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Y Combinator: The Inside Story of Tech’s Most Influential Startup Accelerator
Guest post by Taylor Cromwell
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Today, we have a guest post from Taylor Cromwell who also previously published a piece in Just Go Grind: How the Doan Family Built the $100M "Disneyland of Quilting."
Taylor is a freelance writer, content strategist, and storyteller who helps MarTech, Sales, and other B2B SaaS companies showcase the real-world impact of their tools.
When I saw that Y Combinator recently celebrated 20 years in business, I knew I wanted to publish a newsletter on their journey.
So I enlisted Taylor’s help and I’m so excited to share this piece with you.
Let’s dive in.


In 2005, Y Combinator launched with little fanfare, a summer experiment born out of Paul Graham and Jessica Livingston’s frustration with how traditional venture capital worked.
Their goal wasn’t to build a Silicon Valley powerhouse. They simply wanted to help hackers become founders. But in doing so, they reshaped early-stage investing—creating a fast, founder-focused, standardized approach. Today, YC’s impact stretches far beyond its portfolio, embedding itself into the DNA of startup culture.
The real reason we started Y Combinator is neither selfish nor virtuous. We didn't start it mainly to make money; we have no idea what our average returns might be, and won't know for years. Nor did we start YC mainly to help out young would-be founders. We did it because it seems such a great hack. There are thousands of smart people who could start companies and don't, and with a relatively small amount of force applied at just the right place, we can spring on the world a stream of new startups that might otherwise not have existed.
What began as a scrappy idea between friends—and eventually spouses—became one of the most influential forces in tech.
Before the billion-dollar valuations and flood of imitators, Y Combinator was just a hunch—a weekend conversation, a $200K experiment, and a belief there had to be a better way to back ambitious people.

THE ORIGIN STORY: AN ACCIDENTAL REVOLUTION
The idea for Y Combinator gelled in a single evening.
"Between Harvard Square and my house, the idea came together," recalls Graham. "We'd start our own investment firm, and Jessica could work there. As we turned onto Walker Street, we decided to do it. I agreed to put $100k into the new fund, and Jessica agreed to quit her job. Over the next couple days, I recruited Robert Morris and Trevor Blackwell, who put in another $50k each. So YC started with $200k."
Originally called Cambridge Seed, the name changed swiftly. "That name never saw the light of day," Graham says, "because by the time we announced it, we'd changed it to Y Combinator. We realized early on what we were doing could be national in scope, and we didn't want a name tying us to one place."
Their idea was straightforward: Fund early-stage founders with standardized terms, help them form real companies, and teach them what they wished someone had taught them.
What they didn’t fully realize initially was that funding a batch of startups simultaneously—rather than individually—would be their secret sauce.
In May 2005, Graham tested the waters at Berkeley with a talk titled "Hiring is Obsolete," urging students to launch startups rather than taking safe corporate jobs. The talk electrified many in the audience. A number of student teams pitched Graham right afterward—and their raw talent was so evident that he was tempted to fund them on the spot.
Weeks later, YC’s website went live, inviting applications for the "Summer Founders Program" with a simple pitch: “We give you enough money to live on for a summer, as with a regular summer job… but instead of working for an existing company, you’ll be working for your own.”
With only a 10-day application window, 227 hopeful teams applied.

