Shit Sam Altman says
anandkulkarni.posterous.com
anandkulkarni.posterous.com
For most startups at this stage, the best predictor of success is the founders. So, the most important parts of the application for me are the questions about the founders' backgrounds and the most impressive things they've done. We're looking for evidence that the founders are smart, effective, and determined. If you can't go through your application and point to evidence for all three, that's bad. Don't be shy about telling us why you're good, but don't write a bunch of meaningless marketing speak either.
The first question I usually ask is something like "so, why this idea?" I'm happy when founders say things like "we wanted this for ourselves" or "we understand this space better than anyone else because of Y". We ask about parts of the business we have concerns about, like market size, competitive differentiation, growth plans, business model, etc. In particular, I'm interested in seeing how founders react to new information, and if they're flexible while still standing their ground on things they believe in. If I've already thought of everything a founder has to say about his/her company, that's bad.
It's important to remember that most investors are optimists by default. We want to believe that we've just found the next Facebook.
I think the most important thing in your quote isn't even how to get into YC per se – since is this really relevant to only a tiny fraction of companies in the world – but how young companies can decide whether their team is likely to succeed at the startup business or not.
The factors that matter are the factors that Sam mentions: people with a track record of being smart, effective, and determined.
(Feel free to kill this if you want HN mods)
His advice has consistently been clear, useful, and correct. He's also gone way beyond the call of duty in helping us on a number of occasions.
Though this is only tangentially related to the story, I'll take the chance to say: if you ever happen to have the chance to have Sam invest in your company, I strongly recommend availing of it.
As an example, he told us that our company's valuation would fluctuate wildly up and down, that timing our investment rounds was critical to our success, and that valuation is driven as much by hype and gossip as by real value--especially in the early stages. It was all stuff that just rings true to you immediately, but that insight isn't apparent or obvious without experience.
(Thanks for the help, Sam!)