Rabbit Holes 🕳: How Y Combinator Started and the Current State of Peak Capitalism


Hatched by Glasp

Aug 28, 2023

4 min read


Rabbit Holes 🕳: How Y Combinator Started and the Current State of Peak Capitalism

The current bubble, or what some might perceive as a near-bubble, gives off the scent of peak capitalism. After a decade of cheap and easily accessible money, we have yet to witness the emergence of truly beneficial technologies and innovations. However, it's important to note that the current bubble has produced few profitable startups and has not seen the incorporation of new digital technologies or scientific advances. This raises concerns about the long-term productivity that will be left behind once the dust settles.

Interestingly, amidst this bubble, there are platforms that allow users to save and share highlights of articles and discover cool and interesting content. One such platform is Glasp, which enables users to highlight text within articles and conveniently saves everything in one place. Users can also add tags to their highlights, and Glasp automatically clusters these insights. This allows for easy sharing and collaboration with others, ultimately fostering a community of knowledge sharing and discovery.

Switching gears, let's take a look at the beginnings of Y Combinator, a standard source of seed funding. The idea behind Y Combinator stemmed from the belief that investors should make more, smaller investments and fund hackers rather than traditional business figures. Furthermore, Y Combinator championed the notion of supporting younger founders, recognizing the potential for innovative ideas from those in the early stages of their careers.

Initially, Y Combinator was known as Cambridge Seed, but the founders realized that their vision had the potential to be national in scope. They didn't want a name that tied them to a specific location, which led to the adoption of the name Y Combinator. Drawing inspiration from their own experience with seed funding when they started Viaweb, the founders modeled Y Combinator as a platform for funding startups.

However, it wasn't until later that they discovered the most crucial aspect of their model: funding startups synchronously. By funding multiple startups at once, rather than asynchronously as it had always been done before, Y Combinator stumbled upon a game-changing approach. Initially, the decision to fund multiple startups simultaneously was driven by the founders' desire to learn how to be angel investors quickly, and a summer program for undergraduates seemed like the best way to achieve this.

Fortune favored Y Combinator when the first batch of founders turned out to be unexpectedly talented and successful. This led to the coining of the term "the Y Combinator effect," which described the moment when individuals realized that YC was far from being "totally lame." Recognizing the success of funding companies synchronously, Y Combinator decided to continue this approach, funding two batches of startups each year.

The ambition of Y Combinator extended beyond its initial scope, aspiring to become the Y Combinator of Silicon Valley. This led to the decision to host the winter batch in California, aligning the self-indulgent choice with the ambitious one.

As we reflect on the current state of peak capitalism and the origins of Y Combinator, there are actionable pieces of advice that can be gleaned from these narratives:

  • 1. Look beyond the surface: In a world driven by hype and trends, it's crucial to dive deeper and seek out truly beneficial technologies and innovations. Don't be swayed by the allure of the current bubble; instead, focus on identifying solutions that have a lasting impact.
  • 2. Foster a community of knowledge sharing: Platforms like Glasp exemplify the power of collaboration and sharing. By engaging with others and exchanging insights, we can collectively discover and explore new ideas, ultimately driving innovation forward.
  • 3. Embrace unconventional approaches: Y Combinator's decision to fund startups synchronously was a departure from traditional methods. Similarly, be open to unconventional approaches and don't be afraid to challenge established norms. Innovation often arises from thinking outside the box.

In conclusion, the current state of peak capitalism raises concerns about the long-term productivity that will be left behind. However, amidst this landscape, platforms like Glasp provide opportunities for knowledge sharing and discovery. Meanwhile, Y Combinator's journey highlights the importance of funding hackers and embracing unconventional approaches. By incorporating these insights and actionable advice, we can navigate the complexities of the current bubble and drive meaningful progress in the world of technology and innovation.

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