Rejected from YC (Again) | Hacker News Reader

Rejected from YC (Again)

veed.io

403 pointssabbakeynejad258 comments

This is a fantastic story! A couple of takeaways here. The team took rejection VERY well. This is not as easy as you may think. This to me shows the founders believe in what they are doing and have a deeper goal than just making money. The ability to take the feedback and double down in just a few days is motivational.

Second, The power of positive response to negative situations. Lord knows how long it would have taken them to work on MRR if not for the rejection and they could easily have wasted time fiddling with copy and graphics, but the pressure for YC to re-evaluate them made them release ASAP and now they are already making revenue. At the end of the day, YC rejection allowed them to start generating proper revenue before they would have initially, to me that's a win, and they still get to keep the shares YC would have taken and now they have a higher valuation for whomever they apply to next for funding.

This is a great framing of a story that could easily be a sob story blog post. Keep it up, guys. You are bound for success.

> The ability to take the feedback and double down in just a few days is motivational.

Maybe. I took it slightly differently. They received negative feedback after a 10 minute pitch, and immediately dropped everything to change their product & strategy to appease a potential investor.

Was monetizing in this manner at this moment the right strategy for them? That's a pivotal decision to make and not one I'd throw together at 2 am to try impress a party with no skin in the game.

Their willingness to make the change may reflect the fact that deep down, they had been thinking that they should monetize, and having YC tell them to do it may just have been the kick in the ass they needed.

It's not like YC told them "put on a chicken suit and dance in front of our headquarters and we might consider you".

Monetizing and finding out whether there's anyone willing to actually pay for the product is a straightforward move. They weren't building a social network or something with a massive network effect. Putting off the terrifying discovery ("hey, will anyone pay for this?") in their case may just have been procrastination - and YC's rejection may have been a useful trigger to end it.

I think considering they've grown the MRR to $5000 from nothing since then, it looks like it was a pretty good strategy even if you don't like how it was concocted.

It is very rare that I upvote two comments that seem to be in opposition to each other. In this case, I think it's warranted because you're both likely correct.

In your favour, the strategy was successful and they grew to $5k MRR in four months with estimates suggesting they'll hit $100k in recurring annual revenue by the end of the year. It worked so it's hard to criticize it.

But, what if it hadn't, or what if the founders were in a different situation where they had a bigger team? Last minute "we have to do this now" decisions are often wrong. When they're not, they often result in some really ugly code that will be tough to maintain. Further, they can be hard on morale.

Chances are that the founders had this type of conversation and talked about the risks while they were brainstorming. It almost sounds like they had debated this in the past. Those kinds of debates are very valuable and I think that founders need to talk about how a new feature can go bad.

I think you're generally right, but "we have to make money NOW" is a last-minute decision that's probably right in every scenario.

It can be pretty stressful working for people who pivot too easily.

Some investors may be attracted to this kind of behavior, and I fear they are also the least pleasant to work with. Things can get a little exploitative sometimes.

Just wanted to echo this post. The start of the OP felt a little like the prospective founders were focused more on image than results, but by the end I was convinced.

My 2 cents would be to forget about YC as a source of seed capital and either get a loan or private angel investment to build a solid, revenue generating success.

Ya, if you already have good revenue and revenue growth, why do you need YC? I think YC may be overvaluing their contribution a bit.

If I take on all the risk, blood, sweat, and tears to get a product built and out the door and making money, I don't need your $150k. At least right now in this climate, you can raise much more than that from VCs that carry cachet similar to YC and will be good advisors as well.

We got rejected 4 years ago and ended up building the company to about 40M/yr revenue. And we have many VC rejections to add to it. So dont take any rejections too seriously. Focus on the customer need and building a good team.

YC isn’t a slam sunk. It’s funded 1000s of companies and ~100-ish have made it big.

So you can say 9/10 times they get it wrong but 1/10 is worth it for them.

So if YC gets it wrong, that’s their loss. There is no rule that says to build a great product and a great company you need YC or insane VC money.

So kudos to you sticking out and building a great product.

Also, ~90ish of those 100 successful ones have come from batches pre 2014, so there is that… ;-)

If you define "success" as market valuation, assume that market valuation grows with time for successful companies and YC select companies with a bias for companies that are not successful yet... The fact that most successful companies come from older batches is just a description of their business model right?

Fair point! I'm sure there will be some run off successes among the current crop as well, but so far, my sensibilities tell me that there has been a drop in quality—and in general the appetite for risk taking within the YC has gone down substantially.

Without the data of course it is hard to tell with 100% confidence.

My sensibilities are very different from yours. I see some crazy risk biotech getting selected, not mention some crypto stuff that a lot of people claims to have near zero value. Even the regular software ones seems as risky as always.

My impression is: same quality, same risk level, more companies.

Yeah, growing a business takes time.

In my point of view, theres a cultural ocidental tradition to fight uncertainty at any cost.

This lead us all to a very good economical and technological progress so far, but in a lot of cases i see this fight going too far, where we have pseudo-objective schemes of validation that are completely worthless and while they look a whole lot more 'scientific' their results are no better than rolling a dice.

We need to be aware that people validating this kind of stuff are using patterns based on their former experience to validate better what they are judging.

We need to pay attention and learn with their experience, but also be aware that their denial doesnt necessarily mean you wont make it, because its actually impossible for them to tell you this for sure.

They can only try to calculate who have better chances to succed. And a LOT of people that will actually succed wont get squared up in those patterns, because they are based in past events that are unlikely to repeat (paradigm shifts are pretty hard to predict for instance, because a lot of them come from 'black swan' kind of events).

So you maybe you have a bussiness plan so risky they will calculate that you are likely to fail, they are probably very good to understand the percentage of your sucess/fail rate.. but they hardly can understand your human value to deliver that dream, because this is most in the uncertainty arena.

Maybe some of them will follow their 'gut feeling' and do a very good bet.. but this is beyond what can be extimated, calculated or measured and we need to be very aware of that.

Theres no better teacher than persistence, but one that can learn with its mistakes. And this human-gold value along with others hardly will get detected over some pattern-based human radars.

So my main point is, in the end is up to you to create the means to succeed, and a lot of them have to do with human qualities where most of them cant be measured that way.

Occidental? If anything this is an issue in the Orient, not the Occident. Japan has excellent schools, plenty of money and a very hard working population, but struggle to create startups because the willing to take risks is so low.

I was thinking more in the line of classical philosophy. You have cartesianism and classical geometry shaped line of thinking on one side and taoist, confucionist, budhist line of thinking on the other.

Modern Japan is reshaped orient with ocidental cultural values, so sorry to use terms that can be misleading because i've failed to give a clear context of what i mean.

And you are right in the sense that some cultures are better than others to face uncertainty with a tenacious spirit.

the US culture is also good at this (despite the mixing of both), but my criticism is more target in the sense we need more awareness of uncertainty and where our tools of measure are limited and cannot reach.

People facing the uncertainty with a brave spirit can be deceived to think people judging them can measure them correctly and that some judgements are final.

Its pretty hard to be the one facing uncertainty, and to be judged by things the other side might not have to right tools to do it right.

Not forgeting, in the context we are talking about, a HN board would probably be the best to understand and to predict a lot of things correctly. But my guess is that we need more awareness and understand more a kind of philosophy that in my point of view, is more advanced to undertand problems that are beyond mesure and pratical reason.

Congratulations. Would you be comfortable revealing the startup and/or briefly tell us what it does?

Actually just moved on to start a new startup. Which also YC rejected yesterday. But to be honest most of our success was because the YC and HN network. We got tons of value out of PGs essays, YC posts/videos and HN articles and comments. Hope to continue using those resources for the next one!!

YC is looking at this from the VC/startup perspective. "Does this group of people with this company seem like they can make a billion dollar business in the next ~10 years?" They want founders that target a huge (or growing / potentially huge) market with stars in their eyes and some insight as to how to own it.

If you're content with a small business and growing slowly then you are not a good fit.

