Lollipuff's Y Combinator Experience
lollipuff.com
lollipuff.com
Also: is this the first demo day video that's ever been published by YC? Wow are those short. What does a "good" audience reaction look like? Can you get a read on the room while it happens?
I wasn't the one giving Lollipuff's pitch (it was our CEO, Fei, who has lots of experience from speech competitions). And yet standing just off stage, I was too nervous to judge audience reaction. Perhaps the YC partners standing in / around the audience would be better calibrated to make that determination?
Also, back when there were more sessions and they happened at YC HQ, the time of day played a big difference. The later sessions (I think they started at 4?) had people actually laughing at jokes, whereas the earlier sessions some of the exact same jokes, seemingly delivered the exact same way missed really badly. (I remember people actually cheering for Hipmunk's presentation. It felt like a home run.)
I don't know what it meant for follow up, but two notable presentations at least generated some memorable notes that I spied over people's shoulders. Jason Shen from Ridejoy did a cartwheel on the way in (he's a former collegiate gymnast) and I saw a lot of people drawing stick figures cartwheeling. Also, during SiftScience's presentation, one of the founders punctuated his presentation by saying something to the effect of "We're going to stop people from fucking with our customers." A lot of people wrote down "fuck" next to their name :)
I don't know what happened to most of the companies post demo day with their applicable raises.
*: I did behind the scenes work with YC as the audio / video guy for a bit, before they went to the CH museum.
However, while you can prepare for the SAT, those scores alone are insufficient to guarantee you admission into top universities. You need something unique. In the case of YC, this will be either team, traction, or idea. It's pretty hard to fake a history of making (or pedigree), numbers, and wild ideas.
I myself wrote an article about that: http://ycombinator.com/howtoapply.html
I don't know if the YC reviewer(s) for Lollipuff's application is hanging around, but it'd be interesting to hear if their reaction matches mine.
IMO, the only question is if it can grow beyond the existing niche, and how far it can grow.
Great insight, though! I really like lollipuffs concept, I would also have funded you guys; I love it when the perfect solution for a pain point takes off.
We recently helped with a VentureBeat article about "writing a winning YC application" [1]... I personally believe the most useful thing (besides "being really good already") is to look at other successful applications. Most of the applications found online are from already-successful companies (eg. DropBox and Reddit), so we figured a more-recent, rising company should share theirs too. This might be useful to folks who aren't doing "pure tech" startups -- as Lollipuff is a women's fashion company.
[1] http://venturebeat.com/2013/09/20/how-to-write-a-winning-y-c...
Two-sided markets are generally more difficult to crack, and displacing eBay in particular is going to be challenging. I'd expect your cost of customer acquisition to grow quite significantly once you've tapped out the low hanging fruit.
If your core competency is your ability to detect counterfeits, however, maybe there's an opportunity to convince legitimate vendors to pay you to certify that their items are authentic, something that they then promote to prospective customers in all of their sales channels. You'd probably need to offer a buyer money-back guarantee for this model to be viable, but if you did this, you could try tying your pricing to the vendor's sales price (i.e. it costs more to certify a handbag being resold for $750 than a dress being resold for $250).
If you're wedded to the idea of running your own commerce platform, you could provide vendors that certify their goods with you a free listing on your site, and reimburse the certification fee from the sales commission if their product sells through you. By getting listings this way, you can avoid some of the questions you're bound to be asked if your only proposition is that you're an eBay competitor (think "How many sales do you generate a month?"). And you avoid having to grow your buyer base to make money.
It's great to say that the total size of a market is, on paper, $77 million (or $100 billion). But not only does this fail to reveal how much of it is realistically addressable, the overall number itself is more easily overestimated than underestimated.
I'm not saying that Lollipuff is a bad idea, or can't be successful, but one thing to note is that a lot of individuals who buy fake luxury goods do so knowingly.[1] There are various reasons for this. For many, the real product is too expensive. For others, a counterfeit purchase is based on the recognition that an average person can't tell a decent knock-off from an authentic item (so why pay full price to impress friends and passers-by if you don't need to?). Some opt to buy counterfeit items for "everyday use." Net-net: a not insignificant number of the counterfeit sales are intentional transactions.
Lollipuff's real market consists of women who want to purchase authentic (used?) luxury items online and who can afford them and who are sufficiently concerned about counterfeits and who seek out alternative purchasing channels to address this concern.
Is this a large enough market, and will Lollipuff be able to capture enough of it to have a viable business? I don't know, but I do know that taking the total value of online resales for certain product categories and brands and using those to size the market will produce market size figures that are way too large to be considered realistic.
[1] http://www.reuters.com/article/2013/01/08/us-usa-counterfeit...
(1) Our numbers are based on authentic designer resale. We don't have anything against people knowingly buying knockoffs. Better still, there's an entire new industry in fashion for building "clone" items under a new brand. The real problem arises when people unknowingly get duped. It's like buying a "Aple" computer that epicly fails in 6 months of use.
(2) The irony of designer resale is that you can get a pre-owned, lightly used designer item for approximately the same price as an off brand... and yet the quality will be better and it will last longer. Our CEO is notoriously frugal -- that's actually how she got started in the field.
I built and ran a large (not eBay large, but 100k+ members and maybe $6m in transactions) niche auction site and community for about a dozen years and I recognized that interest in the whole "auction" thing was dying out about the same time eBay probably did. Only difference is eBay had the resources and interest in trying to pivot (something they're still trying to do) and I was ready to move on to something else entirely.
If you can still find just the right niche, there's probably an avenue, but for the most part, I think there's an uphill challenge against the bias of most users against auctions (what with so many other cheap outlets that have usurped everything short of collectables).
Will be really curious to see how this plays out, in and after 2013.
Standard auctions offer the best available price. It would be interesting to see if they A/B test vickrey auctions where the price paid is the second highest bid. That prevents buyer's remorse, and could generate higher prices as people would bid higher without worrying about doing something "stupid".