The Merge

A popular topic in Silicon Valley is talking about what year humans and machines will merge (or, if not, what year humans will get surpassed by rapidly improving AI or a genetically enhanced species). Most guesses seem to be between 2025 and 2075.

People used to call this the singularity; now it feels uncomfortable and real enough that many seem to avoid naming it at all.

Perhaps another reason people stopped using the word “singularity” is that it implies a single moment in time, and it now looks like the merge is going to be a gradual process. And gradual processes are hard to notice.

I believe the merge has already started, and we are a few years in. Our phones control us and tell us what to do when; social media feeds determine how we feel; search engines decide what we think.

The algorithms that make all this happen are no longer understood by any one person. They optimize for what their creators tell them to optimize for, but in ways that no human could figure out — they are what today seems like sophisticated AI, and tomorrow will seem like child’s play. And they’re extremely effective — at least speaking for myself, I have a very hard time resisting what the algorithms want me to do. Until I made a real effort to combat it, I found myself getting extremely addicted to the internet. [1]

We are already in the phase of co-evolution — the AIs affect, effect, and infect us, and then we improve the AI. We build more computing power and run the AI on it, and it figures out how to build even better chips.

This probably cannot be stopped. As we have learned, scientific advancement eventually happens if the laws of physics do not prevent it.

More important than that, unless we destroy ourselves first, superhuman AI is going to happen, genetic enhancement is going to happen, and brain-machine interfaces are going to happen. It is a failure of human imagination and human arrogance to assume that we will never build things smarter than ourselves.

Our self-worth is so based on our intelligence that we believe it must be singular and not slightly higher than all the other animals on a continuum. Perhaps the AI will feel the same way and note that differences between us and bonobos are barely worth discussing.

The merge can take a lot of forms: We could plug electrodes into our brains, or we could all just become really close friends with a chatbot. But I think a merge is probably our best-case scenario. If two different species both want the same thing and only one can have it—in this case, to be the dominant species on the planet and beyond—they are going to have conflict. We should all want one team where all members care about the well-being of everyone else.

Although the merge has already begun, it’s going to get a lot weirder. We will be the first species ever to design our own descendants. My guess is that we can either be the biological bootloader for digital intelligence and then fade into an evolutionary tree branch, or we can figure out what a successful merge looks like.

It’s probably going to happen sooner than most people think. Hardware is improving at an exponential rate—the most surprising thing I’ve learned working on OpenAI is just how correlated increasing computing power and AI breakthroughs are—and the number of smart people working on AI is increasing exponentially as well. Double exponential functions get away from you fast.

It would be good for the entire world to start taking this a lot more seriously now. Worldwide coordination doesn’t happen quickly, and we need it for this.



[1] I believe attention hacking is going to be the sugar epidemic of this generation. I can feel the changes in my own life — I can still wistfully remember when I had an attention span. My friends’ young children don’t even know that’s something they should miss. I am angry and unhappy more often, but I channel it into productive change less often, instead chasing the dual dopamine hits of likes and outrage.

(Cross-posted from https://medium.com/wordsthatmatter/merge-now-430c6d89d1fe to here for consistency; thanks to Medium for inviting me to write this!)

American Equity

I’d like feedback on the following idea.

I think that every adult US citizen should get an annual share of the US GDP.

I believe that owning something like a share in America would align all of us in making the country as successful as possible—the better the country does, the better everyone does—and give more people a fair shot at achieving the life they want.  And we all work together to create the system that generates so much prosperity.

I believe that a new social contract like what I’m suggesting here—where we agree to a floor and no ceiling—would lead to a huge increase in US prosperity and keep us in the global lead.  Countries that concentrate wealth in a small number of families do worse over the long term—if we don’t take a radical step toward a fair, inclusive system, we will not be the leading country in the world for much longer.  This would harm all Americans more than most realize.

There are historical examples of countries giving out land to citizens (such as the Homestead Acts in the US) as a way to distribute the resources people needed to succeed.  Today, the fundamental input to wealth generation isn’t farmland, but money and ideas—you really do need money to make money.

American Equity would also cushion the transition from the jobs of today to the jobs of tomorrow.  Automation holds the promise of creating more abundance than we ever dreamed possible, but it’s going to significantly change how we think about work.  If everyone benefits more directly from economic growth, then it will be easier to move faster toward this better world.

The default case for automation is to concentrate wealth (and therefore power) in a tiny number of hands.  America has repeatedly found ways to challenge this sort of concentration, and we need to do so again.

The joint-stock company was one of the most important inventions in human history.  It allowed us to align a lot of people in pursuit of a common goal and accomplish things no individual could.  Obviously, the US is not a company, but I think a similar model can work for the US as well as it does for companies.

A proposal like this obviously requires a lot of new funding [1] to do at large scale, but I think we could start very small—a few hundred dollars per citizen per year—and ramp it up to a long-term target of 10-20% of GDP per year when the GDP per capita doubles.

