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After reviewing about 30 YC applications, here's some general advice (sandersak.posthaven.com)
120 points by SandersAK on March 27, 2014 | hide | past | favorite | 46 comments

While growth is the most important thing in a startup, it's unreasonable to expect it at the point when companies are applying to YC, so it is not the main thing the partners look for. Neither Dropbox nor Airbnb nor Stripe nor Optimizely had any growth when they applied to YC. When I was reading applications (odd yet delightful to use the past tense) the main thing I looked for was energetic founders working on an idea that grew organically out of their own experience. E.g. Optimizely consisted of the guy in charge of a/b testing for Obama's first presidential campaign, starting a company to turn the insights he'd gained into a product.

That said, startups should certainly seek growth, because that's how you evaluate and refine an idea. When you try to get people to use something you've built, and especially to pay for it, you learn quickly what's wrong with it.

The only misleading thing about Adrian's advice is the implication that you need growth to get funded by YC. That is definitely not true. A quick random sample of the current batch (the first 10 in alphabetical order) shows only half had any growth when they were accepted.

Yeah, I didn't mean to assert that growth will guarantee YC funding, but that growth is the one of the best ways to keep you on track as you explore your idea and prototype.

At least for us, it saved us a lot of discussion when we could say "is this particular feature helping us grow?" and if the answer as no, we would move on.

But I do think, even at the earliest stages, it isn't hard to gauge interest by showing demand. Sign up pages are simple enough to do.

Great article; maintaining focus on growth is good general startup advice. However, I think it breaks down for startups in the Enterprise realm (not talking about the B2B startups that provide commodity services).

Firstly, getting traction by number of users is much harder. But every customer you sign on implies huge growth for your company in terms of revenue. Take Palantir for example; afaik, their initial massive growth came from a single, but huge, government contract.

Secondly, growth will never be a smooth 10%/week type of curve -- more like an irregular staircase; but taken over the long-term (years), it might get you higher. So taking a granular snapshot of the early beginnings might show no growth at all.

Thirdly, there won't be many early signups. Simply because the volume is much lower.

Having said that, zooming out on the macro scale (years), your advice still holds (growth > everything) -- but it doesn't apply to the YC application process :)

I notice that all the companies you mention were in earlier YC sessions, the last being Optimizely in W10.

I've noticed, the companies I hear about going through YC now seem to progressed further along than companies in earlier YC sessions. I admit, this may be due to media reporting bias of covering companies that have product and traction, but I'd like to see some stats comparing YC companies by session and launch dates. I suspect we'd find that more companies being admitted into current sessions are already further down the development track than earlier in YC history.

Of course, this should be expected. YC has grown significantly, and has a ton of media attraction. It has become a signal of success, so YC has more applications from companies which are already seeing success and YC gets to limit their risk by taking on companies further down the track.

I mentioned those because they have the highest valuations. It usually takes several years to reach that sort of valuation, so the most highly valued companies are never the recent ones.

In our case we will wait till next batch to reapply (we applied for the 1st time when we were "naked and stupid" ;-) )

Some months have passed, we've learned our lessons, gathered great team, got feedback from around the world and finally seeing that we're onto something. Nice thing is that on the day-to-day basis it seems that we are doing exactly the same thing as few months ago. But when looking from the time perspective we've discovered that there are changes - details really matters!

Now preparing to hit the local market so we'll make mistakes and adjust our stuff on local scale before hitting US & YC (and it;ll be also nice to show some real numbers from the market in our application).

Good luck to all S14 applicants!

Thank you for the clarification Paul (and Adrian for your perspective). May I ask if there is a bias against applicants who have spent a significant amount of time on the product (say, a year or more) but haven't built a user base?

For example, if the choice was made to put in more effort up front on iterating and validating the product design rather than trying to implement a MVP and try to start building the user base early? Is it easy for you conceive of situations where this is the best, or at least sufficiently logical, choice? Or is that likely a deal breaker?

It depends on what the company is building. Some things take a long time to launch. With others it's a bad sign if the company takes more than a month or two to launch.

Thank you Paul, I appreciate you taking the time to respond. Your answer is helpful in that now I understand your general perspective, which addresses my question.

