One thing to remember is that the goal in many cases is not to build a sustainable business, but prove that there is a market for this thing (of any size). It's not unrealistic for some of the more oddball single utility "companies" to find themselves aquired and rolled up with other strategic acquisitions, and the lot of them presented as some sort of B2B enterprise package worth far more when summed up.
In other words, with VC backed companies, the thing these companies are making isn't really the product in many cases is it? It's the companies themselves. Just like a gear isn't really much, but add some springs, and a few other odds and ends and you have a watch that people will buy. But it takes a bigger picture visionary to figure out that the company that makes gears and the company that makes springs should be both acquired to make that watch company. Till then, they have to try and find their way by either spending their investment dollars till they can find that visionary, or find a market supplying micro-miniature gears to other watch making companies.
The founders and investors are rewarded for taking the high risk of finding out that there is a market for micro-miniature gears after the acquisition. But until then everybody wonders why one would want to get into gear making in the first place?
The real goal of YC is likely to create a great productive and interesting life for the organizers. If the previous number was too hectic and they're scaling back, congratulations to them for choosing quality over volume.
Paul Graham's recent essays on growth and startup ideas reflect a much deeper and more nuanced insight into the startup process than you give him credit.
In other words, with VC backed companies, the thing these companies are making isn't really the product in many cases is it? It's the companies themselves. Just like a gear isn't really much, but add some springs, and a few other odds and ends and you have a watch that people will buy. But it takes a bigger picture visionary to figure out that the company that makes gears and the company that makes springs should be both acquired to make that watch company. Till then, they have to try and find their way by either spending their investment dollars till they can find that visionary, or find a market supplying micro-miniature gears to other watch making companies.
The founders and investors are rewarded for taking the high risk of finding out that there is a market for micro-miniature gears after the acquisition. But until then everybody wonders why one would want to get into gear making in the first place?
YC is basically in the meta-business business.