To clarify a bit here, it’s very hard to know in advance that a founder will be “great”, so I suspect that there are some rough proxies that investors use, and what you or I think of as “great” may not be what the marketplace of investors values when “shopping” for “great” founders to back.
For example, academic achievement. Is that something that makes a founder great? What about social connections? What about dogged determination? Each investor will have a theory, and one or two might even be right.
Probably the only thing that really matters is “the founder actually got the company to a point where it can generate revenue”, and the rest is wait and see.
Which leads back to your excellent summation:
> So the question is not whether they chose good founders and rejected bad ones, but whether they backed a big enough and broad enough pool of companies to get a significant number of huge winners...
PG said often back then that this is what they think matters most. I was there when he was taking about it in a casual chat with a group of the batch members after one Tuesday night dinner, and he said something along the line of “if only we could do something like coat the floor between the front door and the interview room in a highly slippery liquid, and the people who make it to the room get funded”.
Luck is not objectively definable or measurable, and is highly contextual. Was the pandemic bad luck or good luck for Airbnb? It instantly caused hundreds of millions of dollars of lost bookings, forcing staff layoffs and requiring an emergency $1b loan to keep the company alive. But now it’s reported their bookings are stronger than ever, due to people’s different living/working arrangements in response to the pandemic. Maybe it would look like terrible luck if the company/founders hadn’t been formidable and skilled enough to navigate through the initial shock in March-April, leading to the company collapsing. Thanks to getting through to the point where they now have higher-than-ever bookings, it looks like great luck.
Anyway, clearly the point of my sentence about luck was that good luck is necessary but not sufficient; any amount of luck, however you define/measure it, is worthless without strong founders who can take full advantage of it.
When I was in YC (in 2009, a few months after this essay was published), I remember PG saying that plenty of VCs, (specifically Marc Andreessen, as an example), pay just as much/more attention to market/macro conditions as they do to founder talent, but added that this is a luxury Andreessen has when all the very best companies want to be funded by Andreessen, so he can pick companies that have both great founders and favourable market conditions.
> I think it's his job to believe in the "great man" theory, and to not credit circumstances, luck, etc
PG acknowledges often that luck plays a critical role in success. But the point is that weak founders with all the luck in the world won't achieve much, whereas great founders with only a little bit of luck can be hugely successful.
He also points out that it's a long journey, much longer than a downturn will last, so better to start now when you're inspired, especially when the downturn can bring favourable conditions (like cheaper talent, rent, services, etc).
YC is also quite happy to back founders a second time. Off the top of my head, Stripe, Twitch and Cruise were all founded by 2nd or 3rd-time founders. So YC's approach is to find founders with potential, get them into their network, then support them for as long as they need to find success.
> Is there a statistical analysis of YC and PG which shows they choose effectively?
Some people have tried to evaluate this quantitively or qualitatively, but most miss the point, or can't evaluate it correctly without knowing YC's financials, which nobody outside YC management and their investors knows.
YC's approach isn't to try to "choose" only the good founders. Their approach is to cast a very wide net, to invest in a huge number of companies including some very crazy-looking ones, knowing that only a handful will win big but that will yield big enough returns to more than pay for all the losses.
So the question is not whether they chose good founders and rejected bad ones, but whether they backed a big enough and broad enough pool of companies to get a significant number of huge winners - like, say, Dropbox, Airbnb, Twitch, Segment, Cruise, Coinbase, Instacart, Flexport, Brex.
Answer: yes, evidently.