Background for those interested:
Act 1. A kid with no product.
My first YC interview was 10 years ago. I had a laughable excuse of a product. I only got the interview because I had an unusually fast career growth (CMO of a $180m company by age 23).
This remains my only visit to the US. They rightly sent me packing.
Act 2: build skills then build something
In the interim I did consulting for a few years. Then I founded my own small company. I taught myself to code properly. And bootstrapped a small SaaS to $20k MRR and applied again. At interview they said the total market isn't enough. (They were right.)
Act 3: Build something people want.
I wrote a list of criteria for my next product and evaluated literally 1000 ideas.
The resulting idea is excellent but it's technically hard. I've put all the resources of my company and myself into getting it made.
Hard to quantify with it being bootstrapped but I've put the resources of my small company into this. Probably 500k of monetary value.
Talking to customers it's very clear there's demand. My small team is excellent.
Any advice for this 3rd time around? There's clear demand but it's hard to simply launch as the product is complex and I want it to work consistently first. I know YC dislikes solo founders, not sure if having a team already in place helps.
I am the solo founder but at this point I've background in multiple areas; sold half a mill personally, CMO of a big company, built a team, spent the past few years as an engineer.
How best to frame this to YC at this stage? Should I put my team in the video? Should I create a new account to hide that I first interviewed a decade ago?
Any advice appreciated. I didn't link to my company as I didn't want to come across as promoting but will if asked.
YC sounds like a distraction and personal obsession rather than something that would benefit your company at this stage.
Brian Armstrong: https://news.ycombinator.com/item?id=3754664
Drew Houston: https://news.ycombinator.com/item?id=8863
Peldi Guilizzoni: https://news.ycombinator.com/item?id=238772
When I read those 3, each time I had the strong feeling something would come out of it. And each time it did.
Your post leans rather on the "I have a great, secret idea and team" side and features a lot of social proof and other convincing arguments. Your early career success, how much "monetary value" you invested etc.
This focus on tools of communication will probably also show when you present the actual product. My feeling is that more focus on the product itself will help you to get further.
Don't hide anything.
Applying again is not a problem, from what I have seen. One thing you'll see in Paul Graham's writing is that persistence/resilience is the most important attribute of a founder. PG's thinking has defined YC's culture, and that does not seem to have changed.
Secondly, don't do things to get into YC. Do things because they are useful for your business.
Assembling a strong founding team is the foundation of your business - you should do this because it's intrinsically useful.
Don't focus on getting into YC - focus on building a product people want, and a company to seize that opportunity.
Ironically, if you stop devoting mental energy to getting into YC, and devote that into your startup, this will make getting into YC easier.
1) Don’t lie / make a new account - poor ethics, poor signaling about ethics, poor signaling about thinking about being rejected from YC.
2) YC today is not what it was ten years ago; different people, different place in the market, different cohort makeup. It’s still a thing that will boost your social capital in the west coast startup world, but I think from reading your post that you’re probably a little stuck on the white whale of your early 20s - might be worth looking at recent batch companies with a hard eye to see if they still fit your dreams for yourself. In particular, I would note a tendency over the last ten years for more and more of a batch to be companies that service other YC batch companies. This is a sensible strategy during a glut of VC in a startup boom market - you have high trust early sales, and your company gets to scale along with the peak scale of the rest of your batch - however, in choppy waters, this high volatility strategy may not work as well, or at least needs some consideration.
3) If you have a team, talk proudly about them, bring them along for interviews, etc.
4) Don’t spend too much time on this - go get some sales. If you have a great team, some sales, and have bootstrapped, you’re golden - perhaps more likely to get in to a batch, but definitely more likely to win and build something valuable.
Finally, I’ve solo foundered nearly 30 companies, and cofounded a number (5-ish?) in my life - YC’s preference for non-solo-founded companies is a reasonable preference - but it’s informed, at least in part by the milieu - early stage startup with (originally) grad-student age founders. As you know, starting a company is super hard. It’s super lonely, and you want to get off the ride, all the time. Building those co-founder social and ethics skills are a good thing to do, but they’re not the be-all and end-all of business - your best partners for your new company might not prefer equity to cash, or you may just have a lone wolf type temperament where cofounders are going to piss you off and be distracting.
Like so much in startups, it’s up to you to decide what parts of the preferences of others (in this case VC) are because they have real wisdom about your situation and what parts are, while generally helpful, not the best thing for your company / your leadership.
