Y Combinator's Demo Day loses luster | Hacker News Reader

Y Combinator's Demo Day loses luster

axios.com

125 pointssamizdis49 comments

I used to read the articles about the YC batches and the launch threads here, hoping for many of them to succeed and be interested in the various ideas. But later years I've stopped. First reason is because it's so damn many. If all of them had a launch thread here on HN it would probably be more than one a day.

Secondly because so many of them now feels like "X for Y". Or just X in a new geography.

From a TC article I googled from this week:

> MadEats is an online ghost kitchen food delivery service in the Philippines

That to me is nothing new, just a way to kill my local restaurants.

> An online store builder that claims to have a setup process 10x faster than Shopify.

Might be a cash cow and useful, but nothing exciting, eessentially Shopify in a different wrapping.

> Tinai aims to help modernize this with a digital bookkeeping service

Other than being in a new geography, it's nothing new.

> Membo: A premium way to grocery shop. Membo is a next-day grocery delivery service in Europe that optimizes for freshness and quality, instead of 15-minute speed.

We got many of these already.

There are of course exciting ones as well. But so much not-new that I just don't bother shifting through it all anymore.

> That to me is nothing new, just a way to kill my local restaurants.

At least in the Bay Area the ghost kitchen model seems to be a way for local food entrepreneurs to try new brands. I know of several brick and mortar restaurants that are operating ghost kitchens out of their storefront, along with “startup” restaurants operating from ghost kitchen commissaries.

One consistent theme I see here is possible stability for investors.

Bookkeeping works and is that crowded of a space, so maybe with enough cash they can get some ROI. Same for food delivery.

I’m not saying this is good, and I could be wrong here. This is just an observation.

But… if you look at what happened to music in the last 20ish years you see basically the same shift away from creativity and variety and a focus on repeating what works.

I think starting a company these days has become much easier without funding though, so real hungry entrepreneurs _can_ bring excitement and creativity to this game.

What I learned from several years of operating a consulting business building security teams for startups is that you probably have no intuition for which startups are going to be viable and which aren't. Certainly, the idea that you can evaluate their prospects from how exciting a single-sentence description is turns out to be totally false.

I think you're missing the point of parent comment (or at least the point I'd be making) - it's not that those descriptions make it seem like the business will fail, it's that those descriptions make me not care whether or not they fail. I suspect the person you replied to, like me, isn't disappointed because they want to cheer on a possible unicorn but because they want to cheer on startups that are doing interesting things.

Why does it matter whether any of us care whether they fail? That's not the point of YC.

They were commenting about their personal feelings, as am I. Neither of us have stated we think YC will do badly because of it.

On the other hand, while I don't think it's bad enough for YC to suffer massively, they have presumably been helped in the past by having a strong following of techy people who just like YC and who assume that a startup funded by them is likely to be interesting. Will they lose that reputation, and if so will it matter to how successful they are? I've no idea, but it's not impossible.

Because it implies interest in what these startups do.

The OP only said it seems that YC companies became less interesting over the years.

Yes, that's what I'm trying to convey. I know YC prioritize differently than me, and that is fine. Just felt like it used to be more aligned before.

The world is connected now & the Internet is in the deployment phase. Capital, like water, floods the low ground first and there are tons of zero-risk opportunities to roll out first world infrastructure in the rest of the world

I might be missing something - it’s early in the morning - but a VC at another investor says Demo Day isn’t that good, and Axios runs with a story saying as much?

I think capital is plentiful for quality companies so there are certainly options out there. But from what I can see anecdotally, YC is, now as much as ever, a fantastic opportunity to gain visibility to high-quality investors.

Isnt the story saying that the demo day itself is becoming less important, and deals are being signed before or outside of it? I didn't take it as disparaging YC, just that the "reveal" aspect of demo day has given way to a making deals on a one-on-one basis

That's... a pretty old story too, isn't it?

It’s an old story that only the dregs are left over by demo day?

