Who Can Be A Founder?
YCombinator executed upon a simple idea: “What if we can encourage people who would never have founded startups to give it a try?” Seventeen years later, its greatest hits album consists of companies totaling 300 billion in valuation. Names like AirBnB, DoorDash, Reddit, Coinbase, Dropbox, and Stripe all emerged from what has become Silicon Valley’s most famous and successful accelerator.
Initiation
Founding a startup is risky and difficult. Conceiving, developing, and hustling to sell a product is challenging. This is made more difficult by the fact that allocating the time and energy this requires typically entails quitting one’s day job. This typically means the loss of one’s income. Absent access to generational wealth or having already achieved financial independence, some rather stark sacrifices are likely required.1
While there are romantic notions of world-changing technology constructed in an unassuming garage or in the lines of code typed in some hipster coffee shop, the reality is far less glamorous.
My personal experience consists of travel between Champaign, IL and Manhattan’s financial district, performed surreptitiously so my advisor would be unaware of my departures and returns. Around 4:00am, I would depart my girlfriend’s apartment2 and drive to Bloomington-Normal airport, approximately an hour away. I would stumble onto a tiny aircraft, fly to Detroit, then board a flight to Newark. AirTrain to Newark Penn Station, the PATH to WTC station, and a walk to the office just in time to begin a workday around 1pm EST. We’d work until well after dark and I’d follow my colleagues back to their apartment in TriBeCa. Once there, I would lay my head on an air mattress in the common area of a tiny two-bedroom apartment in which two guys, two significant others, and one exhausted graduate student would share a bathroom.3 We’d wake up, head out for another long day, I’d edit my master’s thesis with what remaining waking hours were available, then reverse the commute a couple days later after work, arriving back in the original apartment at a similarly unholy hour.
I was 23. And even this required the financial backing of a college friend’s father’s well-connected associate.
YC presented the opportunity to turn ideas into reality, creating founders who otherwise might have elected more stable employment and more reliable incomes.4 Moreover, their guidance, insight, and connections increased the probability that founders would find their market and ultimately, long-term success.
Imitation
If imitation is the most sincere form of flattery, then YC ought to be flattered. This twitter thread notes that other attempts have been made to create similar incubators, and most gravitate towards a model that essentially duplicates YC.
“Every idea sufficiently close to YC ends up as a YC clone. There's a sort of gravity well there. People in it are often in denial about this at first, but I know where they're going to end up.” - Paul Graham
There are certainly more good ideas worthy of investment than YC can support. There is also a challenge at scale, as the value of the “office hours” and mentorship that YC provides is diluted as its size increases.
Nonetheless, even these additional accelerators still dramatically limit who can become a founder.
Eventually, the practical implications of founding a startup exclude a large proportion of human beings capable of enormous economic productivity.
Most professionals have passed the age of air mattresses and ramen noodles and have acquired the trappings of adult life that are difficult to square with foundership.5
Iteration
The question is not whether incubation can help bring ideas to life that otherwise would have remained little more than figments and shards in a clever mind (it can). The question is how many more ideas remain locked in minds rather than catalyzed?
The lessons learned through YCombinator are now accessible. For instance, mean people typically fail. The next iteration, even if it largely duplicates the previous model, might have the advantage of lessons learned. Alas, the issue of who can become a founder remains. Potential founders, currently, must be willing to eschew stability and plenty of talented individuals, for legitimate reasons, cannot.
What would a better model entail?
Execution
First, a better model might immerse potential founders in an environment with other potential founders, and rather than turn them all into instant founders, would have them build products for current founders. This crucible would represent the best possible learning experience.
Second, a better model might instill the long-term thinking that generates the type of founder who nurtures an idea to its fullest rather than position that idea for swift acquisition. AE believes that increasing human agency represents a long-term perspective that benefits both society and the bottom line. Ensuring that the folks hired begin working in earnest on agency-increasing products instills the proper perspective.
Third, we’d encourage later career professionals to devote some time and energy to a project of their own. Informed by client work, guided and supported by equally seasoned colleagues, and compensated sufficiently as they do so, anyone with the talent and drive can become a founder. Better still, many of our clients become the first paying customer for the technology we develop!
Fourth, with the most common cause of startup failure being disagreements between founders, a better model would generate founders who had already collaborated in a professional setting.
Fifth, we could offer equity not only in the founders’ ventures, but the ventures of other incubated founders and client work as well. And therefore, founders, vetted by other founders, gain experience working with other founders, and receive insight and support from other founders.
We believe not billions, but trillions of dollars in economic value could be generated if everyone interested in and capable of becoming a founder could access the opportunity to do so. In concert with long-term thinking, technology developed would accelerate and enhance an already optimistic, futuristic worldview.
And possibly, unlike the 23-year-old on an air mattress in lower Manhattan eating leftovers, the road to the stars is a tad less rough.
1
For this, and other reasons (e.g. having access to friends and family who can fund such a venture), founding a startup is considerably easier for those from wealthier upbringings.
2
We have been married eleven years. She was awfully forgiving of the disturbance. I am grateful.
3
All five of us were graduates from the same university department, during the same year. In other words, ~10% of the graduating class were crammed into ~800ft2.
4
And the ability to afford meals more compelling than endless cups ‘o noodles.
5
Things like mortgages, rent, children, and other activities requiring some modicum of wealth and financial planning.