My honest take on Y Combinator's Request for Startups
YC just published their RFS (Request for Startups) - The list hasn’t been updated since 2018 and it’s quite exciting to see them spell out some of the emotions in the market on what founders should build (and what’s likely to get funded). Here’s their full list. Read along for my personal take and do subscribe if you haven’t already.
Applying Machine Learning to Robotics: This initiative is particularly exciting as it highlights an entirely new frontier where significant breakthroughs can be made. The analogy to GPT's impact on AI for robotics simply reiterates the transformative potential in industries across manufacturing to agriculture. By encouraging entrepreneurs to venture into this space, they're not just betting on technology, but investing in the future of automated physical work which could essentially redefine efficiency and productivity across sectors. Autonomous industrial robots are getting increasingly popular - everything from manufacturing to inventory management, sorting, packing, shipping in warehouses, construction tasks, infrastructure inspection, and maintenance can be improved through machine learning. Opportunities lie in pretty much any task that’s too dangerous or mundane for a human. An interesting application for me would be search and rescue operations - ML can robots to optimize search patterns, recognize signs of survivors, and navigate obstacles autonomously.
For a while now, we’ve seen robotics startups emerge in service industry tasks, such as driving, cooking, cleaning, or customer service. However, so far pretty much all of them have been associated with either negative headlines or generally been made fun of for comical mishaps - and ultimately recalled. And this further reiterates the need for better ML-robotic integrations and diagnostics.
Using Machine Learning to Simulate the Physical World: The shift towards ML-based simulations is a game-changer for fields as diverse as climate science and pharmaceuticals. This approach would not only democratize access to high-quality simulations but also significantly accelerate innovation cycles in research and development. Imagine shortening the development cycle of the COVID vaccines or other wonder drugs like Ozempic. It just goes to show how computational advancements will leapfrog traditional methodologies to solve complex problems faster.
New Defense Technology: This one quite honestly gives me a reason to pause. No one can disagree that private sector involvement in defense technology can introduce efficiencies and innovations at a pace unmatched by traditional defense contractors. The comparison with SpaceX's disruption of space access underscores the potential for similar breakthroughs in defense - something they didn’t just mention in passing.
However, my Trust and Safety brain raises some alarm bells. Especially around the safeguarding of sensitive information, the risk of technology proliferation, and the potential for technology to be misused, especially if adequate regulatory frameworks are not in place (something private companies have a history of not doing so well). More so, the development of new defense technologies - particularly autonomous weapons, presents huge ethical dilemmas regarding human decision-making in warfare, accountability for errors or misuse, and the risk of access by non-state actors. I personally feel like accelerated innovation in defense technology could contribute to a global arms race, as states may seek to maintain or achieve technological parity or superiority, potentially destabilizing international security environments. So it’s safe to say that I’m not particularly enthused by this one, and obviously do recognize my personal biases.
Bringing Manufacturing Back to America: This area speaks to a broader socio-economic trend of rethinking globalization's impact on US domestic industries and communities. The emphasis on ML-based robotics is definitely a catalyst for this shift and highlights a forward-looking approach to revitalizing manufacturing through technology, which could lead to a resurgence in job creation and technological leadership. This goes to show that not only the US but also any country offering incentives for tech manufacturing will experience significant economic growth in the coming decades.
Climate Tech: The focus on climate technology is both urgent and pragmatic. They pretty much acknowledge the existential threat of climate change while recognizing the economic and innovative potential in addressing it. Supporting startups in this space is an obvious move. Today when it comes to Climate Tech we typically think of Renewable Energy Solutions, ie. Companies focused on advancing solar, wind, and other renewable energy technologies by making them more efficient, affordable, and accessible. But I personally would bet more on Carbon Capture and Storage (CCS). Those are startups developing new tech for capturing carbon dioxide from the atmosphere or point sources like factories, and either storing it underground or converting it into useful products. Similarly, the flipside being Climate Resilience Infrastructure and startups focusing on building infra that’s resilient to climate change effects, like rising sea levels and increased frequency of extreme weather events - things like flood defense systems and resilient construction materials. I would say Agriculture would also fall on here - overall it’s an industry that’s ripe for disruption. There’s a lot of scope for companies innovating in vertical farming, precision agriculture, and biotech solutions for crops that require less water and are more resistant to changing climate conditions, ie. anything aiming to reduce the environmental footprint of farming.
Commercial Open Source Companies: This was a nonobvious pick IMO and in a way reflects YC’s understanding of how open-source models can push innovation, reduce barriers to entry, and democratize access to technology. Companies that develop tools for coding, data analytics, project management, or software deployment that are open source at their core can drive lightning fast adoption. They can be monetized through premium features, enterprise support, or cloud-hosted versions. Similarly, even open source cybersecurity firms allowing for community-driven development and rapid response to emerging threats can essentially drive revenue from offering advanced security services, audits, and compliance certifications despite being open source.
Overall, it’s prioritizing building a moat with an extensively large user base by being a go-to for developers as opposed to relying more on key decision makers as a part of long sales cycles (which we all know is one of the worst parts of building B2B SaaS products). Also, going on the back of open source presents a great opportunity for startups that develop blockchain and cryptocurrency technologies as open source projects - this presents them with an avenue to possibly build trust in the space that is viewed quite skeptically by most.
Personally, these were some of the areas that stood out to me. I’d love to hear your thoughts on YC’s RFS, especially if there was something in the list that stood out to you that I didn’t mention here. Going through the list is definitely worth a founder’s time, but even if you’re not a founder it's about identifying leverage points in the economy and society where innovation can lead to transformative 0 → 1 outcomes. So whether you’re a founder, PM, EM, or anyone looking to make waves in their career reading this, now might be a great time to explore new projects.
Until the next one!