> Unfortunately, this means we will no longer need some of the roles on the late stage investing team. Seventeen of our teammates are impacted today.
I hate this passive voice. It implies there was nothing that could be done, that this was just a force of nature. That it wasn't an active choice by YC, but rather just some eventuality.
Most of us understand the necessity of hard decisions. Own the outcomes. It's ok to say, "We fired 17 people, because their roles were no longer needed by us".
If you think that looks too bad, then don't do the thing -- find other opportunities for the people in the company.
From my experience these things are an after thought, the people writing this stuff are disconnected from the people making the actual decisions and I guess the typical audience that reads it. The people who do the marketing, HR, or "run socials" tend to be from the demographic that over values safe corporate speak. CEOs occasionally write these but usually it's some pre-written stuff that gets signed off on.
We all review these like a ton of thought went into some blog post, and maybe it should, but often it's just a lower end employee who is asked to translate things into an announcement when they played zero role in the hiring/firing part.
Considering how much these posts always bother people [1] maybe higher ups should care more about the blog posts too.
[1] At least a few in every HN thread, whether most people actually care/read it might be different.
> If you think that looks too bad, then don't do the thing -- find other opportunities for the people in the company.
The needs of a business change. Sometimes roles are eliminated and other times roles are added. This is normal and healthy process of every business. Can we get away from infantizing the individuals affected like they're some children whose family disowned them? It's unfortunate and you can certainly empathize with those that no longer have a role in the firm, but it's a business, not a family.
I think they are owning the outcomes. Saying "we fired 17 people" would be more disrespectful and not accurate. If I was let go due to a strategic business decision or through the natural course of the industry I wouldn't want my former employer suggesting they fired me.
"As a result of this, we eliminated the roles of 17 people." is also fine, shows more ownership, and is therefore better (IMO) than "Seventeen of our teammates are impacted today."
The way they phrased it is entirely standard in the industry, so it isn't exactly a mark of shame to conform with that (IMO poor) standard. (At least they avoided using an MLK quote.)
To be pedantically clear, the first sentence here is not passive! Both clauses there have an explicit subject (‘this’ and ‘we’ respectively) and neither verb (‘means’ and ‘need’) is passivised. I like Geoffrey K. Pullum’s article on what is and isn’t passive: http://www.lel.ed.ac.uk/~gpullum/passive_loathing.html
(Not that this means the announcement isn’t problematic, mind you. It still feels like it’s trying to avoid focussing on something. And yes, the second sentence does this by means of the passive voice. I just get annoyed when people misidentify it, as they seem to do regularly.)
It's a tricky judgment call and not everybody will receive it the same. But I like learning little tidbits! Crucially, I don't think poster did a "pedantic correction" for the sake of unfairly dismissing the point ; they did it to educate and that always gets credit in my book :)
"We fcked up. Sorry. We really did. We're looking to identify the source of the decision. We'll be placing the person, or group of people, responsible on a performance plan (that will include the leadership team if appropriate). If they make continued similar mistakes, they'll be fired, or their compensation will be impacted. In the mean time, we'll be working hard to help the 17 poor souls who were sacrificed on the alter of this mistake".
>> we will no longer need some of the roles on the late stage investing team
> I hate this passive voice.
It's active voice, no? How is it different than we fired, except that firing sounds more tied employee performance, no longer needed more seems like employer fault.
> How is it different than we fired, except that firing sounds more tied employee performance, no longer needed more seems like employer fault.
I think this is GP’s issue with the phrasing here. Passive or not, it sounds like it’s deflecting focus away from something — as they said, ‘It implies there was nothing that could be done, that this was just a force of nature’.
A lot of the tradition of passive voice comes from lawyers because you can’t always say somebody was fired or transferred or laid off. There can be different standards of local employment law for different employees. Passive voice can be the least risky of defamation or expressing favoritism to those who didn’t get cut.
That said, it’s abhorrent to see YC cling to tradition here, especially in light of the industry-wide layoffs as well as just how insanely rich YC is versus the headcount at question here. This is absolutely a place to question tradition and seek progress.
