Regarding class size, the incentives are not aligned between the incubator and the startups. For the incubator, the marginal cost of adding one more startup is almost zero, but the chance that you might miss out on the next unicorn is big. So you grow your class size.
For the entrepreneur, the larger class size dilutes you. Yes, the incubator can scale mentoring reasonably well, but the visibility and prestige of pitching at Demo Day is going down.
If YC is graduating 400 startups per year, it's fair to say hundreds of them will not lead to anything. I don't have a good solution for this, each actor is trying to maximize their self-interest.
For the entrepreneur, the larger class size dilutes you. Yes, the incubator can scale mentoring reasonably well, but the visibility and prestige of pitching at Demo Day is going down.
If YC is graduating 400 startups per year, it's fair to say hundreds of them will not lead to anything. I don't have a good solution for this, each actor is trying to maximize their self-interest.