www.wired.com Open in urlscan Pro
151.101.66.194  Public Scan

Form analysis
0 forms found in the DOM

Text Content

Skip to main content

Open Navigation Menu
Menu
Story Saved

To revisit this article, visit My Profile, then View saved stories.

Close Alert


Y Combinator's Chief Startup Whisperer Is Demoting Himself
 * Security
 * Politics
 * Gear
 * Backchannel
 * Business
 * Science
 * Culture
 * Ideas
 * Merch

Story Saved

To revisit this article, visit My Profile, then View saved stories.

Close Alert

Sign In

SUBSCRIBE


GET WIRED


FOR JUST $29.99 $5

SUBSCRIBE


Search
Search
 * Security
 * Politics
 * Gear
 * Backchannel
 * Business
 * Science
 * Culture
 * Ideas
 * Merch

 * Podcasts
 * Video
 * Newsletters
 * Magazine
 * Events
 * WIRED Insider
 * WIRED Consulting
 * Jobs
 * Coupons

Chevron
ON SALE NOWGet WIRED - now only $29.99 $5This is your last free article. See the
future here first with 1 year of unlimited access.SUBSCRIBE NOW
Already a subscriber? Sign in

Get WIRED - now only $29.99 $5. SUBSCRIBE NOW




Steven Levy

Business
Mar 15, 2024 11:00 AM


Y COMBINATOR'S CHIEF STARTUP WHISPERER IS DEMOTING HIMSELF

As the influential startup incubator downsizes—and navigates political
pushback—managing director Michael Seibel is taking a new role to spend more
time working with founders.
Y Combinator's 2024 W24 retreat group.Courtesy of Y Combinator

Save this storySave
Save this storySave

When Michael Seibel lost his position at the startup incubator Y Combinator, he
didn’t find out in typical tech industry fashion, which might entail an email
calling him to a Zoom meeting where the bad news would be delivered. He did it
to himself. Today Seibel is announcing that he’s stepping down as YC’s managing
director, a job that entailed running the heart of the business: selecting
startup founders for the three-month program and running the boot-camp-style
operation that hones the vision and execution of their ideas so they can raise
money, release products, and attempt to become the next Airbnb or Stripe (both
YC alumni).

Considering how important YC has been to the tech startup ecosystem, Seibel’s
exit will have more resonance than your average corporate reshuffle. For one
thing, the person 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 war between tech and progressives. Whether
intentional or not, Seibel, a well-liked entrepreneur and investor himself, is
deftly stepping out of the line of fire.

This is an edition of Steven Levy's Plaintext newsletter.
SIGN UP for Plaintext and tap Steven's unique insights and unmatched contacts
for the long view on tech.

Seibel explains the move as a more personal decision. Sometime last year he
began to take stock, spurred in part by reading Strength to Strength, a book
about career arcs, particularly pivots made late in life. He’s only 41, but
precociousness is part of the founder mindset, and he’d been a startup CEO at
23. “I do everything early,” he says.

Michael SeibelCourtesy of Y Combinator

He realized that he had been running batches for as long as the person who first
imagined YC into being, Paul Graham. After Covid waned, YC had returned to an
in-person experience, and the software that it had developed to smooth the
remote Covid-era program made an IRL operation easier to manage. Now the program
works by splitting each batch of new startups into four groups, none larger than
Dunbar’s Number of 150, estimated to be the maximum number of relationship’s a
human brain can properly maintain. Each group has its own leader, so YC had less
need for someone to oversee each cohort as a whole. And though Seibel enjoyed
managing the overall program, he much preferred direct contact with company
founders. So he will now become one of those four group leaders, who each mentor
a quarter of the batch. It’s a particularly exciting time to do that, Seibel
says, as many of the companies hinge on the AI boom.



Close observers of YC—and many in the startup ecosystem monitor the accelerator
with the diligence of a behavior-tracking ad network—might wonder whether
Seibel’s move might have something to do with his being passed over for the
leadership of the entire operation. Forbes has reported that he was disappointed
not to be tapped as CEO after the incubator’s president, Geoff Ralston, who had
taken over when Sam Altman went full time leading OpenAI, left at the end of
2022. Ralston was replaced by YC’s former design guru, Garry Tan. Seibel tells
me he did not feel dissed, though he would have accepted the job if offered. “If
it was something that people thought was going to be the right thing, I was
happy to do it. If not, I was more than happy to not,” he says. “My whole goal
was to do whatever YC needed for me.”