I have no delusions about the challenges of such a program.  There would be difficult consequences for things like immigration policy that will need a lot of discussion.  We’d also need to figure out rules about transferability and borrowing against this equity.  And we’d need to set it up in a way that does not exacerbate short-term thinking or favor unsustainable growth.

However, as the economy grows, we could imagine a world in which every American would have their basic needs guaranteed.  Absolute poverty would be eliminated, and we would no longer motivate people through the fear of not being able to eat.  In addition to being the obviously right thing to do, eliminating poverty will increase productivity.

American Equity would create a society that I believe would work much better than what we have today.  It would free Americans to work on what they really care about, improve social cohesion, and incentivize everyone to think about ways to grow the whole pie.

 


[1] It’s time to update our tax system for the way wealth works in the modern world—for example, taxing capital and labor at the same rates.  And we should consider eventually replacing some of our current aid programs, which distort incentives and are needlessly complicated and inefficient, with something like this.

Of course this won’t solve all our problems—we still need serious reform in areas such as housing, education, and healthcare.  Without policies that address the cost of living crisis, any sort of redistribution will be far less effective than it otherwise could be.


The United Slate

I would like to find and support a slate of candidates for the 2018 California elections, and also to find someone to run a ballot initiative focused on affordable housing in the state.  A team of aligned people has a chance to make a real change.

I believe in creating prosperity through technology, economic fairness, and maintaining personal liberty.

We are in the middle of a massive technological shift—the automation revolution will be as big as the agricultural revolution or the industrial revolution.  We need to figure out a new social contract, and to ensure that everyone benefits from the coming changes.

Today, we have massive wealth inequality, little economic growth, a system that works for people born lucky, and a cost of living that is spiraling out of control.  What we've been trying for the past few decades hasn't been working—I think it's time to consider some new ideas.

More information about the principles and policies I believe in is at the link below.

http://unitedslate.samaltman.com

Join the YC Software Team

If you want to get funded by YC as a founder in the future, but you don't have a startup that's ready for that yet, joining the YC software team is a great hack to get there.

The YC software team is a small group of hackers in SF that write the software that makes all the parts of YC work.

As a member of the software team, you'll get full access to the YC program, just like founders do.  You'll learn the ins and outs of how YC works, and you'll get to follow and learn from hundreds of companies.  You'll meet the best people in the startup world and get exposed to the best startup ideas.

Software is how we can scale YC, and the limits of that are probably further out than most people think.

You can apply here: http://bit.ly/1Od0T2l.

Quora

I'm a strong believer in the importance of the internet in helping people to share knowledge and learn from each other.  So I’m delighted to share, on behalf of YC Continuity, that we’re investing alongside Collaborative Fund in Quora.

Quora is doing extremely well. They now have more than 190 million monthly unique visitors, almost doubling from a year ago. The combination of their ever-improving machine learning and the increasing amount of knowledge shared means the product gets better as it gets bigger. The content I see from Quora constantly gets more personalized for me.

I also believe they have some of the highest-quality user-generated content on the internet, and a real chance at being one of the few places that contain all human knowledge. The engineering challenges between here and there are great, but if there’s a team and product to bet on, this is one we're backing with confidence.

Adam is one of the few names that people consistently mention when discussing the smartest CEOs in Silicon Valley. And he has a very long-term focus, which has become a rare commodity in tech companies these days. 

My relationship with Quora goes back to May 2014 when the company participated in YC.  Funding an already successful company was an unusual experiment for us.  At that point we didn't have any specific thoughts on how YC might invest in graduates from our program and help them scale.  In a way, Quora was the inspiration for deciding we needed to figure out how to do that, and we launched YC Continuity in October 2015.

As an early admirer of Quora and returning investor, I’m thrilled to see the progress they've made and excited to be part of what they do next.

Tech Workers' Values

For good and bad, technology has become a central force in all our lives.

As members of the community, we're interested in ways in which tech companies can use their collective power to protect privacy, rule of law, freedom of expression, and other fundamental American rights.  

We’d also like to discuss how tech companies can heal the divide in our country. We believe that tech companies can create a better economic future for all Americans by spreading high-paying technology jobs around the country and other measures. We also believe tech companies have an opportunity and an obligation to reduce the polarization we've helped create.

Tech companies are very receptive to their employees' influence. We believe that employees should come together and clearly define the values and policies they'd like to see their companies uphold. A tech union isn't the perfect metaphor for this, but it's not far off.

We are planning to hold a meeting on the evening of April 9th in the Bay Area. Please sign up here or message us at 415 569-2751 on Signal if you'd like to come.

We're going try to keep this first group smaller than 50 people so that everyone can actually participate. If more people than that want to attend, we'll try to select a diverse group of people from a large set of companies. If this event seems to go well, we expect to host similar meetings in the future.