YC’S FIRST BATCH
Each accepted team received a modest investment with standard terms.
"Everybody got the same offer—$6k per founder," Jessica Livingston later wrote, adding that this amount was pegged to an MIT summer stipend. In exchange, YC took a small equity stake (common stock) at a simple valuation, using a one-size-fits-all 10-page funding agreement.
It's hard for people to realize now how inconsequential YC seemed at the time. I can't blame people who didn't take us seriously, because we ourselves didn't take that first summer program seriously in the very beginning.
Weekly dinners quickly became central to YC’s culture. Every Tuesday night that summer, Paul Graham personally cooked dinner for the founders (famous dishes included a homemade stew jokingly called “glop”).
“Weekly Tuesday night dinners with a high-profile speaker, Q&A, and sharing updates and challenges with batchmates over bowls of glop every. single. week. taught us the importance of creating cadence with both product and business cycles of the company. Having milestones, events and regular check-ins to orient our work around is critical to sustainable high output. It also gives a sense of structure and predictability – something startup founders hate in large quantities, but need when building a startup when your world feels like absolute chaos.” — Jamie Wong, Founder of Vayable (YC S12)
The dinners emphasized critical startup lessons, like avoiding raising too much money too early, in a candid environment. This mix of home-cooked food, peer camaraderie, and frank advice from experts created an intimate culture that shaped the early days of YC.
Demo Day originated that summer, too. After roughly ten weeks, YC gathered approximately 15 investors in Cambridge to watch seed-stage teams present working demos or live products. It was a modest event, but groundbreaking in concept: multiple startups pitching back-to-back.
In fact, mid-way through the summer, YC ran a “Progress Day” where teams presented to each other and voted on who they’d invest in themselves. At that midpoint in 2005, the clear winner was 19-year-old Sam Altman’s project, which earned him the tongue-in-cheek label “most likely to be the next Bill Gates,” as one founder recalled. (Altman, it turns out, would later become president of YC – more on him later.)
Sam was sitting around looking very down. And when we asked him why, he said it was because today was his 20th birthday. He was all broken up over turning 20, and how he felt he hadn't accomplished enough, fast enough.
Just a week later, the scrappy Altman flew to Chicago and, incredibly, signed up Sprint as the first corporate client for his location-sharing startup Loopt . “That really struck me… Sam had the skill and confidence to cut a deal with a major company, but when he got there he wasn’t old enough to rent a car to get to the meeting!
Despite (or because of) their youth and tiny budgets, the startups of Summer 2005 punched above their weight. YC’s bet on people over ideas paid off almost immediately. One notable example was Reddit.
Reddit began when Steve Huffman and Alexis Ohanian pivoted from their original rejected idea (a mobile food-ordering service). Graham was “impressed with the founders” and invited them to come to Cambridge anyway and “work on something else.” Instead he suggested they build a "front page of the internet."
I don't think the startup sense of the word "pivot" had been invented yet, but we wanted to fund Steve and Alexis, so if their idea was bad, they'd have to work on something else. And I knew what else. In those days there was a site called Delicious where you could save links. It had a page called del.icio.us/popular that listed the most-saved links, and people were using this page as a de facto Reddit. I knew because a lot of the traffic to my site was coming from it. There needed to be something like del.icio.us/popular, but designed for sharing links instead of being a byproduct of saving them.
So I called Steve and Alexis and said that we liked them, just not their idea, so we'd fund them if they'd work on something else. They were on the train home to Virginia at that point. They got off at the next station and got on the next train north, and by the end of the day were committed to working on what's now called Reddit.
They coded Reddit from scratch, launching it mid-batch.
Slowly but inexorably Reddit's traffic grew. At first the numbers were so small they were hard to distinguish from background noise. But within a few weeks it was clear that there was a core of real users returning regularly to the site. And although all kinds of things have happened to Reddit the company in the years since, Reddit the site never looked back.
Just over a year later, Condé Nast acquired Reddit for $10 million, marking YC's first big exit. At age 23, Ohanian suddenly became a multi-millionaire, and the quick success of Reddit helped put YC on the map.
Not every startup from the first batch succeeded immediately, but even apparent failures yielded lessons and successes later. Aaron Swartz’s Infogami merged into Reddit, reinforcing YC’s belief in betting on people over ideas.
Justin Kan and Emmett Shear’s Kiko struggled against Google Calendar, but their pivot became Justin.tv and eventually Twitch (now valued at $46 billion). Memamp’s founders pivoted quickly when larger companies announced competing products, demonstrating YC’s value in agility and adaptation.
By the end of 2006, YC had funded around 20 startups across three batches, attracting increasing attention. TechCrunch noted Reddit’s acquisition validated YC’s approach of launching startups with tens of thousands of dollars rather than millions.
Reddit’s primary backer, Paul Graham’s fund Y Combinator, has become the poster child for making a successful startup with only tens of thousands of dollars in funding.
YC's small bets on young, technical founders were proving dramatically successful, setting the stage for much broader influence. In fact, by Nov 2006 YC had funded about 20+ startups across three batches and already seen several go on to acquisitions or significant growth.