Man, total amateur hour. A layoff post without talking about how it's the hardest thing the CEO has ever done, or saying the responsibility lies with me? No mention of how deep he cares about those departing? And delivered on a Monday? Why didn't they use ChatGPT to compose this like everyone else?
Leading venture capital innovator, YCombinator, is delighted to announce that over 80 percent of our team remain unimpacted by recent employment-related issues, while other team members will be exploring exciting new opportunities going forward
I wonder what the revenue per employee of YC is. 85 employees, with 1/6 companies unicorns (though some of that is paper valuations, but still huge returns).
> "When they do, a shocking percentage of them will go on to make a startup worth a billion dollars (on average 6 out of 100 startups in recent batches)."
The YC Continuity team did amazing work helping me and many other later stage founders. I’m sad to read this news.
YC is best known for their early stage investing. But Ali, Anu and the team created some excellent programs for later stage companies as well. Shogun benefited from the Series A program, Scaling from A to B program, and the YC Growth program. I wonder what’s happening with all of those initiatives.
Through these programs and the direct support and mentorship from the Continuity team, we learned a ton and significantly scaled our startup.
Thanks Finbarr. The group partners and MD's and I know these are important and valuable programs, and there is a lot more we need to be doing for alumni and the experience after companies do YC.
I don't have more to share now, but know that I really value you and this note.
There was one circulating where the newspaper headline stated that "A man with no active warrants was shot by police." Which is just about the most nefarious way to say "an innocent man was shot by police".
Those don't mean the same thing at all, and the headline is weird for any possible set of facts.
The average mass shooter has no active warrants, but most people would consider it correct for the police to shoot him to end his killing spree. The average wanted fugitive, on the other hand is usually arrested without any shooting.
I read the article linked in another comment, and the headline I would give it is "Police kill man while raiding wrong house".
Isn’t it different? IANAL but having an active warrant issued for you doesn’t really have anything to do with you being guilty or innocent. It just means the police must conduct you to the juge, either because you’re a suspect or (in some countries) a witness.
"A man with no active warrants issued" also perfectly describes every single one of the 9/11 hijackers, but that wouldn't equate out to "innocent" either.
Careful. Presence or absence of warrants has almost nothing to do with getting shot.
Assuming you have no warrants out for your arrest, should you charge at a police officer with a knife or gun drawn while yelling that you were about to kill them, and then ignore any commands they issued, what would you expect to happen?
That one I actually understand. Calling somebody innocent is a very strong and contextual / scoped statement, and ultimately that's what the courts take their time to do (and even they I think kinda stop shy? I don't know if acquitted is the same as innocent. I feel it's more "not proven guilty").
In the US, what happens a if a newspaper calls someone innocent, who is then proven guilty?
That was a super high horse you rapidly jumped on, but where I'm going is, it may not be a risk reputable journalism takes lightly.
"No outstanding warrants" will have been true at the time whatever is uncovered later. "They shot a presumed innocent" is probably safe but meaningless. "They shot an innocent person" - what happens if the person is then found super guilty? And innocent of what - what if somebody says "they were clearly in the video driving without their seatbelt" or "they had expired license plate"? USA has a lovely constitution yes, but also a nicely profitable legal industry.
Put the moral notion aside: In the USA, I don't think it's an easy risk to take, and clearly newspapers agree.
Newspapers also need to be careful to not spout facts about a potential crime that doesn’t have a guilty verdict. They’d have to throw an allegedly or something in there to write it as you described which I don’t know would read as well. The way they wrote it let them put the facts first (woman hit by pepper ball shot by police) and then hedge the intent with an “appeared to.”
That example seems fine to me. There is clear attribution ("by an officer"), and the "appeared to be aiming" could be to emphasize that the officer was not just generally shooting into crowd, but targeting individuals.
This comment comes across as a silly nitpick given the sober content of the post, but I think it is completely fair given Paul Graham's many writings and tweets on the virtues of writing clearly and his hatred of what I call corporatese.
I don’t think it comes across as a silly nitpick, and I’ve read very little PG has written. It’s useful to identify how phrasing and framing of communication can be used to manipulate how that communication is received, regardless of who is communicating. And I think the same observation would have been made if this were a post about any other organization.