--Sam Altman, Debra Cleaver, Matt Krisiloff

Keep the Internet Open

The FCC has announced plans to roll back policies on net neutrality, and its new head has indicated he has no plan to stop soon.

The internet is a public good, and I believe access should be a basic right.  We've seen such great innovation in software because the internet has been a level playing field.  People have been able to succeed by merit, not the regulatory weight of incumbency. 

It seems best to keep it regulated like a common carrier. [1] Doing this allows the government to ensure a level playing field, impose privacy regulations, and subsidize access for people who can't afford it.

But this idea is under attack, and I'm surprised the tech community isn't speaking out more forcefully.  Although many leading tech companies are now the incumbents, I hope we'll all remember that openness helped them achieve their great success.  It could be disastrous for future startups if this were to change--openness is what made the recent wave of innovation happen.

We need to make our voices heard.  We won this fight once before, and we can win it again.  I really hope an activist or tech leader will step up and organize this fight (and I'm happy to help!).  It's important for our future.



[1] There's an argument that Internet Service Providers should be able to charge a metered rate based on usage.  I'm not sure whether I agree with this, but in principle it seems ok.  That's how we pay for public utilities. 

What's clearly not OK is taking it further--charging different services different rates based on their relationships with ISPs.  You wouldn't accept your electric company charging you different rates depending on the manufacturer of each of your appliances.






Emailed comment from Alan Kay:

Yes -- in fact, the original notion about all this was to be in the same spirit as the 1936 Electrical and Telephone Federal Act which was specifically aimed at rural areas that the utilities didn't want to spend money to reach, so the fed mandated "power and phone" as a kind of universal right. This has also been a theme of the EFF. The basic impulse was also one of the drivers behind Carnegie's huge support of the free library system in the US (the whole story there is interesting, including some of the high minded stipulations in the Carnegie bequests, which I've on occasion tried to get the Internet communities to buy off on).

Every Carnegie library had to have two special rooms -- one just for children, and the other where people could be taught to read. Part of the Carnegie money for the libraries supported the reading teachers and sessions. Carnegie was an immigrant and child laborer who could read a little. One of his earliest bosses would open his home library to his workers on Saturdays. Carnegie used this to raise himself up, and never forgot how it happened. (He was also one of the few truly rich people ever who said he was going to give it all away to benefit the civilization around him, and actually did it.)

P.S. I wanted to put the above comment on your blog but there was no button to allow this ...

Greg

A lot of people ask me what the ideal cofounder looks like.  I now have an answer: Greg Brockman.

Every successful startup I know has at least one person who provides the force of will to make the startup happen.  I’d thought a lot about this in the abstract while advising YC startups, but until OpenAI I hadn’t observed up close someone else drive the formation of a startup.

OpenAI wouldn’t have happened without Greg.  He commits quickly and fully to things.  I organized a group dinner early on to talk about what such an organization might look like, and drove him home afterwards.  Greg asked me questions for the first half of the drive back to San Francisco, then declared he was in, and started planning logistics for the rest of the drive.

From then on he was fully in, with an average email response time of about 5 minutes to anything.  Elon and I were both busy with day jobs, but Greg kept everything moving forward with imperfect information and a very high-latency connection.

He recruited the founding team.  Greg is a world-class recruiter (he plans every detail of interviews, heavily researches candidate’s backgrounds, sends thoughtful and persistent followups, and so on), and I now believe even more strongly that someone on the founding team has to be an amazing recruiter.

He’s incredibly open to feedback.  Large or small, he’s always willing to hear it, never gets offended, and processes it very quickly.  I once suggested to him that he wasn't communicating a bold enough vision for the organization, and the next time I heard him talk about it (and every time since) it was a perfectly calibrated explanation of how we were going to succeed at something that really mattered.  Even on non-traditional ideas, like when I suggested he co-lead the organization with Ilya, he was always open-minded and thoughtful.

Greg also played the role of ‘non-technical cofounder’, which is a misnomer because most people who know him will say something like “Greg is the most productive engineer I know”.  But he took on all the non-technical roles at the beginning, defining the culture, making offers, organizing offsites, letting everyone work out of his apartment, ordering supplies, cleaning up after meals, etc.  It's important to have someone great in this role at a small startup—many people gloss over it.

Without someone dedicated to finding a solution to all problems, no matter how difficult, eventually a large problem will come along and kill you while you’re still weak.  Founding teams need a Chief Optimist to rally everyone to press on despite the difficulties, and it’s always hard on that person because they can’t really lean on anyone else in the hardest times.

You for sure need great technical talent on a founding team, but make sure you also have someone like Greg.  If they’re the same person, then you’ve hit the jackpot.

What I Heard From Trump Supporters

After the election, I decided to talk to 100 Trump voters from around the country.  I went to the middle of the country, the middle of the state, and talked to many online.