PROGRAM STRUCTURE AND CULTURE OF THE EARLY BATCHES
YC’s early cohorts had no rigid curriculum—learning was hands-on, guided by mentorship from Graham and seasoned entrepreneurs. The peer network fostered camaraderie and mutual support, transforming a typically lonely entrepreneurial journey into a shared experience. YC’s candid advice, contrarian viewpoints on venture capital, and emphasis on relentless focus and customer interaction became defining features.
The peer network in each batch became a big part of YC’s identity. Founders would often help each other debug code, brainstorm features, or beta test each others’ products. As Livingston put it, “they had colleagues to help them during what had previously been a very lonely process.”
A hallmark of YC culture was its candid advice and even contrarian viewpoints on startups, much of it stemming from Paul Graham’s own experiences.
YC didn’t sugarcoat the challenges. In fact, one of the talks Graham gave to early cohorts was informally called the “VC suckage” lecture, explaining why traditional venture capital often didn’t make sense for embryonic startups . The message—somewhat radical in 2005—was that you don’t need big VC money to start a software company, and taking too much can even be harmful.
VCs are like car salesmen or bureaucrats: the nature of their work turns them into jerks.
Instead, founders should stay small, agile, and close to their users. At YC dinners the founders heard war stories about startup failures and founder mistakes as often as they heard about successes.
Graham and the guest speakers would repeatedly emphasize focusing on one great idea, deploying quickly, and then iterating based on user feedback, rather than obsessing over elaborate business plans.
An observer at the time noted that YC was “forcing a degree of focus” on often-scattered young entrepreneurs—you couldn’t pursue five ideas at once; you had to pick one and execute . This discipline, combined with the built-in deadlines of Demo Day, created a sense of urgency in those early batches that many founders later credited for their momentum.

JESSICA LIVINGSTON’S UNDERRATED ROLE
If Paul Graham was Y Combinator’s philosophical architect, Jessica Livingston was its social architect—quietly and effectively shaping YC’s culture and community from the earliest days.
Much of what's most novel about YC is due to Jessica Livingston. If you don't understand her, you don't understand YC.
Livingston’s gift was her uncanny ability to read people, earning her the nickname “Social Radar” among YC founders. As Graham acknowledged:
“One of the things she's best at is judging people. She's one of those rare individuals with X-ray vision for character. She can see through any kind of faker almost immediately. The earlier you pick startups, the more you're picking the founders. At the stage where YC invests, there is often neither a product nor any numbers.”
Livingston herself explained her approach succinctly:
My cofounders Paul, Robert and Trevor are amazing at judging technical ideas, but as they'd be the first to admit, they're not as good judges of character. That's my department. For some reason I've always been a good judge of character–even as a little kid. So during the history of YC, for the most part they judged the ideas, and I judged the people. My cofounders called me "the social radar" for what seemed to them my uncanny ability to see through fakers and sociopaths. But it has historically been very important in making YC what it is.
This human-centric intuition influenced YC’s culture profoundly. Livingston emphasized authenticity over polish, paying close attention to founders' interactions, noting whether they “finished each other’s sentences or cut each other off.”
As she described, “Most applicants barely realized I was there. But after they walked out, my partners would usually turn to me to get my read on the applicants as people.”
She also shaped YC’s distinctive community-oriented culture, establishing informal mentorship through weekly dinners and intimate speaker events. As Graham put it, “Early YC was a family, and Jessica was its mom.”
Livingston fostered trust and collaboration, which became core pillars of the YC experience.
Perhaps most importantly, Livingston brought empathy into an ecosystem that often rewarded bravado. She prioritized humility, grit, and genuine character, influencing a generation of founders who valued honesty and integrity.
It's obvious why we'd want to fund founders who are knowledgeable and determined. But I also found myself filtering for character. This was not a deliberate decision. I just have a very intense reaction to people I think have bad characters.
Before Y Combinator, character had not traditionally been an important factor for investors. Investors have often funded people who were jerks but who seemed likely to succeed. But I couldn't do it. YC is not just an investment firm. It's like a family in that we're inviting these people into our place to have dinner every week.

