Something that I've really not seen mentioned, is that they are also (and still!) ignoring the licensing that Microsoft has around VSCode.
VSCode is built on open source of course, but the the OSS version is "Code - OSS". When Microsoft builds it and releases it, it becomes VSCode with the Visual Studio trademark and what not.
PearAI's Code fork is using the real VSCode marketplace which has strict "This has to be used with Visual Studio products" (well, and some other MS / GitHub bits), so they can't use that. If you look at other VSCode-adjacent editors, they all use open-vsix.org instead.
They also use extensions that are licensed in the same way:
They have instructions on setting up the WSL extension...which has a "This can only be used in Visual Studio Code" License too, so it can't be used in their PearAI fork.
You can see some examples of the terms of use / LICENSEs here:
I've interviewed for Coinbase and it was a shit show. The recruiter initially said my interviews went well but then never got back to me, even after me reaching out multiple times. Plus there are lots of reports from people working there that things are held together by strings and glue, and the work life balance is terrible.
I imagine coinbase has a legal department and these guys were paid to code.
Using chatgpt to write a license is a ridiculously dumb thing to do since there are so many public templates to choose from, it sounds like they're just overly enthusiastic about AI.
I think there's a line where AI enthusiasm becomes disdain for human expertise. If you can't be bothered to learn about licenses, what else are you just going to assume chatgpt can figure out for you?
One might hold the position that crypto coin companies (particularly those working with POW coins) add very little value to the world in exchange for significant social and environmental cost.
One who held this position would see working at Coinbase as an indicator of a moral failing.
Credit to Garry for unequivocally apologizing and shouting out https://amplified.dev . The whole PearAI situation was a bad look, and it made it seem like YC had not done their appropriate research before investing.
I doubt this really did permanent damage to their reputation (I don't know if anything can at this point), but this move was definitely necessary to placate anyone who was paying attention.
"Credit to Garry" is a funny thing to take away from this. He is ultimately the person responsible for setting up an environment that got them funding in the first place, and he's the one responsible for defending them without checking the facts.
It's good he finally apologized, but let's also be clear that's the minimum bar when you mess up so hard.
Of course, if you think this was just "a bad look", and the apology was just a "move [...] to placate", it might make sense to consider it as a cynical business move only and give credit to the shrewdness of that.
People have weird ideas about what YC is and does. People apply to YC: you can go look at the application. They get gajillions of them. They downselect applications to interviews. The interviews are brief. They downselect interviews to offers to join a cohort. Every company in the cohort gets a group partner that they do regular "office hours" meetups with. There are internal events and talks and stuff. There's a standard investment, and demo day. That's it.
YC doesn't operate YC companies. They're investors. They aren't your boss. They're not looking at your code. They're almost certainly not doing any meaningful technical due diligence. These are things that happen, to an extent, in priced rounds that happpen after your seed round (A-round technical due diligence is also a joke, but whatever, stipulate). The whole point of YC is that they're investing in big batches of startups, at a scale that is a big multiple of what an A-round VC does in a whole year.
Tan is apparently apologizing because he spoke up on behalf of a batch company, or repeated some misinformation TechCrunch published. But it is very weird to ask them how their selection process would change to account for this happening.
YC also offers mentoring and coaching services, which goes beyond what a traditional investment firm does. That's part of their appeal, anyway.
> They're not looking at your code. They're almost certainly not doing any meaningful technical due diligence.
Maybe they should?
If their job is to find talented, and hopefully also ethical and honest, people, then doing a basic check like ensuring that the project they're being pitched was actually authored by the candidates should be part of the vetting process.
If, OTOH, their job is to bet on anyone who's likely to give them the highest ROI, regardless of their personal values, then they don't need to do any of this, and cases like PearAI should be acceptable. But that's not what YC claims to be about.
> The whole point of YC is that they're investing in big batches of startups, at a scale that is a big multiple of what an A-round VC does in a whole year.
