As many of you know, YC was started in 2006 by Paul Graham, Trevor Blackwell, Jessica Livingston, and Robert Morris. It's the world's best accelerator and source of great startups, content, and overall innovation related to starting a startup.
At some point I thought to myself, how about I go over their batch, And learn from it, I have been doing this for a few years but the first time I take a statistical view of the numbers.
I looked at the total 281 companies that got into the 2022/23 batch (As listed on the YC site here.
Here are some findings
The average number of team members of enrolled startups is 2 people. With less than 6% having a solo founder. This shows how much YC focuses on the sustainability and distribution of responsibilities across the team. And when the startup has a solo founder, they are 100% a technical one.
We all know how hard it is to create a product, sell it to customers, pivot, and sell it again until one day you are closer to PMF and have to grow the company.
What I read is, being a solo founder is the hardest path to take. Always try to work with others.
The category of products
62% of startups to get into this batch are SaaS or enterprise software companies. This shows a big belief by the YC partners in the role of technology and software to disrupt or solve issues in an efficient and scalable manner.
The second category YC invested in the most is Fintech. This included a lot of NeoBanks and financial products that cater to niche audiences. e.g. lending working capital for truck drivers.
The third biggest type of startup is marketplaces. And especially B2B marketplaces. This is a category where startups are run efficiently and heavily utilize software to optimize liquidity, increase stickiness and provide a wholesome experience that is more than a connection between two parties.
This tells us that the technology part of the business is vital, and is in many cases the way to grow at ridiculous speeds.
On founder backgrounds
After stalking the founders on LinkedIn I can clearly see the following.
93% of startups in this batch have a technical co-founder as part of the founding team (if not the CEO). Sometimes the technical co-founder is a software engineer, a product manager, or a domain expert (Especially in BioTech).
Another pattern that I saw (on their LinkedIn) is that many of the teams have previous startup-building experience. Many of them have either founded or have been part of a team that is close to the market they are going after.
This shows how important it is for the founding team to have the ability to build the MVP and iterate on it themselves. You can’t ignore how fast a team can pivot, identify what to build, and deliver a new version within a week!
You can’t compete with that if you outsource development and product to a third party. I previously confirmed this with Paul Graham as well.
Out of 4000 startups there's probably at least one, but I'd expect there to be few, because we consider that a predictor of failure.— Paul Graham (@paulg) October 1, 2022
In conclusion, if you are starting a new startup and need some basic advice on team formation and market, these data points might give you a few answers on what to choose and whom you should have onboard when you launch.
If you notice I haven’t taken the industry the startups are working in into consideration. As these change every few years. And new markets are emerging every day. I can say this though, most startups are solving real problems for real people. And YC's selection seems to be minimally affected by the flavor of the day (Although they did a few Web3 startups, to be honest).
You can find the raw data I used to come up with the analysis below. And maybe you can share your own findings as well.