33% is way too low as a failure rate for pre-seed startups. I think that number may be around what you would expect for Series A startups. The data is skewed because class sizes have grown over time so the data is skewed towards younger companies.
Re:Y Combinator Companies
by joncalhoun on Wednesday September 07, 2016 @06:12PM
(#12448344)
Another factor is that it takes some time for a company to admit it failed, and everyone's opinion of "failed" is different. I suspect the actual number is higher, especially from an investors perspective.
If you can just avoid dying, you get rich. That sounds like a joke, but it's actually a pretty good description of what happens in a typical startup.
Unfortunately many only prolong their dying, not avoid it.
YC screens who can get into its incubator which improves the yield.
No, that's bad math. Math to do it right is: https://en.wikipedia.org/wiki/Survival_analysis
Re:Y Combinator Companies
by downandout on Wednesday September 07, 2016 @06:52PM
(#12448690)
I was shocked that it was that low. Even considering that another 20%+ are probably on life support, in denial, and/or destined for failure, that is an amazingly high success rate in startupland.
Techstars has shown stats for all companies for years, and has a 10% failure rate. - http://www.techstars.com/companies/
(78% active, 12% acquired, on a base of 800 companies)
Techstars and YC appear to have pretty dramatically different philosophies on selection, which influence this.
Re:Y Combinator Companies
by josh_carterPDX on Wednesday September 07, 2016 @11:02PM
(#12449977)
Agree. I would say the selection criteria for every program varies and each have their own strengths, but having the data around how many companies have failed should influence companies thinking about which program they should pursue.
You often can't find so much as a blog post for early stage companies that have failed. Given you can keep a mostly dead service with few customers running as is for such a small yearly cost.
The giveaway is usually a blog or social media accounts that haven't been updated in years.
Re:Y Combinator Companies
by CptJamesCook on Wednesday September 07, 2016 @07:05PM
(#12448779)
Paul Graham is on the record as stating that he expects the median value of a YC company to be zero. i.e. >50% failure rate.
Re:Y Combinator Companies
by BinaryIdiot on Wednesday September 07, 2016 @05:12PM
(#12447741)
Seems like a very low number IMO. Well over the majority of start-ups fail in the first 5 years. Perhaps when the largest batches make it to 5+ years the percentage will increase? Though at the rate they're adding new companies maybe it'll just continue to feed the monster.
Getting downvoted for citing numbers and a gut reaction? I don't get HN'ers sometimes...
Re:Y Combinator Companies
by BinaryIdiot on Wednesday September 07, 2016 @05:11PM
(#12447731)
I accidentally downvoted :( (really wish that could be fixed)
look for the unvote link on the post
If you downvote a comment, the link to undo the vote is actually labeled "undown", not "unvote" (upvoted comments have the "unvote" link).
At the top of the comment, you should see something like:
username 1 hour ago | undown [-]
^
click here
Re:Y Combinator Companies
by BinaryIdiot on Wednesday September 07, 2016 @06:12PM
(#12448341)
Are you sure about that? I can unflag something I flag but I don't see any place where I can unvote. Unless it's karma gated? Though I would have figured I would have access to all the features by now...
the delta also includes YC companies that have not launched publicly or not publicly revealed they are part of YC.
Really? I'd have thought it would be higher. Although this figure does fit with things I've heard before.
I would have guessed at least half failed. This number seems pretty low to me.
Not every acquisition is a success.
Re:Y Combinator Companies
by josh_carterPDX on Wednesday September 07, 2016 @10:59PM
(#12449962)
That's a pretty surprising number compared to other programs.
some of the 1297 are still on stealth mode.
Re:Y Combinator Companies
by UlyssesSKrunk on Wednesday September 07, 2016 @06:42PM
(#12448595)
Did you mean lower? Because 33% is super incredibly low.
1297 YC companies (from here: http://www.ycombinator.com/press/)
860 YC companies listed as either active or acquired (from here: http://www.ycombinator.com/companies/)
= 33% failure rate
That's a lot higher than I would have expected, to be honest.