It's an old story that a huge amount of fundraising is done around (and before) demo day. At least: that was very true 5 years ago.

Pretty much.

Immad Akhund (pg once claimed immad was the best at fundraising among all yc founders [0]) tweeted that the yc-batch valuations were at an all time high [1].

Y Combinator valuations are up from 1 year ago. Rest of seed market will prob follow. This YC batch:

Pre-revenue in non hot market: ~$15m (was $8m)

2nd time founder and pre-traction: ~$20m (was $12m)

$30k+/month/revenue or hot market: $25m+ (was $15m)

[0] https://news.ycombinator.com/item?id=2006095

[1] https://archive.is/GYIH0

Just realized how no traction can be nicely repackaged as pre-traction. Language matters!

Relevant Silicon Valley scene: https://youtu.be/BzAdXyPYKQo

Valuations everywhere are at an all-time high. That doesn't mean YC is a better value than other VCs.

What do these valuations even mean? At most it means that money is dirt cheap now.

Following YC launches, it seems to me like YC, after analyzing where they made their money over the last 15 years have taken the “spray and pray” model to the extreme. If it’s only one company per batch that makes most of the returns, you just need to make sure there are enough companies and let natural selection run its course.

The problem is this model doesn’t really work for traditional VCs - they can’t support so many companies (not just money but also partners attention) so there’s an adverse funnel.

Supporting that many companies is easier if you don't really support them. Toss them a little cash, tell them to get a shared house in SF for a months-long hackathon and hope for the best. After the first 12 months, start looking more closely at the fraction of startups that got anywhere.

>months-long hackathon and hope for the best

You framing it this way helped me put a finer point on the vibe I'd noticed but couldn't quite articulate: that it's become less like building a business and more like chasing the prize on a reality show.

Funny to me is that the earlier years where when YC was at it's peak signalling point, yet when I see a company I've never heard of tagging their name with something like (YC12) I assume (unfairly) that they're a zombie.

Seems like pretty lackadaisical coverage with no actual data backing it up other than a line about "many investors told Axios..." which might be interesting if we understood how many they talked to, quality of the firm, etc.

Generally, I'm actually inclined to agree with the article, but what is essentially an opinion piece presenting itself as real coverage annoys me.

A lot has changed:

   * batch size
   * remote participation
   * international companies
   * YC's size and # of partners (vs a few principals)

so to say demo day has lost it's impact is a big stretch (not that the story even really says this). There are too many variables.

The real story is that being part of something exclusive and successful is viewed as more valuable than something much larger and but no more successful. No kidding.

Axios Loses Luster

What they're saying: a lot of Axios has evolved into that sort of editorializing masquerading as journalism.

Between the lines: it's pretty obvious that Axios has a format that seems to be working for them, but is it really?

Yes, but: some people actually prefer it when people stop pretending that they're objective and cop to their biases, which might explain why Axios is still pretty popular.

The bottom line: It remains to be seen if Axios can work through these editorial retreads and come up with something fresh and new.

I’m a founder that went through Techstars, not YC so maybe not exactly similar but accelerators want you to wait to Demo Day to have any investor talks while VCs want to get in early. Much like experienced used goods resellers will attempt to pick through yard sales early - no competition leads to investor friendlier terms. So an investor telling YC candidates not to wait to have these conversations isn’t exactly news. (Question whether waiting makes sense, but these are the dynamics.)

It's not binary. My impression is that most YC companies aren't raising priced rounds at/around Demo Day; these are syndicated seed rounds. They mostly don't have "lead investors". They can happen incrementally over the course of a month.

I'm sure there are companies that have all their round capacity snapped up by single firms, but I don't think that's the norm; I think a bunch of random angels is much closer to the norm.

Which suggests that the "yard sale" phenomenon you're talking about here is mostly not a real thing.

I am not 100% sure that the author wrote this title. It is much more dramatic than the article.

Don't know how it's changed over time, but traditionally the author does not write the headline.

