Paul Graham is one of those people who have the skills, dedication, and vision to become a tech success story. Indeed, he is that but with a lower profile than most. He developed the first web-based application together with Robert Morris in 1995, called the Viaweb. Most would find it hard to recall this software now because it was acquired by Yahoo in 1998. Graham’s feats don’t stop there. In 2002, the spam filter he created spawned a new generation of more sophisticated filters.
In 2005, he founded Y Combinator. It is a hybrid of venture capital firm with a business school-type setting. His firm works with forty or so businesses in their early stages every year. The investment he places in these firms is worth around $25,000; it is small relative to other venture capitalists. But he supplements this with introductions to later-stage investors, business advice, technical support, and access to community. Startups flock to Y Combinator because of its robust model. It has already produced a sizable number of ventures; its success also spawned copycat businesses around the world.
When asked about the idea behind Y Combinator, Paul Graham cites his own experience in the tech industry. He understands the frustration, uncertainty, and persistent fear of failure in starting a business. Y Combinator is a company that guides startups by the hand and helps them with funding at the same time. He also cites the benefits of this business model to society at large. Innovation and starting a company are an efficient way to create wealth, and with Y Combinator’s help, startups can be mass-produced.