You might have a great business in the end, but still not be a fit for the model. Like others have said, YC partners miss big hits. They're not perfect. Keep going and if you have a relentless focus on month over month growth and keep your churn down then you have a chance to get VC-style growth capital. But, if you just want to bootstrap a profitable business you'll be better off doing that on your own and getting bank loans or other risk-adverse capital.

What you say is technically true, but given how easy it is to pivot nowadays, and the fact that YC prides itself on accepting teams even pre-product, this "billion dollar business" line seems like a great way to reject anyone they want for any reason.

Since it’s their money, it seems pretty reasonable that the should be able to invest in whoever they want, for whatever reason.

I agree, and I have no problem with that. What I do have a problem with is telling applicants how they make decisions in a nice fair way, when in fact they use another, “secret” rubric that’s based more on brand and connections. If you’re going to evaluate folks, don't lie about how you're doing it.

I’m not sure how it would benefit them to “lie” about their criteria, unless they were secretly racist or something (clearly not the case). If anything they would want to encourage the kind of founders they actually accept, to make the process more efficient.

I’m sure the process isn’t entirely fair, since picking winners at such an early stage is incredibly hard and they have so little time for each candidate, but I’m also sure that they _try_ to be as fair as possible.

And I write this as someone that has been rejected about half a dozen times...

Garry just posted a video about the criteria they used in interviews when he was there...

https://www.youtube.com/watch?v=rfTgzA6iKZc https://news.ycombinator.com/item?id=21288988

Note: He was one of the partners assigned to us and invested in our company with his VC firm.

They accept founders with a cornucopia of backgrounds. From people with barely an idea to people with running businesses.

I would presume the farther along your business is and the more stuck you are on that particular model the more the evaluation leans toward the business growth metrics.

When we did YC we were accepted with an idea, a landing page with some email signups, and almost a customer. They asked hard hitting questions in the interview. We did have industry connections, some unique insights, and previous startup experience.

After being "inside" (as a company founder at least) and seeing everything they write about on the "outside", I take what YC says at face value. They earned trust.

It's a bit off topic, but I wonder why everyone is so focussed on MRR (monthly recurring revenue). Why are you focussing only on people who want to pay you every month?

Especially for a tool that targets beginners. I mean, if someone uses your app enough to keep paying 20€ for it every month, I would assume that they'll soon want to upgrade to "real" video editing software. Adobe Premiere isn't that much more expensive.

Of course, the non-power users can just use the free version with watermarks. But who wants a watermark on their videos?

I always wonder why these SaaS companies do not offer something for casual users?

If I want to edit just a single video from a special event, why do I need to get a monthly subscription? Why can't I just pay $5 or whatever to remove a watermark from a single video?

I understand that targeting casual users may seem less profitable than targeting power users. But there's probably also lot less competition in that space, and it may help with word of mouth advertising if you don't focus exclusively on the most frequent users of your software.

Subscriptions are cool right now. It's an easy way, especially when you're a new company, to show that people like your product and need your product enough to use it on a recurring basis.

One off purchases are great for consumables. You wouldn't expect a shoe company to have recurring revenue (at least not monthly, should hopefully take a bit longer than that for shoes to wear out). But for software, the current emphasis is on making products people use, and pay for, regularly.

> Subscriptions are cool right now > But for software, the current emphasis is [...]

Yes, SaaS is hot now, but this doesn't explain why.

> an easy way [...] to show that people like your product and need your product

This attempts to explain an advantage of Saas, but totally neglects the viewpoint of the customer. And that's the problem I have with it: SaaS is an advantage in the relation between the company and their investors (look, recurring revenue!), but for the customer it's often not a good thing.

The reason most companies have turned to SAAS is that it provides a more reliable revenue stream at the low end of the spectrum given that individuals are usually bad about paying attention to recurring billing, and much cheaper to support at the enterprise level. You don't have to support 20 versions of the same product, you just roll out one or two and support those.

I remember someone mentioning that one of the dark secrets of the SaaS world is reliance on people procrastinating on cancelling the subscription, forgetting to cancel it, etc.

I think if I had a SaaS company, I'd try to avoid doing that, and encourage people who are clearly not using the product to unsubscribe.

Most SaaS is enterprise facing, not consumer, so I don't know how much procrastination fits into it as the momentum behind decision making in a business.

As long as you've got the cost approved for your cost center it will continue to be paid until someone says otherwise. The end result is the same.

The other part though is that if you want your data from a SAAS platform to migrate to another one, it's a giant pain in the ass because most SAAS platforms don't have "export data for use with competitors" at the top of their TODO lists. You need to get the data, get the new system configured, and then train your employees on that system.

Good point, I didn't think about B2C vs B2B difference, I was thinking about B2C SaaS.

I think Saas has a ton of advantages for customers as well. Just spitballing some:

- Updates happen automatically without disruption to users

- The product, at least in theory, improves and adds new features over time

- Can access from any device

- Better integrations through APIs, Zapier, etc.

All of those things are pretty non-trivial.

Another complaint about MRR is that it doesn't take into account how much time/money was spent to earn that revenue. Is there a good alternative metric that factors in margins or profitability or something? MRR is great if you're venture-backed and don't have to worry about your marketing budget. But if you're bootstrapped (like these guys are), MRR is less useful than something that at least accounts for costs associated with the revenue.

Wouldn't it be extremely difficult to build a sustainable business on random one-off payments from casual users?

So many businesses rely on one-off payments. It's a lot easier to get people to pay once than it is to convince them to pay every month.

It's true that it's harder to sell people on a monthly subscription, but once you do, the revenue is much more predictable.

From the entrepreneurs perspective, SaaS is a much more appealing business model, though of course customers would prefer to pay once instead of every month.

Also, I'm not a technical person so I might be wrong, but I'd also imagine that an online video editing tool requires a lot of money to maintain, so random one-off $5 payments might not be enough keep the lights on.

> the revenue [on a monthly subscription] is much more predictable

That's a common fallacy here on HN. But it's just not true that one-off payments aren't predictable.

If you have a large enough number of potential customers, and some small fraction of them buys your product every month, you'll end up with very predictable revenue, even if each single customer only pays once.

As the number of sales per month increases, the variance goes down, and you end up with remarkable constant revenue. I don't know enough about statistics to explain why that is the case, but I know from experience that it does work like this.

Note that I'm not saying that pay-once is more or less profitable than subscriptions. I have no clue, and I suspect this strongly depends on the target audience. All I'm saying is that subscriptions are not "more predictable".

Customer acquisition is expensive, and if you have a subscription-based model you only have to get a customer once. If you're relying on one-off payments, every transaction comes with acquisition costs.

Customer acquisition can be expensive, but that's not a given. If your product is good enough that people tell others about it, you might not have any customer acquisition costs at all. (I know that because I sell software and spend almost no money on marketing)

It’s probably not a lot easier and lifetime value is probably a lot lower.

You can can't you. You can license Premiere Pro for 1 month for $31 or at least it appears you can. When I go here https://www.adobe.com/creativecloud/plans.html and click Premiere Pro it gives me 3 options

1. Annual plan billed monthly $21 a month

2. Annual plan billed yearly $240 (So $12 cheaper)

3. Monthly plan $31 a month

$31 seems like an incredibly good deal to me since the software is amazing (IMO) and I probably only need it once every 2 years at the moment.

Good point. That is pretty affordable if you only need it for a short project.

But then again, I never even considered buying access to Adobe apps for just a month -- I'm wary of subscriptions, it's all too easy to forget cancelling them in time, and then you end up paying for software you don't need.

Tech startups and the Angel/VC ecosystem feels like a Ponzi scheme sometimes. The goal doesn’t seem to be to create a profitable business, but to make a good exit with the next investor’s money (or the public’s in the case of an IPO).

Congratulations on your achievement!

I’m not sure it is very common that the next round investors buy shares from the first round, seems to defeat the purpose of raising money. IPOs are a different story though, cf We, Uber.

