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Ask HN: Who got rejected in earlier cycles of YC application and made it anyway?
80 points by jacquesm on Mar 14, 2010 | hide | past | web | favorite | 66 comments
Daniel just wrote he got rejected and someone else chimed in they had been too, but were definitely not going to let it make a difference.

So, my question is what is the biggest success that YC missed out on, some group that pitched during one of the cycles and that was rejected, manned up and made it without the YC funding and the access to the network?

My company was rejected from YC W09, but raised $1.5M in VC 2 months later.

We just buckled down, and launched anyways (ahead of schedule!). Once you get users and have some promising data, raising money is definitely doable.

We totally blew it that time. IIRC you did fix the thing we were most worried about when we were talking to you.

Well, I think it's still a little too early to tell if you blew it ;-) Raising capital != successful company, so we'll have to wait a few more years to see if I can make something of the opportunity.

There were some significant problems with the company/idea when we applied. Hopefully, we're fixing things quickly enough to win in the end (I think we are!) :-D And thanks to PG's advice, I have a new-found appreciation for some aspects of the business that I'd overlooked before.

Congratulations, to raise a million and a half from a VC within two months of a YC rejection is probably a record.

That should really help to put a YC rejection in to perspective for those who receive 'bad news' in the mail in the next couple of days.

I know of one other team that did the same.

I think the best advice Ive ever gotten was "dont be such a pg fanboy"

We've definitely missed good startups. But one advantage of having so many competitors is that we're much more likely now to learn when we screw up. When a startup from one of the other YC-like organizations does well, I often check their YC application to see how we missed them. Usually it's because they were good guys but working on a terrible idea, which they later changed. So in response to that we now make a conscious effort to pay less attention to the idea and more to the people when we read applications.

Ok, what about if the opposite was true?

How do you handle situations where the idea is (in your opinion) great but the person is perhaps lacking for whatever reason?

Is this a situation where you pass or do you take a proverbial punt? Have you done so in the past (don't need to name names to save someone's ego)

We wouldn't fund a group if the founders were really lacking, e.g. if they seemed uncommitted, or not smart enough to build whatever they were planning to.

    we now make a conscious effort to pay less
    attention to the idea and more to the people
    We wouldn't fund [people who were] not smart
    enough to build whatever they were planning to
These comments don't seem entirely non-contradictory. Wouldn't you ever say "I don't think you're smart enough to make that work, but how about working on a less ambitious problem"?

Cheers for the reply Paul

But people change as the idea do, no?

So in other words the rejects can now infer its because they suck, and not just their idea.

We were rejected, with some recommendations on what to work on next; we changed our application for our technology when we heard that twice, then after nine months we raised money from a top green VC at a multimillion dollar valuation. We just made it through series B, and we're going to power the developing world before coal can get its pants on.

That sounds like a very interesting project, I've read a bit on your pages and I figure Vuilleumier heat pumps or the Stirling cycle figure in there somewhere.

I wish you much good luck with this, one reason why I'm really happy someone is looking in to this is because coal causes more radioactivity released in to the atmosphere than nuclear plants even would.

"My question is what is the biggest success that YC missed out on"

There is a company that makes iPhone software that was rejected by YC, and they recently turned down a buyout offer of 10M. I can't really give more details than that since obviously it's not public.

AfterTheDeadline was rejected, and got acquired last year by Automattic (WordPress). http://blog.afterthedeadline.com/2009/09/08/after-the-deadli...

Edit: I should note that Paul Graham mentioned in his interview on Mixergy that picking companies is one area where they are weak. That may be true, but I'd wager the YC batting average would be higher than typical Angels/VCs.

Hmm don't know. With all due respect to PG and crew, VCs and angels seem to do their homework as well. Actually their initial filters are probably much more restrictive so I guess it would depend on how you calculate the batting avgs.

It depends whether you are more concerned with how often they pass on someone who then goes on to be successful or how often they pick someone who then fails.

I suspect for most investors passing on someone who goes on to be wildly successful hurts a lot more than investing in multiple failed ventures. Given that, having a longer more thorough process may not be beneficial. At best a long process can reduce the number of failures by refusing to invest in them but it will never increase the number of successes which is limited by the number of people who ask you funding.

I'm kind of surprised that no well funded VC funds have come up with the idea of just handing out 5-10k to every single not obviously doomed startup they come across in exchange for a few percent of each company. They could call it shotgun investing.

VCs do months of due diligence before they'll write you a check. We review an application from and write a check after speaking with you for 10 minutes.

