The Silicon Valley incubator says layoffs in big tech are creating an opportunity for “little tech.”
(Bloomberg) — Amid the flood of big tech layoffs, entry to Y Combinator has become the most competitive it’s ever been. Silicon Valley’s premier business incubator has received 44,000 applications so far this year, the most ever, and the acceptance rate for its summer batch was less than 1%, the lowest in the organization’s history.
Garry Tan, the president and chief executive officer of Y Combinator, said he anticipates “little tech” will thrive even in a turbulent economy. Cuts at big tech companies have unshackled people to work on important, new companies, Tan said on this week’s episode of The Circuit with Emily Chang. “I think a lot of large companies started treating their employee base almost as a place to park resources and almost as a competitive moat versus the other giants,” he said.
“The amount of talent that was locked up in cushy jobs,” Tan said, “I’m hoping a lot of them actually come over to startups, and they realize, oh, this is what it’s like to run fast again.”
Tan stepped into the top job at Y Combinator in January, succeeding co-founder Paul Graham and Sam Altman, who went on to help start OpenAI. Tan himself was accepted to the incubator as a founder in 2008, the same year Mark Zuckerberg attended the accelerator’s regular “demo day” where Jeff Bezos announced Amazon Web Services.
Entry to Y Combinator is highly sought after, with startups around the world looking not just for the $500,000 investment but also one of the most prestigious networks in tech. Other companies seeded by Y Combinator include Airbnb, Coinbase, Dropbox, Instacart and Reddit.
A new startup boom could be just what San Francisco needs. The city has struggled in recent years. “When we have prosperity in tech, we should be able to share that because we want abundance and we need policies to actually get us there,” Tan said from his balcony overlooking the city’s skyline. “I just want things to work. Can we meet in the middle? Can we find common sense things to do? Common sense policies that work? Can we find politicians that represent us that are not at the extremes but finding ways to work together?”
This episode of The Circuit With Emily Chang premieres Thursday, Aug. 10, at 8 p.m. in New York on the Bloomberg app and Bloomberg.com and on Bloomberg Television at 10 p.m. Check out The Circuit podcast for extended conversations.
–With assistance from Lauren Ellis.
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