"What this means is that YC is not looking for sustainable businesses, but homeruns. Which is entirely fair, that's the business they're in."

I think it means more than this - it means if you invest in companies the homeruns will dominate your returns no matter your preferences for it to be otherwise. So there might be no model of systematic investment that makes sense investing in companies with no homerun potential. At least at the risk levels of software startups.