It sucks to be rejected from anything, especially YC, but as a catalyst to push you forwards and move from 'interesting tech project' to 'actual business making money' it sounds like your interview was exactly what you needed. Well done.

Completely agree, we now profitable and own 100% of the company. Thanks, YC :)

Profitable with $5k in monthly revenue? Profitable needs to cover market salaries and all expenses, IMO. Maybe Ramen profitable.

The Veed founders are in London, and while about $2500/month each after tax isn't great money for a London dev it is definitely "low end junior dev" level wages.

So the business costs $0 a month to run?

> push you forwards and move from 'interesting tech project' to 'actual business making money'

That's the thing. Who are you trying to impress? Investors? Or your customers?

This is exactly what I thought. Sometimes a bad dish is a wonderful elixir.

> Video editor in browser

But why? YC takes up a lot of risky ventures but I really don't see video editor in browser taking off beyond a fun little toy so I definitely get why they refused. Could you elaborate more who's your clientele? I'm very curious.

Nevertheless it was a fun read!

I had a browser based video editor startup (we failed). Video editing on the desktop sucks if you are not a pro. For causal users it's like rocket science. Enabling video editing in the browser is a godsend since it takes out so much from the equation which makes it hard.

There are now successful startups in this space with serious investments.

Huh? How does moving from desktop app to browser remove hard elements from the equation?

Just to name a few:

- installing codecs

- video conversion to the right format the editor can handle

- video export to the right format, size, frame rate that works on the web

- navigating a complex UI with usually the most common features hidden in context menus and shortcuts

The first three are more or less the same thing, and could easily be handled by a native app if there’s internet.

The last one seems completely unrelated to the choice between browser and desktop. If anything it is harder to make nice UI in the browser.

Your point is that a native app is better than a browser app or that current solutions are good enough?

By moving rendering server side, a lot of problems are solved.

Casual users shouldn't install complex solutions and watch tutorials to do simple things.

I didn’t know the rendering was done server-side, but if that saves time then that’s a plus of course.

I don’t agree about installation at all, with mac app store (and probably on the PC as well) installation is a one-click affair.

As to tutorials, I don’t see how the choice of platform would make it any easier to use, how do you mean?

Oh, and my point was that These points don’t really seem to be arguments for a browser app.

I would think that this makes most sense for casual video editing. If you can be bothered paying for a subscription you might as well get adobe or some other established, native app. Installation is trivial.

Which startups?

Kapwing, Animoto, WeVideo, Magisto...

With things like Figma changing the nature of design tools (in the browser) why don't you see a video editor in the browser taking off?

Let me reverse the question - why would I want something in unstable, resource heavy and non-native environment?

I think it depends on what you're editing. With internet speeds continuing to increase and be widely available, people getting increasingly used to recording themselves/creating their own content, and the influencer marketing wave educating/inspiring them that they too can create, the demand for video will only continue to go up.

I think people also underestimate the collaborative nature/ease of use that comes with creating video, editing it, commenting w/ colleagues, and sharing it seamlessly via a url or uploading to your intended social network. I don't think people will be making full-fledged movies anytime soon, but there's likely a lot of use cases beyond the hardcore power user that absolutely needs a native tool.

Maybe you own a $150 chromebook and can't run video editing software locally?

I could see this being useful for youtubers without access to decent hardware.

It’s still run locally isn’t it? Just in a much less optimal environment.

well, the $150 chromebook is not going to help you with figma either way

For one, the actual editing industry operates mostly offline. The amount of data is simply too large to rely on cloud apps.

We render 4K video and all files are uploaded in the background.

Well I’m referring to actual, professional editors (which probably aren’t your target customer anyway.) When you’re working with terabytes of video, it’s not practical to rely on an internet connection to get work done.

Apps like Canva have shown that simplifying power user software and making it accessible in a browser is in fact very much a venture backable project!

Even more specifically for video editor in the browser: https://techcrunch.com/2019/09/24/kapwing/

Eh, it's a bit of a stretch to attribute success to "runs in browser". Students in my college use Canva all the time but not because it runs in the browser - because it gives you a bunch of easy templates and you put things together fast even on their questionably performing software.

Why wouldn't you out it in a browser? Saves tons on OS specific builds, works on any machine you log into.

Google docs, Invision, canva, all browser based.

And then, if you really want to make a desktop version, you take a shortcut and put in in electron. Which is just a browser.

Because it _sucks_

Video Editing in particular is graphically and resource heavy process. Veed doesn't even work on my browser (qutebrowser via webengine).

In general web based apps are just inferior to native ones in every aspect except for "don't need to install" aspect and I don't think that many people who edit videos mind that. If you're spending hours on this might as well spend 10 minutes to install proper software, right?

Its main purpose is probably video editing for social media videos. I doubt anyone would use it for their actual time-consuming, resource-heavy work.

Just guessing here. I haven't used the service nor do I have any use for it.

This strikes me as the main difficult proposition of this business, at least for the VC model—people aren’t going to pay much for this if they perceive it as being only for ‘casual’ use. That can be ok if you can get tons (millions) of users, but otherwise it’s a really hard road.

While it’s a huge achievement for an entrepreneur, investors aren’t interested in a 10k MRR business except for the potential it demonstrates to be 1000x bigger. This seems like the part of the story that the OP is missing.

>people aren’t going to pay much for this if they perceive it as being only for ‘casual’ use.

You don't need people paying much for this to be monetarily successful. You just need many people paying a little bit.

I honestly believe that if GarageBand was multiplatform, browser-based, and priced at something around $10-15/mo (as opposed to being free, but native and limited to apple devices only), it would make a lot of money, despite not being a full replacement for software targeted at people who are professionally making music (like Bitwig, Ableton, Logic Pro, etc.). A simplified video editing service would make way more than that, because the number of casual users who need to make simple changes to a video is way larger than the number of casual users who want to mix or edit a simple track.

"Many people paying a little bit" certainly works but it's really hard to pull off without funding, an extremely compelling product, or some kind of brilliant viral growth strategy because you have very little room to spend on user acquisition. That's why investors in a product like this want to see early growth metrics that are on fire. They are looking for something that can rocket up into millions of users, so if your growth slows down too much as you reach 100k users or whatever, investors will start questioning whether the market is big enough or whether the product is appealing enough to go the distance.

If you make something people will pay more for, it's just a very different calculation because you then have the potential to sustainably convert capital into growth. It allows you to grow more under your own power through sales and marketing rather than relying so much on virality.

For this reason, the GarageBand comparison isn't really helpful. Sure Apple could make a lot of money with that strategy because they could easily market it to millions of people. A new unfunded startup doesn't have that ability.

This reads very similar to the classic Dropbox response. You seem pretty unaware of the technical expertise of average people.

> If you're going to be sharing files seriously, just install an ftp server.

> Less serious people should just use email.

Almost the exact same response. No concept of the prosumer / intermediate user.

Average people who edit videos are already doing so with existing native apps or Youtube's in-browser editing capabilities.

The ones who aren't _yet_ editing videos aren't.

What if you don't want to put it on YouTube?

Most people who are editing video online are uploading it to some social media sites, and most of those are uploading to YouTube.

And there are free editing apps for every platform, and every digital camera probably comes with one.

Also a search for "online video editor" returned plenty of results. I don't know about the quality of capability of those sites, but it doesn't seem like "video editing for amateurs" or "video editing in the browser" were unsolved problems until veed.io came along.

I don't know anything about video editing, but if they are at $5k/MRR, doesn't that serve as a proof of concept?

Clearly there are people who are willing to pay for what Veed is offering.

A proof of concept? Yes. A viable business? probably.

A revolutionary, industry disrupting, potential billion-dollar concept? Something worth injecting VC money into? I don't think so.

> qutebrowser via webengine

So you're an edge case?

Modern chrome/ium has ever improving GPU acceleration.

