YC was selling information arbitrage. "Join us and you'll know what others don't."
Made sense in 2015.
In 2026? I can search anything. Learn anything. Connect with anyone.
The arbitrage evaporated. The pitch didn't change.
Used to think I needed permission for everything:
- Permission from VCs to be legit
- Permission from YC to have credibility
- Permission from gatekeepers to connect
Now I have Claude, Perplexity, and the same capabilities a Fortune 500 had 20 years ago.
The permission model is dead.
The Information Arbitrage Era
YC's original value proposition (2005-2020):
"We know things you don't know."
- How to talk to users
- How to build product
- How to raise money
- How to scale teams
- How to think like founders
The scarcity: This information wasn't available anywhere else. Paul Graham's essays were the only source of founder wisdom at scale.
The arbitrage: Pay us in equity, get access to knowledge that gives you an unfair advantage.
It worked. YC companies had systematically better outcomes because they had systematically better information.
But information scarcity was the entire moat.
What Changed in 2024-2026
AI democratized everything YC was selling:
1. How to Talk to Users
- YC: "Get out of the building and talk to customers"
- AI: Gives you specific interview questions, research methodologies, and analysis frameworks
- You can learn customer development faster from Claude than from YC's curriculum
2. How to Build Product
- YC: "Build something people want"
- AI: Helps you analyze market demand, competitive landscapes, and user feedback at Fortune 500 consulting firm level
- You can do product strategy with AI that rivals McKinsey's capabilities
3. How to Raise Money
- YC: "Here's how to pitch VCs and what they want to hear"
- AI: Generates pitch decks, financial models, and investor research that would have cost $50K+ from consultants
- You can prepare for fundraising better than 90% of founders did in 2015
4. How to Scale Teams
- YC: "Here's how to hire and manage people"
- AI: Provides hiring frameworks, management techniques, and organizational design principles from every business school and consulting firm
- You can access better scaling knowledge than most YC partners have
The arbitrage collapsed. The information became free.
My Permission-Seeking Phase
2021-2022: Peak Permission Addiction
What I thought I needed:
VC Permission to Be Legit:
- "Real startups raise money"
- "If VCs won't back you, you're not building something big enough"
- "Bootstrap founders aren't serious"
YC Permission for Credibility:
- "YC founders are the smart ones"
- "Without YC, how do you know what you're doing?"
- "YC network is essential for success"
Gatekeeper Permission to Connect:
- "You need warm intros for everything important"
- "Without insider access, you can't reach decision makers"
- "The best opportunities require connections"
How this showed up:
- Applied to YC three times
- Spent months perfecting VC pitches for companies that didn't need funding
- Paid for intro services and networking events
- Waited for "permission" to build what I wanted
The cost: 18 months of seeking validation instead of building value.
The AI Capability Revolution
What I have now that Fortune 500s didn't have in 2005:
Research and Analysis (Better than McKinsey 2005):
- Claude analyzes market trends, competitive landscapes, customer segments
- Perplexity researches anything instantly with citations
- AI synthesizes information from thousands of sources in minutes
Strategy and Planning (Better than BCG 2005):
- AI generates business models, financial projections, scenario planning
- Strategic frameworks from every business school, accessible instantly
- Decision trees and option analysis that consultants charged $200K for
Content and Communication (Better than agencies 2005):
- AI writes copy, creates presentations, designs workflows
- Marketing strategies and execution plans at agency level
- Communication frameworks from every industry, customized instantly
Technical Capabilities (Better than IBM 2005):
- AI codes faster than teams of developers
- System architecture and database design at enterprise level
- Integration capabilities that required dedicated teams
Global Reach (Better than any company 2005):
- Direct access to talent, customers, partners worldwide
- No geographic constraints on building or scaling
- Real-time collaboration across time zones
The reality: I have better capabilities alone with AI than most Fortune 500 companies had with thousands of employees.**
YC's Unchanged Pitch
What YC still sells (2026):
- "Access to our network"
- "Mentorship from successful founders"
- "Curriculum that's proven to work"
- "Demo Day exposure to VCs"
- "The YC brand opens doors"
What YC doesn't acknowledge:
The network is on Twitter. Most successful founders are accessible directly. You don't need YC for intros.
The mentorship is on YouTube. Every YC partner has shared their knowledge publicly. The curriculum is free online.
The curriculum is on every AI model. Claude knows everything Paul Graham ever wrote, plus knowledge from thousands of other sources.
Demo Day is on Product Hunt. You can get more exposure launching publicly than in a room of VCs.
The brand matters less than the product. Customers don't care if you're YC-backed if your product solves their problem.
The New Independence
What permission-free building looks like:
Week 1-4: Idea to Product
- Use AI to validate market demand
- Build MVP with AI coding assistance
- Test with real customers found online
- Iterate based on direct feedback
Month 2-3: Scale and Optimize
- AI helps optimize conversion, retention, growth
- Find product-market fit through direct customer interaction
- Build sustainable business model without external validation
Month 4-6: Growth and Expansion
- Scale using AI automation and global talent
- Expand based on customer demand, not investor pressure
- Maintain high margins and sustainable growth
No permission required. No gatekeepers consulted. No information arbitrage needed.
