When all the VCs are busy chasing Consensus, how should entrepreneurs respond?

Original Title: “Build What’s Fundable” Written by: Kyle Harrison Compiled by: Jiahua, ChainCatcher

In 2014, I had just sold my first company. The money wasn't much, but at the time it felt like all the wealth I needed for a long period. After that, I felt pulled in several different directions. I had previously written about one of those paths and the self-exploration that led me to venture capital. But at that time, there was another pull that made me want to create something else.

I don't want to start a business just for the sake of entrepreneurship; I hope it can be more meaningful and aim to find a problem worth solving. In my search for meaningful problems, I came across the RFS list from Y Combinator (YC), which is a “Request for Startups.”

I remember being deeply inspired. It felt like a series of ambitious, problem-oriented questions waiting to be answered. For example, seeking opportunities for cheaper new energy than anything before; exploring robots from space to the human body; and Norman Borlaug-style food innovations. It was this captivating vision that led me to start my second company: dedicated to promoting solar energy in Africa.

Before we begin this article, there is an important reminder: I have never applied to YC. I have never attended a YC demo day. I only watched it once when it was live-streamed online during the pandemic. I have invested in a few companies that have participated in YC. I have only been to their office in Mountain View once. For most of my career, I have neither been a die-hard fan of YC nor a critic of YC. They are just a small part of this vast and beautiful world we call the “tech circle.”

But it wasn't until earlier this year that I saw this tweet, which made me start to think: 11 years have passed, how is that startup proposal checklist performing now?

So I conducted an investigation. My findings made me extremely sad. Dempsey was right, at least reflected in the shift in focus of the RFS list – it moved from “problem-first” inquiries to “consensus-driven” ideas. Video generation, multi-agent infrastructure, AI-native enterprise SaaS, replacing government consultants with LLMs, forward-deployed agent modules, and so on. It's like taking a million tweets from venture capital Twitter to generate the word cloud.

Looking back to 2014, I remember being deeply shocked by YC's entry about “one million job opportunities”: since then, I often pondered that in the U.S., only Walmart (and later Amazon) really employed a million people. This is incredibly difficult to achieve! In a world where job opportunities are increasingly disappearing, this prompt aims to explore what kind of business model can employ a million people. This is very thought-provoking!

So, what about the version in the fall of 2025? It is “the first company with a scale of 10 people and a value of 100 billion dollars.”

At first glance, this may feel similar. But it is completely the opposite (for example: because of AI, hire as few people as possible!) and essentially it has loudly stated the “unspeakable secret.”

“What problem do you want to solve? Who cares! But a lot of VCs are talking about how crazy these 'per employee income' numbers are getting, so… you know… just do it that way!”

This is Dempsey's comment. YC is becoming “the best window to glimpse the current mainstream consensus.”

In fact, you can almost feel that this startup solicitation list is instantly morphing around “mainstream consensus.” It was the disappointment with such an ambitious product that led me into a mental “rabbit hole.” I reflected on my understanding of the original purpose of YC and why it was so valuable in the early years. At that time, the tech world was an opaque domain, and YC represented the best entry point into this field.

But then, I realized that the goal had changed. As the tech industry became increasingly directive, YC became less focused on making the world easier to understand and instead turned to catering to consensus. “Give the ecosystem what they want, they are just playing the game under the existing rules.” They are serving the needs of the larger “consensus capital machine” - those startups that have a specific appearance and shine.

However, the toxin of “chasing consensus” has spread from capital to cultural shaping. The prevalence of “normativity” has infected various aspects of our lives. With the demise of reverse thinking, independent critical thinking has given way to a cultural adherence akin to party lines.

We can diagnose some issues arising from the evolution of YC. We can describe it as a symptom of a broader “normative consensus engine” that spans capital and culture.

But in the end, there is only one question. How do we solve it?

How can we break the shackles of compliance and reignite the flame of personal struggle and independent thinking? Unfortunately, we cannot rely on the halls of either the “consensus capital machine” or the “normative accelerator” (referring to YC) to help us.

