YC: Stop Comparing Your Startup Growth to Cursor

How YC Partners See Founder Comparison Anxiety

Dalton Caldwell and Michael Seibel from Y Combinator tackle the founder psychology epidemic: comparing yourself to Cursor’s growth and despairing. Their message: understand your actual comparables, recognize we’re in an early phase where nothing has firmed up, and don’t psych yourself out with irrelevant benchmarks.

On the wrong comparison: “The number of founders I’ve talked to who basically said ‘we’re not growing as fast as Cursor, so we should pivot’—and when you look, you have the best product in your category. For some reason founders think startups are fungible, like ‘I could make DoorDash or GitLab.’ That’s not been my experience.” The error: treating all startup growth as comparable when categories have completely different dynamics.

On creative accounting: “These days annual recurring revenue is often not annual nor recurring nor revenue. Every aspect of the term is wrong. You see a lot of creative accounting where people are reselling API calls to Anthropic, they’re upside down on it, multiplying numbers by 12 to make an annual number.” The caution: headline growth numbers require serious diligence.

On relative judgment: “You’re going to be judged relative to your direct peers. If you’re doing vertical voice AI, you’ll be judged based on how fast other vertical voice AI companies are growing. Realize who your comparables are and be better than average.” The framing: investors compare within categories, not to the hottest company in tech.

On expecting to be surprised: “I am fully expecting to be surprised. I don’t trust my ability to predict what is enduring and what isn’t. At the time, Stripe and Teespring seemed like equally good startups to me.” The humility: even insiders can’t predict what sticks during phase transitions.

On the positive framing: “Better tools are coming out every day. I’ve seen companies that were two or three years in, did a crazy pivot nine months ago, and it totally worked. With great tools, you should be able to go faster than before. Don’t be discouraged—be inspired.” The action: AI tools are a chance to create more value, not a reason to despair.

6 Insights From Dalton and Michael on Startup Growth

• Compare to your actual peers - You’ll be judged against your direct category comparables, not against Cursor or OpenAI
• ARR often isn’t - “Not annual, nor recurring, nor revenue” - headline growth numbers are often creative accounting (pilots as logos, upside-down API reselling)
• Phase matters - We’re in early mobile/early web apps phase; nothing has firmed up yet, predicting what sticks is the dumbest moment
• Expect to be surprised - Yahoo was declared the winner before Google won; Stripe and Teespring looked equal at the time
• 6x year-over-year is fine - If you’re depressed about “only” 6x growth because of Twitter memes, that’s self-defeating
• Better tools = new opportunity - AI pivots are working for 2-3 year old companies; if you can create more value, get back in the game

What This Means for Early-Stage Founders

Dalton and Michael offer the antidote to Twitter-induced founder depression: the comparisons that matter are within your category, not to the hottest company in tech. The growth rates are real for some companies, but the creative accounting is also real. And crucially, we’re in an early phase where predicting what sticks is essentially impossible—even for insiders. The right response isn’t despair; it’s recognizing that better tools mean more opportunity, not more pressure.