Why Y Combinator is a waste of time
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We applied to the Fall 06 YC round. I was in school and my co-founder had a job at a small software company. Really we just had a cool idea and wanted to do it. When we found out about YC we thought it was "perfect for us". We spent a week or two struggling over answering question just right. We had no product, and had not yet considered some of the questions the application was asking. As you may guess we got an email from YC in late October saying:
--- " We're sorry to say that we can't accept your proposal for funding. Please don't take it personally, because most of the proposals we rejected, we rejected for reasons having nothing to do with the quality of the applicants. For example, we were very reluctant to accept proposals with only one founder, because we think starting a startup is too much work for one person. We also rejected a lot of proposals simply because we couldn't understand them, or didn't understand the problem domain well enough to judge them, or because the project seemed too big to start on only three months of funding.
We realize this process is fraught with error. It's practically certain that groups we rejected will go on to create successful startups. If you do, we'd appreciate it if you'd send us an email making fun of us; we want to learn from our mistakes.
Thanks Y Combinator Staff" ---
We told ourselves that wasn't going to stop us.... but it sorta did for a while. I wasn't done with school, but was getting dream job offers, and my co-founder was enjoying his software development job. So we didn't do much for a few months. We just kept talking about our idea for Revvu.
In doing some soul searching though, I decided I had to turn down these job offers and stop wasting time in school. This is not the life I wanted. After talking to my co-founder we came to grips with the fact that... working regular jobs was the default. That was the easy way to go about life, but we wanted more than that. We are too creative and determined to be held back or stifled by the nuances of a "job".
In January I moved across the country to live with my co-founder and work full time on our project. Shortly after that we had a full business plan, and were testing our site in closed beta. As of this week we've launched publicly and are getting encouraging user feedback.
We are beginning to tap our network to find potential investors, so that we can grow the business significantly in the next 12 moths.
About a week ago my co-founder brought up YCombinator for the first time in months, and we decided to apply at the last minute. Not because we NEED the living expenses, we both have savings. Also, not because we need it to feel like we're doing something. We're already confident that we're doing something, and we'll peruse other sourced of funding if we don't get YC. We applied because we know we could benefit from the mentoring, the guidance, the connections, and i guess partially because not draining our bank accounts just to eat would be kinda nice.
If the author had good intentions, IMHO, we might be a model for what he was trying to communicate. We weren't ready before. We were sitting around waiting to hear back from YC in October, and nearly let our passion fade after not being accepted.
This time filling out the application didn't take long at all, because we actually knew our answers. This time we have a real plan for our business and legitimately strive towards success.
If we get YC... awesome, if not... thats fine too.
I hope many of you are in the same boat. I hope you're building something you believe is great, and nothing will stop you. Don't get discouraged. Don't let anything slow you down. The world is big enough for all of us to succeed.
-if you build it, they will come
Yeah that rant was a bit hard to follow. In particular his definition of "backup plan" seems rather fuzzy.
My startup initially wasn't going to apply to yCombinator. We have a solid team, a product that I really want to see exist, and we're making steady progress implementing it. But I figured that if we have a decent chance of success without yCombinator, we'll have an even better chance of success with yCombinator. So why not spend 4 days or so putting together an application and see if they accept us?
If they turn us down, fine, we go back to our original plan and keep working on the product. But if they don't, great! It's advice, connections, a set timetable for when I leave my day job and work full-time on the startup (for me, this is a question of when, not if: yCombinator would just make the decision for me), and a cool hacker environment where you get to bounce ideas off other equally-smart people.
For more on the money aspect of the decision - see my post on 'Outside Money and Irritable Bowel Syndrome' at http://blog.nanobeepers.com
I also have to agree with the others that the writer of the article kind of missed the point of the environment and guidance that YC provides. But then again, perhaps some of the applicants are only applying because they think they need the money.
You're making the right points but drawing the wrong conclusions from them. Yes, users need to be your highest priority, yes you need to have the drive to succeed that is reflected here by not relying on Y Combinator to be your ticket to wealth, Yes you need to get out there and actually DO; actually BUILD. But these are precisely the kinds of people and ideas that y combinator IS GOING TO PICK.
The fact is that Paul Graham says these same points time and time again in his own essays, and so anyone that is applying to y combinator without these things in mind is obviously not very bright. But your conclusion is not very bright either. Someone who really had all the qualities you describe would recognize that while y combinator doesn't mean success or failure, it provides a number of extremely valuable resources (of which money is only one of, and not #1 of, the list). I certainly wouldn't want my competitors to be in a y combinator group that I was rejected from -- that is a bad sign.
To reiterate, good points; bad conclusion.