This was a surprisingly interesting and helpful experience—I highly recommend it.  With three exceptions, I found something to like about everyone I talked to (though I strongly disagreed with many of the things they said).  Although it shouldn’t have surprised me given the voting data, I was definitely surprised by the diversity of the people I spoke to—I did not expect to talk to so many Muslims, Mexicans, Black people, and women in the course of this project.

Almost everyone I asked was willing to talk to me, but almost none of them wanted me to use their names—even people from very red states were worried about getting “targeted by those people in Silicon Valley if they knew I voted for him”.  One person in Silicon Valley even asked me to sign a confidentiality agreement before she would talk to me, as she worried she’d lose her job if people at her company knew she was a strong Trump supporter. 

I wanted to understand what Trump voters liked and didn’t like about the president, what they were nervous about, what they thought about the left’s response so far, and most importantly, what would convince them not to vote for him in the future. 

Obviously, this is not a poll, and not ‘data’.  But I think narratives are really important.

Here’s what I heard.

The TL;DR quote is this:

“You all can defeat Trump next time, but not if you keep mocking us, refusing to listen to us, and cutting us out.  It’s Republicans, not Democrats, who will take Trump down.”

 

What do you like about Trump?

“He is not politically correct.” Note: This sentiment came up a lot, probably in at least a third of the conversations I had.

“He says true but unpopular things.  If you can’t talk about problems, you can’t fix them.”

I'm a Jewish libertarian who's [sic] grandparents were Holocaust survivors.  Over the last few years the mainstream left has resorted to name-calling and character assassination, instead of debate, any time their positions are questioned.  This atmosphere became extremely oppressive and threatening to people, like myself, who disagreed with many of Obama's policies over the past several years.  Intelligent debate has become rare.”

“It's a lot like political discussion was in Soviet Union, actually.  I think the inability to acknowledge obvious truths, and the ever-increasing scope of these restrictions makes it particularly frustrating.  And personally, for whatever reason, I find inability to have more subtle discussion very frustrating--things are not white or black, but you can't talk about greys since the politically correct answer is white.”

“He is anti-abortion.” Note: This sentiment came up a lot.  A number of people I spoke to said they didn’t care about anything else he did and would always vote for whichever candidate was more anti-abortion.

“I like that he puts the interests of Americans first.  American policy needs to be made from a position of how Americans benefit from it, as that is the role of government.”

“He is anti-immigration.” Note: This sentiment came up a lot.  The most surprising takeaway for me how little it seemed to be driven by economic concerns, and how much it was driven by fears about “losing our culture”, “safety”, “community”, and a general Us-vs.-Them mentality. 

“He will preserve our culture.  Preservation of culture is considered good in most cases.  What’s wrong with preserving the good parts of American culture?”

“He’s not Hillary Clinton.”

“I’m Mexican.  I support the wall.  The people who have stayed have destroyed Mexico, and now they want to get out and cause damage here.  We need to protect our borders, but now any policy is like that is called racist.  Trump was the first person willing to say that out loud.”

“I am socially very liberal.  I am fiscally very conservative.  I don't feel I have a party--never have.  I grew up in a more socially conservative time and picked the "lesser of two evils" during elections.  Now, the more socially liberal side supports bigger governments, more aid and support and that money has to come from somewhere.  I see what's deducted from my check each week.  I'm OK with never being rich but I'd like more security and that doesn't come from more government spending.”

“We need borders at every level of our society.”

“I’m willing to postpone some further social justice progress, which doesn’t really result in loss of life, in favor of less foreign policy involvement, the opposite of which does." 

“Brown people are always the out-crowd.  I think subconsciously, part of the reason I supported him was a way to be in the in-crowd for once.”

 

What don’t you like about him? 

“The way he talks about women is despicable.”

“Everything about his style.  We only voted for him because this election was too important to worry about style.”

“I don’t like most things about him.  The way it worked is we got to choose one of two terrible options.”

“I think our nation needs Trumpism to survive long term, and to me that supersedes almost every other reservation I have.  My issue is with Trump himself--I think he's the wrong vessel for his movement, but he's all we've got so I'm behind him.” 

“I think the rollout of the immigration executive order is emblematic of a clusterfuck, to be completely frank.”

“I now believe the Muslim ban actually makes us less safe.”

“Isolationism and protectionism at this point is insane. We've done that before.”

“I, too, worry about the dishonesty.  His relationship with Russia, his relationship with women.  His relationship with questionable financial matters.  These all worry me and were they to continue I would lose all respect.”

“He continually plays into a character that he has created to rile his fan base. Accepting anti-semitism, white nationalism, or hate emanating unnecessarily, creates a vacuum of fear on social media, on television, and around the dinner table.  Even though the policies may be similar to that of any recent Republican President, the behavior to act so immaturely sets a bad example for children and undercuts many cultural norms, which more than anything causes disruption to our sociological foundations.”