> VCs do months of due diligence before they'll write you a check.

That just simply isn't true. Early stage is much quicker. The only time a VC needs 'months' to do dd is when there is a substantial company already, so when you're doing a late-stage investment, usually in the millions.

Exactly. I think YC's process works for YC. But I wanted to make that counterpoint about VCs/angels and batting avgs in the context of this thread so that people don't infer that because they didn't get YC they will likely not get angel or VC money.

I don't have a "YC missed out on investing in our insanely profitable company" story, but I did get rejected before finding myself at a YC company anyways.

Evan Miller (emiller) and I applied for Summer 06. Evan had to do most of the work on our application because I had deadlines with my publisher on my Ruby book. I was proud that I was writing a book, so I mentioned it in my bio.

In retrospect, I wonder if that doomed us. Sorry, Evan. If I was reading applications, I'd have been like, "This guy thinks he's writing a book and starting a company? Fuggedaboutit."

But another one of my friends got into Winter 07 and he's very persuasive. A year after their session ended he convinced me to leave the corporate world and join him and his cofounder.

Wish I could finish the story by saying we're insanely profitable already, but hey, we're still alive, we've got a great product, and that's awesome.

There are a ton of ways to get a business off the ground, so one rejection from one incubator is really just the beginning. To everyone in that situation, don't give up. And if this one doesn't pan out, maybe you'll go even further with the next one!

That's a hell of a story. I can't imagine that the book thing is what blew the application though, after all that could have been discussed in the interview if it would come to that.

Good to see you're still going!

Haha, well, we were also in a pool with a ton of other brilliant, driven applicants! That might have had something to do with it too. =)

My company is a YC-reject, we're doing ok. With that being said, I still love YC and it makes sense for a lot of companies and I agree with pg that it just wasn't right for mine.

Here are a couple things I have learned about funding in my last 2 years building my startup:

1. Funding is mostly a security blanket. An expensive and usually unnecessary one. I think most startups do worse with funding because they lose that fight or flight mechanism that drives entrepreneurs to do mind-blowing things. I don't think most ideas require funding exceeding the seed stage, which is usually a lot cheaper if you can find it elsewhere. For example, I launched my company to profitability with just 3 laptops + servers, which you can usually dump onto credit cards if you're growing way faster than your cash-flow (which makes your startup cost almost $0 to start).

2. You cannot base your startup's success on whether or not one person (pg) believes you can make it. If nothing else, pg cannot possibly be an expert in every field.

3. Money is EVERYWHERE in the valley. It is absurd how many different VCs there are, and how much money they're obligated to deploy in behalf of their LPs. There are definitely less opportunities than the money out there to fund them. Getting funding is pretty easy. It's all about building models that you can plug a # into and get a bigger # out, which if anyone needs help with please feel free to email me.

4. Lastly, if you believe you can make it, no one can stop you. Go be a tiger.

CouchDB is a pretty well-known "didn't get accepted, but kept going anyway" project. Not really a business success story, but it is a project that has had an impact on web technology, and on a scale that many YC companies have not. It's an Apache Foundation project now, but I don't know what that means for its business case.

And, of course, several teams have been rejected once or twice and then gotten in later. A few have even blogged about it; notably wheels of Directed Edge.

Actually, the authors of couchdb did eventually start a company around it: http://is.gd/aEdvW . I think it's still in stealth mode, though.

it's up and running at http://www.couch.io/

funny how TC called it "stealth mode". i don't recall the couchdb guys ever being very secretive about it. they are too relaxed for that :)

I was rejected the first time, got in the second time, but dropped out a week later to run a different company. We were profitable at 32 employees and got acquired by Zynga last month.

It is probably not an accident that this is phrased in such an odd way, with the subjects of the sentences missing. It should read "we got in the second time, but I dropped out a week later." What happened is that Siqi and a cofounder started YC, then a week in Siqi bailed and left his cofounder in the lurch because a side project of his had unexpectedly taken off. We suggested making the side project be the focus of the startup they were doing, but Siqi didn't want to share it with his cofounder. His poor cofounder kept going and managed to recruit someone new, but the startup limped along without Siqi and didn't live much past demo day. It was probably the most treacherous thing one cofounder has done to another in YC so far.

I would never have said anything publicly about the matter, but I can't stand to hear it described in this misleading way.

Wow, this really stings coming from someone I respect so much. This is what happens when you leave without an explanation from YC I suppose.

Paul, I agree I should have said "we got in the second time, but I dropped out a week later". I apologize for not being clear but I don't accept that there was anything wrong with what I said.

