Thank you for applying to Y Combinator. Your application looks promising and we’d like to meet you in person…See you in California!
Twice a year, thousands of entrepreneurs are glued to their email in anticipation of these magic words. Our team was fortunate to receive them, not once but twice, over last year. YC deadline is in a few days…Sharing our experience and lessons so that other teams can hopefully gain and plan for a successful outcome.
For many, Ycombinator or YC needs no introduction as it’s the top startup school in the world. Our inspiration for YC was the series of lectures at Stanford — How to start a startup (Must watch if not already). That is the most condensed piece of great startup advice you could find on the internet at one place
We had been in operations for around 6 months and felt pretty good about our business growing @20% MoM notching up top level global clients like McKinsey, ATKearney so were fancying our chances. Our application is at the bottom so you can read up to see the business that we are in. There is a ton of great advice including from YC itself on how to write a good application so won’t repeat that here, however a few stood out for us
Crystal clarity — Important to be really clear and explain everything that goes on beneath the hood of your startup. Keep sentences short but the explanation must be comprehensive. Have you read Paul Graham’s essays on startups? These essays, like all important ideas, are models of clarity and brevity. As founder of YC, this philosophy is drilled in the selection of startups
The first question is most important: “What is your company going to make” — is usually the question which decides the flow in which the reader will decide to go ahead with the application. It should be as simple yet comprehensive to your startup as possible. Important to cover your key strengths in this question, we had decided to cover the following
- What is Vedak — explained through an example
- Under the hood explanation of how we do it
- Our initial go-to-market strategy
Market estimation should be bottom-up: A top down analysis is calculated by determining the total market, then estimating your share of that market. Let’s say you are building a SAAS Solution for restaurants in India. You get a report saying that the SAAS market size for restaurants is expected to be around $ 500 Mn in the next 5 years, and you can expect a share of 10% of this market in the next 3 years. See what the problem is here? It
- Overlooks critical market and customer segments which result in breakout startups
- Can over-estimate the market size
In a bottom up analysis , you will find out the number of potential restaurants who can pay, whom you can reach to (addressable market), which of them can be profitable customers for you, and what is your final tally. It will possibly come to a fraction of what you had estimated in top-down analysis
Restaurant or salon SAAS solutions are classic case of top-down analysis burning startups. The large number of these establishments gives misleading potential market information, however a very small %age of them in metros, are actually in need, and can pay decent bucks for these systems
Proof-reading by a founder (pref ex-YC) Quite trivial but potentially most important, my first draft had changed by 50% post a read by ex-YC founder. YC founders are now in every geography and due to the pay-it-forward culture they are ingrained with, won’t mind reading your draft. So hit up one of them, if not YC, find a good founder to help you. Hustle at this like everything else
Think deeply on the extra-curricular(?) questions A lot of applicants tend to ignore the extra curricular questions like ‘What is the best non-computer way of hacking’, ‘Tell us something impressive about you’. While these questions will not help you sprint the entire run, they certainly help you boost to the finish line
Here’s our application YC Video Interview
Before YC flies down teams across the world to San Francisco just on the basis of an application, they have a quick video chat of shortlisted startups with one of the partners. In our case, the partner was Dalton Caldwell, he was founder of Imeem, a pioneering music streaming service. We had a 10 min video chat with him during which the questions were
a. What are your biggest clients. What are the typical requests on your platform. Why do they need this service
b. What is the user journey. How are orders generated. Who pays, how much
c. What is the vision for Vedak. How big do you think it can be
We were feeling good about the fact that we got a chance to talk to one of the partners before the results, that showed that our application was at least being considered. Hence the results day was filled with the same anticipation as the time I stayed awake the whole night waiting for CAT results
YC Main interview in Mountain View, California
So the main day arrives and we are in the storied office. The panel consists of Dalton Caldwell, Eric Migicovsky (Founder of Pebble), Carolynn Levy, Lyle Fong (as an expert). Usually a panel of 5 members includes one who will be playing around with your software during the interview. So here goes the interview
1. Ok take us through the time you get an order. What do you do?
2. So how are you reaching your clients
3. Does a client require hand holding after they post a project
4. How many orders did you get the last month. What is the average order size. How does payment work
5. Someone from your team works with the client?
6. Big players like GLG (an expert network) have a fantastic business model. Why will anyone use you over them
7. How do you tackle issues of confidentiality and compliance.Is there a legal angle to it
8. Can you show me how it works on your website
9. What is next on product
10. What does each of you do on the team
As you can see, the team had a very good grasp on our business and within 10 min had gleaned a fair bit of understanding of our company and potential. I was particularly impressed by the questions on legality and business development as these are the most challenging aspects and powerful entry barriers for incumbents.
During the Q&A, I thought we had done a decent job but my team-mates who were observant, correctly perceived that we were coming off as a service model. Anyway, there was not much to be done, we took our mandatory photos on the YC signboard and went off to chill at the verdant Castro Street in Mountain View.
If YC decided to fund you, they will call but if you are rejected, you get an email. About an hour from the interview, we got the dreaded email, which went like this
Unfortunately, we’ve decided not to fund Vedak. This was a tough call for us because we are impressed with your early customers and traction, and can imagine this being something used by a bunch of customers in the future. However, we are not convinced that this is not a manual process that is less like a tech startup and more like a consulting service with a lower price. We would like to see more evidence of recurring usage on the part of clients, as well as a higher number of matches. Your current numbers seem pretty spiky and we are not sure if you have completely nailed your sales and distribution strategy yet. I would be interested in keeping in touch as you make progress with the business. Thanks,
So here it was, the first part of our experience which was Summer 2017. Overall a great experience since the very act of talking to so many smart people helped us understand our own business much better. Even though we couldn’t make it to YC, we had a concrete set of next steps to be taken which was quite a favourable outcome for us.
Here’s our application for YC S17
You can also check our application for YC W18 here which also culminated in an interview