Review — “The Launch Pad” by Randall Stross
What is it really like to be involved with Y Combinator? “The Launch Pad” is the newest and most complete piece to date. While other writers have penned articles about YC (notably Stephen Levy in Wired magazine), this is the first book. It follows the Summer 2011 class of Y Combinator from the applications/interviews, during the program and Demo Day, through to the successes and failures the startups have experienced to date. In addition to this class, the author has interviewed a variety of founders across numerous YC classes to provide a more detailed history.
If you don’t know much about Y Combinator, I would highly recommend this book. It’s a very thorough picture of what it’s like for the founders of the startups going through YC (including what it’s like to get accepted!) as well as insights into the YC partners’ experience. It details a microcosm of the startup experience; initial successes, technical breakdowns, pivoting business models, and debates about age and gender. I found it a nicely complete book.
For people who are familiar with Y Combinator, you will probably enjoy it but you will likely not learn much more than you already know. There were some details that I hadn’t heard before, like the exact investment splits of the early YC partnership. And there are a lot of interesting stories and anecdotes about a lot of different YC founders and YC partners. But there’s little that would be unfamiliar or groundbreaking if you’re a regular Hacker News reader.
Overall, if you’d like to get more detail and color into the Y Combinator experience, check out “The Launch Pad.”
Thoughts on scaling seed accelerators
One of the more interesting phenomenons I see in seed accelerators is how they scale, and in general I see three models. There’s the YC model, which features large class sizes (>25 startups per class) and/or continually adds more and more startups to each class. There’s the TechStars/franchise model, which keeps class sizes largely the same (5–15 startups per class), but scales by adding more classes per year and/or more franchises in different cities. Finally, there’s the quality (aka default) model, which doesn’t change class sizes or frequency, but “scales” by getting better startups through the doors. (The last model is effectively just keeping the status quo and not scaling; I’ve included it here to be complete.)
There are only a small number of accelerators that use the YC model: Y Combinator, 500startups, and Startup Chile are the top examples. They have developed programs which scale with more startups, and through portfolio theory should have a better chance of generating a solid financial return on their investments.
Many accelerators use the TechStars model; TechStars in particular has popularized it through their Global Accelerator Network (GAN) with which ~50 accelerators are affiliated. In this model class sizes are “no more than 10–20 companies at a time” involving “40–80 mentors”. By capping the size of each class, it does limit the scaling potential; instead of adding more startups per class these programs add classes or add similar franchises in new locations. Clearly the GAN has taken a stand that it’s more important to provide the in-depth, personal mentoring for all startups in their programs than it is to scale to larger numbers in a class.
Finally, a lot of accelerators are really in the default model; these programs either don’t have enough quality deal flow or cash to invest to expand the number of startups they fund. In this case, they need to scale the quality of the startups they do fund by continually marketing their program so they can raise the bar for admission.
Which is the best of these models? There’s no definitive answer. I’ve discussed this with a number of people and currently believe it depends on the startup. Susan Cohen, a founder of Priceline.com and a PhD researcher of seed accelerators at the University of North Carolina, was particularly helpful and shared with me her thoughts from her research to date. If you’re coming into a program with just an initial idea, the programs that provide in-depth mentoring can help founders iterate on their ideas and business models faster because of the intense mentoring. But for startups going into a program with a well-established seedling business, the YC model can provide the time/space to hack and iterate on a product because of the lighter-touch mentoring. I’d be interested in your thoughts; please send me an e-mail with yours!
Seed-DB three big new features
I’m very happy to officially announce three big new features in Seed-DB. Some of these have been live for a while, but together they make the site much more useful.
1- Accelerator ownership
I’m proud to announce that accelerator owners can now get access to edit the entries of their accelerator and the startups they fund on Seed-DB! Access will be granted manually to verify that only program partners/administrators are given access. But once granted, you’ll be able to edit your own information, add startups you’ve funded, and provide information on when your program is open for applications. To get access to your program, follow the instructions on the guide page for accelerators.
By doing this, I’m hopeful that the data on Seed-DB will be even more up-to-date, since the program administrators will be able to make any changes without me (Jed) being a bottleneck.
2- Application dates
Accelerators can now provide information on application dates to their programs! Simply provide the date applications open, the date they close, and a link to the application page. If your program currently is open for applications, it will be highlighted on the list of seed accelerators. And if you’re a startup wondering which programs are currently open, just check out a single page: http://www.seed-db.com/accelerators/apply
I hope this will help accelerators better market their programs to interested startups, and it will help startup founders discover and apply to as many programs as they fit.
3- Funding over $X
Have you ever been curious how many startups have raised more than $X in funding, where X is a value that you care about? Well now you can. To get the information, use the URL in the form: http://www.seed-db.com/companies/funding?value=X where X is the funding level you care about.
For example, as of today there are 237 companies in Seed-DB that have raised >=$1million in funding: http://www.seed-db.com/companies/funding?value=1000000 64 companies have raised >=$5million and just 28 have raised >=$10million.
Finally, to see data on all the companies that have achieved an exit (currently 102 startups), simply check out this page: http://www.seed-db.com/companies/funding?value=exit
Please remember that the “H” / “M” / “L” letters next to the exit value column represent the Seed-DB confidence level in that particular value. “H” is reported/verified information, “M” is rumored value, and “L” is an educated guess.
Summary
Thank you for reading to the end of this post. I really value feedback; please send me a short note or comment below on what you liked, what you didn’t like, or what you’d like to see more of in this newsletter. And if you liked it, please forward it to a friend!
Jed Christiansen 