[fragsworth]

How can you really do any experiments on this kind of shit, when the real winning investments exist in front of a zipf curve?

You get one or two huge winners out of hundreds, and they are so huge that they are bigger than all the others combined. The investors care most about getting these rare winners, and if YC does any kind of controlled study on who becomes these winners, I don't believe there will be any statistical significance to speak of.

[fleitz]

If there is no statistical significance then it means that there is no difference in picking randomly and doing interviews for the rare winners.

Since the winners are what they are after they can omit the interview process.

[dllthomas]

That's not what "no statistical significance" means.

[fleitz]

Sorry, statistically speaking the difference in results of interviewing and not interviewing are insignificant.

I have a feeling that eventually there will be a Vangaurd of startups that will massively outperform traditional VC/incubators due to reduced management fees similar to index funds vs. regular funds.

[vasilipupkin]

On the one hand, it's probably true that experts overweight their own ability to pick winners. My guess is, PG is likely overestimating the ability of YC staff to actually identify good patterns simply because it's easy to draw conclusions from just a few datapoints but it's hard to draw statistically significant conclusions that hold up out of sample. However, I doubt that a startup index fund will outperform the best VCs and incubators simply because good deal flow is key, whereas in publicly traded markets, everyone has access to all deals. Having said that, I have no doubt that a VC index fund would outperform many of the VCs that are not that good

[jbooth]

There's also a question of how do you define the index fund. The S&P is pretty non-ambiguous. How do you define which startups are in the index? By the time they're definable as a real business, they're no longer early-stage startups.