My first time at news.ycombinator, but i've been reading paul graham's essays for a while now and am increasingly impressed. I'll be back
For us, Julian's help was both a necessary and sufficient condition of getting launched. Nothing has changed since then about life in the seed stage. Sure, maybe you can get to the next stage on $200k instead of a $2m series A round like in the Bubble, but initially you still need at least a few months' living expenses.
I only skimmed that [what should I call it? article?], but I did notice one other thing that's mistaken. We don't judge people by their karma on news.yc, but by the quality of their comments and submissions. Surely that is a reasonable test.
But anyone who has left college and is working for a living should be able to save up one months living expenses every month. (EG: make 25 an hour, gross $4k, $3.6k after taxes, live on $1,500 a month or so.) Thus if you work for 6 months as a contract programmer (or better yet as an employee for a startup) you will then have 6 months of expenses to build your business. Thus there's no reason that not getting YC funding should be an impediment to strting a business.
The strong impression I get from people who post here, and the people who attented startupschool is that they are focused on getting funding. They want to go to YC, or move to the bay area for connections to funding. Landing a VC deal is seen as the end goal.
This is not an entreprenurial focus. Were you focused on VC funding for viaweb, or were you trying to build a business?
The original poster is right-- build a business-- that should be the focus. Not getting funding. Not worrying about what you're going to do if you don't get into YC. YC should be seen as a possible opportunity, but not critical to success.
And since YC only happens twice a year and is limited in the number accepted... waiting for the next round of YC indicates that building the business or product is not the number one priority.
As an investor, I'd rate highly someone who was living off of their own savings to build their product-- they have shown the gumption and have even more skin in the game.
That said, I'm a little curious about the money aspect too. I had no problem saving up more than $15k. I could easily self-fund my startup for a while. I'm far more interested in YC because it brings together smart people from across the world and fosters the sort of environment you'd see in a hacker lab or math competition.
Viaweb raised a total of $2.5 million during its life. Some of the time I was focused on funding. Investors like you to be, when you're asking for that much.
It's ridiculous to suggest that one has a choice of focusing on funding or building a business. Pretty nearly 100% of successful startups take outside funding, from Google on down.
"When we started our startup in 1995, the first three were our biggest expenses. We had to pay $5000 for the Netscape Commerce Server, the only software that then supported secure http connections. We paid $3000 for a server with a 90 MHz processor and 32 meg of memory. And we paid a PR firm about $30,000 to promote our launch.
Now you could get all three for nothing. You can get the software for free; people throw away computers more powerful than our first server; and if you make something good you can generate ten times as much traffic by word of mouth online than our first PR firm got through the print media."
Like it or not, all successful web companies have at some point taken on funding. It is an inevitable part of building a company.
Raising funding is a resource and time drain. The author argues that we should all be spending time building our products. I completely agree and that's why I applied to YC. It's the equivalent of outsourcing your "distractions". Being a YC company dramatically reduces the amount of time you have to spend finding PR and investment (things you will have to do at some point). These things will find you.
The real power of YC is not the money. It's their ability to take away most of the distractions that cause startups to fail and let you concentrate on what really matters - building your product.
The author shouldn't be so short sighted and should take a longer term view of building a business.
The true ethos of a hacker lies in building stuff. If you get rejected, just keep building stuff!
YC, like other angels/VC firms, has a profile they prefer, even if they may not state it explicitly: i.e. teams of at least two people, under 35, writing web-based software, etc.
So just because you don't fit that profile (or you do, but YC rejected you), doesn't mean you will fail.
The author is right in that you should plan on doing it without YC help. My point is that you should still try to get YC's help. It'll be worth it.
A valid point to make would have been: Accepted into the program or not, a good startup will learn from the experience and continue on.
Then stop there; everything else was either superfluous or unfounded.
"I read YCombinator Startup News. I read that thing that Paul wrote saying that anybody who contributes regularly is going to fare better. Thats shit from a bull! Anybody who is spending time posting on a site that is a collection of links to dream money instead of working on his project is never going to make money. Anybody who cares about karma on that site instead of spending time reaching users for his product is an idiot."
I've been checking out these threads for a few days and have started leaving comments because that apparently gives you a better chance. Paul has a lot of tough choices to make and I understand his reasons for using comments as one of the many tools in filtering prospective startups, but I really hope its a small small factor. Sure it proves I read blogged advice and other mumbo jumbo on the subject of startups and am interested in the funding, but it also might indicate that a person has way too much free time or has a serious net addiction (a major development killer). I've been getting ready to kick start my startup this summer for over a month now. During that time I've read a lot of these startup articles, all of Paul's entries, Founders at Work, bought a few other books and searched the net for VC firms and how to get in touch with them. One article at the beginning of the process affected me greatly. When I was making the tough decision to do the startup or take a very appealing job offer I read Paul's article (not to brown nose) "A student's guide to startups" which said the best time to start one is when you're 24, fresh out of grad school, and hopefully have a solid internship behind you. That was something I didn't know and hit me hard because this summer that will be my exact situation. If I hadn't have read it I might have missed my perfect window! I made my decision right then. Every article, book, or resource since however has been repetitive and more draining on my energy to get started than helpful.
