Silicon Valley

The outer ring of support is Silicon Valley itself, and the value it adds is significant. There's no question you can start a successful startup elsewhere. There are plenty of examples to prove that. But even the most ardent boosters of other cities wouldn't claim they're at parity with the Bay Area. All other things being equal, Silicon Valley is the best place to start a startup.

最近あらわれたYCに似た組織の多くは、活発なベンチャーの共同体を、ある特定の街につくることを目標に作られている。それをY Combinatorが目指したことはまったくなく、そこが大きな違いだ。YCをボストンで始めたとき、目標は起業家を支援することであって、ボストンを支援することではなかった。最初のサイクルの後で、すぐに私たちがシリコン・バレーに支店をつくったのは、そのほうが起業家にとって良かったからだ。
Most of the YC-like organizations that have appeared in recent years have been created with the goal of enriching the startup community in some particular town. That's a significant difference, because that was never our goal with Y Combinator. When we started it, in Boston, our goal was to help founders, not to help Boston. Which is why after the first cycle we immediately branched out to Silicon Valley―because that was better for founders.

I know how much better the Valley is than Boston because for the first several years YC alternated between them every 6 months. Founders from other places are almost always surprised when they get here by the breadth and depth of support for startups. The Bay Area is for startups what LA is for the film industry. Large numbers of the people you meet by chance have some connection to it.

だが私は本当のところ「ベンチャーの拠点を置くのは、西海岸のほうがいいか他の都市のほうがいいか」なんて質問は脇においておきたい。というのも、人々はY Combinator的なものに応募するとき、そんな質問で決めたりしないからだ。
But actually I'd rather leave aside the question of whether it's better to base a startup in the Bay Area or elsewhere, because that's not the question one is deciding when deciding whether to apply to something like Y Combinator.

Y Combinatorには3カ月しかかからず(どんな学校よりも短い)、その後ベンチャーは好きな場所に引っ越してかまわない。だが私は正直なところ、シリコン・バレー以外の街に拠点を置くことを望むベンチャーにとって最高の方法は、YCのときは西海岸に来て、その後、その街に戻ることだと思う。大志を抱く学生にとって最適なプランが、しばしば「大学時代はたとえばボストンに住み、卒業後は故郷に戻る」になるのと同じだ。起業家は少なくとも西海岸を検討してほしい。そうすればシリコン・バレー以外の街に企業の拠点を置いても、それしかなかったのではなく選択した結果だ、と自分で納得できる。
Y Combinator only takes 3 months―less than any school―and afterward startups can go wherever they want. So I honestly believe the optimal plan for a startup that wants to be based in some other town is to come to the Bay Area for YC, then go home afterward, just as the optimal plan for ambitious students is often to go to, say, Boston for school, then come home afterward. Founders should at least take the measure of the Bay Area, so they can be sure that if they base their company in some other town, it's by choice and not by default.

Intros and Connections

I hesitate to make too much of this, because a lot of potential applicants overestimate the degree to which the value of YC is in the introductions we can provide, but the fact is that we are now pretty well connected.

Startups benefit from these connections in several different ways. One is that between our own connections and those of the alumni we can arrange intros to almost anyone. One founder wrote:


Last week I spent over 3 days searching in my own non-YC network, which includes PayPal mafia mind you, for a contact at some really random data company. No results. Then I emailed the YC list, and in 5 minutes, someone offered a 2nd degree connection. In under 24 hours, someone offered a 1st degree connection.

YC出身者にはのタダでサービスしたり、特別なアクセス権をくれるハイテク業界の多くの企業と、さまざまな形式の取引をしている。大部分は話せないが、YC出身者に聞けば「たしかにあったよ」と言うだろう。話すことができる取引の1つは「YCから資金を貰ったベンチャーはInstant Personalizationにアクセスしていい」というFacebook社との取引で、以前はごくわずかな大企業しか利用できなかったものだ。We have deals of varying degrees of formality with many companies in the technology world either to give free services or special access to YC-funded startups. We're not supposed to talk about most of them, but if you ask any YC alum they'll confirm their existence. One we can talk about is the deal with Facebook giving YC-funded startups access to Instant Personalization, which previously only a handful of big companies were allowed to use.

We also have connections to most companies that could be described as "platform companies," which enable us to smooth out difficulties that arise for startups building stuff on their platforms. We often host events where they send people to talk to YC startups.

これほど良い人脈に恵まれているのは、私たちがとりわけ口が達者だからではない。[4] たくさんの最高の企業に投資をしているからだ。だからベンチャーのコミュニティーに近づきたいと思う企業は、私たちとの関係を作るだけで、何百ものハイレベルのベンチャーに、いっぺんに近づくことができる。同様にベンチャー関連について書くレポーターは、私たちに電話すればiPadのアプリを作る企業であれ、オフィス・シェアをする企業であれ、何を書いてたって実例をいくつか紹介してくれると知っている。
The reason we have such good connections is not that we're particularly good schmoozers. [4] It's because we have a large number of really good portfolio companies. So any company that wants to engage with the startup community can just plug right into us and get access to hundreds of high-quality startups in one shot. Similarly, reporters writing about anything to do with startups know they can call us and odds are we'll be able to give them intros to multiple examples of whatever they're writing about, whether it's companies writing iPad applications or companies sharing office space.

