Scaling YC

One of the most common questions I hear is: “why has YC continued to grow our batch size?”.

For each twice-yearly batch, we receive thousands of applicants through our online application. We have always wanted to fund as many great founders as possible and are convinced that in the incoming torrent of applications there are hundreds of startups with epic potential, if we could only work with them and make them part of the YC community. Growing the batch not only allows us to accept more of these companies, it also has other benefits, including adding greater value to the overall YC network. The batch’s value itself grows with size as founders make more contacts, have more companies and founders to learn from, sell to, and with whom they can make lifelong friends.

But we took to heart a lesson on scaling, which many of us have lived in previous jobs and of which we always remind our companies: scaling too fast before you are ready can be fatal. When I led the team building Yahoo! Mail, the challenges of scaling and what could go wrong were obvious. Adding too many users, too quickly, led to painful outages and failures I won’t ever forget.

Therefore, we have grown our batches with deliberateness and care over the past sixteen years. Our first batch included eight companies, and we didn’t break one hundred companies in a batch until our twentieth. And then it took us another four years to fund two hundred companies in a batch. Scaling from eight to two hundred companies per batch was hard, but we managed it with care and by focusing on a few key aspects.

The first step we took was to shard our program into smaller groups at the same time as we acquired more physical space in which to operate. The physical space allowed us to continue to bring entire batches together for talks and all-batch events. And the smaller groups allowed YC group partners to focus on a set of companies that they could get to know intimately over the course of three months.

We also built a world-class software team over the years and have written software that helps in every aspect of running a batch. We have improved founder onboarding, alumni directories, our internal wiki and catalogue of startup advice, the Demo Day website and experience, and integrated Slack and Zoom into the batch experience. Software is also key during our admissions process, and here, too, we built a world-class team. This admissions team is solely focused on the all-important problem of sifting through the mountain of inbound applicants to determine who we should fund each batch and ensure we don’t overlook incredible founders.

Lastly, a YC batch is built around people and the great advice they give. We have continued to add experienced group partners to our team over the years and have created a visiting group partner program to supplement the team. In our latest batch we included five visiting group partners, and in the past year, we have promoted three (see here and here) new group partners.

Still, the number of inbound applications continued to grow. As we funded ever more companies and founders, we began to run into physical constraints such as the number of available parking spots, offices for office hours, and space for our weekly dinners. Then, in 2020 COVID-19 came along and imposed its own, very specific set of constraints upon us, including, most notably, the requirement that batches be virtual only.

As it turned out, going virtual freed us of physical limits and enabled us to experiment with an entirely virtual batch. This has allowed us to scale even further as our inbound interest from around the world has grown. A virtual batch forced us to document more, write more software, experiment with an all-virtual demo day, and all remote batch. In fact, this has allowed us to fund more companies than ever before. The Winter 21 batch will be the first batch with more than three hundred companies and the largest batch in the history of YC. Yet it is operating as smoothly as any batch I have seen. Ironically, although we are in the midst of such a dark time around the globe, I suspect this will rank as one of the best batches we have ever funded.

In a post-COVID world many of the changes we were forced to implement will live on just as several pre-pandemic experiences will return. But one thing is certain, the batch will continue to evolve just like it has over the past sixteen years. From our earliest batches VCs claimed that YC funded too many companies, that the batches were too large. They were as wrong then as they are still wrong today, and YC will continue to fund more and more epic companies.

This post was originally published on this site