Make Your Own Winners

Y Combinator already is a leader in the accelerator industry, and it is poised to continue being one over the next 10 years.  I anticipate Y Combinator to continue accelerating startups that match the company’s criteria of becoming profitable enough that the venture ends up being worth the risk taken. 

That’s not to say that every company Y Combinator accelerates will be a success, nor would this be expected.  If they increase the rate at which they find unicorns, it only makes sense that there will be an increased rate of companies they output that don’t quite make it to super-stardom.

One way Y Combinator can hedge against the risk they take every time they invest in a startup is to start putting their profits into startups at an earlier stage in the process. 

At this point, the company has produced a sort of model for what unicorn companies look like from the time they start at the accelerator to when they become blow-up success stories.  Y Combinator has real data that they can use to refine their process and increase their return on investment. 

In addition to focusing on small teams for a fixed amount of “acceleration” time, they could also put some money into refining the value proposition of a founder’s idea to make their early stage company look more like the later-stage startups that apply to Y Combinator’s accelerator program and move on to be highly successful. 

I see this diversification as a way to protect Y Combinator’s position within the market by using their profits and considerable industry influence to better the chances that they pick winners. 

Afterall, it’s much easier to pick a winner if you have guided them from the start to be one.