Y Combinator may be the most important driver of high tech entrepreneurism ever. While smart software engineers have historically dreamed of becoming successful entrepreneurs, insurmountable hurdles often stood in the way. The biggest hurdle was fear: “Am I really good enough to do this?” Getting accepted into the Y Combinator program is enough to push many aspiring entrepreneurs off the fence.
The second major hurdle is execution. Y Combinator entrepreneurs are “hackers,” which is another name for scrappy software engineers. Engineers typically thrive on the challenge of “can it be done?” Before Y Combinator, this challenge spawned many useless companies. Y Combinator refocuses “hackers” on a new target which is closer to “should it be done?” Their mantra “make something people want” helps entrepreneurs create useful stuff that solves real problems.
Unlike overly exclusive VCs, the Y Combinator model is heavy on general guidance and light on cash. This makes it much more scalable – they can afford to make decisions after a 10 minute interview. Sure there will be more failures, but many more brilliant minds will be willing to take a chance on starting a company. In fact Y Combinator founders are among the smartest entrepreneurs I’ve met in 15 years of startup life.
Y Combinator gives these aspiring entrepreneurs the tools and subsistence funding to actually get a product to fruition. This significantly increases the likelihood that they can eventually get the funding necessary to build a company. Some will have the skills to lead this company while others will pass the leadership baton to a more capable CEO. But regardless, they will have executed the most important part of creating shareholder value – and if the company thrives, they will receive enormous financial benefit.
If you missed the Startup2Startup interview with Y Combinator founding partners Paul Graham and Jessica Livingston, I recommend you read my guest post recap on the Startup2Startup blog. There are also plans to post the full video of the interview.