Maybe that's part of the problem then. When you're trying to fund and mentor hundreds of companies in a few months, it's impractical to think you'll be able to successfully screen all of them. But the startups must grow...
Having seen/participated in it firsthand several times, I don't believe priced, institutional A-round technical due diligence would have turned any of this up. It is not realistic to think YC would have.
YC can never say enough that they invest in people, that only the people matter, etc. "Founders, Founders, Founders" is YC's answer to Balmer's "Developers, Developers, Developers".
That they decided to fund bros that simply copy-and-paste others' code (!) and are happy to declare publicly that they "chatgpt'd the licence" (!!) and "can't be bothered with legal" (!!!) is... alarming?
One thing that's happening here is that YC believes "sloppy copy-paste is Good, Actually" more than you do. Maybe more than is polite to say in public. I don't mean to defend PearAI, which seems to be doing dumb and unacceptable things. But in YC's circles, if you say "I can't be bothered with legal" about something, they would be more likely to say "yeah makes sense" than "!!!".
If YC rejected everyone who was offended by sloppy shortcuts, they would not be YC, and they would have rejected many of their unicorns.
Shortcuts are core to the professional practice of founding startups in the culture of YC. Even the sloppy kind that offend people, like Airbnb's launch-era marketing that violated Craigslist's TOS, or Reddit's founders posting under fake accounts. The message of YC during the program is that you have exactly one job: make your key metric (revenue, users, whatever) grow 5%-10% week-over-week. When founders internalize this, they often do work that contains shortcuts, including shortcuts which might offend people. It is a challenge for some people with a professional or personal aversion to sloppy shortcuts.
(This isn't to say that sloppy is the standard at YC. "Sweat the details until 100 users really love your product" is canonical YC wisdom. Time forces you to be sloppy on everything else. And if you tell a YC partner that you're just buying bot traffic to hit your numbers, they will tell you that is a dumb plan.)
Yes, you're right and I agree with you, but there's a difference between doing borderline things (and dealing with the consequences), and not giving a sh*t one way or the other. There's also a difference between "fake it until you make it" and trying to sell someone else's work as your own, that you didn't make and arguably don't even understand.
But in the end it's possible the only actual difference between a crook and a master of the universe is one got caught and the other didn't.
Yes, but it doesn't matter, because the point is not "what could have been discovered by a proper due diligence", it is: "is YC a good judge of character".
I'm skeptical. I don't think this "vetting" argument is a real thing. And, again: you're talking about a priced A round, where the legal costs alone are into the six figures. For YC? Come on.
Good technical due diligence from reputed organization costs something like $50-100k. Good legal/accounting due diligence costs the same amount. Which is >20% of what YC invests. Even if 20% are committing clear fraud, it is worth it to pay them. Actual numbers are likely lower.
Don, do you honestly think that's a lapse in the process, or are you just joining in to dunk on this random company? You think the YC interview involved licensing questions, and, if it did, that they "dawged" their way through it?
elicksaur: Why would you believe anything this person says after that? Default assumption #1 is any writing they output is an LLM product and insincere. Assumption #2 their actions are taken with little thought or intentionality.
JohnFen: ... This one line tells me that's an outfit that should be avoided entirely. It's either unfathomable incompetence, or a strong aversion to doing things properly. Either way, it says nothing good.
JumpCrisscross: ... The move that dials the dumbassery to eleven is using it as a defence. On Twitter. Like, Exhibit A for any lawsuit that company is ever in will be this tweet: it demonstrates a proud disrespect for law and contracts. That’s high-proof mens rea if I’ve ever seen any.
Alex Cohen
@anothercohen
It’s not just the actual legal issues but generally the dismissiveness and sloppiness towards real concerns but I guess good on you all for making the appropriate changes
More seriously than my joke about how they should have screened out companies whose names were anagrams of "Rape".
I personally think they shouldn't fund bullshitters, or sociopaths either, but if their spreadsheets tell them that startups run by bullshitters and sociopaths make them more money, then who am I to tell them how to invest?
