
How I Got Kicked Out of Y Combinator and Then Raised $1.5m for My Startup - eoghan
http://joncrawford.com/how-i-got-kicked-out-of-y-combinator-and-rais
======
pg
Every batch there are some groups that fall apart between when we agree to
fund them and when YC starts. Sometimes we tell them not to worry about it and
do YC anyway, and sometimes we tell them they should take some time to repair
the damage and reapply for the next cycle. It depends on how bad the breakage
is. If a team of 3 loses 1 person, that's no problem. Whereas if a team of 3
loses 2 people, that's bad.

In this case, the breakage was not only on the bad end of the spectrum, but we
weren't told about it till the last moment. IIRC Jon told us an hour before he
got on the plane here. That affected our decision more than the breakage
itself. At the scale we operate on, we can't afford to have people around who
aren't upfront with us.

I'm glad Jon got funded though. As he says, I was quite enthusiastic about
what they were working on.

~~~
MortenK
To be fair, the guy had to manage an unscheduled move from kansas to sf,
including family in one week. At the same time he had to figure things out
with the cofounders. In such a short timeframe, isnt it understandable that YC
werent notified earlier?

~~~
DevX101
If I were managing an incubator with 1000 applicants twice a year, and 2/3s of
a founding team decided they didn't want to join the program, I would take
that as a vote of no-confidence from those two members.

In a lot of situations in life, you have imperfect information and you have
make the best judgment call based on what you have. Maybe those 2 guys didn't
go to YC because of family obligations although they'd really love to, but
maybe they just thought the startup team didn't really have legs and was just
a side project.

At that early in the game, the 2 cofounders knew the author better than PG
did. I'd make the same call.

~~~
NewMonarch
FYI, we were all full-time, the business was already profitable and we were
all living off of the income it was generating. The startup clearly had legs
then and still does.

------
Timothee
_In 2010, I got accepted and kicked out of Y Combinator, lost my cofounders,
and raised $1.5M from A-list investors_

Sounds like it was more "our team was accepted even though they had no idea
what I was up to, I subsequently lost my cofounders, and Y Combinator revised
their decision based on that."

I'm surprised that YC accepted "them" after meeting just one of the co-
founders. Also, what is not very clear is why he went by himself to get money
and how he continued the company by himself without his cofounders. Meaning
that it sounds like it's just that they didn't want to move to SF with a week-
notice, not that they gave up completely on the startup...

~~~
NewMonarch
I came to SF the first time by myself because I was the hustler in the group.
I talked to my team members every day. They knew I was in SF talking to
investors and they knew I was interviewing for YC. They just hadn't heard of
it until I was already doing the interview.

As to how I was able to continue, as I explain in the article, they spun off a
t-shirt printing business that we had been running. It was a more predictable
business. Less risky for them. More of a 9-5 thing with a steady income.

To be fair, they still believed in the business. They just didn't want to
tattoo it across their face and sell their first born son like I want to.

~~~
joh6nn
what's your asking price for your first born?

~~~
electromagnetic
That's what I'm wondering, I bet there's good money in child-flipping. You
know buy a 3 month old, get them to the walking+talking phase and boot them
off to someone willing to drop top dollar.

(FYI for the downmodders: that's what's called a sick joke)

~~~
joh6nn
well, thanks for posting that publicly: there goes the idea for my YC '12
entry.

~~~
JacobAldridge
Not at all - ideas are worth nothing, but if you can prove the execution
you're good to go. So own the idea, go forth, and execute some kids better
than anyone else.

~~~
jacques_chester
You'll all be out-marketed by a company run by Amy Chua.

~~~
electromagnetic
Ah, but she only seems to deal with kids beyond the walking-talking phase, so
there's potential for a partnership supplying her with kids for her to
mentally whip into later life therapy.

~~~
jacques_chester
I smell the potential for a vertically integrated megacorp.

That, or a sitcom.

------
scottkrager
Wow really shows how Y Combinator values co-founders...

No co-founder....no soup for you!

To be fair, they did get accepted based on having the whole team.

Do you think you would have been excepted if you applied as just yourself?

