“Did Sam Altman Make YC Better or Worse?”, 2019-03-09 ():
Y Combinator revealed yesterday that its president, Sam Altman, is stepping down from his role [was fired] to become the accelerator program’s chairman. This change, said YC, will allow Altman to “spend more time focusing on OpenAI”, the San Francisco-based nonprofit that was cofounded by Altman and Elon Musk 3 years ago to get ahead of the risks posed by artificial intelligence.
…Either way, Altman’s newest move begs a question that industry watchers are likely to be asking for some time, and that is whether Altman—who was part of the first YC startup class in 2005, began working part-time as a YC partner in 2011, and was made the head of the organization 5 years ago—made YC better or worse during his tenure at the top.
Certainly, it is much changed. When Altman was handed the reins, YC had just graduated 67 startups, all of them from the US It was a record number at the time, but Altman has since more than tripled the number of startups that YC will process in one batch, with YC set to present 205 startups to investors over two days across two stages in San Francisco two weeks from now.
Those numbers merely hint at Altman’s ambition. In the past two years, YC has launched Startup School, a free 10-week online program; the Series A program, which coaches seed-stage alums on how to nab follow-on funding; the YC Growth program, a 10-week dinner series that it characterizes as a kind of grad school program; Work at a Startup, a platform that connects engineers with YC companies; and YC China, a standalone program that will be run out of Beijing once it gets up and going.
Even with a network that has 4,000 alumni and 1,900 companies, Altman has long said that he thinks YC can do even more. “Part of our model is to make the cost of mistakes really low, and then make a lot of mistakes”, he said at TechCrunch Disrupt in 2017. “We’ll fund a lot of people doing a lot of things that sound really dumb, and most of the time they will be. And some of the time, it will seem like a bad idea and be jaw-droppingly brilliant. The very best startup ideas are at the intersection of the Venn diagram of, ‘sounds like a bad idea’, ‘is in fact a good idea.’”
Some worry that Altman may have taken YC to unsustainable extremes, encouraging too many people with wobbly ideas to forsake safer, more conventional options for a chance to become the next Brian Chesky, and encouraging them, specifically, to come to the Bay Area for its accelerator program, despite overcrowding and soaring costs.
…VCs—many of whom have a love-hate relationship with the powerful accelerator—have also whispered at times about possible conflicts of interest owing to Hydrazine Capital, a venture fund that Altman formed before being appointed as head of YC, with “significant investment” from Peter Thiel, as described in a 2017 New Yorker article about Altman.
…Equally important, Altman—a masterful networker who isn’t known for being a terribly warm boss—ensured that everyone at the partner level at Y Combinator enjoys the same economics. It’s a surprisingly rare structure in venture capital, where it’s more often the case that a small group of investors is accruing most of the financial rewards based on how long they’ve been involved with an outfit or their specific contributions.