Well, I think YC is pretty clear about the sorts of companies they aspire to invest in, e.g., Dropbox, AirBnB, etc. I also imagine quite a lot of the founders who apply to YC aren't aiming for "lifestyle" businesses, in particular since there are cheaper ways, from a dilution point of view, to raise the equivalent amount of capital (or alternatively, to bootstrap to early revenue and find alternative means to finance the business).
YC does indeed optimize for power law outcomes, but then again so does every venture investor (or at least, so should every venture investor).
YC does indeed optimize for power law outcomes, but then again so does every venture investor (or at least, so should every venture investor).