The idea of a VC having its own news aggregator was a bit outlandish in 2007. But Y Combinator was in an unusual position in those days anyway. Startup incubators had been a highly visible part of the dot-com crash, and Silicon Valley was still skeptical of the concept nearly a decade later. So YC set out to be something different — a community of hackers building companies on their own terms.

Hacker News was initially built by YC co-founder Paul Graham as a demonstration of Arc, a new programming language he’d been working on. He quickly realized that it could help bring together the companies he was supporting and the rest of the folks who wanted in. With 1.6 million page views and 200,000 unique visitors on a given weekday, it’s now a key part of the venture firm’s success.

But the site quickly took off, as former Redditors flocked to it to talk about tech and startups (the site was then known as Startup News).

Having a big audience isn’t really the goal. In comparison, Hacker News’ inspiration and the first big YC exit, Reddit has seen as much as 4.4 million page views in a given day.

A Community For Ex-Redditors

As Graham explains, as the site started seeing traction immediately, he realized this wasn’t just a way to test Arc. He wanted to make Hacker News a place to recreate the way Reddit felt in the good old days, when most of its community was made up of hackers. As Reddit drew more traffic, the hacker focus of the site evolved. The community’s user base became diluted as it grew, and Hacker News was a new home for some of the early Reddit hackers.

Graham writes in February of 2007:

Reddit used to have a good concentration of startup-related links, but that was because so many of Reddit’s initial users were connected in some way to Y Combinator. Now that Reddit is so much more popular, the top links tend to be images, or videos, or political news.

Another goal of Hacker News, says Graham, was to be a place where founders could share ideas and communicate. In the spirit of Y Combinator’s own incubator, Hacker News was focused on being a community for entrepreneurs and founders in the tech community: a place where they could freely post and where Y Combinator could also get to know potential founders and leaders in the tech world.

“From the beginning we had a real community, and some of the core group of refugees from Reddit are still prominent on Hacker News today,” Graham explains. Part of what attracted many to Hacker News was its simplicity and voting system. The product’s UI, design and color scheme have remained relatively constant over the past six years.

Thomas Ptacek, one of the site’s first users, explains that he was a Slashdot user and then a Reddit user, and flocked to Hacker News (at the time Startup News) because it was more relevant to the technology and startup community. He found Hacker News to be a refreshing change from past forums where the quality of commenting was declining.

Here’s how Hacker News works: Users submit links to stories, and stories are ranked according to a voting system, similar to Reddit. The difference between Hacker News and Reddit, however, is the voting system. While you can vote stories up, you cannot vote stories down (but you can flag stories). According to Graham, 100 upvotes will get a story to the top of the front page of the site. You can only downvote a comment if you have enough “karma” on the site, which is another compelling element of Hacker News. The Karma factor is determined by the number of upvotes on a user’s submission and comments minus the number of downvotes.

In terms of the design, Graham says he wanted Hacker News to look like your list of processes in a terminal window. The look and feel of the site was aimed at hackers themselves who are familiar with tabular data.

Graham will occasionally add new features, some of which are on the backend of the site. For example, as comments get more deeply nested and heated in terms of exchange, the reply link takes longer to appear. There is a purposeful drag implemented on this, says Graham, because deeply nested discussions are rarely interesting.

Another subtle feature addition: a flame-war detector. Graham has been consistently deploying and updating proprietary software that determines whether there is a flame war, where people argue heatedly. When these flame wars take place (which Graham says can often get ugly and personal), the story in which the commenting is taking place is moved further down the page.

Graham has also created sophisticated spam-detection software, which was just updated with new code six months ago. With the update, Graham says that it’s rare for spam to last on the site for more than 10 minutes. If a user does spam the site or engages in personally vicious behaviors, they run the risk of being banned. But in an interesting twist, called “hellbanning,” the user may not actually know they are banned.

On the backend, Hacker News runs on one core, and Graham calls this a “remarkable feat of scaling.”

In terms of human moderation, Graham himself had been spending three to four hours per day simply moderating the site. And that’s in addition to all of his duties running Y Combinator. While a number of other YC alums have moderating abilities, Graham has been the main human element of the site. “It was becoming my life,” he says. Around six months ago, Graham brought on someone else, who he chose not to name, to moderate the site. He says the individual is affiliated with Y Combinator and is a “prudent and thoughtful guy,” and has been doing a great job ever since.