If sociopathic behavior is worthy of investment, then maybe aspiring YC applicants could pre-emptively impress YC investors and signal their political alignment by sending death threats to the appropriate people, then demonstrating what flowery insincere non-apology apologies they can write, an extremely valuable skill in the industry!
(Extra credit for tweeting said non-apology apology as a garishly animated video with kinetic typography in Comic Sans!)
The "that's it" is the problem here. The lack of due diligence on YC's part caused a PR disaster and ideally that's something they would want to avoid.
YC's way of operating is globally optimal. The cost (in money and time) of adequately vetting every company they've ever invested in would dwarf the cost of this little brouhaha.
Even in later rounds due diligence skews non-technical. E.g. for Series A it mostly takes the form of "What licenses do your OSS dependencies use?", and (for B2B SaaS) "We want to talk to a half-dozen of your customers, preferably of different sizes and from different industries, and ideally one that's renewed".
YC cannot do a ton of due diligence. Their strategy is to back many companies with small amounts of money, basically in the hope that a few companies in the batch end up as unicorns. This means they want to select founders capable of getting those outcomes, which will also select many liars/psychopaths due to the need for variance/risk taking behaviors in these founders.
Now is there a problem where YC and many other VCs basically advise founders to commit fraud and lie to customers/stakeholders? Yes but that has nothing to do with YC admissions strategy. I’ve seen many VCs (including YC) advocate for lying and unethical behavior by their founders. It’s a big problem in the startup industry, and often the biggest brunt of this is taken by unsuspecting employees. One reason I would never advise someone to join a startup is the massive prevalence of unethical and dishonest founders.
Subtle touch here in linking repeatedly to Continue and not Pear. Really nice implicit message on what Garry's final view of the situation was after getting more information.
The other day I was browsing the two most recent YC batches. There were so many times that I stopped in awe and thought: "WOW.. I cannot believe they funded that". But each time I would think, OK this looks like a terrible idea, but they have to know something that I don't, and I'm just being cynical.
This lack of due diligence makes me think that I may have been wrong, and they are really just throwing money at everything with AI in the pitch.
However, I do salute him for the honesty, and for apologizing.
You do know that Garry banned a bunch of people who criticised him over this.
And that when told about PearAI violating the terms of the license said to the effect "who cares it's open source" as though none of this actually matters and it's just a bunch of nerds over-reacting.
It's arguably worse than what PearAI did in the first place.
I was one of the people Garry blocked on Twitter and after this article was published, I was unblocked. So to be fair, it does seem like Garry has taken steps to reverse that.
I had the same reaction. I'm usually quite cynical about these things and was ready to scoff at it, but I thought that was about the most you could really accomplish in an apology.
The key to me was that it wasn't focused on how sorry YC is, it focused on how great of a team Continue is. Far too many apology posts are just another way to get attention, so it was nice to see that attention directed at the party receiving the apology.
Ideally it would have a section on next steps and how YC will prevent such events in the future, but definitely preferable over a corporate nonapology.
This is great. But as I said in another comment, you guys don’t owe us anything, we’re not YC shareholders.
But YC is so prevalent in the hacker community that is kinda associated with Open Source, is like we feel entitled to ask for explanations when in reality it’s just a private business. It’s an interesting phenomenon.
I think it’d be great if you could keep transparency in order to keep encouraging founders to apply to YC, but we have to learn that’s just an option.
But we’re not YC shareholders, they don’t owe us anything. I understand the point, it’d be nice to read how they might prevent it, but it’d be completely informative.
Of course they don’t owe us anything. But when you back something that ends up being a big problem people generally won’t trust your judgement until you explain the how and the why. You are perfectly at liberty to not do that, but then you get to deal with the consequences of that.
And now all we are left with is two random guys who have built nothing, have no novel idea and have given the middle finger to the open source community.