And this isn't for people who spend hours, it's for those who want some editing power better than adding a star wipe and filter, but don't need full blown color grading and multichannel layering.

Webengine _is_ chromium. I'm just trying to illustrate that the main advantage of "being crossplatform" is a bunch of bs if you can only run it on _some_ versions of chrome or firefox, _sometimes_ with _some_ addons. Such complex apps fail too often - there's no "crossplatform" benefit here.

They can just do the heavy lifting on the backend if they run into browser limitations.

> Veed doesn't even work on my browser (qutebrowser via webengine).

FWIW it seems to work fine for me in qutebrowser.

I've been sitting on bit of an older version, will update it and see if anything changes.

The immediate benefit that I see with these types of things is: installation isn't needed.

I remember this being quite a good thing for the Harvard course CS50. You don't need to download an IDE, you can just open one up in the cloud.

Video editing falls in the same space, depending on one's tech savviness.

> installation isn't needed

That is such a silly gimmick. Video editing is a pretty time intensive activity - if I'm spending hours on something might as well spend 5 minutes installing the app locally, right?

You have full local admin access, right? And a dedicated workstation that's powerful enough for the job?

I'm not in the target market for this, but I can absolutely see a class of people for whom this style works completely.

That is if you can install the app. Some people aren't tech savvy but quite internet savvy. That wouldn't be us :P But some older aunts and uncles that I know, definitely.

Would they pay for a subscription in order to do video editing in the browser though?

It's not a gimmick, it's just better user experience. Look at it through the lens of an average user rather than a power user ("power user" in the context of someone who is fluent with technical aspects of computers, not the domain).

I'm not arguing that the app itself has better video editing UX -- it may very well be that local apps win there. But for onboarding, no installation wins.

There are photo editing browser apps that are very popular and received huge funding. Video is naturally the next thing, right?

I would honestly probably pay if they gave better controls on gif conversion. There's a ton of gif websites but they don't do longer gifs / multiple scene text editing very well.

> So even though we have a great growing company, it is possible YC does not think we will be a billion dollar company.

And that's perfectly fine. Not every company needs to be a billion dollar unicorn. Not every founder needs to strive for that.

Continue to grow the company organically. You have clearly already found a path to success without YC. YC is great, but is not essential to your startup. Not getting in is not the end of the world.

I started a company about 10 years ago. We are making money, but not lots. But that was never the point of the enterprise.

Me, and my co-founders, created the company for us to be able to work with great colleagues and to limit the work hours. Our employees, including ourselves, are not allowed to work more than 40h/week. We have parties and trips where we invite all of our friends and family etc. We make sure our employees have 80% of full salary for at least 9 months for parental leave. Work-life balance is core to our values.

Our employee turn-over is basically zero. And if someone leaves we go out to dinner to thank them, keep in touch and they are always welcome back to our events and parties (also to come back to work for us of course).

I understand the idea of going big with a start-up, make tons of money. But there are other goals one can pursue with a start-up that, at least to some, is just as fulfilling.

Great job! You still have control and ownership and might be better off in the long run.

This is such a breath of fresh air in the tech world. I dream of working for a people over profits org, where value is placed on your compassion and custodianship as a means of getting things done (and enjoying the journey there).

Then go work for a non-profit. There's a lot of e.g. human rights NGOs needing IT people and having a hard time finding them.

I was at a NGO for a while where we interviewed North Korean refugees about execution and burial sites and collected the information in a PostGIS db with QGIS as a frontend and working towards a custom UI plugin for the interview process, and it was very rewarding. Their operations also had a lot of unique security challenges to deal with.

I'm not sure if working for an NGO is necessarily better in terms of culture. It seems to me you can have good or bad culture and management either way, regardless whether the purpose of the organization is making profits or not.

Getting talked into working late because your boss is persuasive and his bonus is on the line happens all the time here.

Working late because people are dying is a much better justification, but you will burn out just as fast. People who are too earnest about a cause have difficulty pacing themselves. Every org has people who burn the candle at both ends.

Definitely. However, by and large in NGOs you will work with people who are intrinsically motivated, and not by their paycheck.

From my interaction with people from NGOs, mostly from foreign aid organizations, there seemed to be as many people genuinely trying to make a difference as the ones that are only interested in their own agenda. I would like to think the smaller an organization the easer it is to maintain certain standards and not the other way around.

There's no magic bullet solution to finding a great life by just applying for a job in the right sector. Non profits are not necessarily healthier places to work.

The world as a whole is still trying to work out how to be productive enough to provide for everyone, fairly or reasonably divide up the pie and achieve the vaunted work-life balance.

That's a relatively new concept. In the past, a lot of people were literally slaves or metaphorically "wage slaves." A standard expectation was that the man of the house was the primary breadwinner and he had a wife handling all the quality of life work -- cooking, cleaning, shopping -- so he could put most of his time and energy into the job. In exchange, he got enough income and benefits to support a family.

We are gradually transitioning to a two income couple model in part because people are living longer and having fewer kids. It no longer makes sense to sequester female labor and limit it to women's work. It doesn't make sense for her life, for her marriage or for society.

The transition is proving bumpy.

I have friends who have had awful experiences working for NGOs, and eventually ended up burning out.

It can be all the stress of working for a tech company, with 1/3 of the pay. The dynamic that often shows up is that higher-ups try to use employees' intrinsic motivation to guilt them into working longer hours and accepting low pay, "for the greater good".

There are good and bad NGO workplaces, just as there are good and bad private workplaces. But NGOs as a whole are no safe haven.

I've seen plenty of toxic non-profits that will happily burn you out while paying far below market rate. Bonus: total disillusionment with the mission that excited you in the first place.

Not saying there aren't great NGO roles, but the company being an NGO isn't a good signal that it is a great role.

I think the values and work/life balance are really great, but it still has to come with a decent paycheck to be great, which NGO’s often seem to lack.

I work for a non-profit. Yes, they're chill about some things, but it's not lower-stress by any means, and work/life balance is a joke.

This is what I aspire to. Thanks for showing this is possible!

It's something that I've been thinking about a lot lately, especially after reading "A company of one". That it's possible to make a good living with friends and not be the next X or Y hypergrowth company.

For some context, I am currently working for one of the hottest startups in the world (not hyperbole, we have the metrics to back it up), and I have been here long enough to remember when we could all fit in a small room.

The first 2 years were a dream, this last year has been pretty terrible, and coincidently, is when we started our crazy rapid growth.

It went from a place where you felt like you were working with your friends, and could have great conversations/humour and learn, to politics, arguments, poorly defined scopes on projects, process for the sake of process, or no process at all, but not knowing whom to ask, and not being empowered enough to sort it out yourself.

I realized, and I think I kind of knew this previously, that my happiest work was when I was working with a small team of smart people who could relate to each other. Basically, going to work with my friends.

I think after the IPO, it will be time to leave and find/start something similar to what you are doing.

The thing about success is that it's addictive. Particularly with the mindset that you seem to have currently. I'm not judging, and I don't know you, so this is just the feeling I get from your post. You seem to be ambitious and on the trajectory for massive success.

It's easy to justify putting in extra hard work now if you tell yourself that the struggle is only temporary. That once this success materializes, you can relax, take it easy and just "work for fun". Some people pull that off.

Ultimately though, we are all human, and one thing humans do is get addicted to the adrenaline. Particularly if we come out having accomplished something after the struggle. Particularly those of us who have this innate drive to push the envelope. You might relax for a little while afterwards and savor the fruits of your labor, but soon you'll get restless. You'll yearn for the feeling of acute focus, that rush of adrenaline and that state of being on top of the world when things come together and you pull off something big.

This is what drives many already accomplished people to continue. It is a self fulfilling prophecy as well, because it takes this sort of drive to get there in the first place, and it's the same drive that prevents your from ever stopping. Take Musk for example. He has generational wealth. He could sit back, put his money in some safe assets and neither him nor the following 10 generations would have to ever work in their life again. Bezos could have long ago retired and just enjoyed his wealth. The thing is, once you have FU$, it all becomes a game. You no longer need the money, but you still want the feeling of success and prove to yourself that you can do well.