I recently wrote a few articles for a couple different publications and while I suggested headlines, the editor is who chose them in every case

I am in the current batch, and I had similar thoughts that author implied in the beginning - large number of Startups in batch , how remote would work , and how remote would affect fundraising .

I feel remote or some kind of hybrid is here to stay since it is better - work in your home country or hometown , no commute needed for office hours , exposure to more VCs via remote , and flexibility to move out of a session if it is not relevant or you are feeling sleepy.

The real downsides are below and our partners shared the same in beginning . 1. Less interactions with your batchmates and random chat on all kinds of topics 2. Exposure to the SF area that most international founders do not have 3. Parties at restaurants - not shared by partners

I love YC, so my opinion might be biased . YC is best and 10X better than anything I know or heard of.

Don't expect this lacklustre quality from Axios. The body of the article says nothing.

Par for the course with Axios. Their articles never say anything. They give the appearance of providing information with their bullets points and ‘why it matters’ sectioning, but it’s really the journalistic equivalent of cotton candy.

Axios does provide information, it's just that rather than a long-form essay they distill a story down to a few bullet points. You are obviously going to lose something if you exchange essays with 3-5 bullet points. Nevertheless, Axios is unique in choosing this style.

I don't know how they did it, but Axios emerged out of nowhere and suddenly developed access to the White House, including under the Trump administration.

They were founded by a group of bigshots from Politico. It wasn’t out of nowhere. Punchbowl News is the same way. In 2025, I hope you don’t say they came out of nowhere.

Is being in Y Combinator in the long run make any difference to the median startup, or just really affect the companies that succeed big time, measured once they attain that big time?

Is it really fair to measure valuations early on and call it a success, or does it make more sense to wait X years? Is raising money early on any indicator of later success inside YC (as opposed to doing it outside of YC)?

Well raising money early is likely appealing to the founders of the companies, which may help YC attract better talent, creating a virtuous cycle.

Raising money at demo day is somewhat correlated with success, but many companies that had trouble raising seed funding go on to become huge, and many companies that were hot at demo day fizzle out.

Early-stage fundraising success is a function of how many investors think the company is promising. Investors work hard on learning to judge accurately, but they can't see the future and they are often wrong. They can be wrong both by adding random noise to each judgement, and by being systematically wrong in their investment thesis.

If you could figure out with high accuracy which startups would succeed, you could:

- make $100B in 10 years

- increase the world's rate of technological progress

- reduce the vast waste of creative manpower at doomed startups

Does the body of the article really match the headline? People are tuning in online instead. There might be less pressure to watch them.

This struck me: “ According to YC, more than 1,500 investors tuned into Demo Day this week, generating almost 50,000 investment leads.”

So on average each investor reached out to around 33 companies?

Does anyone else feel like this is a clickbait article? I don’t really see anything that substantial here.

Of course it has. Spending a today chatting with folks as you walk through 60 demos vs a webpage that lists 400? Fortunately the demo day isn’t the totality of YC’s value, as e article notes

Does anyone have any articles about where the attention has shifted?

I don’t get this article. In order to objectively claim YC has somehow lost value, they’d need some measurable proof.

Unless YC companies are failing to find funding, which is exceedingly doubtful, I don’t know how you could claim they’ve “lost luster”.

Where does the article say that YC has lost value?

Misleading headline

Knowing Parker, his quote was taken out of context and turned into a clickbait title. He would be the last person to tell you that YC is not at the very top of their game right now. We all have to learn that when talking to journalists, you have to phrase each sentence in such a way that it can stand on its own.

I am sure he would agree with me that the YC game has changed, and perhaps it requires more work from VCs than ever before, but it's definitely the biggest game in town (or even globally), and it would be foolish to ignore it. There are plenty of VCs for whom this game no longer works, but that's more of a reflection on them than on YC. You can still make boat loads of money with the best YC companies, and you have to evolve your signal gathering and ability to close rather than reminiscing the good old times when just having a large fund alone was enough to get into any deal you wanted.

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