Hard Tech Startups

Some people think YC only funds straightforward software startups. That’s definitely not the case — YC’s largest exit to date is a self-driving car company, Cruise Automation, and we’ve funded many other hard technology companies like Gingko Bioworks, Oklo, Helion, Rigetti Computing, OpenAI, Perlara, uBiome, Verge Genomics, X-Zell, Athelas, Auro Robotics, Bagaveev, Boom, Gecko Robotics, Multiply Labs, OpenTrons, Varden Labs, Atomwise, Transcriptic, IronOx, 20n, Bikanta, Industrial Microbes, Cofactor Genomics and many more

We’d like to fund a lot more hard tech companies [1], and I’d like to explain how YC most helps hard tech founders.

At the earliest stages, there’s actually a lot more in common between a self-driving car company and a file sharing company than people think–all kinds of startups usually work best when initial costs are low and iteration cycles are fast. It’s relatively easy for a software startup to take short cycle times and low-costs to an extreme, but hard tech founders are often surprised by how effectively they can do this, too.

Many hard tech founders come from academia or big company backgrounds, where projects can be expensive and slow. We help these founders shift into a much more iterative mindset so they can move faster.

Very often, the first thing we do is help hard tech founders find a small project within their larger idea that fits the model of quick iteration and requires a relatively small amount of capital. This project is often the smallest subset of their technology that still matters to some user or customer. It may at first look like a detour, but it’s a starting point that lets founders build measurable momentum–for themselves, for recruiting employees, and for attracting investors.

And while we encourage hard tech startups to start small, we love when founders think very big.  When needed, we help founders think through a long-term plan of how they can develop their technology to build companies of massive impact.

It’s not a YC company, but Tesla is my favorite example of how powerful this small project + long-term planning mentality can be. Their vision has always been to bring an affordable electric car to the masses, but they first built the Roadster—the opposite of a mass market car—to generate revenue to get to the Model S. The Model S then generated the revenue to start the Model 3.

And Oklo, which is building next generation nuclear reactors, is a promising example from YC. When they first came to YC, they were considering going after several very different markets simultaneously. We encouraged them to focus on one market they could enter quickly and not try to do too many things at once, but we also encouraged them to open up to thinking through their most impactful possible future.

In terms of cost, we help hard tech startups operate as efficiently as possible. One factor that lead to the explosion of internet startups was that web hosting became a couple of orders of magnitude cheaper and easier to do. This is happening now for hard tech: there are many more standard components and services at much lower costs for startups in biotech, energy, robotics, and everything in between. We help founders think about how to build their first version and source components as quickly as possible, and we have deals with suppliers and service providers that you can use based on your needs.

We also help hard tech startups balance the need to move quickly with complex regulatory environments. Hard tech startups often operate in heavily regulated markets, and the activation energy required to get over regulatory hurdles kills many of them. Even the most regulated industries have paths to quickly test your assumptions though, and we help you find the best plan of attack without getting into trouble.

When appropriate, we help hard tech founders find customers. For some startups this doesn’t make sense—there are some ideas that people will obviously want if the technology can be figured out, and there are obvious other things to focus on. But for others, it can be a useful way to find that smallest useful project and/or build more momentum.

Gingko Bioworks, which biologically engineers custom microbes, is a good example of this— before YC they had done a few large deals, with long ~6 month sales cycles. But when they went through YC, we encouraged them to figure out how to do minimal sized engagements that they could sell more quickly. During YC, they took this strategy and closed 3 new Fortune-1000 sized customers. They say this strategy gave them a lot of momentum to keep building on to where they are now.

Hard tech companies go through the same 3-month batch format as all of the startups we fund. No matter what people are working on, it ends up being very motivating to be around other founders for this short, intense period of time. And during the batch, hard tech founders have hardware and biotech days, where companies come together to hear from successful founders on how to best tackle their specific problems.

Hard tech companies also join the same 3,000-person-plus YC alumni network as all of our startups. The network is just as useful for a hard tech company as any other startup—alumni are resources for advice, recruiting, and serve as first customers. For example, Transcriptic, which operates a robotic laboratory for outsourced science experiments, offers $20k in credits to every YC biotech company that wants to use their service. This both helps other YC companies, and turns them into customers that Transcriptic can grow with as their customers' businesses scale.

