
Ask HN: Why aren't you applying to Y Combinator? - dstein
There are far too many one-sided "here's why you should apply to YC" articles on HN.  I'd be interested in hearing why other startups (particularly bootstrapped ones) have chosen not to apply to Y-Combinator.<p>As for me, angel investing (call YC what you will) just has a creepy "bank strategy" feel to it - to make the most amount of money off those who have the least.
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patio11
Never say never, but I won't be applying to YC this time, either. I don't
think my plans for my life or my company coincide with the trajectory their
successes take, and could not in good conscience take their money without
being able to guarantee that I would try my level best to arrive at a positive
outcome for them. For example, I couldn't justify to YC or subsequent angel
investors that I optimize my work habits for QOL rather than for growth, or
that I am happy with 30% ~ 70% YOY growth, or that I prefer living in small
town Japan to living someplace where there are plenty of top-notch engineers
to hire and financiers to woo.

Plus, there is a wide range of probable outcomes where I feel on top of the
world at age thirty and YC would count me in the fail column. (Say, a few
hundred thousand in revenue, organic growth, a schedule close to mine today,
and minimal desire to sell.)

If my plans change, I would probably apply.

~~~
lzw
Not disagreeing with you, but I think it is kind of amazing that a "few
hundred thousand in revenue" would be considered a failure. It is a shame that
it might be in some circles.

Say, $300,000 in revenue, and a %80 operating margin, would mean you're
operating profit is $240,000. IF you're growing at %50 a year, and the company
sells for 50 times earnings, then you've got a business worth $12M.

That's a success in my book!

~~~
il
Unfortunately companies only exit for 50 times earnings in Web 2.0 fantasy
land. In the real world, it's closer to 2 or 3 times EBITDA(not revenue).

If I could build a business to $20K in revenue and flip it for a million I,
and many, many others making a living online, would be a millionaire many
times over.

~~~
utunga
An interesting recent example: [http://flippa.com/auctions/84185/11000month-
Revenue-No--1-In...](http://flippa.com/auctions/84185/11000month-Revenue-No--
1-In-Market-1500-Customers)

A 'lifestyle business' - but fairly "web2 buzzword compatible". And yet,
according to the fairly believable numbers they made than $100K in _profit_ in
their first year (and about that much LTM also) and sold for only $90K after
18 months.

That's a 'multiple' of only 0.9 ;-(

~~~
il
Interesting example, as the creator of that site, dangrossman, posted in this
thread. You can ask him about the sale.

In that case, any smart buyer will instantly see that there is a sharp
downward trend in revenue. Maybe the site is falling in the SERPS, new
competitors have entered the market, or, worse, the target market is becoming
saturated.

This explains the low sale amount.

Dan was smart to sell before revenue declined too much.

------
dotBen
For me at least, here is why I don't think I'll ever be applying to YC

a) I don't need the $20k (and certainly not for the %age YC want to take - 6%
for $20k = valuation of $333,000). In fact I don't even want to price a deal
so early in the company lifetime.

b) I find myself introducing so many fellow entrepreneurs to contacts in my
network that after 4 years in SF I probably have a large overlap of contacts
(which seems to be a big draw).

c) YC seems designed to let a bunch of smart young guys(/girls) hack around in
cheap accommodation eating ramen until they come up with something cool. I
guess cos I'm almost 30, live with my partner and business minded I'd rather
be clear with the problem I'm trying to solve and the business model to
achieve success before I write much code. Pivoting is to be expected but it
should be a 'get out of jail' card, not a standard MO.

d) I think it's hard to break out of the mould of being "a YC company" and
stand on your own feet. A few have managed it but not many.

tl;dr: Perhaps ultimately I don't fit the mould of recent college grad with
little money, low personal burn, probably not living in SF yet and little-to-
no startup experience -- which seems to be the type of founder YC likes.