My problem is that I purposefully tried to ask a general question with broad applicability, because I think that is respectful of your time and the community. However, what remains unclear are the specifics of how my product and company would be assessed. The devil is always in the details. I don't think it is fair to ask for such personal advice from you, but perhaps you have some advice as to the best way to go about getting good feedback on my company and product? Short of getting into YC, I mean. Should I take Adrian up on his offer if he is still willing (for my own edification, not for this round of applications)? Are there other good ways you know of?

And yes, at some point I will just launch on my own if necessary, but I continue to believe the cost/benefit trade off of getting counsel from experienced mentors is very favorable. So, I want to make sure I am doing everything I can to be successful and in the meantime to be able to demonstrate evidence that I am worth the time/effort/capital of those who are looking for those with potential.

I was wondering if YCombinator is looking to partner up with industries like TechStars has with Disney and Sprint?

It would be awesome to see Y and or TechStars or another incubator team up with the Recording Industry! I'm surprised that industry hasn't already established an accelerator.

Seems unlikely. YC doesn't need the money, so it would just be a distraction.

Yeah wasn't thinking about the money more so YC being an impetus in getting the industry to loosen it's copyright belt. At least for incubated companies.

YC is all about changing the game. Their game needs to be changed and it would be a win for them!

On a different note last year we applied and got denied, but a week later we we're invited to demo our novel tech to a company out in the valley. Not sure how that happened, but it was a good start to our story & journey!


I take his post to mean that demonstrated growth helps bump your rank up the list, consistent with the themes you explore in some of your essays.

Starting a startup is like going to war with hundreds of millions of people except instead of attacking you, they just do not give a shit about what you're doing and ignore you all the time.

This is really important. When I first started a business, criticism stung. Now I love it. It means someone knows you exist, and it's worth their time to tell you what you're doing wrong.

I liked that line too. The worst place to be is in the nobody gives a shit category. I would rather people attack what I am doing than just not give a shit because at least than I have something to work with.

>The goal of your startup is not to get into YC

One of my friends who did YC said something that stuck in my mind: "Getting into YC is like getting into Stanford. For 70% of people it's their zenith. Sure the other 30% go on to do amazing things, but for most people just getting in is the most impressive thing they ever do."

I found the perspective extremely motivating and it doesn't surprise me at all that he and his company have continued to do well.

So true. It's fairly common for people to spend most of their lives expecting others to give them value. "If I get into Stanford/YC, then I'll be successful"

It's weird people don't think about the other way around:

• Strive for success — period — and then Stanford/YC will want YOU.

At the end of the day it's about creating value. It's not made out of thin air. It's not made from a diploma. It's not made from an acceptance letter.

It's made by You.


This lines up so well with what I've been thinking. If your goal is to get into YC or some other VC thingy or get some high-level contacts or something of that nature, then you are probably thinking all wrong. Start by building something and getting some customers, then find out what else they want. If you can't get any customers at the un-funded scale, then funding isn't likely to help you much.

I bet every investor out there would much rather fund the guy who says "I built this website with this basic feature set, got a few dozen customers and X revenue. My customers want these totally doable features. If you give me $Y, then I can hire more engineers or whatever to build them." than the guy who says "I have a really cool idea that I haven't done anything at all with yet. Give me $Millions and I'll do something awesome".

If your goal is to get funded, you're much more likely to get ignored. If your goal is to build something awesome with whatever is at hand, then the investors just might come to you.

> It's not made out of thin air. It's not made from a diploma. It's not made from an acceptance letter. It's made by You.

You couldn't have said it better. Nothing motivates me more than realizing that if I don't do something I care about myself, it won't happen.

This is awesome Adrian - I wish this existed six months ago. I've been asked this many times lately, and I think it's important enough to add it here as well:

The best way to prepare for the YC application process is to actually work on your company.

You learn so much about your customers and product space by actually building something and talking to customers about it. By doing that, thinking critically about the results, and iterating, you'll find the YC application and interview questions get easier to answer - because you'll know more about what you're doing and why than anyone else.

