Born in 1954, Paul Graham is the creator of Viaweb, which began as a small startup, and was later acquired by Yahoo, for such a large profit that he would never need to work another day in his life. He was on the verge of retiring from the business world when, in 2005, he decided to found Y Combinator, or YC for short. The unusual name is borrowed from the IT industry, and is related to a computing function that most programmers have never even used. The other three initial founders of YC are Jessica Livingston (who would later become Graham's wife), Trevor Blackwell, and Robert Morris.
Thanks to his experience, Graham has come to understand which characteristics startups and, especially their creators or founders, must possess. With Y Combinator, he is able to select the best ideas, in order to finance and support them as they are launched onto the market.
The founders he is looking for must be young, resilient, tenacious and motivated by financial needs, although they must not be in debt, as this forces them to remain stuck in stable, well-paid jobs. They must be free from family ties, which chain them to living in a certain place and, above all, they must be completely unaware of the fatigue and stress involved in launching a startup. Graham was in much the same position when he started Viaweb, the only difference being that he was already in his thirties.
In its first year, Y Combinator only funded eight of the few dozen companies that sent in their applications. As many as 170 teams of founders – calling them companies always seems a bit premature at this stage – applied for the 2011 summer batch, in the hope of spending a quarter near the YC headquarters in Mountain View, Silicon Valley. Only forty-four were selected. Since then, countless companies have been created, which do exactly what YC does, and many offer excellent opportunities for aspiring digital entrepreneurs, but Graham's model remains the original. His simple format is based on three steps: selecting batches of ideas in which to invest; offering a three-month residential programme; and a final one-day presentation in front of investors.
