Y Combinator’s main startup whisperer is demoting himself

When Michael Seibel lost his position at startup incubator Y Combinator, he didn’t find out in typical tech industry fashion that all he needed was an email to summon him to a Zoom meeting where the bad news would be delivered. He did it by himself. Today Siebel is announcing that he is stepping down as managing director of YC, a job that included running the centerpiece of the business: selecting startup founders for a three-month program and running a boot-camp-style operation. Which improves their approach and implementation. idea so they can raise money, release a product, and try to become the next Airbnb or Stripe (both YC alumni).

Given how important YC is to the tech startup ecosystem, Siebel’s exit will have more resonance than your average corporate reshuffle. For one thing, the guy who runs YC’s blue-chip accelerator has a significant hand in shaping the next generation of tech companies. And in recent months, YC has found itself in the crossfire of a battle between tech and progressives. Whether intentionally or not, Siebel, himself a popular entrepreneur and investor, is shrewdly moving out of the line of fire.

Seibel calls the move a more personal decision. Sometime last year he began to take stock, inspired in part by reading strength to strength, a book about the ups and downs of career, especially the turning points late in life. He’s only 41, but haste is part of the founder mentality, and he became a startup CEO at age 23. “I do everything quickly,” he says.

Michael SeibelCourtesy of Y Combinator

He realized that he had been running the batch for as long as the man who first envisioned YC’s existence, Paul Graham. After COVID subsided, YC returned to an in-person experience, and the software it developed to streamline remote COVID-era programming made it easier to manage IRL operations. The program now works by dividing each batch of new startups into four groups, no larger than Dunbar’s number Out of 150, this is estimated to be the maximum number of connections that can be properly made by a human brain. Each group has its own leader, so YC is less likely to need someone to oversee each group as a whole. And although Siebel enjoyed managing the overall program, he preferred direct contact with the company’s founders. So now he will become one of the four group leaders who will guide one-fourth of each batch. Seibel says this is a particularly exciting time to do so, as many companies are banking on the AI ​​boom.

Close observers of YC — and many in the startup ecosystem diligently monitoring the accelerator with behavior-tracking ad networks — might wonder whether Siebel’s move had something to do with him being handed over leadership of the entire operation. It is possible Forbes reports He was disappointed not to be selected as CEO over incubator president Geoff Ralston, who took over after Sam Altman, who led OpenAI full-time, left at the end of 2022. Ralston was replaced by YC’s former design guru, Gary Tan. Seibel told me he had no objection, although if offered the job he would have accepted it. “If it was something that people thought would be the right thing to do, I would be happy to do it. If not, I was very happy not to do it,” he says. “My whole goal was to do everything YC needed me to do.”

Siebel’s self-deprecation seems to be in keeping with a recent rethink at Y Combinator: refocusing toward a scrappy, boots-on-the-ground startup accelerator similar to the one it was founded on by its early leaders and co-founders. -The founder was under Graham. His successor, Altman, began an extensive research campaign that, among other things, launched OpenAI. Ralston had his own dreams, and YC started a continuation fund to enable him to make later-stage investments in mature startups. Ralston was also fascinated by scale. The Winter 2022 batch consisted of 412 companies, each funded by YC’s traditional seed investments. Ralston got a boost The initial slug of capital ranges from $125,000 to $500,000 per company for a 7 percent stake. When I last asked him if there was a limit to how many startups YC could accommodate in each batch, Ralston said there was not. He believed it was possible for a batch to number “thousands” of startups.

Under Tan, who takes over in January 2023, there has been a renewed focus on the founders themselves. Tan says that YC had become, in a way, an umbrella company saying yes to many things. “I asked, ‘How do we focus on what made YC amazing in the first place?’” The answer was to guide good founders, who were selected through an exacting application process. continuity fund Locked up, YC had already done isolated myself FFrom Altman’s research division, now called Open Research. The only remaining trace of Altman’s research operations within the company is now a financial stake in OpenAI. The most important thing is that the batch size has been reduced to almost half. At the beginning of summer 2022, their number was in the mid-200s, the current batch has reached 260. This is not due to demand – 27,000 companies applied for those slots.

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