“I hate that he discredits the press all the time.  That seems to forebode great evil.”

 

What are you nervous about with Trump as president?

“The thing I’m most worried about is war, and that he could destroy the whole world.  I think I may have underestimated that risk, because he is more of an alpha strongman that I realized when I voted for him.  Otherwise I still like him.” Note: Most people weren’t that worried about war.  More frequent comments were along these lines: 

“I know he’s taking strong positions on certain foreign issues, but I feel in negotiations you need to do things to move the needle and when a whole country is watching its hard to keep a poker face, but at least his business track record overall gives us reason to believe ultimately stability will prevail.”

and

“He’s crazy, but it’s a tactic to get other nations not to mess with us.”

“I worry he will drive us apart as a nation.  I believed him when he said that would stop with the campaign, but I haven’t seen signs of it so far.”

“I am nervous that his mental health is actually bad.”

“I worry he is actually going to roll back social change we’ve fought so hard for.  But I hope not.”


What do you think about the left’s response so far? 

“You need to give us an opportunity to admit we may have been wrong without saying we’re bad people.  I am already thinking I made a mistake, but I feel ostracized from my community.” 

“The left is more intolerant than the right.”  Note: This concept came up a lot, with real animosity in otherwise pleasant conversations.

“Stop calling us racists.  Stop calling us idiots.  We aren’t.  Listen to us when we try to tell you why we aren’t.  Oh, and stop making fun of us.” 

“I’d love to see one-tenth of the outrage about the state of our lives out here that you have for Muslims from another country.   You have no idea what our lives are like.”

“I’m so tired of hearing about white privilege.  I’m white, but way less privileged than a black person from your world.  I have no hope my life will ever get any better.”

I am tired of feeling silenced and demonized.  We have mostly the same goals, and different opinions about how to get there.  Maybe I’m wrong, maybe you’re wrong.  But enough with calling all of us the devil for wanting to try Trump.  I hate Hillary and think she wants to destroy the country of us but I don’t demonize her supporters.” 

“I’m angry that they’re so outraged now, but were never outraged over an existing terrible system.”

“The attacks against Trump have taught me something about myself. I have defended him and said things I really didn't believe or support because I was put in a defensive position. Protesters may have pushed many people in this direction BUT it is ultimately our responsibility and must stop.”

“I'd like to also add that the demonization of Trump by calling him and his supporters: Nazis, KKK, white supremacists, fascists, etc. works very well in entrenching Trump supporters on his side.  These attacks are counter-factual and in my opinion very helpful to Trump.” 

“So far his election has driven our nation apart.  So far I see most of the divisiveness coming from the left.  Shame on them.  I don't see it quite as bad as during Nixon's era but we are truly headed in that direction.  I could not speak with my parents during that time because political division would intrude.  This Thanksgiving and holiday season were as close as I've felt to that in 40 years.  We are increasingly polarized.  It doesn't seem to be strictly generational, though that exists.  There is an east coast-west coast, rural vs. urban, racial, and gender division forming now.  It has the potential to be devastating.” 

“The amount of violent attacks and economic attacks perpetrated by the left are troublesome.  My wife and I recently moved to the Bay Area.  I was expecting a place which was a welcoming meritocracy of ideas.  Instead, I found a place where everyone constantly watches everyone else for any thoughtcrime.” 

“Silicon Valley is incredibly unwelcoming to alternative points of view.  Your curiosity, if it is sincere, is the very rare exception to the rule.”

“There is something hypocritical about the left saying the are uniters not dividers, they are inclusive and then excluding half the population with comments on intelligence and irrelevance in the modern world.”

 

What would convince you not to vote for him again?

“War would be unforgivable.”

“If the Russia thing were true, I’d turn against him.  Why don’t y’all focus on that instead of his tweets?”

“Give us a better option, and we’ll be happy.  But it needs to be a moderate—Sanders won’t win.”

“I’ll happily vote for someone else.  There’s a lot I hate about Trump.  But our lives are basically destroyed, and he was the first person to talk about fixing that.”

“Generally hard to say.  Extreme corruption would do it.”

Second person in the same conversation: “I don’t care if he’s corrupt.  Y’all voted for Hillary and she was the most corrupt candidate of all time.”

“Another worry is an escalation of overreaches between him and the left that culminates in the breakdown of our system of law.  I'd hold him responsible for that.”

“If he were to get the US involved in a major military conflict (I think the odds of this have actually decreased versus Hillary, but I'm willing to be proven wrong). If he were to substantially increase the cost of doing business (by increasing regulation or taxes for instance).”

“I'm socially very liberal. If he were to do something like restart a war on drugs, try to restrict rights of LGBT, or make first trimester abortions difficult or dangerous, I'd rethink my position.  I think these type of things are extremely unlikely though, especially with an election a few years away the country as a whole becoming more socially liberal.”