Hacker News has a strong affiliation with Y Combinator, as well. Graham explains that founders usually all create a Hacker News account when they apply, and that user name is the founder’s identity at Y Combinator. Hacker News also features a jobs page that shows any jobs available at Y Combinator companies. He adds that this jobs portal is very useful for Y Combinator, as the majority of the site’s audience is made up of programmers and engineers.

If you are a YC founder, your username will show up in orange to other YC founders to enable these entrepreneurs to recognize and meet each other.

Graham says that Hacker News gets a lot of complaints that it has a bias toward featuring stories about Y Combinator startups, but he says there is no such bias. Instead, the culture at the incubator is to use Hacker News, and with more than 1,000 YC alumni who have graduated from the incubator, many of these founders are still active on the news site and post links to their fellow founders’ launches and news.

“It was a small intellectual village and now it is a giant city.”

Growth has its downside. What keeps Graham up at night is worrying about the dilution of quality of the Hacker News. He explains that the site was community of insiders in the hacker world, and it has gradually been getting diluted. “That is what I spend all my time thinking about,” he says.

He worries that Hacker News will become what he calls “an old crumbling building.”

“The community has been in a perpetual but slow decline because the site is growing,” he says.

Ptacek agrees that the value of Hacker News has changed a bit. “I don’t get a community feel as much, whereas in the beginning it was a small group of people who all know each other,” he says. “It’s less likely now to see the same people from thread to thread.”

One of Graham’s biggest pain points is the “schoolyard quarrels” he finds on the site on a daily basis, and wishes “users would stop misbehaving.” He cites the example of users organizing voting rings to purposefully vote up stories, which caused Graham to develop additional software to detect this. He adds that more users are trolling under newly created accounts, and are deliberately starting flame wars on the site.

“I wish I could get people to stop posting comments that are stupid or mean,” he says. “It takes only one or two negative comments and a discussion turns into a flame war.”

Graham adds that he gets a lot of vitriol from users personally with accusations of bias or censoring. He clarifies that he, and the other human editor, rarely take links down unless they are dupes. Even with tabloid or gossip stories that surface, Graham will not take them down. Users with high karma points tend to flag these stories, he adds, and they can then be taken down.

“Hacker News makes me sad a lot,” says Graham. “I wish the community would behave the way they did when it was a little village.”

Users are noticing Graham’s frustrations. Ptacek says that he observes that Graham is careful not to tell people what to say or think, but it’s clear that he wants people to treat each other better and he gets more sad over time.

Could This Be A Business?

While Graham is open about not wanting to be the next Reddit, it’s hard to ignore the fact that Hacker News could be a business. Reddit is reportedly raising cash at a $400 million valuation. While Hacker News has a fraction of the traffic that Reddit does, the smaller site could actually have an impressive valuation as a business without any funding or employees.

Graham himself uses the site as his primary source of news. He’s even found Y Combinator companies through Hacker News. A user in the community posted a link to Watsi, a non-profit that allows people in dire need of medical care to raise money for procedures and health care. He noticed Watsi the second time it was posted on Hacker News and thought it was an amazing idea. He cold-called the founders and convinced them to be the first ever YC-backed nonprofit. And Graham recently took a first board seat at Watsi, his first board position ever.

But Graham is adamant that Hacker News is not a business and would not become a business. There are no ads on the site, and he has no interest in making money from ads. He admits that through the jobs page he indirectly makes money, as he is an investor in Y Combinator companies and will inevitably profit if the company’s hires help the business. Nor would he be interested in selling the site.

While it’s clear that Graham has his frustrations with the community, when he talks about the site’s defining moments, he sounds like he is speaking about his own child. One of his most distinct memories about the site is the day following Steve Jobs’ death, when every story on the front page was about the Apple founder.

“Users did it collectively as a tribute, and I found this a really remarkable way to show the power of a community. I thought this is really a living, breathing thing. It was like a bunch of birds flying through the sky forming themselves as an S.”

“There are really good reasons to engage with Hacker News,” says Ptacek. “There is no better place to stay engaged with the hacker community…At the end of day it is a message board. Having a place where you can reach and talk to groups of people is an important concept.”

As for the future of Hacker News, it’s clear that Graham is focused on maintaining quality and making sure that the community treats each other with respect and kindness. “I hope that most Hacker News readers know that I am doing this for their sake,” he says.

