That's right. The Launch HN format works better if a company is not at the super earliest stage—the startup needs to have ripened a little. This is an exception to the normal YC advice of launching as soon as possible. That advice is valid, including for other kinds of HN post (like Show HN, if you have some kind of tech for people to try), but it's not as applicable to the Launch HN format.

We learned this by watching how the community reacts to Launch HN posts. If it feels like the company isn't "ready", the reactions tend to be skeptical and disinterested. "Ready" for a Launch HN can still be early-stage, but the company needs to feel real, there has to be a real product, more than a bare-bones website, should show pricing, something more than "Book a demo" for trying out the product, and so on.

By the time a company has developed enough to check all those boxes, it's natural that it would already have a bunch of users, as Circleback does in this case. In fact, that's the ideal case—the startup should be making something people want, and have users to back that up, before doing a Launch HN. (There are always exceptions, like if you're developing an electric airplane, a cancer therapy, or something else that takes years before users can try it.)

After puzzling over this, I came to the conclusion that the bar is higher for Launch HNs because they have the official stamp of (1) being YC-funded and (2) getting placed on HN's front page. (For background on the latter, see https://news.ycombinator.com/newsfaq.html and https://news.ycombinator.com/yli.html). That raises community expectations, and rightly so!