It's a great idea, but I doubt it'll scale. That doesn't mean I don't wish them the best, and really hope to be wrong. But they face an uphill battle to make it as a startup-startup.<p>If it works there'll be a bunch of competitors that will pop up. Sure a bunch of them will just cargo-cult and not understand <i>why</i> they're supposed to do things a certain way, but plenty of them will understand.<p>The other problem is that these guys could make their own product and once they do that, they're probably out of the "helping other people create products" business.<p>Finally if competitors don't spring up and they do somehow manage to capture enough mindshare to keep people beating a path to their door it's going to be tough to keep hiring VP-product kinds of guys and employing them and not having them get poached.<p>It's possible to do this of course, just look at Bill Gross' Idealab: <a href="http://www.idealab.com/" rel="nofollow">http://www.idealab.com/</a><p>If you compare the track records of Idealab and YC, I suspect that YC is coming out ahead at least in terms of financials. Idealab might have happier employees versus the difficult grind that founders face and that's not necessarily good or bad, just different. But I really do suspect that YC is a better model if you're in it for the returns.<p><a href="http://www.idealab.com/our_companies/show/all" rel="nofollow">http://www.idealab.com/our_companies/show/all</a><p><a href="http://yclist.com/" rel="nofollow">http://yclist.com/</a><p>I suspect that while difficult they could make something like Idealab work for hardware, but I have no idea how they'd make something like YC work for hardware. But I think you have to if you want to make a real business out of it, or else just making your own product will be way, way more profitable than continuously doing it for other people.