For better or worse, Y Combinator is putting the pedal to the metal.
On the heels of some of its biggest classes to date, the well-known accelerator is today introducing yet another new program. That initiative? The YC Fellowship program.
The broad strokes are as follows: About 20 teams that are “very, very early” and haven’t yet received funding elsewhere will be chosen by Y Combinator to receive a $12,000 grant. The teams can be based anywhere.
In exchange for the grant, the chosen teams will be expected to focus on their companies full-time for the eight weeks from mid-September through mid-November. During that period, YC will have one full-time partner and one part-time partner dedicated to helping them. The teams will also be flown to Y Combinator’s headquarters in Mountain View to meet its partners, they’ll take part in its “office hours,” and they’ll attend workshops run by YC partners and alums. After that, the teams will be welcome to access Y Combinator via remote office hours every two weeks, as well as to book office hours with people in the YC community.
At the end of the eight weeks, Y Combinator will host an event where the teams will again gather in Mountain View for a demo day attended by partners and alums. Note: these presentations will not include outside investors. Though none of the fellows will be obligated to raise funding from Y Combinator, it’s the program’s hope that some of the startups will apply for its Winter 2016 batch (after which they would take part in one of its more widely attended Demo Days).
Asked why Y Combinator is launching the program, partner Kat Manalac says it’s a “concept we’ve talked about among the partnership for a while. As an organization, we want to be able to enable as much innovation as possible.”
Asked whether Y Combinator has concerns regarding how well it can know a team that it’s mentoring from afar, Y Combinator President Sam Altman admits easily that no one yet knows.
“To be very clear about my own feelings here: I think this is the part of the experiment most likely to fail,” he tells us. “I could easily see us deciding to proceed long-term with the fellowship but killing off the remote part. Of course, I’d love to be wrong.”
One thing that seems certain: Founders with a promising business but who haven’t yet raised funding can’t use this new fellowship program as a backdoor into Y Combinator’s more traditional program. Pressed on the meaning of “very, very early,” Manalac tells us it means “teams that are in the idea or prototype stage . . . If you’re further along,” she says, “we would encourage you to apply for the winter 2016 batch of YC.”
Certainly, YC Fellowship is an intriguing proposition. Says Altman, “I think one thing we often forget in Silicon Valley is that it is often harder for very talented people far away from any startup hub to raise a tiny amount of money to live on while they hack than it is for someone in SV to raise half a million dollars.”
The idea of almost limitless Y Combinator is fascinating, too. It’s Altman’s believe that “there are advantages to every node in the network with the network getting bigger, assuming the average quality of each node keeps going up, which it seems to be doing.”
Still, yet another new program may have some wondering if Y Combinator isn’t iterating too quickly.
Since cofounder Paul Graham stepped away from day-to-day operations early last year and installed Altman as head honcho, Y Combinator has gone through an almost breathtaking number of changes, including growing the number of partners within the organization to 16 full-time partners (up from four in earlier days); ending an investment structure that invested in each startup with the help of outside investors; and assembling a late-stage vehicle that will reportedly allow it to take stakes in some of its fastest-growing portfolio companies. (Altman declined to address questions about the last, citing SEC restrictions.)
Of course, Graham had long aspired to see Y Combinator fund many more companies. Under his own stewardship, the fraternity of startups that Y Combinator has advised grew from roughly a dozen startups per batch to an eventual 84 startups in one class. (Graham later conceded that the number stretched Y Combinator’s comparatively limited bandwidth at the time. It’s largely why today, YC is split into four groups, each of which has two or three dedicated partners who have between 25 and 30 companies under their oversight.)
Altman doesn’t mind naysayers, in any case. He argues that Y Combinator “seems to keep scaling pretty well,” saying that “on the metrics that we can judge [one to two] years out of the program, the companies seem to keep getting better.” He also tell us that he has “never believed the maxim that VC firms can’t scale. If product companies can, we should be able, too. In fact, I think we’ve already scaled much more than most people thought possible.”
Indeed. Late last year, Y Combinator welcomed 114 startups into its winter program, and there are currently 106 companies in its summer batch.
By many measures, that seems like an already stunning number of companies. Yet if Altman has his way, those numbers may soon seem quaint by comparison.
“Someday,” reads a newly published post about YC Fellowship, “we’d love to fund 1,000 companies per year.”