“I think if 2008 happened again (further into Trump's tenure, so that causation can be shown, hypothetically), the base would evaporate.” 

“Based on Trump's history before politics I don't believe he is racist, sexist, homophobic or bigoted.  If that were true it would supersede everything else since it would be even worse for individual liberty and freedom than any freedom of speech restrictions or increases in government size proposed by the Democratic Party.”

2017 YC Annual Letter

Dear YC Community:

In response to a comment on Hacker News, I’m going to try writing an annual letter to the YC community with an update on our progress.

Our mission is to enable the most innovation of any company in the world in order to make the future great for everyone.  We believe new technology, economic growth, and new ideas about how our society might function are more important than ever before.

As of January 1, 2017, YC has funded over 3,200 founders and 1,470 companies.  This year, assuming there is not a macroeconomic meltdown, we expect the total valuation of companies that have gone through our program to surpass $100 billion.  We have also funded more than 30 non-profits.

As always, most of the credit goes to our founders—they, and the astonishingly strong and helpful community they create, are what make YC special.  The second-most credit goes to our team—I am incredibly thankful to work with such a talented and driven group of people.

YC Companies & Investments

We invested about $27 million in the Winter and Summer 2016 batches, and so far we have invested about $187 million in later-stage investments from our first Continuity fund.

We are excited to fund companies in any space that we believe is good for the world and can eventually sustain a very large company.  Some of the many areas we’re interested in are noted in our Requests for Startups.

Our largest exit of 2016 was Cruise, a self-driving car company.  We expect to fund many more machine learning-driven companies in the future (I will generally avoid calling out trends in these letters, because I’ve noticed doing that produced unintended consequences, but this one is so obvious and so important that I’m happy to mention it).

Helion, Oklo, and Bright are all working toward inexpensive clean energy, an area of great interest to us.  LendUp and Coinbase are two examples of YC companies innovating in financial services technology.  Boom and Relativity Space are pursuing strategies in aerospace that most companies haven’t pursued seriously in a long time, or ever.

Gingko Bioworks is learning how to design new organisms, and Science Exchange is making it easier to get new experiments done.  FarmLogs is making it easier and more efficient to grow food, and Gobble, Instacart and Doordash are making it easier to eat it.  Reddit and 9Gag continue to make me waste enormous amounts of time, but I love every minute I waste.  

Docker, PlanGrid, Checkr, Flexport, Gusto are just a few of the enterprise companies we’ve seen begin to thrive.  Machine Zone has become one of the largest gaming companies in the world.  Rappi, Wave, and Strikingly are some of the many YC companies succeeding on other continents.

In addition to the three companies we are currently best known for—Airbnb, Dropbox and Stripe—more than 50 of our companies are worth more than $100 million each.

We’ve funded a lot of other companies, but in the spirit of not exhausting your patience, I’ll stop listing them here.

Hyperscale

There’s one more trend I want to mention, though it’s not about a specific market.  I think we’re now in the era of hyperscale technology companies.  If you believe Metcalfe’s law, it stands to reason that network-effected technology companies are now far more powerful than ever before, simply because the number of people connected to the internet keeps getting bigger, and n^2 gets big really fast.

Companies like Amazon, Facebook, Google, Apple, and Microsoft have powerful advantages that are still not fully understood by most founders and investors.  I expect that they will continue to do a lot of things well, have significant data and computation advantages, be able to attract a large percentage of the most talented engineers, and aggressively buy companies that get off to promising starts.  This trend is unlikely to reverse without antitrust action, and I suggest people carefully consider its implications for startups.  There will of course be areas where these companies are naturally weaker, and these are good areas to start companies.

Diversity & Inclusion

In 2016, we funded 68 female founders at 52 companies. About 22.3% of the companies we funded had a woman on the founding team, and about 12.5% of the founders we funded were women.  In 2016, we funded 52 Black and Latino founders at 29 companies.  11.6% of the founders we funded were Black or Latino.

The percentage of women who apply to YC is roughly the same as the percentage of women who get funded.  The same is true for Black and Latino founders.

From the data we have available, it seems that the percentage of women and people of color applying to YC is higher than the overall percentage of women and people of color starting startups.  This is encouraging, but we continue to want to understand and address the barriers that prevent more founders from underrepresented groups from starting startups and applying to YC.  We still have a long way to go.

While we remain committed to helping more underrepresented founders get started, we believe that’s only part of the solution.  We still see significant dropoffs at the stages after YC (e.g. raising late-stage capital).  The larger startup community needs to consider how little the unicorn-founder demographics resemble the early-stage demographics.

There’s clearly a lot more work to do here, and we’re committed to help do it.  We’re hosting our fourth annual Female Founders Conference this year in June, continuing our Open Office Hours with underrepresented communities and bringing in unconscious bias experts to train our team.  We’re always open to hearing how we can do a better job, so if you’ve come across practices or programs that work well to support diverse founders, please let us know.

