Many of the best ideas we’ve funded were ones that surprised us, not ones we were waiting for.
There are, however, some startups that we’re very interested in seeing founders apply with. Below is an updated Request for Startups (RFS), which outlines some of those ideas in general terms.
Please don't feel that you need to work on one of these ideas in order to apply to Y Combinator 1. While many of the areas listed below fall into the “breakthrough technology” category, the great majority of startups we fund will continue to be the sort of Internet and mobile companies we’ve funded in the past. If that’s what you wanted to do before this post, keep doing it.
Also, you shouldn’t start a company just because it’s on this list. The RFS mostly exists to encourage you to apply if you’re already working on an idea in one of these areas.
If you’d like to know what we look for in non-profits, read this post.
AI stands to have a large impact on society. So large that we've created a vertical within YC for it.
It feels like it could be one of the dividing lines in the history of technology, where before and after look totally different. We’re interested in people applying research to any narrow domain (drug discovery, programming assistant, legal advice, fraud detection, etc) and especially those focused on the intersection of AI and robotics (manufacturing, self-driving cars, etc).
It's still early, but it seems like we're finally making real progress hacking biology.
We are certain that this is going to be a surprising, powerful and controversial field over the next several decades. It feels a little bit like microcomputers in the 1970s.
Engineering principles are now routinely applied through synthetic biology and bio is touching all aspects of life from healthcare to manufacturing and even food and agriculture.
There are so many directions this can go–fighting disease, slowing aging, merging humans and computers, downloading memories, genetic programming, etc.
Reading DNA has become incredibly fast and cheap. There are many interesting applications here. There will perhaps be even more interesting applications as we get better at writing DNA.
We are also interested in applications of biotech to prevent its own misuses. For example, if the bad guys can create new infectious diseases quickly, it’d be nice if the good guys could create new cures and vaccines quickly as well.
Brick and Mortar 2.0
We are interested in seeing startups that use brick-and-mortar commercial or retail space in interesting and efficient ways.
Amazon is putting malls and big box stores out of business. Rather than fighting a losing battle with Amazon, brands need to rethink how to use retail space in ways that play to their strengths. Tesla, Warby Parker, and Peloton, for example, use brick and mortar locations as showrooms that complement their online sales channels. Without the need to store inventory, retail space can be used much more efficiently.
Interesting uses of brick-and-mortar space are not limited to retail stores: similar sea changes are happening to restaurants, entertainment venues, local service providers, and office buildings. New businesses will be purpose-built for customers that are trained to expect features like online ordering, deep integrations with other services, and immediate delivery. Flexibility is key. For instance, it is likely that rather than multi-year leases, businesses of the future will utilize “micro-leases” that last days or even hours.
Additionally, the era of big box stores that migrated consumer attention out of main street and into suburban shopping centers flanked by parking lots is likely to change as the era of self-driving begins. Once self-driving cars are adopted widely, our relationship with physical space will evolve in ways that are hard to predict. We want to see startups that are thinking about that shift and building new ways to use physical space.
Carbon Removal Technologies
The Paris Agreement set forth a global goal to limit the earth’s temperature increase to 1.5°C this century. Just switching to renewables isn’t going to be enough to reach that goal. We will also have to remove carbon from the atmosphere.
Carbon removal and sequestration technologies are still in their infancy. The current solutions can be divided into two groups: natural (such as reforestation and biochar) and technological (such as direct air capture). Two challenges with direct air capture are costs and scale. Several countries including the US recently stepped up and created financial incentives for removing carbon from the atmosphere, but it is not yet cost effective with current technology. More information is available at the Center for Carbon Removal.
Other approaches to geoengineering to counteract the effects of climate change could have potential as well.
Cellular Agriculture and Clean Meat
Recent scientific developments have changed the way we think about producing protein.
For the first time, we can now produce food that is scientifically indistinguishable from animal products like meat and dairy, using only cells and not harming any animals.
Today humans use farm animals mostly for meat and dairy production. Whether or not you believe this is cruel and wasteful, we know it’s not sustainable. More people eat meat every year, yet most of the available farmland in our world is already being used for production of meat. The agricultural sector is the world's second-largest emitter of greenhouse gas after the energy sector, and the use of antibiotics in farming is real danger to our own health system.
Growing real animal-meat directly from cells is a revolutionary science. We would love to fund more startups taking this science to market. We also want to fund startups specializing in the scaling phase of cellular agriculture. The world will massively benefit from a more sustainable, cheaper and more healthy production of meat.
At current rates of deforestation, there will be no rainforests in 100 years.
There are many environmental reasons for why this is bad, but it will also be problematic for the industries relying on these increasingly scarce resources.
Startups have already started to address the need for cleaner consumer products, but industrial commodities like palm oil and soy are getting less attention.
