Sil­i­con Val­ley’s lat­est startup of­fer­ing: a whole city

San Francisco Chronicle - - BUSINESS REPORT - By Max Chafkin

Y Com­bi­na­tor, the startup ac­cel­er­a­tor and in­vest­ment firm that helped produce Airbnb, Drop­box and In­stacart, is em­bark­ing on a project ar­guably more am­bi­tious than any com­pany.

“We want to build cities,” Y Com­bi­na­tor part­ner Adora Che­ung and Pres­i­dent Sam Alt­man wrote in an an­nounce­ment Mon­day. YC Re­search, Y Com­bi­na­tor’s non­profit arm, plans to so­licit pro­pos­als for re­search into con­struc­tion meth­ods, power sources, driver­less cars, even no­tions of zon­ing and prop­erty rights. Among other things, the project aims to de­velop ways to re­duce hous­ing ex­penses by 90 per­cent and to de­velop a city code of laws sim­ple enough to fit on 100 pages of text. Even­tu­ally the plan is to produce a pro­to­type city. “We’re not try­ing to build a utopia for techies,” says Che­ung, the project’s direc­tor and the for­mer CEO of failed house­clean­ing startup Home­joy. “This is a city for hu­mans.”

Ini­tial ap­pli­ca­tions are due July 30. Che­ung says she’ll start hir­ing re­searchers this year and is al­ready think­ing about pos­si­ble lo­ca­tions. If all goes well, the project would be a show­case for new ur­ban pol­icy ideas — and for the ex­pand­ing am­bi­tions of Y Com­bi­na­tor, which was dis­missed as un­se­ri­ous by ri­val ven­ture firms when it was founded in 2005. Early on, YC, as it’s known in Sil­i­con Val­ley, was best known for mak­ing in­vest­ments as low as $6,000, so small that its port­fo­lio companies were told to aim for “ra­men prof­itabil­ity,” or to gen­er­ate enough profit so that the founders could af­ford in­stant ra­men.

YC has since seeded more than 1,000 star­tups and today com­petes in later-stage deals

with the likes of Se­quoia Cap­i­tal and An­dreessen Horowitz through a $700 mil­lion ven­ture fund man­aged by for­mer Twit­ter Chief Op­er­at­ing Of­fi­cer Ali Rowghani. Alt­man formed YC Re­search last year with a $10 mil­lion per­sonal do­na­tion and a con­tention that “re­search in­sti­tu­tions can be bet­ter than they are today.” He now says the lab will even­tu­ally have an an­nual bud­get of $100 mil­lion. “The cen­tral theme is to work on things that we need for the suc­cess­ful evo­lu­tion of hu­man­ity,” says Alt­man.

In De­cem­ber, Alt­man and Elon Musk, the Tesla and SpaceX CEO, an­nounced the for­ma­tion of OpenAI, a re­search ef­fort aimed at en­sur­ing that ad­vances in ar­ti­fi­cial in­tel­li­gence don’t lead to killer robots that de­stroy hu­man civ­i­liza­tion. (Musk has sug­gested that ar­ti­fi­cial in­tel­li­gence could be “more dan­ger­ous than nukes.”) The fol­low­ing month, Alt­man an­nounced a long-term study into “ba­sic in­come,” the con­cept of giv­ing cit­i­zens a cash al­lowance to spend as they wish. (A pi­lot pro­gram is now in the works in Oak­land.) In May, Alt­man and com­puter sci­en­tist Alan Kay formed the Hu­man Ad­vance­ment Re­search Com­mu­nity, a re­search lab fo­cused on ed­u­ca­tion, among other things.

The city project in­serts YC into a long-run­ning de­bate over hous­ing af­ford­abil­ity. For years, ac­tivists in San Fran­cisco have blamed tech star­tups — es­pe­cially Airbnb, Y Com­bi­na­tor’s most valu­able port­fo­lio com­pany — for record-set­ting rents and home prices.

Alt­man de­nies that YC’s new re­search ef­forts rep­re­sent a re­sponse to the back­lash against tech in­vestors, char­ac­ter­iz­ing them as an an ef­fort to ap­ply the firm’s in­no­va­tion model to so­ci­ety’s most in­tractable prob­lems. “I be­lieve that we should view it as a ba­sic hu­man right to have enough money to af­ford food and shel­ter,” says Alt­man, re­fer­ring to the ba­sic in­come study. “It’s an idea that’s makes sense to most chil­dren.”

“We’re not try­ing to build a utopia for techies. This is a city for hu­mans.” Adora Che­ung, Y Com­bi­na­tor

Sean Gallup / Getty Im­ages

Sam Alt­man, pres­i­dent of Y Com­bi­na­tor, says they’re work­ing “for the suc­cess­ful evo­lu­tion of hu­man­ity.”

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