Nothing changed, it was never a good question. There are many ways to be productive, entrepreneurial, and creative while working "within the system", so the question was intrinsically discriminatory to those who did so.
If someone loses 30 pounds of body fat and you ask them how they did it, would it be considered hacking the system if they told you that they worked out and ate healthy meals while restricting their caloric intake? To me, that's the expected normal way to go about losing weight and for the majority of people is guaranteed to work.
So it is possible to get extraordinary results through the application of discipline to boring, traditional approaches.
Regardless of whether it is or isn't "hacking the system", that answer tells you something about the someone in question. From that, I learn that they are able to exert focused discipline and flex willpower where others might not be able to.
I've flown a kite once in my life, as part of a competition, that I won. My kite flew more than twice as high as the next highest kite. After the competition, people asked how I got my kite so high, and my answer was just that I brought more string than they did. Some might attribute that to dumb luck, but I have a history of winning silly little competitions like this by being prepared.
I lost 40 pounds of body fat in 3 months by not eating carbohydrates, and eating an over 2000 calorie high fat diet. I think that losing 30 lbs of body fat the normal way isn't that extraordinary. I think what I did by hacking the system was more so extraordinary.
You've identified a task that 98% of motivated persons can accomplish. Building a billion dollar company is something that less than 2% of the YC companies have done.
Necessarily? Powerful incumbents can put up artificial barriers, but many times these players can be blindsided by the innovative competition anyway. So is America's economic system, and the full business environment for internet startups inherently caustic to new business ideas such that you have to work outside the system?
And are most YC applicants significantly revolutionary? How many systemic barriers would you expect to hit if you have some insight on how to build the next popular photo sharing app, for example? And if they are applying for YC and answering that question, it's not a safe assumption to make that the founders would have hit up against those barriers yet. A lot of YC founders are barely out of college and just turning their idea into reality.
It doesn't really matter how many of the applicants are revolutionary. But I can see that some of their biggest hits so far don't pay a lot of attention to following existing rules systems. And as pg has said numerous times now, it's the big hits that matter. The rest is noise.
Gmail was pretty revolutionary. Just out of curiosity... were the biggest obstacles more technology/product related or "human" (eg. making it an official Google product)?
I've assumed it means cases like you were faced with some bureaucratic wall that was an impediment to getting things done, and you figured a way around them. It doesn't necessarily imply unethical behavior, though I'm sure if the example someone gave was of illegal or unethical behavior that would be important information for the questioner to consider. Sometimes this sort of practice is called social engineering, knowing how to work the system, or being street smart. It could even refer to starting a grass roots campaign to get a bad law changed. To succeed in business you need to be able to solve difficult non-technical problems as well as technical. Rather than based on logic, the answer may be based on insights into human behavior, loopholes, or just understanding practical matters of dealing with red tape. This question gives the person an opportunity to discuss cases where they did so successfully.
If you can't fill the application form, you're already out
I guess it makes sense, if you can hack (in the traditional meaning of the word) something outside of 'tech' this shows that you understand something about entrepreneurs sometimes having to play with the rules or thinking outside of the box (which does not mean doing something illegal)
I suspect, and I could be wrong here, that the reason YC associated so much value to those questions was that Power Law function which describes the ROI on their companies (so far) indicates that only 1 to 2 out of the 50 startups they fund (if that many) will be the ones worth investing in, the others can be written off.
So, PG and the rest of the crew probably looked at the limited supply of "Hits" that they had, and tried to identify, in their minds, what characteristics they associated with successful founders.
For whatever reason, the ability to overcome obstacles, sometimes "creatively", (aka "hacking the system") was one such characteristic.
They may also have had a few successful startups as well that worked "within the system", but I suspect those made up small percentage of their hits, and therefore would be much harder to predict.
From my limited exposure to very successful founders (Those who exit with an IPO or acquisition of > $1B), they are all mavericks willings to do almost anything to be successful. Many (most?) of them come very close to the line of what a reasonable person would consider generally acceptable , and they all have vast number of detractors, and quite often casualties and lawsuits on their path to success.
Think about the various legal issues associated with AirBNB - the AirBNB founders were funded, in no small measure, based on their unwillingness to let anything get in the way of success, and certainly weren't going to let some status quo/system which said what they were doing was wrong slow them down.
I'm sure it's possible to be a breakout hit, and create a $1B+ company while working within the system, but the large majority of times it's done (80%+), it's done by those who don't completely work within the system - ergo a demonstrated ability to work outside, increases your chance of falling into that 2-4% of very successful companies.