YC Organization

Y Combinator is currently made up of 5 groups.  I’ll talk a little about each of them here.  We expect to add several more over the next few years, and in general you should expect us to try a lot of stuff (though of course not all of it will work).  You should also expect us to continue to grow the number of companies we fund.

YC (our flagship program)

In October of 2016, Michael Seibel took over responsibility for our main program as CEO of YC.  He’s doing an outstanding job, and I expect the program to significantly strengthen over the course of 2017 and beyond.

In 2016 (and the first part of 2017), we added three remarkable partners to the flagship group: Tim Brady, Adora Cheung and Daniel Gross.

One of my partners that I’d like to especially thank is Dalton Caldwell.  Dalton has been a YC partner since 2013, and now runs our admissions team, which is perhaps the most important function we have.  Dalton has taken a process that used to be stressful and deeply imperfect and improved it by a huge amount.  Though I’m sure we’ll still make mistakes, I sleep better at night thinking that we’re making far fewer in this area than we used to.

While I’m on the topic of recognizing partners, I’d also like to thank the three partners at YC that get some of the least public recognition.  Kirsty Nathoo is our CFO, and Jon and Carolynn Levy are our General Counsels.  They are full partners at YC but since they don’t advise our companies (as much) on business as the other partners, they are less well-known.  However, they work incredibly hard and thoughtfully, and they are one of the secrets to our success.  In fact, one of our most successful founders recently said to me “I tell every startup I meet they should do YC, and the reason is Jon Levy.  I don’t get how he managed to take my calls at all hours of the day, because the other founders in my batch said he did the same for them, but he solved more problems for us than I can count, and also just listened to me when I had a bad day.”

Finally, I’d like to thank our entire software team, lead by my partner Jared Friedman.  We’ve had an incredible improvement in our software over the past year, and someday when the history of YC is written, I expect that people will talk about software as one of our secret weapons.  This shouldn’t be so secret—one might reasonably expect technology investors to understand the importance of great software for themselves—but it is generally not the case.

We give companies in this program $120k for 7% ownership in their company, and work with them intensively for 3 months and then less intensively for the rest of the company’s life.  We run this program twice a year, and currently fund about 125 companies per batch. While at YC, founders get access to a range of resources, advice, connections, and special deals.

Anyone can apply on our website, and all sorts of people do (here are some common misconceptions about who YC accepts).

Companies often ask us how we decide who gets into YC.  There are four questions I consider:

1) Will this company build something lots of people really love?

If so, and if ‘lots’ is sufficiently large, the company has the chance to produce substantial earnings.

2) Will this company be easy to copy?

The most successful companies I’ve worked with have a significant competitive advantage—network effect, proprietary technology, complex coordination, or barrier to entry of some other sort.  I understand in theory it’s possible to build a very successful commodity company, but I don’t know how to do it.

3) Will these founders develop into “forces of nature”?

As most people say, it’s hard to make money unless you invest in great founders.  Defining what that means is usually left as an exercise to the reader.  Here are some questions I ask myself: Are these founders relentlessly determined?  Are they original thinkers?  Are they smart, and especially do they have new insights I haven’t heard before?  Are they good communicators (and so will they be able to hire, sell, raise money, talk to the press, etc)?  Are they focused and intense?  Do they always seem to find a way around obstacles?  Would I work for them?

This is the often the hardest factor for me to evaluate, because you have to make a judgment about trajectory—you are trying to predict where someone will be in five years.

4) Does this company have a clear and important mission?

Without this, I usually get bored.  More importantly, companies that don’t have this usually have a hard time recruiting enough great people to work with them, and thus struggle to become very large.

We especially like founders who have some sort of non-traditional background; we are somewhat suspicious of founders with extremely “tracked” lives.  Startups are not a resume item, and we don’t like founders who view YC as a stop on the way to B-school.  Although in many ways it’s a good problem to have, the increase in the value of YC’s brand means we have to work harder to find people doing a startup for the right reason: to bring an idea they’re obsessed with to life, and willing to do something unreasonable to see it happen.

We have had great success funding “unknown” people, and we will keep doing this—it’s one of our two or three best secrets.  Please help us spread the message: you don’t need to be experienced, well-known, or have an impressive resume to get into YC.  We fund smart, ambitious people with a great idea and evidence that they can build things.

If you know a founder who should apply to YC, you can recommend them to us. That said, companies don’t need a recommendation or introduction, and most companies we fund don’t have one.

As I mentioned before, I think the strength and quality of our community is one of the most important things we have to offer.  As with any community, this emerges from a complex set of factors, but I’ll mention three here.

One of the most important cultural values PG and Jessica put in place was to do the right thing for founders, even when it is not in our own short-term interest.  When I was going through YC, it was the thing that most stuck out to me as different from other investors.

