I have a lot of respect for this viewpoint, and the clarity with which you state it, though it is almost exactly the opposite of what I would say myself. You should write an essay on this if you can find time. It would be incredibly interesting, at least to me.
I think framing matters. If it's presented as "when you take my money, you must live on my land, be overseen by me" etc., it's almost feudal, and of course no-one with free choice would choose that kind of environment. But if it's "if you want to be mentored by me, I can host you for a short while along with a bunch of other ambitious folks", it seems different.
Sounds like the thing to do would be to eliminate that friction by helping people quickly and easily locate places of their own, then.
YC isn't a charity, after all, beyond the public forum for discussion they provide in HN--and even that is arguably a chance to promote their own startups and scout talent. :)
I was under the--obviously mistaken--impression that pure profit motive was involved here, and thus was curious if a blog entry would be stating the obvious. Now that you've given some more info there, I agree with my parent poster--please do a writeup!
I understand your point though.
But to clarify my idea, I don't mean an office space people come into... but rather if you had a live/work space, it's like the same thing of a startup getting a house together and banging away for 3 months... but they happen to be next door to other batch-mates. I wasn't in the Y Scraper, but what I can see of the successes from those batches are that it worked pretty well for them to all be in close proximity to each other.
I know you mean living space rather than office space. It just doesn't seem an urgent problem. I think we've succeeded in making happy hours non-lame this batch, now that Garry Tan has taken over as social director. It may be that is the best way to bring founders together outside YC.
In some senses, it is like on and off campus housing: Sure for some people off campus is less of a distraction, cheaper or just totally sufficient, but it is arguable that the on-campus philosophy of American colleges has contributed to Americas success.
What's stopping them from doing so?
We went a little outside of the Mountain View area and got a house in the Santa Cruz mountains. It was great. Three desks, three computers, three bedrooms, a nice kitchen, and a hot tub - perfect for those cold February days. There was a country store up the road, but not much else for miles around. Nothing to distract us except for redwoods, wild animals (turkeys, mice, deer, a scorpion), and the occasional storm. But still, we were only 30 minutes from Mountain View and 40 minutes from Palo Alto - closer than if we had lived in San Francisco.
Those were the 4 most productive months of my life.
I agree about the need to build you own culture, etc, but there are some undeniable benefits to being near other YC startups and sharing resources such as a kitchen (which seems pretty rare in a ~5 person closed-off office space) or food delivery. The YScraper in SF does seem to be pretty popular for this stage, but I imagine there's a better hypothetical option.
Plus we have no particular expertise in real estate. We have some insight about what startups need, but I suspect it is more than counterbalanced by our ignorance of real estate. It's better if we stick to what we're good at.
E.g. it probably is encouraging for the weakest startups to have some kind of shared workspace they have to come to every day. But for the best startups it's not only unnecessary, but undesirable. Larry and Sergey would not have been better off in some kind of shared workspace. Their garage was the ideal place for them.
The arguments pro and con for shared living space seem to be more extreme versions of the arguments for shared workspace.
If we have to choose between helping failures become small successes and helping successes become big successes, we'd prefer to work on the latter.