YC ignores a lot of good ideas because it's really focused on BIG ideas. YC wants to build Paypal, not 37signals. They lean toward ambitious infrastructure ideas which also have a higher failure rate. But there is a huge number of great ideas with lower risk/reward ratios that will still make stellar companies. I say bring it on... it's a great time to be in the HTML writing business. :)

We'd be happy to have funded 37 Signals. We funded Wufoo, which is very much like 37 Signals, and we'd be delighted to fund more companies like that.

But Wufoo still deals with a Big Idea: namely, something that's creating a large infrastructure on the Internet. 37signals is a private, internal service: they make things that appeal to closed niches. On the other hand, Wufoo is something that's more public, in a sense.

Maybe it's just a matter of what YC companies get named more than others, but the ones that immediately come to mind are big-problem companies. Reddit for finding news online. Disqus for comments. Scribd for document indexing. Wufoo for forms. There aren't as many niche sites (versus something like TechStars, which had a cooking site) - or am I just missing lots of niche YC sites?

even the smallest niche can be huge.

Absolutely. Furthermore, niche users tend to be more fanatic about the sites they use if they're done well.

Many of us Atlantans have a lot of respect for the people involved in Shotput. As some others here have said, I'll wait to judge until the first class of Shotput companies graduates.