------
dangrossman
I bootstrapped my business from nothing to paying myself six figures a year
while in college. I have enough saved that I don't need outside investors.
While the experience, advice and connections would be useful, I'm more on
track for growing a lifestyle business than something that would return
multiples on an investment in a short time.

~~~
il
I'm in the exact same situation, bootstrapped a business from nothing to low
six figures in the first year. My company is growing steadily and profitable,
but it's not really YC material and will never be a multimillion dollar
breakout hit.

I've got a couple high-growth startup worthy projects I might pursue but even
then, I don't think I would apply to something like YC. Honestly, I think I'm
at a later stage in terms of growth than YC requires.

I'm already more than ramen profitable, and if I step it up and invest
aggressively in growth for a webapp, I could probably raise an angel round
fairly easily.

YC is good if you only have an idea/prototype. If you have a product with
paying customers, a proven business model, and established customer
acquisition channels, the value of YC is significantly less compared to the
growing value of the share you would be giving up.

I would rather take the amount of equity YC asks for and divide it among my
founding team/first employees.

------
ziadbc
People get caught up on this "I don't need 20k." YC is like the best
university in the world paying you to go to it.

Secondly, people make all kinds of assumptions about "I don't fit their
model." The best way to determine if you fit their model is to apply.

If you have an inkling to apply, do it.

Finally, saying there are far too many one sided arguments in favor of YC is
like saying "There are far too many people who are happy with their lives."

~~~
dotBen
_"I don't fit their model." The best way to determine if you fit their model
is to apply._

I don't belong in the army. I don't need to apply to determine if that is
true.

I don't think taking drugs would be good for me. I don't need to try it to see
if that is true.

etc

Give people the room to be able to make an informed decision based on prior
knowledge without having to actually go test it out in reality to confirm it
is correct.

~~~
ziadbc
I agree with your premise that one does not need to try something to know it
is not for them.

However, you are making an apples and oranges comparison here. You don't apply
to the military. You volunteer for service, and it is compulsory from there on
out. You can't apply to take drugs, the act is self contained.

I am speaking to those people who have a desire or interest in applying to YC,
but don't because they assume they don't fit the model. If you have an
interest, apply, and find out definitively. If you don't have an interest,
don't (much like your military example)

------
frisco
I think YC is an amazing value for the talented hacker in the Midwest looking
to break into the Valley. On the other hand, if you're already here and
connected into SV, it's really expensive equity.

~~~
adora
Being "well-connected" will only get you so far. YC helps you develop as an
entrepreneur, among many other things unrelated to having the right
connections. Even if you previously worked at a startup, that's still very
different from founding your own company.

Also, I think a lot of people overestimate the value of their current network,
and underestimate the value of the YC network.

------
BerislavLopac
One of the comments state "I don't live in the US", which is my reason too,
but let me elaborate a little.

Simply put, while YC seems great, it's just too expensive for me and my co-
founders. There is three of us, and if only two of us engage actively in the
process we would have to spend over $1200 just for getting to the interview
(based on a quick Expedia search, and not including any car rentals, visa fees
and the like); and if we get accepted, just getting us over there would spend
at least 10% of the supposed YC investment.

