Y Combinator sees no shortage of startups that apply to be a part of their funding cycles. But they don’t always see all the ideas they’d like to see come out of the classes. So starting with the upcoming Winter 2010 cycle, they have a new idea called RFS, Requests For Startups. Basically, Y Combinator will issue some ideas of what they’re looking for in any cycle, and will accept the ones that pitch the best way to do the idea.
Now, to be clear, Y Combinator will not be forgoing its usual method of combing over any and all startup pitches outside of the ones they lay out. “We don’t expect responses to RFSes will ever be more than a fraction of the applications we accept. We wouldn’t want them to be. Most good ideas should be ones that surprise us, not ones we’re waiting for,” Paul Graham writes on the site today. The hope is that this will help guide some new startups without solid ideas in the direction of something that is missing in the market. Or encourage ones that already have a similar idea to apply.
Y Combinator’s RFSes won’t describe exactly what Y Combinator is looking for, but rather will give a general idea, with the hopes that the startups can come up with even better plans than Y Combinator is thinking of, Graham says.
So what is the first RFS? Well, it’s something near and dear to our hearts: The Future Of Journalism. Y Combinator is wondering what the online content sites will look like in the future when print publications are gone. Certainly some, like TechCrunch, have gotten large enough to support themselves now, but most content sites are still built on the notion of content first, monetization later. Y Combinator notes that in the heyday of print media, the approach was often the opposite, there was a business plan in place before the launch. It believes that approach can still work, and has laid out a rough outline of what it’s looking for from startups that want to do this:
Groups applying to work on this idea should include at least one writer who can write well and rapidly about any topic, one or more programmers who are good at statistics, data mining, and making sites scale, and someone who’s reasonably competent at graphic design. These functions can of course be combined, and in fact it’s even better if they are. Xooglers would be particularly well suited to this project.
This RFS is just the first of 3 to 5 that Y Combinator hopes to get out there before the October 26 Winter 2010 class application deadline, Graham tells us. Startups applying specifically for these RFS ideas will be able to indicate that on their applications.
Graham notes that Y Combinator has sort of passively given ideas to startups in the past, like this, but thinks this new explicit call will lead to some interesting things.
We asked Graham if this new approach means these types of startups will get different financial deals from Y Combinator. “Not significantly,” Graham says. “Execution matters so much more than the idea that even if we supplied the entire idea we wouldn’t be entitled to more than 10% of the company,” he notes. On his post he gives a bit more:
We might ask for a little more equity from startups responding to an RFS, because we’d expect to contribute more to them. But at most a percent or two, and often nothing. Ideas count for something, but execution matters far more.
[photo: flickr/eran finkle]
It sounds like a good deal for aspiring entrepreneurs who have the technical know-how.
“should include at least one writer who can write well and rapidly about any topic”. Can’t wait to read badly written copy by non-experts!
How about ’space elevator’? Hope they have that as an RFS.
It’s come up, and been discussed on HN before, not really a *web* tech startup idea but a good (long-term) science idea.
http://searchyc.../space+elevator
It’s not just “feeding ideas” it’s taking partial responsibility for the eventual outcome, which I applaud. VCs don’t do this because imagine the chagrin when the entrepreneur is being fired and says to the VC, “but it was your idea!”? LOL. Graham is right though, this will only be a small portion of funded deals…
Half the fun is creating a Start Up that you “the entrepreneur” is passionate about. NOT spoon fed an idea.
I guess if you are an entrepreneur with no ideas about a start up this is a good idea. Then again, that is an oxymoron, and maybe you shouldn’t be an entrepreneur.
Justin, I assume you’re not interested, but that’s no reason to piss on those who might be. One of the virtues of this approach is that it endorses ideas that may be similar to those already rattling around in a potential entrepreneur’s head. In any case, if this first RFS is a representative example, it’s clear that a successful response to a “spoon-fed idea” will require loads of creativity.
Well put Daniel. I like that notion that it “endorses” ideas already present in an entrepreneur’s mind.
Actually, I somewhat agree with Justin but I’d phrase it differently. It’s not that this isn’t a creative idea on YC’s part to find good startups, it’s just that it doesn’t speak to ALL entrepreneurs.
There are those of us entrepreneurs that wouldn’t want an initial idea given to us to build from. This setup alone would make feel like rejecting whatever the concept is. If it’s not something that came from my own heartfelt passion for solving a specific problem, then it’s simply not anything I’d desire to pursue.
That said, not every entrepreneur thinks like this. It might hit a chord for some people. I suppose we shall see.
It speaks to me.
I’ve been thinking about the last point a lot, “startup for startups”. I was thinking of it as “entrepreneurs for entrepreneurs”. Why? Because I am passionate about entrepreneurship / startups, and I want to solve problems for this group of people I have selected.
However, gathering “requirements”, learning about their day-to-day problems (to identify opportunities to create value by helping them create value) isn’t as easy – I don’t have a network of fellow entrepreneurs I can just tap for info, to hear their “I wish I had a … to solve this @#$% problem”
I would love to combine #4, 5, 6, 7, 11, 14, 21, 22, and 30 (or simply “anything software or hardware”) to help the small businesses – even one-man SOHO shops. I like helping the little guy.
Do reach out to me if you’re interested (or know someone) who has a problem you think there should be a solution to.
Jay
The source of an idea dosen’t matter so much. As entrepreneurs we get ideas everyday from multiple sources, a conversation with a stranger on the street, a TV show, a problem we have or a website. So I think its a good thing direction.