It is laudable that this observation was very close to the top when I clicked to see the comments. I’d be surprised if this critique gets buried by HN moderation, and cautiously hopeful it won’t get buried by folks biased to defend YC &co.
But the exact same language from any other source would be examined exactly the same way, and for very good reason.
You would imagine he read it at some point. You would also imagine his CEO would have internalised Paul Graham's most important piece of advice about communication (writing clearly).
I have no inside information on this one, but YC has been around for 18 years, and pg left the president role 9 years ago. It's been about half of YC's life that he's been out of the day-to-day stuff. It's absolutely not obvious that he'd be reading each announcement that goes out (I'd be surprised at such).
I think this is just a matter of opinion. When something severe happens it's natural to not use the most harsh term to describe the event. It doesn't seems like something malicious.
When describing a death many people will say "they are no longer with us" instead of describing the circumstance of death. When talking about traumatic events we as a society have a natural propensity to not use triggering words. There is nothing intrinsically wrong with that unless it's hiding information. As described above no one is hiding anything because we all understand what happened.
Death is inevitable, unexpected, unplanned, usually caused by things beyond human control. Layoffs are a planned thing explicitly done by one human to another in order to increase corporate profits.
Layoffs are a consequence of business decisions by a specific corporate entity.
If someone died in a mining accident and their employer sent their partner a letter saying “It appears they’re no longer with us”, that would not be well-received (to say the least). Euphemisms are only appropriate in the right circumstances.
Do you have some data to back that up? I'm not sure if a small percentage of employees are so expensive as to be the tipping point for a company to go out of business.
Employees are one of or the most expensive part of doing business for many. I guess you could google Gross vs Net margins in various companies or industries as an example (maybe here[1]). But layoffs aren't merely firing people, they are "firing people and not re-hiring for their positions or work." So it's often closing out on entire product strategies, such as the case here with YC.
> Employees are one of or the most expensive part of doing business for many
Not debating that. I'm debating:
> Layoffs are often a choice between letting a small percentage go or causing the entire company to go out of business
Show me a company that MUST let go a SMALL PERCENTAGE of its workforce in order to not go out of business. Meaning a company which is hanging by a thread and that thread is (again) a small percentage of the workforce. Because if a small percentage of the workforce is expensive enough to provide you with the runway you need to continue doing business, that runway is short enough that the company will cease to exist anyway, so the point is moot.
I'm willing to accept this for a company that has verifiable issues that are not just accounting fuckeries (aka owners pulling cash out of the company by having a 2nd company that nominally owns the office building, patent licenses, overseas shell companies): consistent losses, lack of cash, you get the idea.
But for companies pulling in profits to the tune of millions if not billions of dollars in profit?! Their leadership should be terminated before even the lowest performing employee instead of getting paid bonuses for ruining the lives of thousands of people who made their bonuses possible by putting in the work.
When someone is accidental, blameless or unexpected, like someone suddenly dying, it's entirely natural to use something like "passed away". Not the case when someone is directly responsible - "X was murdered by Y" is quite common, I believe?
Perhaps you could argue over the use of "impacted", but the use of passive voice is pretty objective. "We impacted 17 roles today" or perhaps "I impacted 17 roles today" is, well, it's still pretty bad, but at least it takes some responsibility.
I agree with you, but I think a passive voice is used correctly in that sentence you are referencing. It puts the emphasis on the impacted employees and then goes on to speak to their contributions. This takes away the company for a moment from the conversation to discuss the "impacted teammates". They were using an active voice up till that point.
> When describing a death many people will say "they are no longer with us"
Fussell describes (in Class) this kind of talking-around situations as a "low" marker (in a class-signaling sense). The "high" version is to just plainly state "X died" or "X is dead". Similar for describing things like pregnancy.
Not sure what significance this has for corporate communication, and I'm also not sure how true it is (though all the things he described that I do know about were remarkably accurate) but, well, there's that I guess. Regardless, I'm not sure that kind of avoidant language is natural (though possibly it is, and it has to be trained out to get the more-direct "high" version—but I suspect either preference is mainly a socialization thing).