It would be great if YC would open a European counterpart, but that don't seem
likely as they have closed off even the East Coast one.

~~~
patd
YC reimburses up to $600 according to their point 2 in the apply:
<http://ycombinator.com/apply.html>

As another European, I would also love a European counterpart. But to me,
applying to YC is not really about the money, it's about the advices, the
networking and the press coverage that is hard to get when bootstrapping.

------
JeffL
I would love to, but I really don't feel like they would take me seriously.
I've been working on my indie MMO for over 5 years now. Not like that is
exactly a new groundbreaking idea, though I do think it's an amazing game and
so do my users judging by the consistently low and ever lowering churn rate.

------
jordo
I don't live in the US.

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dazzla
I would love to learn from YC and work full time on my startup but I have made
life choices that mean it would not work for me. Mainly I spent too much money
on a house and have a wife and child to support. So that means I need to keep
my stable (as much as any really is) corporate job and work on my bootstrapped
startup in my spare time.

Would have been nice to be more enlightened earlier in my life but now that
hindsight just fuels my motivation.

------
Mc_Big_G
Kinda off topic but it's odd to see this post this morning.

Last night I had a dream where I spontaneously got on a plane to SF bay and
loitered outside the YC offices where I social engineered my way in and
pretended to be a founder.

PG was there just kind of hanging around and giving advice to whoever
approached. I sat and listened for a long time and now I can't remember a
thing he said. I'm sure my subconscious stored it all since that's probably
where it came from anyway. Then I was suddenly in a gondola near the YC
offices, over-looking the ocean and some mountains with a really majestic blue
sky. My wife and a female YC founder were there with me and we were talking
about how beautiful it is in California.

When I woke up, I had the feeling like maybe I should apply again and the
first thing I see when I log on this morning is this post. I had firmly
decided not to apply and told myself to just focus on the business.

Ignore the synchronicity or give it a shot...

------
nickpp
My business, bootstrapped from nothing, has multimilion dollar revenue. It is
not in a hot, web 2.0 area, yet growing all the time.

Myself and my cofounder have families, kids and enjoy healthy life/work
balances.

Finally, I have no plans of living in SV. I love Cali but I hated living in
the Valley.

------
j_baker
...because I don't have a startup.

------
jrussbowman
I'm too far along in my life to do the incubator thing. I have a wife and 2
kids and make about as much or a little more than YC funding would provide for
me to live off of. I also have a ton of debt because of financial mistakes I
made in my 20's that I'm paying for now in my 30's.

Fortunately unscatter.com is something I can bootstrap and build slowly. Also,
by not being a part of an incubator I can work at my own pace, which means I
have that time to spend with my girls, one of whom is only 3 months old.

Different strokes for different folks.

------
onwardly
As a response to angel investing being a "bank strategy", it seems obvious to
me that most of the benefit of participating goes to the founders.

YCombinator gets 6%? That is peanuts compared the benefits you already know
about, hardly exploitative.

I'm applying because the "bank strategy" seems to be on the other side of the
table.

------
AmberShah
All that support and knowledge is tempting, but I won't be applying. I'm
currently in private beta and making very good progress with my product on my
own by bootstrapping. It would also be incredibly difficult for me to move to
another city and work there full time for a few months when

I have a full time job that pays my bills (which are MORE than what YN would
give me as an investment AND I'd be giving up equity for it).

Plus, I have a 2-year old who still nurses (not open for debate, sorry).
Basically he'd HAVE to come with me and assuming they'd even allow that, I'd
also have to move my childcare with me (my dad) and he'd have to be away from
his family too.

Plus, I have no immediate desire to find a co-founder and no plans to exit.
All of these things may change and I'm open to that, but that's how it is
right now.

------
math
Going out on your own for many is about breaking out of systems and
processes.. but joining YC can be perceived as becoming a cog in "the startup
factory". I know in reality it's far from that! Just noting a slightly
negative opinion I have observed from some entrepreneurial type people.

------
nmaio
I think the answer falls into two categories:

#1) Startups that don't apply 'cause they just don't want to

#2) Startups that don't think YC would accept them

#1 is fine - if you don't want to do something, don't do it

#2 is silly - let YC reject you; don't reject yourself (regardless of
location, stage you're at, one co-founder can't make it, idea, etc.)

------
ericb
YC has the beauty pageant problem. After the 1st round the judges are left
with a room full of 10's, and the criteria becomes "so... do you have any
other talents?" It's a nice problem for them to have and they deserve their
success for a million reasons, but I'm not applying because I'm sure they
could find applicants who are just as appealing that can _sing_ (MIT degree,
prior startup success, already profitable, cofounder who's an identical twin,
etc.)

There are other simpler reasons I wouldn't apply now--wife, 2 kids, and the
Boston sessions are gone.

------
waitingforgodel
After visiting a YC dinner and meeting several YC founders, the biggest turn
off for me is the cult of personality around PG.

------
bjoernlasseh
I have the feeling that Y-Combinator is a great fit young engineers who build
a web consumer product/app that monetize quickly. If you or your idea doesn't
fit into the brackets than another path is most likely much more promising :)

------
jonah
Reasons we're not: a) My cofounder has a family and can't move to SF for the
season. b) We have more than a YC amount of cash on hand already.

Reasons we should anyway: a) Connections. b) Exposure. c) Connections.

~~~
nmaio
I don't think those two reasons should keep you from applying. We have the
same "issues" - but we still applied.

------
fauigerzigerk
For three reasons:

* We don't make the kind of software YC is interested in

* We don't need the money

* We're not in the US

------
nopassrecover
I can't anyone else who would make the overseas (aus) + life leap.

------
TheSmoke
well, one of my reasons is reasonable and other is not.

