

On YC Demo Day, and those graphs - replicatorblog
http://blog.noupsi.de/post/30000141259/on-yc-demo-day-and-those-graphs

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smalter
Part of the power of YC is that it's in some way collective bargaining.

There's a similar phenomenon at top law schools (I was a lawyer in a previous
life). When law firms come to campus to interview students, the school's goal
is to obscure which students are top students and which aren't. Why? To
protect the middle and bottom of the class and facilitate everyone getting
jobs based on the school's brand.

The YC Demo Day format and the removal of the fundraising slide can in part be
explained by the desire to obscure which companies will be hot (unlike say, if
there are booths), so that everyone can raise based the YC brand versus just
the hottest companies.

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akldfgj
Doesn't a law school give everyone an official rank to put on their resume?

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dmarble
The general idea above is certainly true for most top schools. AFAIK, several
(Yale, Stanford) give no rank whatsoever. A number of the top schools will
only segment by one or two major divisions. For example, many give distinction
for top 10% and top 30-35%. Some will publish what the actual GPA is for
cutoffs, so employers do have a good idea, but many do not post such
information.

See, e.g., [http://legalgeekery.com/2010/04/09/a-comparison-of-law-
schoo...](http://legalgeekery.com/2010/04/09/a-comparison-of-law-school-
graduation-honors-requirements/)

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pg
The goal of a Demo Day presentation is not to convince the audience to invest.
It's just to convince them to follow up with you. It's at that second stage
where the demos happen-- as they were in fact happening all over the building
during the breaks between sessions.

At events like TC Disrupt, where startups demo in booths, few (perhaps no)
investors ask for demos from all of them. The startups have posters and
investors decide based on those which to approach and talk to further. In
effect YC Demo Day presentations are those posters.

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djt
How many potential investors do you have attend these talks?

Has the type of investor changed over the past few years?

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pg
Just over 400. The big change in the past few years is the arrival of "super-
angels."

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djt
By "Super angels" do you mean they are funding higher dollars or are they
investing in far more companies?

Do you think that "super-angels" are taking over from traditional VCs in that
the costs of getting to scale are lower these days?

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cwilson
As someone who pitched on stage yesterday I have mixed feelings on this
subject. I understand that seeing a graph up and to the right on every single
slide, 74 times in a row, might get a little repetitive. That said, you're
also getting pitched by 74 companies who actually have graphs that are up and
to the right. You're being pitched by companies who have been focusing on
nothing but acquiring users, talking to users, learning from users, and
building in parallel. Many of us took money from those users. By making sure
we realized graphs that go up and to the right would be a standard on which we
were judged, we were all essentially "tricked" into doing something that
SHOULD be obvious for any entrepreneur, which is doing nothing but talking to
users, building a product users like, signing users up, and ultimately
charging users (this isn't always something to focus on from day one depending
on the product). Everyone else is going to have a graph that goes up and to
the right? Shit, I better as well! What I'm trying to say is, being pitched by
companies who are already doing this well in such a short amount of time
should be a good thing.

While 2:15 is most definitely short, it also gets you thinking about the 2 - 3
things that you want potential investors to remember about you. How can we be
most effective in the least amount of time? It's an amazing exercise and it's
very helpful for pitching in the future.

After pitching, the investors who really love your vision or idea let you know
they are interested, and you have plenty of time to tell them more, show them
your product, etc.

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robryan
I think the issue is that any startup can produce a metric in which they have
a nice graph going up and to the right, no doubt some of the 75 companies are
likely far more attractive than others but it probably isn't clear without
followup which those are.

At the same time I am not sure you can do it any other way and still have the
time for everyone to see all the pitches. You are right that longer
presentations with a group this big would probably result in most of the
audience forgetting most of what they see.

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cwilson
I don't disagree, but I also think this system is a great way for investors to
get a quick glimpse of a ton of awesome companies at once, and find the ones
they are most interested in and chat more. Someone else in this thread already
mentioned this, but the point of the pitch is not to close a deal. That takes
multiple conversations, sometimes days, sometimes weeks.

