Yesterday we hosted 400 top university students at the YC Summer Conference - a fun day of talks about startups. Talking to the students afterwards, I found myself giving a lot of the same advice. So in case it's useful to others, here is my startup advice for students.
Some of the best startup ideas live in a grey area of legality. Airbnb, Uber, Lyft, YouTube, Coinbase were all somewhere between questionable and flat-out illegal in their early days.
One reason for this is that incumbents cannot take any legal risk on a new initiative. Even if
(0/25) Here's a list of 25 YC companies that have trained their own AI models. Reading through these will give you a good sense of what the near future will look like.
One of the mega trends in this YC batch is the wave of consumer AI companies.
Consumer was stuck in the doldrums for years, but AI has brought it back in a big way.
Here are the 21 consumer AI companies that launched today. 🧵
Talking to second time founders (especially v. successful ones), I've realized they tend to make the same mistakes. In fact, I made these myself in my brief attempt to start a second company after Scribd. The three most common ones:
The OpenAI board was particularly bad, but every board I've been on has been a clown show of incompetence. People who haven't been on boards don't realize how dumb they usually are.
Founders are always worried about competition, but startups are so hard that most of your competitors will shoot themselves in the foot at some point. Most of the time you can win by just not dying.
This quote from
@paulg
about startups and money is what convinced me to drop out of Harvard and start a startup:
By compressing the dull but necessary task of making a living into the smallest possible time, you show respect for life, and there is something grand about that.
Introduced some young founders to a number of incredibly successful people. Every single one was happy to meet them and give them advice with no expectation of anything in return.
Silicon Valley is an amazing place.
The real reason startups do so much better in SF isn't because it's easier to raise money or hire employees, even if both of those of are true.
It's because you become the average of the 20 people you spend the most time with. If you live in SF, those 20 people are probably
One of the interesting consequences of the AI boom is that it's returning the advantage to young founders.
When things are changing this fast, experience is not that helpful and what matters most is how quickly you move.
One of the less talked-about qualities of good founders is that they are good business thinkers. They're naturally curious about how different businesses work and are good at breaking them down, the same way you would take apart a machine to understand it.
41% of recent YC founders worked at a YC company as employees before starting their own company.
We only learned this stat recently and even we were surprised it was so high.
Today
@toinfinityai
made history with the first completely AI-generated YC demo day presentation.
Here's their full demo day video, featuring
@lina_colucci
's AI clone.
An interesting consequence of the wave of startups building on LLMs is that for the first time I can remember, many YC startups are facing more technology risk than market risk. The main question is not if people want it, but if it's possible to build it.
(1/5) A few years ago, it was widely believed that the first deployment of self-driving would be long-haul trucks on highways, which is a much easier technical problem than city driving.
VCs invested billions based on this theory.
Why did so many people call this wrong?
In 2006, Elon wrote a blog post called, humorously, the "Secret Tesla Master Plan". I find these 21 words fascinating, because they not only predicted the next 10 years of Tesla, they established a new model for how to build hard-tech companies.
Many of the best startups ran their company out of the founders' house for a curiously long time - often until they had 10+ employees. This is Replit when they were working out of
@amasad
's house.
It's unbelievable that our government is happy to spend $2T on a stimulus deal, but won't spend even $2B on scientific research to solve the problem that is causing us to need the stimulus in the first place.
3) Running away from their existing expertise. People are burned out on their first industry because they know what makes it hard. So they try a new industry only to realize it's just as hard but they have fewer advantages. Usually better to stick with the devil you know.
How do you start a startup that's building a supersonic jet?
@bscholl
did, and his company
@boomaero
just did their first flight.
Here's a breakdown of 8 hard-tech companies with crazy ambitious ideas, and how they got started.
Most first-time founders are hilariously incompetent for the first couple of years (I certainly was). The ones that make it just manage to not die for long enough to get good.
When I talk to founders of YC companies started before 2020, one of the things they tell me most consistently is that they wish they could switch back from remote to in-person but can't figure out how to do it.