YC出身者のネットワークはとても広く、強く結びついているので、YCから資金を貰ったベンチャーをいじめる投資家や企業も、普通はやめさせることができる。[5] だがシリコン・バレーの人々はこの人脈の力を知っているため、この力の大部分は抑止力だ。現実にYCから資金を貰った企業に意地悪いじめようする人などめったにいない。ベンチャーを搾取する投資家というひどい話も、私たちが資金を供給したベンチャーではめったに聞かない。めちゃくちゃな条件書など、まずお目にかからない。[6]
Because the alumni network is so large and tightly knit, investors or companies who try to maltreat a YC-funded startup can usually be made to stop. [5] But because everyone in the Valley understands the power of this network, most of its value is in deterrence: in practice people rarely do try to maltreat YC-funded companies, because they know it wouldn't be worth it. The kind of horror stories you hear about investors dicking over startups rarely happen to those we fund. We almost never see broken termsheets. [6]

Social Events

Initially the only social events were the weekly dinners. We've gradually added more, and I think now we have enough. We don't want to have too many. Though founders often become close friends through YC, that's not its primary purpose. Plus social events organized by sponsoring institutions are often lame; in a true community people organize their own.

In the first week or two of each cycle we host a party at our house for all the founders in that batch and their SOs, so everyone can get to know one another. There is another usually somewhat less restrained party at the other end of the cycle, after the investors leave on the last day of Demo Day. We also now organize happy hours at bars near YC; the first was this year, and founders liked it, so we're going to organize more.

Early in YC's history we used to take each startup out to dinner at some point during the cycle. Now that we've grown past the point where we can do that, we invite several at a time over to our house for dinner instead.

We host a reunion dinner for each batch at YC. Because the time scale is so fast in the startup world, we don't wait a year: the reunion dinner is usually about 6 weeks after the end of the cycle, because that's when startups running into headwinds start to get discouraged and need cheering up.

We encourage founders to organize their own social events as well, and they often do. These usually persist past the end of the YC cycle. The last couple batches have organized their own regularly scheduled dinners to replace the YC dinners once the cycle ended.

There's a natural tendency for founders to stick together after the cycle ends, because as well as having been through the same experiences together, they have a lot in common as people. As one founder put it:


One of my goals since my last job was to stop working with mediocrity and find/surround myself with people smarter than I. YC definitely provided the quality of people I needed to be around.


We fund a lot more startups than we used to. The first YC cycle in summer 2005 had 8 startups. The most recent, in summer 2010, had 36.

There are two reasons we've chosen to grow: that it's better for the startups, and that it's better for us. It's better for the startups because a lot of the benefit startups get from YC is from the other startups―both those in the same batch and the alumni―and the more startups there are, the more help a new startup can get from them. The more startups there are, the greater the chance there's another that's the intended user of whatever you're building, or that has a founder who is an expert on some problem you need to solve, or knows someone (or is someone) you need to reach.

Being big also helps the startups indirectly, because it makes other people and organizations more willing to engage with us and thus with them. Famous people are more willing to come and speak when audiences are bigger. Investors are more interested in coming to Demo Day when there are more companies presenting. Other companies are more interested in partnering with us, reporters more interested in talking to us, etc, etc.

The other advantage of being big is that it helps us learn faster. The more startups we fund, the more knowledge we get not only about startups but investors. We've now observed the trajectories of hundreds of startups, and seen the results of thousands of interactions between startups and investors. This lets us predict outcomes even in quite rare situations.

This effect is compounded by the fact that at YC the startups are advised by a small number of people doing it full-time. Because we've not only funded such a large number of startups, but also advised them all ourselves, we may now have more data in our heads about early stage startups than anyone else. The only person who's funded more is Ron Conway, and he may not have had such close interactions with all of them.

The danger of being big is that we might get spread too thin. We're acutely aware of this danger, because we've had 5 years' practice growing, and at each point in our growth we've thought about it. We've been careful not just to eliminate bottlenecks as they appear, but also to monitor whether startups are getting enough attention. That's why for example we wrote the office hour booking software so it shows us if demand is satisfied.

Of course the best test of whether we can handle our scale is how well the startups do when they come out the other side. That's the ultimate measure of our performance, and certainly the one applicants should care most about. Fortunately everyone seems to agree that our most recent batch, which had 36 startups in it, was the best yet. So whatever the limit of our model is, we still haven't hit it. [7]

We can speak from experience about being both big and small, because we were small before we got big. Big is better.

The Goal

The overall goal of YC is to help startups really take off. They arrive at YC at all different stages. Some haven't even started working yet, and others have been launched for a year or more. But whatever stage a startup is at when they arrive, our goal is to help them to be in dramatically better shape 3 months later.

