Paul Graham Steps Down From Y Combinator, Installs a Younger Model
On stage at the Launch festival this afternoon, Y Combinator cofounder Paul Graham explained his decision to step down from Silicon Valley's ur-accelerator. He wanted to "get his brain back."
Graham made a similar comment in his blog post announcing that Y Combinator will have a new president. "In fact, since I'll only be doing office hours and not also worrying about running YC, I'll probably be able to give better advice," said Graham.
The accelerator will now be led by Sam Altman, the former CEO of Loopt, a location-awareness app that was bought for $43 million in 2012 and then shut down. (Altman was a little ahead of his time in terms of acqui-hire trend, too.) As a source told Valleywag: "He is like a young PG with less social charm and less computer science skills :)."
Altman, the source added, "is very sure of himself and his ideas. His hit rate is lower than his confidence would suggest. But if it works for you, he's great." Another source said Altman "likes talking startup buzzwords (PGisms, disruption, founder probs) and altcoins. Never heard a word about anything else."
The reaction on Secret to Altman's promotion from part-time partner was similarly mixed:
Graham told audience members at Launch that his recent statements exposing an unexamined bias against foreign and female founders were merely misunderstood. But in the announcement, Graham openly acknowledged that the time for right for a YC reboot:
Why the change? Because YC needs to grow, and I'm not the best person to grow it. Sam is what YC needs at this stage in its evolution.
I'm convinced there's a fundamental change happening in the way work gets done. It's becoming normal to start a startup. There will be a lot more startups in 10 years than there are now, and if YC is going to fund them, we'll have to grow proportionally bigger.
In an interview with The Information from December, Graham addressed issues with Y Combinator beyond just growth. [You can find the full interview behind a paywall here.]
Why do Y Combinator startups all seem to search for a way to explain how their business could address a billion dollar problem?
What investors are looking for when they invest in a startup is the possibility that it could become a giant. It may be a small possibility, but it has to be non-zero. They're not interested in funding companies that will top out at a certain point. If you were the early Bill Gates explaining your startup to investors, if you just said "We're going to keep making programming languages for microcomputers," that would not have seemed promising.
You would have wanted to say something like, "We're starting out with programming languages because that's all microcomputers can run, but microcomputers are going to become more powerful and more prevalent. As they get more powerful we're just going to work our way up the stack until we write all the software that runs on all the microcomputers." [...]
Why do people attack YC?
It's weird. Just last night, actually, in bed, Jessica [Livingston, his cofounder and wife] was saying, "Why does everybody hate us so much? Why is everyone trying to attack us?" I explained that reputation is potential energy.
For example, some random clothing brand you've never heard of has their stuff made in sweatshops, right? Someone writes a news story about that, everybody would say "Yeah, so? Isn't that how all the clothing is made, in sweatshops?"
Nike has their clothing made in sweatshops, and suddenly it's like "Nike uses sweatshops!" It's big exciting news. Newspapers report about it because it gets pageviews, and labor advocates are all over it, even though they're not over the smaller companies using sweatshops, right?
It's because their reputation is potential energy.
She was talking about investors who were trying to stab us in the back, and stuff like that. There's so many.
If you're a startup and you ask an investor, "Should I apply to Y Combinator?" The investor will say no, right? They resent us! The investors resent us. A lot of investors resent us.
Well, it depends. You could say, if you think we're actually good, then envy. If you think we're not actually good, then it's because they think we don't deserve all the deal flow we get. That's what investors all want. They want deal flow.
We are rich in deal flow, and they are poor in deal flow. It's like the haves and the have nots. They're angrily looking at us, and when they see another startup about to become part of our deal flow, they're like "No, not another one!"
Judging by the response to his talk at Launch this afternoon, Graham already has better control of his faculties:
.@paulg gives such great advice. I wish he'd not have his pattern matching blind spot, but I won't toss out wisdom when I hear it. #launch
— Melinda Byerley (@MJB_SF) February 24, 2014
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