Personally, I only want to talk to investors who are actually interested in
our space, or have expertise and connections in the space, especially when
there are hundreds in the room (half the conversations would be a complete
waste of time otherwise).

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robryan
True. The accelerator that operates out of the space I work at, they
emphasised the idea of including a slide about what type of people the startup
is primarily interested in working with.

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jasonshen
I think a big part of why Demo Day is run like this is because good products
_do not_ speak for themselves.

Investors are often not the target demographic of a particular product and
given the range of products (wedding registry app, logistics/shipping
software, developer tool for checking insurance claims, humor website, etc)
most YC companies have chosen to show _traction_ as a proxy for both demand
for and quality of, their product as well as the execution ability of the
team.

As others have pointed out, this is a great way to get an investor interested
in learning more about the company.

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iamwil
Investors often asked YC companies themselves, "What company is hot?" instead
of judging things on their own.

If you have booths with demos, having more investors gathered near one booth
might end up as signaling to other investors that this is the "hot" one of the
batch, which results in more gathering. And where the investors cluster could
have been a random event, or the location of the booth was better, etc. I can
imagine founders spending all their time being big and splashy with swag and
posters.

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jvrossb
The point of those 2 minutes is not to explain the product. It's to get you to
want to talk to the company presenting. Deals don't get closed based on the
substance of a 2 minute presentation, but meetings can and do get scheduled
based on one. The booth idea is not a bad one but it doesn't allow the
companies to blast their message to everyone at once.

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djt
I think the main problem is the time constraint. None of these solutions can
lead to investors figuring out which businesses to follow up on out of 75
businesses in under 3 hours.

Also why have demo booths when it's an online service? Why not try it out from
a customers perspective and log onto the website. If you need someone in a
booth to step you through it then I would be very surprised.

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ibdknox
How would you try warehouse software, a wireless network, or a developer tool?
A number of the companies that presented yesterday are not easily try-able and
some that simply wouldn't appeal to this demographic in any meaningful way.

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djt
I think we are saying the same thing, I doubt that a Demo Booth is going to
fix this problem?

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mjn
Interesting to see the startup industry running into some of the controversies
of academia. :) This 1- or 2-minute pitch, where you essentially advertise
your real pitch (poster or demo or longer talk) by using a "graph going up and
to the right", along with 1-3 slides and a quick blurb, is a mainstay of
academic conferences, and not liked by all. Sometimes called "1-minute
madness".

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ibdknox
interestingly, we intentionally didn't show a graph, nor did we actually say
any of our numbers when we presented yesterday. Our goal was to tell a story
about why what we were doing mattered and I think that resonated really well
with investors. Not sure if our presentation works for everyone else, but I do
believe being a bit different was immensely valuable.

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kazevedo
I really enjoyed your presentation for that reason - you did a great job of
building a narrative that wasn't exactly "We're X for Y in a $Z billion
market". I did consider your HN vote count and Kickstarter numbers similar to
an "up and to the right" graph, but is your distinction that you only
displayed them, and didn't weave them into the pitch?

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tomasien
Disservice is a strong word for this, but yes I agree it's a little tough.
Everyone can go use the products later though right?

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blahedo
WTF with all the title changing? This one was originally posted as "On why Y
Combinator Demo Day does its companies a disservice", which is what I clicked
on from the main page, but now is retitled to "On YC Demo Day, and those
graphs", which is an inferior title for the purpose of, you know, suggesting
to the casual reader whether they'll want to read it. The submitted title even
made use of the article's actual subhed (reformatting it to remove the
question, per guidelines).

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rubidium
The authors main point: "But it really seems like a better format for this
would have been to have people demo-ing in booths, keeping the focus on what
they’ve been working so hard on: the product."

Sounds like a perfect solution. Why not?

