This didn’t happen on its own; Paul, Jessica, Sam and the other YC partners made it happen by force of will, hard work, and smart decisions. I don’t know what the future of YC is, but as long as those people are still running it and doing pioneering things like the YC Fellowship program, I think we could still be in the early part of a much bigger story.
My first Y Combinator demo day was the one I presented at, back in the summer of 2006. I’ve gone to every single demo day since then, making me, I believe, one of the few people who have seen virtually every YC company present.
People often ask me, “how has it changed?”. In a word, utterly.
The demo day I went to today, about 100 companies presented. It took place in a huge auditorium and basically every serious investor in silicon valley had a representative there. The companies delivered polished presentations and together will raise hundreds of millions of dollars in the coming months.
The first demo day took place in a small building near Harvard. A couple of VCs attended, but I think they were just being polite, because they certainly had no intention of investing in any of the companies. The audience was mostly personal friends of Paul and Jessica.
12 companies presented, and the presentations were 10 minutes each (these days they are 2 minutes). Not a single company raised money. Most of them died within a few months and the founders went back to school or got jobs.
Here are some of the trends I’ve seen over nine years of demo days.
● Companies are much more ambitious now. In 2006, getting acquihired by Google for a couple million buckets was considered a fabulous outcome and basically the goal of every company. Today, there are six YC companies worth over a billion dollars, and as a result new startups aim much higher.
● Companies are joining YC at a much later stage. When I started YC, most companies wrote their first line of code in the first week in the program. Today, many of the companies have been working on their business for a long time and some even have substantial customers and revenue before applying. If the companies in my batch applied to YC today, I doubt that many of them would get in.
● Founding teams are much more diverse, and much older. In 2006, almost every founder was between the ages of 20 and 25, majored in computer science and was building a website. Today the average age is over 30 and the founders come from all walks of life – lawyers, doctors, real estate agents, and domain experts of all kinds.
● The companies are working in much more diverse areas. This is maybe the most publicized change – that YC has gone from being all about software to doing everything from pharmaceutical research to fusion. But even within software, things have gotten much more diverse. In 2006, founders were essentially all making software for ourselves, which meant they had to be things that college students would want. Today, YC companies make software for everyone from transit route planners to parking lot operators.
● YC is less personal. Getting into YC in 2006 was like joining an outcast band of adventurers. Our little band of rebels didn’t have much going for it, but in our shared struggle we made lasting personal connections. Getting into YC in 2015 is more like getting into Harvard: you will be showered with resources and doors will open for you. But you’re traveling a well-trodden path.
It’s been incredible to watch YC grow from a bunch of college students with big dreams to the very center of innovation of the technology world. Every year I think “this must be the peak of YC”, and yet the quality of the companies has been monotonically increasing so I keep being wrong.