For example, palm oil is the most used vegetable oil in the world -- it’s in about 50% of grocery-store products. In 2016, the global palm oil market was valued at over $65 billion and it’s expected to reach $92 billion by 2021. But, palm oil production tends to rely on crude, environmentally destructive slash/burn methods, exploitative labor practices, and contributes the most global-warming emissions of any commodity aside from beef.
We think these big market/low-tech industries could be interesting to go after. Examples of startups we’d like to see apply are those working on synthetics, cleaner alternatives, or supply-chain improvements. Price point will likely be very important here, more so than for consumer products. It would also be great if new jobs are created or if the solution involves reforesting.
Securing computers is difficult because the work required is so asymmetric -- the attacker only has to find one flaw, while a defender has to protect against every possible weakness.
Unfortunately, securing computers isn’t just hard—it’s critically and increasingly important. As more critical information and systems are connected to the Internet, we become more vulnerable to cyberattacks and the disruption is more severe.
A diverse workforce is good for business and good for the world.
Without different perspectives, the products and services we create will miss big opportunities for large segments of people. We want to fund non-profits and startups that are working on making technology a place that is more inclusive and attractive to people of all ages, races, sexual orientations, and cultures.
If we can fix education, we can eventually do everything else on this list.
Human brain power is vastly underutilized on this planet because most people lack access to a good education. Strong education systems lead to greater social mobility, better workers, better citizens, and more and better startups. A small increase in the learning output of education systems across the globe would have an enormous impact on human productivity and economic growth.
We are interested in new school models that can develop critical thinking, creativity, citizenship, and job skills at massive scale. We’re looking for ideas that combine technology and person-to-person interactions to deliver highly individualized educational experiences.
We also know that 90% of the human brain develops before age 5 and achievement gaps open up well before kindergarten. We’re interested in ventures that dramatically improve outcomes for children from birth to age five, that reduce inequality, and that have the potential to enhance the future quality of life for those children and their families. Scalable solutions in these areas should now be doable thanks to advances in brain science and technologies such as smart home devices, wearables, and mobile.
There is a remarkable correlation between the cost of energy and quality of life.
Throughout history, when the cost of energy has come down a lot (for example, with the steam engine) the quality of life has drastically improved.
Cheap energy would do a huge amount to reduce poverty. New energy sources could also help the environment, the economy, reduce war, ensure a stable future, make food and water more abundant, and much more.
We believe economics will dominate—new sources must be cheaper than old ones, without subsidies, and be able to scale to global demand. Nuclear energy can hit the bid, and possibly so can renewables. But pricing is the first order question.
In addition to generation, we’re also interested in energy storage and transmission. 10x better batteries would enable great new things, as would the ability to easily move energy around.
Software used by large companies is still awful and still very lucrative.
Category-defining enterprise software companies will emerge to solve problems for every vertical, every business size, and every job function. Here are 3 specific areas we think are particularly interesting:
Making The Expensive Cheap: Because of the cost of traditional enterprise software, many categories of solutions were previously cost prohibitive for small or even medium sized businesses to benefit from.
The Next Billion Workers: Traditionally office-based knowledge workers have been the users of enterprise software. Mobile phones and tablets turn every type of employee -- from the retail store associate to the field services team -- into a knowledge worker.
Digitizing Every Industry: Every industry is going through some form of information-based disruption; this is causing businesses to modernize their practices, leveraging new data, accelerating key processes, and delivering digitally-enabled experiences in the process.
The world's financial systems are increasingly unable to meet the demands of consumers and businesses.
That makes some sense because regulations designed to protect customers can't change fast enough to keep up with the pace at which technology is changing the needs of those customers. This mismatch creates inefficiencies at almost every level of the financial system. It impacts how people invest their savings, how businesses gain access to capital to grow, how risk is priced and insured, and how financial firms do business with each other.
We think that software will accelerate the pace at which financial services change and will eventually shift the nature of regulations. We want to fund companies with novel ideas of how to make that happen.
Future of Work:
Jobs will look very different 25 years from now.
We’ve already seen a massive shift toward automation, robots, and AI, and the pace of their impact on work isn’t slowing down.
There’s uncertainty on whether these new technologies will result in more or fewer jobs in aggregate. We’re interested in what you think will happen and what comes next.
In particular, we want to figure out what new work will be created to leverage these new technologies. And what can be built to help people and companies adapt to the changing skills requirements they face.
We also want to know how the meaning of work will evolve. People seek full-time jobs for many reasons, including money, healthcare, and a sense of purpose. We’d love to see solutions that address each of these factors (or any others) in anticipation of a changing job market.
Healthcare in the United States is badly broken. We are getting close to spending 20% of our GDP on healthcare; this is unsustainable.
We’re interested in ways to make healthcare better for less money, not in companies that are able to exploit the system by overcharging.
We’re especially interested in healthcare startups working in the following spaces:
Diagnostics: Diagnostics guide clinical decisions and can have a significant impact in healthcare. We can now build diagnostics cheaper and faster than ever before and the most important opportunities are in how we use them.