Please don't compare death with layoffs. One if an inevitable but tragic part of life the other is an inevitable but tragic part of keeping the shareholders happy.
I think the whole notion of companies doing things "for the shareholders" is vastly overblown. Doesn't it make perfect sense on its own that YC realized the late-stage game was not working out, and that they were not going to be able to use those people effectively on other work?
> I think the whole notion of companies doing things "for the shareholders" is vastly overblown.
Everyone is entitled to their own opinion, and I don't share yours. Everything makes sense with the proper framing. My guess is that this has more to do with perception than with actual business needs. I can try as well: Doesn't it make perfect sense that in the current context it's very easy to justify cutting costs which if done during normal times would signal trouble/mismanagement?
“They are no longer with us” is widely understood and very unlikely to be ambiguous. If you said “they were impacted” I would lodge the same complaint.
HR might have an issue about disclosing private personal information about their embarrassing medical digestive system disorders, and implying they were fired for being full of shit.
When there's a PR person involved, truth goes away, double-speak comes in. Even in the case of YC, which in general is way better than most other organizations.
To be fair, that's usually accurate - unlike someone getting fired because of their own performance, layoffs are usually untargeted, and include people that were great at their jobs.
And let's face it, getting fired is a huge stigma, so it's totally understandable that someone would phrase it like that, as the victim of the situation
It's hard to blame anyone for using the "soft" terms about their own situation, since firing tends to be a very sensitive topic. It's not hard to blame companies for using those same terms, since it comes off as "MBA-ish" and sleazy.
Sometimes it's not for the company but for the person who was laid off.
To mean that the person was laid off but it wasn't their fault. It's their position that was impacted. Somehow.
Result the same but sentiment might be dulled a little. Not blaming the person but blaming external conditions that resulted in someone being made redundant.
A number of reasons already discussed, but in person it has the “benefit” of slowing down (drawing out) bad news. It’s like string betting in poker, but it’s also a way of showing dominion over time (by burying the lede and making someone anxious.)
You have to stop and think about what it really means. "Impacted" just means something happened. You have to do the legwork to get to "called into a meeting and fired."
Distancing. It lets people who make these decisions portray themselves as the helpless victims of the way things are, rather than people who have made choices that have led to this.
"The market says that we need to downsize" sounds a lot better than "an investment analyst says I go, or you go".
That is a reasonable argument if one assumes that this is an unconscious choice, however, passive voice has become the standard with these types of press releases. It is a conscious, intentional choice.
Passive voice is a tool. It’s perfectly valid and grammatical. The problem is the abuse of it to misrepresent one’s agency or responsibility, but there’s nothing wrong with the sentence, “I was hit by a car on the way to work.”
The issue with corporate passive is that business language is not only ugly but serves evil purposes. In person, it exists to slow down bad news so you can read and manipulate people (“string betting”) and, on paper, its raison d’etre is to project authority to which one has no actual right.
Assuming legal signed off on the basic message, I'm guessing it's out of a sense of 'politeness' in a delicate situation. Consider how someone might publicly communicate a relationship breakdown with language like "we're parting ways" or "we have made the decision to end our marriage." Sometimes you get plain, direct language but people might infer acrimony from it.
My sense is that in the particular case of layoffs, companies are hesitant to actually use the phrase "laid off" because it triggers a sense of implicit shame in those affected. There is definitely an unspoken assumption that folks who get laid off are underperformers, and the extent to which we talk about how untrue that is (see: LinkedIn) shows how pervasive the assumption is.
I knew an ex co-worker who grew up in another country whose manager, in a "sync up meeting", told him that he was "impacted" and he didn't need to continue work on his current sprint. He came out of the meeting with a smile, had no idea what this meant, and he showed up the next day.
Exactly the point - passive, weak, blameless terms makes it nebulous on what has happened. Just say you want you need to say - you're the captain of the ship.
Oh c'mon, there's no way this is it. If they hadn't been laid off there wouldn't be an external announcement. You don't post something like this merely to announce that you're retraining some employees.
They were 100% laid off. The wording is intentional and standard for the industry.
You aren't "impacted" by changing roles or retraining, you're impacted by losing your job.
