
Common Misconceptions About Applying to YC - craigcannon
http://themacro.com/articles/2016/09/common-misconceptions-about-applying-to-yc/
======
cperciva
Without knowing how many applications meet each criterion, advertising how
many YC companies meet those criteria is more misleading than helpful. If 95%
of applications are from pre-revenue companies, then the 50/50 split between
acceptees which are with/without revenue would indicate that companies with
revenue are 19x more likely to be accepted; if half of applications are solo-
founder, the fact that only 8.5% of accepted companies have solo founders
indicates that they are at a huge disadvantage.

Frankly I expect better than this from YC. You guys have the data, and don't
need to be actively deceptive.

~~~
craigcannon
Thanks for the feedback. With this post I was hoping to clarify misconceptions
that might be used as reasons not to apply. I tried to avoid doing an analysis
that could be interpreted as a playbook for getting into YC because it would
result in the same issue: "If I'm not like X I shouldn't do YC."

Anyway, thanks for the feedback and it's cool to know there's interest around
YC data.

~~~
sidlls
Counterpoint: if the data strongly suggest a set of profiles are far more
likely to be accepted it is perfectly rational to evaluate one's own profile
first against that information in order to assess the effort required to
overcome differences and evaluate the risk.

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jknoepfler
The post is biz-dev, not friendly advice.

Look, it benefits YC if you apply. They are trying to reduce the probability
that you don't apply. It takes a lot of time and effort from you to put
together a high quality pitch and very little for them to evaluate it. They
lose nothing turning you down. They lose a lot if you are successful but
didn't bother to apply.

The numbers are kind of a crock of shit for reasons others have articulated in
this thread. YC is a business, this is a press release. Don't be shocked that
it's transparent biz-dev bullshit. (But do be offended, and do let it reduce
the probability that you do business with YC, because if they can't treat you
like an intelligent customer, they're probably peddling snake oil.)

Edit: I'm not trying to discourage startups from seeking funding. I just hate
pre-21st-century marketing hype. Developers live in a post-Cluetrain-manifesto
universe, we expect intelligence, authenticity, and depth. Our currency is
trust, you build trust by being correct, thorough, and sincere. The blog post
was correct but shallow and insincere. That loses trust; lost trust means lost
business.

~~~
Iv
After reading it, I totally disagree. They provide numbers, they assume the
reader is intelligent and hope they will learn new things and unlearn wrong
assumptions.

Yes, their interest is in more people applying, but I don't see them being
misleading. For me, they are actually really assuming intelligence from their
readers. They don't say "We love foreign companies! Apply if you are
foreigner!" They say "29% [of W16] were from outside the US". Which I read as
"we are pretty US-centric but you still have a chance".

They don't say "Apply even if you are solo!" They say that some solo project
were funded but that they are a small minority and that they do not recommend
this path.

Of course this is self-interested, but I fail to see where it is dishonest.

~~~
venkynarayanan
YC encourages founders to be concise and get to the point, so if they wanted
to say "we are pretty US-centric but you still have a chance", they could have
and should have just said in plain language.

> They provide numbers, they assume the reader is intelligent and hope they
> will learn new things and unlearn wrong assumptions.

This exactly is the issue people here are intelligent and that is why they can
see the glaring gaps in the way the data is presented.

I think people are little pissed because the article chose to go the data
route and dint provide the complete information for people to infer from.

~~~
Iv
You seem to complain that they did not dumb it down enough and that did dumb
it down too much.

They provided a number, explaining what this number was. Assuming the reader
is actually educated in statistics 101, that is not misleading at all.

Yes, they could publish all their data, but you also said you want concision.
You can't have it both ways!

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w1ntermute
> Misconception: I need to raise a seed round before I apply to YC.

> S16: False. 14.2% of accepted companies weren’t even incorporated when they
> applied.

This didn't actually address the misconception - it sidestepped it. I would
love to see data on what percent of YC companies raised a seed round prior to
being accepted (or had a cofounder who had raised a round for a prior
company), and how that's changed over time.

