How to get accepted for a Y Combinator interview
leavingcorporate.com
leavingcorporate.com
The first thing I ask of anyone interviewing with YC: Do you have a demo?
If you don't have a demo, you're going to have to describe your vision in a very short span of time and under pressure. Your demo, presumably, won't be shaky or easily confused by pg's questions (which I was pretty much always thrown off by, as they weren't the things we came in expecting to answer or talk about), and will just work. Even a mockup is better than having nothing, though not by much.
Having a demo exhibits so many things that are impossible for them to really judge in any other way. It shows you're committed to the project enough to spend some of your own time on it. It shows you're capable enough to build the things you say you're going to build (or at least a reasonable start on those things). It shows that you've thought enough about the idea to produce a prototype, which gives a much better view of the workability of the concept. And, finally, it helps them to understand what the heck you're talking about--they're hearing dozens of pitches on the interview weekend, and will be far more likely to remember what you're doing, if you show them than if you merely tell them.
By limiting the scope (rather than the maturity) and testing heavily you can be reasonably confident, but it will leave you with a less impressive demo to throw up.
Read that over a few times. By putting your name on that application, you're starting a commitment to your co-founders that you should take seriously... Life can take a turn, but for the most part, you should be prepared to set aside a couple of years at least-- losing a co-founder early on can be pretty deadly.
The market does not care whether your friends are "top quality players" who make important contributions. You are not a unique snowflake. If your product or service offering works, you will win.
With the caveat that you shouldn't really give a shit about what I think, my objection to this process is that it turns starting a company into yet another "thing you apply to", like college and grad school and a job at Google. Starting up is simultaneously much easier than YC can make it sounds like, and much harder.
But I disagree. Here is why: expressing your idea is one form of product development.
Writing down your idea in a way that other people understand is absolutely essential. Similarly, practicing for demo day means getting the exact phrasing of a 7 minute talk absolutely perfect. That might seem like a waste of time, until you realize that you'll be able to pitch at the drop of a hat for the life of the company as a result.
When I was a student of Toastmasters, I came across the treasure chest of dot-com era (2001) VC pitches from SpringBoard Enterprises ("Women-Capital-Connections").
I feel that many of the video clips of pitches in their Learning Center's Video Archive demonstrate the power of a confident, polished, professional, articulated pitch.
I'm happy to have found them again on Google. RealPlayer streams (Use Real Alternative instead of Real Player)
http://www.springboardenterprises.org - Learning Center - Video Archive or http://64.45.59.230/learning/lc3.asp?pid=699
KimFisher of AudioBasket.com - http://eventuring.org/Video/real/opsv00audiobasketa.rm
Julz Chavez, Get Real Girl, New York 2001 (0:42 min) Chavez describes her two market segments and focuses on her addressable market. http://eventuring.org/Video/Real/marny001getrealgirla.rm
Yes, most of the pitches are for failed B2B enterprises but you can't dismiss the presenter's drink-the-kool-aid-style fervor (remember that?)
Raising money beyond bootstrapping is very difficult unless you are referred by a credible source, which is what YC is. Its about the referrals and connections and the associated attention that comes along with them, not so much the money. I'd give up 6% of my startup if I could personally connect with all of the important angels in SV and Boston, probably even if no money was involved.
But, like you say it all really comes down to the product. That I'll agree with.
(1) The overwhelming majority of VC A-rounds don't go to YC companies.
(2) A majority of YC companies don't seem to get funded --- defined here as "an A round of over $1MM".
Graham knows more about (2) than I can claim to, and I could be wrong, but my sense of it is that I am not.
The normal route to funding for News.YC readers seems to be:
(1) Bootstrap (2) Prototype (3) Customers (4) Adult Supervision (5) Funding
(4) --- a CEO who knows how to talk to VC --- sounds demeaning, until you realize that it pales in comparison to (5), which dominates both the normal and the YC graph (note edge to (0) FAILURE at every vertex).
http://www.matasano.com/f38a0ad3a3d5c1a4a666.png
(n.b.: large). Instead of YC A-rounds, we were looking for security A-rounds. It took a few hours. This is very OCD, but hey, you can spend a few hours doing nothing on IRC.
My point is, I think your numbers are wrong, and no way do 10% of all A-rounds go to YC companies. Do YC companies have a 50% chance of getting an A-round within 12 months? I guess Graham can tell us.
Most entrepreneurs would not give up 6% for a 10-fold chance in simply getting funded. You will find this hard to believe, but I'll report it to you firsthand: some companies turn down the opportunity to get funded. We haven't even gotten into the terms discussion. Say 50% of YC'ers get funded. What percentage of them get good deals, and what percentage get tranched, 3x prefs, tiny valuation, and loss of the board? 0% of bootstrapped companies have those problems.
Late edit: there are more than 100 VCs on that radial chart. So much for 10/100=10%.
Off the top of my head, I'd say the ratio is about that, of companies that want to raise series A rounds. Most don't actually want to. They don't need that much money, so they go with angels because it's so much less restrictive.
I'm saying, to the person who said "I wish it was that easy", it is exactly that easy. Most of the companies YC "funds" don't need VC to start up, which is good, because YC doesn't give you that kind of money anyways.
There are lots of paths to success. Look at virtually any Mac software startup; none of them get VC, and they accomplish ridiculous things. Which is harder to build, Reddit or Quicksilver? Reddit was Graham's "hello world" for Arc.
Not all that hard: my last employer turned down VC financing. And I'm going a similar route with my own startup: I'm not averse to VC financing, but only after achieving "product/market fit". There's no sense taking other people's money for an idea that may not fly, and I can change direction more easily without employees or investors.
I still would like to see actual numbers for the 4 quantities I mentioned. My point is not that you're wrong, it's that without that data, you can't draw a sound conclusion either way.
"What percentage of them get good deals, and what percentage get tranched, 3x prefs, tiny valuation, and loss of the board?"
One of the advantages of YC, as I see it, is that this is far less likely to happen. YC brings bargaining power: if a VC screws over a YC startup, you can bet that YC will not be bringing any future deal-flow to that VC. You don't have this advantage as a lone startup, regardless of how good your product is. Never underestimate the power of incentives in getting people to behave properly.
How many YC "sessions" have there been so far? If each produces 4-5 funded companies 6 months later, this isn't a hard question to answer. For instance, most companies publish their boards of directors. Let's see which ones got screwed.
I'm not trying to debate whether YC is a good deal; I'm objecting to the idea of spending more time and effort applying to YC than building an offering.
However, you'd be one month behind in development. For a start-up, that could be critical.
I love the fight club tone...