Y Combinator revealed yesterday that its president, Sam Altman, is stepping down from his role to become the president of the accelerator program. This change, YC said, will allow Altman “to spend more time with OpenAI,” the San Francisco-based nonprofit that was co-founded by Altman and Elon Musk three years ago to anticipate the risks posed by artificial intelligence.
The timing may not be so casual. Two weeks ago, Musk parted ways with OpenAI, whose operations Musk and Altman have funded, along with Reid Hoffman, Peter Thiel, YC co-founder Jessica Livingstone and former Stripe CTO Greg Brockman, who is today the chief executive officer of OpenAI technology . Musk cited disagreements over the development of the company as a reason for “parting with good terms.” A source is now telling us that Altman actually intends to become CEO of the organization, although asked directly about this yesterday, Altman said he was too busy to talk about his immediate plans.
Either way, Altman’s newest move raises a question industry watchers will likely be asking for some time, and that is whether Altman, who was part of YC’s first startup class in 2005, got started on time. Partial as YC partner in 2011, and became the head of the organization five years ago, he made YC better or worse during his tenure at the top.
It is certainly very changed. When Altman received the reins, YC had just graduated 67 startups, all of them from the US It was a record number at the time, but Altman has tripled the number of startups YC will process in a single batch, with YC. scheduled to present 205 startups to investors over two days in two stages in San Francisco within two weeks.
Those numbers just hint at Altman’s ambition. In the past two years, YC launched Startup School, a free 10-week online program; the Series A program, which trains alumni of the seeding stage on how to obtain follow-up funds; the YC Growth program, a 10-week dinner series characterized as a kind of graduate school program; Work at a Startup, a platform that connects engineers with YC companies; and YC China, an independent program that will run in Beijing once it goes live.
Even with a network that has 4,000 alumni and 1,900 companies, Altman has always said that he believes YC can do even more. “Part of our model is to make the cost of mistakes really low and then make a lot of mistakes,” he said at TechCrunch Disrupt in 2017. “We will fund a lot of people doing a lot of things that sound really silly.” , and most of the time they will be. And sometimes, it will seem like a bad idea, and it will be amazingly brilliant. The best starter ideas are at the Venn diagram intersection of “sounds like a bad idea,” actually it’s a good idea.
Some worry that Altman has taken YC to unsustainable extremes, encouraging too many people with shaky ideas to abandon safer and more conventional options for a chance to become the next Brian Chesky, and specifically encouraging them to come to the Area of the Bay for its Accelerator Program, despite overcrowding and rising costs.
Others wonder if startups will eventually rebel against YC’s terms, which see you invest $ 150,000 in exchange for 7 percent of each company, a stake you can hold throughout the life of the company if you choose. , according to its pact with its founders.
While YC’s halo effect is real, giving away such a large chunk of the company for so little funding puzzles some founders later.
The VCs, many of whom have a love-hate relationship with the powerful accelerator, have also whispered on occasion about potential conflicts of interest due to Hydrazine Capital, a hedge fund Altman formed before being appointed head of YC, with a “significant investment”. by Peter Thiel, as described in a 2017 New Yorker article on Altman.
Still, even people who might be tempted to beat Altman a bit say he’s done a phenomenal job running Y Combinator, including turning the team into a global brand, creating a steady stream of new products, and overseeing development. infrastructure and software that have allowed the company to continue to scale for the foreseeable future.
Altman also diversified the types of founders YC supports (though it could do better); 15 percent of the founders who went through the accelerator last summer were women. And while the program was once dominated by consumer startups, it now graduates business-to-business software and services companies, healthcare startups, blockchain companies, real estate companies, govtech and fintech, among others. .
Equally important, Altman, a networking expert who isn’t known for being a terribly warm boss, made sure everyone at the partner level at Y Combinator gets the same economy. It’s a surprisingly rare structure in venture capital, where a small group of investors is more often than not getting the most financial rewards based on how long they’ve been involved with a team or their specific contributions.
In fact, Altman’s obvious push will make it even more interesting to see what he does with OpenAI, which just two weeks ago said it had developed an artificial intelligence system that can create fake news so authentic that it decided not to publish the full research for The public so that it can better weigh its ramifications.
Meanwhile, one guesses that YC, where Altman has not been operationally involved for some time, will be fine without him at the helm, even thanks to the continued involvement of Altman and YC founders Paul Graham and Jessica Livingston at the leadership level. More importantly, YC has Michael Seibel, its CEO, who has led YC’s core program for the past four and a half years. (Other of his many partners have also been steadfast for years.)
As a VC told us yesterday, even with a YC that looks very different than it did five years ago, perhaps because of that, investors would be “idiots to not pay attention” to the founders they back. Many of YC’s fledgling startups have started raising funds on valuations that make it too expensive for angels or some startups, and these founders later regret the inevitable market crash. But for Series A and later stage investors, there is still no better way to reach promising founders. When it comes to curating talent, says this investor, YC “is too good.”