"we want to acknowledge and express our appreciation for their substantial contributions" translates to "these people will no longer be contributing as they are laid off effective immediately".
They're not quite the same, those two terms have taken on different meanings. "Fired" has come to mean "for cause", and "laid off" has come to mean "not for cause".
My hunch is that the evolution was driven by executives, probably in the 70s and 80s, that didn’t want to say they were firing people in order to make more money.
In other words the same dynamic that now leads to ‘impacted’.
Some members of my family (back in the day) used to be laid off from positions seasonally, and were then rehired the next year.
I suspect that in its early versions, it referred more to the notion that "we won't have any more work until the spring, so we'll see you then."
I don't know its etymology or when it might have been coopted by employers who didn't intend to rehire, but I suspect its intent is to signal that there's no ill will between the employer and the employee, and that it WOULD rehire those impacted persons in the future.
I'm not as sure that it means anything so specific now.
Manufacturing can still work like this (and maybe other industries?). You're laid off every now and then, if work slows down, but with the expectation (possibly contractually—many of these have unions) that you'll be brought back when work picks back up. AFAIK they can collect unemployment during the lay-off, so it's better than being kept on with much-reduced hours.
In the UK they have the term "redundancy" (as in "your position has been made redundant"). Can't see that term catching on in the US but it does cover the use of "laid off" to mean "the company chose to eliminate the position I worked in rather than choosing to get rid of me as a person", and thus may carry less stigma.
It’s the opposite: they started out distinct, but then, by the euphemism treadmill, became used interchangeably.
And if you go back even further it meant something even milder, like furloughed or terminated with the intent to rehire when expected business picks up.
A furloughed employee has the expectation that employment can resume with the company, while a laid off employee does not. This is important for tax and other legal considerations.
This very much depends on where you are. For example in the UK a lay off technically means being told to stay at home because there isn't enough work [1], although it's often used these days to mean "fired without cause", i.e. the American usage of lay off has become more common and it has simultaneously became common to use the term "furlough" to describe layoffs during the pandemic.
Fired still semi-exists. Let go seems to show up for insufficient performance, e.g. semi-amicable “it’s not working out”. Fired shows up when somebody really screwed up, e.g. laws were broken or products failed.
I think of it more like the protagonist (or antagonist, one could argue) of a movie holding on to the hand of someone (employee) about to fall off of a cliff (the descent, ultimately, to poverty and homelessness) just to make the metaphor as vivid as possible.
Playing around at the online etymology dictionary, it appears dismiss is the oldest—early 15th century. Sack and fire are from the 19th century, and laid off in this sense isn’t until the 1960s. Terminate, as in dismiss from a job, is first attested in 1973.
Depends on the circumstances. I associate “fired” with a negative reason (e.g. performance, theft, harassment). “Laid-off” doesn’t carry the same connotation.
There isn't even a need for a public blog post about this change in business strategy. This reads fine as an internal email, but I've never worked at a company that publicly referenced their layoffs.
What you're talking about linguistically is the difference between passive voice ("I was laid off") vs active voice ("YC fired me"). It is a pervasive technique and a form of blame-shifting. Whenver you see a headline, ask yourself which voice is being used and why. It is a key part of media literacy.
I actually believe he put out a 10/10 example of how this should be done. We all know what he meant, he was concise and then reminded you of the mission and that this is all about the mission.
If you’re laying people off, say it straight and with a backbone. The language is passive, weak and makes it sound like a mere consequence of a slight breeze upon a dainty leaf causing it to gently fall from a tree.
17 people lost their jobs. Likely many of those have families to feed, houses to uphold and bills to pay. In this economy, the same will likely happen to many of us and a statement like the above would feel like a punch to the gut.
The uppercut that follows is:
> we want to acknowledge and express our appreciation for their substantial contributions.
Saying you want to acknowledge and express something is not the same thing as acknowledging and expressing something. A statement would struggle to get more generic than this.
Why is it the corporation's fault though? We live in a society and governance structure which encourages corporations to consider revenue over everything else. Why would they act differently? What should Google do? Sorry I understand the human cost of layoffs. But it is a reflection of what this society values. If you want corporations to consider the human cost, you need to make it feature in their financials. Or the government should offer better protection to unemployed people.
