Show Notes
Some of the biggest companies of the next decade won't be software businesses, they'll be services companies like insurance carriers, law firms, and tax practices rebuilt from scratch with AI doing most of the work. In this episode of Startup School, YC Visiting Partner Charlie Warren walks through the playbook for building AI native services companies, covering how to pick a market with the right traits, why variance kills these businesses faster than anything else, and the P&L math that’ll transform your business model.Chapters:00:00 — Intro to AI Services Companies01:01 — Picking the Right Market02:55 — Markets YC Likes Right Now03:43 — The Sam Altman Test04:35 — The Right Founding Team05:28 — Building the Product06:19 — Variance Is the Existential Problem07:08 — The Early Demand Trap07:53 — How to Price AI Services08:41 — The P&L Walkthrough09:33 — AI Operating Leverage10:27 — Don't Buy Your Way InApply to Y Combinator: https://www.ycombinator.com/applyWork at a startup: https://www.ycombinator.com/jobs
More from Y Combinator Startup Podcast
There’s a misconception that a successful launch video needs to cost tens of thousands of dollars and feel like a high-production commercial. But Farza Majeed has a different approach.
Magic Patterns (YC W23) is one of the fastest-growing design tools in AI, helping product teams turn ideas into interactive, code-backed prototypes in minutes. Alex Danilowicz and his co-founder, both front-end engineers, built Magic Patterns to solve a problem they had themselves: finding a better way to turn ideas into something visual. They were among the first teams building prompt-to-design tools back in 2023.In this episode of Design Review, Alex joins YC’s Aaron Epstein to demo Magic Patterns and its new MagicOS canvas, where teams can bring together prompts, images, PRDs, and other context to explore ideas visually. Then they review a handful of startup websites to break down what makes a site feel “vibe coded,” where founders go wrong, and how to make AI-generated design feel more intentional.Chapters:00:00 - What Magic Patterns is03:01 - Nine months of pivots05:59 - Using the MCP from Cursor08:21 - The end stage is compressed now11:23 - Demo: postcards for every meetup city15:35 - The RollerCoaster Tycoon chocolate theme park18:17 - Site 1: Ego21:39 - Inputs you can't type into23:59 - Site 2: Sentient OS27:57 - "Free" should be giant30:20 - Instrument Serif and the em dash32:01 - Site 3: CeraNovus36:59 - Site 4: Slashy38:36 - Nobody clicks your tabs43:08 - Getting better at design as an engineer46:07 - What's next: Magic OSApply to Y Combinator: https://www.ycombinator.com/applyWork at a startup: https://www.ycombinator.com/jobs
One of the biggest surprises in AI over the last few years has been how well coding agents generalize beyond software. In a recent essay, MIT professor Philip Isola argued that we may be entering the era of robot-use agents: general-purpose models that can control different robots, write policies, and learn new physical tasks with little or no robot-specific training.In this episode of Decoded, we're joined by the founders of Waddle Labs and RoboCurve, two of the startups whose work helped drive this realization. They're working at the frontier of using general-purpose models to control robots, and their recent demos helped inspire the growing conversation around robot-use agents. Together, we dig into the research behind that idea, from code-as-policies and vision-language-action models to the harnesses and evals needed to make these systems work in the real world.
YC works with thousands of founders every year, which gives us an early look at how startups are changing. Right now, the shift is striking: startups are moving from bits to atoms, nearly one in five YC companies has a solo founder, and companies are reaching meaningful revenue faster than ever.In this episode of The Lightcone, Garry, Jared, Diana, and Harj dig into what’s driving these changes and what they mean for founders. They discuss how AI is making it possible for smaller teams to take on more ambitious problems, why experienced founders are having a resurgence, and why knowing what to build is becoming more important than simply knowing how to build it.
The best outbound starts before you automate anything. Founders need to learn who actually has the problem, what gets their attention, and what makes them reply. YC Visiting Partner Christina Gilbert recommends doing at least your first 100 outreaches by hand so you can learn those things yourself.