~~~
craigcannon
Sure. I'll update this post/thread once I pull together more seed info.

~~~
dsacco
While you're at it, could you update with:

1\. the respective percentages of companies that _applied_ with and without
prior seed funding, and

2\. the respective percentages that were accepted from applicants with seed
funding and applicants without seed funding.

As has been noted elsewhere in this thread, I think applicant vs. incumbent
numbers would be a more honest reflection of the data if you want to dispel
these myths.

------
wasd
I found these statistics to be very helpful.

I'll be honest, I have my own misconceptions about YC and it's put me at an
impasse of wanting to apply.

1.) From what you read, it seems like everyone has a positive experience. At
least in my network, that doesn't seem to be true. I'm not applying the logic
that it sucked for X, therefore it must suck for everyone. I just want to know
who YC works best for and who it doesn't. After all, the old adage goes, if
you're selling to everyone, you're selling to no one.

2.) Following up on that point, I thought very few enterprise startups did YC
and that YC would be weak in that category. From the stats, it seems like a
majority of startups were enterprise focused! But, the standard YC terms kinda
suck for enterprise startups. If your ACV is +$100k, why raise $120k for 7%?

3.) When is the right time to apply? Taking some thinking from pg, you should
make 100% focus your customers and product. If I needed to raise $ now and
wasn't accepted into YC, I would just go try raise money at that moment. Seems
odd to hold out and keep trying.

Once again, I think most of my points are misunderstandings about how YC
works. I don't think this should help reflect anyone else's decision to apply.
I think it's very likely that I will apply to YC. I just wanted to get some of
my thoughts out.

~~~
yurisagalov
> 2.) Following up on that point, I thought very few enterprise startups did
> YC and that YC would be weak in that category. From the stats, it seems like
> a majority of startups were enterprise focused! But, the standard YC terms
> kinda suck for enterprise startups. If your ACV is +$100k, why raise $120k
> for 7%?

I believe the "enterprise" number in the article includes B2B startups, not
just enterprise.

That being said, it's a pretty common misconception that YC is about the
money. It generally isn't! Money might be the smallest part you get for that
7%, and certainly is the most short lived, which is why in many cases even
companies that are already generating revenue find it valuable to apply. This
page covers a lot of the benefits (beyond money):
[https://www.ycombinator.com/why](https://www.ycombinator.com/why)

~~~
craigcannon
Yuri is right. The enterprise number contains B2B. I'll update the post.

------
harperlee
> MessageBird was making $20M a year and profitable prior to YC.

Did they get the standard valuation deal (7% equity per 120 K$)?

------
mey
Even though YC may be a good fit for me, I won't apply to YC because I can't
afford (or don't want to) to uproot my life to go to SF or NYC for the
duration. I expect this has a lot over overlap with the average age of
applicant (or accepted participants.)

~~~
enra
YC will invest in your company, and part of that money you should be able to
use to reasonably live in the area.

~~~
sharemywin
Not if you have a family.

------
jondubois
Everything listed there makes me more pessimistic about my own chances.

Only 30% of founders are from outside the US, only 14% aren't incorporated,
50% had no revenue, only 8.5% are solo founders, 54.7% were recommended by YC
alumni...

So basically the odds of being accepted if you fit into ALL those buckets are
probably very very slim. I don't see how fitting into all those buckets make
your company unworthy of investment.

It's good to know this though then you can mess with your startup to make it
fit into high-probability buckets. I don't think it would improve the startup,
but it would certainly improve your chances of getting into an accelerator.

~~~
sharemywin
If you look at it that way the stereotypical startup that's:

-US based

-Incorporated

-Recommended

-with Revenue

\- 2 Founders

has only a .71x.85.8x50x46.3x61.3 ~ 8% chance of getting in.

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danielvf
The biggest surprise for me was this:

"Misconception: YC doesn’t accept companies without revenue. S16: 50% were not
making money when they applied."

