Y Combinator founder and master essayist Paul Graham is an indispensable source of wisdom for startups whether they read his advice online or soak it in first-hand by attending YC. Recently, however, Graham felt that many misunderstood what exactly goes on at the unique entrepreneurial breeding ground, so he "wrote something explaining that in detail," as he puts it. And by "in detail," he means, "in the form of a massive, 8,000-word dissertation." Here are some of the highlights from what he had to say about Y Combinator.

One of the more interesting areas Graham covers in his essay has to do with the series of dinners which take place over the course of Y Combinator. At these meetings, startups are able to mingle with industry luminaries and founders of successful companies in a relaxed, off-the-record atmosphere.

"Eventually we may hit some kind of limit on the number of people we can advise, but we haven't hit it yet."
- Paul Graham
"I didn't consciously realize how much speakers at more public events censored themselves till I was able to compare the same people speaking off the record at YC dinners and on the record at Startup School," writes Graham. "YC dinner talks are much more useful, because the details people omit in more public talks tend to be the most interesting parts of their stories. About half the interesting things I know about famous startups, I learned at YC dinners.

A longer and equally interesting section (chapter?) of the essay detailed how YC deals with office hours. Throughout the year, it's not just the companies in the current class that meet with the incubator's advisors. With the exception of four weeks of the year, any YC member can schedule office hours at any point.

"Eventually we may hit some kind of limit on the number of people we can advise, but we haven't hit it yet," writes Graham. "And untaken office hour slots show us that, as of now at least, we're never so overloaded that we can't satisfy the startups in the current batch."

Graham continues to outline what happens at Angel Day, Demo Day and other events, as well as the relationships with alumni, foundations and other groups. It's interesting to see the ins and outs of such a successful startup accelerator program. If you're considering applying to YC, reading Graham's essay is a good place to start to get a feel for the program.