Good luck!
>> "And bootstrapped a small SaaS to $20k MRR and applied again."
What is it you actually want out of YC funding? It sounds like you've got a good handle on business. This is the kind of thing banks are for. Why not get a real small business loan? Seed/VC funding is speculative. You're well past that point.
What you're doing is like a scientist trying to find grants at a high school science fair. Try pitching a bank instead of YC.
If you need cash then go and pitch some investors. Either you’ll get some cash or you’ll get a reality check. Both have value.
Being outside the US doesn’t stop you pitching US early stage investors and then flipping the company to move there (if that’s something you want to do).
Will it make launching easier?
If the difficulty with launching is that you need to get the product to work consistently, and the money that YC gives you makes a real difference in hiring someone to fix the consistency issues, then sure, go ahead an apply.
Otherwise your efforts may be more usefully directed at actually solving the issue with the product working consistently.
If there are other benefits to applying to YC, and you don't have to spend much time to do it, then there is no harm in applying. At worst you'll get a no. I would not get overly enamoured of YC. It's a great accelerator. But there are other good accelerators as well.
I'm also in tha stage of finally found and chosen good app&service idea that has potential to make millions$ of revenue. I would need an investor of 60 - 100k$ to be able to concentrate on it 100% and make it polished and at fast phase. would anyone know how and where to attain such investors ? I have been making other web apps before with < 100k$ revenue, but it's not enjyable anymore to grind your health and relationships away for months for a product with 0 marketing budget..
You don't need YC. You need a fiscal path from here to break-even. YC would invest $500K. Would that amount get you to launch? Be realistic.
I'm with you and want you to crush it! Playing devil's advocate for a minute, there might be some issues with the current state of things.
Parts that will make it hard to get in (and could put the company health at risk):
- the company is default dead right now with no revenue stream[0]
- employees were hired so the burn rate already started with no product
- currently locked into doing a big launch
- the majority of the focus is on software development
- it's harder to do significant product changes since you already have a team of employees coding the technical solution
- there are no customers on board yet
Sorry if any of those parts are off base from the actual details. From what you posted it sounded like there was positive user feedback but no customers/revenue.
Before focusing on a development team you also need to know that your product is something users love. Don't get emotionally invested in creating the "right" thing off the bat. Learn how to talk to different users frequently and set up development cycles to know that you're building something people need. It's better to not be attached emotionally and learn how to iterate quickly then to start a big development push early on.
The more you invest into building an initial idea, the more locked in you are on that solution. If you have any way to prototype a $500k solution manually or with a cheap automation that doesn't scale, do that first. Your goal is to know that you're solving the right problems.
An early launch should be able to solve something to prove viability but be easy to build. The faster the future product build times are, the more chances you have to iterate and measure your solutions with UX research. Getting user feedback early and often helps de-risk your product build cycles. With only one big launch, it puts most of the risk into things going well with the initial product build. It will also miss out on early growth opportunities that you can have with customers. They won't be able to give input as the parts are built and they'll have less connection to the early product if they weren't part of shaping it.
Actions also speak louder than words. Many people are nice when talking to you because people like to help each other. Get people to pay for your product. Any promise without money is worthless.
For a pre-seed stage bootstrap your best investors are your customers. They'll give you money without taking equity and help you prove out the product market fit. That gives you leverage later when talking to investors because you'll have a nice picture of how the company has been solving real problems, acquiring new customers, growing revenue, etc. Any prospective investors should be worried about missing the chance to grow with you.
I think these line up with problems 1, 2, and 3 from the startup lessons essay.[1]
Having prior experience with a bootstrapped company is great and they'll probably be neutral or positive on re-applying. They'll also like that you've talked extensively with users before building the product. I don't know much about launching SAAS businesses so that initial build hurdle could just be part of the process. My bad if that was overly critical. Building something in front of users can be extra nice though.
YC put out the online startup school for free.[2] If you're only looking for advice, that may be more bang for the buck. It's a different story if you want to take funding and use YC as an on-ramp for that.
Either way, it sounds exciting. Sorry if this post sounded all negative. I was trying to give advice from where I think YC would be coming from. Things can go well without those call outs. I'm just a random internet person. I hope it ends up being successful!
[0] http://www.paulgraham.com/aord.html