The thing about doing something like what PearAI did is that worst case, they get flamed, they apologize and make changes, but overall don't lose much. They still have the YC label, the money, and free publicity. In a few months nobody will care, so overall their decisions were a net benefit.
Has any startup founder ever really suffered due to bad publicity? Short of extreme cases like Theranos, worst case scenario is they get a golden parachute, enjoy a few months/years "soul searching" then emerge with another startup. However most of the time nothing really happens.
People only came after PearAI because their founders' arrogance was particularly egregious. A bit of preemptive covering their tracks and nobody would have done anything.
I agree with you, but what do you think should be done instead? What they did was misleading and dishonest, but it wasn't illegal. Should they be expelled from YC because of it? Maybe, maybe not.
I feel like endless persecution for "bad" behavior, part of the current cancel culture we're living in, is not healthy for society. People can make mistakes, and as long as they acknowledge and make an effort to correct them, they should be allowed to move on with their lives.
Well that's the thing, they only owned up to their mistakes because they were criticized. However what they did to any objective observer was a net benefit for them in the end, so it overall incentivized misleading and dishonest behavior as long as you can get away with it.
The only things standing between where we are and a low-trust kleptocracy are upholding standards of behavior, either through encouragement of good behavior or punishment of bad behavior.
Why shouldn't YCombinator just drop PearAI from their program? I mean they literally stole another YC startup's work wholesale and effectively defrauded YC investors. I don't know much about startup land but it seems there's an absurd amount of forgiveness given to a company that is clearly fraudulent.
Who cares whether or not they received the standard amount of due diligence/vetting? The only reason a system like that can work is if participants act in good faith, and this company obviously didn't.
edit: Like I said, I'm not exactly knowledgeable about the world of tech startups. If i've learned anything though, it's that the money being given to obvious scam artists being excused as "vetting batch investments doesn't scale" has made me even more depressed and cynical about tech startups than I previously thought was possible.
> I mean they literally stole another YC startup's work wholesale and effectively defrauded YC investors.
Didn't YC know it was a fork of one of their existing investments? If they knew then it is bad, if they didnt know then it is bad. If they didnt know and continue to fund this startup then they are stupid.
> The only reason a system like that can work is if participants act in good faith
If you are a professional investor you need a better bullshit detector. If you fail any time someone acts in bad faith, it is not the game for you.
The investment world is full of functional sociopaths. You get used to it I guess. YC's bullshit detector would be blaring nonstop if that was enough to tank a deal.
Isn't this a thing that blew up like a week ago? After they were accepted into the program? If that's the case, what does this have to do with "vetting"?
I'm not sure I understand your confusion. Yes, any vetting that occurred would have occurred in the past. Clearly there wasn't as much vetting as some other comments i've seen might have hoped. Nevertheless, a system which requires minimal vetting (as suggested by others) only works if participants aren't literally fraudulent.
I'm just repeating myself though. That's all in my original comment.
YC funds startups based on their teams and ideas, and in some cases, even without the latter. Building a code editor is not a requirement to get accepted.
It's very possible that Pear AI even mentioned that they're a fork in their application, just like they mentioned it on their description on GitHub; you could say that they were being dumb by generating a license with ChatGPT, but at worst that's a stupid mistake, not fraud.
I can promise you that after all of this outrage, they're going to be much more careful about everything they do.
To respond to your question directly though, yes it does matter; any accelerator that accepts hundreds of companies every year based on a 10min interview is gonna get some bad ones, but rescinding the offer to them is just really bad form if they didn't commit actual fraud.
Why should they drop them, though? The damage is done, the money is spent, and they can just as well wait it out now, to see if anything comes from it anyway. In the worst case, it is a failed investment, and they will have plenty of those, and the reason doesn't actually matter, except in learning from it for the future.
There definitely are things to get depressed about, I just don't think this is one of them.
Was doing a bit of searching to get context on this story and found an unrelated but interesting tangent... there's another unrelated startup named pear.ai that's been around for years.
