Meh... Y Combinator is a potential source of start-up funding. Just as important, Y Combinator is not exclusive of any other source of funding. The difference between YC and other sources of funding is that YC funds a lot of companies twice a year rather than on an as-needed basis so the whole process is very eventful.
As YC funds more companies, the value of the "We're a YC company" branding diminishes faster. Whatsmore, there's some curious economics in how YC companies do business with other YC companies. If the bulk of customers of YC companies are other YC companies, then you what you have is basically just a pyramid scheme. It's also kinda lame to hear Paul Graham play favorites and talk about how great Sam Altman is all the time.
Most YC companies sell their initial product to other YC companies (whether it is consumer or enterprise) because that is what everyone does when they start out: sell to people in their personal social circles -- that's who you have access to as a nobody with no sales force that is just initially developing a product. This is hardly a conspiracy; as with all products sold to friends and family, the initial customer set will give the product a shot, but won't continue to use it long just because a friend sold it to them. YC companies that are successful break out of this initial customer base and sell to people outside the YC network. This is a must for any company that wants to grow past its founders.
The YC brand has improved over time drastically despite the increase in companies. When I started in the first YC batch, there were only 8 companies but the only angels that could bother to show up to demo day were just some of PG's friends. Now, demo day is a who's who of SV investors, even though they have to sit through 5x as many presentations!
I know you think you have a better way of running an accelerator and that is fine. At the same time, you can't look at someone who is successful and diminish their success with mere words. If you have a point to prove, do it with your own success and point out the flaws in this model through your model that is contradictory to his, but until such a time, please applause.
Very good point about the economics of YC companies doing business with each other, and I would extend that to their investors' circles as well. It's worked so far ...
As YC funds more companies, the value of the "We're a YC company" branding diminishes faster. Whatsmore, there's some curious economics in how YC companies do business with other YC companies. If the bulk of customers of YC companies are other YC companies, then you what you have is basically just a pyramid scheme. It's also kinda lame to hear Paul Graham play favorites and talk about how great Sam Altman is all the time.