If you think Y Combinator dominates the world of the startup accelerators, YC President Sam Altman agrees with you.
In an on-stage interview at TechCrunch’s Disrupt New York conference, TechCrunch founder Michael Arrington said he was trying to get something controversial from Altman, so he asked whether YC sucks “99.9 percent of oxygen out of the accelerator ecosystem.” Altman countered that other accelerators are “doing really cool things,” especially the ones that focus on specific areas like hardware.
However, Altman added that YC is reluctant to invest in startups that have gone through other programs.
“I do think, unlike other stages of investing, there is a monopoly in the accelerator space,” he said.
Arrington pressed him on whether he considers Y Combinator a monopoly, and after a brief, awkward silence, Altman said, “Yeah. I think we get the best companies, which is 90 percent of the hard work.”
Altman became YC’s president in February, and he said he’s tried to reduce potential conflicts and risks of “signaling risk” in YC’s investing, for example by revamping its funding program and limiting how YC partners can invest in the accelerator’s startups.
On the technical side, the firm has expanded its development team from one to three people, with more hires coming in the future. Altman said there are two main projects — the Hacker News aggregator and its own internal tools: “The way to really scale a venture firm is with software.”
And as we wrote elsewhere, YC is also taking its Startup School event international.
Altman also had some theories about why companies lose their early idealism and focus, a transition that he described thusly: “You start with missionaries and end with mercenaries.” One issue, he said, is going public.
“Being a public company is really terrible for most companies,” he said. “I’d say Facebook and Google have done a pretty good job of standing up to the incredible quarterly pressure to hit numbers, but most companies, and I’ve observed a lot now, don’t do a very good job of that. [Those companies] become incredibly focused of what’s happening this quarter.”
In fact, Altman argued, “I think you can say a lot of evil behavior by companies is short-term optimization,” and conversely, good behavior comes from long-term optimization.