[graycat]

> Counter-intuitively, their success was pg's essays plus HN, which stuffed their funnel with high quality applicants.

Yup, but there's at least one more: YC took applicants from anywhere provided that they could get to the YC site. VCs want to fund only founders with offices the VCs can easily drive to, and that is very limiting. YC has been able to fund founders from Silicon Valley, NYC, Boston, DC, all points between, and many points outside the US. Biggie difference in size of good stuff entering the funnel.

The VCs have some rigid ways of doing business. The best of the VCs had good returns, but on average the VC returns have not been good. Some of this rigidity seems to be enforced by the LPs. But in general the rigidity has seriously hurt the VCs.