SHARING AMERICA'S TECH NEWS FROM THE VALLEY TO THE ALLEY
by Megan Rose Dickey (courtesy BusinessInsider)
Y Combinator is one of the most prestigious startup accelerators in Silicon Valley.
It has an acceptance rate similar to that of an Ivy League school, and a track a record for producing billion-dollar-valuation startups, like Dropbox and Airbnb.
Over the weekend, YC founder Paul Graham tweeted that 37 companies out of the program’s 511 startups are either worth at least $40 million, or have sold for that amount.
We first saw the news over on TechCrunch.
The most surprising success story for Graham: Rap Genius, the startup that annotates rap lyrics, literature, and poetry.
But what is it actually like once you get accepted into Silicon Valley’s most prestigious accelerator?
Last year, we compiled thoughts from several Y Combinator founders about the incubator.
The best parts are, one, the YC founders support each other. They help with recommendations and suggestions for lawyers, fundraising, testing your product, help through the inevitable ups and downs of startup life, help with setting up payroll, hiring, leads on hires (like engineers), partnerships and deals. Intros to whoever you need—you could ask for an intro almost anyone and someone in the group would have it (or one of the partners would).
The Y Combinator partners are top-notch. Their help was critical to almost everyone. They helped with fundraising, constantly pushing you to launch early (“if you’re not embarrassed when you launch, you’ve waited too long”).
We demoed Parse (and Scribd the last time around) every week at dinner to our classmates, and that really helped push us every week to have something new to show. The deadline of Demo Day forces you to get a years worth of work done in 10 weeks, and is a great motivator in general.
One of big advantages to being part of Y Combinator was the unfiltered advice. The partners and alums are exceptionally candid in helping founders navigate around easily avoidable mistakes that could waste time or come back to bite you later. Stuff like financing documents are standardized (and founder friendly) so you don’t waste cycles and can focus on building your company.
That’s not to say that you won’t make mistakes—you will—but at least you dodge many of the avoidable ones, without needing to build a network of trusted advisors from scratch. The Y Combinator experience itself is a pressure cooker, as the countdown to Demo Day begins the moment you get in. So you’re forced to stay focused and work as hard as you can with the time you have. It seems to work to effectively “reset” your work/social life. At least it seemed like the case for us, since we were one of many who moved down to Mountain View for the summer, leaving many of the things that would have distracted us in the City [San Francisco], so we could work hard to get into the groove of being productive.
Finally, the support of alums was invaluable. They always seemed to make time when you needed help and the network is large enough that the problems you face are rarely if ever unique. And there definitely seems to be a spirit of indebtedness toward Y Combinator itself, so past founders look forward to helping future founders, because it wasn’t that long ago when someone, perhaps an alum or YC partner, did the same for them.
During the program, I would say that the constraints of 90 days and weekly conversations about your product and growth are invaluable for focus and productivity.
And since the more recent your batch, the larger the network you graduate into—the network of other founders and companies has become the single biggest factor in why I tell every tech entrepreneur I know that they should apply to Y Combinator.
In their own words, PG et al. have almost turned into more of a flight control center … “Oh you’re having this problem, talk to these founders. Oh you’re selling this solution, these guys need that.” It’s pretty incredible.
“It’s really provided us with a very strong network as well as advice from people who have pretty much seen it all. The structure, I think, is really beneficial to getting early traction and getting things off the ground. Seeing the progress everyone has made, that’s what’s most important right now.”
Going through Y Combinator is like is like training to run a race that you treat as a 100 meter dash, but ends up in fact being a marathon. You’re working toward a goal of demo day, which you’ll later exchange for other milestones. You develop a cadence as a team, with product, growth and user interfacing that will become so ingrained to your own circadian rhythm, that by the time Tuesday dinners end, you’re still in flow.
Demo Day feels like a final performance, and you hope you can hit the time you’d been able to hit in training, it’s the culmination of all the hard work, just so you can make it through the next rounds and do it all over again, but faster, stronger, harder. The best lesson you learn, is to hack your Y Combinator experience to your own benefit, starting the minute you scoop your first serving of glob out of the famed Y Combinator crock pot.
You show up to Y Combinator every Tuesday and you get asked about your growth. We’re motivated to keep figuring out whatever it takes to grow. You gotta get those growth numbers higher.
Going through Y Combinator is like enrolling at the Harvard of hustle. You’re surrounded by amazing people all moving at light speed in their own directions. The partners are the best part though.. they provide focus and clarity in a way that amplifies your efforts all summer.
Y Combinator opens up opportunities, not even to just investors, but to meet people you might not otherwise meet and learn from them. It’s not even them giving you anything necessarily or opening doors, it’s learning from people you would never have the opportunity to see. That’s the most valuable thing we got out of it, beyond the fact it also let us focus. We didn’t have to worry about, how in the world do you set up a company. They have a streamlined process, now it’s all done, so go do your stuff.
We didn’t have an alum network to lean on, but we developed invaluable relationships within our class (starting a startup, especially back in 2005, made it hard to relate to most of our peers—fellow founders understood why we didn’t care about having health insurance or a salary). Our first hire, Chris Slowe, came about because Steve and I moved into his two spare bedrooms; he decided to go back to grad school after that summer of YC and we lucked into one of the best developers/friends you could ask for.
We were in a somewhat unique position, since we are a hardware and software company. There were at least five hardware companies in Y Combinator this batch, which is the most ever. At the Y Combinator dinners every Tuesday, we basically dominated the front lobby, so everyone had to see us and help beta test our robot on their way out.
One of the most interesting things we learned is to do nonscalable things to make a few customers very happy, then figure out how to scale later. We took that advice and have been running a beta program with several companies. We’ve learned a lot and have improved the product based on their experiences. We’re now in the process of scaling our production to meet the high demand in pre-orders.
We worked for a few years on WebNotes, the idea we used when we applied to Y Combinator. We got in and moved from Boston to San Francisco about two and a half years ago. We pivoted in the middle of the first class to the first version of what would become Crocodoc.
This is about my third time through, so far it’s been really fun. I’m back in early-stage mode and building a product myself.
Thank you. TiA.
Thank you. TiA.