Article courtesy of TechCrunch

Before the pitches kicked off at today’s Y Combinator Demo Day, partner Paul Graham said the incubator was stricter than ever when selecting the current batch — there are 47 companies demonstrating today, compared to 75 in the last session.

“There are hardly any startups in this batch that are bad,” Graham said.

For that reason, he claimed that it will be just as hard for investors at this demo day as in the past to select the best startups. That’s a general complaint about demo days in general, especially YC’s (where there are more presentations, and those presentations are only a few minutes long), but Graham said it’s not about the format. When it comes to choosing winners, Graham said, “if it seems like it’s hard, it actually is hard.” He added that it’s best to think about the presentations as a “live action” name tag, and that investors should make their real decisions after talking to the founders.

Graham offered a few more details about the process in a short conversation before the event. He said that this time around, YC looked at “predictors of failure,” not just “predictors of success.” For example, he said that in the past YC might have chosen a company that had great founders (a predictor of success), but this time it might have filtered that same company out because those founders, while great individually, all hate each other (a predictor of failure). He also wrote about the methodology back in December.

As for what he means when he says there are fewer bad startups, Graham said he normally ranks all the companies, then goes down the list to find the point at which he’s comfortable predicting that a startup won’t be one of the big hits coming out of Demo Day. This time he didn’t reach that point until five or six companies before the bottom, which is unusual.

To be clear, Graham said this isn’t the first time YC decreased class size — it also did so right before Graham and YC partner Jessica Livingston had a child together. (He pointed out that the smaller class had Airbnb in it, so being stricter didn’t prevent YC from landing a big hit.) However, Graham said this is the most serious the firm has been about cutting back.

Article courtesy of TechCrunch

Y Combinator founder Paul Graham tweeted today that the accelerator’s 464 startup graduates (prior to its current batch) have raised an average of $3.18 million in funding each, which means YC’s companies have landed a total of just under $1.5 billion.

The 464 startups Y Combinator funded prior to the current batch raised an average of $3.18 million.

—
Paul Graham (@paulg) February 08, 2013

When Billy covered the incubator’s progress last summer, YC had launched 380 companies, which had raised just over $1 billion in total, with each company averaging about $2.7 million. So, over the course of the last six months (or one batch in YC terms), the accelerator’s startups have raised nearly $500 million and increased their average raise by nearly $500K. Granted, as Billy pointed out at the time, those statistics are skewed by the top alums, like Dropbox and Airbnb, which have raised $257 million and $120 million, respectively, accounting for nearly 30 percent of total funding.

Y Combinator, as many of you may know, launched in 2005 and selects two classes of startups per year into their three month program, during which the expanding team of mentors connects their teams with investors and invests in the companies. Initially, Yuri Milner and Ron Conway’s Start Fund invested $150K in each startup, however, in November, the accelerator created a new fund called YC VC and decreased its investment to $80K per startup in an effort to “become more startup friendly.”

YC VC also aimed to provide more time and involvement from VCs in the development of startups, and Graham has said previously that the partners have been looking to lower the overall size of its startup classes.

Graham explained at the time: “The reason we accepted fewer applications was that in summer 2012 we grew too fast … We had 66 companies in winter 2012, and that was fine, but for some reason more things than usual broke when we jumped from 66 to 84.”

This comes on the heels of YC beginning to accept applications for its Summer 2013 batch, which will begin in April, with applications due by March 29. So, startups can expect that, while the total number of applications for YC has continued to grow as the incubator grows in renown, the next class size won’t continue the current trend. Instead, Graham said that there may be less than 50 companies in the mix this time around.

Applications open for summer 2013 Y Combinator funding: ycombinator.com/apply.html

—
Paul Graham (@paulg) February 08, 2013

Article courtesy of TechCrunch

Y Combinator co-founder Paul Graham just had a few interesting things to say about the accelerator’s Winter 2013 batch, the biggest of which is that it’s going to be smaller than before. There’s no firm number just yet, but he notes in a new post on the Y Combinator website that there may be less than 50 startups in the mix this time around.

In case you haven’t been keeping track, that means that Y Combinator has gone from its largest class to date (84 in Summer ’12) to one of its smallest in a long time.

“The reason we accepted fewer applications was that in summer 2012 we grew too fast, Graham explains. “We had 66 companies in winter 2012, and that was fine, but for some reason more things than usual broke when we jumped from 66 to 84.”

