Does What Happens at YC Stay at YC? - Privacy & Confidentiality

The Growing Importance of Community in the Startup Ecosystem

A strong sense of community is currently a significant focus within the startup world. Humans are naturally inclined to connect over shared interests, and following a period of isolation brought on by the recent pandemic, startups are prioritizing the development of community, open dialogue, and mutual support.

Recently, attention was drawn to how Y Combinator, a highly respected and influential accelerator in Silicon Valley, manages the complexities of a large, yet selective, community.

The Bookface Controversy

The situation unfolded after two founders were removed from Y Combinator’s internal messaging platform, known as Bookface. This action brought the accelerator’s community management practices into the public eye.

Paul Biggar, CEO of Dark, and Katia Damer, CEO and co-founder of Prolific, both claim they were removed following public criticism of Y Combinator, though for distinct reasons.

Biggar had previously pointed out on social media in March that a fellow YC founder was sharing information about circumventing vaccine waiting lists. Damer, more recently, voiced concerns regarding the alumni network’s backing of Antonio García Martínez, a controversial figure.

Y Combinator’s Stance

Y Combinator maintains that the removal of both founders was due to violations of community guidelines. Specifically, they were accused of publicly sharing internal information originating from Bookface.

The public nature of Biggar and Damer’s dismissals, initially detailed on Twitter, highlights a complex scenario. Y Combinator states that it has only removed a limited number of founders – approximately a “dozen or so” – over its 16-year history for breaches of YC ethics and Bookface forum rules.

Questions of Moderation and Free Speech

However, Y Combinator’s decision to remove these founders has sparked debate, particularly in the context of ongoing discussions about free speech and dissent within the startup landscape.

This has led to inquiries – including those from YC founders themselves – regarding the accelerator’s community moderation policies, its handling of potentially damaging publicity, and the boundaries it establishes for open expression among its alumni.

Here's a summary of the key points:

• Startups are increasingly focused on building strong communities.
• Y Combinator faced scrutiny over its handling of founder criticism.
• The controversy centers around the internal messaging board, Bookface.
• Paul Biggar and Katia Damer were removed for sharing internal information.
• The situation raises questions about free speech and community moderation.

Privacy as a Cornerstone of Online Communities

Thriving online communities depend on the ability of members to share experiences, engage in debate, and express differing opinions in a secure environment. A fundamental aspect of this safety often involves a widely accepted guideline: refraining from publicly disclosing private information.

Bookface: Y Combinator’s Internal Forum

According to Y Combinator (YC), upholding privacy is a crucial expectation for all participants in Bookface, their internal messaging forum. This platform connects approximately 6,000 individuals within the YC network, encompassing alumni, management, and companies currently in the program.

Founders regularly utilize Bookface for various purposes, such as requesting introductions to specialized professionals like crypto accountants or soliciting feedback on job postings.

YC’s Strict Privacy Policy

Lindsay Wiese-Amos, Y Combinator’s head of communications, emphasized to TechCrunch that sharing information from the forum externally is prohibited. “We ask that founders don’t share anything from the forum with anyone outside of YC, as this is a community built on trust and privacy,” she stated.

This isn't merely a suggestion. Upon acceptance into YC, founders are required to sign investment documents, including a founder ethics policy. This policy explicitly outlines guidelines for Bookface, stating: “Don’t share anything in the Forum, or any links to the content posted to it, with anyone outside of YC.”

Consequences of Policy Violations

YC maintains that repeated breaches of these rules result in removal from the community, typically preceded by a warning.

In cases where a startup is removed, YC “generally” returns the company’s shares, although exceptions may apply. Amos clarified that in the instance involving Damer, her “co-founder is still actively working on Prolific, and both he and Prolific remain part of the YC community.”

Biggar’s YC-backed startup ceased operations eight months after completing the accelerator program, negating the need for YC to sever financial ties.

Distinguishing Discussion from Breaches of Trust

Garry Tan, co-founder of Initialized Capital and a former YC partner with investments in companies like Coinbase, differentiates between constructive discussion and violations of community trust. He explained to TechCrunch that while debate is acceptable, disclosing the private viewpoints of other community members is not.

Tan believes YC has evolved into a significant institution, and therefore faces increased scrutiny. “That’s not a bad thing, it’s probably how it should be,” he added.

He further elaborated that the point of contention arises when attempts are made to attribute specific political stances to the institution, given that it comprises numerous individuals and is unlikely to actively promote a single viewpoint.