Seibel’s self-demotion seems to be in keeping with a recent rethinking at Y
Combinator: a refocusing toward a scrappy, boots-on-the-ground startup
accelerator as it was under its initial leader and cofounder Graham. His
successor, Altman, started a sprawling research operation that, among other
things, launched OpenAI. Ralston had his own dreams, and YC started a continuity
fund to enable it to make later-stage investments into maturing startups.
Ralston was also enamored with scale. The Winter 2022 batch included 412
companies, each funded by the traditional seed investment from YC. Ralston
boosted that initial slug of capital from $125,000 to $500,000 per company, for
a 7 percent stake. When I last asked him whether there was a limit to how many
startups YC could accommodate in each batch, Ralston said there wasn’t. It was
possible, he believed, for a batch to number “thousands” of startups.



Under Tan, who took over in January 2023, there’s been a refocus on the founders
themselves. Tan says YC had become kind of an umbrella company saying yes to a
lot of things. “I asked, ‘How do we focus on what made YC awesome in the first
place?’” The answer was mentoring cool founders, chosen through an exacting
application process. The continuity fund was discontinued. YC had already
separated itself from Altman’s research division, which is now called Open
Research. The only remaining trace of Altman’s research operation within the
company now is a financial stake in OpenAI. Most notably, batch sizes have been
cut almost in half. Beginning Summer 2022, they numbered in the mid 200’s, with
the current batch inching up to 260. This isn’t due to demand—27,000 companies
applied for those slots.

Featured Video



John Malkovich Answers the Web's Most Searched Questions



Most Popular
 * Culture
   The Kate Middleton Photo’s Most Glaring Photoshop Mistakes
   
   Reece Rogers

 * Security
   Automakers Are Telling Your Insurance Company How You Really Drive
   
   Dell Cameron

 * Security
   There Are Dark Corners of the Internet. Then There's 764
   
   Ali Winston

 * Science
   Solar-Powered Farming Is Quickly Depleting the World's Groundwater Supply
   
   Fred Pearce

 * 





That’s more intense competition than gaining entry to an elite university like
Harvard or Stanford, which Y Combinator is often likened to. While Seibel
resists the comparison, I suspect that, as with Harvard, many of those 27,000
applicants to YC are just as interested in the halo that comes from being
accepted and in getting access to its network of alumni as they are in the
education that they will get. When I ask Tan whether YC might now be part of the
establishment, his pushback is tepid. “It was probably entering that realm,” he
says. “I like to still think of this as entrepreneurs trying to figure it
out—like Rage Against the Machine.”



Speaking of rage, it’s a good word to summarize how a lot of progressives feel
about the tech industry. There’s an ongoing battle in San Francisco between
techies demanding the city adopt tougher policies in the pandemic-blighted
downtown area and liberals who cherish the city’s antiauthoritarian heritage. In
May 2023, YC moved its headquarters from Mountain View to a large pier facility
in San Francisco, steering itself into the teeth of this controversy. And one of
the loudest voices in the conflict has been Tan, a participant of the movement
to recall the city’s progressive district attorney and a source of intemperate
tirades against the civic leaders.

In an era of tech scrutiny, the ethic of Y Combinator—which sees mentoring
founders as akin to a social good to wider society—is being questioned. In the
early days of YC, the fabled interviews that determine entry to the program had
a vibe of American Idol to them. Founders were underdog talents reaching for the
brass ring of glory. Now it’s more like being tapped for a secret society like
Skull and Bones: Simply getting accepted means you will be not only well-funded,
but cosseted by a network of 10,000 founders eager to help you out. Not exactly
underdogs. Though Seibel disagrees: “When you’re a startup the whole ecosystem
is the underdog,” he says. “Here in the Bay Area, we're surrounded by the big
tech giants.”

