The power of Y Combinator has always been his network. The legendary Silicon Valley startup accelerator is known for fusing mere ideas in some of the most successful companies in tech, including Reddit, Airbnb, Dropbox and Stripe. And in turn, those companies’ mythologies often commemorate crucial early contributions from people within Y Combinator’s powerful circles.
But Y Combinator’s success has also spawned a deluge of imitators, and today’s entrepreneurs have many incubators, accelerators, and startup schools to choose from. Why apply at YC? If you ask Garry Tan, who will take over as YC’s president and CEO next year, the answer is simple: the network is still unbeatable.
Tan, originally a designer and software engineer, went through the gas pedal himself in 2008 as the co-founder of Posterous, a blogging platform that was later sold to Twitter. In 2010, he returned to YC as a partner, where he spent nearly five years advising more than 1,000 companies. He also created Bookface, an internal LinkedIn-meets-Facebook for YC alumni to seek advice, post job openings and exchange gossip.
It is this last contribution that Tan is most proud of. book face, he once said, is “the biggest successful founder mafia ever created.” As he prepares to take over the reins of Y Combinator, it’s this alumni mafia that Tan plans to tap into. The next chapter of YC, as he sees it, is about harnessing the talent of the past to secure his place in the future.
Tan’s third act with YC comes at a challenging time, as fundamental assumptions about how startups and tech companies should operate shift. YC has just started reintroducing in-person programming after two years of outside cohorts—a reversal from the previously strict requirement to move to San Francisco. The change prevented some founders from applying, but also allowed non-U.S. companies to make up more than a third of recent cohorts.
At the same time, YC competes with dozens of other startup accelerators, venture studios, and incubator programs for the best startup entrepreneurs. When Tan went through the program, in 2008, YC’s model was one of a kind. Now founders with a good idea have an embarrassment of options to choose from; some seedling startups get millions of dollars from investors right away, while cash investors look for a place to put it.
Perhaps for that reason, YC sweetened the deal for its most recent group of founders, increasing the standard investment from $125,000 to $500,000. That’s more than double the size of other accelerator programs and more than the standard angel investment for most pre-seed startups.
“No other accelerator can match that investment package,” said Randall Stross, the author of The launch pad, a book that followed YC’s summer 2011 cohort, which featured companies like Genius and Caviar. “And no one else can come close to matching its roster of successful alums.”
