Last week, we launched our Summer 2021 batch here at Y Combinator, the 33rd batch since our founding in 2005. We are now funding hundreds of companies each batch, and I’ve been reflecting on how we work with those companies during the batch and afterward, as they build their business.
Over the years, I’ve found that there is a common misapprehension about what we do at Y Combinator. People often believe that YC’s raison d’etre is Demo Day and fundraising — and that founders’ singular goal in applying to YC and completing our program is to increase their probability of executing a successful fundraise.
It is true that companies that complete YC’s core program have an easier time raising money from angel investors and venture capitalists. It is also certainly correct that raising capital is extremely important to early-stage startup companies as they finance their product development and the growth they plan and hope for.
But this begs an important question: why is it that YC companies have a better chance of fundraising success? Is it because YC is an effective filter: choosing only the best founders and companies? That is certainly one reason. However, there is more to this answer and it is fundamental to what we do. By joining YC, by going through our program, working with our group partners, and by becoming part of the YC community, each startup undergoes a subtle transformation into a company more likely to succeed. This is the real secret to YC’s success.
We are far more than a ticket to raising capital. We aim to change each YC company into a better version of itself — into a startup which has a better chance of surviving the bitter battle where only the fittest and best-adapted companies survive. The comparison of a startup ecosystem to the biological version is, of course, not a new one. We often extend the analogy and speak to a startup’s DNA — referring to the core company features which lead to success or failure.
Recently, I’ve realized that thanks to advances in biology there is now a way we can extend this analogy even further to better describe what YC does. Thanks to innovations from Nobel Prize winners Emmanuelle Charpentier and Jennifer Doudna, biology now has an effective gene editing technique called CRISPR. And YC is CRISPR for startups.
Startup founders with epic potential join YC. Their startups come in with their own DNA and we modify it, edit it, CRISPRize it, if you will, to include key alleles that make success most likely. What alleles?
- Product-Market Fit: How to think about customers and find the right way to deliver them value.
- Growth and Sales: How to economically and intelligently grow a customer base.
- Company Building: How to create the durable, long term infrastructure of a company. Especially, how to find and hire the right talent.
- Fundraising: How to best execute a strategy to raise the right amount of capital, at the right time from the right investors.
- Health: How to stay sane and strong while building a startup.
- Focus: How to move quickly while staying intensely focused on the goal.
- Leadership: How to believe enough in a startup that a founder can persuade others to join in the battle and to stay through the inevitable ups and downs.
- Ambition: This is perhaps the least understood, but most important effect of being a YC founder and part of the YC community. We aim to instill the belief that anyone, no matter where they come from or who they are, can change the world and create the next epic startup success.
Today, founders from around the world join YC. While most are very early in their startup journey, our goal is that by the end of the batch every one of them finds their trajectory transformed to give them the best chance to survive and thrive. YC’s “gene editing” doesn’t end there. We continue to work with founders as they build their companies, helping them recruit, raise a Series A, and grow.
At YC, we’ve seen every mode of success and failure with the thousands of companies we have funded over the years. We deploy that knowledge each batch to give YC companies every advantage we can. However, in the end, the secret to success of any startup lies squarely with the founders — their vision and their execution. We simply help those founders find the very best versions of themselves.