My point, and the article's author's point in the quoted paragraph is, use these articles to get yourself inspired and confident about doing this thing and then stop reading and commenting! You're inspired now don't kill it and waste your time with reading more and more of the same crap, go make your own stories. This is most likely my last post here. I hope that doesn't effect my rating :).
To call YC "a waste of time", however, seems to me nothing but attention grabbing... if anything, YC is the opposite of a waste of time - for a student like me, YC funding means _not_ wasting my time at a summer job for food/rent while working on an idea, and _not_ wasting my time on searching for business advice/legalese if the idea makes it off the ground.
How the heck did this make it to the #1 story? Is it because people anxious about being rejected by YC, or is it just the rebellious headline?
I think most people are applying for the mentoring and collaborative environment.I found a great partner in the process. That has to be worth taking the time to apply.
So it is certainly a waste of time if - you think of an idea, write an application and decide to work on only if YC is funding it..
But not - when you are working on something or planning to work on something, YC offers you that last bit of motivation to actually go and do it because you want to play the YC gamble.
And it might happen that otherwise, you end up building something, YC rejects you, but you say to yourself, what the heck, I have already done something so lets take it to a logical conclusion (may be 90% will chicken out. but who knows one of those who persisted might be next big thing!!) YC has certainly helped them, who would have been left in "I am planning to do" state otherwise and I think thats what PG is essentially trying to do. Make more people try a stint at 'startuping' and all of this comes at a reasonable cost to everyone!!
To conclude - would the authors' brother have not been happy if there was an "Irish Pub" or something that promised, hey if you send us your recordings, may be we can give you a saturday night and if you get a deal from a recording company, we get cut out of it... (Ouch! I just spit out an idea for some "irish pub" owner, if he's on the list!)
FWIW, his piece does have a good point: that a viable startup should be able to continue along a successful path even if they get rejected by YC. But as other people have noted there are benefits to being funded by YC: firstly they can [remove some of your distractions](http://news.ycombinator.com/comments?id=9439) and give you good advice; and secondly, applying to and being rejected by YC might just [force you to step up and improve your company](http://news.ycombinator.com/comments?id=9486). While there certainly are (and should be) companies that don't need YC to become successful, I think if you can get ahead by getting funded, then you should do it, and that's why YC really matters.
However, the money YC gives is really insignificant. I doubt many people even applied for the money at all. Its really more about the network and mesh of people you get with it. Anybody can work and save up 6k, its not that hard.
I didn't apply because I want to be in the San Fran. network isntead of the cambridge area. If this round was in the bay area, then I would have applied, and been accepted :).
He realizes that a startup won't magically succeed by being a part of the right group or having the right connections. It still takes extremely hard work, undying dedication to users, timing, etc... YC is only one cog in the wheel, and plenty of startups actually succeed without them -- which might seem disillusioning to some, especially those that hang around these boards too often.
I believe that's what he's getting at, anyhow.
YC is a model that was created based on expereince and success. The value of YC funding is not the money, $5-20 k is not hard to save or raise.
It has been encouraging and interesting to hear from so many people, who obviously find a lot of value in VC's approach, offering slight variances based on their personal situation.
It is important to take what is valuable from a model and apply it to your own startup situation. If you can implement the use the best concepts and models from other and apply them to your unique startup, you will reduce the chance of failure and save a ton of time and money.
If you fallow blindly and base your success on one groups acceptance your not an entrepreneur.
People that are applying for YC definitely are just seeing this as another possibility and not an end all to their idea. I'm sure that a very small amount of people are going to give up their business if rejected.
Here's a startup idea Mr PG: I will pay $50 for basic feedback on a very early startup idea and give you 1% equity.
What are the alternatives? Is there any way to get feedback on startup plans from half competent people without broadcasting your ideas all over forums?
I suspect the problem is that time is their scarcest resource, not money. They want to spend their time mentoring the startups with the greatest chance of success. Until you reach the point where you have a reasonable chance of success, you're stuck with YC News.
In biotech, I emailed Joerg Poetzsch to ask a question about early stage funding. I got a lengthy response from him. Then, I told him my idea and we've had a wonderful exchange since then -- he ended up writing me a letter of recommendation and said he is interested in selling my product for a percentage of the revenue he generates.