I found that to be true applying to YC for the first time now. We spent an hour or two doing a first version of the application.

After that we spent 95% of our time talking to potential customers and building things. We just refined our application every few days.

The questions get a lot easier to answer, and you're not wasting time trying to hack answers.

I've talked to a few potential applicants this week and something that perturbs me in particular is that YC will somehow "make everything work". In startups things rarely work (at least initially).

YC should be regarded as fuel to the mythical fire... whether that fire is your passion, an initial sloping growth curve, or a crazy new technology you just created in your attic.

Partners, the schedule, constant accountability will all provide structure and tremendous value to accelerate your progress - but the mythical fire must already be a spark.

Some things just require a lot of time to grow, either because it's a new problem or a new technology. We were lucky because both of us (founders) had a headstart in academia, which funded our research for 2 years. We could chart prototype pools of 20,000+ people and test out things like scalable mesh wifi networks and user-persona switching because of that academia safety net.

Maybe it's more truthful to say - "having a growth vertical and being able to articulate it concisely is the most important." Things will change. Your strategy will change, your product will adjust itself based on testing, listening, more testing, listening. Getting that market fit, and knowing your market ensures that you're growing in the direction that you actually want to grow in.

I'm a current applicant though, so maybe I'm wrong. Regardless, we did our best in the application and that's all we can do. Now -- back to working on the company! (it takes them a while to get back to you anyway, no point waiting anxiously)

PS. good luck to everyone else who applied

I applied, with growth. Funny enough this is truly the first time I've gone asking for money when I didn't need it.

YC has a lot of benefits, but I feel like it would be a amplifier to our existing success and a community of mentors and entrepreneurs to help us stay focused on what it takes to sustain growth...

Growth is very gratifying. It still surprises me when people like the things I build.

Can somebody help me - how do you show/project "growth" before actually creating the product? (a SaaS app)

Adrian reviewed our application at a time when we had absolutely zero evidence of traction or growth. Our product was (and still is) unfinished and certainly not at the stage where we could run beta tests.

To combat this, we presented a concept video on our website[1] and accepted emails for signups. By carefully explaining the idea and finding people who might be interested in it, we've managed to collect over 600 emails in the past few weeks. I'd recommend a similar approach, reach out to people and communities who might be interested in your product. If they're unwilling to give you their email, it might indicate they're even less willing to give you their money.

Once we flushed the idea out a little bit more, we updated the video[2] with actual footage.

[1] https://www.youtube.com/watch?v=nbezr3yDJtQ

[2] https://www.youtube.com/watch?v=CuQ8NJOypqs

You can't really have growth without a product, but like PG said in the top comment, that's not a reason not to apply to YC. You can probably still assess demand - hopefully because you yourself want what you are building. That's also helpful for us to say, though again not make or break.

Growth and potential market are things we'll look at, but we're careful about making sure neither unduly influences us. The most important things are the founders and their relationships to one another. We want great founders with great ideas and the tenacity and ability to go after them.

It would be interesting if YC ever rejected someone with 10% growth over 8 weeks or what the rejection rate at that growth is, because I think it's quite a strong criterion? (given that it's not a totally unscalable business)

Well, let us say you start out with a pool of 10 people.

Week 1 - 11 [10%] Week 2 - 13 [>10%] Week 3 - 15 [>10%] Week 4 - 17 [>10%] Week 5 - 20 [>10%] Week 6 - 23 [>10%] Week 7 - 26 [>10%] Week 8 - 29 [>10%]

Would a growth rate of 2-3 paying accounts at a SaaS price point of $10/month really affect a decision?

Sure, if your MRR grew by 10% and your starting base was $10,000 I could see a reasonable extrapolation from that. But if your starting base is 10 accounts @ $10/month [$100 MRR], you might die out once you realize your niche is only 1000 accounts deep.

So I'd say 'growth' is probably the equivalent of a +1, criteria met, rather than an overpowering criterion that is weighted higher than any other.

That is just my guess tho.

This is actually a totally legit target for investment on Demo Day.

