Currently, startups attract many of the smartest and most ambitious people in the world. Non-profits don’t. Many of the most ambitious people in the world think that non-profits are pretty crappy, and they’re pretty justified in thinking that because most non-profits are pretty crappy. This means that the peer group you get as a non-profit is not the most motivating. If we surrounded ourselves only with non-profit people, there would be a temptation to coast.

Because the third sector doesn’t currently have a great reputation for competence, it can be hard for non-profits to recruit the most ambitious and talented people, who want to be around other ambitious and talented people. Think of YC like taking your non-profit through a top university like MIT. You get direct instruction, a change in attitude by being surrounded by smart, ambitious and hard-working people, and a credential that opens doors. The disanalogy, for non-profits, is that YC pays you to attend.

By having the Y Combinator stamp of approval, suddenly you’ve moved into a different reference class. There’s a clear signal that you’re an exciting organization with big aims, and are therefore much more interesting for other ambitious people.

A particularly useful point of learning for non-profits is being able to tell at least some plausible story about how your organization could grow to 1000x its current size: how are you building a recursively self-improving engine, where growth fuels greater growth?

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