So, if you want basic feedback about your idea, email someone with a blog or website and I promise you can get some feedback. If someone takes 1% of your company for that, you're getting ripped off.
Also, I don't believe he was comparing Paul to a 15-year-old musician, but rather screwed up and switched the name of his cousin from Steve to Paul. A freudian comparison perhaps, but not intentional. He failed to communicate his point effectively.
Of course he was insulting Paul, and us later on.
The point of my thread was that the author was being a jerk to Paul and should apologize. When I posted the quote where it's clear the author is insulting Paul, you got all uppity about it.
"your initial comment said that the author should apologize for comparing Paul to the musician."
At what point did I deny that I "compared Paul to the musician?" I never claimed I never said that. I simply replied to you and posted his quote you might have missed where the author said "YC is a waste of time" and also says, Paul is a bull who speaks "shit". That's why I said the author should apologize.
The author obviously meant to say Steve instead of Paul, in the intro. I didn't confuse that part of the article like you arrogantly believed. The reason I compared the two is because the user shows disdain and hate for the YC, so much he even confused his friend and Paul's names, when the two had nothing to do with one another.
You work in public relations so you're probably very good at attacking people. You're a liar and exaggerate by trade.
Do you understand it now? Or are you attacking me just because you're a PR person trying to test your training?
You are correct, I work in PR. The reason you know this is because I've provided a reasonable level of transparency in my profile. Additonally, I use my real name as my user name becuase I want to be held accountable for what I say.
If I ever lied to a reporter it would end my career. I'm sorry if you felt like I was attacking you, I wasn't. I was debating the merit of your arguements, which is lost now because you continuously edit them.
Public relations has nothing to do with attacking people. The 150 people I work with would be highly offended if I told them that we lie by trade - it is simply not the case.
Do I exaggerate? Yes, but who doesn't? I'd wager the best YC applications contain a degree of hyperbole, because no one wants to get involved with something that isn't exciting.
Finally, words are the simplest way to express logic, so I'm glad we could find some common ground. If you go back and read my original comment you'll see I wasn't attacking you. I wasn't even disagreeing with you. I was simply adding my insight to your original post, which is lost now because you continue to edit or delete what you say. I'm not going to debate this any further with you, because I am starting to feel foolish being dragging into this.
So again, I am sorry if you felt attacked, that was not my intention.
Best wishes,
Clinton
PS - I've taken the liberty of copying and pasting your post below so you won't feel compelled to edit it.
0 points by voiceofreason 10 hours ago | link | parent How DARE you call me a liar? You work in a PR firm, so you use WORDS. I use LOGIC.
The point of my thread was that the author was being a jerk to Paul and should apologize. When I posted the quote where it's clear the author is insulting Paul, you got all uppity about it.
"your initial comment said that the author should apologize for comparing Paul to the musician."
At what point did I deny that I "compared Paul to the musician?" I never claimed I never said that. I simply replied to you and posted his quote you might have missed where the author said "YC is a waste of time" and also says, Paul is a bull who speaks "shit". That's why I said the author should apologize.
The author obviously meant to say Steve instead of Paul, in the intro. I didn't confuse that part of the article like you arrogantly believed. The reason I compared the two is because the user shows disdain and hate for the YC, so much he even confused his friend and Paul's names, when the two had nothing to do with one another.
You work in public relations so you're probably very good at attacking people. You're a liar and exaggerate by trade.
Do you understand it now? Or are you attacking me just because you're a PR person trying to test your training?
All I said was the above, and you started accusing me of editing my posts. Why? I thought you'd say, "OH, I see why you think he should apologize to Paul."
Of course, you could argue that if one really wants their startup to succeed, they shouldn't have a day job. I'd probably even agree with you. But "when to quit" is a complicated question, particularly if you're gaining (or hopefully soon will be getting - damn boss!) valuable experience in addition to cash.
I'm not really sticking with the day job for financial reasons though. I want to see the product I've been working on ship. Get it into the hands of actual paying customers. Because I figure then I'll get to see a whole bunch of other problems that will likely impact the startup too. Much better to make the initial mistakes on someone else's dime.
Problem is, my day job seems to move at a glacial pace. So despite having a 6 month handicap and about 1/5 the number of man-hours available, my startup may launch first. If that happens, I'll probably quit the day job whether it's done or not, because it's just a drag on the startup.
So perhaps it might be best to leave when your product is about 80% to the point of launching, because then you can focus full time on actually getting it out the door, and on the aftermath. If you have a day job, it might never seem like it's ready to launch.
But that's just my hypothesis; I don't have any actual experience with that. :)