

Our YC Interview: A Scottish Startup's Perspective - akh
http://blog.shopforcloud.com/2012/06/our-yc-interview-scottish-startups.html

======
mrkurt
I think one of the most common problems incredibly smart hackers have is
working on "businesses" with no real viable... business. They probably don't
expect you to know everything there is to know about a given market, but it
would be a little silly to make an _investment_ in a group that can't think
through money and evaluate how worthwhile something could be.

~~~
ChuckMcM
Totally resonate with this comment, when the article said:

 _"So our lesson learned is that, if you're a Scottish startup and want to
apply for YC, make-up some numbers, and multiply them by 10, then walk into
the interview and confidently say that you can make that much."_

In my mind I saw potential investors rolling their eyes and saying, "Oh, one
of _those_ types."

Places like Google or Apple with billions of dollars in free cash flow can
spend money to solve 'problems' for which their are no customers, startups
cannot afford that luxury. There is a place where the goal is to come up with
a novel solution to a hard problem, its called a 'research lab.' And something
I always look for in people is where they sit on the spectrum between research
and development [2].

The good news is that you can use this to guide your thinking about what the
next steps are when you find yourself all revved up to solve a problem. Ask,
"Would anyone pay to have this problem solved for them?" and if the answer is
yes, figure out how much. And once you know that you know if there is a
business there. And you can defend that number using your research.

If you don't know if anyone would pay for it, and after trying cannot figure
out why they would or how much, then you are still doing research.

[2] Startup types need to be much closer to the 'development' side than the
'research' side.

~~~
akh
mrkurt, ChuckMcM: As my co-founder mentioned in another comment a bit further
down "We had been approached and offered investment as well as a global IT
company asking for an exclusivity deal. However, I think the numbers that the
Valley works on is on a different scale and that's what we are trying to
convey in the blog post (not bulshitting without basis)."
(<http://hackerne.ws/item?id=4112064>)

So I think we're passed the research stage, and we are actively developing
software at the moment (no more research). Overall, as I mentioned in the
post, the experience of going through a YC interview is definitely worth it,
specially for guys like us who're doing our first startup. But we got the
feeling that YC is after more consumer-oriented startups that can scale to
huge numbers.

~~~
ChuckMcM
Fascinating, I don't think the ycombinator guys run the 'hackerne.ws' site, it
looks like a pure MitM type deal (registrar name.com, hosted by ThePlanet in
Houston TX?)

I don't doubt you're past the research stage, my comment was that your advice
to 'make up numbers, multiply by 10, and then bullshit' is really _horrible_
advice, Scottish or not.

My opinion is that if someone can't providing the reasoning behind their
numbers from first principles then you're not in a 'business' you are in a
research project.

I've heard dozens of pitches from folks who 'hand wave' around numbers and I
sigh. They say "You can't know this, we'll just have to try it and see." And
its true you cannot _know_ what sort of revenue you will get but you can do
the research to isolate what you know and what you don't know, and then you
can come up with some tests for what you don't know which might inform the
possible answer.

You're blog post advice tickled a bit of scar tissue that a lot of people
reading this share.

------
dariusmonsef
So wait.

You note that nowhere in your YC application do they specifically ask you
about money stuff.

But, you talked to some YC Alums before the interview and they all asked you
about $.

And since you didn't get selected you now assume that the YC partners really
only care about the $? Sorry, I think that's a leap in thinking that might be
in the wrong direction.

I applied with a website that let people name & share color... There wasn't
billion dollar company sitting in front of them. There were a few guys with a
passionate community and the ability to build great product. We were never
asked in our interview about $ and didn't need to bullshit anything.

Yes, the Valley hype scene is heavily influenced by who's the next billion
dollar company and puts little success on people making $5-10M/year in great
businesses... But that isn't YC.

PG has on a number of occasions given me advice that is all about us as the
founders being happy. Not about YC getting the biggest return possible.

So yeah, hopefully your idea could be a big business. But I would argue the
opposite of what your post says. YC mostly cares that your idea is big and
that you are a team that might be able to pull it off.

And IMHO... Try not to bullshit. It'll eventually catch up to you.

