Tech innovation is a cycle, especially in the main character-driven world of early-stage venture capital and copycat nature of startups.
The latest proof? Y Combinator this week announced Launch YC, a platform where people can sort accelerator startups by industry, batch and launch date to discover new products. The famed accelerator, which has seeded the likes of Instacart, Coinbase, OpenSea and Dropbox, invites users to vote for newly launched startups “to help them climb up the leaderboard, try out product demos and learn about the founding team,” it said in a blog post.
If it sounds familiar, it’s because — in my perspective — Y Combinator is taking a not-so-subtle swipe at Product Hunt, a nearly decade-old platform that is synonymous with new startup launches and feature announcements.
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Y Combinator doesn’t necessarily agree with this characterization: The accelerator’s head of communications, Lindsay Amos, told me over email that “we encourage YC founders to launch on many platforms — from the YC Directory to Product Hunt to Hacker News to Launch YC — in order to reach customers, investors and candidates.”
The overlap isn’t isolated. As Y Combinator makes a Product Hunt, Product Hunt is making an Andreessen Horowitz. Meanwhile, a16z is making its own Y Combinator. Not to mention Product Hunt has investment capital from a16z and formerly went through the Y Combinator accelerator.
Ah, the complexity of competition.
Without trying to confuse you, here’s why I think this is interesting: Launch YC feels like Y Combinator’s strategically sound answer to one of the loudest critiques of its model in recent years: As its cohort size has bloated, standing out within a batch is harder than ever. As standing out inside of YC has become more difficult, and given how important distribution is for early-stage startups, YC offering a way for startups to make a bit more noise might make the implied equity cost of its program more attractive.
Similar to Product Hunt, Launch YC is pitching itself as a place where people can detect the next big startup, vote for the best ideas and connect with napkin-stage founders. Product Hunt estimates over $100 billion in startup value has been launched on the platform — including the launch of companies like Stripe, Airtable, Zoom and Robinhood.
The difference between the two programs is that Product Hunt is for the general public while Launch, at least at this point, is only for startups that have gone through Y Combinator’s accelerator.
Y Combinator’s move comes just months after Product Hunt CEO Josh Buckley unveiled Prologue, a holding company that owns Product Hunt alongside Hyper, a $60 million early-stage venture firm.
Hyper helps startups, batched into small groups, hire and get seen by users and the general tech community (i.e., do PR). The reason I jest that Product Hunt is trying to build its own a16z is because it joined forces with a venture arm that has an appetite for both media and early-stage companies.
Plus, Prologue raised $23 million from Sequoia Capital and, you guessed it, a16z.
Speaking of, let’s end with how a16z fits into all this. Earlier this year, a16z launched a seed-stage accelerator, the firm’s first formal foray into the earliest step of an entrepreneur’s journey. When announced, a16z’s program seemed competitive to YC; both institutions want early-stage founders to take their capital, networks and advice in exchange for equity.
https://techcrunch.com/2022/04/22/should-i-choose-andreessen-horowitz-or-y-combinator/
It was extra fitting given that, over the years, a16z has often led some of the buzziest rounds coming out of Y Combinator, including Tandem, Queenly and Contra — essentially sourcing deal flow from the accelerator. With its own accelerator, a16z has a clear advantage over other firms: the insane amount of dry powder at its disposal. Earlier this year, the firm raised $9 billion in new capital, and its check-writing capabilities could see founders receiving up to $1 million, nearly double the capital that YC offers in its recently expanded standard deal.
Add in the fact that Future, a16z’s media arm, just passed the one-year mark, and it’s clear that top institutions are trying to be accelerators, discovery engines, content marketers and check-writers all in one. I wouldn’t be surprised if YC and Product Hunt start to get noisier on the editorial front, joining the ongoing VC media apparatus that has its own considerations to factor in.
You can’t avoid the chaotic, fascinating web of venture and startups these days. The pain points of capital, distribution and support are all overwhelmingly obvious, and in response, institutions are borrowing more than sugar — I mean, deal flow — from their neighbors.
This article would have been perfect if the accompanying image was the Spider-Man meme pic.twitter.com/RosX8ShyQL
— Jay Kapoor (@JayKapoorNYC) July 21, 2022
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