For most startups, better shape translates into two things: to have a better product with more users, and to have more options for raising money. The ratio varies depending on where the company is. A startup that's just starting will want to work more on the product, while one that's already launched will usually want to focus more on investors.

だがどんな段階のベンチャーであっても、YCに熱中したことによる恩恵を得る。それはたぶん、YCの雰囲気にいちばんぴったりな言葉だ。3ヶ月間は寝ても覚めてもすべてがベンチャー。周りのすべてが -私たち、同期の他の起業家、YC出身者、講演者、投資家、そしてシリコンバレー全体が- あなたのベンチャーが成功するよう、協力したがっている。そんな雰囲気の中では、嫌でもやる気が湧いてくる。そしてそんな桁外れのやる気こそ、ベンチャーを立ち上げるといった困難に立ち向かうときに必要なものだ。
But startups at all stages benefit from the intensity of YC. That's probably the best word to describe the atmosphere. For 3 months, it's all startup, all the time. Everyone around you―us, the other founders in your batch, the alumni, the speakers, the investors, and the Valley itself―wants to help your startup succeed. In that atmosphere it's hard not to be highly motivated. And that kind of extraordinary motivation is what one needs to do something as difficult as starting a startup.

As one alum wrote after reading an earlier draft:

火曜の晩にY Combinatorに着いたときのざわめきや、起業家たちのエネルギーや興奮があふれている様子を伝えることができないのが残念です。YCについて考えたとき僕の頭に浮かぶのはそれなので、周りの人から「YCは何がいいの?」って聞かれると、そう答えてしまうんです。

It's a pity that the piece can't convey the buzz of walking into Y Combinator on Tuesday evening, and the general energy/excitement of the founders. That's what comes to mind for me when I think of YC, and it's what I describe to others when they ask why they should do YC.

Many founders describe the 11 weeks leading up to Demo Day as the most productive period in their lives. Though YC continues after the 3 month cycle, and the alumni network is an increasingly valuable resource, those 11 weeks are still the most important thing. You can't make people something they're not, but the right conditions can bring out the best in them. And since most people have way more potential than they realize, they're often surprised what they're capable of.


[1] この比喩は「自分たちを偉そうに見せたがっていると思われる」と議論になったが、その大学に行ったハージが「そっくりの雰囲気だったよ」と言ったので、そのままにしておいた。
[1] There was some debate whether to keep this analogy, lest it seem a pretentious comparison, but I kept it after Harj, who went to college there, insisted the atmos was in fact very similar.

[2] 講堂を借りてデモ・デーを一般公開したら、とても多くの投資家が一同に集まるので、彼らに会おうと何百ものベンチャー投資家が集まり、聴衆はずっと多くなるだろう。それがデモ・デーを一般公開しない理由だ。一般公開したら投資家の注意を惹こうと競うYC以外の企業でいっぱいになってしまう。
[2] If we got an auditorium and opened Demo Day to the general public we'd have much larger audiences, if only because hundreds of other startup founders would come for the opportunity to meet such a large concentration of investors. Which is why Demo Day is not open to the general public. If it were, the audience would be full of other companies competing for the investors' attention.

[3] デモ・デーでプレゼンする前に、もうベンチャー・キャピタルとの専属契約を済ませているため、投資家から熱い注目を集めるベンチャーも稀にある。今までのところそれが起きたのは、Heroku社とAirbnb社の2回だ。
[3] On rare occasions, startups attract so much investor attention before Demo Day that they don't present because they already have a VC deal with a "no shop" clause. That has happened twice so far, with Heroku and Airbnb.

Though it might seem great to raise series A before Demo Day, we don't encourage most companies to try. It's risky to get into series A negotiations too early, because these draw the founders' attention away from working on the company and often end in a no, whereupon the company would be screwed on Demo Day because they'd have neither a deal nor impressive progress on the company to present. But if VC interest crosses a certain threshold, we'll advise a company to risk it and seek series A, whereupon we shift into introducing them to VCs.

[4] 実は今ではハージを雇ったので、特に他の企業とのつきあいでは、ずっと話すのが上手くなった。
[4] Actually we are now much better schmoozers since we hired Harj, who is among other things in charge of relationships with other companies.

[5] まるで核兵器を持つ無法国家のようなレコード会社は例外だ。私たちも、他の誰であっても「レコード会社と関わるようなベンチャーを立ち上げるのはやめろ」と警告することしかできない。
[5] Except for the record labels, which are effectively a rogue state with nuclear weapons. There is nothing we or anyone else can do to protect you from them, except warn you not to start startups that touch label music.

[6] この2年間というもの、お目にかかったことがない。
[6] Currently we haven't seen any for about 2 years.

[7] 現在、YCのバッチがとても大きいのは確かだが、起業家は自分のバッチで、昔みたいに他の起業家すべてと知り合いになるわけではない。彼らは今でも、ほぼ同じくらいの数の人々と知り合っており、その数が全体に占める比率がちょっと減っただけだ。
[7] It's true that because YC batches are now so big, the founders don't each get to know all the other founders in their batch, like they used to. But they still get to know about the same number of people; that number is just a smaller percentage of the total.