How We Got Into Y Combinator After Failing Miserably The First Time

It all started with a Facebook post I made in late 2016…

Spoiler Alert: We got in 🙂

Y Combinator (YC) is the premier startup accelerator in the world. They invest $120k for 7% of your company and then provide mentorship and a network with the hopes that you become a huge freaking company one day.

Airbnb, Dropbox, Instacart, Reddit, Weebly, Doordash, Optimizely, Mixpanel and other companies you’ve heard of all got their start in YC.

When I made that Facebook post, I had been following YC for a while. Yet, at that time, our company sold online course teaching entrepreneurship and online marketing. Proof didn’t even exist yet. I had no idea how we would ever get into Y Combinator.

I knew I wanted to build businesses at the highest level, and believe the fastest way to get there is with the help of other businesses at the highest level. I couldn’t get there by simply reading blog posts.

Within a few days of that Facebook post, we created the initial vision for Proof:

To help businesses grow using honest marketing strategies.

Initially, we got started by creating a notification that popped up alerting visitors of recent purchases for our Entrepreneur Alliance program. This was the first page we tested it on.

We were shocked. Our conversion rate went from 20% to 42% overnight.

We felt we had a great initial idea, and after generating $38,000 of pre-sales for Proof, we applied to Y Combinator.

Y Combinator Application #1 (Failure)

It took me about 12 hours to complete the YC Application and after reading multiple stories of successful applications here, here, and here, I felt pretty good about it.

And then we waited…

After a few weeks, I checked my inbox and saw an email from YC!

We made it past the first round, and now they wanted the 3 co-founders to fly out for a 10-minute in-person interview. The three of us were ecstatic. We booked our flights, flew 6 hours from Annapolis, MD to Silicon Valley, and showed up for our interview.

The interview was a warp-speed 10-minute lightning round with 4 very smart YC partners. We felt we had a lot of good things going for us headed into that interview.

• One of our companies Payfunnels had been acquired a few weeks before thanks to the help of FE International brokering the deal.
• Proof had about $5,000 of MRR, 200+ customers, and a bunch of amazing results of increasing conversion rate.
• Our team had been together for more than 2 years and had a great relationship.

But there was one question we were dreading, and it was the one question they honed in on.

“This is really cool guys, but how does this become a really big company?”

Hmmmm.

While Proof was proving to be a really cool notification that worked really well, we hadn’t spent enough time thinking about where this could go.

We were busy figuring out how to accept credit card payments, and now they wanted us to explain the vision for disrupting Shopify.

In our replies, we gave some best-guess answers, but ultimately we didn’t know what the next features would be, where it would go, or any other big companies that looked like us.

We left the interview feeling optimistic but ultimately got an email that night from Michael Siebel saying we didn’t get in.

The feedback:

• Really great concept. They love the social proof idea.
• We need to pick SMB’s or Enterprise clients. We were wishy-washy about that in the interview.
• They didn’t see our BIG vision for the future. We didn’t have much of one, to be totally honest.

He was incredibly gracious, and said he hoped we’d think on this and apply again the next batch, and that he was available to help if needed.

We were bummed for a few minutes but then realized that being formidable was what got us here in the first place. We had a few beers, realized there was a huge opportunity here, and got to work figuring out the vision for the future.

Y Combinator Application #2 (Success!)

We spent the next 6 months heads down building our business. Y Combinator or not, we were going to build something great.

The 6 months after that rejection, Proof grew at warp speed. We added over 3,000 customers and things were going better than we hoped for.

I spent a lot of time thinking about the question, “What would Proof look like as a billion dollar company?” “What is our BIG vision for the future?”

After doing much research, talking with mentors, and thinking about what would be true of the world 10 years from now, we finally had our answer.

We knew where Proof would go from here to a billion dollars. (more on that plan another time)

We applied to YC again, and like 6 months before we got the email inviting us out. 7 days later we were flying out to San Fran once more.

We laid out or vision of a world 10 years from now where every website you visit will shift and morph to offer extreme relevancy to the website visitor. That static website would be dead, and personalized interactions fueled by social proof would be the new norm.

Websites might even be entirely dead by then. But personalized social proof would be alive and well. Relevancy would win the day, and we are the team to provide it.

We also showed them the quick MRR growth we had achieved and the passionate user base that joined for the journey.

We gave them everything we had.

This time, they bought in.

That night, sitting in our hotel room, we got the legendary call every YC company had gotten before us.

We gladly accepted.

And while we know we don’t need YC, we also understand the value of mentors, connections, and getting around founders who have done this before.

January 4th, 2018 marked the kickoff of YC. 7 of our 11 team members moved out to Palo Alto to pack in a house for these 3 months.

We’re on a mission to personalize the web and bring honesty and transparency back to marketing. I can’t tell you exactly what that will look like over the next 10 years, but it will happen.

Here’s to the next big chapter and to increased conversions for everyone!