The tech industry is focused on growing startups to be unicorns, but there is a huge market for the SMBs of tech products (lets called them microsaas) - smaller tech products that tend to be localized for the communities that they choose to build for. These would look like products that would aim to get to $1-10M in ARR, and would retain a small ish team size of about 10-100 people. In order to cultivate a market for this, there needs to be funding with infrastructure for supporting in the form of community and help with decision making - essentially a YC for microsaas.
When every product is forced to grow to be a unicorn, it ends up putting undaunted pressure on it. Some survive, most don't. While some products are indeed capable of reaching the scale that is proposed for the traditional model of hypergrowth, a ton of products aren't.
Based on the preferences of the teams that are running the product, and the fit of the product for a hypergrowth/hyperscalable system, there ought to be support for an entire segment of market for such microsaas since they still provide a ton of value for their users, and can act as a form of competition for big tech. This also democratizes tech by giving more people the power to build tech businesses with a larger success rate, than the offshoot chance of becoming a billion dollar co.
Of course, a traditional sense of investing for equity would not work as well, because these microsaas businesses would not aim to exit with a large multiple, rather they would aim to be sustainable businesses at the level they reach, with some slow growth. These would be run more on a profit-share model, so shareholders can expect to take a cut of the profit as the company grows. Perhaps, there's a minimum of ARR that the company ought to reach before the profit sharing begins, just so that the company would be able to initially reinvest into it's own growth.
Investing in this can be thought of as a separate asset class from traditional startups - the value prop for LPs would be that this is a more stable asset class with regular income (because of the profit sharing model). Ideally, at the start, this business would require external funding, but at some point, it would be able to fund companies using it's own wallet and therefore grow at it's own pace.
YC, for me, was a biggest investment in myself than in my startup - my startup died but I continue moving forward with the resources and brand name it has afforded me. Therefore, other than just pumping out microsaas businesses, I see this as a short course for anyone who wants to break into tech/product. In a way, it can be a "Tech MBA" program, where students get to experience launching product off the ground, and therefore get experience in PM-ing, designing, engineering.
There is probably a play here as well where with the rise of no-code tools, such microsaas businesses will boom because there isn't much pressure to optimize for scale, more so for good UX and user satisfaction.
At the end of the day, this can lead into a way to fund the rest of the efforts with:
I would consider this mostly an operation heavy business. In order to be able to raise funds for something like that, I feel like I would have needed to first prove that I can execute on such a microsaas model, before people would believe that I can propagate such a model for others by teaching them.
I would probably want to pair with someone who's really interested in building something like this, and it would be ideal if they have previous success in launching product and getting to ~$1-10M ARR, preferably someone who's passionate about education, the tech industry, and is great at no-code tools/building product quickly.