
A Successful YC S13 Application - zt
http://blog.zactownsend.com/our-yc-s13-application
======
davidtyleryork
"No online demo yet. It might be awhile before we have a dashboard and mocking
up a fake API for you doesn’t seem worth it."

Honestly my favorite part of the application. It gives the implication that
"you're smart enough to understand that this would be a waste of both our
times"

~~~
mhartl
Agreed. The confidence and maturity it takes to make this kind of statement is
a positive sign, and I'd bet the YC partners interpreted it as such.

------
guynamedloren
Not sure I understanding the 'hacking a system' answer..

> _When I started in Newark, I didn’t have a computer or an email, and City
> Hall didn’t have wireless. So I tracked down one of the wireless networks I
> could find - owned by a bails bondsman close to the court, and negotiated
> with them for their wireless password._

Why did you need the wireless password if you didn't have a computer or email?
Needed wifi for mobile device or something?

~~~
zt
I was working for the city but didn't have a computer or email. Brought my
laptop to work but couldn't do all that much without Internet--couldn't access
the network and no public wifi. Point was I got that through chatting with a
bail bondsman. It's not the greatest hack in the world.

~~~
sillysaurus2
_It 's not the greatest hack in the world._

It's just a tribute.

~~~
namenotrequired
I think it's your comment that's a tribute to a tribute :)

------
jlongster
This is ironically close to a proposal over at
[https://news.ycombinator.com/item?id=6556415](https://news.ycombinator.com/item?id=6556415)
that I just saw the other day. We were complaining that there isn't a
standardized, thought-out API for getting bank data, and someone got motivated
to apply the YC with the idea. Is OP's proposal basically the same thing?

~~~
zt
It's a subset of what we're doing, yes. We've focused on taking internal bank
systems -- information, payments such as ACH, wires, bill pay, other products
most people aren't aware of like virtual card numbers -- and presenting them
as clean, RESTful APIs.

Also see [https://plaid.io/](https://plaid.io/) which is more directly going
after Yodlee.

That's not a reason not to apply / work on it though. It's an ecosystem with a
lot of space for innovation. Or you could come work with us!

~~~
praxeologist
What positions are you hiring for? I'm not a programmer but I would love to
work with you. I've been paying attention to your blog since reading the post
about online-offline businesses. It struck a nerve with me and I was thinking
to contact you about my idea for a marketplace.

The idea kind of crashed and burned right after that because Balanced changed
their merchant agreement regarding "high-risk" and I can't use them. The only
way to make it work seems to be to become a processor too and I don't have the
money/experience for that if it is even a good idea. I'll send you more info
if that is okay.

------
MilesTeg
One thing that leaps out at me from the few successful YC applications I've
read is some of the informal language used. For instance, I would never write
'Most banks suck at technology' If it was still legal when I was in school, my
English teacher would have beaten me with a ruler for writing that.

On the other hand, I can't think of a way to state the point more succinctly.

------
zenonu
"O(100s of billions)"

I see big-O notation as shown in the application all the time, and it's
completely meaningless. People, please do not use it as estimation function,
but rather a bounding function with respect to the size of the input. The
details are a tad more fine grained than that, but Wikipedia is a few clicks
away.

~~~
zodiac
I agree. O(100s of billions) = O(1).

~~~
nawitus
Even more precisely: If a function belongs to O(100s of billions), it also
belongs to O(1).

------
SurfScore
The thing I kept thinking when I was reading this was pedigree, pedigree,
pedigree. Brown grad, University of Chicago, met at Harvard Summer School.
Invested in a YC company already. One works at Stripe. This is quite the
resume for two people.

On the other hand, it kind of worries me, because a lot of the most successful
founders don't have anywhere near the level of accomplishment that is listed
on this application. I think pg mentioned this at the last Demo Day. More and
more "qualified" people are applying to YC now. I don't say this to diminish
the quality of the application, I just wonder if these types of applicants are
pushing out the young hackers that might have made it to an interview a few
years ago.

~~~
pytrin
The common perception is that YC is very big on pedigree (top schools, serial
founders, worked at top companies). They are known for having a prototype
(they liked to call it patterns) of what is the ideal founding team.

500startups for example are willing to take more risks on people and look more
deeply at the product if it has traction and a business model, even the
founding team is unknown / international.

There's a lot of different investment thesis, which all make sense for
different reasons.

