Comment by simonw
5 days ago
"Why haven't we seen an explosion of new start-ups, products or features?"
You're posting this question on a forum hosted by YC. Here's a story from March 2024: "YC’s latest W24 batch includes 240 companies. A significant portion of the companies have some AI component, with 63% tagged as “Artificial Intelligence” — a notable increase from 51% in the preceding S23 batch and 29% before that.". https://jamesin.substack.com/p/analysis-of-ycs-latest-w24-ba...
I've not seen the same analysis for more recent batches.
I don't think that refutes the parent's point. So many AI companies, but where are the companies _using_ the AI?
It's also interesting how when you look at the websites for the new wave of AI B2B SaaS startups, most of the customers they list are other AI B2B SaaS startups. It makes me wonder how much of the "AI industry" is just startups sending VC money back and forth to each other.
Probably a large part of it, honestly. I was just talking with someone the other day about how the whole cloud economy for the past 15 years may have been grossly exaggerated by very loud VC backed companies flooding the internet with blog posts like this one. The big behemoths - hospitals, governments, law offices, manufacturers - those people tend to run a lot of local tech for various reasons. And they’re also the most quiet when it comes to the internet.
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Sorry I don't follow, would you mind clarifying your point?
Not the person you are asking to clarify. But, I can read it in two ways:
1. A huge part of the demographic group visiting HN is biased in favor of AI given the sort of startups YN decides to fund.
2. The large amount of start-ups funded by HN that are related to AI should answer your question.
I am slightly leaning towards the first one combined with a little bit of the latter one. A lot of people working in startups will be used to building up a structure from scratch where incorporating the latest "thing" is not that big of a deal. It also means they rarely see the long term impact of the code they write.
They have a huge blind spot for the reality of existing code bases and company structures where introducing these tools isn't as easy and code needs to be maintained for much longer.
You said "Why haven't we seen an explosion of new start-ups?" so I replied by pointing out that a sizable percentage of recent YC batches are new AI startups.
I categorize that as "an explosion", personally. Do you disagree?
I'd disagree, because you've misunderstood his point.
His point is that if AI were so great, loads of NON AI startups would be appearing because the cost to make a company should have dramatically dropped and new opportunities for disruption in existing businesses should be available.
His point is that they aren't.
You pointing at AI startups in YC actually highlights the opposite of what you think it does. People are still looking for the problems for AI to solve, not solving problems with AI.
Your example is actually a bell-weather that there is no great leap forward yet, otherwise the companies delivering real world value would be taking spots in YC from the AI tooling companies. Because they'd be disrupting existing businesses and making lots of money, instead of trying to sell AI tools.
It's like you pointing at the large batches of YC companies doing crypto 5/10 years ago and saying that proves crypto is a game changer and everyone would soon be using crypto in their development.
The YC companies are focused on the AI tool hype, not making money by solving real world problems.
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Yeah I don't agree that having more start-ups checking a box saying that at least one of their component uses some form of AI indicates that we are experiencing a surge in new start-ups.
The amount of start-ups getting into YC hasn't really changed YoY: The W23 batch had 282 companies and W24 260.
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