If your product costs $30+/user/month, dozens of users could mean that you're ramen profitable at the end of two months, a major milestone. If you can sustain that 10% growth for two months of YC, you'll have enough money to hire an employee by bootstrapping alone, which means that you're able to turn down investors, which makes you more valuable.

You shouldn't ask for (and shouldn't take) millions of dollars in investment at that point, but you're certainly lined up for hundreds of thousands of dollars; keep up that 10% growth rate a few more months and you will be ready for VC.

A special note to those energetic founders: don't go after a small market. That will certainly cut your chances in half or more. I've seen in many times (and for myself). Yes, I A/B tested the 'energetic founder' YC claim myself.

Show you want to go after something big. And if you switch after (you most likely will), no problem. You still meet all the big players and accomplish your goal (which will be impossible to uncover).

> because growth is nearly the only thing that really matters, if you can't get growth, then you should probably hang up your boots and retire from founder life.

Lifestyle businesses are not failures. If you're making enough money to live on from your business, and you're happy, then keep doing it, even if your business isn't growing.

• Does YC fund "lifestyle businesses"?

• Even a lifestyle business needs growth — just enough to support the owner's lifestyle — but growth nonetheless (unless one customer is all you ever need)

YC doesn't fund lifestyle businesess (on purpose).

Lifestyle businesses don't need growth; they need profits. If your revenue/profit are consistent, and they're high enough, you don't have to grow.

I am currently working on a side project that requires contracts with content producers - think HBO. My goal is to have a technical prototype and apply for YC in W15. The main thing I need from YC is connections to be able to get those contracts. I cannot get users until I have contracts. How do I show growth in my application?

Sounds cool!

But the reality is that with or without YC, you're going to need to learn how to close some of those contracts on your own.

Of course having connections is super helpful, but you're much more likely to get those introductions if you can show that you get things done without them.

So my advice would be to work on closing smaller contracts / deals and show that you are capable of running those processes first (and you also show growth!).

Then it's a lot easier to recommend you and pass you along to people in a network.

This is the whole point of domain expertise that so many people ignore. Domain expertise is not just about knowledge; it's about the relationships you develop by actually spending time in an industry.

Thousands of people work at HBO. Tens of thousands of people work at Time Warner, which owns HBO. And tens of thousands more work in the broadcast media ecosystem. If you're really passionate about doing something in this industry, why not work in it for a few years?

Not only are you bound to meet the people who can help you, or who know the people who can help you, if you're strategic, you can put yourself in the position to come to the table with a modicum of industry cred, something that run-of-the-mill introduction-seekers almost always lack.

I've had some experience doing IPTV stuff both with incumbent MVPDs and as part of an OTT play. I'll warn you, in case you don't know, that these kinds of deals take a LONG time (think 2-4 years) and if you are looking for content rights expect significant upfront cash payments if you can even get them. HBO for instance is/was part of a conglomerate that also owned a cable company and like everyone else in the space is very sensitive about anything that will increase risk (even marginally) for their multi-billion dollar cable deals.

I'm not trying to discourage you, just pointing out that there are huge obstacles in the space that have nothing to do with technology.

It may make sense for you to look at the Disney/techstars accelerator as it might be more closely aligned to the kind of connections you'll need.

All good except :

> if you can't get growth, then you should probably hang up your boots and retire from founder life

Don't let anybody tell you when to retire.

Growth > everything is something that just came up in a conversation I had with a VC-backed startup. My employer is bootstrapped, and I have both EBITDA and YoY growth goals. The startup told me that they essentially ignore acquisition cost. It made me incredibly jealous, since I've been driving growth with positive EBITDA for two years, and I am salivating over what I could do with a good product and no EBITDA constraints.

Just want to clarify this - I'm speaking solely as someone who was given aggressive growth and profitability targets that pretty clearly were so aggressive that it was highly unlikely we could hit both. The envy I felt was primarily about early stage startups being able to focus primarily on growth (and covering as much of their burn as possible), rather than outright profitability. I don't think companies should ignore profit, especially not as they grow larger. But having a clear primary goal sounds pretty great.

Startups are difficult; conviction and passion for what you're doing is imperative.

So...should I mention growth in my application? ;)

growth before all else. i'll take that.

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