I think the answer is more boring than most people think.
- most of us have never had exposure to it first-hand
- most of us don't even know anyone that works in defense, so nothing second-hand either
- most of us had zero exposure to it anytime in our education
- seemingly very few technologists in the space are prolific bloggers or podcasters so glimpses into that world is not something we'd normally stumble across.
So it's like a reverse Bike Shed dynamic. It's hard to have rigorous conversation or opinions on something we have so little insights to.
"Why is Hacker News not interested in Ethiopian mating ceremonies?" might be a good comparison.
You ask: "Do the startups applying this year and giving you 6% of their founder shares understand it's just a test drive this year?"
We're not going anywhere, nor will our support, nor will our mentors. We may change the focus of our classes (although we haven't decided yet) but nothing changes for our startups this August. They still receive massive value from us and will continue to long after they leave the nest.
Hey Matt, nice to see you chiming in. Appreciate the thoughts.
You say "You are left funding founders not dedicated enough to their startups to move and give their startups the best chance." Interpreted another way: everyone not smart enough or driven enough to move to the Valley we'll be stuck with. Second raters.
But you're missing the point: Is this pool still good enough? In the pool of 5,000 rejected YC and TS applicants per year are there any winners? We think so. We think there are a lot. Chicago is a far cry from SV or NYC yet a full half of Accelerate Labs' last class* went on to raise an impressive angel round. 50% follow on funding is nothing to sneeze at no matter how you measure it. Most accelerator programs cross their fingers for that.
You say "Thanks to Angel List you don't have to pay an accelerator for access". You just made raising a round leveraging AL sound really easy. You've found success with it -- is it really that easy? But even so, how do you think companies that are a tad too early for that going to maximize their chances of getting to that point? A Pedal Brain c. 2009?
You bring up good points, and I think that they lead to the fact we appear to be "just another YC". Stay tuned. This is just our first class (what we call a cycle). In 2012 and beyond we'll be focusing much more on niche cycles. Ones that are absolutely perfect for this ecosystem. See this year merely as our test drive, but we know we're not perfect. Factor that in before you short us into the ground. =)
Your point on network value is an excellent one, one definitely worth challenging us on. I suspect almost no accelerator in the next 5 years will touch YC's network, especially since they're right in the heart of M&A-land.
However every accelerator, except for dopey government-run ones, needs an ROI. The numbers we came up with were our attempt at a happy medium. "Price"-wise, we can be lower than others (TechWildcatters, Shotput Ventures, SproutBox, Momentum) but we also add value and perks that few others do. We also have massive pent up demand in our region.
Value prop is a tough starting point because it means different things to different people. And you know what? Maybe we'll find out our terms aren't right and we'll pivot. Just like almost every entrepreneur does on pricing.
But then again, until you can find another accelerator that is open to single founders, open to non-technical founders, provides a dev team in India to support, and that has a selection process that includes a educational mini-bootcamp...then it's a tough comparison.
No, our network isn't 1/3 as valuable as theirs (although we will have a few mentors from SV). But we've got plenty of tech entrepreneurs banging down our door so I think, for now, we're on the right path to helping them change the world.
We just think it's something worth experimenting with. PG (and David Cohen et al.) are engineers. We think their bias towards developers is natural but until we see empirical data showing otherwise we think there's still potential for non-coders to successfully start and grow a product company.
There's no question there's pros and cons.
The only question is can we address the cons and accentuate the pros. (See Quora: What are the pros and cons of a non-technical founder for a start-up: http://qr.ae/clRm )
No. Heck, we might not have any of our companies interested in going that route. But the option's there and we'll have a BA at their disposal. How many business minded entrepreneurs do you know that couldn't manage a contract developer if his life depended on it? We teach them how.
The bigger point here is that for the first time ever guys who are non-coders but have domain expertise and the ability to take the product to market now have an option. Every other accelerator will slam their door in your face.
We're pretty pumped about this. Having a tech cofounder is massively helpful, but we don't feel the lack of one discounts your value to zero.
Ownership is a sacred thing -- we don't tinker with that at all. The dev team takes no equity. After all, you're running the company, not us. We just help with the resources and motivation. The dev team in India (which my cofounder Cem has worked with for years) are merely a perk we provide to our companies. It's one benefit of many.
If there's already a CTO in the company then great, he can focus on what's core and have the offshore team work on secondary stuff.
If it's a team of 3 business guys who have the right approach and the right knowledge then here's their chance to get the prototype figured out and raise that first bit of money to plow into a full time developer.
- most of us have never had exposure to it first-hand
- most of us don't even know anyone that works in defense, so nothing second-hand either
- most of us had zero exposure to it anytime in our education
- seemingly very few technologists in the space are prolific bloggers or podcasters so glimpses into that world is not something we'd normally stumble across.
So it's like a reverse Bike Shed dynamic. It's hard to have rigorous conversation or opinions on something we have so little insights to.
"Why is Hacker News not interested in Ethiopian mating ceremonies?" might be a good comparison.