Graham’s tech roots run deep. His mother, he says, was a computer, back when that was a profession for humans: she performed actuarial computations for a bank. His father was a nuclear physicist who worked in research labs in the U.K. Graham himself got involved with computers early on, programming an IBM 1401 using punch cards before getting a PhD in computer science from Harvard.

Graham came into some money when Yahoo bought Viaweb, a company he’d cofounded, in 1998. Graham figured he’d become an investor, but instead became occupied writing a series of essays that became the 2004 book Hackers & Painters: Big Ideas from the Computer Age. When he was asked to give a talk to an undergraduate computing club at Harvard a year later, he talked about how to start a company; any of the students listening to his talk could easily do so, he thought, and helping them would be a great way for him to begin investing.

Y Combinator was meant to be an experiment—an alternative to a summer programming job for students—but within a few weeks Graham realized he was on to something bigger. In addition to Reddit, the first group of startups included TextPayMe, which Amazon bought in 2006. “We were like, ‘Holy shit,’” Graham says. “This wasn’t supposed to be serious.”

The incubator model works because the cost and time needed to develop a viable Web company has fallen so steeply. And for participants, the program offers an intense atmosphere that’s conducive to successful business ideas. “We wanted to be in the company of people who are grinding 24/7 because it gets you to grind,” says Michael Seibel, 29, who is in his second trip through Y Combinator, this time as a cofounder of a video sharing app called Socialcam.

In addition to offering office hours with Graham and other partners, Y Combinator holds weekly group dinners with speakers that have included former vice president Al Gore. The sessions end with a “Demo Day” in which each team gives a two-minute presentation to a crowd filled with journalists, potential investors, and peers.

The median age of participants is in the mid-20s, Graham says. A few are over 40 or as young as age 17. Graham says young founders are better at building products aimed at young users. True, they need advice—but he is there to give it.

His favorite tip? Build something people want. It sounds obvious, but he says failing to fill a need is the top mistake startups make. One way to ensure you’re on the right path, says Graham, is to build something you already want yourself. That way, he says, you’ll have at least one customer. “It’s a damn good piece of advice for founders of any age,” he says, “but essential for young founders.”