There was a time not all that long ago were if you wanted to start up a new business you were looking at significant financial outlay. Most businesses required an office or shop front at a minimum. If you were an inventor you needed some sort of garage and tools. If you had a computer you were probably one of about a half dozen in your neighborhood.  

Then came the internet, and things changed…

The internet, and the digital economy it heralded, brought a new animal into the startup world: the hacker. Working out of their bedroom or basement, hackers don’t need nor care for business plans, what more, they don’t really need investors either. Not the traditional types at least, not just to startup. When you can get a business up and running over a weekend, for less then $10k, things change a little. The power shifts, from being heavily weighted towards the investor with the money, too the entrepreneur who needs far less to get going, and can bootstrap his/her way up. If investors wanted to come to the party, they would have to change their ways.

Sure enough, in 2005, a new model of startup funding came to the fore. Rather than choosing to fund a handful of startups for millions of dollars a piece, one company, ‘Ycombinator’ – headed by Paul Graham – decided to fund startups in batches (their current batch contains 43 startups): two batches per year, in three month cycles, investing only a small amount of money for a much smaller amount of the business. With this new model in hand, Ycombinator has now funded more than 250 startups – all in the last 5 years!

Paul Graham – with his essays and associated efforts with Ycombinator – is a grandfatherly figure lauding over this domain, his thoughts on entrepreneurship and funding have heavily influenced our thinking here at Agents of Change. Those familiar with the Ycombinator website will notice ours is basically an exact replica. Homage to a true revolutionary in the world of startup investing.

Many variations of company with the Ycombinator model now exist, all over the States, and SeedCamp the major European player. Just recently one has spawned on our shores! Startmate situated in Sydney, is currently going through its first intake cycle! (We’ll be covering Startmate in more detail in the next couple of posts). Paul Graham and Ycombinator for the time being however remain at the pinnacle. The Ycombinator brand has become bigger then most of its startup alumni. Speaking of whom, notable alumni include: Loopt, Reddit, Wufoo, Scribd, Xobni, DropBox, Justin.tv, Posterous, and PicWing.

One alumni worthy of special mention – for us at least – is Adioso, founded by a couple of Melbourne boys; Tom Howard, and Fenn Bailey. These guys flew all the way to Silicon Valley for a ten minute interview, all just for the shot at a spot in Ycombinator! Tom has appeared at some of the Student Entrepreneurs events in the past, most recently as a panelist during one of our Entrepreneurs Week workshops on tech startups. A written account of their  Ycombinator interview and accompanying journey can be found here.

The Agents of Change program hopes to make students “Ycombinator ready". We’re aiming to help demystify entrepreneurship and startups to students, teaching the principles of lean startups, staying hungry, always producing, and putting in the hours. We are hoping that over time, many more will apply to programs like Startmate and Ycombinator, successes from which can only aid the fledgling Australian Startup scene.

The kindness and generosity shown by those in and around this community in support of the development of entrepreneurship has been remarkable, and for this we’d like to thank you.

Amir Nissen, on behalf of the Student Entrepreneurs | Agents of Change team.