You should take care of that drive. Don't let it consume you. It should be a tool, a means to an end, not the thing that defines you wholly.

Thank you for the incredibly insightful comment. It's given me a lot to think about.

If this is Deliveroo ("limey", hottest startups) and you've been there for a few years you don't need to wait for an IPO to enjoy healthy stock?

It's not deliveroo.

What do people with power want? More power.

You are correct, but this is not the whole picture I feel. Yes, people with power still desire more power. But it's the same drive that fueled all the great pioneers and explorers of the world. Very few if any stopped after the first breakthrough and said: "Alright, I can stop now".

I consider this one of the great distinguishing features of the human race. For some people, enough is never enough. Yes, obsession has it's dark side, but without these people, we'd not be where we are today. The human race needed this trait to push the envelope. We needed (and for a while we'll still need) boneheaded bastards who won't take no for an answer.

Sometimes this obsession gets us dictators who ruin the lives of millions, sometimes it gets us breakthroughs that improve the lives of billions.

When reading such comment, I'm glad I decided to stay in Europe. Here you don't need to do anything special to have 40 h work weeks, paid parental leave and other benefits mentioned by the poster.

The fact that it's not normal, but something to praise is very unfortunate description of many peoples reality.

Starting something from nothing and running it yourself, this agency, is a reason in itself to start something. I think it shouldn't be understated that many of us start things because we want to, not because we want to become billionaires of have convenient lifestyles.

I agree but it's actually a Swedish company so the comment is a bit misleading. Parental leave with 80% salary is paid for by the government up to 1.5 years.

That’s not the complete picture though. The government pay you in parental leave up to a limit. The most anyone can get is more or less about 2900USD/month for full parental leave. All of our employees make more than that limit, most a lot more. We pay them the difference between what they can get from the government insurance policy up to 80% of their normal salary.

We also keep paying for their pension. There we also pay about 80% of what we would otherwise.

I don't think many who starts a company stops at 40h though.

I think there is a lot of confirmation bias on these sorts of discussions on places like HN.

I wouldn't be at all surprised to find out that the number of companies started as lifestyle businesses, freelancing, etc. far outweigh what we think of as "startups" here. Many of them are very explicitly targeting number of hours - I know a bunch of people who went freelance mostly because they can target 30h/wk that way a lot more easily than in traditional employment.

Freelancing is one thing but a comparing it to owning a company with employees is very different.

I have no numbers but what I've seen from people owning businesses with employees (or even alone) in various fields none are stopping at 40 hours a week. That is in Sweden.

EDIT: Just for fun I googled some and found an article where they had made a poll in a magazine about small business owners. The distribution was:

Less than 30h 7,5% 31-35h 2,3% 36-40h 6,5% 41-45h 10,5% 46-50h 14,9% 51-55h 13,9% 56-60h 15,8% 61-65h 8,0% 66-70h 7,1% 71-75h 3,4% 76-80h 3,9% More than 80h 6,2%

https://www.foretagande.se/nyheter/sa-manga-timmar-jobbar-eg...

> Freelancing is one thing but a comparing it to owning a company with employees is very different.

Yes of course, but I did not mean to do that. I don't know what the relative distribution is, but think HN readership plausibly has a particular view of "starting a company" which is not very reflective of that distribution...

I'm surprised nobody in this thread has called out StarterStory/IndieHackers as a place to read about stories like this!

https://indiehackers.com https://www.starterstory.com/

or https://discuss.bootstrapped.fm

Thanks for the shoutout! (Starter Story founder)

I'm convinced it's possible to create a company that looks and feels like yours and still makes it big. The idea that you can only grow quickly when everybody's being pushed into a burnout feels hopelessly outdated to me.

(and I'm putting my money where my mouth is: here at TalkJS.com we're VC funded and on a steep growth curve, and we also have sane working hours and good benefits etc etc)

I’ve worked at a few places where we pushed an agenda of always getting better at our jobs, so that doing things like we’ve done before gets cheaper, and things we couldn’t do before become feasible.

It’s great for some things, but it also gives the devs more time (and moral authority) to think about the flaws in other parts of the organization. It seemed like there was just as much complaining and stressing about things, it was just different things.

I suspect this is why the “good enough” culture of thick-skinned, slightly masochistic people who put up with the same busy work is the de facto standard.

Part of what drew me to software was that you “figure out” how something works, you write a bit of software to manage that task, and move on to the next problem. I amazes me how many people who are capable of automating simple tasks are content to simply repeat them instead.

Its very, very, VERY hard to keep such a company culture when you grow company big time.

You would effectively have to have people dedicated simply to this task, with massive managerial powers checking all management decisions and keep reminding all folks to stick to them (I can't imagine any other way). Its not only about things on paper like benefits and working hours, but overall company culture, agility to change and corner cases. If you manage that, kudos to you, but you are rather an exception.

I've seen it first hand - an amazing, startup-like company, growing super fast, and culture suffered.

Sure, if you have plenty of money flowing in (whether it’s VC funds or paying customers) it’s relatively easy to provide good working conditions and benefits. Is it sustainable though? Investors will push for an exit, and once you get bought it’s out of your control. If the buyer is a publicly traded company, its shareholders will mostly care about short-term profits rather than the conditions you provide for your workers.

The shenanigans and culture drift happen once you need a layer of “middle management”. Their goals are often focused on their own careers rather than the success of the company as a whole.

I agree, but I would expect to that growing fast usually means bringing in lots of people over a short amount of time. I’ve never done something like that, but I imagine keeping the culture of the company might be challenging.

I would imagine your zero employee turn-over is more about employee selection. Your company won't get the "I'm going to change the world" hustlers, it will get lifestyle employees. The latter can be good of course, but you won't get access to the really relentless innovators who could totally transform your startup/ create value you didn't think was there.

What's the supporting evidence to suggest that's the case?

Well to start, for most of the relentless innovators and world changers, their life is what they work on. Would you disagree with that?

I definitely think that most people who describe themselves that way probably subscribe to the idea that unhealthy working hours are the only way to be innovative.

But this isn't so much evidence that your claim about the OPs employees is true as an attempted definition of "relentless innovators and world changers".

We could equally baselessly argue relentless innovators who are trying to find the next big thing would prefer a sane working environment so that they can have enough of a life to actually pursue their passion.

The really relentless innovators would never work for your startup. They’d have their own.

These responses are common on here, and in my opinion, unhelpful. A conventional Vc funded businesses is supposed to either get big or fail. That is the model. Everyone working on them and everyone investing in them gets that. Advocating for someone to do something completely different by starting a low-growth business is somewhat irrelevant to the conversation.

Don't understand why you got downvoted, because what you're saying is indeed the conventional wisdom : you can't get big without getting big fast , with a lot of VC infused money, and work insane hours.

I think the next (current ?) generation is going to question that : values like "durability" and "long term vision" starts to get fashionable again.

The old industries were based on "family businesses" where you would take extreme care before letting someone new have shares of the company, where growing was measured in terms of generations, based on reputation and quality of work, and sustainability. And that gave giants, which lasted for generations.

I think it's getting clearer and clearer that there are alternatives to "pump and IPO" models, and that they may even be preferable for everybody (founders, employees and customers) except VCs who needs quick cash rotation.

Note: maybe what you meant is just "we're talking about VC funded companies, not other types". Still, i think VC will need to take new aspirations into account when looking for next gen companies to fund.

> Still, i think VC will need to take new aspirations into account when looking for next gen companies to fund.

they don’t. it’s not their model. get big or fail is inherent to their model and is what their fund investors want. for long term steady value or other (valid) models the VC customers (LPs) can just invest in index funds.

The entire point of the VC is risk/reward. remove the reward and why would you take on the risk?

I actually think it's important to share that there are other ways.

We tend to follow patterns and being reminded that there is value in alternatives is precious.