~~~
NewMonarch
It's hard to say. To be fair, YC never met the rest of my cofounders. I was
the only one they'd ever spoken with.

\- Jon (The guy who wrote this story. :)

~~~
shasta
)

~~~
NewMonarch
The smiley face/close parenthesis move is completely valid. (Otherwise you get
double lips. :))

~~~
alanfalcon
Actually, then it's time to get all fancy (that's right, I'm talking Reverse-
Smiley! (-: )

But then it's like he's bald.

------
physcab
We use storenvy at grooveshark
(<http://www.storenvy.com/stores/3605-grooveshark> and
<http://store.grooveshark.com/>) and its super awesome. I love the emphasis
they place on community as that is something we value very highly internally
as well. Great work and thanks!

------
alexophile
I was kind of hoping this would be a story of Yuri Milner tracking down the
one that got away.

~~~
rokhayakebe
Can you please explain?

~~~
alexophile
Who downvoted this? That's not cool. Asking for an explanation is always ok.

Anyways, Yuri Milner (with Ron Conway) recently announced a blanket offer to
all YC companies: $150k in no cap convertible debt. The title could have been
to a story where a YC company dropped, presumably forfeiting the offer, only
to be tracked down specifically and offered much more.

[edit: typo]

~~~
marcamillion
Love your name alexophile. I also love the explanation for it in your profile.

------
ztan
I'm curious in how things would have turned out had he not been kicked out of
YC. My guesses are he probably wouldn't have been that much better off. My
analogy for this would be the situation of a Harvard drop out. You've already
accomplished the toughest task - getting ACCEPTED. Whether you graduate or not
seems pretty insignificant since it's so much more unlikely for an average
high school student to be accepted into Harvard, compared to an average
Harvard student finishing the program he was accepted in. Ultimately he was
able to demonstrate his ability to network and raise fund despite not
completing YC. What I don't know is how much did having that YC stamp of
approval (despite being taken away later) helped in those endeavors.

Edit: rephrased my question a bit, still seems awkward...

------
joshu
As my cofounders are no doubt tired of me saying: "Keep your hat on, we could
end up a long way from here."

~~~
bmull
\+ "but please don't wear your hat inside. That's impolite."

------
aepstein
Jon/Storenvy is a case study in refusing to die.

~~~
borism
dunno, imho AirBnB story was more thrilling.

~~~
aepstein
It's not a contest, there can be more than one :)

~~~
borism
well, at least they were as close to death of a company as it gets. Not
getting funded by YC is hardly death, IMHO.

------
dh
Love Jon and Janette and everything they are doing. I remember getting calls
from Jon when all of this happened and so happy to see where he is today.

------
dariusmonsef
Glad I could be a part of this story of boy meets incubator, boy loses
incubator... boy still gets the funding. :)

------
run4yourlives
The article makes it sound that PG and co allowed this guy to pick up and move
to SF only to tell him to suck it the next day.

If that is what happened, they deserve some scorn for playing with a person's
life like that. That's just not on. If, however, they were clear about their
reservations and just wanted to meet the guy again to discuss, it was really
stupid of him to transport himself from his home to a hotel.

Such a cavalier attitude to risk actually might be a very good reason that
this guy should not be running anything, and YC made a sound choice.

Either way, don't know any of the actors in the story and wish them all the
best. Thanks for sharing this rather strange story.

~~~
ghshephard
"Such a cavalier attitude to risk actually might be a very good reason that
this guy should not be running anything"

I read this story very differently. Jon was fearless, took a calculated risk,
and, when the initial outcome didn't role in his favor, just kept plugging in
the face of obstacles - to his success.

If you think that "Flying out to Silicon Valley on a reasonable chance that Y
Combinator was going to fund his startup that already had a community, but
with several months of cash regardless of that funding" is a cavalier attitude
to risk, I would love to think what your thoughts about what some of the
_really_ hair brained things that startups do to become successful.

The sheer _act_ of deciding to create a startup is easily one of the most risk
prone acts one can take - so, ironically, per your logic, anyone who does so
should not be running anything. :-)

I loved the story, loved how he rolled with the punches, and loved his
positive attitude at the end towards everyone. I have almost no doubt that
he's going to deliver great things.

