Paul Sloane in his latest newsletter article An Industrial Process for Driving Innovation and Start-Ups talks about Y Combinator – a seed fund and startup accelerator. To their credit they have companies like Scribd, Stripe, reddit, Airbnb, Dropboxand Disqus in their portfolio. YC start-ups have been bought by Google, Facebook and Twitter. Dropbox is one of their best offspring. It is a cloud based file storage service valued at $4B. YC’s founder, Paul Graham distributes his capital and risk by putting a small amount of money into a large number of companies. He calls it classic mass-production techniques. Funded entrepreneurs are provide with counseling, support, connections in twice yearly programs. Graham believes that the biggest mistake start-ups make is building something interesting rather than something that people really need. Focus on something people need.
I found this concept of supporting big number of small entrepreneurs very interesting. We need more Y Combinators.