He doesn’t detail how the process “broke” with such a large class, with the implication being that YC isn’t sure yet. The news comes just days after Graham announced a considerable change to how the Y Combinator start fund works, with startups receiving a much smaller initial investment and more face-time and input from advisors in the form of office hours. Word on the street for some time has been that this class would be smaller, as Alexia noted recently in a larger piece on the cooling investing climate around consumer startups.

The issue of overall class size is one that seems to crop up regularly as the number of applications continues to increase, with the recent expansion previously billed as an experiment. YC Partner Harjeet Taggar said on stage at TechCrunch Disrupt New York 2012 that despite that summer’s large class size, it was the accelerator’s most rigorous selection yet (the number of accepted companies was around 2% of the total number of applicants).

That commitment to selectivity and rigor Taggar mentioned is naturally still in play, as Graham and company didn’t actively set out to put together a smaller class this time around — he notes that the dip in class size is thanks in large part to being more selective in general. That involved “looking for qualities that were missing in the top startups we’ve funded, and by looking at things the failed startups had in common,” as well as coming to the conclusion that YC partners tended to be more lenient after having lunch.

Article courtesy of TechCrunch

If you’ve been following my weekend watch reviews, you’ll note that I tend to like bigger watches. But even this monster – the Graham Oversize GMT – is too big for me.

Graham is a British manufacturer of haute horology. Named after famed clockmaker George Graham, the company manufactures mostly in Switzerland and uses a combination of bespoke movements as well as some modified ETA pieces. The Chronofighter is a bit different and a bit more interesting.

What are you looking at here? First, this is one of Graham’s flagship watches. It contains an automatic caliber G1733, Graham’s first in-house movement with a big date at twelve o’clock and a large GMT hand. It also has a chronograph with a unique pusher/crown arrangement to stop and start measurements and a plunger-like pusher.

That big trigger stops and starts the chronograph and it also protects the crown. The case is 47mm in diameter and the watch is quite thick, with a signed, solid case back. It is ostensibly water resistant to 100 meters.

On the wrist, especially with a leather strap, the watch is surprisingly light. However, the trigger on the side is definitely an acquired taste and tends to dig into the flesh if you’re on the slightly slimmer side. While I wouldn’t count myself as svelte, I felt it was a bit too big.

But what fun it is to wear. Graham is a polarizing watch company that jumped into the big watch trend with both size 14s. The piece is bold and very eye-catching and the British pedigree and essential “tool-ness” of the watch makes it an interesting find. You can pick these up for about $11,000 brand new but the collectors markets often surfaces them for about $8,000, which isn’t bad for a hand-manufactured watch the size of a bundt cake.

Of all the big watches I’ve reviewed, this watch is the most difficult to recommend outright. I’m more inclined to encourage folks to visit the dealer and try this thing on to see for themselves how it fits and I worry that it is big for big’s sake – a concept watchmakers throughout the previous decades were falling over each other to promote.

Graham has a unique new vision and although they’ve been attacked by some purists as being garish I would say that they are instead bold. The Chronofighter is a huge watch for folks who like huge watches and, for the money, I haven’t seen anything beat it in terms of visibility, utility, and sheer cheek.

Product Page

Article courtesy of TechCrunch

The startups that presented at Y Combinator’s Demo Day last week were remarkable in their own right, but perhaps the most striking thing was the sheer number of them.

With 66 companies and 180 founders in this season’s batch, the auditorium at Mountain View’s Computer History Museum was practically bursting with angel investors and reps from every notable venture firm last week. And that was just the latest class. Since 2005, Y Combinator has since spawned more than a dozen batches of startups including Dropbox and Airbnb. The last two classes alone have created more than 120 companies.

So it raises the question of how Y Combinator has been able to grow in size while sustaining both the quality of startups it churns out and the value it provides for founders.

Essentially, how do you scale a company that creates companies?

The Strategy and Vision

“Our whole approach to scaling Y Combinator is the standard approach to scaling software,” said Paul Graham, Y Combinator’s co-founder.

There are a couple rules, he said. 1) You can’t predict in advance where the bottlenecks will be so you just keep going until you hit the next one and 2) You can always scale a lot more than you originally predicted. ”When you scale things, they often turn into other stuff that you would have never imagined,” he said.