That stance is pure Seibel. If nothing else, his conscious self-demotion puts a
spotlight on an entrepreneur whose modest public profile belies a powerful
impact on the startup world. I first met him in 2007, when he was a recent
graduate of YC, a cohort then in low double digits. Seibel’s company was a wacky
project called Justin.tv, devoted to livestreaming people’s lives 24/7, starting
with that of eponymous cofounder Justin Kan. These looney videographers prowled
a San Francisco highrise where so many YC founders rented space that it was
nicknamed the “Y-scraper.” One might argue Justin.tv was a precursor to the
influencer economy—after several pivots it morphed into streaming platform
Twitch, purchased by Amazon for almost a billion dollars. Seibel had a talent
for sharing the essentials of foundership. He was also African American,
relatively rare in a field overly dominated by privileged, white Stanford grads.
His upbeat demeanor and canny knowledge of the inside game of growing a company
has benefited hundreds of startups. And since he is a personal investor in
dozens of companies, and is on the boards of Reddit and Dropbox, the association
with YC has been very good to him as well.

Most Popular
 * Culture
   The Kate Middleton Photo’s Most Glaring Photoshop Mistakes
   
   Reece Rogers

 * Security
   Automakers Are Telling Your Insurance Company How You Really Drive
   
   Dell Cameron

 * Security
   There Are Dark Corners of the Internet. Then There's 764
   
   Ali Winston

 * Science
   Solar-Powered Farming Is Quickly Depleting the World's Groundwater Supply
   
   Fred Pearce

 * 





While becoming the CEO of Y Combinator might have been a capstone to his career,
he says he’s a huge fan of Tan’s and is feeling great about his decision to move
away from management to become more hands-on with future founders. “I always
knew I wanted to kind of teach as my last job,” Seibel says. “Could you imagine
teaching anywhere better than here?” Maybe … a university? I hear that there’s
some teaching at those places as well.


Time Travel

I’ve embedded inside two different Y Combinator batches. The first was for
Newsweek, when all of 12 startups were in the game. Four years later I returned
to track the much larger Winter 2011 batch for WIRED. That cohort was
transformational for YC, as midway through the process a surprise announcement
dramatically changed the terms for every wannabe unicorn: Instead of an initial
investment of around $20,000 for each company, every participant was staked
$150,000. (These days, each startup gets $500,000.) Here’s a description of the
moment that happened in late January 2011.



A couple of days after Prototype Day, the class convenes for a special
Friday-night session at YC headquarters. Nobody knows why they are there; when
Graham announced the mandatory meeting, he gave no clue as to what he had
planned.

There has, however, been plenty of speculation. Is there going to be a big party
for [YC cofounder] Jessica Livingston’s 40th birthday? Is Steve Jobs going to
speak? Is Barack Obama?

Now Graham stands before the class. In an early sign of the evening’s
significance, he is actually wearing long pants. He introduces the group to Ron
Conway, the noted angel investor. Then Graham introduces a special guest, Yuri
Milner. Milner has been conducting a relentless campaign to become a prominent
Silicon Valley investor, putting hundreds of millions into Facebook, Groupon,
and Zynga. Milner is not in Mountain View; he’s attending the World Economic
Forum in Davos. But [YC partner Trevor Blackwell] has set him up with one of the
Anybots, which Milner can control remotely from Europe. A tiny screen atop the
wheeled robot’s saucer-shaped “head” carries a projection of Milner’s face,
allowing him to talk to the group.

Most Popular
 * Culture
   The Kate Middleton Photo’s Most Glaring Photoshop Mistakes
   
   Reece Rogers

 * Security
   Automakers Are Telling Your Insurance Company How You Really Drive
   
   Dell Cameron

 * Security
   There Are Dark Corners of the Internet. Then There's 764
   
   Ali Winston

 * Science
   Solar-Powered Farming Is Quickly Depleting the World's Groundwater Supply
   
   Fred Pearce

 * 





“So, the surprise,” Graham says, gesturing to Conway and the Milner-bot, “is
that they want to invest in all of you.”