~~~
meowface
I think it's often a reasonable assumption for YC to make.

It would be interesting to see a break-down of school + degree for all
successful YC applicants, though. Not sure if that's ever been listed
anywhere.

------
6thSigma
Impressive application. I wonder what percentage of teams get accepted to
interview with YC without a demo.

------
minimax
How did you get in contact with the banks? Neither founder seems to have a
background business development or banking, so I'm curious how you were able
to pitch to them.

~~~
zt
The short answer is that we basically know a ton of people both in financial
technology and in the valley. If people know you, know you're a good person,
and know you're looking for something specific they'll often help you.

Tons of people have been surprised by our success to be honest. We had a talk
with a potential investor recently and we told him who we were working with at
[big bank]. The potential investor was shocked - the gentlemen leading our
project at [big bank] is in charge of a 10-digit-a-year business and is a hard
man to find time with. But one of our lawyers, who is also an investor,
introduced us. They are old friends. Banking innovation / payments /
technology, etc, is a small world.

~~~
throw_way_away
Don't you think that leveraging relationships you may have made via Stripe
alone is going to cause a huge legal fracas?

~~~
zt
Interesting question. The only people I interacted with in a work context
through Stripe was Wells Fargo Merchant Services, a joint company of Wells and
First Data. I've never spoken to one of the people again because it's a
completely different part of the bank than the one I deal with now. One didn't
lead to the other.

------
RyanZAG
Key reasons this was accepted (in my opinion, anyway):

1) Stripe employee.

2) Very clear product. Potential market is huge and has money and is willing
to pay for this service - they already pay banks for it. First successful
product in this market will create huge barriers to competition by essentially
setting the standard in banks. Also very clear descriptions of how/where they
are tackling the problem shows a lot of understanding.

3) Second time founder, already built a successful product - Giftly.

~~~
davidtyleryork
I would like to think that its overwhelmingly due to #2. It's a really
articulate, I-know-what-the-fuck-I'm-talking-about explanation of a huge
problem and market. Rest is icing IMO

~~~
zt
I think #2 is the primary reason. We got an interview, which we didn't accept,
for the Winter 2013 batch. I didn't work at Stripe then. Dan didn't found
Giftly.

------
joelthelion
My question after reading this application is why do you need YC?

YC, at least as it was originally conceived, was designed to help young very
bright hackers with no or very little business knowledge.

You guys are very far from this category. I guess YC is still useful for their
network and the simple fact that being a YC startup will open a lot of doors
for you. But the fact that you were accepted could mean that YC is slowly
drifting away from its original mission.

~~~
gmonaco

        YC is slowly drifting away from its original mission.
    
    

I think that they tend to fund people who they think will have the highest
chance of success. You end up with priorities like:

1\. Previous successes

2\. Company with traction

3\. Employee at Stripe/Google/Apple/etc

4\. Smart MIT/Harvard/Stanford student

5\. Misc. high magnitude achievements

I think what you're seeing might be a higher number of 1-3 applying to YC, not
leaving much room for 4 and 5. The four and fives who do get accepted are
extraordinarily impressive.

~~~
deanly
I agree with you because (afterall) they aren't a charity. They makes money by
investing early in these start-ups, so they need to focus on bringing people
through their program that have a higher chance of success.

------
andrewhillman
The key reasons they got an interview (and accepted).

-The application was concise. -They seem to understand the hurdles ahead, had a plan. -Founders have been friends a VERY long time. This removes a lot of risk since startups die when founders don't get along. -Little bit a domain experience.

~~~
sharkweek
Definitely cracked a smile when I got to the "who do you fear" answer --

I used to work for one of the large banks on a commercial operations team. It
was one of the most bogged down, regulated things I have ever witnessed in my
life.

This product will end up doing extremely well; then I see the regulators and
major financial institutions going "hey wait a minute, these guys are making
too much money, let's fix that"

Best of luck to the team -- I think you're onto something huge, should make
the speed bumps worth it.

