YC Season Every Season

Y Combinator is moving from two batches a year to four. You can read the Bloomberg article here as well as Garry’s tweet about it here. The first question that everyone asks is if quality will go down. The second is why now. Answering the first question is pretty easy. The second is more of an educated guess, but I think it’s a good one.

In terms of quality going down, I actually think the opposite. I think quality will go up. The first important thing to note is that they don’t plan to increase the total number of startups that go through the programs each year. They have mentioned specifically that they will move from ~250 startup cohorts to ~125 each. So, it’s still around 500 per year. These cohorts will get more attention in what feels analogous to a school having smaller class sizes. Definitely a good thing.

The second thing worth touching on quality wise is timing. In the old era of two cohorts per year there was a definitive lag between batches and there were definitely situations where good companies didn’t apply because they got momentum between batches. In the new model of four cohorts per year, there’s always a cohort around the corner so timing shouldn’t be a factor in the decision to apply. This is YC moving onto a more founder-friendly timeline. The underlying “why now” for a startup should never be because YC applications are due soon and they’re taking that off the table.

This is a good segue to the “why now” of this cohort strategy shift. One of the easiest things to point to at first was the AI craze. “Oh YC is just doing more batches because they don’t want to miss AI.” This was actually part of my first reaction and had some logical grounding in the fact that they ballooned cohort sizes to ~400 during ZIRP. Although I think the AI paradigm shift may have been a catalyst in there thinking around this - I don’t think it’s the driving factor. Really, I think this is just plainly better for startups - but it’s much harder for YC.

In the comments of one of one of the YC Partner posts they mentioned some of the operational complexity of moving from two batches to four. In the past, I think this was a real deterrent. The pure lift of it. It’s just going to be a lot more work for YC Partners who will move from being “in batch” ~6 months out of the year to ~12 months out of the year. This is the equivalent of being a college professor and getting your summers taken away. If you’re hard core, you don’t mind. If you anything else…

There’s an argument to be made that there could be a risk of Partner burnout or a decrease in their ability to explore their own ideas/theses outside “in batch” grinds. Generally though I think this is a strong move from Garry to continue to institutionalize YC and create an environment where only the “hard core” survive. Not by reinventing the wheel, but by simply doing more of what they do well. Garry led the charge here on content (video quality, podcasts, etc.) when he first stepped in and he’s doing it again with this batch strategy change.

The conclusion being that the “why now” is simply Garry’s leadership and willing to push harder on YC Partners. It has been working great so far and I suspect it will continue to in the years to come.

Sandhill Exclusive Content 

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• Zehra Naqvi, Investor @ Headline

  • Zehra Naqvi is a Consumer Investor at Headline Ventures, Angel Investor, & Columbia University Alumna B.A. in financial economics and art history. She also is the founder of the Z list, A next-gen newsletter community covering consumer news, VC investments, and the NYC tech ecosystem. X - @zehranaqvi_

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Key Takeaways Blog 👀

A few weeks ago we sat down with WeiWei Wu, CEO of Momentic, and Nikhil Gupta, CTO of Vapi, to explore the evolving landscape of software development––particularly how AI is transforming the industry. Check out our key takeaways post below to catch the highlights and favorite quotes from the discussion.

Talk soon,
Adam

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