Paul Graham of Y Combinator just published a list of 30 types of startups he and his crew are interested in funding. The range of ‘fundable’ companies is large, even though many are simply taking existing products and giving them web 2.0 updates. The types of companies include enterprise 2.0 (go Workstreamer!) photo-sharing 2.0 and somehow devising an end to the music-stealing era. For me, perhaps the most interesting thing about Paul’s list is the industry variation. It almost seems like Graham is calling for the rethinking of almost every industry!
I also really admire the proactive approach Graham is taking as an investor; blogging about companies you’re looking to invest in is brilliant — especially when it’s from an established venture capitalist. Here’s why: people respect Paul Graham and believe that if they execute one of his fundable ideas that he – or someone he knows — will invest. More importantly from Graham’s perspective, this strategy likely gives him the first investment opportunity because people who read his blog and create a startup based on one of this ideas are predisposed to seek his capital first! Graham now gives himself an edge on the competition by having a first look. To an extent, Fred Wilson has used this same ‘first investor advantage’ strategy successfully for years.
Plus, at the end of the day those who elect to execute against one of Graham’s suggested areas know that they are addressing markets that smart investors are talking about. So, even if Y Combinator doesn’t invest, they are at least catalyzing the creation of products that have potential to really make a difference.