| Paul Graham, Black Swan Farming: https://paulgraham.com/swan.html > "The two most important things to understand about startup investing, as a business, are (1) that effectively all the returns are concentrated in a few big winners, and (2) that the best ideas look initially like bad ideas." _initially look like bad ideas_ meaning "we can't pick them out of the crowd of other bad ideas" > "there is probably at most one company in each YC batch that will have a significant effect on our returns, and the rest are just a cost of doing business" > "For that reason one of my most valuable memories is how lame Facebook sounded to me when I first heard about it." > "We'll probably never be able to bring ourselves to take risks proportionate to the returns in this business." So it's not like this model is alien to Our Kind Hosts at YC. They understand that this is a crap shoot with a slightly tilted table, but they're optimising for staying out of the zones where everybody else is betting and not that much more. To be remembered: if you're having a hard time getting funded, the VCs are also having a hard time funding you, because the huge returns go to things that look odd, lame, and weird. For the most part. |
Do you think this still applies, given recent waves of following the crowd in the last few years like crypto, and now AI? It seems that YC is actually in exactly the same hype zones as everyone else these days.