PAUL GRAHAM’S ESSAYS AND CULTURAL INFLUENCE
You can’t discuss YC’s early rise without highlighting Paul Graham’s essays.
Graham’s writing distilled complex startup ideas into memorable mantras—principles that not only attracted talented founders but also shaped the broader entrepreneurial ecosystem.
The phrase – “make something people want” – became YC’s motto, literally appearing on YC t-shirts and on the wall of their office. (It’s even the Wi-Fi password in YC’s office, insiders joke.)
Among Graham’s most pivotal essays was “How to Start a Startup” (2005), which famously introduced the core YC philosophy: “Make something people want.” This deceptively simple mantra encapsulated YC’s relentless focus on user needs, becoming its unofficial motto. It emphasized solving real problems over chasing trends, a lesson reinforced continuously at YC dinners and mentoring sessions.
Arguably Paul Graham’s most famous essay of all, “Do Things That Don’t Scale,” didn’t arrive until 2013—but it distilled wisdom that had been brewing since those early YC batches. In it, he implored startups to deliberately do manual, unscalable things in the beginning to delight their first users.
This essay drew directly from YC alumni experiences like Airbnb.
In YC, Airbnb’s founders were struggling until Graham gave them an unusual assignment: go to New York City, meet your users, and improve their listings by taking high-quality photos yourself.
It sounded “completely non-scalable,” but they did exactly that—and saw their weekly revenue double, which saved the company. Co-founder Joe Gebbia later said “it was the first time someone gave us permission to do things that don’t scale… I’ll never forget it because it changed the trajectory of our business” — First Round Review
Graham also popularized the concept of “Ramen profitable,” describing startups generating just enough revenue to cover founders’ minimal living expenses—a critical milestone of sustainability celebrated within YC. This concept, along with Graham’s encouragement of relentless resourcefulness and frugality, became foundational principles guiding countless startups.
Strategically placing an “Apply to Y Combinator” button atop his essays during application seasons, Graham effectively converted inspired readers into YC applicants.
His writings resonated deeply within the startup community, continually attracting ambitious, technically gifted individuals eager to implement YC’s core lessons. Over time, Graham’s essays didn’t just describe YC’s philosophy—they actively shaped it, embedding these timeless lessons into the very fabric of startup culture worldwide.

YC SCALING UP (2007-2010)
YC had already proven its initial model could yield real, promising startups, but it was still running lean, investing modest amounts, and relying solely on its founders’ personal funds.
They were investing about $15K on average into each startup (e.g. $6k per founder for a two-founder team was $12k, sometimes a bit more for larger teams). By 2007–2008, YC was funding roughly 20–40 companies per year (10-20 per batch). The model was working well, but to scale further YC needed more capital for investments (and to support a growing staff).
In March 2009, YC took its first significant step towards scaling. Sequoia Capital, the storied firm behind companies like Google and Apple, led a $2 million investment round into YC. Prominent angel investors like Ron Conway and Gmail creator Paul Buchheit joined the round.
This wasn’t just funding—it was validation. TechCrunch marked this as a watershed moment, declaring YC had earned “the Sequoia Capital seal of approval.”
This initial funding allowed YC to expand the size of its batches modestly—moving from 40 companies a year to around 60. But more importantly, it reinforced that YC’s experiment was ready to scale.
Y Combinator startups get a big head start in the competitive tech world. The founders, often just out of school (or still in school), get enough money to pay the bills for a few months as they work on their projects. They also get mentoring and polish from the Y Combinator team and a chance to present to prominent angel investors and venture capitalists at twice-yearly demo days (example). A surprising percentage of the startups go on to raise bigger venture rounds and become real companies. Many of the founders that fail come back and try again.
Just a year later, in May 2010, YC raised another, much larger round—$8.25 million, again led by Sequoia. Angels Ron Conway, Paul Buchheit, and Geoff Ralston participated, further cementing YC’s financial runway.
The incubator is currently seeing 1,000 applications per session, so the expansion is good news for fledgling entrepreneurs.
This period coincided with YC’s emergence as an incubator of iconic startups. Companies funded in this era—Dropbox (Summer 2007), Airbnb (Winter 2009), Stripe (Summer 2010), and Justin.tv (later Twitch, Winter 2007)—rapidly gained traction, becoming YC’s first generation of billion-dollar businesses. These early breakouts not only validated YC’s model but attracted a new generation of talented entrepreneurs who dreamed of being the next Dropbox or Airbnb.
To handle growth without losing its intimate culture, YC started formalizing mentorship from successful alumni.
By 2010, founders like Alexis Ohanian (Reddit), Harj Taggar (Loopt), and later Garry Tan (Posterous) were stepping into advisory roles. This peer mentorship—young founders advising newer, even younger startups—became a signature YC practice, helping maintain quality at scale.
It’s important to remember that failure is an option—the sooner you fail the better. Now is the time to fail. You are surrounded here by a great safety net of people and opportunity.
In short, by 2010, YC was no longer just a scrappy accelerator. It was now an established startup institution poised for even greater influence.

