Y Combinator

YC is experiencing a major shift toward hardware and physical technology companies, with hard tech representation growing from 8% to 20% of their portfolio. This trend is driven by AI acceleration enabling faster development, macro factors like SpaceX's success and geopolitical concerns, and the emergence of agentic AI that can automate entire job workflows rather than just point solutions.

A comprehensive guide to improving outbound sales by a YC visiting partner, covering eight key strategies: starting with manual outreach before automation, prioritizing prospect targeting over perfect messaging, crafting compelling value-focused messages, optimizing LinkedIn profiles, analyzing reply rates diagnostically, consistent follow-up, time management, and leveraging customer feedback for messaging improvements.

Mass Magnetics recycles rare earth magnets from electric vehicle motors to produce domestically-made magnets for robotics and defense applications. The company uses a capital-efficient recycling approach that bypasses expensive mining and refining processes, extracting and processing magnets that would otherwise be discarded.

Susan Kare discusses her pioneering work designing icons and fonts for the original Apple Macintosh, sharing design principles focused on simplicity and metaphor, along with advice from influential figures like Paul Rand that shaped her career in digital design.

Chelsea Finn discusses advancements in physical intelligence, highlighting the development of general-purpose robots capable of performing various tasks autonomously. Key techniques include reinforcement learning, efficient data utilization, and the importance of memory in complex task execution.

Ali Haghani discusses CircleBack, an AI note-taking tool designed to capture, organize, and automate meeting content. He shares insights on his hardware setup, unexpected uses of CircleBack, and the evolving landscape of software engineering as AI capabilities grow.

YC Paper Club discusses why robotics remains unsolved despite repeated predictions of breakthrough years, presenting four fundamental challenges (physical modeling, deformable objects, sensorimotor feedback, embodiment drift) and showcasing recent advances in memory-augmented policies, embodied reasoning, sim-to-real learning, and world action models.

Max Hodak, CEO of Science (a retinal prosthesis company), explains that deep tech startup success is determined by infrastructure and iteration speed rather than technical brilliance. He emphasizes that proper systems for purchasing, recruiting, and performance management are as critical as the core technology, and shares specific processes Science uses to scale efficiently.

Philip Johnston, CEO of StarCloud, discusses building data centers in space to address Earth's energy bottleneck for AI. The company launched its first satellite (StarCloud 1) in November 2025 with an Nvidia H100 GPU, and has raised $170 million to deploy a constellation of 88,000 satellites that could provide 20 gigawatts of compute capacity.

Patrick Collison discusses Stripe's founding story, the importance of concrete customer problems, and shares data suggesting it's the best time ever to start a business. He argues that despite AI advancement, there will be many winners rather than centralization, and emphasizes the value of deep learning alongside AI tools.

This YC Paper Club event focused on chip and kernel specialization in AI systems, featuring discussions on multi-GPU kernel optimization, energy-efficient inference, AI-generated kernel code, heterogeneous inference hardware, and GPU-accelerated game engine simulation. Speakers explored how specialization across hardware, software, and algorithms can dramatically improve efficiency and performance across different AI workloads.

Blake Scholl, founder of Boom Aerospace, discusses building the first independently developed supersonic jet by applying software development principles to hardware manufacturing. He argues that startups can compete in regulated industries by building solutions that solve regulatory concerns, and emphasizes that passion, iteration, and vertical integration are key to breakthrough innovation in deep tech.

Boris Cherny, creator of Claude Code, discusses how Anthropic's Opus 5 model represents a major leap in AI capabilities, requiring a fundamental rethinking of how to build AI products. Rather than accumulating complexity, successful builders must regularly delete system prompts and code to "unhobble" the model, allowing it to tackle increasingly complex tasks like rewriting entire codebases and maintaining software automatically.

The speaker argues that API communication is fundamentally broken across the industry, with breaking changes and new features going unnoticed. Since agentic coding tools have proven viable and developers accept external tool access to codebases, API providers should automatically apply changes to customer code rather than just announcing them—similar to how Dependabot works for dependencies.

YC partners discuss what makes startups durable in the AI era, emphasizing that while AI reduces software development costs, founders must focus on harder problems with defensible moats, maintain direct customer contact, and prioritize co-founder relationships for emotional and strategic support. They argue that pure software businesses are no longer durable and that the pace of AI improvements means cost concerns will self-resolve within 6-12 months.

Deepfakes and AI-generated voice clones have made digital fraud increasingly sophisticated and harder to detect, with a recent $25 million wire fraud involving deepfake video call participants exemplifying the problem. The traditional trust signals of seeing faces and hearing voices are no longer reliable, necessitating a fundamental rebuild of the internet's trust layer to verify that humans—not AI—are on the other end of communications.

Alex Lebrun, CEO of Amilabs, discusses his journey building multiple AI startups and explains why world models—AI trained directly on sensory data rather than text—represent the next frontier beyond large language models. He argues that being early in technology requires specific founder strengths, and shares lessons on ambition, fundraising, and the challenge of managing a $1.2 billion seed round.

Eric Landau, co-founder of Encord, discusses his career trajectory from particle physics to quantitative trading to founding a data infrastructure company for AI. He explains how Encord pivoted from general vision AI to focus on Physical AI, which he believes will be a massive market as robotics proliferates across manufacturing, logistics, and autonomous vehicles.

Traditional software for physical-world industries like construction and fleet operations hasn't evolved in 20 years, but AI agents, robots, and wearable-equipped humans now create a new operating system opportunity. These new systems will manage human and robot labor together, capturing end-to-end work data that incumbents lack, while operating in industries that spend 10-100x more on labor than software.

Jay Vineet, CEO of OpenCode, discusses how his open-source coding agent reached 13 million monthly active users and $40M annualized revenue in just 8 months by offering free access to coding agents globally and a cheap subscription tier for real work. He shares how being blocked by Anthropic's Claude Code actually accelerated growth, the company's unique insights into model usage patterns, and his 16-year journey building the same legal entity through multiple failed startups before finding product-market fit.