This is quite the skeptical take, but then again, a few startups ago I saw things that definitely suggested you are right. I often find myself wondering how some startups raise so much money. It’s tempting to think that VCs and many co-founders are playing an insider’s game. But even if so, this doesn’t imply malice or malfeasance. It implies what has always been true: tribes take care of their own in contrast to taking care of “the other”.

Of course, any VC, accelerator, or angel investor who desires success is going to work hard to make their investments identity-blind. But you can’t ignore that a startup’s success is affected by the breadth and depth of the cofounder’s network. Given two startups with equal talent, wouldn’t it be wiser to pick the cofounders who are sons and daughters with deep connections to the rich and powerful rather than the sons and daughters with no network? Objectively this is probably a rare edge-case. But startups are notoriously hard to evaluate objectively — it almost seems like a throw of the dice. This dynamic only strengthens the temptation to make judgments based on identity, as it is an easy and accurate judgment to make — are you one of us?

A large part of YC’s success is that they were able to choose winners based on merit rather than identity, because PG and team’s domain knowledge was “what it takes to be a successful startup.”

Is that the case today, when YC highlights their Alum network as a significant benefit to their startups? Presumably, YC has built a network based on merit rather than identity. But is the network itself strong enough to resist the temptation of relying on easy identity-evaluation rather than on hard merit-identification? Concretely — will two YC companies enter into business with one another due to shared identity rather than on measured merit?

There’s something really fascinating and subtle occurring here: the assumed coupling of merit with identity. Just as a good VC will try to avoid the lazy-thinking of identity-bound evaluation, I’m sure the YC alums strive to evaluate one another without reference to their shared heritage. But the temptation for a YC startup to outsource their decision-making to identity is amplified by the cognitive dissonance of trusting in their own YC-identity-as-merit while being skeptical of the other alums.

The aspiration to evaluate merit rather than identity is great, and is part of what makes America feel special to itself. But seems to me to be quite difficult to live up to that aspiration.