FOUNDER PHILOSOPHY — HACKERS OVER MBAs
Before Y Combinator, startups were often handed over to “professional CEOs” once they gained traction.
Investors valued polished résumés and MBA credentials, seeing technical founders as people best suited to early-stage experimentation but ill-equipped for the challenges of growth. YC fundamentally disagreed. Instead of betting on professional managers, YC placed its faith in a different kind of leader—hackers, builders, obsessives—people who refused to quit when things got tough.
Paul Graham crystallized this philosophy early: the best startups were run by technical founders who were relentless, resourceful, and deeply passionate about their ideas, no matter how rough around the edges.
In YC’s view, a founder’s grit, adaptability, and technical intuition mattered far more than experience managing spreadsheets or leading boardrooms.
This wasn’t just a contrarian investment thesis; it became a cultural movement. YC did more than simply write hackers a check—it made them heroes. The archetype shifted away from polished executives toward figures like Mark Zuckerberg or Steve Jobs, individuals defined not by their polish but by their obsession, their stubborn determination, and their ability to execute even under chaos.
If YC were a movie, it would be a hero’s journey: founders overcoming impossible odds, failing repeatedly, and eventually achieving glory—symbolized by YC’s famous “I built something someone wants” T-shirt, given to founders whose companies achieved liquidity through an acquisition or IPO.
This cultural shift wasn’t superficial. It reshaped the startup landscape, turning founders from supporting characters into stars. Young entrepreneurs saw YC alumni like Drew Houston (Dropbox), Brian Chesky (Airbnb), or Patrick and John Collison (Stripe) as role models, proof that you didn’t need an MBA, traditional business credentials, or even a polished idea at the start. You simply needed the obsession and determination to keep going when everyone else would quit.
YC’s founder-first philosophy had profound ripple effects.
Suddenly investors everywhere started looking for technical, gritty, deeply committed teams. Startup culture itself changed—becoming more grounded, more practical, and less focused on style or pedigree.
YC’s fundamental advice—“Make something people want,” “Launch fast and iterate,” and “Do things that don’t scale”—became commandments for founders around the globe, a startup gospel built not on polish, but on authenticity and relentless execution.
In just a few years, YC didn’t just bet on hackers. It elevated them, celebrated them, and redefined what the ideal startup leader looked like, transforming the entire landscape of entrepreneurship in the process.