It's in a different domain, but the name is basically identical. Are people just... not doing any due diligence around company names any more? At all?
> Are people just... not doing any due diligence around company names any more? At all?
Well, there was a famous tweet/post/("X"?), answering to the claims of illegal relicensing, reading, "dawg i chatgpt'd the license (…) we busy building rn can't be bothered with legal" – I guess, the answer may be indeed "no"…
It’s a trend. There was a wave of companies with unique and easily pronounceable names, then it was popular to drop a letter and add a “ly” suffix, later a phase of my/get/lets prefix. Etc.
It’s shaped by how we build and use digital products. E.g. domain names were once super relevant, today less so.
Perhaps in this case they don’t care; they’ll either survive and become the dominant pear, or they’ll get eaten.
I see similar name overlap criticism by people in every other HN thread. Are you of the opinion that once somebody names their company something, that name is forever unusable for a similar or different company ever again? I’ve seen both kinds of examples being criticized, even for acronyms! Mind boggling.
Apparently YC has over a dozen active partners. They don't coordinate tightly. They compete against each other for investments and often overlap verticals.
That's why you see 2, 4, or more redundant investments in the same space from YC. It's a mess but not uncommon.
Open source has been infinitely more valuable and important to humanity than the latest LLM or AI trend will ever be. Without it Linux or Apple would simply not exist. And every startup would be solely dependent on Microsoft for their future. It would've set back software decades and seriously harmed the take up of the internet.
And all of it hinges on everyone agreeing to play by the same rules which are codified in the licenses. And acting like it's no big deal that can be safely ignored is to frankly spit in the face of all of the selfless developers who contributed their code for no financial benefit over the many decades.
> In 2024, Tan attracted criticism for a profane tweet wishing death on seven of the 11 members of the San Francisco Board of Supervisors. In a later apology, he said he was referencing a rap track.
I sometimes think private individuals in America are held to much higher standard than public representatives. Somehow, it is like "all things considered" my party did the right thing under the circumstances but that "all things considered" leniency is not shown to private individuals.
Counterpoint: PearAI was launched as a trivial copy of another product and framed by its creators as the greatest thing since sliced bread.
It's obvious that these people are less interested in making something useful than they are in making something that will generate enough hype to get another round of funding.
These people of PearAI made a series of mistakes and felt the burn of the community. Give them a chance to learn from it, you might be pleasantly surprised. They’re people, and most people learn from mistakes.
I’m assuming it was all done in good faith, for now at least.
"These people acted wholly incompetent, proceeded to act clownishly in public when people asked questions and then still ended up with a bag of money and a product that is largely not their own. Let's give them another chance."
Much of the criticism comes with a tinge of envy. "How did those guys get funding and not me?"
Envy is insidious. Focusing on how other people have unfair advantages eats away at your principles, motivation, creativity, and presence of mind to capture the opportunities available to you.
As a founder myself, I appreciate the fact that it's so easy (for some people) to raise money. It means that the competition is softer than it seems.
VSCode is built on open source of course, but the the OSS version is "Code - OSS". When Microsoft builds it and releases it, it becomes VSCode with the Visual Studio trademark and what not.
PearAI's Code fork is using the real VSCode marketplace which has strict "This has to be used with Visual Studio products" (well, and some other MS / GitHub bits), so they can't use that. If you look at other VSCode-adjacent editors, they all use open-vsix.org instead.
They also use extensions that are licensed in the same way:
https://trypear.ai/blog/wsl-setup
They have instructions on setting up the WSL extension...which has a "This can only be used in Visual Studio Code" License too, so it can't be used in their PearAI fork.
You can see some examples of the terms of use / LICENSEs here:
https://cdn.vsassets.io/v/M190_20210811.1/_content/Microsoft...
https://marketplace.visualstudio.com/items/ms-vscode-remote....
It just shows a complete lack of regard for licensing...