Additionally, we only hear about what they've decided to launch with. If they start with a grandiose idea, start it and find it impossible, we only hear about the twitter app they salvaged from the wreckage. If they have a plan to get to world domination, but don't tell you, we only see a new calendar site.

And the idea that people who set out to change industries start with something that is not perceived as so is included in that same Paul Graham essay. i.e. AirBnB launched as a way to rent out airbeds and couches. They didn't launch saying they will revolutionize the hotel industry but that might the end result of their work.

There are a lot of launched YC companies with enormous ambitions that choose to not make them public.

I think that as a startup, pointing your bat to the stands is something best left for investor meetings and internal goal-setting. In the press, it might not go over so well.

I'm curious if "failure to launch" happens more often with ambitious startups vs. less ambitious startups, and if so, by what ratio.

Good point. Another interesting datapoint would be (and this is something that only PG or other YC founders can answer) to see what is the scope of the original vision (eg - change/revolutionarize industry XYZ) of the founders and where they end up (provided they stay in the same space). The original vision is of course going to change, but if a large number of founders are scaling down their original idea, that is an interesting data point. It may be possible that 3 months of iteration may not be sufficient time for certain types of startups. (Again, without any actual YC experience, I am simply speculating).

I'm not sure I'd want to use a search engine that was created in 3 months by 3 guys.

Maybe a 6 month version of YC where more money is invested could work, but I don't think YC is setup to support those types of ideas. I'm sure someone out there can surprise me though...

Challenge Accepted.