[slg]

Jared made the comparison to S06 and it might be interesting to note that was the worst performing class in YC history in terms of percentage outcomes for each company. 73% of those companies are dead, 9% are still alive, and 18% got exits[1]. Although YC almost certainly cares more about money than percentage outcomes and one of those exits was Zynga buying OMGPop, so YC probably views that class as a success. Seems like they are taking on more risk for greater upside.

[1] - https://www.ycdb.co/

[hn_throwaway_99]

S06 was also the --first batch-- (Edit: I was mistaken, S05 was the first batch, but the rest still stands), well before YC was the "hit maker" its known as today, so it's not surprising that class didn't do as well as subsequent ones. The acceptance rate for startups into YC now is miniscule compared to what it was in 2006.

[slg]

>so it's not surprising that class didn't do as well as subsequent ones

But it also didn't do as well as the previous ones. I don't know when exactly YC got that "hit maker" reputation you are talking about, but S06 is an outlier regardless. The class directly before and directly after had failure rates of 29% and 38% compared to S06's 73%. The only classes coming close to the failure rates of S06 were in the lead up to the 2008 financial crisis.

[hn_throwaway_99]

Haven't done the math on this, but those early batches were so small - S06 only had 11 companies - so I think that statistically it's probably not that significant in any case, especially since there are huge grades of "success" even within the 3 categories of "alive", "dead", or "exit" on ycdb.co.

For example, in S06 there was one big exit (OMGpop), one company still alive and very well known today (Scribd), and one what I'd call "failure with an exit" - Xobni sold for a relatively low 60 million to Yahoo and was then shutdown.

Compare that with the batch directly after that, W07, which had 13 companies. Of those 13, it had one smash hit (Twitch) and one other relatively big success (Weebly). While it may have a lot fewer overall "dead" markers than S06, a lot of its exits look like acqui-hires or "OK buy our IP before we die" type exits. Better than an outright "dead" score I guess, but from the perspective of a VC like YC it hardly makes any difference. Point being I think it's a stretch to say there were really much significance in the "success difference" between S06 and W07 despite the differences in dead counts (with the possible exception that Twitch ended up being such a home run, but those are so rare they average 1 or fewer per batch anyway).