Just to play smartypants, small teams are the ones that can afford loose deadlines for the gain in versatility. You have to agree that YC's program schedule results in better resource management, is needed, and so, your claim of "never setting deadlines" as a general statement is false. To make it true, you would need to accept applicants off the timetable. (Actually, how much was the YC program schedule influenced by university calendars?)
As a personal statement though, I totally agree. Assuming a startup team or artist isn't starving, not setting deadlines makes total sense. I remember somebody in high school was required to build up a portfolio of artwork during the semester. It's a rather preposterous requirement, because if there is no inspiration, there is no art. Churning out a portfolio of unimpressive drawings is easy, but nothing is genuine. Alas, people who operate off of schedules cannot accommodate the uncertainty. Universities, for example.
Hell, if I owned a school, I'd try to recruit good students whenever they appear, any time of the year. If you can finish a course in one day, great. If it takes you 10 semesters, great, as long as it's worth it.
A deadline helps me to minimize features. "I can't build that and still make the deadline.." and then also, the question: Is this feature so important that the dealine can be moved for it?
That seems sort of backwards to me. If you're implementing only the strictly necessary there's no room for compromise in either direction. You can't ship with less features than are necessary and you wouldn't add more just because you have additional time according to a deadline.
That's effectively like a continuous deadline then: "Always Be Coding".
Deadlines are another form of advance planning, kind of a way to tell yourself to clear your schedule of distractions. I think it applies more to obligations you have trouble with dedicating time toward -- you don't really need to plan to do stuff you want to do :)
I prefer the opposite approach: every time you have a block of time, set a task list of things you want to accomplish in that block, and hold yourself to that.
Problem with deadlines is they tend to back-load a task. If you know you need it done in a week, you might figure it'll take you 3 days to do, and hence start it in 4 days. Of course, things rarely take as long as you expect them to, so you end going over the deadline anyway or stressing yourself out to make it.
With a task list, you'd start that task immediately, and it's done when it's done. If you go over, you have some padding before it's necessary, and you can decide whether to give up on your original task and start the next item, or push through with it and postpone everything else. It's also much less stressful, since things don't get bunched up around the deadlines.
