the founders are pretty much fluff, because they don't understand rudimentary concepts of code, what can and cannot be done, how long things could possibly take, etc.

vaksel• 18 years ago

if no other choice sure why not? Not everyone gets into MIT, so it doesn't hurt to diversify your applications. And in the end run its better to have even a crappy state school over not going to college at all

Ask YC: Attack of the clones; would you take your start-up to a YC Clone?

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