~~~
BadCookie
In the most recent application round, they did specifically ask about money in
the application. And they asked my team about money in the interview as well
(with a visibly negative reaction from an interviewer when the number we gave
was smaller than he apparently wanted to hear). Please don't assume that your
experience is the same as everyone else's. Perhaps the fact that you already
have a strong community gave you a free pass with regard to money issues.

~~~
dariusmonsef
My bad. Mistyped. He specifically said they didn't focus on $ in the app. Yes
there is a question that asks about it. (We review applications too), But that
isn't a core focus in the application.

And its a bit ironic to tell me no to assume my experience is the same as
everyone else's on a blog post telling everyone else how to treat the YC
interview, no?

I've said this many times before and perhaps need to include it on every
comment regarding startup advice. There are some common concepts, useful
general practices, etc. But it's a very different experience for all of us.
There is no general advice that will work every time for everyone. Take ideas
that work well with you... leave the rest.

------
tylermenezes
As someone who's both conducted interviews for an incubator, and been through
the YC interviews, I think you're focusing on the wrong thing here. "The team"
goes a lot beyond paper qualifications, and I think a lot of your shortcomings
are there if anywhere:

* You changed your answers quickly before your interview because you hadn't thought them through before-hand. * You weren't confident. * You weren't committed. This is the big one for me. If this is a great idea, why is putting your PhD on hold conditional on getting into YC?

YC often accepts startups with ideas they don't like. We got a phone call
right after walking out the door even though half the partners still weren't
convinced of our idea. The important thing isn't having amazing figures at the
start, it's being able to think things through. The YC partners can help with
tuning to get the most impact. (It honestly doesn't seem like this is the
biggest issue for them, either.)

~~~
akh
As I mentioned in the post, we changed our answer because we were overwhelmed
by the YC Alumni placing an important emphasis on the figures.

You can't advise someone to put their PhD on hold if it's a great idea without
knowing the status of their PhD progress. I'm very close to finishing, I only
have to write my introduction and conclusion chapters, the rest is all done,
and I have published several papers. So I don't think it would be wise to put
it on hold when I'm so close to finishing.

If I was YC, I'd be placing my bets on the companies who say they can give me
bigger returns. So I think YC's final decision might be heavily influenced by
figures.

~~~
tylermenezes
I understand wanting to get into YC, but if your figures were wrong, you
should have known that long before the interview. If your figured weren't
wrong, and you changed them for the interview, that's also a pretty big
problem. We got in with half the partners disliking our idea. I don't know how
they can make it more clear than the "no idea" application - they care about
the team so much more than the idea.

The biggest thing for me is this: if you were willing to put your PhD on hold
with YC, you should be willing to put your PhD on hold without YC. The fact
that it changes your answer is probably one of the biggest reasons you weren't
selected. pg has stated before, YC doesn't want to make companies succeed.
They want to make companies which _will_ succeed more successful. Successful
teams know they're going to be successful with or without YC.

If you were turned away for low numbers, they would have said so in the
rejection email. I find it unlikely that they did, or you would have posted
it, I'm sure. The fact that so many people are giving you advice as to actual
problems, and that you're ignoring them, is a pretty big issue.

------
camtarn
It's great seeing the Scottish startup scene represented on HN :) Well done
for getting the interview, even if you didn't get in.

~~~
akh
Thanks! Were you at TechMeetup in Edinburgh last night by any chance?

~~~
camtarn
Unfortunately not - the programme looked interesting, but I skipped out on it
to go watch the Olympic torch go by :) I don't regularly make them, but I was
at the one at the Amazon offices a while back.

------
paulsutter
If you just made up numbers you don't believe, it's no surprise you were
rejected. Bullshitting is not a success pattern.

~~~
akh
We didn't just make some numbers up, we made assumptions (e.g. 1% of users
would signup to premium version), BUT the problem we had was that we've been
brought up in a culture where people look down on you if you say you can make
$5M/year, they say that it's bullshit. So although we knew we could make that
much, we needed to be more confident in communicating it.

~~~
pcrh
Having been in both SV and the UK, the difference you mention is one of
culture.

In SV you are supposed to be super-enthusiastic and ambitious, the world is
your oyster, etc. Any deviation from that will have investors worried that you
don't have enough confidence.

In the UK, on the other hand, the approach is more defensive, and encourages
you to avoid over-stating your case,in case you are wrong.

I always found Dragons Den to be a bit disappointing in terms of the ambitions
of the people pitching. A 1/2 million per year business is no bigger than a
cafe in a popular spot.