To be clear, the side project of mine which took off was co-owned 50% by my another founder who was not involved in YC and didn't want to join, so it wasn't mine to simply share with my YC team.

There were 3 cofounders who went to the YC interview - there were 2 cofounders remaining after I left. I was transparent with both of my cofounders and we remain friends to this day - they had zero involvement in the side project from beginning to end. I specifically asked each of them if they felt I was behaving unethically - they responded that they don't believe so and would have done the same in my shoes.

I created another account just so I could get around my noprocrast settings.

Out of the 2 cofounders in YC, one I later hired to run network operations at my company and the other I am very close friends with and regularly have beers. We left on good terms. Why don't you ask the two of them what they think of me?

You're the reason why I'm an entrepreneur today and I respect you immensely. To hear you describe what I did as treachery is hurtful but worse it's just factually wrong. It was an incredibly difficult ethical decision for me at the time, but I truly believe that I behaved in a transparent and above the board way.

I take responsibility for not talking to you before or after I left - I didn't realize you felt this way about it and I'm happy to have the chance to bring this out into the open.

I was Siqi's cofounder both times we applied.

Siqi is correct; we didn't believe he was being unethical. The 3 of us agonized over the situation for quite a while, and understood his decision to leave, especially given that the side project wasn't completely his to share. It was a really tough spot for all of us, and I know he didnt make the decision lightly.

I'm glad they don't blame you. But what bothered me so much about what you did was that you were the leader of that group. You'd recruited them as cofounders to apply to YC with. IIRC you were the CEO. So it was like an officer deserting his men, not just one of three guys dropping out of a three person startup.

It was far from an easy decision and I never felt great about it. This is fair criticism and I accept it.

However, I don't feel the same way about your original response. The side project wasn't mine to share, and calling it "treacherous" takes it way too far.

Seems like everything was fair and transparent among them.

Reputation saved.

Hmmm, both points of view have merit.

IIRC PG/YC fund the team and not a specific idea. If you are on shaky idea, they would want you to persist and figure out a better idea as a team. This is clear to anyone who follows HN. So it does make sense that PG/YC don't like it if the founder(s) quits when something else interesting (like great job offer or another idea) comes along.

And your POV, that it is something you did outside of YC and don't want to share, makes sense too.

I don't know what I would have done if I was in the same situation.

I think whats going on is pg is pissed someone ditched YC and made out better - "HOW DARE you leave YC and go on and make millions- while the rest of my flock struggles on ramen noodles and my outworn cliches!!!"

Umm, hold on a second. So I have a cofounder and a startup, but I also do little side projects here and there on my own, mostly for fun / learning. Am I to understand that if one of them blows up and I elect to leave and pursue that instead of my current startup, I've committed "treachery" against my cofounder? If my cofounder had something like that happen to him, I'd be incredibly happy for him (and a little jealous), but I wouldn't consider it treachery unless he tried to take his equity or it was competing with our startup or something.

I know that it's popular to compare picking a cofounder to picking a spouse, but they're not the same thing, and if you start a company with someone who later decides to move on, that's just how it goes. Am I way off?

As in everything: It depends.

I don't know this story beyond what two people have just said. But, I know that if I commit to something, I expect my co-founder to also be committed to it (within the bounds of what we've agreed upon). Working on other projects now and then is fine and normal...it's what hackers do. But, if you've committed to build a business with someone, it's not really the idea that makes the business. It's the combined effort and execution of the team. So, splitting your time between building your "private business" and your "co-founded business", and then taking off when the private business has some bit of success, is probably not what an honest business person would do. If you don't believe in the co-founded business idea, anymore, you talk it over with your co-founder, and you try to fix the problem.

But, shit happens. If you give up your equity in the co-founded startup, apologize for flaking, etc. then I guess you've done the best you can. I wouldn't expect the co-founder to ever be willing to do business with you again, but it's probably not what I would call "treacherous", either. I think the story of Evan Williams and Blogger (and Odeo/Twitter, for that matter, maybe even moreso) would sound kind of similar when told by different involved parties, and we don't consider Evan treacherous.

Then again, we are talking about one week later. He had to know that he had other irons in the fire and probably wouldn't be involved in the company much longer. So, yeah, this actually does sound kinda nasty.

"Then again, we are talking about one week later. He had to know that he had other irons in the fire and probably wouldn't be involved in the company much longer. So, yeah, this actually does sound kinda nasty."

