Comment by exogeny
5 years ago
YC invested in a company called Balto that was easily the most absurdly weak idea/company I've seen pass through. It was basically a crappy free-to-play fantasy sports platform that was lightyears behind the incredibly well-established, deeper-pocketed, and totally change-resistant market. The only possible advantage it had for it was that one of the founders was Joe Montana's son, as sad as that sounds.
I'm not sure who they have advising them, but in the areas of games and sports, they're so bad at identifying opportunities that it's borderline comical. Where I will however grant some defense is that ideas like AirBnb probably also looked ridiculous at the time; it's only in hindsight where you have the clarity.
> AirBnb probably also looked ridiculous at the time; it's only in hindsight where you have the clarity.
There is a difference between assumptions of the market, and assumptions of the amount of work a team can accomplish.
The latter is easier to estimate since you have a lot of data points of what teams can do in an amount of time.
They invested in the team, who were supposedly one of the best teams they'd ever seen and they knew the immediately after meeting them
Joe Montana is pretty involved in investing in YC companies. So some math of the kind you are describing could have gone on: What is more expensive on the long run? To let Balto through, or stop Joe investing in the other companies.