Graham doesn’t have an exact size in mind when accepting companies for a new class. The early-stage venture firm accepts as many companies as the team thinks are worthy. Nor does Graham know how large Y Combinator should ultimately be.

“Imagine if you had asked Mark Zuckerberg that question when Facebook had just two universities,” Graham said. “A lot of what drives us is curiosity about what happens when something like this gets bigger.”

Indeed, some of the other partners liken working at Y Combinator to building a university or a new type of institution that’s never been seen before.

“If you think of YC as a corporation or a company, it has these characteristics that every big company would love to have,” said Harj Taggar, an alum who later became a YC venture partner. “It’s a bunch of smart people working on projects that they love and have upside in. But they are all linked together and get the benefits of being a part of a larger group. YC is effectively inventing a new form of organization.”

Given the scale of Graham’s ambition (which shouldn’t be surprising since he tells founders to have “frighteningly ambitious” startup ideas), we walked through some of the many bottlenecks YC has faced through the years:

Applications:

Y Combinator’s increasing cachet has brought a ballooning number of applications. Last October, Graham said that the firm was seeing about one submission per minute on deadline day for the most recent class.

Every one of the firm’s venture partners used to read every application. Now they don’t. They might read one-third of the applications. It’s the alumni who make the first pass, depending on how much time they have. Some do none while others read as many as 100 applications or more.

“We went back over the years and saw that we had never accepted a company for an interview where the alumni were majority ‘No,’” Taggar said. “This weeds out really bad applications so we can focus on the borderline ones, which take more time.”

But just in case they miss a potentially good company, Y Combinator is starting to use data mining software. They’ve fed a program all of the old Y Combinator applications to find predictors of success and apply them to new submissions, creating a backstop in case they miss something.

“There are two kinds of mistakes: funding a bad startup or missing a good one. Our biggest fear is missing a good startup,” Graham said, adding that Dropbox’s co-founder Drew Houston was actually rejected the first time around. They’ve used the program to generate a top 10 list of factors predicting the probability of acceptance. ”I don’t want to share it, but it was fascinating,” Graham said.

After they pick a cohort of companies to interview, they fly them in. They used to do a single track interview process where every single partner had to be present in the room. Last time, they did two interview tracks with half the partners in one of two rooms that went through half the finalists each. This time, they might do three tracks simultaneously.

Following the interview, the partners decide immediately within the next five minutes about whether they should accept the company or not.

“We have to be very disciplined,” Taggar said. “By the end of the day, when you’ve done twenty-something interviews, you can barely remember what happened in the first one.”

Advising:

Y Combinator’s big initial bottleneck was that there was one Paul Graham, and he only had 24 hours in a day. So the company brought on additional venture partners like Gmail creator Paul Buchheit and alumni like Taggar, Posterous co-founder Garry Tan and Aaron Iba, who successfully sold AppJet to Google. Geoff Ralston, who was chief executive of Lala, the music startup that exited to Apple in 2009, is joining as a partner for this round. Plus there are part-time partners like Loopt co-founder Sam Altman and Justin.tv founders Emmett Shear and Justin Kan. They joined YC’s original partners Jessica Livingston, Trevor Blackwell and Robert Morris.

“It turns out that this is almost perfectly parallelizable,” Graham said. “I know from experience that one partner can deal with 20 startups and if we have 66 startups, we’re at more than 2X over capacity.”

All of the partners are available for office hours and there’s an internal scheduling tool that Y Combinator uses to gauge demand and urgency from founders. Ash Rust, who co-founded SendHub, had an HR issue once. He was able to get office hours within 30 minutes and the right documentation almost immediately after that.

“I know how hard it can be to get help as a founder if you’re not the belle of the ball,” Rust said. “But I’ve never experienced that here.”

If that still sounds a little impersonal for something as unpredictable and idiosyncratic as founding a startup, Buchheit points out that YC’s alumni network is now so large that the firm is starting to have world-class experts on running companies in many areas.

“As YC gets larger, it actually gets better,” Buchheit said, pointing to the firm’s 800 alumni. ”Half the time, I’m sending founders to talk to different alumni. If you’re doing a video startup, then I know the person you really ought to talk to is Justin Kan.”

The firm taps this alumni network when it holds mini-conferences around issues like user acquisition or iOS development.

“There’s this real feeling of appreciation,” Buchheit says. “The founders are very grateful for the experience, so they have a real loyalty and want to help out other companies. There’s a little bit of a pay-it-forward model built into the network.”