Another cultural value they created is to try to fund only good people (in the sense of doing the right thing, though separately we evaluate for effectiveness).  We sometimes get this very wrong, and dealing with the repercussions is the most unpleasant part of our job.  However, we manage to get it right a lot.

Thirdly, we have a ‘pay-it-forward’ mentality.  Startups in the batch know they can ask any alumni for help, well beyond normal Silicon Valley expectations.  Later, when they’re successful alumni, they help new companies without us ever asking.

YC Continuity

YC Continuity is our growth-stage fund.  We started it in 2015, and it’s run by Ali Rowghani.  Last year, Anu Hariharan joined as our second YC Continuity partner.

We do this to provide a source of friendly growth-stage capital to companies and founders that go through the YC program, especially to companies that other investors may not fully understand.  We also hope to be a force for good in the growth-stage investing market.

YC Continuity will begin to experiment with programs to provide more advice and resources to growth-stage companies in 2017.

YC Research

YC Research is a non-profit research division of YC.  Although we think startups are a good structure to align people to solve a problem, they are clearly not the best solution for everything.  For some important problems, a non-profit research lab is a good approach.

We sometimes fund and run internal groups, and sometimes fund external organizations.

So far there are 5 groups: Basic Income, OpenAI, HARC, New Cities, and Universal Healthcare.

Basic Income is studying the effects of giving people unconditional monthly cash.  We are currently in our pilot phase in Oakland.  We are continuing to learn and make changes, and work with various public agencies and governments to enable the full-scale study.  We are planning to run a larger study than we originally intended, and we hope to start fundraising for it soon.

OpenAI is trying to develop artificial intelligence for the benefit of humanity.  In our first year, we released Gym, Universe, and a number of new ideas that were at the limits of my understanding but that I enjoyed reading about.  In 2017, we hope to achieve significant new milestones that are not possible with current AI technology.

HARC is a group headed by Alan Kay inventing new ways for humans to learn and understand more.  My visit to Bret Victor’s lab last year, which is a sort of computerized interactive room, remains one of the new technologies I think most about.

New Cities is still in the exploration phase, but we hope to have more to share over the course of this year.

Universal Healthcare is a project on which we are partnering with Watsi to study how we can use technology to make healthcare both better and more affordable.

We grew a little faster than we were expecting, so we are trying to take a breather on further growth at YCR.  But we may still add one more group in 2017.

Startup School

Startup School is our new MOOC (which we will supplement with our existing series of conferences).  It will be open to anyone (unless we get absolutely overwhelmed with interest) and is free.  We will stream talks like the ones that happen during YC dinners, provide advice to startups, and help them connect to other startups in the program and other people that may be helpful.

Although we clearly stand to gain from this, we are doing it because we believe spreading the message about entrepreneurship and making the necessary information, community, and connections freely accessible to everyone who might want to start a company is important.

This year, I’ll be teaching it.

If this goes well, we hope to offer it every year.  In future years, we also hope to explore how something like ‘financial aid’ might work for people that need a small amount of capital to help get their startup going.

Hacker News

Hacker News (HN) is an internet forum, created by Paul Graham shortly after YC got started and now run by Daniel Gackle.  Its original purpose was to try out the programming language PG was developing—a dialect of Lisp called Arc, that HN still proudly uses today—and to be a place to find interesting things to read.

HN’s initial users were fans of the essays PG had been publishing about startups, programming, and a lot of other things.  Soon it became a hub for everyone interested in YC and startups YC was funding.  YC and HN grew up together, and many YC founders started as HN users.

HN remains focused on startups, programming, and lots of other things—anything intellectually interesting goes.  The HN community has developed many unique features over the years, such as the "Show HN" format, where users share something they've made, and monthly "Who Is Hiring" threads that have helped many community members find jobs.

Hacker News has 3.4 million users per month and 350,000 users per day, with 4 million pageviews a day.  There are just under 1 million registered accounts, with several hundred added each day.  Users post around 1,000 articles and 6,000 comments to the site per day.

These numbers are all growing, but relatively slowly, and we like it that way.  Internet forums are notorious for degrading over time--one of the ways PG described HN was as an experiment in seeing how long a forum could stay good before it deteriorated.  We've mostly managed to stave that off, for 10 years now, but we're always mindful of this risk.

HN has grown into the leading community for tech and startups on the internet, known for its emphasis on civil, substantive discussion—at least in theory!  Our team affectionately refers to HN as "the worst internet forum, except for all the others".


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We are only about 30 years into the age of software, about 20 years into the age of the internet, and about 2 years into the age of artificial intelligence.  Each of these by themselves is a technology revolution that I believe we will look back on as being extremely significant; taken together, I believe they will represent the most significant technology revolution in human history—I believe we are likely to have less in common with whatever we call the most intelligent species on the planet in 600 years than we did with humans 60,000 years ago.

It’s an exciting time to do what we do.



Sam Altman

President, YC Group