A thread expanding on how credentialing works, and the tension between building for signal, filter, and utility 👇
A better term for credential is a "signal."
Harvard is a signal that you’re (book)smart & industrious.
YC is a signal that you’re a well-connected & (usually) a good startup founder.
The "good" comes from its filter. The "connected" comes from the utility YC provides
Harvard is a signal that you’re (book)smart & industrious.
YC is a signal that you’re a well-connected & (usually) a good startup founder.
The "good" comes from its filter. The "connected" comes from the utility YC provides
The filter is acceptance rate.
1% means much more than 5% in terms of valuing YC's talent rating.
Utility is how much more valuable the startup is bc of the program. e.g Bigger network = bigger chance of success
Filter is pre-program. Utility is post
Signal = Filter + Utility
1% means much more than 5% in terms of valuing YC's talent rating.
Utility is how much more valuable the startup is bc of the program. e.g Bigger network = bigger chance of success
Filter is pre-program. Utility is post
Signal = Filter + Utility
There's more to signal than filter
Thiel Fellowship (TF) has higher filter than YC
But many would choose YC b/c it has higher utility
- more legible to investors, hires, & your parents
- more alumni you can sell to or raise from
For utility, quantity has a quality all its own
Thiel Fellowship (TF) has higher filter than YC
But many would choose YC b/c it has higher utility
- more legible to investors, hires, & your parents
- more alumni you can sell to or raise from
For utility, quantity has a quality all its own
Curation businesses need to align filter w/ utility
Utility pulls you in the direction of expanding size. The more ppl there are, the more total opportunity there can be
Filter pulls you in the direction of less. The more ppl there are, the less likely the quality of avg person
Utility pulls you in the direction of expanding size. The more ppl there are, the more total opportunity there can be
Filter pulls you in the direction of less. The more ppl there are, the less likely the quality of avg person
Focus too much on utility (get too big), and you kill the signal.
Focus too much on signal itself without bolting on utility, then it becomes like Harvard — people know it has no purpose other than the signal and that itself weakens the signal.
It becomes a bubble.
Examples:
Focus too much on signal itself without bolting on utility, then it becomes like Harvard — people know it has no purpose other than the signal and that itself weakens the signal.
It becomes a bubble.
Examples:
TF has stronger signal than YC but not as much utility
YC has weaker signal than TF but more utility
Harvard is stuck in a bit of a hopeless middle: it’s neither so big that there's a ton of utility nor so small that it’s super curated. (It wins b/c it’s a monopoly.)
YC has weaker signal than TF but more utility
Harvard is stuck in a bit of a hopeless middle: it’s neither so big that there's a ton of utility nor so small that it’s super curated. (It wins b/c it’s a monopoly.)
If you’re building a curation business, your goal should be to start with meaningful signal and then optimize for utility as soon as possible, without compromising signal.
Which is why YC scaled to 200+ companies & didn't miss a beat, & why Harvard can scale too (to some point)
Which is why YC scaled to 200+ companies & didn't miss a beat, & why Harvard can scale too (to some point)
