That's exactly it. Revenue. I've heard PG say in numerous interviews that he doesn't want to incubate small companies. He said he wants "the next big thing". Has he changed his mind?
Revenue growth is better than active user growth, but growth is the high order bit.
In other words, growing revenue 10% a week is better than growing active users 10% per week. But for a startup (in the startup=growth sense), 10% growth in active users per week and no revenue is much better than being ramen profitable and growing revenues at 2% per week.
PG has always been in favor of "ramen profitability." I've never heard him disparage revenue or think having it is indicative of being a small company.
Perhaps the average group going into YC has shifted in their goals. I believe there's a general trend towards focusing more on small-risk small-reward startups, I assume this trend is trickling into SV as well.
