Great Presentation / Q&A from Sam Altman from YC
Highlights of the discussion:
Many MBAs struggle to succeed in launching startups because they are not passionate about the idea. Instead, they do it because startups are the cool thing to do. Successful founders have to be passionate about the idea, because success is driven by building a product that small number of people deeply love and then expanding from there. So, if you are thinking about starting a startup because it's fashionable - don't, you will fail.
When MBAs apply to YC and indicate that they are only willing to work on the idea full-time if YC accepts them, then that's a pretty good indication that the passion is not there.The MBAs YC funded that have been the most successful either dropped out of business school because they were so passionate about the idea, or they worked in a specific industry for a few years after business school and really understood it in depth.
For many MBAs, however, the best time to join a startup is when it hits the upward sloping part of a hyper growth curve. When a company needs to build out its organization and scale, then MBAs can have a huge impact in Biz Dev, Finance, Marketing, etc. And working at a fast growing startup is one of the most valuable things you can do.
YC gives many companies a little money, and then gives them a lot of advice about what to do. In particular, YC advice tends to focus on product and growth, though over time they've also developed expertise in building a team and raising money. More than anything though, YC provides access to other YC companies, which Sam considers the strongest network in Silicon Valley.
When looking at YC applications, the most important thing is for founders to clearly indicate how they and their company are special in a few easy to understand, impactful sentences. YC has found that people who can't communicate their ideas effectively are bad at running startups, and YC will choose not to accept companies because the presentation wasn't succinct and powerful.
YC will even take chances and fund ideas that seem seem "out there" at the time, as long as the founders can communicate the problem/vision in a compelling manner. When Airbnb's founders indicated that people's homes are the largest untapped asset in the world, it was a powerful statement. YC thought the idea was crazy at the time, but the opportunity was expressed in such a compelling manner that it was worth a shot.
On the Startup Ecosystem
Many people ask whether we are in a bubble. Maybe, but the difference between the 2000 bubble and now is that today's companies have real revenue. Areas where Sam (and presumably YC) are particularly excited about include Energy, Biotech, Healthcare, AI, Internet communities.