For a few seconds there is stunned silence as 99 founders try to process this
news. It’s like a denial-of-service attack on their brains. Finally, there’s a
collective exhale and a round of applause. This is good. Then Graham explains
the terms that Milner is offering in collaboration with Conway’s firm, SV Angel:
“$150,000 on a convertible note,” he says. “No cap.”

Translation: Instead of demanding a relatively large share for their
ground-floor stake, Conway and Milner are agreeing to invest at whatever
valuation the next round of investors sets. In other words, they get no
advantage from taking such an early position. These are the most
founder-friendly terms imaginable, with no downside. The room erupts into
applause, hoots, and shouts. The budding entrepreneurs look like an Oprah
audience after learning that everyone is getting a free Pontiac.


Ask Me One Thing

Lesley asks, “Why has Apple abandoned their not-so-secret car project?”

Thanks for the question, Lesley. I suspect Kevin Lynch, the brilliant engineer
who moved from heading the Apple Watch franchise to Apple’s auto venture
codenamed Titan, might be asking the same question. Then again, he might be
among the few that really know the answer. I don’t!



Surely among the reasons are factors that outside pundits have cited. Cars have
lower margins than digital products. Weakening government resolve to push for
electric vehicles means that automakers would get fewer tax breaks and an
insufficient battery-charging infrastructure. Fully autonomous driving, which
was allegedly the original idea for an Apple Car, has proven to be incredibly
difficult to realize. With those thoughts in mind, Tim Cook might well have
balked at spending the hundreds of billions of dollars necessary to ramp up
manufacturing for an auto company significant enough to make Tesla look like
Tinkertoy.

Most Popular
 * Culture
   The Kate Middleton Photo’s Most Glaring Photoshop Mistakes
   
   Reece Rogers

 * Security
   Automakers Are Telling Your Insurance Company How You Really Drive
   
   Dell Cameron

 * Security
   There Are Dark Corners of the Internet. Then There's 764
   
   Ali Winston

 * Science
   Solar-Powered Farming Is Quickly Depleting the World's Groundwater Supply
   
   Fred Pearce

 * 





But let me suggest another reason that Cook unplugged this decade-long project.
I find it significant that many of the engineers on the project have been
transferred to work on generative AI. Maybe Apple realized that the very
survival of a major tech company depended on being a major player in this hot
area. Instead of trying to lure outside talent—a difficult task in this
ultra-competitive arena—it instead opted to reassign a handy internal stock of
machine-learning acumen, the engineers futilely banging away on Titan.

You can submit questions to mail@wired.com. Write ASK LEVY in the subject line.


End Times Chronicle

Driven by power-hungry data centers, power plants are overwhelmed. And new ones
to replace them will be fossil-fuel burning climate killers.


Last but Not Least

Seibel is on the board of Reddit, part of YC’s first batch. Could its impending
IPO be a threat to the platform’s survival?

The judge has spoken: Craig Wright is not Satoshi.

Most Popular
 * Culture
   The Kate Middleton Photo’s Most Glaring Photoshop Mistakes
   
   Reece Rogers

 * Security
   Automakers Are Telling Your Insurance Company How You Really Drive
   
   Dell Cameron

 * Security
   There Are Dark Corners of the Internet. Then There's 764
   
   Ali Winston

 * Science
   Solar-Powered Farming Is Quickly Depleting the World's Groundwater Supply
   
   Fred Pearce

 * 





The horrifying story of 764, a network of child predators operating on Discord,
Minecraft, Roblox, and other sites popular with young people and teens.

Here are our favorite pillows. Wake me when this year is over.



Don't miss future subscriber-only editions of this column. Subscribe to WIRED
(50% off for Plaintext readers) today.






YOU MIGHT ALSO LIKE …

 * In your inbox: The best and weirdest stories from WIRED’s iconic archive

 * A network of violent predators is extorting children to commit acts of abuse

 * Solar-powered farming is quickly depleting the world's groundwater supply

 * Can Reddit—the web’s most reliably human forum—survive its own IPO?