BROADENING REACH — MEDIA, SAM ALTMAN ERA, AND GLOBAL IMPACT
By 2014, Y Combinator had already cemented its reputation as Silicon Valley’s premier startup accelerator. But when Sam Altman took over as YC’s president that year, his vision was even more ambitious: turn YC from a niche accelerator into a global magnet for innovation.
Altman had been a YC success story himself—he joined YC’s first-ever batch in 2005 at just 19 years old with Loopt. His firsthand experience made him uniquely suited to scale YC’s cultural influence beyond the confines of Silicon Valley.
Altman’s writings and talks often aimed at scaling YC’s culture to a larger audience. One of his first major projects was partnering with Stanford University to create CS183B: “How to Start a Startup,” a series of 20 lectures featuring legendary entrepreneurs like Paul Graham, Peter Thiel, Reid Hoffman, and Brian Chesky.
These lectures were released for free on YouTube, where they’ve accumulated millions of views globally, extending YC’s reach far beyond the physical batches.
This approach soon evolved into YC’s popular Startup School, a free online curriculum launched in 2017, accessible worldwide. Tens of thousands of founders participated each year, connecting through virtual office hours, workshops, and global meetups. Startup School effectively became YC’s global talent funnel, allowing ambitious entrepreneurs worldwide to learn from YC’s expertise without ever setting foot in Mountain View.
Meanwhile, YC’s vibrant alumni community amplified this impact.
Founders who emerged from YC batches became active content creators themselves, sharing startup lessons publicly on platforms like Twitter, Medium, and YouTube. YC alumni such as Justin Kan (Twitch) and Garry Tan (Posterous, Initialized Capital) frequently published widely read essays and videos distilling YC lessons on product-market fit, fundraising, and resilience.
This alumni-driven thought leadership spread YC’s ideas, ensuring a steady flow of top-tier global talent applying to the accelerator.
Another critical, but subtle, channel was Hacker News, a link-sharing forum created by Paul Graham in 2007. Initially a simple tool for YC founders to discuss tech news, Hacker News rapidly evolved into one of the largest tech-focused communities online. It served as both an informal recruitment platform and a cultural barometer, giving YC visibility into global developer trends, interests, and talent pools.
This strategic outreach had transformative results. By 2023, more than half of YC’s applications came from outside the U.S.—from India to Nigeria, Brazil to Eastern Europe—dramatically reshaping the batches.
By freely sharing so much wisdom, YC built enormous goodwill and mindshare among entrepreneurs, many of whom would eventually apply, or recommend others to apply. This strategy of openness was itself a lesson in doing things that do scale: knowledge sharing.

