One of the most valuable things about YC is the pressure it puts on a startup: focus or perish, excellence or death. I've really seen this bring out the best in people, including myself. I think that reducing the "free" c-note from $150k to $80k will increase the pressure a little bit, that entrepreneurs will rise to the challenge, and that the overall outcomes will actually be better. Accountability closes the feedback loop and results in faster learning.
As for (2), potential investors say a lot of things that just make you feel terrible. The best response is to dig into them and try to figure out if there is any truth in the criticism, make any adjustments you can, and keep pushing ahead.
There is no doubt about the track of record YC has built over the years. I believe that reasoning behind it as I read it sounds not compelling from an entrepreneur's point of view (kind a putting it like we are going to protect you against yourself). From a business point of view I just don't know if there are any matrices supporting their decision. And that's why I don't want to judge since I don't have the background information.
I am just wondering how this move will impact the new type of companies (big picture vs. short gains) & investment climate in the valley:
1. future valuations
2. Early stage rounds
3. product-market fit discoveries & pivots
As for (2), potential investors say a lot of things that just make you feel terrible. The best response is to dig into them and try to figure out if there is any truth in the criticism, make any adjustments you can, and keep pushing ahead.