~~~
BalancedThought
It was risky. But, I also believe that there are two key points from the story
that made it easier.

1\. He married a woman who is extremely supportive and dialed in. 2\. He had a
savings that he could fall back on. So, getting kicked out of Y Combinator was
heartbreaking but not soul crushing.

Basically, he had some good protective factors which made it possible for him
to take risks.

Congratulations and best to you and Storenvy.

------
erichurst
You can say all you want about resiliency, but I think it was the ninja-moves
animated gif.

------
Mistone
IMHO - one of the very best HN posts ever. no way for YC to be right about
founders every time but the rejection feels devastating (we got interviewed
then rejected for Winter 2010). But truth is that the vast majority of
startups don't do YC or other incubator programs. Hustle, more than anything
stands out as the factor that turned a rough situation into a success. good
stuff Jon!

------
jeromec
I love this guy's writing style. Great read.

------
jacoblyles
YCombinator has a very narrow niche for the kind of companies they fund. They
reject many companies, not because they aren't good companies, but because
they don't fit the YCombinator style. This isn't a bad thing for YC. Everybody
needs to specialize. And it means there are plenty of good startups out there
that aren't getting funded by PG/Yuri Milner.

------
eoghan
Love this story and can vouch for its authenticity!

------
bootload
_"... Still, a couple hours later, I boarded a plane with my wife, dog, and
all the necessities for the summer stuffed into a suitcase and flew to SFO and
hoped for the best. Seven days isn't nearly enough time to find a proper
housing setup in SF, so we checked into an extended stay hotel where we would
end up living for an entire month.

The next morning, Paul emailed and arranged a meeting with the entire YC team
for us to discuss the future of Storenvy in YC. Since we didn't have a car,
and I didn't have enough time to figure out something better, Janette and I
took a $100 cab ride down to Mountain View. ..."_

Anatomy of determination.

~~~
jacques_chester
Yes, he pretty much burnt the boat on this one.

------
jeffreyk
I couldn't be more proud of Jon, Janette and Storenvy. Serious ass-kickers.

------
boredguy8
Good job.

I'm curious why you list SF as the location, giving how well everything
started out for you even though you were spread out geographically.

------
phatbyte
Amazing storry. I just wished I was one of his co-founders, I would never say
no to that. But I guess this just goes to proof that not everyone has a
startup goal in their minds.

I wish you the best of luck on your project, it is a true inspiring story.
Congrats

------
micahb37
Its important to note that YC isnt "at fault," or "did something wrong." They
did what they thought was best, and that decision drove Jon down a different
path. The end result (at least at this point) is net-net positive for both.
Being in YC as a single founder would have been really hard on Jon, and would
have probably netted a different short-term result, given the learning and
potential shift in direction an accelerator can bring (YC, TS, etc.)

------
marcamillion
This is awesome. One thing about storenvy though, if I were to trust my
business with you guys, I would want to know that there is a future and you
aren't just figuring it out as you go along.

I would say figure out a way to monetize it in the short-term (perhaps
transaction fee on all the sales), that way, your sellers can be confident
that you are a going concern.

Just my $0.02.

~~~
NewMonarch
This is covered. We'll be releasing loads of new stuff involving $$ in the
coming year. But it's still free!

------
wmboy
Great story! And guys, I personally think the discussion should focus more on
"...and Then Raised $1.5m for My Startup". He clearly has no hard feelings for
YC and even said "they did the right thing".