From entry channels to manufacturing factories

When you look back at YC in the summer of 2005, you can see the desire to mentor newcomers and the hopeful optimism in the eyes of Paul Graham (the founder of YC, on the far right in the picture). The original vision of YC was to serve as an “entry channel” for a startup ecosystem that was (at the time) extremely difficult to access.

In 2005, SaaS was still in its infancy. Mobile devices did not exist yet. Entrepreneurship was far from a common career path. Technology was still that emerging newcomer, rather than the dominant force in the world.

When Y Combinator was just starting out, it had a clear opportunity to help unveil the mystery of starting a startup. The phrase “Build something people want” might be laughed at today as obvious, but in the early 2000s, the default business logic was more about feasibility studies and market analysts rather than “talking to customers.” We take for granted many of the truths that YC helped popularize, which have unveiled the entrepreneurial journey for future entrepreneurs.

I have no doubt that YC was absolutely more beneficial than harmful to the world, at least in its first ten years. But I don't know when the rules of the game changed. Startups are no longer so opaque; they have become easier to understand. YC can no longer just lift the veil; it must “scale up production.” The number of companies increased from 10-20 in the early years to over 100 in 2015, and finally peaked at 300-400 per batch in 2021 and 2022. Although this number has decreased, there are still about 150 companies per batch now.

I believe that the evolution of YC has occurred alongside the changes in the “understandability” of the technology industry. The easier the technology industry is to understand, the lower the value that YC can provide with its original operating model. Therefore, YC has adapted to this game. If technology is an increasingly clear path, then YC's mission is to get as many people as possible to walk down that path.

Convergence in “Overly Clear”

Packy McCormick (founder and main writer of Not Boring) introduced a term that I now use frequently because it describes our world very effectively: “hyperlegible.”

This concept suggests that, since we can obtain information through various content and understand the nuances of culture through social media, the world around us has largely become extremely clear: almost to the point of being tedious.

The technology industry is also so “overly clear” that the culture traits of a large group of people were still extremely accurately depicted in the series “Silicon Valley,” produced from 2014 to 2019.

In a world where the tech industry is so “overly clear,” YC's original mission to “reduce the opacity of the industry” has been forced to evolve. In the past, startups were the preferred tool for rebels breaking the norm, but now, they are increasingly becoming a “consensus norm funnel.”

I am not an anthropologist of the tech industry, but my interpretation of the situation is that this is not a deliberate decline on the part of YC. It is simply a path of least resistance. Startups are becoming increasingly common and better understood. For YC, a simple North Star (fundamental goal) is: “If we can help more and more companies secure funding, we have succeeded!”

And today, those who can obtain financing often look very similar to those who obtained financing yesterday. Thus, you start to see this “normativity” among YC founders and teams.

A few days ago, I saw an analysis of the statistics from the YC team:

1. Youthfulness: The average age of YC founders has decreased from 29-30 years old to around 25 years old now.

2. Elite Education: The proportion of founders graduating from the top 20 elite schools has increased from about 46% in 2015 to the current 55%.

3. Returning YC Founders: The number of founders with YC experience has increased from about 7-9% to about 20%.

4. Focused on the San Francisco Bay Area: The proportion of YC founders headquartered in the Bay Area is even higher than pre-pandemic levels, now reaching 83%.

Reflecting on these dynamics, they are just a part of a larger narrative. YC has evolved from an “entry channel” in an opaque category like technology into more of a “consensus-shaping machine.”

It is not only the founders who are being shaped by consensus. You can almost see the entire YC team being shaped around “mainstream consensus.” As trends like voice assistants touch everyone’s consensus, you can see its reflection within the YC team.

Ironically, Paul Graham describes this consensus as a logical reflection of technological reality. I'm sure that's true. But I think what is different is that the consensus characteristic of “what can attract investment” has turned into the ultimate goal of the entire operation, which has sidelined those ideas that might have been more contrarian and unconventional in the past.