YC’S BILLION-DOLLAR BREAKOUTS
Ultimately, Y Combinator’s lasting influence isn’t measured solely by the volume of startups it funded, but by the iconic companies that emerged. YC’s track record of identifying and backing future unicorns was unmatched, turning what venture capitalists considered “fringe ideas” into billion-dollar businesses.
The accelerator’s earliest and most iconic breakout was undoubtedly Airbnb (Winter 2009). The startup began with an absurd-sounding idea: convincing strangers to rent their spare bedrooms to travelers. Traditional investors scoffed, but YC saw potential in the founders’ passion and grit.
The rest became startup legend: Airbnb famously survived by selling novelty cereal boxes during the 2008 presidential election, showcasing the relentless resourcefulness YC prized. Airbnb eventually went public in 2020 at over $80 billion, proving YC’s instinct right.
At YC, we were challenged to do things that don’t scale – to start with the perfect experience for one person, then work backwards and scale it to 100 people who love us. This was the best piece of advice we’ve ever received.
Stripe (Summer 2010) is another quintessential YC success story, reflecting the accelerator’s belief in tackling underestimated markets.
I doubt that Stripe would have worked without YC. It's that simple. Acquiring early customers, figuring out who to hire, closing deals with banks, raising money -- YC's partners were closely involved and crucially helpful.
Payments processing wasn’t exactly a glamorous industry at the time, but YC recognized the technical brilliance and ambition of Patrick and John Collison. Stripe simplified online payments with just a few lines of code, growing quietly yet relentlessly into one of the most valuable private tech companies, currently valued at over $95 billion.
Another example is Coinbase (Summer 2012), which launched into an entirely fringe market: cryptocurrency. YC made an early bet that even if crypto failed, the talented founders—Brian Armstrong and Fred Ehrsam—would pivot successfully.
Instead, Coinbase became one of the largest crypto exchanges worldwide, going public at nearly $100 billion in 2021.
Other billion-dollar breakouts reinforced YC’s core strategy:
DoorDash (Summer 2013) and Instacart (Summer 2012) exemplified YC’s knack for funding scrappy, operationally intense businesses in seemingly competitive sectors—food delivery and grocery logistics—turning logistical headaches into scalable, multi-billion-dollar operations.
Cruise (Winter 2014), later acquired by GM for over $1 billion, and Brex (Winter 2017), a fintech startup valued at several billion, highlighted YC’s willingness to fund ambitious, technically complex startups run by immigrant founders or college dropouts—profiles many traditional VCs would overlook.
Across its history, YC’s outsized returns were evidence of exceptional pattern recognition. As Marc Andreessen said,
Several of our best investments have come from Y Combinator. Y Combinator is the best program for creating top-end entrepreneurs that has ever existed.
YC repeatedly bet early on talented teams with unusual backgrounds, pursuing ideas that looked small, boring, or outright bizarre at first glance. Yet these fringe ideas often turned out to be transformative.
Today, YC’s global brand recognition comes from its unmatched ability to spot potential where others saw risk.
It proved the power of funding fast, betting on founder talent, and believing in big ideas long before the rest of the world caught on. This became YC’s lasting legacy—not just backing billion-dollar companies, but redefining how the world saw startup potential itself.
By 2025, YC-backed startups have raised over $115 billion in funding and boast a combined valuation exceeding $800 billion. More than 90 of them are unicorns, valued at over $1 billion, and over a dozen have gone public.
Lenny’s Newsletter took an interesting look at the data and found that 10% of YC companies have an exit.
“As of today, 17 companies have been backed by YC and gone public. Another 76% are still actively pursuing an exit. But one impressive fact is that only 13% of companies have gone out of business,” writes Palle Broe.

LASTING LESSONS & MANTRAS
Nearly two decades after its founding, the essential playbook that Y Combinator pioneered remains remarkably consistent. These mantras, distilled from hard-earned experiences, are now part of global startup culture:
In honor of @ycombinator's 20th birthday I thought I'd share why this institution means so much to me.
I graduated from a public high school in a small western NY town surrounded by farms and factories.
— Pete Koomen (@koomen)
4:09 AM • Mar 12, 2025
Make Something People Want: At its simplest, the startup game boils down to solving genuine problems. This principle urges founders to obsess less about flashy tech or hype and more about deeply understanding customer pain points. It's YC’s first commandment.
Do Things That Don’t Scale: Early success is built through gritty, manual, and deeply personal interactions with users. Airbnb famously took this to heart, personally photographing host listings to grow early traction.
Talk to Users: Constant engagement with real customers shapes product direction. YC companies relentlessly seek user feedback, ensuring their products evolve closely aligned with genuine user needs.
Stay Focused / Don’t Scale Prematurely: YC urges startups to narrow their focus initially, mastering one core problem before scaling. Early distractions, expensive hires, or unnecessary features can kill momentum.
Be Relentlessly Resourceful: Founders must creatively overcome barriers. YC loves founders who hustle and improvise, treating constraints as opportunities to innovate.
Growth Solves (Nearly) All Problems: Consistent growth is the single strongest indicator of startup health. Fast, measurable growth attracts funding, talent, and morale.
Don’t Die: Survival above all else. YC advises startups to remain lean and adaptable enough to weather inevitable storms.
Founder = Fit: Above ideas, markets, or business models, YC bets on people. The right founders can pivot and adapt to market realities, underscoring the importance of team dynamics and character.
These lessons remain YC’s timeless blueprint, guiding generations of founders through the uncertain landscape of entrepreneurship.

