Y Combinator vs. Graduate School

Y Combinator* is the new Graduate School.

In some ways, it’s better:

- You pay to go to graduate school. YC pays you.
- After school, you get a job. After YC, you create jobs.
- You repeat the works of the greats in school. YC expects you to do original work.
- In school, you are graded on an arbitrary scale by arbitrary people. After YC, you are graded by the real world.

Some day, most schools in most disciplines will be like this.

* – Of course, “Y Combinator” is a generic term for Techstars, I/O Ventures, SeedCamp, Capital Factory, Founders Institute, and all of the other similar pre-angel incubators.

22 thoughts on “Y Combinator vs. Graduate School

  1. Of course, graduate school presents almost no risk by comparison to incubating your own start-up, which is all about risk. If your start-up doesn’t succeed and you didn’t graduate, you are without any kind of safety net (college degree, well paid job).

    Don’t get me wrong, I am the co-founder of a start-up. And starting up was the right decision for me. However, that won’t make me quit university.

    I and my associate can handle increasing our workload three times to combine the advantages of both worlds.

    But most people cannot handle that, nor can they handle increasing risk-factors tenfold just to chase a dream.

    You are right, Naval. In the future, higher education will (or at least it should) be more like starting up a business. The truth of today nevertheless is that starting-up is risky and entrepreneurship isn’t for everyone.

      • peennrckpc on October 20, 2011 Taken because its a action/myst. and playing the dad would be great. Get to go and find those that taken his daughter. Bust drug ring and illeage selling of womn for prostution. I think the story line is built for it.

    • What is the risk though? That you won’t be able to get another job after or your opportunities won’t be greater than if you had gone to school? In most cases I find this to be untrue. If you start a company and fail you learn a *lot*, and that experience around Silicon Valley is often much more heavily weighted than a degree.

  2. While I like the idea of comparing YC and grad school, you’ve got some errors of fact here:

    (1) No strong students in the sciences (including CS) pay to go to graduate school at the better American universities. In fact, many graduate schools pay comparable rates to YC if the YC rate per founder is annualized.

    (2) No strong students are intended to repeat previous work during their graduate study. In fact, non-original research is one of the surest ways not to get a good tenure-track position after graduating.

      • There are two types of Masters degrees – Masters purely by coursework and Masters degrees with strong research components. Not to mention that some undergraduates also do original work as part of their degrees. I suspect most people choosing between YC and graduate school are considering PhDs or Masters by research degrees (if they are in the sciences).

  3. So I have seen both sides of this – I just finished earning my MBA this past year, and took part in Launch Box Digital this past summer. And I can that I have learned exponentially more about “business” in running my own start up than I did in B-School. I really wish I used to the cash I spent on grad school to fund my start up.

    I do recognize that B-Schools (or other grad schools) are the right course for a lot of people and a lot of careers, however if you want to get involved in a start up or want to be a VC, I would definitely recommend the YC route.

  4. Models like YC absolutely have more “real-world” applications. The model has been proven already and will continue to be replicated.

    Are we going to see a day where they become commonplace that those opportunities could rival grad school? Are enough investors (and $$) out there to make it a reality? i’d love to see it happen!

    -adam w.

  5. I agree that starting up is more valuable than a college degree. Even failing is more valuable.
    Although this might be true for me and people reading this blog – it is often not true for a lot of others out there.
    Not everyone is cut out for entrepreneurship. A college degree is still the best fit for the mindset of 99% people out there. For now, anyway.

    • Good call. Different breeds of people. But, consider this thought experiment

      Imagine if the people who read ‘entrepreneur’ magazine went to college and those who went to college started companies. Would the world be better or worse?

  6. This is a great point. I work for Bizdom U (http://www.bizdom.com) a preseed incubator in Detroit, so my viewpoint is pretty biased. I’ve seen several MBAs who’ve applied to our program who’d be challenged to run a business. Lots of theory, little practice.

    The fundamental issue I think is that entrepreneurship isn’t ‘business’ any more than karate is ‘physical fitness.’ Sure it fits into the general category, but the degree of specialization is such that it really has become its own discipline. That’s why you see lots of successful entrepreneurs who aren’t MBAs. The entrepreneurial skill set isn’t necessarily the MBA skill set.

    To really train as an entrepreneur, you need lots of hand on experience, particularly with problem solving and fulfilling customer needs.

  7. - What do you want to learn?
    - How do you best learn?
    - How are the skills you NEED best taught?

    I think that’ll lead most people to the right conclusion for them.

    On the education side, though, it’d be great to see schools that have Co-Op programs let students duck out for a semester to work for themselves and build a startup instead of spending yet another semester at Google, RIM or Microsoft.

  8. As someone currently in an MBA program, I read this post and thought, man I’d love to work in a startup! But I think most here are looking at it from the perspective of someone who is already at a startup. Here I am, an MBA, who would love to just become an employee at a small company, and yet I’m not finding many opportunities.

    I visited YC grads WePay earlier this year – they are living the life, grinding it out and making real decisions. It’s definitely my short-term goal to be in that type of position. But I don’t have a startup idea worked out right now, so I’m just looking to help a current one. Where are these opportunities for us that are non-technical grads? The opportunities are very few from my perspective. Or perhaps I have been looking in the wrong place?

    Naval, I would agree with your analysis, I would much rather do YC than be at Grad School. However, I’m hoping the skills I’m honing will help me latch on with a great startup someday. Your recommendations and advice are, as always, welcome.

    thanks, and great post.
    jv

  9. I’m not sure that these are really things that can be directly compared. Doing a post grad course or an MBA is a valid choice, but it’s a completely different sort of education to running a start up, or taking that start up to Y-Combinator.
    Maybe it’s because I’m old (43) but I’ve had chance to do both of these. I worked after my first degree and did my MBA while working, first as an employee, and then as the director of a few start ups, and now I run a business consultancy company (The Joy of Business) helping small businesses to grow. I use much of what I learnt on the MBA, and a lot of it is either irrelevant (because it only applies to bigger corporates) or I’ve forgotten. I also use what I’ve learnt from hard experience, and much reading after finishing the MBA.
    I worry that people think that starting up a business is what you should do when you’re 21 – my advice would be to go and get some real skills by working for someone else first, otherwise you won’t have the basics in place.
    Maybe a post grad course or MBA would be useful within this, but don’t feel that you have to conquer the world in your early 20′s. Some people are equipped to do this, but it’s rare. Remember that there’s plenty of life left, and you don’t have to achieve everything right now – in fact you’re more likely to achieve what you want if you learn how to do the basics first.

  10. can you come up with pagerank in a 3 month ycombinator incubator? how about invent e-ink?

    ycomb incubators are great but grad school still has merit.

  11. The last post translated to English:

    After graduation? I open a business! The relationship between education and business world has always lived on the edge of the collaboration that sometimes falls or expires in the competition, especially when a young graduate of having to choose between a poorly paid job (at best) and a master that’s not necessarily guarantee a better job. I am fortunate to be able to see up close the two worlds (business and education), but lately I’m getting close to many as a “third pole”that could change the rules of the game, introducing it with the words of a very incisive post start up boy

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