YC has innovated in a lot of really promising ways, expanding the partnership, expanding access, scaling successfully, and doing some new things.
Succession is one of the biggest challenges in organizations, and navigating it successfully is a big win.
Now their valuations are sky-high, and they've raised an incredible amount of money, but it seems like a big chunk of YC people (people working for YC, not in the program) haven't really successfully led a company to a big exit (IPO or $100m+ cash buyout).
PG: Sold Viaweb for ~$50m
Sam Altman: Sold Loopt for ~$43.4m after raising ~$30m
Anne Wojcicki: Raised $191m, no exit
Ben Silbermann: Raised $1.3bn, no exit
Joe Gebbia: Raised $2.3bn, no exit
I'm sure they're all very bright people, but at the end of the day, these aren't companies that have been profitable or really been sustainable. They're great resources for how to raise lots of money, sure, but are they people who can speak at any great lengths about building a long-standing business?
I don't mean to sound incredibly negative about YC; I want to keep a level head when looking at them and what they offer.
I'm talking about YC, not the companies of these specific YC partners. YC has done well through the transition. The best measurement for that is not "have YC partners exited their own firms at huge profits", but "do they provide meaningful help to people joining YC, do they bring great companies into YC, and do they make the tech industry overall better". I think the answer to that is pretty clearly yes.
YC open office hours, the YC fellowship (which hugely benefits remote people), expanding the partnership, expanding YC into new areas (hardware, bio, real science), etc. are more relevant than that Loopt was 3 years too early :)
Obviously it's still a work in progress. Would be interesting to look back in 10y.
For building a long-standing product or business, I would argue that Pinterest, AirBnB, 23andMe, GMail, and Yahoo Mail all qualify, as does YC itself. That's why they haven't exited: Ben/Joe/Anne are all still building their businesses.
For exiting: PG/TLB/RTM (Viaweb), Kevin Hale (Wufoo), Justin Kan (Twitch), Michael Siebel (SocialCam), Paul Buchheit (FriendFeed) and Alexis Ohanian (Reddit) all exited for F-U amounts of money. Sam Altman (Loopt), Dalton Caldwell (iMeem), Garry Tan (Posterous), Qasar Younis (Talkbin), and Geoff Ralston (Lala) may have, but it's unclear from public documents whether the acquisitions of their companies resulted in a significant payoff to them after the liquidation preferences of their investors are taken into account.
If you want to affect the world through business, the type of business you'll start is a startup. Counter-intuitively, it may be true that sustainability doesn't necessarily matter for a startup. If so, then sustainability in business doesn't matter for affecting the world.
That seems like dangerous thinking, and I've been trying to escape the conclusion. But since the home runs are how VCs make their returns, why is it a bad thing if 9 out of 10 startups eventually fail? And if it's not a bad thing, then why decry companies for being unsustainable, or the valley for funding them?
Yeah, I can't think of a leadership handoff that's gone this smoothly - no loss in continuity, while at the same time launching new ventures[0], partnerships, and programs as well.
[0] pun intended :)