\- i'm very far away from the US.

\- my brother didn't agree with me on appyling to YC.

------
lzw
1) History of working for startups, and in every case, the VCs seriously
damaged the startup with bad advice or strings tied to the money, which has
left me wary of VCs. Further, I have been to a couple events in the bay area,
including a YC sponsored one where I mingled with investors and talked to them
about various business ideas. I've not gotten the impression that these people
have the first clue. Not talking about PG or the other YC people, but just my
general impression of people who represented themselves as working for venture
capital firms. (and not angels, angels are a different breed I believe and
I've had less contact with them.)

2) There simply is not much need for outside capital, as we have a large angel
round worth of our own capital in the bank.

3) Strong impression that there is no chance that YC would take us. My co-
founder has zero interest

4) YC is predicated on a certain set of assumptions about the type of
business, and the priorities of that business. We don't share some key
premises there. Namely, it appears that YC believes in betting it all on a
short term, big reward, while we believe that a very quickly growing,
profitable business will produce a better return for us, at lower risk.

5) As I mentioned we don't really have a need for outside capital, and the
contacts YC would get us would primarily serve the purpose of doing additional
rounds. Thus, in my opinion the increased risk of having to adopt a specific
outside investors timetable, and operational style, along with the risk of
having to follow bad advice, does not seem to be worth it, for money we don't
need. While YC doesn't subject us to that risk directly, joining the YC
program would be getting on that track....

~~~
rantfoil
1) Angels and YC can't really even be mentioned in the same sentence as VC's.
Totally different goals and alignments.

4) Not true, many counterexamples, most notably Wufoo.

Sounds like you're doing just fine on your own, though.

~~~
fookyong
re: (4) - an anecdotal example does not imply intent.

Wufoo is a good PR case for YC in that it has contributed to the startup
ecosystem a sustainable, profitable company that creates value. It's good to
see.

However, YC cannot survive on happy thoughts. The fund and LPs need to see big
returns for the wheel to keep turning, and growing happy sustainable
businesses doesn't move the needle enough.

Realistically, YC probably needs to push out a mix of sustainable companies
for good ecosystem PR, and a handful of home-runs that keep the LPs happy and
the fund financially viable. To say that Wufoo is an "example" of YC's backing
of neat sustainable businesses is to see half the picture.

------
robwgibbons
Bootstrapping has some inherent disadvantages: you're working to pay the rent
at the same time you're trying to build a successful product, so you have less
time to accomplish what you really want to do, and less financial resources
overall.

But if you can overcome these obstacles using proper time management, project
scheduling and keeping fixed costs to a minimum, you'll end up with
significantly greater equity and fewer fingers in your proverbial pie, in
contrast to giving up equity and answering to your investors, however useful
their input may be.

Bootstrapping a startup requires you have a real-world business model which
actually generates revenue, which is more than many investor-backed companies
can say. However, a profitable model is not necessarily a sustainable one. You
could fill your schedule with client-contracted work and pay the monthly
overhead and maybe yourselves too, but it's not the most sustainable long-term
business strategy (unless you really want to be doing this forever.)

So you contract/consult to pay the bills, at the same time devoting a
reasonable portion of your time to building your own products and looking for
your "homerun."

~~~
lzw
Maybe you wouldn't call it bootstrapping, but someone whose in their mid 20s,
who has been working as an engineer for startups for the past 5 years, could
easily have saved $25,000-$75,000. IF you live cheaply and "bootstrap" by
focusing on your startup %100 of the time and funding it from these savings
you could easily have a 2 year runway there... assuming also that your co-
founders have similar savings.

This is pretty much what I did, I saved money and now don't have to worry
about contracts or client work, I can focus solely on the company and keep
costs down as if I had taken outside investment.

~~~
nletourneau
I'm in this boat. Me and my co-founder had enough to live on while we worked
on the product for the last 6 months. I did do some consulting one day a week
for spending cash, but it was limited to that and never really caused a huge
time-suck.

YC never really entered the conversation for us, I view YC as a place for
people that fall into a "I have this idea I want to try, but if I quit my job
I can't pay rent" type category, which wasn't me or the people I'm working
with.

(edit to say that I'm not knocking the stated category, I'm really happy that
YC exists)

