I, like many geeks, love the Ycombinator programme. It was really the first of its kind, and was started by Paul Graham and his friends in 2005.
About YCombinator (YC)
What is it? A three-month long programme to help start startups. Founders (you) get ~$15-20k in “seed” cash so they can live without any other commitments for the three months, in return for ~6% equity in the business. (Thus, being accepted immediately values your business at ~$300k, not that this really matters.)
During those three months there are weekly dinners with the ~15-30 other companies accepted into the programme. YC specifically doesn’t offer office space, but these regular dinners and office hours with Paul Graham provide regular contact and guidance from other startups going through the same issues you are. These dinners also feature guests/speakers from across the startup/tech industry.
At the end of the three months is a Demo Day, which is attended by some of the top VC’s and angel investors in the US. (I’ve heard anecdotally that as YC has established its brand, Demo Days have become much better attended.) So in addition to helping get your startup and demo ready, YC puts you in touch with an incredibly ecosystem of VC’s and advisors to take you to the next stage.
Since Ycombinator became successful, there have been efforts around the world to try and copy the “secret sauce” which makes YC a success. These include:
But while each of these other programmes are broadly similar to YC, they’re actually fairly different. What I consider to be broadly similar is:
- For small teams of startup founders to work on their own ideas
- Defined term of programme
- Funding – for living expenses while on programme
- Education – intense period of product & business advice
- Contacts – help you make appropriate contacts to help you in the next stage
- Demo Day – opportunity to pitch to potential funding sources and advisors
I am writing my dissertation in order to put a “framework” around the YC “special sauce.” If you’re thinking about setting up something like YC, what do you need to include and what do you need to avoid? How do your goals for the programme help or hurt its eventual chance for success? What will truly help entrepreneurs, and how do you make sure you do that in the programme?
So this is what I’m going to be spending a lot of time on this summer. I hope to release an early draft or two openly to get comments, and then release my final paper when it’s finished at the end of August. I hope that providing a way to think about YC will help other people as they set up similar programmes, hopefully world-wide!