C’mon Justin this RFS doesn’t even seem to be an “idea”..
More like a “market opportunity”.
Wow, this is really cool! I’m proud that YCombinator is just continuing to innovate in the space of funding and creating startups.
What are “Xooglers” ?
People who used to work at Google. It would’ve taken fewer keystrokes for you to just type Xooglers into your search bar.
http://lmgtfy.com/?q=xooglers
Google it retard : )
You mean “is”…. ironic
LOL!
This is a great way to feed inspiration to the startup eco-system.
In fact, we should allow anyone to seed ideas, and people to vote on the quality of the ideas.
just sounds like they want someone to create crowdfusion to me.
Cool idea. I’m interested in seeing how these teams perform against those that develop their own idea. My bet is on the second group.
Sounds like they might be having trouble attracting talent.
It was only a matter of time. Does this mean that instead of IPO’s we’re going to start seeing ebay style auctions of startups?
not much if an idea, more of a topic …
With the current acquisition drought, YC has some pressure from Sequoia to launch winners. So YC has to come up with half-baked ideas that have potential…
Check out klatcher.com. That’s the future of journalism and user generated content monetization.
I dont think so, thats one of the most horrible sites I ‘ve seen
“T. Rex doesn’t want to be fed… he wants to hunt!”
Brilliant. Paul Graham is a smart cookie.
hmm, wonder if any other early stage investors doing this? i like the idea.
And because you like the idea, your comment will not be deleted.
I like the idea too.
Christine,
I have seen seed stage VCs in India who are open to doing something along the same lines (Seedfund is one of the firms who were open to an team of entrepreneurs being seeded with an idea).
This makes sense in ecosystems like India where there was (and still is) a lot of money trying to chase too few ideas. I am not sure how well it work work for someone like Ycombinator. Best of luck to them!
An entrepreneur used to be someone with an idea or concept that he wants to turn into a successful product or business.
Y-Combinator seeks executives who will work for them instead.
awesome idea.
Y Combinator doesn’t seem to make a compelling offer to entrepreneurs. Hate to be blunt, but it’s true. “We make small investments (rarely more than $20,000) in return for small stakes in the companies we fund (usually 2-10%).” http://www.ycom....com/about.html
One can do an Angel deal for $1M and give up less than 30% of the company. I’ve done it. Do the math. Also, I don’t see what one can do with $20k.
we hear this a lot. but the entrepreneurs keep flocking to YC because it’s an amazing support and marketing platform. And some great companies have launched there. My guess is your $1m angel round was on the back of a product that was very far along in the dev process. YC guys come to the table with an idea and a spark in their eye. And I’ve never heard a single one complain that they got an unfair deal.
“spark in their eye”
Listen sparky, can you quantify the *value* and *quality* of the services provided to the startups, while they effectively self-fund their endeavor?
I believe it is Newton who said, there aint no such thing as a free lunch.
Mike is right – none of the YC alums complain because they understand the Equity Equation and can work out the cost/benefit of the YC brand and Paul’s mentorship in the early stages. You can read about the Equity Equation here: http://www.paul...com/equity.html
In other words the YC alums themselves don’t place much value on their ideas?
Agreed with @arrington above – the ycombinator cash supply is poor but they give a massive amount of support, contacts, business experience, and above all motivation and encouragement!
I still do not think that these “idea” companies will work. If the founders are not passionate enough to come up with the concept on their own then they are very unlikely to stick with it when tough times hit.
I can imagine the Y Combinator founders have gathered a long list of products/services they’d like to see built over the years… this sounds like a smart way to get some of them made on the cheap.
I think the idea of creating a startup that plays into a gray area is smart. That’s what this sounds like to me.
How is this different than a just hiring a team of developers to make a product. This completely defeats the purpose of a incubator and really is just getting your apps made for cheap while YC keeps a huge chunk of equity.
No, this is what an incubator is, except in this scenarios, the executioners will reap the rewards. A far better outcome than most incubators.
Makes sense. Investors are not good at executing ideas.
Looks like finally ideas matter. 2 years ago they told me its “all about the people” behind. I think I´ll have a dusty NA somewhere.
I’ve been thinking about the last point a lot, “startup for startups”. I was thinking of it as “entrepreneurs for entrepreneurs”. Why? Because I am passionate about entrepreneurship / startups, and I want to solve problems for this group of people I have selected.
However, gathering “requirements”, learning about their day-to-day problems (to identify opportunities to create value by helping them create value) isn’t as easy – I don’t have a network of fellow entrepreneurs I can just tap for info, to hear their “I wish I had a … to solve this @#$% problem”
I would love to combine #4, 5, 6, 7, 11, 14, 21, 22, and 30 (or simply “anything software or hardware”) to help the small businesses – even one-man SOHO shops. I like helping the little guy.
Do reach out to me if you’re interested (or know someone) who has a problem you think there should be a solution to.
Jay
YC has this requirement, though:
“If we invest in you, your group is expected to move to the Bay Area for January through March 2010.”
Is that carrying over to news startups? While the requirement to move would be fine for most tech startups, I’d think most successful news ventures of the future will be geography-based.
Thats a good thing.It gives some people a good hint on startup areas that are promising. Thanks YC for pointing my ideas to a good direction
yawn
This is a great idea. I completely agree with the approach – the importance is not in the idea but in other things like execution. Read more at http://www.yani...nerate-one.html