Questions Regarding Public Criticism of YC

While YC’s Bookface rules appear straightforward, the actions taken against Biggar and Damer raise questions about the repercussions of publicly criticizing YC itself, independent of Bookface. Would such criticism also warrant expulsion from the organization?

Furthermore, would YC potentially make exceptions for exceptionally promising founders?

YC’s Stance on Free Speech

Amos asserts that all founders are treated equitably and that constructive criticism is welcomed. “We believe strongly in free speech and are open to criticism. People are allowed to criticize YC and would not get kicked out of the community for doing so,” she affirmed.

‘I had no faith in Y Combinator doing the right thing’

Biggar participated in the Y Combinator program in 2010. He describes himself as having once greatly admired Paul Graham, stating, “I was like a Paul Graham acolyte.” He possesses a signed copy of Hackers and Painters and diligently read all of Graham’s published essays. Following the completion of his PhD, he promptly applied to Y Combinator.

For more than ten years, Biggar has been an engaged member of Bookface, recently providing financial guidance and advice on co-founder disputes to numerous companies.

As the Black Lives Matter movement gained momentum last summer, Biggar observed a noticeable lack of discussion on Bookface. He characterized the atmosphere as “apolitical, but in a derogatory way” concerning topics like diversity and police brutality. This contrasted with Coinbase, where CEO Brian Armstrong issued a memo prohibiting political discussions in the workplace.

Biggar’s discontent intensified, reaching a critical point in March when he encountered a founder openly boasting about circumventing the vaccine queue. The founder also shared advice on how others could do the same.

Subsequently, Biggar posted on Twitter: “For the second time, a @ycombinator founder has posted to the internal YC forum about how they lied to skip the vaccine queue in Oakland, with instructions for other founders to do the same. Absolutely fucking disgusted.”

To protect the founder’s identity, Biggar refrained from including screenshots or any identifying details in his tweet. However, within hours, he received a direct message on Twitter from Y Combinator co-founder Jessica Livingston. She requested he notify a YC partner about the inappropriate content on Bookface, suggesting, “You may get a faster and more thorough response than posting to all of Twitter.”

His reply to Livingston was direct: “Hey Jessica! Truth be told, I’m so disillusioned with YC that it never even occurred to me.”

Biggar chose to leave the tweet publicly visible. Meanwhile, YC states that the post was removed from Bookface within 24 hours, as the community had expressed its disapproval – Amos confirms “the community made its perspective quite clear in the comments.”

Biggar claims this incident wasn’t on his mind when he received an email from Jon Levy, YC’s managing director of partnerships, requesting a meeting last week. To his surprise, Levy informed him of his removal from the YC community. This meant exclusion not only from Bookface, but also from Demo Day and the YC Slack channels.

Biggar notes that YC did not issue a warning or request the removal of any posts before removing him from the community, although he had anticipated stricter enforcement of community guidelines. He recalls Y Combinator reminding founders about a “no leak” policy within Bookface just a week prior to his removal.

YC presents a different account, stating they were “recently” informed of Biggar’s tweet by a member of the YC community and that all founders receive a warning. YC also asserts that removal occurs only after “multiple” violations of its terms, while Biggar insists he only tweeted about Bookface once. When asked for further examples of Biggar’s violations, YC declined to comment.

Biggar reflects on the situation, stating: “I got criticized for not posting it internally, which I think is kind of bullshit. But, you know, the reason I didn’t post it internally is just that I had no faith in Y Combinator doing the right thing. I didn’t think that going public would do anything, either. I mean, I’m not someone who actually matters here.”

“This is the smallest way that one could possibly call out YC,” Biggar continues. “A couple of community members did a shitty thing, which I think is reflective of the community. That for them is, like, too much dissent — shut it all down.”

He believes that if you are not among “the people who have been elevated to part-time partners [or are] tight with the people that matter,” your opinion is disregarded. He adds, “No one ever asks what you think . . .You can’t have dissent internally. There are just too many disciples.”

‘YC is not engaged in self-reflection’

The departure of Damer from Bookface may not have become widely known had Biggar not disclosed on Twitter last week that he had been “removed.” Shortly thereafter, Damer revealed that she too had been expelled from Bookface two weeks prior, citing her public criticism as the reason. According to Damer, her removal stemmed from voicing concerns regarding misogyny and a perceived deficiency in diversity within the accelerator program.

