>3) YC has no incentive to increase in size if it can't maintain a high-quality program because top founders only want to participate in a program with other top founders. If we do something that convinces top founders to stay away - then we lose.
It says right in the post - YC's goal is mass production of startups via incubation.
I think Michael is saying "Just like it would be dumb to increase the size of a factory too quickly, it would be dumb to increase the size of our batches too quickly."
We're always looking for more ways to help more startups, sometimes within the framework of our original incubation program and sometimes without it.
If YC lives up to its potential, I suspect the startups that actually end up going through our accelerator will be just a small fraction of all the ones we've meaningfully helped out in one way or another.
It says right in the post - YC's goal is mass production of startups via incubation.