I have to agree. It feels like punching below the belt. The only reason why you know that the smaller startups have failed is because the founder has humbly written up a writeup on what went wrong and lessons learned, in the hope that it'll help others. By including them, the article is functionally punishing them for being open about their mistakes.

Maybe for larger companies this is debatably okay, because there's diffusion of responsibility. But to call out a startup with one or two founders who have been shouldering the weight of the startup? Who wrote a post because they wanted to be helpful, and now they're being publicly shamed? Come on

I had the same reaction, but then I was delighted they included these smaller examples. It was especially interesting to hear about the desktop search startup from the summer founder’s program.

There’s an inclination to view this sort of thing as adversarial / picking on the founders, especially because there are a lot of haters for successful people in general. But this piece seemed clinical, not critical.

I think Failory is meant to be an educational tool for founders. I suppose there's lessons to be learned at any scale.

We aimed to cover different sizes of business, industries, raising funds, etc. as our audience is quite broad.

Why call it "Biggest Y Combinator Failed Startups," and just randomly pick on some very small companies that weren't even contacted for their side of the story?

Like, what could anyone learn about from what you wrote about, for example, the vegan milk startup? You just picked on a random small company, and then said generic stuff about "economies of scale".

I love hearing about failures (and am happy to talk about my own!), but there's a difference between exploring what went wrong, and "punching down". Now when you Google their names, "Biggest Y Combinator Failed Startups" will be the result. Unfair.

I agree with gkoberger, you're not considering the impact on individuals for whom a Google search of their name may in the future come up with "Biggest Y Combinator Failed Startups". At least take the founder names out of the section at the end dealing with the random smaller failures.

One of the companies on the list took consumer crowdfunding money from IndieGoGo and failed to deliver, and said IndieGoGo buyers "eventually stopped receiving communication" from the company.

But one shouldn't mention the names of the founders because future crowdfunders being able to look them up for the purpose of due diligence and deciding whether to invest their hard-earned dollars in their next venture would be unethical.

(I'd imagine both the law on, and attitudes to, online privacy would be in a much different place if people in Silicon Valley exercised the same level of empathy for all those pesky end users as they always find in droves for the saintly and well-intentioned startup founders.)

This applies to only 1 of the 5 companies named in the "Other Failed YC Startups" section. What about the founders of the other 4 companies there?

Presumably, since failing in Silicon Valley is widely seen as a good thing, this should be seen as a step on the path to enlightenment.

Some of the people who will view the post will think that. Others will not.

The YC business model (because it's a business, not a charity) is upselling their abilities to investors, and the financial institutions backing those, such that they continue to put up tens of millions in series A, B, etc. rounds for companies that would otherwise struggle to raise money because their business models, tech stacks, and product market fit are questionable at best.

Part of that business model is that in case a company doesn't work out (i.e. almost always), these losses are absorbed such that the investor can spin the investment as a success to their clients (e.g. pension funds). YC is good at this to the extent that even these failures are quite lucrative for everyone involved. The message with this article is that complete failure and loss of investment is quite rare for them but of course it happens. It's basically a "don't worry, we know what we are doing" kind of message.

Any time you hear the words acquihire, what happens is a controlled shut down of a failed business. Mostly these are actually complete failures in terms of the buying company spending money on a company that then gets unceremoniously killed or absorbed into the main company at a loss and is never heard from again. Quite often this is the whole point: kill the company as cheaply as possible with as little loss of face for founders and investors as possible. Mostly, services are shut down or mismanaged, people start leaving almost right away, and most of the "money" is actually just investors swapping one set of shares for another and high-fiving each other. Somebody just lost but it's not them.

Why would companies volunteer to do that? Well for that, you just have to follow the money and basically you'll find that these companies are typically backed by the same groups of investors and financial institutions. It's a form of creative bookkeeping and investors consolidating their assets and risk such that they can continue to up-sell their abilities to manage other people's money (because it is rarely their own cash).

Startup funding is mostly a pyramid scheme with smart investors at the top basically making money from increasingly more gullible investors the further down that pyramid you go. Sometimes it accidentally produces a profitable company that actually makes it to an IPO worth many billions. These unicorns then promptly start acquiring their less lucky siblings so that those too can be spun as a great success. But even some of those unicorns are questionable. E.g. Uber is a great success. So is Wework. But are they profitable and will they ever be and does that even matter? YC is successful in the sense that their network of investors has access to a great number of such unicorns. This means most of the companies they investment in are relatively safe investments no matter how silly the company is.