Medical Devices: Costs of prototyping and manufacturing are lower than ever and computational power is higher than ever. We’re excited to see what devices have the most clinical impact and how the data they generate can make medical devices more valuable than ever before.
Pharmaceuticals: Drug development has gotten slower and more expensive. We’d like to fund companies doing this in new ways. We take a broad view of this—we’re interested in things that may not become prescription drugs but still really help people.
Preventative Healthcare: This is probably the highest-leverage way to improve health. Sensors and data are interesting in lots of different areas, but especially for healthcare.
Human memory is too volatile.
Compared with computers, humans have an odd memory system. We can recall subtle emotions and feelings from 10 years ago while simultaneously forgetting where our phone is and what to pick up at the store. The increasing bombardment of information and ideas certainly does not make it easier, nor do age onset diseases like dementia and Alzheimer's.
The Merge is coming. Some solutions like voice assistants and wearables may help supplement short-term memory. More complex approaches involve neural interfaces but raise new UX problems. We want to fund startups that are exploring how to improve human memory with technology. Ideally we can solve Mitch Hedberg's problem once and for all.
Longevity and Anti-aging
YC Bio is a new way for YC to fund early-stage life science companies that are still in the lab phase. The first area we’re going to focus on is healthspan and age-related disease.
We think there’s an enormous opportunity to help people live healthier for longer, and that it could be one of the best ways to address our healthcare crisis.
This will be a special track. The companies will go through the regular YC batch, but there will be a few differences. Instead of the standard deal for YC companies (which is $120,000 invested for 7% ownership) we’ll offer these companies any amount between $500k and $1 million for 10-20% ownership, scaling linearly. We’ll also offer the companies free lab space, a number of special deals, and access to a wide range of experts.
One Million Jobs
We want to fund companies that have the potential to create a million jobs.
There are a lot of areas where it makes sense to divide labor between humans and computers-—we are very good at some things computers are terrible at and vice versa—-and some of these require huge amounts of human resources.
This is both good for the world and likely a good business strategy—-as existing jobs go away, a company that creates a lot of new jobs should be able to get a lot of talented people.
Software developers are shaping more and more of our daily lives.
The products they use to make software are a powerful lever: they have a dramatic impact on the quality and kind of software being built.
We're interested in helping developers create better software, faster. This includes new ways to write, understand, and collaborate on code, and the next generation of tools and infrastructure for delivering software continuously and reliably.
We believe it's especially important to build products that make software development accessible to the widest part of our society. In fact, we’re especially interested in new ways to program. There are probably much better ways for people to program, and figuring one out would have a huge impact.
The frameworks are better, the languages a bit more clever, but mostly we’re doing the same things.
One way to think about this is: what comes after programming languages?
Robots will be a major way we get things done in the physical world.
Our definition is pretty broad--for example, we count a self-driving car as a robot. Robots are how we'll likely explore space and maybe even the human body.
Safeguards Against Fake Video
Fake videos are on the rise
The tech to create doctored videos that are indistinguishable from reality now exists, and soon it will be widely available to anyone with a smartphone.
We are interested in funding tech that will equip the public with the tools they need to identify fake video and audio.
The internet has made it easy to distribute creative work to millions of people, but no one has figured out how to help creatives make a sustainable living.
In the arts, there is an army of middle men that exist between the artist and the fan. Each person in the middle takes a cut of each dollar made by the artist. We want to see more startups that are building a direct pipeline from artist to fan.
We believe there are ways to build more creator-friendly platforms, and we’re interested in seeing projects that make it easier for artists to raise funding, track consumption of their work and prevent piracy.
Transportation & Housing
About half of all energy is used on transportation, and people spend a huge amount of time unhappily commuting.
Face-to-face interaction is still really important; people still need to move around. And housing continues to get more expensive, partially due to difficulties in transportation. We're interested in better ways for people to live somewhere nice, work together, and have easier commutes.
Specifically, lightweight, short-distance personal transportation is something we're interested in.
Underserved Communities and Social Services
Tens of millions of working poor in America don't see a path to the middle class.
This population has to navigate a world with substandard services, low quality housing, overcrowded schools, and crime in their neighborhoods. They are often unbanked and living paycheck to paycheck.
The US government alone spends hundreds of billions of dollars per year on social services and safety net programs for these underserved communities.
We believe great non-profits and for-profits can bring technology and strong metrics-driven approaches to this largely ignored, massive market.
Tens of millions of households have smart speakers.
We are interested in figuring out which voice apps will deliver the most value on this new platform.
Voice applications are so different from typical web/mobile applications that we think creating products that engage and retain users will require a lot of innovation.
Voice app companies who participate in YC will have a direct channel to the Amazon Alexa and Google Assistant teams.
VR and AR
Virtual reality and augmented reality have been a long-unfulfilled promise.
But we feel the wave is coming, and this is the right time to start working on it.