Smash Notes

Back to Garry Tan on the Past, Present, and Future of YC, with Garry Tan.

How Did a Summer Internship Experiment Grow Y Combinator?

On the show, Garry Tan says the program started as an experiment by Paul Graham and Jessica Livingston to give small amounts of money, almost summer-internship style. His own batch paid only about $13,000. Twenty years in, YC is going on more than 100 billion-dollar companies.

People apply online, so a founder does not have to know anyone. YC accepts about 1% of the people who apply. Getting in brings half a million dollars for about seven percent of the company, and he says a YC partner matters more than the money. He is one of 15 people who select companies: they read the application, watch the video, meet the team for 10 minutes, and decide yes or no on half a million dollars within the 10 minutes. He thinks Shark Tank has zero billion-dollar companies.

The first YC batch had Reddit with Steve Huffman and Alexis Ohanian, plus Sam Altman, whose company Sequoia funded. He believes another company sold to Amazon. The batch succeeded, so they kept going, and the internship-sized check of about $13,000 became half a million dollars.

Grokipedia·Jessica Livingston·Shark Tank

Transcript

Garry Tan on the Past, Present, and Future of YC ·

The Peel with Turner Novak

More from this episode

  1. Why Did Garry Tan Call Going Direct the Counterbalance After Reporters Refused to Publish a Proposition?Garry Tan sent an understanding of an actual proposition to a number of reporters, and the reporters would not publish it.
  2. How Did Airbnb Make Y Combinator Write Bigger Checks?On The Peel, Dropbox becoming a billion-dollar startup around 2011 was called one lucky year.
  3. How Did Office Hours Turn Garry Tan Into an Investor?Garry Tan joined YC with no plan to invest. After he raised and quit his startup, he was really burnt out and needed to recuperate.
  4. How Did Coinbase Carry Initialized Fund One?Initialized Fund One was a $7 million fund that returned more than 55x DPI. Most of that return came from Coinbase and Instacart.
  5. What Share of Giant Startups Came From Y Combinator?Garry Tan says Y Combinator is a managed marketplace for the smartest people starting the next companies, and he calls the setup a good thing.
  6. Why Does Surviving Rejection Mark a Y Combinator Founder?Garry Tan says 99% of people who apply to Y Combinator end up getting a mortal ego wound by being rejected.
  7. How Many Y Combinator Applications Get Rejected?On The Peel, Y Combinator gets about 80,000 applications a year. Something like 78,500 of them are mortal wounds, the rejections handed out.
  8. Why Do Two Y Combinator Years Beat Twenty in Venture?Two or three years of YC time as a partner is equivalent to 20 years in venture. The 15 partners are practitioners of product market fit.
  9. Why Did Y Combinator Stretch the Batch to 13 Weeks?Garry Tan says Y Combinator just extended the program to 13 weeks. The team talks to people about how things went and what can be done better.
  10. How Did Bathroom Notes Get Airbnb Funded Early?The weekly growth chart on bathroom Post-it notes is why Airbnb raised from Sequoia before demo day.
  11. Why Did Y Combinator Build Bookface?Bookface is internal software at Y Combinator. On The Peel, Turner Novak had heard about Bookface and asked whether Garry Tan made it. Garry Tan said yes.

People

More answers like this

The other side

More with Garry Tan

Related episodes

Plays from this note through the rest of the episode.

Note

Weekly highlights

One letter a week.

The notes worth hearing, with the minute they were said.