Y Combinator’s Hacker News Advantage
Hacker News (HN) is the news aggregator site run by Y Combinator (YC), the seed accelerator led by Paul Graham. According to this October 2011 posting, HN generates a staggering 120k unique visits every weekday, which is significantly more traffic than both DaringFireball and Techmeme, two popular technology sites.
The question I’d like to consider in this article is, what are the strategic benefits of HN to YC? In other words, aside from any social benefits, why does Paul Graham and YC continue investing their time and resources on this news site?
As I’ll explain in detail below, HN is not only important to YC but it’s a key reason why YC has quickly risen as the most successful accelerator in the world.
Before I continue, below is a list of the top five accelerators, as ranked by Forbes. The ranking is based on the total value of the accelerator’s investments.
HN provides YC with at least five significant advantages over other accelerators, specifically in the areas of branding, deal flow, recruiting, marketing, and market research.
Hacker News Advantages
Branding
First, HN and its tremendous traffic has significantly raised the profile of YC and its portfolio companies. Regular users of HN include various influencers in the tech community, from Matt Cutts of Google to Josh Schachter, the founder of Delicious. Among other benefits, this high profile helps YC attract higher quality investors for Demo Day, more press coverage for itself and its portfolio companies, and higher quality applicants for its funding cycles.
Deal Flow
Branding affects YC’s deal flow, and so does the size and quality of the HN community. Given the bulk of HN’s users are engineers and founders, HN helps YC attract the right people and teams to apply during its twice a year funding cycles. These funding cycles are announced and discussed formally and informally on HN. If YC attracts the largest number of high-quality teams and has proper screening methods in place, then YC will make the best seed investments. [1]
Recruiting
YC funded companies have special permission to recruit via the HN website. This is what a recruiting post looks like:
Recruiting posts by YC companies automatically start at the top of the HN front page and their ranking slowly decays over time. If we assume that HN readers include many of the world’s best software engineers (and other bright minded folks), then these recruiting posts provide a significant recruiting advantage for YC companies and by extension YC itself. Startups live or die by their talent, and YC companies, in part through their access to recruiting on HN, are able to recruit many of the most talented engineers in the world.
Marketing
When a YC Company has news to report, a related post will typically make its way onto HN and include a YC mention somewhere in the post. For example,
I don’t have any hard data, but I suspect that posts that include a YC association are much more likely to get upvoted in a given amount of time and thus have a higher probability of appearing on the HN front page. HN, given its association with YC, naturally attracts a lot of supporters of YC and its portfolio companies. Once a post, whether it’s YC related or not, is on the HN front page it can yield thousands of unique visitors within a short period of time. This provides HN companies with a marketing advantage, especially at early stages, and therefore provides a significant strategic benefit to YC companies and YC.
Market Research
In the startup world, the cutting edge ideas aren’t reflected in the products of established companies. This is because it can take years for a company or startup to move a product from conception to mass adoption. HN, with its “Show HN” posts and its various other discussions, provides a hotbed for learning and new ideas. Sure, other investors and founders can keep an eye on HN, but few people are going to pay as close attention to HN as Paul Graham, the YC Partners, YC companies, and funding cycle applicants. [2]
Conclusion
HN provides at least five strategic advantages for YC and YC companies. These advantages give YC a competitive advantage over other incubators and accelerators. Furthermore, this competitive advantage is sustainable because it would be extremely difficult for other incubators or accelerators to replicate HN, given the significant network effects in building such an online community. Given the importance of HN to YC, it’s critical for YC to continue cultivating HN, while preventing any decay in the quality of the community.
What are your thoughts? I’d appreciate your input below in the comments.
Join the discussion on Hacker News.
If you’ve read this far, you should follow me on Twitter.
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[1] I realize screening is not a trivial matter.
[2] As of today, Paul Graham has a Karma score of 127,427, which is the highest among all users on the site.
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Awww… shucks.
~joanna
It was great to read this post as I was one of the luck individuals to find the deck that joanna submitted. I shared this deck with my Twitter followers as the advice she gave really resonated with me. It contained lessons that any business can learn from and there were lots of tips that I plan on incorporating into my business. Great job Joanna! Also, the page 99 test site looks great, best of luck with the venture.
Silly question but doesn’t it take a day to see Google Analytic traffic? I use other services for real-time stat reporting for this reason.
Hey Josiah, fom what I can tell, there is about a 3 hour latency — for my GA account, anyway. I’ve heard good things about Clicky…
I remember reading your post on the page99test, and also Shereef’s post about Joanna’s PPT, on HN. I strongly believe in karma, and am glad Joanna’s good karma did great for your startup.
All the best with your startup!
You might increase your chances of “serendipity”, but it can also be a deadly time-sink!
Wow, I just checked out Joanna’s slideshow. That was some amazing feedback!
I am very impressed.
Good for you guys! I wish you much success!