Which means 50% were already making money when accepted. Given that I'm
guessing way less than 50% of applications are making money, this would seen
to be a big advantage.

Of course, I could be wrong on that too. :)

~~~
aepstein
Ultimately what you want to do is de-risk the potential investment by showing
that you have significant traction, and having actual paying customers is a
great way to do that.

~~~
danielvf
Absolutely. It's a great sign.

------
koolba
> Misconception: If I applied YC and got rejected, there’s no point in
> applying again.

> S16: 45% were rejected at least once before. Of those previously rejected,
> the average number of rejections before being accepted was 2.

What's the most rejections for someone that _was_ accepted and most rejections
for someone that was not?

~~~
craigcannon
That's actually a pretty neat stat. Most rejections for someone that was
accepted in S16 was 7.

~~~
duncanawoods
I'd like to hear that story!

~~~
koolba
" _Well we can all agree you 're persistent ..._"

------
goeric
Adding a thought here. It's easy to find a reason not to apply. But 100% of
the companies accepted into YC applied. Don't let any stat deter you, you have
to start somewhere.

~~~
cperciva
_100% of the companies accepted into YC applied_

Is this true? I know companies have been accepted which didn't apply before
the deadline, and IIRC one of the early YC companies got in basically because
they bumped into one of the principals and were told "you should be part of
YC".

I wouldn't be surprised if there have been a few companies which due to
unusual circumstances got into YC without submitting a formal application.

~~~
thaumasiotes
>> 100% of the companies accepted into YC applied

> Is this true?

Depending on how you want to think about it, you can trivially falsify this by
looking at ImagineK12.

~~~
dbnoch
codecombat might fit this criteria too.

------
KanyeBest
> S16: 54.7% did not have a recommendation.

This begs the question: How much weight does a recommendation carry?

Or put in another way: Should you network with YC alumni in case you ever want
to apply?

~~~
dsacco
_> >Or put in another way: Should you network with YC alumni in case you ever
want to apply?_

Absolutely, yes. It doesn't mean that you will certainly get in, but having a
professional relationship with one or more influential YC alumni will be very
helpful.

Like almost anywhere else in life, networking is an essential business skill
to have and use.

~~~
mkagenius
not good

~~~
wslh
Why not? Relationships give trust. On the other hand I think if you don't have
any relationship but your business is obviously good I am sure you will be
selected.

------
miiiiiike
How many groups were accepted without having a live product or a prototype
with users?

> Misconception: I did another accelerator so I can’t do YC.

Sam posted back in January that it was actually much harder to get into YC if
you'd done program: [https://blog.ycombinator.com/getting-into-y-
combinator](https://blog.ycombinator.com/getting-into-y-combinator)

Did this change?

------
jaypaulynice
What does YC have to lose by telling people the actual numbers? You created
the misconceptions in the first place. It's also reinforced by the number of
'Common misconceptions' articles...

------
teddyh
I’m wondering how many companies fit _none_ of the listed criteria?

~~~
hkmurakami
Hard to be both making money and not making money. ;)

~~~
mildbow
"revenue positive"

------
wslh
One more question: do you accept services oriented companies? I am confused by
the typical YC mantra about scale and by this response:
[https://news.ycombinator.com/item?id=12275696](https://news.ycombinator.com/item?id=12275696)
. Services companies like consulting are difficult to scale but they can be
interesting.

~~~
snowmaker
We might. Usually service companies have not led to huge businesses, so you'd
need to explain how yours would be the exception.

------
wslh
I think YC wants everyone to apply to get the complete picture/data about the
startup market around the world which nobody currently has and has a lot of
value. Like Google seeing what is happenning around the world with search and
ads, you can leverage the startups you fund with better global information.

------
wj
I'm curious as to overlap in the portfolio. It is my understanding that VC
firms wont typically invest in competing startups but if you see a competitor
in the previous batch does that hurt your chances?

I know you have at least a couple areas where you have had overlap but I
believe they were all at least separated by a year or two.