I'm sure many founders think the vc funded startup is the only way to create a cool company as their parents thought that a steady office job was the only way to live a comfortable life.

As it turns out the juicy parts of life are where it's less crowded.

Maybe some kid who wants to go it alone will read it and realize that being your own boss does not require buying into the whole "start-up" package.

> Everyone working on them and everyone investing in them gets that.

I agree with everything you've said but this. I don't think everyone really fully groks this and hence why comments like the above are helpful.

Young impressionable people don't know there are alternatives when all they hear is "startup, startup, startup" being echo'd out of SV.

PS - it's also frowned upon on HN to say what comments are beneficial/relevant. Just use the arrows next time.

I’m not so sure. I sometimes meet startups, at meet-ups or conferences. Many that I have spoken to seem to just run their startup according to some kind of start-up template. There is an expected trajectory, just as you said. Maybe that doesn’t apply as much here at HN as many have read stories like this plenty before, like you said. But, I bet many don’t even consider that there are completely different goals one can pursue with a startup.

Yes! I like your attitude and I think that many companies could use it. I was inspired into thinking along these lines after reading "Let my People Go Surfing" and if I ever start a proper company then I'd love to hold similar values to yours.

Right now I'm working as a consultant, early on I decided that I'm going to donate 1% of my revenue to 1% For The Planet. One other value that I chose to follow was that health > work and having this attitude I visit the gym 3 times a week, no matter how things are at my consultancy.

I hope that I can keep these values as I move to setting up a proper company out of my activity.

I see that your company managed to become the kind of unicorn we all would actually care about. In a system where growth takes precedence over taking care of people and building employee loyalty, something seems desperately wrong

This is something corporations like banking don't fully get (yet) - there is only so much you can achieve with money as reward for work done. Yes if you underpay severely most brilliant people will go elsewhere because mortgages or whatnot. But there is so much more to life than work, and if we spend most of our waking time there, the better and more supportive the environment is, the better for all involved.

Things like parental leave support, work from home in reasonable cases/amount (not fan of 100% remote from receiving side in general but there might be exceptions), more informal approach, management that reasonably listens to its employees and so on. Suddenly, motivation to join and work hard is much better.

what i've found working in tech in financial institutions are just more up front and "ruthless" with the reality that you aren't going to have a cushy 10-year type "career" where your output ebbs and flows between, say, 0-20% (new kid, divorce) or 80-100% (new title, new project). obviously one has to be OK with that coming in, but it was made abundantly clear to me that it's not a lifestyle gig.

getting laid off in a finance job typically comes with severance and an understanding that it's not your fault, necessarily, just that the project didn't meet expectations, or the bank had a bad quarter, or whatever else. it was made clear up front that in exchange, you get to work on very interesting stuff, have long (9hour M-F) but reasonable and well-planned days (no on-call stuff typically), and an understanding that you share in the profits of the institution (typically via bonuses instead of equity a la google at one point), so have incentive to keep working hard.

when compared to startup model that i read about on here a lot (work hella hard then get shafted by equity games), it's honestly refreshing to just get the bottom line up front vs. game playing, loyalty/honor manipulation to work uncompensated, etc.

when compared to what i consider a "normal" office job, where you probably work about 4 solidly productive hours per day over the life of your career, it's just more honest about the value of your labor and that it's sort of ridiculous that we have this charade that knowledge workers are consistently doing 8 hours of deep knowledge work every day they are in front of their computer.

I'd question whether a person who values work/life balance, family, empathetic management, etc. would do well on Wall Street.

It might be that people who do best in these kinds of occupations are cutthroat sociopaths obsessed with money and power.

This means that if you want to attract and retain them, you need to offer them money and power.

If you can afford to give your employees these benefits your profit margins are vastly larger than most software companies.

Are you the sole founder of this software company? If there are/were other founders, do they also carry the title 'Senior Consultant and Partner'? I've yet to see executive or founder leadership at a software company carry a similar title. Not that titles matter, but I'm just a bit confused on your claim of founding the company vs. what I've seen in the industry with respect to titles.

My eyebrows are practically in orbit. If you believe that, you're being fooled. There is plenty of money to give employees these kinds of benefits, especially in a high-margin business like software. We don't see it very often because VC funding invariably comes with certain expectations about fiscal discipline when it comes to rewarding the rank and file, and because owners of successful bootstrapped startups prioritize taking profits over investing back into their people. But the money is there.

> If you can afford to give your employees these benefits your profit margins are vastly larger than most software companies.

the 40h/week, paid leave, etc. are minimums set by law in my home country, so I really doubt that.

Sounds very cool! Something I would like to achieve one day :) Thanks for sharing, good to know there are people with similar values that "made it".

That's a great comment, it's very refreshing to hear someone write about a different reason for starting a business and how beneficial it can be.

Note on terminology. A new company, or new small tech company is not automatically a startup.

http://www.paulgraham.com/growth.html

>A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth.

That's the definition that PG uses but I don't think it's common to the world at large.

Usually the difference is between a first stage company and a self sustaining operation. Once revenue is enough to cover costs and the company can essentially run without outside funding it pretty much stops being a startup.

Definition on Investopedia: https://www.investopedia.com/terms/s/startup.asp

My company has always been under 20 people. We’ve developed some unique tech and are the industry leader in our sector. We’re 18 1/2 years old, yet everyone still calls us a start up. WE’RE NOT A START UP! We’re a small tech business.

I think you were rejected this go around for your own good.

You don't necessarily need YC. You're growing at a growing rate. You're not at any kind of impasse, you're not making a transition. You'd be giving up 7% for a lesson you already got for free.

Bootstrap until you can't.

Hello there! I was rejected today for 7th time I believe.

We started selling our product in January, We just signed a contract with Accenture, we are on track to have 1 million websites using our technology and we are about $20k MRR (which we know will be a much more thanks to some partnerships we are about to sign.

YC is an amazing opportunity, but it's just one of the many tools we have as entrepreneurs. Keep working, be better and more important than anything, be permissionless.

After 5 rejections, what made you keep going back for the 6th and 7th?

Isn't there a limit beyond which it's a bit disrespectful to keep asking?

I'm an entrepreneur, I don't care about odds.

How is disrespectful to keep asking?

Just the act of applying is a healthy exercise, and chances are that the people who got accepted are just better than our company. We keep moving, keep making progress and keep applying.

I don't see what is disrespectful about that. I would love to learn more if you care in elaborating.

Honestly you might be past the point where you need YC, but I agree that there's no harm in applying -- if your experience is anything like this one, even applying to YC apparently gives some value to the companies doing it.

True. Also if you have been rejected once too many, the chances of you getting accepted goes down.

Unless you knew why you were rejected and you improve on that.

Ultimately you are wasting time applying and then waiting for results. Every rejection is a step down the morale ladder so be judicious in your applications

Most YC founders were rejected multiple times before they got in. In my batch around 50% of the founders were previously rejected, which I believe is standard for most batches.

"Over the space of a year, we had a 60% MoM Growth Rate, 35K MAU and a great team!"

60% MoM growth = 281x growth in a year. So you had 35k/281 = 125 users a year ago? This seems like a disingenuous growth rate unless I'm missing something

Why is this disingenuous? Just curious :)

If I had 1 user on month 1, 1000 users on month 2, 5000 on month 3, 10000 on month 4, I could claim a 1000% (10x) MoM growth rate. But that'd imply you'll have 100K users during month 5 and 1M users on month 6, whereas it'll likely be <40K.

One of the reasons you look at MoM growth rate is to project how fast it'll keep growing over the immediate future. It's unclear to me right now

BTW don't get me wrong, I like the story and the hustle. Just not these numbers :)

Something like this? https://xkcd.com/1102/

> even though we have a great growing company, it is possible YC does not think we will be a billion dollar company.

This is a very positive take away: Y combinator is not for the vast majority of startups (and that's ok). They are not destined to become billion dollar companies, yet they will still go on to provide huge value to a large number of people and turn a big profit - they should still exist, and may even be vital for many.