At the beginning of 2025, YC celebrated its 20th anniversary. During that celebration, it described its achievements as “creating $800 billion in startup market value.” Note the word “creating” rather than “helped” create billions in value. They see it as something they “created.” Something they “manufactured.” I believe YC's ultimate goal has shifted from “helping people understand how to build companies” to “maximizing the number of companies through this funnel.” Although they feel similar, the two are not the same.

The most important insight here is that I don’t think it’s YC’s fault. Rather than blaming an entire industry for the sins of one participant, I would say that they are simply following a rational economic incentive shaped by a larger force: the “consensus capital machine.”

You must look “worth investing”.

A few weeks ago, Roelof Botha (head of Sequoia Capital) stated in an interview that venture capital is not really an asset class.

“If you look at the data, in the past 20-30 years, on average only 20 companies have ultimately reached a valuation of 1 billion dollars or more at exit each year. Only 20. Despite more capital flowing into the venture capital space, we have not seen a substantial change in the number of those huge outcome companies.”

Venture capital funding in 2024 is $215 billion, up from $48 billion in 2014. Despite investing 5 times the capital, we have not achieved 5 times the results. But we are desperately trying to get more companies through that funnel. And in the venture capital engine, every loud and clear voice that feeds the startup manufacturing machine revolves around this idea: desperately trying to get more companies through a funnel that can no longer be expanded.

YC has become an accomplice in the process of pursuing scalable models in this “non-scalable asset class.” So has a16z. These engines, which thrive on more capital, more companies, more hype, and more attention, are exacerbating the problem. In the pursuit of non-scalability, they attempt to scale in areas that should not be scaled. In business building, the largest and most important outcomes cannot be meticulously planned. And in trying to establish a formulaic scalability for companies, the “rough edges” of important ideas are being smoothed out.

Just like YC's “Startup Proposal Solicitation” has shifted from a “problem-driven” idea to a concept of “seeking consensus,” the formula for building a startup reinforces a demand: you must appear “worthy of investment” rather than creating something “truly important.” Moreover, this is increasingly true not only in the way companies are built but also in the way culture is shaped.

The normative trend from capital to culture

Peter Thiel is highly praised for his multiple correct judgments. Interestingly, one point that Thiel is most talked about (for example, “being a contrarian/investor”) is also a characteristic where he once again significantly outpaced everyone else, and was previously mocked as “trite and obvious.” As a result, it has now become increasingly rare, almost disappearing.

The continuous pursuit of consensus has poisoned every aspect established by the company and increasingly poisoned the way culture is built.

Venture capital, as a profession, also has the same “normative” characteristics. Starting a startup, participating in YC, raising venture capital, and building a “unicorn” has become the new era version of “going to a good school, finding a good job, and buying a house in the suburbs.” This is a normative culture; it is that time-tested stable path. Social media and short videos only exacerbate this “programmable normativity” because we see these “overly clear life paths.”

The most dangerous aspect of this path is that it undermines the necessity for the masses to engage in critical thinking. Because thinking has already been done for you.

When I think about the true value of something, I often reflect on Buffett's famous saying about the market. In the short term, it is a voting machine; in the long term, it is a weighing machine. However, a system that is increasingly forming consensus, or even 'manufacturing' consensus, has the issue that it becomes more and more difficult to 'weigh' the value of anything. The formation of that consensus 'invented' the value of specific assets, contexts, and experiences.

The same is true in the field of technology. This “normative mentality” built around the idea of consensus is penetrating the lives of millions of people and will have a negative impact on them, not only because they will create worse things but also because they will be unable to develop independent thinking skills.

There are always some people who know this. They know that following the prescribed path does not lead to the best results.

Be a “Puritan” type of founder

When reflecting on this cycle, to be honest, the only answer I can think of is that we are facing a massive economic shock.

When you observe those successful counterexamples, you will find that many of them are established by existing billionaires: Tesla, SpaceX, Palantir (CIA data supplier), Anduril (military drone company). I believe the takeaway from this is not “first become a billionaire, then you can think independently.” On the contrary, it prompts us to reflect on what “other characteristics” often lead to those outcomes.

In my view, another commonality among these companies is that they are led by “Ideological Purists,” those who believe in a mission and dare to challenge consensus and authority.

