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Why Y Combinator Is The Hottest Startup School In Silicon Valley

paul-graham[1]

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.

Tikhon Bernstam, cofounder of Parse, says you have to  get a year’s worth of work done in 10 weeks.

Tikhon Bernstam, cofounder of Parse, says you have to get a year's worth of work done in 10 weeks.

Parse

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.

Ryan Mickle, cofounder of Yardsale, said the finish line  is already in sight as soon as you join.

Ryan Mickle, cofounder of Yardsale, said the finish line is already in sight as soon as you join.

Yardsale

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.

James Beshara, cofounder of Crowdtilt, says Paul Graham  has turned Y Combinator into a “flight control center.”

James Beshara, cofounder of Crowdtilt, says Paul Graham has turned Y Combinator into a

Crowdtilt

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.

Jamie Wong, cofounder of Vayable, said it’s all about  “hacking” the experience.

Jamie Wong, cofounder of Vayable, said it's all about

Vayable

“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.

Tyler Bosmeny, cofounder of Clever, said the “Harvard of  hustle” pushed for growth numbers every week.

Tyler Bosmeny, cofounder of Clever, said the

Clever

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.

Chris Granger, cofounder of Light Table, said it  streamlined the nitty-gritty of starting a company.

Chris Granger, cofounder of Light Table, said it streamlined the nitty-gritty of starting a company.

Light Table

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.

Alexis Ohanian, one of Y Combinator’s first company  founders, still managed to pick up a network.

Alexis Ohanian, one of Y Combinator's first company founders, still managed to pick up a network.

Alexis Ohanian

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.

Matt Debergalis, cofounder of Meteor, says it brought  hackers together.

There are three of us, we’re all hackers. We’ve done some  projects that all ran into this problem. The reason we wrote Meteor is that we  struggled with exactly what I described, spending months building the  underpinnings of applications because we want these kinds of interfaces. We  thought this was an opportunity with the growing acceptance of JavaScript, it  was time to bring an off-the-shelf solution that we could put together as a  product that would let any developer use those same techniques to the table. We  went through Y Combinator last summer, we’ve been working on Meteor for just  about a year.

David Cann, cofounder of Double Robotics, said Y  Combinator is becoming a place where you can do a hardware startup, not just  consumer Web properties.

David Cann, cofounder of Double Robotics, said Y Combinator is becoming a place where you can do a hardware startup, not just consumer Web properties.

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.

Ryan Damico, cofounder of Crocodoc, found it easy to  pivot.

Ryan Damico, cofounder of Crocodoc, found it easy to pivot.

Crocodoc

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.

It’s not just a one-time experience. Justin Kan,  cofounder of Exec, has been through three times now.

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.

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This entry was posted on May 28, 2013 by in FUNDED, STAR-TECHS, STARTUPS and tagged , , , , , , , .

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