~~~
paulsutter
Bullshit, this isnt about culture. Read my response above.

The only possible cultural angle here may be coming from an academic
background and having bizarre/naive ideas about business.

~~~
pcrh
It is cultural, at least in part...

Specifically: the enthusiastic, go-getting, I'm gonna win, we've got the
numbers, it can't fail attitude that you encourage ("Get going. Dive in. Make
stuff happen.") is _not_ encouraged in the UK, and in the UK is described as
"bullshitting" (this may be different from the US understanding of
"bullshitting"). The reason being that these projections/ambitions for success
are not based on hard facts, but on the ambitions of the presenter.

Where SV, and yourself it seems, differ is they _accept at the outset_ that
failure is a possibility, but that avoiding failure is not only a matter of
soft or hard facts, market conditions, etc, but also of the character of those
involved.

Thus, an enthusiastic and ambitious UK team may focus too much on why they
"won't fail too much" (i.e. their ambitions are not too unrealistic), whereas
a US team would focus on how they are going to whip ass.

~~~
paulsutter
That's not the cultural issue he raised. He suggested that Scottish seed
investors wouldn't ask about projections or market size because the Scottish
just don't talk about such things. Yeah right:
[http://www.archangelsonline.com/content.asp?Page=399&Men...](http://www.archangelsonline.com/content.asp?Page=399&Menu=395)

Regarding your comment on SV culture: exaggeration is a losing strategy when
dealing with SV investors. They want realistic sobriety, and dislike naive
cocky projections.

Regarding your interpretation of my comments: there is not one shred of
"enthusiastic, I'm gonna win, we've got the numbers, it can't fail" attitude
in my comments. Much to the contrary: I was saying he's completely unprepared
to do a startup, but the best way to remedy that problem is to dive in head
first, start failing, and learn from the school of hard knocks.

There are plenty of people in SV who are deathly afraid/ashamed of failure
too. They just don't tend to start companies.

There are plenty of superb UK born entrepreneurs, both here and in the UK.
Where do you think the industrial revolution began? The only bullshit I'm
detecting here is the inclination of certain people to hide their shortcomings
behind convenient excuses.

~~~
akh
The culture issue that pcrh mentioned is what I was referring to. It's not
that Scottish seed investors don't ask about projections, it's that if you're
a Scottish startup and what to apply for YC, you have to be thinking about
much bigger numbers and get into that mindset of "go-getting, I'm gonna win,
we've got the numbers" that pcrh mentioned.

Eitherway, thanks for the discussions and comments. I've emailed you a quick
question :)

------
akkartik
As someone who's been there, it's super interesting how different everybody's
interview experience is. I get the sense they tailor their strategy for each
company, whether it's advance prep or just going with their gut. YC seems to
have a nose to sniff out the most likely place a startup will raise a red
flag. (One failure mode for them is if the interviewer guessed wrong.)

~~~
akh
You're right, they go through so many interviews (around 370 in our batch)
that they probably develop gut feelings about which startups to pick. But like
you said, they might have guessed wrong in our case.

~~~
akkartik
Sorry I wasn't clear. The guesswork I was referring to was to figure out the
most probing question to ask of each startup. If you guess right you just
learned something relevant to the decision. But if you guessed wrong, if you
could have asked a more probing question, you might end up accepting a startup
you shouldn't have.

I don't know enough about your situation, and I wasn't implying any judgement
either way. I was just trying to put myself in their shoes.

------
akh
If you've been through the YC interview process, we would love to get your
views on this.

~~~
sim0n
We weren't quizzed much about our numbers (I don't think money was really
brought up at all) but asked more about the product (what it does, who uses
it, why they use it, etc). That may have been because we're in the enterprise
market (project management) and our competitors are quite well known, so they
would already have an idea of potential revenue.

------
splatzone
I don't think bullshit is the answer, just appreciating the difference in
scale between the UK and the rest of the world.

~~~
akh
Completely agreed about a difference in scale between US (your comment said
UK, typo?) and rest of world. We knew we could make money but it seems like YC
is after more consumer-oriented startups that can scale to huge numbers. So if
you're like us from the UK, where the culture is much more conservative, what
choice do you have? We spoke to groups that were telling us they could make
upwards up $20M in 2-3 years! How can you justify that when you've just
launched 2 months ago and have made 0 so far.