Last week, I wrote about “founder ideologies,” and there are different types of founders: missionaries, mercenaries, bards, etc. Among all these types, one of the most important categories is the “missionary.” The best founders usually come from this type.

The key insight here is that for a “normative culture” increasingly built around “consensus formation,” the only antidote is to incentivize the participants of that culture to pursue the purity of ideology: to “believe” in something!

YC's slogan has always been “building the products people want,” which is very insightful. However, more importantly, it's about “building things worth building.”

Embark on the right path

The first element of becoming a Puritan in thought is what I have repeatedly written about: embarking on the right path.

Last week, YC announced one of its latest investments: Chad IDE, a “brain-eroding” project.

This product can integrate your social media, dating apps or gambling apps, so that while you're waiting for the prompt to load the code, you can do other things. It's no big deal, of course. Everyone knows we switch contexts between tasks, bouncing back and forth between mindless leisure and work.

But that “flavor” felt off, and the whole world noticed. A reaction to Chad IDE precisely captured the “atmospheric shift” that was happening:

Ulysses company founder Will O’Brien commented: “Venture capital funds that choose to support 'startup factories' like this and other ethically questionable startups should be aware that mission-driven founders will take note of this and seriously undervalue the company's reputation.”

Startups on the assembly line carry a deep nihilistic tone. The founders and investors supporting them are no different than saying: nothing matters. We should try to make money, even if it means producing complete junk or encouraging evil. This infuriates mission-driven founders and creates a profound sense of repulsion that is hard to overcome when we consider potential partners.

The concept of “startups on the assembly line” is a natural extension of pursuing scalable models in an “asset class that cannot be scaled.”

It's not just YC that feels this shift in atmosphere.

Be the purpose of oneself, not the tool of a tool.

Technology itself is not a force for good. Technology, like any amorphous concept and collection of lifeless objects, is a tool.

It is those who “wield” technology that determine whether it produces good outcomes or bad outcomes.

Incentives are the forces that drive people towards specific paths (whether good or bad). However, beliefs, if steadfast, can transcend incentives when pursuing more important things.

My incentives may encourage me to lie, deceive, and steal, as these could make me financially wealthy. But my beliefs prevent me from becoming a slave to those incentives. They motivate me to live on a higher level.

YC was initially intended as an “entry channel” to help people understand how to build technology. What they choose to do with that ability is up to them. However, during this process, the incentives shifted, and the ugliness of scaling began to show. As technology became a more navigable path, YC's goal shifted from “illuminating this path” to “getting as many people as possible to walk down this path.”

From YC to giant venture capital firms, the pursuit of scale has turned a wide range of participants in the tech field into slaves of incentives. The fear of failure has further exacerbated this enslavement. We allow incentives to shape us out of fear. Fear of poverty, fear of being foolish, or simply fear of being left behind. Fear of Missing Out (FOMO).

That kind of fear leads us down the path of “normativity.” We are assimilated. We seek convergence. We grind away the rough edges of our individuality until we are smoothed down to fit that “path of least resistance.” But the path of least resistance has no room for “counter beliefs.” In fact, it has no room for “any beliefs” because it fears that your beliefs will take you down a road that consensus is unwilling to take.

But there is a better way. In a world of systems seeking norms, anchor yourself in beliefs. Find things worth believing in. Even if they are difficult. Even if they are unpopular. Find beliefs worth sacrificing for. Or better yet, find beliefs worth living for.

Technology is a tool. Venture capital is a tool. YC is a tool. a16z is a tool. Attention is a tool. Anger is a tool. The good news is that tools are everywhere. But only you can become the craftsman.

A hammer seeks nails. A saw seeks wood. But when you “believe” that something is possible, it allows you to transcend the raw materials and see the potential. To see the angel in the marble and then chisel away continuously until you set him free.

We must never become the tools of our tools. In this “normative” world seeking consensus, filled with incentives to make you their slave. And if you have no special “beliefs”, then they are likely to succeed.

But for those who understand the reasoning behind it, there will always be a better way.