(5/5) A lot of learnings here for AI startups. Many startups are working on an AI system that effectively replaces a human doing some important job.
The best way to get these systems live is to find a way to start with a near zero-risk setting.
Solo founders often think that the more progress they make, the easier it will be to attract a co-founder. But our data from running YC's co-founder matching site shows the opposite: the people with funding or traction are least likely to find a co-founder.
I should add that all the companies that I can think of in this category were violating laws that were widely regarded as dumb and unpopular, like the laws protecting the taxi monopoly. Startups violating laws that are widely regarded as important aren't likely to end as well.
A startup selling to a large but slowly dying industry (i.e., car dealerships) will tend to be valued lower than you'd think. It took me a while to understand why because, after all, they're not dying anytime soon.
Once a startup saturates its initial market, there are two basic ways to expand. Sell the same product to new customers, or sell a new product to existing customers.
When they're getting started, most startups think they'll do the former, but they mostly end up doing the latter.
Last week we celebrated the end of YC's S23 batch. It seems like a good time to share some thoughts on the batch, and on the ways YC has changed in the last year.
2) No idea is good enough. First time founders enthusiastically leap into their first idea. Second time founders know that they're signing up for a 10 year commitment, so they're gun-shy. But the problem is that all startup ideas have major flaws.
1) No cofounder. They started their first company with a friend. But now they can raise money and hire a team with just an idea, and giving up 50% is so expensive. But cofounders are also about accountability and moral support, and that turns out to be incredibly important.
Kyle is a force of nature who pulled forward the future of self-driving cars probably by several years. That alone will end up saving thousands of lives. We call people who did less heroes.
Now that Cruise & Waymo have wide availability, I've switched to getting around SF exclusively via self-driving cars. It feels like living in the future.
One of the important stories that's gone only lightly reported is how smoothly the rollout of fully autonomous Cruise cars went in SF. It reminds me of when the Wright brothers invented the airplane and nobody noticed for a few years.
One of the craziest stories from Demo Day is the story of
@arcimus_com
.
The Arcimus founders wanted to automate premium audits. To learn how, during their YC batch, they WENT UNDERCOVER and got full-time jobs as premium auditors.
In September,
@sdianahu
and I dropped by MIT for a casual talk with students interested in startups. We hoped we'd inspire one or two of them to start a company someday.
3 months later, YC has literally funded 10% of the students who were in the room with us.
When startups start taking off, the founders usually can't tell what's changed. It's some combination of all the random things they did to make it take off, but it's hard to say which ones.
A lot of advice I gave this batch was some version of noticing that one thing the company was doing was working, and encouraging them to prune everything else and focus on that one thing.
For example, it's reasonable to try 5 different ways to get users, but if one of them works
I've never seen a YC batch where it's easier to find ideas for teams that are pivoting. There are so many great AI startup ideas just sitting there that you can't help but bump into them.
I've noticed I reliably wait 20 minutes for a Waymo rather than wait 2 minutes for an Uber - I suspect that says a lot about the future prospects of the two products.
We got the YC generative AI companies together in SF for an event hosted by
@sdianahu
. Impossible to be here and not feel like you are seeing the future.
Spent Friday night using DALL-E. It's the most impressive new technology I've seen since I picked up the first iPhone in 2007. What
@sama
and
@OpenAI
are building will change the world.
When founders are raising a Series A, they typically prioritize getting the best economic terms first, and treat who sits on their board as a second priority. They should do the reverse.
It's unfortunate how difficult it is to Google for startup ideas. One of the reasons tarpit ideas persist is just that people have a startup idea and Google for it and don't get any hits.
(6/25) Edgetrace (): Takes a huge video dataset and allows you to search through it in plain English. Instead of digging through hours of traffic footage, ask for a "red prius with a golden wheel cap turning right".