YC TODAY & THE AI ERA (2025)
In 2025, Y Combinator is larger and more influential than ever, accepting hundreds of startups from tens of thousands of applicants per batch.
Competition is fierce—acceptance rates now hover around 1%.
A dramatic shift has reshaped recent batches, driven by breakthroughs in artificial intelligence. More than 80% of YC’s Winter 2025 cohort were AI startups. YC CEO Garry Tan noted a historic surge: “The entire batch is growing 10% week-on-week. That’s never happened before in early-stage venture.”
AI now allows tiny teams—often fewer than ten people—to rapidly build sophisticated products by automating previously labor-intensive tasks.
YC has adapted accordingly, evolving beyond mentorship to become a comprehensive startup operating system. Startups today benefit from YC-provided resources including legal documentation, operational playbooks, and AI-driven productivity tools. This infrastructure allows small, agile teams to rapidly scale from initial idea to market-ready product.
Beyond funding, YC acts as a critical global infrastructure provider, educating hundreds of thousands through Startup School, publishing influential "Requests for Startups" memos, and nurturing an expansive alumni network. Its ecosystem increasingly supports a global community of AI-driven startups, positioning YC as essential startup infrastructure worldwide.

YC’S LASTING LEGACY & CULTURAL IMPACT
Y Combinator didn’t just reshape venture capital—it redefined how the world thinks about entrepreneurship.
It normalized ambitious side-projects, demonstrating that tiny, scrappy teams could challenge problems once reserved for massive corporations or governments. Today, YC startups tackle fusion energy, supersonic travel, autonomous vehicles, and global financial systems.
YC also permanently altered startup culture, embedding phrases like “ramen profitable,” “default alive,” and “hockey-stick growth” into global entrepreneurship lexicons. These ideas encapsulate a pragmatic, resilient approach to building sustainable companies, far removed from early-2000s startup excess.
Perhaps YC’s most profound legacy is how it reshaped the role of founders themselves. The archetype of the modern founder—bold, resourceful, relentlessly focused—is directly traceable to YC’s early philosophy. Today, creators, makers, and builders worldwide, even outside traditional tech circles, embody YC’s ethos.
Y Combinator’s ultimate legacy lies in democratizing entrepreneurship. What began as an experiment in Cambridge now symbolizes an accessible path for anyone with talent, ambition, and grit. In making the act of starting truly attainable, YC launched an entrepreneurial revolution.

Mostly we had the same sort of insight Socrates claimed: we at least knew we knew nothing. What made YC successful was being able to pick good founders. We thought Airbnb was a bad idea. We funded it because we liked the founders.
Culture matters for startups. For a startup to succeed, it must have a culture that reflects what it wants to achieve… company culture starts when it's just two people working on an idea at the kitchen table. In my experience, the founders who start to care about their culture the soonest also tend to be the ones who build the best companies.
The question to ask about an early stage startup is not "is this company taking over the world?" but "how big could this company get if the founders did the right things?" And the right things often seem both laborious and inconsequential at the time. Microsoft can't have seemed very impressive when it was just a couple guys in Albuquerque writing Basic interpreters for a market of a few thousand hobbyists (as they were then called), but in retrospect that was the optimal path to dominating microcomputer software. And I know Brian Chesky and Joe Gebbia didn't feel like they were en route to the big time as they were taking "professional" photos of their first hosts' apartments. They were just trying to survive. But in retrospect that too was the optimal path to dominating a big market.
I have never once seen a startup lured down a blind alley by trying too hard to make their initial users happy.
I’d say determination was the single most important quality in a startup founder. If the founders I spoke with were superhuman in any way, it was in their perseverance.
One of my biggest motivations for wanting Y Combinator to succeed is that I want to give other people a better opportunity than I had in my professional career. Like a parent who wants to provide their children with a better life, I don't want young people to endure corporate America like I did if they don't want to.
By nature, startups are very non-discriminatory. As a founder, your success is directly tied to the success of your product. You must please the market, not your boss or other executives. The market doesn't care how old, what race, religion or what gender you are. It cares if the product is actually good.

In the past nearly two years, we’ve published dozens of deep dives on world-class founders, sharing how they built their companies. These typically take 20-30 hours to research and write. The most recent ones are below:

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Best,
Justin
Founder of Just Go Grind
P.S. Hiring? Check out the team at Athyna
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