> “Whatever you do will be insignificant, but it is very important that you do it.”

The most important take for me was that YC gave great free advice even in the rejection email.

When I was working at Google I was not allowed to give detailed feedback to the person whom I was interviewing and I hated that, because I think people deserve to know why they weren't hired.

This is why I stopped applying to YC. I feel I've learned most of my startup skills through trial and error by now, and don't have the need for them. I'm able to raise funding, build a product, and grow the business. You guys have already proven to be better than most of the applicants in my opinion.

Moral of the story is: there's more than one way to found a company and the current startup model ( place hundreds of bets, hope a few win big) doesn't work for all of them.

This story and others ( like the one of Gumroad: https://marker.medium.com/reflecting-on-my-failure-to-build-...) that show that success can be achieved even when others consider you a failure are refreshing and should taken as an inspiration from those who wish to become an enterpreneur (and possibly by everyone to be applied to life in general).

How did office hours between the two batches go? That was left out of the blog post.

Similar to when you're in the lunch round during a job interview are told "oh don't worry, lunch is not an interview, just relax", I imagine attending office hours after you got rejected last time is in the same boat - it's another hidden interview. It's possible that there were indicators during that time period that indicated how the next batch might go for you guys :/.

Best of luck regardless

I can’t understand some of the YC invested companies. They don’t seem to be billion dollar companies to me. For example, why is a form builder a billion dollar company?

As of just now, surveymonkey's market cap is 2.463B

I've noticed this for a few companies as well (https://www.keyvalues.com comes to mind).

Don't get me wrong it's a great company for the founder and maybe a small team, but there's no intent to grow it massively. The founder has even said so.

Not sure why YC makes those exceptions sometimes.

Zapier is already one of YC's top 100 companies. Form builder apps tap into that same growing 'no code' movement.

A form builder can evolve into an app builder.

I don't believe that YC made that assumption when they accepted the form builder. There are many things that's in-browser video editing app can evolve to.

Why is an app builder a billion dollar company?

An app builder can turn into a SAP.

and also saying a form builder can become an app builder, is like saying a plain paper can be used to print money ...

we all know that the delta between them is huge. We are not selling fairy tales to VCs, or are we?

Of course you are, "and then they all lived happily ever after, and by all I mean 7 billion people, and by happily I mean paying $10/month or clicking ads"

> We are not selling fairy tales to VCs, or are we?

Silicon Valley should have its own version of the Hollywood sign that reads "There's a Sucker Born Every Minute."

Everyone wants to build one.

It’s based on investors’ view of the future of the company and economy.

It could be that investors believe the company can grow into something large and profitable.

It could be that investors believe they will be able to sell their shares to someone else for more.

There is no law that says these beliefs have to be rational.

A "form builder" that obviates the need for lots of expensive web development would be huge for intranet and small business applications. It would blow away Sharepoint, for example.

The trend I have seen is that VC's invest in teams, not in the idea at least in the first place.

I would not sweat it. I was an early employee in a startup that got rejected twice from YC (because it was from Mexico) and nowadays is one of the fastest growing FinTech companies in LatAm and just raised their series B.

You know, lots of VCs maintain a good list of anti-portfolio, the most famous being the BVP one (https://www.bvp.com/anti-portfolio/ ).

Maybe for you next YC app, take or leave this idea... Put Wibbitz out of business by developing AI that can create short videos based on text from written content. For instance, the video at the top of this page, which was adapted from its attached article. https://www.realsimple.com/food-recipes/recipe-collections-f...

I don't know the first thing about AI or video, but I do know the humans who make those sorts of videos just read the article and search Getty images. You could prolly train the AI to have the right "taste" based on all the content created by Meredith Corp lifestyle brands, like Real Simple, Food and Wine, etc. Meredith now owns Time Inc, and I know that they and every other media company are doing whatever they can to compete in the digital space. One way is by adapting their written content into short, digest-able, social media-consumed videos.

> it is possible YC does not think we will be a billion dollar company

Most VCs always emphasize that they invest in the team and not just the idea. Ideas always evolve for startups. You guys not only monetized your MVP very quickly, but also have shown that you are hustlers and work very fast. Even if your idea "in current form" doesn't generate billion dollars, but you have high potential as a team to find a path to success.

I worked in early stage startup few years ago, their original idea didn't show huge success but they kept improving until they eventually found a path to huge success and then acquired by large company. The improvement all revolved around the same concept (which was an audio app)

IMO, the fact that YC didn't even invite you for the second round means that they need to really work on their selection process.

This has come up before here: https://news.ycombinator.com/item?id=20224157

Posting because I found the analysis of filmgirlcw in that discussion interesting.

It was interesting, thank you for mentioning it!

I don't understand. If they make money from the app, why not simply just keep working instead of letting go of a portion of the company?

Sure, it is a lot of money they will get but it seems like they don't really need it?

Y Combinator isn't just money. If you have a growing company with a vision, you can definitely find some investor interest. However, that should rarely be your goal, unless you flat-out just can't move your business forward otherwise. Y Combinator is what some would call _smart_ money: money that comes with a network of advisors, constant input and a nagging push to improve what you're doing. All of that combined can be worth more than the actual money.

I have seen people say this on HN over and over again. But it's not like most people who start businesses lacks vision. If you got a vision and start to earn enough money to sustain yourself you are free to hunt whatever vision you want.

> constant input and a nagging push to improve what you're doing

I get why this can be good, but honestly it sounds terrible when you lay it out like that. If I want to be nagged on, I would just get married.

150k it's not a lot of money for Silicon Valley, that's just enough to keep the light on for a few months. But they outgrew that, I mean in course of only a few months they hit 100k and still growing. And I agree, they really don't those money unless they somehow think investing those in something, let's call it "magic dust" that in next month will allow them to hit the threshold of millions. Otherwise they should just forget about YC and just rack in the dough.

Yo its Tim (co-founder @ VEED). It's not really about money for us, but more about the hustle. We think of it more as getting into NBA or Olympic Games or becoming a Navy Seal. It is tough to get in, tough throughout and will only harden you if you don't break along the way. Just my 2c

Appreciate the post and kudos on the product - looks great.

Just to counter your argument though - getting into the NBA is the only way to be a successful pro basketball player. Getting into Navy Seals is the only way to be an elite special forces soldier (well, that and a bunch of other elite forces).

But getting into YC isn't the only way to build a successful company.

I understand the appeal - getting into an elite institution can open plenty of doors. But do consider whether that is worth whatever % of your company YC will take.

Ok, I get the desire, but personally I believe it's a bit fluffy.

I'd love to be in your guys position and I have a hard time just understanding why you would want to give away control which is basically freedom, be essentially be cool or be part of an "elite" group?

You guys already are cool, you don't need someone else to be it.

But are you giving away control by giving YC 7%? YC isn't a traditional investor. You don't need to raise money on demo day and are free to go back to being a small business that puts profit before growth. YC isn't going to send you an angry email or frankly even remember you if you don't stay in touch and continue to do office hours.

Perhaps not. Maybe the contacts you will recieve and the amount of money is enough to help you bootstrap stuff faster.

I have never actually started a company myself, so I wouldn't know. I just think I would be extremely satisfied if I could sustain myself without any investor money.

Seems like a better way to grow in my mind, if you're not aiming to be a billion dollar company anytime soon.

Great article, thanks.

But - it seems that you guys put more importance on being perceived as successful (= backed by YC), then actually building a profitable business.

Y Combinator isn't just about investment, it is also a great community of like-minded people which give great feedback and motivation.

Great story and lots of positive messages here so let me take a different view and get downvoted here. Obviously you want to be as big as airbnb and box otherwise you will not be applying to YC year over year. Point here is that don’t settle for these small wins of 100k revenue..and no it is not ok to NOT be hugely successful company if you really want that go be that. Now there are many other VC companies out there who have helped many others companies do the same so Yc rejection is a blow but there are other options too. Don't stop until you get into one.