The situation originated with a memo posted on Bookface, titled: “Is YC an inclusive organization? Continued inaction risks damaging YC’s reputation.”

In her communication, Damer detailed her observation of numerous individuals defending Antonio García Martínez, the author of Chaos Monkeys, who was initially welcomed by Apple, then subsequently asked to depart Apple following a petition signed by over 2,000 Apple employees calling for a review of his appointment. The petition highlighted specific passages from his book, including the statement: “[M]ost women in the Bay Area are soft and weak, cosseted and naive despite their claims of worldliness, and generally full of shit.”

Echoing the concerns of the Apple employees who initiated the petition, Damer characterized the book as evidence of García Martínez’s “misogynistic” views, expressing her “discomfort” with the level of support he received on the internal platform.

“My concern is for the well-being of YC, and that is why I am raising this issue,” Damer stated. “The current situation is atypical and suggests a lack of internal examination within YC. Failure to address this could lead to a decline in the quality of deal flow, particularly from female and underrepresented founders.”

Livingston subsequently responded to Damer’s post.

“YC is not undergoing ‘self-reflection’,” Livingston asserted. “Antonio was a participant in YC a decade ago, and I recall him as a respectable individual… I believe the YC community should be defending Antonio, as many of us have direct experience with him, rather than relying on selectively quoted excerpts from a book. We understand, from our experience in the startup ecosystem, how frequently individuals are unfairly criticized by the media and on social platforms.”

Livingston’s post garnered significant support, receiving hundreds of upvotes, while Damer’s post received comparatively few. Feeling frustrated, Damer then shared screenshots of the exchange on LinkedIn and Twitter, withdrawing previous endorsements of YC’s founders and advising founders to withhold equity until VCs have demonstrated their trustworthiness.

Following this, a YC partner contacted Damer via email, offering to discuss her concerns with group partners or the partner directly, as documented in a communication shared with TechCrunch by the accelerator. The partner also reminded Damer of a community guideline prohibiting the sharing of Bookface content outside of YC. The partner requested that Damer remove the screenshots. Damer did not respond to the email and did not comply with the request. 

Within less than two weeks, Damer received a second email from the partner, delivering a definitive message: Due to her failure to remove the posts, Damer had been removed from Bookface, with an offer to rejoin should she wish to re-engage.

This level of communication contrasts sharply with the organization’s response to Biggar’s tweet, indicating that YC adhered more closely to its established procedures in Damer’s situation.

Nevertheless, Damer contends that YC’s policies foster inaction, particularly concerning diversity issues, and links her diminishing support for the organization to its perceived failure to “advocate for women when presented with the opportunity.” Damer further added, “I do not believe any of the partners are intentionally harmful; in fact, I believe they are fundamentally good people. My primary concern is the prevailing complacency—that is what truly troubles me.”

Regarding whether she regrets publicly expressing her dissatisfaction, she maintains that she felt she had no alternative. “Rules are often invoked when individuals lack a better course of action. This is a matter of courage, of actively defending what is just.”

Clarity in community guidelines contrasts with inconsistent enforcement

A case can certainly be made both for and against Y Combinator’s decision to remove founders from its forum. It is standard practice for investors to require portfolio companies to adhere to specific terms and conditions. YC explicitly informs new members that access to Bookface is subject to supplementary terms and conditions.

However, the fairness and reasonableness of these community terms may be questioned by founders who have not yet applied to the program. This is particularly true given YC’s differing responses to two founders who violated the established rules.

Generally, individuals within communities who feel their internal concerns are dismissed, yet are simultaneously prohibited from public expression of dissatisfaction, are actively resisting such restrictions. Coinbase experienced the departure of at least 60 employees last autumn after a directive forbidding internal political disagreement or discussion. Later, in May, Basecamp reportedly lost a third of its workforce due to disputes concerning the company’s stance on internal political discourse. More recently, Medium saw half its staff depart in July following a strategic realignment and a critically received internal culture communication.

Due to its history of success, YC may wield more institutional influence than any single company. Nevertheless, competitors are consistently seeking vulnerabilities, and discouraging members from voicing complaints externally could ultimately be detrimental to the organization. A new generation of founders and operators is demonstrating a growing unwillingness to stifle their opinions for the benefit of others, and the most capable among them have ample alternatives regarding both guidance and funding.

YC, with its vast network – potentially even as a result of it – may find itself increasingly susceptible to this evolving trend.