Comment by vonnik

It's useful to think about Jessica's comment under the original message, that YC is "mass production of startups." What it really means, I think, is that YC is comfortable with more failure than other investors. They are spreading their bets wide by making many small investments, and as they have said many times, only a small percentage of those bets need to be right. That's quite different from how most VCs invest at any level. Most VCs are trying very hard to be right while making very few bets that are fairly large relative to their fund. And as the Kaufman report shows, that doesn't work. Most of those VCs are failing to show ROI to their LPs. YC's approach -- making many small bets and tripling down on what works -- is similar to some biological processes. Consider how mammals manufacture antibodies, for example. When an antigen is detected, we start to make tons of different types of antibodies, not knowing which ones will successfully attack the pathogen. Most of those antibodies turn out to be useless, but a few succeed, and their success is reported so that the body makes more. That is, massive, parallel failure is the precondition of success here. YC is like that. But instead of manufacturing antibodies, they're manufacturing startups. Those startups are attacking lots of different problems rather than just one. And it's hard to know in advance which ones will succeed.