Alumni and batchmates also give moral support—more so than with others, we hear from hard tech founders how isolating a startup can be; problems are difficult and payout can be very long-term. Having a group of other founders going through the same things can help a lot.

Finally, we are particularly good at helping hard tech companies raise money. Fundraising can often be harder for hard tech founders, as the things being worked on often fall outside investors' comfort zones. But at this point a lot of investors take YC's judgement as an encouraging sign. Being backed by YC can help legitimize daunting ideas.

We hope to fund a lot more hard tech companies in the future, and if you’re tinkering on something or even just toying with an idea, we hope you’ll apply now, even if that means you have to turn in your application late. There will be many $10 billion+ hard tech companies in the future, and we hope to help a lot more of them get started.

[1] I use ‘hard tech’ to mean a startup where there is doubt that the technology can be built at all.

Welcome Craig, Fred and Mark!

We're excited to announce three additions to the YC team: 

Craig Cannon is joining YC as Director of Marketing. Prior to YC, he cofounded Comedy Hack Day and was Graphics Editor at The Onion. Craig also holds a cycling world record.

Fred Benenson is joining YC as an admissions manager.  Previously he was VP of Data at Kickstarter and their second employee. He has a masters from NYU's Interactive Telecommunications Program and also studied philosophy and computer science undergrad there.

Mark Thurman is a software engineer interested in esoteric programming languages and distributed systems. He graduated from the School of Computer Science at Carnegie Mellon University. Previously he worked on backend systems and API design for Evernote and App.net. In his free time he enjoys reading, traveling with his family, and cooking.

Requests for Startups Refreshed

We’ve refreshed the Requests for Startups. Here are the additions:

Food and Farming
An estimated 40% of the world’s workforce works in agriculture.

Better food and farming could increase the world’s health, unlock the potential of numerous workers, and improve living conditions for billions of animals.

We believe economics will dominate - reducing cost while preserving or improving flavor will win the day.

Mass Media
What can we do to bring up the baseline and make the vast majority of our mass media better?

Media outlets that rely on polarization, misinformation, passivity, and fear, are not improving society. We’re looking for ways to bring the average back up and improve mass media.

Updated: Underserved Communities and Social Services
Tens of millions of working poor in America don’t see a path to the middle class.

This population has to navigate a world with substandard services, low quality housing, overcrowded schools, and crime in their neighborhoods. They are often unbanked and living paycheck to paycheck.

The US government alone spends hundreds of billions of dollars per year on social services and safety net programs for these underserved communities.

We believe great non-profits and for-profits can bring technology and strong metrics-driven approaches to this largely ignored, massive market.

You shouldn’t start a company just because it’s on this list. It’s mostly here to help stimulate you to think about ideas.

Apply to YC

YC and Founders Pledge

Many of our founders ask us about how they can donate part of their equity or post exit proceeds, and now we have an answer: Founders Pledge.  

With Founders Pledge, founders can sign a pledge to donate some portion of their personal equity and then figure out the recipients for the donation later. Founders Pledge handles all the legwork. As a charity itself, pledges are eligible for tax relief at time of exit and funds can be deployed globally.

Founders Pledge (1) allows founders to decide now that charitable giving is important to them, (2) doesn't impact other stockholders of their company and (3) requires only about 5 minutes of time and no participation costs. Founders Pledge also provides substantive post-exit support including cause area analysis, charity sourcing, deep due diligence, and impact reporting.

More than 500 founders have already pledged with Founders Pledge, including those from Jawbone, Shazam, SwiftKey, AvantCredit, Deepmind, Huddle, Farfetch, Hampton Creek, FundingCircle, Blockchain, Zesty, Vicarious, and Unruly, as well as 10+ YC companies. 

If you want to learn more, visit https://founderspledge.com/. If you have questions, you can reach out to Ben Clifford (ben@founderspledge.com).

YC Office Hours in Prague - Sept 22

YC is hosting office hours in Prague on September 22. 