(1/25) Atmo (
@atmo_ai
): Atmo replaces traditional physics-based weather simulations with AI-driven forecasts. This is 40,000x more computationally efficient, which means it can be both cheaper and more accurate.
It's well known that YC is a great way to get early customers for a B2B startup. What's less well known is that it is also a great way to get your first users for a B2C startup. Doordash, Instacart, Reddit - their first users were mostly YC founders.
There's finally a paper analyzing commercially-available serology (antibody) tests. These tests, mostly Chinese-made, have been available for a couple of months but it was unclear if they work. Turns out, they do. 90% sensitive, 100% specific.
Zepto went from 0 to 4M subscribers in 6 weeks with a new product.
When you've made a product people love, often your business has built up potential energy. When you figure out how to tap it, you get results like these.
4 weeks ago, I posted about Zepto Pass crossing the 2M subscriber milestone. Now, we're at 4M...
I can barely believe the growth myself over the past 6 weeks. Our customers continue to surprise us and we're grateful for the opportunity to serve them day in and day out.
Feels
(2/5) Multiple reasons, but a key one is that they focused on the technical problems, instead of the societal ones.
A fully-loaded 18-wheeler wiping out at 70 mph is a catastrophe. Even after the tech was probably good enough, society was not willing to take that risk.
Some founders told me that they were hesitant to apply to YC because they were on a visa and worried about losing their ability to stay in the US if they left their jobs.
Actually, when founders on visas get into YC, the first thing we do is introduce them to our immigration
The deadline to apply for YC S23 is tonight at 8pm PT!
YC works with founders to build the world-changing companies of the future — and we'd love to work with you.
Apply at .
(3/5) What actually worked for getting self-driving live was the Cruise / Waymo approach of deploying it in the lowest-risk setting possible.
The first Cruise cars in SF were only allowed to drive in the middle of the night, in the emptiest part of the city, below 30mph.
7/ (h/t to
@eshear
for this one) Startups are not a thinking game, they are a doing game. If you don't have good startup ideas now, the way to get better ones isn't to think really hard - it's to build stuff and launch it and learn from what happens.
Infinity AI just launched and they are building a product that's basically magic. They can generate videos of people from just a script. Check out this hilarious video they generated of the YC partners (including me!):
(4/5) I knew self-driving had finally arrived when Cruise cars had been driving themselves for a few weeks with no major mishaps.
After that, usage expanded basically in order of risk - first to more parts of the city, then more times of the day. Next up is highway driving.
there are 246 companies in the latest
@ycombinator
batch (W24)
72 of them use
@supabase
: 29% of the batch
Build something people want, with Supabase ⚡️
A good conceptual tool for founders is "Just-in-time decision making".
When founders ask me about a decision they're wrestling with, I often start with "Well, do you need to decide now?"
If you've got a hard decision ahead, you're usually better off not worrying about it until
Tomorrow's the deadline to apply to the next YC batch.
Many of the most famous YC companies decided to apply at the last minute. The Airbnb founders wrote their application in a couple of hours before the deadline.
You become lucky by creating chances for yourself.
At YC, we work with founders throughout the life of their startup and beyond, to build the world-changing companies of the future.
And we'd love to work with you.
The deadline to apply for YC W24 is this Friday, Oct 13 at 8pm PDT — apply today at .
"LLMs allow whole categories of manual processes to be automated in ways that weren’t possible until recently.
Where there’s linguistic ambiguity or some amount of subjective evaluation needed, LLMs come into their own."
@t_blom
During 2020-2021 there was a whole wave of startups building the new tools the world would need for a future of remote work. It's interesting that that future of remote work they envisioned largely came true, but none of those tools have been break-out hits.
2 years ago, only 10% of the YC batch was college students or new grads. The last batch was 30%.
Because of AI, it's the best time in a decade for college students to start startups.
That's why all 14 YC partners came to Boston today to talk to undergrads.
In the early days of YC, Paul Graham cooked all the dinners himself. We haven't done that in a decade, but this batch
@t_blom
(who founded two billion dollar companies!) brought it back and cooked for 150 founders every week.