Sounds to me that being reject was super valuable to you guys anyway and instead of being "accelerated" you'll be able to go in your own speed the way you want with your product, not as YC, VC's or anyone else wants, which can easily "accelerate" you into the void and add extra level of stress to the one already, because imo investors are more like all-or-nothing types, when for you building "normal" sustainable business, that can later be sold for some X-XX million amount, is viable option as well.

Good luck and keep building! :)

I remember reading the article when it got first published in June 2019, this is the same article but with an update at the end. YC W20 batch just got all their letters.

Good luck, I hope you guys succeed and keep grinding!

The update was because we just found our today we did not make the cut for W20

Oh, wow. Funniest thing. I started reading your blogpost, got to the part where you mention the overpriced Airbnb, looked at the picture with the white truck and then realised MY TEAM AND I HAVE BEEN LIVING IN UNIVERSE Z for the past 4 months. Moved here when we got into YC and I'm currently writing this message from here. Your story is truly fantastic.

Haha, good old Universe Z. Didn't know anyone would recognize it. Thanks for the kind words!

And how did you feel about Kapwing recently getting $11 million funding for the same thing?

This is how I felt:

http://www.superanimo.com/animos/mfw-competitor-gets-11-mil-...

If you can have 100k ARR organically already why do you still need YC?

Nevertheless, great job and execution!

If your business is that good, you'll be able to find $150k in seed funding elsewhere.

The $150k is the least compelling reason to join YC. Most people apply to YC for the ecosystem, community and access to (relatively) good VCs.

Is that what YC tells you because they know $150K won't go far.

Agreed. $150K is basically enough for you to move to the Bay Area (or pay rent) for 3 months + salaries + expenses, possibly hire some folks, while you're going through the program. The way I read it, it's bridge financing until Demo Day.

Its not about the money...

mind sharing what pushed you to apply?

We think of it more as getting into NBA or Olympic Games or becoming a Navy Seal. It is tough to get in, tough throughout and will only harden you if you don't break along the way. Being part of community and other perks also are a nice-to-have.

Honestly it sounds a bit like one of those false-validation goals that makes a founder feel good about their company when other, more objective metrics aren't looking as nice.

Like writing a blog post vs. adding a desired feature.

Wonderful story Thanks for sharing it with details and updates. A little question is funding the current bottleneck for your growth? If you receive $X Million how would you spend it to increase the growth?

We are growing fast. But if we take $X Million yeah we will grow SUPER fast. So yeah. But whether you should do it is up to you, there are horror/success stories on either side.

To be honest, it’s hard to imagine a horror story where the protagonist has a company that is growing fast and decides not to take on investors.

Forget whatever YC tells you about how they accept and vet startups. YC is highly biased in their process. For an investment company of their size, it strikes me as odd that they seem to mostly "wing it". There's no apparent (or at least nothing they make public) structure and no real or apparent analytical process that goes into their application process. I'm sure they do have a process, but you can glean a lot and read between the lines on those rejection emails that give very little evidence as to their actual decision making process. It's probably opaque for a reason, right?

I've had friends who literally have gone through them multiple times, taken their money, and failed with multiple different business ideas, that, on their face were both poor ideas and poorly executed. Only to see them get accepted again. Your chances of being accepted greatly increase if you know them personally, or went to MIT/Stanford and part of that crowd. The other case is where you are part of their current focus and just happen to get lucky. What they fund and are interested in seems to change based on their moods and personal interests more than any overall strategy that is more complex than a blog post.

You're far better, at this point, to simply take on debt. With that revenue you could qualify for a loan from any number of banks. Most banks have a small business division and would be very eager to start working with you. Just go in with your current Stripe dashboard and a simple plan of what you'd spend the money on (marketing, development, etc). It doesn't need to (and shouldn't) be complicated, a single page is enough. More than likely, you'll be offered many different types of financing and the terms are almost guaranteed to be better than any VC could offer. If they decline you, they'll give you directly actionable requirements, which, once you've full-filled you can re-apply and they will give you the money as long as you have met those requirements. Unlike a VC, who may have been out the night before drinking and simply decline you for no other reason than their own hangover. Banks make their money in interest, they want to lend you money, they stay out of your business. They do not make money by holding a percentage of your company hostage and pumping up the value (real or imaginary) and then selling to the next guy (which is exactly how a VC operates).

Or look for funding and mentorship in the software community in which you are operating -- from Adobe or one of the other video editing software companies. Start attending conferences attended by people in the video production industry. You might be able to find a niche for your product in a large video production company that could optimize their process or save on licensing costs. One or two of those deals is really all you need.

And the value of the YC network is greatly overstated. If you're building anything other than run-of-the-mill SaaS software, it's almost useless. They can give you money, but they can't write code for you or (in my experience working with other VC's) help you with recruiting, beyond having someone send out blind emails on LinkedIn and adding you to their jobs page.

> With that revenue you could qualify for a loan from any number of banks.

I'm not reading the rest of this thread but going to say in the hierarchy of raising funds in order best to worst.

   1. Bank Loan.
   2. Angel Investor. 
   3. Venture Capital.

Venture Capital should be ones absolute last resort. Almost to the point if you need VC money consider doing something else.

4. Private Equity 5. Your parents' retirement account

Since we're digging.

6. Israeli Mafia.

Off topic, but I really like their blog site. Seems very similar to Medium. Does anyone know if they used a template or blogging platform with custom domain?

It's https://ghost.org in its default template.

Ghost blog with default template

I don't know why you tech/software startups fight so hard to get funding. Just self-fund it and keep your equity for yourself. If your idea has potential, you should be fighting to keep as much equity as possible, not selling it off to the lowest bidder - VC firms. Only go to VC firms as last option as in literally the startup will die if it doesn't get funding.

The bigger value proposition I see from Y Combinator is simply the networking and community. A lot of the advice I see given during startup school is spot on from my experience.

Some businesses lend themselves to bootstrapping, others are just straight up capital intensive. Others are somewhere in between, and venture capital just allows you to "skip ahead" and find out how good the idea really is by scaling it and hiring people to polish it and make it run well instead of on a shoestring budget.

I had to Google MAU, and MRR. Monthly Active Users, Monthly Recurring Revenue. (Couldn't you just say users access revenue on this case?)

Awesome effort and thanks for sharing the ups and downs. Quick question - why aren't you guys on mobile yet?

Canvas touch events, we just got them working, mobile will be live in 2 weeks max.

You posted the same exact article 4 months ago: https://news.ycombinator.com/item?id=20224157

I was rejected too, so I feel your pain. But come on... This is such a low-effort post. It seems like all you did was update it with 1 paragraph saying "we got rejected again." What's the point? Why does this belong on HN?

It’s content marketing and according to the 150+ comments people still find the story worthwhile.

How would you like if everyone kept submitting their old blog posts over and over again?

Do you genuinely believe that would lead to a community of great content ?

They will fly off the homepage quicker than you can say “repost”

I found the story and the discussion interesting.

I only started actively using HN recently so I haven't seen it four months ago.

Meh, YC is so 2010.

Let's be honest. Even solely from money and evaluation point, being accepted to YC increases your evaluation for your startup significantly. I'm not advocating that this is why you need to apply, but FOMO on YC companies is real among VC's. On demo day same companies who are pre-seed or just started get new rounds on $15Mil+ evaluation. From what I have heard and seen the biggest value is advice, but getting so much hype to raise big money is not bad for founders.

I've heard from a VC recently that YC is usually associated with teams of very young entrepreneurs and some VCs avoid this team profile. Not sure if this is a widespread stereotype.

> We are now at $5,000 in monthly recurring revenue

You're doing it. Very impressive/cool. YC isn't the end-all, nor is HN. It's objectively impressive that you got rejected, saw something you can fix right away, and executed. Not only that, but you continued to execute/grow from there to $5k.

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