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Wednesday, June 11, 2025

YC Is the New IBM — And That’s the Problem

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YC Is the New IBM — And That’s the Problem

Y Combinator is one of the most iconic institutions in the startup world. It has funded over 4,000 startups, including legendary names like Airbnb, Stripe, and Dropbox. It redefined what early-stage acceleration could mean. It made demo day a cultural event. It scaled.

But here’s the uncomfortable truth: Y Combinator never grew up. Yes, it scaled like a factory—like you used to make five ceramic cups and now you produce 50. But scale isn’t evolution. And YC hasn’t evolved for the era we’re in. It was designed for 2005, and it’s still running the same playbook in 2025.

Can the next OpenAI be born inside YC? The answer is clear: No. And here's why that matters.

The Myth of Scalability as Innovation

Y Combinator perfected the pipeline of churning out “fundable” startups, often with minimal innovation risk. You don’t go to YC to build a moonshot—you go to YC to get a bridge round and validation. The model optimizes for safe bets, not world-changing bets.

That’s why the biggest tech bets of the last decade didn’t come from YC:

  • OpenAI? Born out of an elite coalition of thinkers and capitalists, not a YC batch.

  • NVIDIA’s AI bet? Vision from within a hardware company with deep technical roots.

  • DeepMind? U.K.-based and far more academically anchored than YC-style hustle.

  • SpaceX? Elon didn't start it with $125k and a pitch deck.

YC didn’t—and perhaps couldn’t—incubate these.

The Platform Problem: YC Is Craigslist

YC today is like Craigslist. Once, it was everything—jobs, housing, gigs. But then a thousand verticals unbundled it: Airbnb took housing, LinkedIn took jobs, Uber took rides, and so on.

YC is waiting to be unbundled in the same way.

It is a generalist factory in a world now defined by the intersections of specialized, emerging technologies—AI + biotech, crypto + supply chain, robotics + mental health. These aren’t demo-day darlings. These are decade-long labs. These are fund-and-build platforms. They require long-term, infrastructure-level thinking.

The Old Playbook Can’t Win New Games

YC was built for Web 2.0. It flourished when minimal viable products and agile iterations could quickly lead to market traction. But the new wave of innovation doesn’t move in 3-month cycles. We’re entering a world of:

  • Pre-trained models that cost tens of millions

  • Deep tech that requires regulation-savvy founders

  • Climate tech with long feedback loops

  • Decentralized protocols with complex incentive engineering

What these ventures need is not YC’s playbook. They need patient capital, deep integration with research institutions, infrastructure support, cross-disciplinary expertise, and a new breed of founder networks.

YC Is IBM. Where’s the Next Apple?

In many ways, YC is IBM now—respected, still powerful, but stagnant. You know what that makes the opportunity? We need 100 new post-YCs. Each one laser-focused on a vertical. Each one optimized for depth, not breadth. Just like Airbnb pulled one vertical out of Craigslist and ran with it, the accelerators of the next decade will do the same with YC.

We’ll see:

  • An OpenAI-style research-to-commercialization lab for AGI

  • A biotech founder accelerator with embedded labs and FDA navigation

  • A climate moonshot studio building infrastructure, not MVPs

  • A sovereign-technology accelerator for deep geopolitical alignment

Each of these would make YC look like a hobby club for hustlers with slide decks.

Point Be Noted

Let’s not confuse ubiquity with relevance. YC’s continued dominance in the startup discourse is a legacy effect. Its true limitations are masked by volume. But volume is not vision. And in the AI era, in the climate era, in the post-scarcity, post-crypto, post-Web2 world, we need vision.

The most important companies of the next 20 years won’t come out of YC.

They will be born elsewhere—on new platforms, with new rules, under new accelerators that know how to build for complexity, capital intensity, and global impact.

YC lit the flame.

But it's time for a new fire.

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Y Combinator (YC) holds a 7% equity stake in each of its ~5,000 portfolio companies via its standard deal (ycombinator.com).

Industry estimates put the combined valuation of YC-backed startups at approximately:

Using those ranges:

  • At $600 billion total, YC’s 7% stake is worth:

    0.07×$600 billion=$42 billion0.07 \times \$600\,\text{billion} = \$42\,\text{billion}

  • At an upper estimate of $900 billion, YC’s stake would be:

    0.07×$900 billion=$63 billion0.07 \times \$900\,\text{billion} = \$63\,\text{billion}

📊 Summary

Assumed Portfolio Valuation YC’s Stake (7%) Estimated Worth
$600B 7% $42 billion
$900B 7% $63 billion

So, YC’s 7% equity across its ~5,000 companies is likely worth between $42 billion and $63 billion, depending on how you calculate “total portfolio value.”


Opinion: First Lady Melania and Pope Leo are right — it’s “unum” time Unum doesn’t erase conflict or pretend we all agree. It’s not utopia. It’s the hard, daily work of choosing coexistence over chaos ..... a time when America — and the world — feels dangerously divided. ....... Unum means Jewish and Muslim Americans grieving side-by-side. It means a First Lady who grew up Catholic in Slovenia invoking a motto that speaks across American synagogues, mosques and churches alike. It means a Pope who spent years in Latin America calling for peace — not as an abstract dream, but as an urgent task. .......... In moments like these, we face two temptations. One is despair: to give up, to believe the divisions are too deep. The other is rage: to blame, punish and retreat into our tribes. ......... Pope Leo XIV said it plainly: “Be bridgebuilders, peace seekers, and companions on the journey.” That’s not just a prayer. It’s a plan. ......... Because in a world driven by algorithms that divide and outrage that sells, choosing Unum is radical. It means staying at the table when you’d rather storm out. It means believing that pluralism — people of different faiths, races, beliefs and stories — can still build a shared life. ......... belonging isn’t partisan. It’s American. It always has been.

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