 * Battery-powered bikes: Enjoy the benefits of cycling, minus the sweat

Steven Levy covers the gamut of tech subjects for WIRED, in print and online,
and has been contributing to the magazine since its inception. His weekly
column, Plaintext, is exclusive to subscribers online but the newsletter version
is open to all—sign up here. He has been writing about technology for... Read
more
Editor at Large
 * X

TopicsPlaintextStartupsY CombinatorSilicon Valley
More from WIRED
Tech Job Interviews Are Out of Control
Tech companies are famous for coddling their workers but after mass layoffs the
industry's culture has shifted. Engineers say that getting hired can require
days of work on unpaid assignments.

Lauren Goode

Ageism Haunts Some Tech Workers in the Race to Get Hired
Hundreds of thousands of tech workers have been laid off since 2022. Some who
don’t fit the young coder archetype say being more experienced can feel like a
disadvantage.

Amanda Hoover

The Fear That Inspired the Creation of OpenAI
Emails released by OpenAI to refute a lawsuit from Elon Musk show how he, Sam
Altman, and other cofounders were motivated by fears of Google's dominance.

Will Knight


Elon Musk Sues OpenAI and Sam Altman for ‘Flagrant Breaches’ of Contract
In the lawsuit, Musk claims OpenAI has abandoned its mission to develop AI for
the benefit of humanity.

Morgan Meaker

The Wild Claim at the Heart of Elon Musk’s OpenAI Lawsuit
Elon Musk’s lawsuit against OpenAI hinges on a dubious claim that the company
has already developed ‘artificial general intelligence’—and handed it over to
Microsoft.

Will Knight

The Skilled Workers Training AI to Take Their Jobs
A new workforce of language experts, creative writers, and nuclear physicists
are turning to data labor—and potentially making their future jobs obsolete in
the process.

Morgan Meaker

Why Elon Musk Had to Open Source Grok, His Answer to ChatGPT
Earlier this month Elon Musk sued OpenAI for keeping its technology secret.
Today he promised to give away his own “truth-seeking” chatbot Grok for free.

Will Knight

Nvidia Hardware Is Eating the World
Tech companies can’t get enough of this tech company. Earnings are off the
charts. WIRED probes the mind of its CEO, Jensen Huang.

Lauren Goode







ONE YEAR FOR $29.99 $5

SUBSCRIBE
WIRED is where tomorrow is realized. It is the essential source of information
and ideas that make sense of a world in constant transformation. The WIRED
conversation illuminates how technology is changing every aspect of our
lives—from culture to business, science to design. The breakthroughs and
innovations that we uncover lead to new ways of thinking, new connections, and
new industries.

More From WIRED

 * Subscribe
 * Newsletters
 * FAQ
 * WIRED Staff
 * Editorial Standards
 * Archive
 * RSS
 * Accessibility Help

Reviews and Guides

 * Reviews
 * Buying Guides
 * Coupons
 * Mattresses
 * Electric Bikes
 * Fitness Trackers
 * Streaming Guides

 * Advertise
 * Contact Us
 * Customer Care
 * Jobs
 * Press Center
 * Condé Nast Store
 * User Agreement
 * Privacy Policy & Cookie Statement
 * Your California Privacy Rights

© 2024 Condé Nast. All rights reserved. WIRED may earn a portion of sales from
products that are purchased through our site as part of our Affiliate
Partnerships with retailers. The material on this site may not be reproduced,
distributed, transmitted, cached or otherwise used, except with the prior
written permission of Condé Nast. Ad Choices

SELECT INTERNATIONAL SITE

United StatesLargeChevron
 * Italia
 * Japón
 * Czech Republic & Slovakia

 * Facebook
 * X
 * Pinterest
 * YouTube
 * Instagram
 * Tiktok


Manage Preferences





WE CARE ABOUT YOUR PRIVACY

We and our 164 partners store and/or access information on a device, such as
unique IDs in cookies to process personal data. You may accept or manage your
choices by clicking below or at any time in the privacy policy page. These
choices will be signaled to our partners and will not affect browsing data.More
Information


WE AND OUR PARTNERS PROCESS DATA TO PROVIDE:

Use precise geolocation data. Actively scan device characteristics for
identification. Store and/or access information on a device. Personalised
advertising and content, advertising and content measurement, audience research
and services development. List of Partners (vendors)

I Accept
Show Purposes