As far as we're concerned, missing a good startup is by definition an error in our process. We may never get our error rate down to zero, but we can try. And it's reasonable to assume we have a lot of room to, considering how early we are.
Having funded 465 startups over 7 years may not sound early, and I suppose it isn't in a relative sense, but it is in an absolute one. Society in general and we in particular are still learning how to predict which startups will succeed.
But surely there are success stories which are outliers/anomalies/red herrings, that you really don't want to try and replicate?
To say that every missed opportunity is a failure is like saying that every CA lottery I didn't buy a ticket for was a mistake. That strategy risks over-fitting to successful fluke's, to people who made bad bets that happened to work out. There is enough loose money floating around today that some people out there are going to make bad bets and succeed.
I don't see why you/YC wouldn't focus on bets where you have an unfair advantage over the market and feel fine passing those up where you don't, even if they have some non-zero probability of success.
Startup success is a reflexive (from social theory) process, not a scientific one. As in economics, successful long-term predictions would, by definition, beat the market. Its impossible for "society in general" to learn how to do that.
Having funded 465 startups over 7 years may not sound early, and I suppose it isn't in a relative sense, but it is in an absolute one. Society in general and we in particular are still learning how to predict which startups will succeed.