(3/25) Deepgram (
@DeepgramAI
): APIs for ultra-fast speech-to-text transcription and natural sounding text-to-speech. One of the original deep learning companies.
This launch is two years in the making, and it was well worth waiting for.
@maxvwolff
has been quietly building this since he dropped out of MIT to do YC in 2021. It took him a long time because it was very hard to build, and he didn't want to release it until it was ready.
Ozone raised $7.1m in seed funding and is launching its beta today!
Ozone is building the first AI-powered and collaborative video editing platform, designed to supercharge content creation for video creators and their teams.
Try Ozone now at .
This isn't just a fundraising announcement, it's the *real* story of Slope, from starting with a bad idea, to pivoting to a good one, to eventually raising $187M.
The thing that finally worked was the fifth idea of their second company.
At
@slopepay
, we’re excited to announce our $30M round led by
@USV
with major participation from
@sama
- bringing our total equity/debt funding to $187M. Since launching in Aug ‘21, we are over 8 figures in ARR and are a lean team of 18. In the midst of this excitement, I wanted
(5/25) Draftaid (): AI that automates the boring part of creating CAD drawings. It turns 3D models into the highly detailed fabrication drawings that manufacturers expect.
It’s such a great feeling when you finally complete your product vision and you can approach your marketing with boldness and authenticity (still can’t get myself to pay for marketing tho, so thank you brex)
If you want to switch off Carta, it's quite easy to do.
Even before the recent issue, the majority of recent YC batches had already switched to using Pulley.
@karrisaarinen
@joeblau
Common misconception is that it's difficult. It's not.
Here's what it involves: export a cap table from Carta, import cap table to new system.
You do need to contact your stakeholders on the switch, but given the recent news, many folks will welcome the switch.
Many Pulley
If you're looking for a startup idea with GPT, a good place to look is adapting it to work in some vertical. For a company to adopt GPT to automate some menial job usually requires a middle layer that integrates with their systems, and that's a good opportunity for a startup.
2/ The limiting reagent in the # of startups in the world is not the # of good ideas. I'd argue it is the # of high quality teams. A high quality team is 2-4 smart people who know each other well, have at least 1 technical founder, and are all serious about doing a startup.
W24 Alumni Demo Day is today!
Alumni Demo Day is one of my favorite YC traditions - where we let YC alumni see a preview of the batch before we open it to the world. Thousands of alumni come back every year to help and invest in the new batch.
New paper showing that when people do their own nasal swabs for covid, they get the same results as when healthcare workers do it for them. This should pave the way for at-home testing.
16/ My colleague
@KatManalac
made this fascinating infographic of how YC's top companies met their co-founder. College friends are by far the biggest source.
There’s one school absolutely dominating attendance at YC’s Startup School East. Not Harvard, not MIT. But Princeton! Some 40 students bused up this morning.
There’s gonna be a long line to meet alum
@bradflora
🐯
(1/21) Eggnog (
@eggnog_ai
): Youtube for AI-generated video. Eggnog is the only AI video generator with character consistency, essential for serious videos. Launched 1 week ago, and they've already had videos go viral. Team from MIT / Harvard / Meta / Quora.
.
@garrytan
started a new tradition where every Friday, founders would demo their products to a live audience, and then we'd go out for drinks at a neighborhood bar. Because of AI, there were a lot of products this batch with incredible demos.
We've now tried every point on the spectrum: fully remote, hybrid and fully in-person. So now we don't have to worry if we're being luddites: in-person YC just really is the best.
It's YC Demo Day!
I sat down with
@garrytan
,
@mwseibel
and all the YC group partners to film this video about the W24 batch.
... actually, no I didn't, I just made it using
@toinfinityai
.
The companies in this YC batch are inventing the future.
8/ Building and launching your own products, end-to-end, is especially important experience to have. Building software at large companies means tweaking features of large existing products. That's a very different skill from launching your own stuff.