The YC Paradox
YC's success stories increasingly don't need YC:
Stripe (2010): Information about payments was scarce. YC's network and knowledge mattered.
Airbnb (2008): Platform business models weren't well understood. YC's mentorship was valuable.
Dropbox (2007): Consumer internet products were new territory. YC's guidance was essential.
But in 2026:
Payment processing: Stripe, Square, and dozens of others have open APIs and documentation. AI can build payment integration in hours.
Platform business models: Analyzed to death by every business school. AI knows every platform strategy ever attempted.
Consumer internet products: Mature category with established patterns. AI can design and build consumer apps that rival billion-dollar companies.
The irony: YC's most successful companies made YC less necessary by democratizing the capabilities YC used to provide exclusively.
Want the full playbook? I wrote a free 350+ page book on building without VC.
Read the free book·Online, free
The Permission Model's Last Stand
Where people still seek permission:
1. Venture Capital
- "I need VC backing to be a real startup"
- Reality: Most successful businesses never raise VC money
- AI alternative: Build profitably, maintain control
2. Media Coverage
- "I need TechCrunch to write about us"
- Reality: Direct customer acquisition is more valuable
- AI alternative: Create better content than most publications
3. Industry Validation
- "I need experts to validate our approach"
- Reality: Customer validation is the only validation that matters
- AI alternative: Access expert knowledge directly through AI
4. Network Access
- "I need warm intros to important people"
- Reality: Cold outreach works if you provide value
- AI alternative: Research and personalize outreach better than any intro
The pattern: Every permission model is being replaced by direct capabilities.
Real Examples: Permission vs Direct
Example 1: Customer Research
Permission model (2015):
- Pay consultants $50K for market research
- Get intro to industry experts
- Attend conferences for insights
Direct model (2026):
- Use Perplexity to research market in hours
- Claude synthesizes insights from hundreds of sources
- Talk directly to potential customers via social media
Example 2: Product Development
Permission model (2015):
- Raise money to hire technical team
- Get YC to validate product approach
- Use VC network for technical advisors
Direct model (2026):
- Use AI to build MVP in weeks
- Test directly with target customers
- Iterate based on real usage data
Example 3: Go-to-Market
Permission model (2015):
- Get VC backing for credibility
- Use YC network for customer intros
- Hire expensive marketing agency
Direct model (2026):
- Build in public on social media
- Use AI to create content and campaigns
- Acquire customers directly through value creation
The difference: Permission models add cost and delay. Direct models create value immediately.
What This Means for Founders
If you're seeking permission:
- You're optimizing for the 2015 playbook in a 2026 world
- You're giving up equity for access you can get for free
- You're wasting time on validation instead of building value
If you're building directly:
- You have better tools than YC companies had 5 years ago
- You can move faster without permission layers
- You can maintain control and capture more value
The choice: Pay for information arbitrage that no longer exists, or use freely available capabilities to build something valuable.
The Contrarian Prediction
What everyone believes: "YC, VCs, and startup accelerators are more valuable than ever because competition is increasing."
What I believe: "YC, VCs, and startup accelerators are becoming less valuable because capabilities are democratizing."
The reasoning:
2015: Information scarcity created value for gatekeepers 2026: Information abundance eliminates gatekeeper advantage
2015: Network effects required intermediaries
2026: Direct connection eliminates intermediary tax
2015: Capital was scarce and expertise was concentrated 2026: Capital is abundant and expertise is democratized
The future belongs to founders who build directly, not founders who seek permission to build.
The Uncomfortable Questions
For YC: If your curriculum is freely available and your network is accessible online, what exactly are you selling for 6% equity?
For VCs: If founders can build faster and cheaper than ever, why do they need your capital and "value-add"?
For founders: If you can access all the information and capabilities that used to require gatekeepers, why are you still seeking permission?
For the ecosystem: If the information arbitrage is gone, what happens to the institutions built on that arbitrage?
What I Wish I'd Known
In 2021, I wasted 18 months seeking permission.
What I should have done:
- Started building immediately with available tools
- Talked directly to potential customers
- Used AI to accelerate everything I was trying to learn
- Maintained 100% equity and control
What I actually did:
- Applied to accelerators for validation
- Pitched VCs for credibility
- Attended networking events for connections
- Gave away equity for information I could have accessed for free
The cost: Time, money, equity, and psychological energy that should have gone into building.
The lesson: Permission is a luxury you can't afford when you have the tools to build directly.**
Action Steps for Permission-Free Building
This week:
- List every "permission" you think you need
- Research how to get the same value directly using AI tools
- Cancel one permission-seeking activity (application, meeting, pitch)
- Start building one feature customers actually want
This month:
- Use AI to replace one expensive service you thought you needed
- Make direct contact with 10 potential customers
- Build and ship without external validation
- Measure progress in customer value, not gatekeeper approval
This quarter:
- Eliminate all permission-seeking from your workflow
- Build a profitable, sustainable business without external dependencies
- Help other founders skip the permission-seeking phase
- Document what you learn for founders coming behind you
The goal: Prove that direct building beats permission-seeking in 2026.
Why This Matters
Because YC takes 6% equity for information that's now free.
Because founders are still optimizing for 2015 when it's 2026.
Because the permission model creates artificial scarcity in an age of abundance.
Because the future belongs to builders, not permission-seekers.