Tan even built a private social networking tool for YC founders. Taggar says it’s useful for putting faces to names and that they’ll probably add a section for skills like the ability to code in Python and so on.

Y Combinator’s emerging network effects:

Not only are alumni helping with admissions and advising, they can serve as market-makers for new startups. Many of mobile payment startup Stripe’s customers are part of Y Combinator while Exec is now offering special corporate accounts to run errands for other startups.

“Y Combinator has a built-in economy,” Buchheit says. “We have this tremendous network and another YC company can be your first reference customer when others won’t take the risk.”

Then if one company isn’t quite a home run, its founders and employees will likely be able to find work at another Y Combinator startup. When Jeff and Dan Morin were considering next steps after working on event startup Anyvite for a few years, Graham paired them with another founder, Olga Vidisheva, from the most recent batch. Now they’ve rounded up funding from Greylock Capital, Andreessen Horowitz, SV Angel and Benchmark Capital to bring independent fashion boutiques online at Shoptiques.

The alumni also come back to Demo Day to angel invest in startups from later batches and companies like Parse, Carwoo and Dropbox have raised angel funding from other alums.

Demo Day and Investors:

Maybe the next big bottleneck is the most obvious one: helping investors wade through the dozens of startups it launches every half-year. The firm had to move Demo Day to The Computer History Museum because its offices no longer had space to fit the hundreds of investors. Y Combinator is also reaching the upper limit of how many startups can pitch in a single day.

Getting through 66 pitches is a slog. ”I don’t think we could handle a Demo Week,” Buchheit joked.

Taggar says he’s thinking about how to make it more efficient for investors to set up meetings with the right startups following Demo Day. Right now, the partners just have a mental map of the investor landscape and try to route the right companies to the right investors.

The week after Demo Day is an especially intense one as entrepreneurs and investors try to lock down deals. It’s kind of a weird biannual version of mating season.

With all the investor interest, the founders clearly don’t see Demo Day as the issue.

In fact, Rust had something else on his mind — how to efficiently get food on speaker nights. ”Seriously, the only scaling problem is the enormous dinner line,” he said.

Article courtesy of TechCrunch

It appears Brian Solis’ Fast Company post about the Psychology of Social Commerce is getting big play, so much so that interactive marketing news site ClickZ is jumping on the bandwagon.

Reporting on a session held at the recent SES New York conference, ClickZ contributor Rob Graham said that, “social commerce is about providing consumers with a meaningful experience and then giving them the opportunity and tools to share that experience with others.”  Graham went on to outline four best practices that retail brands need to consider when seeking to provide such experiences:

Make it easy for customers to make an informed buying decision – Graham suggests that, rather than preventing customers from comparison shopping, retailers should make it easy for them to do so by providing easy access to ratings, reviews and product listings that help the consumer to make smarter purchase decisions.

Consumers respond to brands that can give them easy access to tools they need to share a brand offer or message with other people – Based on consumer’s apparent need to share, retailers should provide the necessary tools on their websites to facilitate social sharing. That means including sharing options to social networks like Facebook, Twitter, Pinterest and others.

Make a message “sticky” by offering consumers a meaningful experience – Graham said that, in order to be most effective, brands must create ways to engage consumers so that they garner more time and attention and tell a more complete brand story.

Don’t minimize the value of social media sharing opportunities – When implementing social sharing opportunities brands should consider the needs of consumers and how they can make the best use of each channel to share product information with others.

Part of the emphasis in each of these best practices is to help consumers connect where they buy, which is one half of the social commerce equation (the other is to help consumers buy where they connect). His point is that gaining a better understanding of how social commerce works from a psychological perspective is the real key to maximizing its effectiveness.

That does not undermine the need to provide useful tools to help customers make better informed choices. However, simply providing tools absent an understanding of the psychological motivations that drive consumer engagement won’t get the job done.

Tools are not an end in themselves, but are a means by which retailers can harness the power of social influence and social learning. But providing useful tools combined with a proper understanding of the psychological understanding of what drives consumer behavior is the one-two punch that enables them to deliver “meaningful experiences” that will result in generating greater customer loyalty, advocacy and, ultimately, revenue.

Article courtesy of Social Commerce Today

Wow. Silicon Valley-based startup incubator Y Combinator is getting just over one application per minute, according to a Tweet from co-founder and partner Paul Graham. Today is the last day for applications for the next Y Combinator class, and clearly founders are in a rush to get their applications in.