While those examples do use the passive voice, the passive is not the real problem. "These events impacted seventeen of our teammates" is the active voice, and it is no more forthright. "Mistakes were made by Bob, Sean, and Susan, who have been fired" is (if accurate) quite clear about assigning blame while using the passive. It's true that some people overuse the passive, and for those people noticing and considering whether to rephrase can produce better writing, but insisting on forgoing the passive entirely probably won't. If we want to prevent evasive writing, we should look for and call out evasive writing, whatever voice is used.
Right, the active construction does grammatically require we put something there, where in the passive we get to omit it, which is why the passive is sometimes used for evasion. But if you're interested in whether someone is being evasive, just... look at whether they're actually assigning agency appropriately. Grammatical form doesn't answer that.
Sorry to everyone who lost their jobs. It can feel like the end of the world and your worth. But I’ve seen throughout my career people land somewhere better. Someone once wise told me the most important saying in the world is “this too shall pass,” which applies to all things, good and bad.
Also wanted to add: never forget that “the law of averages” is our friend when this happens. It ensures that there is always a good chance to lend somewhere if one keeps trying (submitting applications and giving interviews).
I mean... not even, right? A "livelihood" is one's ability to make money in their career, not specific to an individual job. Surely these highly qualified people will find work elsewhere.
So it's really not worth getting dramatic about. It's sad, but such is life. I wish the best of luck to these folks, but I doubt they're in mourning. I'm sure the YC leadership is helping them figure out next steps as we speak.
Things like this are almost always traumatic regardless. We wrap ourselves and our identity in our jobs, especially ambitious and successful and highly qualified people. While objectively you’re right, it is still unnerving and unpleasant to have to find a new job and learn your contribution and value to the company was worth less than others. It’s also not the best job market for tech focused folk. I think it’s ok to feel sympathy for someone laid off.
Does this also mean YC is killing off their YC Continuity Programs:
>> Series A Program: Help founders achieve the best possible outcome when raising a Series A via year-round workshops, fundraising guides and 1:1 support.
>> Post-A Program: Batches for YC startups immediately after their Series A to share best practices for growth: managing a board, building a team, key metrics for a Series B and more.
>> YC Growth Program: Graduate school for startups. We bring together cohorts of CEOs of rapidly growing YC companies to focus on the challenges of company building: the changing role of a CEO at scale, setting strategies and success metrics for the organization, hiring and managing great leaders, and more.
Sorry - the link in that thread is to a tweet, not the article the tweet links, which is what I wanted to link - that article indicates the partners leading the fund (and program) left YC.
I haven't heard specifics about those programs but with the partners leading gone it seems difficult to imagine them continuing - fair point though, no solid news.
Already linked to a source that shows the references to the programs are gone in my original comment; though that page is still there.
Also, might be wrong, but “theinformation.com” as a source is insta ban as a result of it being a “hard walled” content; hard walled meaning it’s not possible to access the content via alternative means. If you have a source that’s not blocked, feel free to provide it, otherwise just see this as promoting a source that’s ban on HN.
Here’s all the dead submissions, though you likely have to have “show dead” turned on from your profile settings:
Oof, I don't lurk here during work nearly as much as I used to - missed the memo about it being a banned source, do you have a link for that? In the past that source has unpaywalled articles specifically for HN readers so I'm saddened (but not really surprised) they decided to go for the full cashgrab.
Not really sure what you want here - the evidence of those programs being affiliated with YC has been scrubbed from the public web, do you not believe in Occam's Razor or are you waiting to find a quote delivered straight from Garry Tan's mouth on the question before you accept the likely conclusion from all evidence?
edit: either way, I don't have a second source - that article from theinformation is the only active story I've found that specifically names the partners leaving.
Oh, got it! Thank you for scrounging that up I was specifically looking for mention of that site, no wonder I didn't find it. Makes a ton of sense in general and it's lame we no longer get a special exception to their wall.
I wish there were some publicly available numbers to analyze here, but it seems likely that YC's late stage funds have lost a lot of money (on paper) doing late-stage investments at sky-high valuations over the years leading up to 2022 that are now down significantly as a result of the current startup downturn.