------
001sky
Can you guys discuss how far along you were at pitch day and how you
strategized or optimized your time at YC given you had to deal with large
BigCo's? Did this come up at all in the interview, do you have best practices,
etc.

~~~
zt
We certainly were not as far along on demo day as we (or the YC partners!)
would have liked. That's the reality of big enterprise sales. Our customers
have incredibly long procurement and sales cycles. We aimed to get signed LOIs
by demo day and instead we got very serious negotiations.[1]

We spent the summer building the product to support a heavy amount of sales
and business development work. We put together a prototype (we essential built
the platform against something we call "fake financial") where we can use the
terminal and some simple application to show banks and bank customers how easy
it would be with our platform-as-a-service.

[1] Whats important here is that you can't bullshit investors. The proof is in
the pudding. We had to account for where we were with every potential
customer, who we were speaking to at the companies (investors might end up
knowing them!), what terms were discussed, etc.

------
fieldforceapp
That was a good read, congratulations. Would you mind answering how you plan
to work, or will you compete with, private ACH networks like these folks:
[http://www.epaynetwork.com/cms/services/processing/001459.ph...](http://www.epaynetwork.com/cms/services/processing/001459.php)

Good luck!

------
cestep
Thank you for your posts! It's great to see alumni trying to help the next
wave of people with their applications.

------
throw_way_away
Surprised at the success given the potential non-compete shit storm situation
with Stripe.

~~~
zt
Ultimately they're very different businesses. Card payments and banking are
related but not directly. The truth is that all I know from Stripe about the
card networks, card risk, etc, has proven not useful in commercial banking. I
couldn't even use their IP if I wanted to (!) and they know that as well as I
do. If I started a payments processor I'd be in deep trouble. But a different
part of finance, with a different business model...no one seems that worried.

~~~
throw_way_away
Well, congrats on making it and good luck either way!

------
zach
How cool that you met at Harvard SSP, an amazing program that I loved even
though I preferred technical college over an Ivy.

May I ask if you were you roommates or suitemates (or how you met otherwise),
and how you stayed in touch afterwards?

~~~
zt
We were the only two people in the same two classes.

The real answer about staying in touch is the internet -- yay AIM, the best
communication tool of 2003. In reality though we didn't live that far apart in
New Jersey so we could hang out from time-to-time.

------
taariqlewis
Nice work kimerling. Congratulations and keep on cranking. That is all!

------
pla3rhat3r
A lot of people are going to do exactly what I did, "Oh this is cool maybe
it'll work for......wait a tick! These guys have done amazing things! Of
course they were accepted."

Congrats. :)

------
nfoz
Wow that "kudos" thing is really f'ing obnoxious. If you mouseover it then it
increases the global counter. Beware!

------
nawitus
The more I read these the less I want to apply. There's just this "phony"
feeling I get.

~~~
zt
I can't quite tell if you're calling me a phony or yourself one. If you're
call me phony then I'm sorry I come off that way. I have a lot of personal and
professional flaws (far too long to enumerate here) but I don't think a lack
of genuineness is one of them.

If, on the other hand, you're saying you don't want to apply because you feel
phony, well, then, that's hogwash. Impostor syndrome is deep in most YC
founders, in most ambitious people, and in Silicon Valley more generally. If
you have an idea that you're passionate about then you should apply.

~~~
nawitus
Ah sorry, I didn't mean to call you phony.

I guess the feeling I get is that to even bother applying, I need to present a
phony picture of myself; to reflect certain values and use a certain language
to increase my chances. Of course you can say that 'just be yourself', but no
system works perfectly, or necessarily even well..

~~~
nairteashop
I know very little about the YC application process, but if you are confident
that the problem you are tackling is real, and have done your homework, I
don't see why you would need to present a phony picture of yourself. In fact
I'm pretty sure that the YC folks have enough smarts and experience to pick
out phonies.

If you're presenting the phony picture because you don't really have a clear
understanding of the problem, then yeah, you will have bigger issues with your
business outside of getting into YC.

If you've put in the work and still feel like a phony, try to ignore the
feeling - it's probably just the impostor effect.