The side project was a Facebook application. It grew from about 10,000 users to more than a million from interview time to the week the season started (about a month). By the time the season started I had my doubts (along with my cofounders), but I thought I could tough it out and do both. I was wrong and made the hard choice to leave.

As I mentioned, I don't know the whole story, only the tiny bits and pieces presented by biased parties. And, as I also mentioned, shit happens. Congratulations on your acquired startup, and I'm glad to hear your cofounders in the failed YC startup hold no grudges.

Trying to do both would have been a more unfair choice, and the much safer and easier road to take.

Good point.

Maybe what happened was that he didn't know whether they'd get in YC or not so was OK with being part of the application.

Then they found out they got in and he realized he had to make a decision between the two projects and it took him one week to make that decision.

That doesn't really make it better, and I can understand pg's disappointment, when a team falls apart almost instantly upon getting accepted. Ethically speaking, you don't ask someone to invest time, money, and effort into helping you build a business if you aren't actually going to build that business.

It would depend how transparent you were to begin with. If you were honest with your co-founder in fully advising that you'd take off to pursue your own project if it started going well, then he could make an informed decision about whether to co-found with you to begin with.

Given the stakes involved, most co-founders would expect more of a solid commitment than that.

You're wrong because;

A) pg was simply pointing out what the guy had failed to mention in his post.

B) The manner in which you leave a partner to pursue your own thing can vary. It wasn't that he left, from pg's comment I get a feeling the issue is HOW the founder ended his affairs with YC and co-founder.

So relax, keep your side projects. all though I highly recommend that you focus one at a time. put all you can in one idea before you leave and potentially put your team mates in jeopardy to pursue another.

Yeah I mean I face this issue too and it can go both ways.

I've talked to other potential founders who like my idea and would want to participate as a side project. But I've been loathe to do that. Initially I thought more help would be better but as I started working on it, it just seemed like it would be a logistical nightmare. Also, PG has some words with people working part time which mostly were not good and I totally agreed with his points.

It's a double-edged sword though. It's infinitely easier to find someone who will work part time on your idea than be committed to it.

> I would never have said anything publicly about the matter.

And you shouldn't have, it's unprofessional from someone holding your position.

> I can't stand to hear it described in this misleading way

How is it misleading? He didn't say we in reference to his YC history. He omitted any concept of more than one person, thus the assumption should be that he was speaking about himself. Which is fine.

Why is it unprofessional?

For the same reason he claimed he would normally never make this statement public to begin with.

Siqi hadn't agreed to share his entire life with his YC cofounders and pretending otherwise is very childish. The fact that PG is being upvoted for this simply because he is PG is damaging to reasonable debate.

That sucks.

Oddly enough I actually know (well, actually met) Siqi back in the day when he was at Powerset. It's interesting to hear this kind of story.

Go figure. :\

It wouldn't be wise, or kind, to judge based on hearsay, even pg's hearsay.

Yeah. Well I take it with a grain of salt I guess.

Anyway, I saw Siqi's response and it seems pretty legit.

That's pretty low.

Has YC changed its contractual agreements with new YC companies to avoid such treachery in the future ?

No; the biggest danger of people doing bad things to you is that it will make you paranoid, so we've made a conscious effort not to accumulate a lot of defensive cruft. E.g. to this day we don't ask startups to sign any kind of LOI at the the point when we agree to fund them.

If only the security organisations of the world could share your attitude.

All the dude gave was a brief description of his experience in response to what the original poster asked for. Calm down pg, you are not a god.

That is serious business.

More like treacherous business. (Sorry, I could not resist.)

I believe Directed Edge got rejected, kept going anyway, and got accepted a year later. They had already done a bunch of work and had customers in the pipeline, which let them make great use of the network once they were there.

I definitely intend on continuing development on my projects. If you're a YC reject and want to join the community of rejects in moving forward, I'm putting together a group (in SF).


It would be good/fun to see a little competition develop between YC funded companies and the YC rejects. The empire Vs the rebellion if you will. I'll leave it up to you to decide which is which.

The guys from MyFit are doing well, (by well I mean raised a series A) and they were rejected from YC. But, In my opinion, if you get rejected by YC, it doesn't mean your idea is awful. From my experience, it seems PG likes ideas that with a ton of hard work in 3 months can go from concept to market. Some ideas, such as MyFit, were going to to take too long to get a proof of concept ready and thus it's not exemplary of the program.

If you are thinking about applying, or re-applying, keep your idea simple and concise. Let PG and all the amazing YC contacts help you figure out what the killer feature is of your app that will turn it into the multi-million dollar idea.

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