Folks who are thinking about these YC changes as a layoff are missing the point -- YC is exiting what had been a major part of their business (especially if measured by total dollars invested).
And from the outside it seems likely that the reason for the layoff is probably less that YC is in troubled financial straights and needs to cut costs on its operations, but because their late-stage investing business was losing money and YC has decided to give up on it and no longer has work for specialists in that work.
Id guess that YC has a much greater competitive moat in the former. It's much "easier" to do late stage investing - a few big transactions instead of many many small ones, and everyone's working with the same information.
Very few places have the infrastructure to deal with large volumes of start-ups + a lead flow of small companies trying to join YC, so there's no acquisition costs. Add to that, YC's experience with small start-ups compounds - they can probably predict start-up success way better than competitors at this point. That's almost certainly not true for late stage investing.
I would think having seed stage investments would offer additional late stage moat. My first thought was that the current down round later stage environment is squeezing a ton of common equity founders/execs. Its tough to be both founder friendly and investing at later stage prices that leave many startup execs low in equity/motivation.
Not privy to special information w.r.t. this change, but I can think of a few:
1. Breaking focus / competing on multiple fronts. Lots of firms specialize in A-stage or later. By investing in seed and later rather than just seed, the later stage firms see you as a "competitor" for, rather than a "supplier" of, early stage startups. You have that many more competitive relationships rather than cooperative ones.
2. LP fundraising. LPs have to make choices as to who to fund, especially in this economy. Later stage vetting, returns, etc are different than early stage. May not be worth the heavy lift of competing for LPs.
3. Specialization. Once you get into later stages, you get firms that specialize by industry vertical. Not just business (marketplace, fintech, hardware) but even within software (SaaS, dev tools, consumer, enterprise, etc). Might make it harder to make deals. You now have a multi-front problem where each potential counter-bidder for the deal lead has hyper specialization to the startup, whereas YC is a generalist by nature.
4. Competition for deal terms. Most of the time, the deal lead sets the terms. If you can't aggressively bid to lead deals, they may not get the best economy for each of the deals since the lead may have other priorities. This may produce less optimal returns vs just putting more money into seed.
5. Partner / investor preference. VCs compete for partners / investors. If partners in the late stage at YC are limited to only YC companies vs the whole late-stage market (or have other limitations), it may not work for them vs going to a firm with less terms.
Ultimately as a generalist investor, pre-seed/seed/A-and-later are very different markets. With interest rates this high and everyone being more picky, it becomes harder to outperform unless you can operate in that market independently. I suspect YC looked at a model for their returns and came to this conclusion.
My pithy observation - Early stage investors are fantastic at extrapolating from minimal data points. Late stage investors are fantastic at extrapolating from many noisy data points. They screw up because the methods for each of their extrapolation functions are entirely different, so much so that they manifest as cultural differences in investment firms.
All of Y Combinator startups try follow the same playbook: successfull exit, or successful IPO. YCombinator benefits from both.
Since most YCombinator startups never see any profit, late stage investment becomes a risky proposition since even "top YCombinator startups" lose billions of dollars a year, for years, with no path to profitability or recouping investments.
> is so different that the success of YC in early stages doesn't translate
that's not a claim made in the article. It just said the late state was different enough to be a distraction from their core mission of being an early stage investor. A company with just an idea and 2 founders and nothing more is obviously very different from a company with many employees, a revenue stream and a long list of customers. It should be obvious how different that is.
I am not VC but I think this is kinda apparent from the get go.
In early stage you are betting on and nurturing a small team with a full-of-hope business plan. They need relatively small bits of help that can go a along way. So both "who you are chosing among" and "how you are helping them" is very specific.
With bigger companies, the team and the business plan is more proven and they need help navigating size and scaling their offering - a very different set of people you are chosing from and what they need from you.
Well, for one, I imagine the "network" provided by YC is less valuable to late stage companies than it is to early stage, so YC probably found they were not able to bring as much value.
Second, the amount of capital needed to invest in later stages is much higher, and with companies delaying IPO, they would be tying up capital for much longer than they probably expected originally.
