Lightcone: Consumer is back, What’s getting funded now, The vibes immaculate

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AI Focus

70% of the companies in the Winter 2024 Y Combinator (YC) batch are working on AI-related ideas, showcasing a strong emphasis on artificial intelligence.
The profile of founders has shifted from domain expertise in non-software businesses to those with expertise in AI technology.
AI has emerged as an exciting area for founders to work in, attracting many former crypto founders who are looking to get back into building after facing setbacks in the crypto industry.
Unlike crypto, AI products in this batch of YC companies have been more tangible and user-friendly, with impressive progress made in a short time.
The recent Bookface live demo of a voice AI agent passing the Turing test highlights the potential of AI and the excitement surrounding its development.

Developer tools have seen a significant increase in popularity, with 30% more dev tool companies funded in this batch compared to four years ago.
The rise of developer tools is attributed to the influx of technical founders who are building the infrastructure and tooling needed for AI applications.
The current YC batch has a record number of open-source Dev Tool companies, with 22 compared to only five in Winter 2020.

Consumer ideas are making a comeback, with several founders pivoting towards consumer-facing products during the batch.
There is a debate among YC partners about the potential drawbacks of pivoting to consumer ideas, with some arguing that it can lead to "tarpit" ideas that are easy to build but hard to gain traction with users.

Open-source companies are judged by their adoption among tastemakers, GitHub star growth, and early signs of getting into production with companies.
Open-source companies win when they have developer mind share, similar to how Facebook won with network effects.
Superbase, an open-source Firebase competitor, gained traction through a successful Hacker News launch and is now used by a third of the current YC batch.

YC funded fewer companies targeting local markets and more international teams during the 2020-2022 period.
International companies funded by YC include Monzo, Groww, Zepto, and Coinbase.
YC funded fewer crypto companies in Winter 24 despite being in the middle of a crypto bull run.

YC batch companies experienced significant growth, increasing their total ARR from $6 million in January to $20 million by demo day in April.
The batch witnessed a remarkable 30% pivot rate, indicating a higher proportion of companies finding and landing on promising ideas compared to previous years.
The AI boom has led to a surge in companies generating recurring revenue by selling software to legitimate businesses.