To me the story speaks of the rewards of true hustle. That and making sure
you're family is 100% involved in your start up too, as his wife sure helped
too!

~~~
NewMonarch
Couldn't agree more.

This is about the future! We could sit around and dissect events from the past
all day long, but I'm way more interested in building a team and destroying
the e-commerce space together. If you're a UI designer or Ruby hacker, please
get in touch! :) <http://www.storenvy.com/jobs>

~~~
tm65atcolumbia
An enthusiastic +1 for you. Not only do you possess the open mind to see all
these business decisions as rational as humanly possible (I envy that in a
startup founder ;-)), you also turn that experience towards strengthening your
business in multiple ways. Class act @NewMonarch.

@vocabgenii @tm65

------
KMStraub
The way I see it, Paul was willing to take a huge gamble on this company from
the outset because of a strong gut feeling. Y Combinator didn't have to let
them in and was being incredibly generous, going as far as setting aside their
own rules for this one special case. They went above and beyond the call of
duty. And then, to hear word that they'd have to yet again do things
differently than they are accustomed to for this one company probably just
didn't feel right anymore. I am happy for the writer and I bet he'll be very
successful, but where he went wrong (if my facts are correct) is expecting YC
to allow him to stay in the program because of "protocol." They made the first
decision based on a gut reaction, and they reserved the right to make a second
decision "on gut" as well. Also, to be clear, they didn't kick him out, they
respectfully asked the founder to apply again next quarter. My purpose isn't
to declare a winner. I have a lot of respect for the author and his
perseverance. But I hope he sees just how much he was asking from YC, what an
incredible achievement that was to convince Paul to take the first leap of
faith, and why he probably should have just swallowed his pride and accepted
YC's decision with genuine gratitude.

------
johntmeyer
Awesome insight Jon. Thanks for the honest look back. I never found you
inspirational, but you fake it well, ha.

~~~
johntmeyer
Sorry for the bad sarcasm community. I love Jon and Janette. I met Jon way
back in 2009 and he was hustling with just an idea then. As a fellow Midwest
entrepreneur it's awesome to see him "graduate" from our area and succeed in
the valley.

~~~
sinzone
Imagine how hard could be for foreign entrepreneurs that have to deal with
immigration and visa also.

------
budu3
Wow. Your wife was really supportive.

~~~
NewMonarch
She's amazing.

------
tianimal
Really inspiring story. I can attest you and Janette were experiencing "the
trough of sorrow".

------
micahb37
vision is something Jon is not short on...great post!

------
bmull
Great story. Happy to know you guys

------
luckymurari
The most intriguing point is "Why doesn't Storenvy accept other payment modes
than Paypal??? "

~~~
NewMonarch
[http://www.storenvy.com/help/articles/can-i-use-any-
payment-...](http://www.storenvy.com/help/articles/can-i-use-any-payment-
systems-other-than-paypal)

------
thematt
Why did you have to move to San Francisco? I understand the benefits, but I
thought YC funds companies based outside CA, so was that a condition of the
funding that they made?

~~~
btilly
A startup batch has to all be physically present for the YC period. That is
because they meet in person frequently. So for 3 months you have to live where
they are holding it.

Originally YC alternated between Boston and Silicon Valley. However they have
now changed to always operating out of Silicon Valley. So you have to live
there for that period.

This does not stop companies from moving there for 3 months and then moving
back. As a notable example, Wufoo is based in Florida.

------
kajecounterhack
On another note, storenvy.com is really well-crafted. I just spent an hour
browsing the products on the many stores. The UI is really a job well done.

------
mdoerneman
Awesome story! I am building a startup in a small town in Nebraska (not too
far from KC, MO) so I feel like I can relate to a lot of what you said.

------
knowsnothing613
So are you like a competitor to shopify? It seemed like you'd disrupt their
market with your free shopping stores.

------
JohnMaloney
Great post, Jon. This mix of tenacity/hustle/risk can't be learn. DNA.

After reading this I'm even more excited to be an investor

------
marcamillion
I would love to know what the traffic is like on this article - because this
has just shot through the roof.

------
michaelpinto
Is there a way that I can apply to be kicked out of Y Combinator without being
in Y Combinator?

------
rwebb
Awesome post!