Back in August, Graham said that the acceptance rate to Y Combinator is just 3%. But because of an increase in applications, Y Combinator has increased its class sizes of late.

In June, Graham revealed that total value of YC companies is around $3 billion. In total, YCombinator has funded 316 startups including the summer round that just debuted in August. Checkout Graham and fellow Y Combinator partner Harj Taggar’s most recent office hours with startup founders at TechCrunch Disrupt here.

Article courtesy of TechCrunch

YCombinator has just announced its “Part Time Partner” program, which will bring in former YC alumni to mentor the most recent cohort of startups, like regular partners, but only 1/5 of the time.

Joining the prestigious ranks of Paul Graham, Paul Buchheit, Trevor Blackwell, Jessica Livingston, former MIT professor Robert Morris, and Harjeet Taggar are Loopt’s Sam Altman, Posterous’ Garry Tan and Justin.tv founders Emmett Shear and Justin Kan, all from the first YC batch in 2005. “They’re good eggs and it’s nice to have them around,” Paul Graham wrote in the “Welcome” blog.

YCombinator has funded a total of 316 startups to date with around 60 in the current class. In a recent post on the value of a YCombinator startups, Paul Graham pinned the total value of the top 21 YCombinator startups at $4.7 billion, which puts the averages out to around $22.4 million a startup.

“There is massive value creation happening through mentorship, the passing of knowledge, the value of the YC brand, and the community of hundreds of founders,” said new part time partner Tan. “I consider it a rare opportunity to help make YC the Harvard of this kind of value creation.”

Paul Graham explained the rationale behind the program, “These guys are more like the founders’ peers.  They went through what the founders are going through, and perhaps still are dealing with more advanced versions of the same problems (e.g. raising money).  So their advice is hard to ignore.”

YC partners are famous for the invaluable advice and mentorship they provide during “office hours” with the fledgling startups in each batch. You can watch Y Combinator founder Paul Graham bring these office hours to prime time onstage at TechCrunch Disrupt here.

Article courtesy of TechCrunch

Paul Graham and Y Combinator just got the Wired treatment. Steven Levy writes a long and loving article which evokes what it’s like to go through the program (or at least what it’s like to be a fly on the wall watching startups who go through the program). A big part of the Y Combinator experience is learning from Paul Graham, who is like a Jedi master for startups. Graham is famous for his “office hours” when founders can come and consult with him. (Graham will be holding office hours onstage next week at Disrupt NYC and will also be interviewed by Charlie Rose).

Levy explains how office hours work in his article:

When the companies run into questions—and they all run into questions—they sign up for office hours with one of the YC advisers. . . . appointments with Graham are the most coveted. A few times a week, he and the other partners announce their availability in a private section of Hacker News—a news site hosted by YC—and founders can book a time slot.

Graham often conducts office hours while perambulating. He favors a quarter-mile circuit around the cul-de-sac at the end of Pioneer Way, dispensing wisdom while founders scamper alongside him like acolytes of Socrates. One day in February, he has several of these meetings, one after another.

The first group asks about its financial situation—should they begin seeing investors? Graham explains that the YC program is designed to let them create the best product possible, shutting out distractions. “Money comes with Demo Day,” he says.

“But when do the best startups raise money?” one of the founders asks.

“It’s random!” Graham says. “The best startups do things when it’s right to do them.”

The article is filled with other great details. Like the description below of when Yuri Milner and Ron Conway told the winter class that they would offer funding to each one of $150,000, no questions asked. Milner was in Davos, so he participated remotely through an Anybot robot:

A tiny screen atop the wheeled robot’s saucer-shaped “head” carries a projection of Milner’s face, allowing him to talk to the group.

“So, the surprise,” Graham says, gesturing to Conway and the Milner-bot, “is that they want to invest in all of you.”

For a few seconds there is stunned silence as 99 founders try to process this news. It’s like a denial-of-service attack on their brains. Finally, there’s a collective exhale and a round of applause. This is good. . . . The budding entrepreneurs look like an Oprah audience after learning that everyone is getting a free Pontiac.

I do have one quibble with the article. Although it does mention TechCrunch a lot (Levy is obsessed), there is not one link. Will those magazine guys ever learn?

Article courtesy of TechCrunch