YC's Dominika Blackappl will meet founders for 25-minute sessions. She is an industrial and user experience designer who cofounded and led 5 startups. Prior to that, she ran her own design firm and spent time at IDEO.

She's interested in speaking to any types of companies, and can be particularly helpful if you need design advice. 

Please sign up by end of day on September 18. If you're selected, we'll reach out with your time slot and the location by end of day on September 20.

YC EdTech Office Hours - Sept 29

YC's Tim Brady and Geoff Ralston are hosting office hours with edtech companies on September 29. 

Office hour slots are 25 minutes each and will be especially helpful for founders who are considering applying for the next batch of YC. 

Sign up here. 

Please sign up by end of day on September 21. If you're selected, we'll reach out with your time slot on September 23. Office hours will take place at YC's office in Mountain View or on Skype.

YC EdTech Office Hours
Thurs, Sept 29, 2016 from 2pm-5pm PT
Sign up here >

YC Changes

*Michael Seibel will be the new CEO of YC Core, which we are now just going to call "YC".
*Ali Rowghani is now the CEO of the YC Continuity Fund.
*I’m going to be the President of YC Group, which includes YC, YC Continuity, YC Research, and our new online class. We’ll add more organizational units over time.
*We’re going to replace the Fellowship with a much larger MOOC launching next year.

YC continues to expand and we have several changes to announce:


Michael Seibel is going to become CEO of what we called YC Core and are now again going to refer to as just “YC”. Making a distinction between YC Core and the Fellowship was simply too confusing for everyone. Michael will be responsible for the administration and success of the program.

Michael has been an informal leader within the organization for a long time, as well as a close advisor to many, many startups we’ve funded.  He began his relationship with YC as co-founder of Justin.tv (which became Twitch) along with Emmett Shear, Justin Kan, and Kyle Vogt in the W2007 batch.  He was also the CEO of Socialcam (YC W12, sold to Autodesk) and an early advisor to Airbnb.

Paul Buchheit (known to everyone in YC as PB) is going to take on a role similar to the provost of a university.  He will drive improvement of the program and help advise startups on their hardest problems and biggest opportunities (which, again, he’s been doing for a long time).  PB is one of the most consistently brilliant out-of-the-box thinkers I’ve met.

YC Continuity Fund

Ali Rowghani is now the CEO of the YC Continuity Fund, which has already become a thriving unit within the YC Group. The Continuity Fund has grown from just Ali 18 months ago to a team of 6, and has already led a number of investments in growth stage YC companies.

In addition to becoming the first phone call of the founders he’s worked with, Ali has become an invaluable part of the YC partnership as we operate and scale our own organization.  

My role; other groups

I’m going to change my title from “President of YC” to “President of YC Group”.  In addition to the 4 we already have, I expect that we will add another two large units to YC in the next couple of years, although that number could easily be 1 or 3.  I’ll be responsible for getting new units started.


We’ve run the Fellowship 3 times.  We’ve learned a lot about how to help remote startups (and found a few things that didn’t work).  

The goal of the Fellowship was to make YC more inclusive and increase the number and range of companies we can help get started. Now, we're taking the lessons we learned from Fellowship and we're expanding it into a MOOC, so that anyone can participate. The online course will teach content similar to that of the Fellowship, and it will follow a similar structure.

We’re going to call the MOOC “Startup School” as an homage to YC’s Startup School (the conference YC has hosted since 2005). We plan to offer it in 2017 and we’ll share more information on it soon.

I’m going to teach the class.

YC Research

We’re currently supporting 4 groups—OpenAI, Basic Income, HARC, and Cities.  This is a little ahead of our planned pace, and we expect to add just a couple more over the next couple of years.

We’ve also mostly figured out what our unifying theme for YC Research is and will share more soon.

A List of Y Combinator Companies

We published a list of launched YC companies we've funded since 2005. 

See it here.

The list was opt-in, so not every company we've ever funded is listed. 

Quick stats (which you can find here):
- As of today, YC has funded 1,382 companies (including Fellowship companies)
- Total market cap of YC alum: $70B 
- Total money raised by YC companies: $10B 
- Number of YC companies worth more than $1B: 10
- Number of YC companies worth more than $100 million: 52