I have no insight into YC, this is just my guess as to how it is different.
More upside on the table if you get in early. It’s probably just not an efficient use of their time since the returns from gettin in early are so outsized.
It costs a lot more to invest in a late stage startup than an early stage one.
In the current economic climate they probably can't afford (or just don't want to risk) to invest large sums, while on the contrary can "take advantage" of early stage startups which will struggle more to get funding.
YC made a decision about the value of one of their departments, and HackerNews generally accepts it as given that companies can make these kinds of self-determinations. The reasons for the decision were given. As a result of that decision, 17 people no longer have jobs with YC.
All that’s really left to debate is how YC phrases it. “17 teammates were impacted” is weasellier than the average layoff announcement so it gets the criticism.
As an aside, there seems to be a general but informal understanding that fired means you did something wrong while laid off means you’re alright but the company no longer employs you. Other terms like “impacted” have to be matched to one of these two cases. Probably a lot of benefit for everyone from formalizing this distinction. The military uses “honorable discharge, other than honorable discharge, dishonorable discharge” https://www.zero8hundred.org/types-of-discharges for example.
Clarity and technical honesty are very important in technical work; especially so in a startup: you want people to focus on solving technical issues, not translating corporatese to human.
Plus, if a group tries to hide behind the wording for an inconvenient message what else would it sweep under the rug? YC is usually way better than this, which may be the reason there is so much attention to the wording which reads like the standard PR spin. My 2c.
Sticks and bones may break my bones, but words can divert me into hours and hours of endless hairsplitting and bickering until I die of being bored with myself and doctors gather and marvel at the inexplicable fact that I am still complaining in the absence of a discernible pulse
Probably because there’s not much new in the layoff story that hasn’t been covered in tens of thousands of comments on previous layoffs. But this is the first time a lot of people have had an outlet to discuss the frustrating linguistic phenomena that have been on display this cycle.
not only that but it's the exact same top-comment subthread that appears at the top of literally every story involving corporate comms. I wonder if it's the same people every time or if there's a constant influx of new commenters who feel strongly about corpspeak.
I don't think that'd be accurate - YC is exiting the business of late-stage investing, and that's the main news. It sounds like they had 17 people who were working on that part of the company who they laid off as part of this transition, but given the major role that YC Continuity played, it's significant news that they're no longer doing that.
Only if you're not fluent in corporatease. Whenever I see an e-mail entitled "Changes in [some organization]", I assume that one or more of the following is true:
1. The leader is leaving.
2. People are getting laid off.
3. They're exiting a line of business.
4. They sold the company.
Haha, same here, whenever I see some random meeting called "[whatever] chat" being scheduled, like "Engineering chat" or "Quick eng all-hands", you know it's
1. Someone's leaving or is getting fired from the department
2. More people are getting fired
The point is that this, along with "*changes" is always bad news. :D
Any company where the execs and decision makers are so far removed from the people they're judging, where they won't even truly understand or care what the person does, let alone who they are.
Google and Twitter and two very recent large companies that have done just that.
I mean if the company is pivoting and closing the entire division because they no longer need to, eg, make film cameras or make buggy whips, why would you keep anybody from there around? You don't need their expertise any longer. Even if they were the best at their job, if you're not doing those things any more, what would you keep them around for?
No no, clearly it is just a coincidence that lay-offs are happening everywhere at the same time. YC must have made a fully independent assessment and decided based on spreadsheets and algorithms that this is the correct business strategy by using past data and developing predictive metrics. Just looking which business unit to cut loose based on cost reductions cannot have been a part of this process.
They did not state the growing economic concerns as reason for layoff like other big companies. They stated a business unit is not valuable enough and they are laying off 17 people. YC is beyond wealthy and successful. They laid off 20 percent of their staff. Not a good look.
I hate this passive voice. It implies there was nothing that could be done, that this was just a force of nature. That it wasn't an active choice by YC, but rather just some eventuality.
Most of us understand the necessity of hard decisions. Own the outcomes. It's ok to say, "We fired 17 people, because their roles were no longer needed by us".
If you think that looks too bad, then don't do the thing -- find other opportunities for the people in the company.
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