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Is Y Combinator Worth It? A Founder’s Experience
   

Is Y Combinator Worth It? A Founder’s Experience

How did we get in?
What it’s really like?
Is Y Combinator worth it?

Those are the questions I get asked the most after doing Y Combinator a year ago. If you don’t know what YC is, it’s an accelerator out in Silicon Valley. Big companies like Airbnb, Stripe, Dropbox, and many other big startups have come out of their ecosystem.

I would say YC is kind of like the Harvard of startup accelerators. Basically, once we got into Y Combinator, everything changed for our business.

The decision to apply to YC

Going back to the beginning here, it was about two years ago, started with a Facebook post.

I posted on my Facebook wall back when we were selling coaching and courses. I said:

y_combinator

That kind of got me started. The reason that I wanted to get in in the first place is not that I thought it was gonna give me a ton of value or that I needed the stamp of approval. I thought we our business was doing well, and I knew we were gonna build a great company. But I truly wanted to build an industry-defining, once every few years kind of company.

To do that I thought, “Well, we need help because I don’t know how to do that. I don’t know anyone that has done that. I wanna go learn from the people that have done that before.”

As I started looking at companies I really liked and looked up to, I found a lot of them came out of or had touch points with Y Combinator. We wanted to get in to go learn a lot from and be connected to Silicon Valley because that’s where a lot of the great tech companies have come out of before. So we applied.

The way the process works is they have an application. They do two batches a year for three months, where you fly your team out to California and live out there for about three months and work. We applied the first time and there are eight thousand people that apply.

The dreaded interview

About 300 people are granted an interview and fly out there for it. They do a 10-minute interview and then after that — they decide if they’re gonna invest in your company and accept you to the program. We applied when Proof had just launched. We had about $4k in MRR and we got through to the stage of 300, which we were excited about.

Is Y Combinator worth it? Our interview day

JP, Chris, and I before our YC interview

We flew out there and we’re ready for this 10-minute interview. The first question they asked after we explained our business was, “This is cool, but how does this become a billion dollar company?”

I just paused. I actually hadn’t thought about that much because we were just so heads down in the weeds trying to just build anything, trying to get our order form working because it had stopped the day before. And they were asking, “How do you disrupt Shopify?”

We ended up not getting in, largely because we didn’t know the future. I got an email from them that night that said, “Hey, we’re not gonna let you into this batch. We like the idea. Come back in six months and let us know what’s the future of this thing and help us kind of understand the story about where you’re taking us.”

If at first, you don’t succeed, apply again?

Six months later, there we were, applying again. At that point, we had $75K in MRR, which was big growth.

More importantly, we came to the interview with a new vision. Rather than saying, “We want to increase website conversion through personalized social proof,” we changed our answer to be, “We want to personalize the entire marketing funnel for conversion.”

That became the root of our mission — to make the Internet delightfully human through personalized Experiences.

And we ended up getting in that second attempt. We were off to the races.

If you’re thinking of applying, my advice is to make sure you can answer that question. I don’t think everyone has to have a billion dollar company. I just think that’s one metric. You can certainly be successful with a lot of different ways. For us, we wanted to create something great. That was just kind of a benchmark that we thought would be really exciting to go after.

Another piece of advice I have is to fill out the application as a goal-setting exercise.

If you’ve got a startup or you’re inside of a startup and you’ve got some idea, go through the application because it just helps clarify a lot of your thinking. That was really, really huge for us. I think we came away with just a much bigger and better thought out vision for our company, even just going through the application process.

The misconceptions about YC

1. It’s like school

First, YC is not at all like school or college or anything that you’ve experienced before. Really Y Combinator, as far as events is about four hours a week.

Is Y Combinator worth it? A group presentation at YC

A typical YC guest speaker with our W18 batch

Every Tuesday, we would go to the Y Combinator Headquarters. We would meet with a small group of other companies in our batch. Then we would have dinner where a guest speaker would come address the group. It’d be a former successful founder or current founder who was formerly in YC.

We had the Airbnb guys come.
We had Tracy Young from PlanGrid.
We had the Reddit and Twitch founders join.

Basically, you get to meet and hear from a lot of the former founders that have gone through the program. They’re really successful, and they just kinda shared their story.

That was really awesome, but outside of those four hours, it is just work. We would just go back to our house, and we would just work in the morning until evening, six days a week. That’s what Y Combinator really was to me.

It wasn’t all events and speakers. Those things happen but are only a small part of the time in YC. It’s really that you go to the events, you go speak with mentors, they give you a little bit of advice. You go back all week and you implement that advice, and you talk to customers. You write code, you build product, you talk to your customers more. Then you go back and you get a little bit more advice from YC.

They’re just kind of trying to focus you each week. That was a big shift for me about what I was expecting. It’s different than a lot of other accelerators or startup programs out there. It wasn’t like school at all.

2. You’ll meet your best friends

Secondly, I thought I was gonna come away with my best friends. I thought I was gonna be so tight with all the other companies — we were just gonna build these companies together and it was gonna be amazing. I walked away knowing just a few people really well.

Real reality of Y Combinator

The real reality of Y Combinator

Again, part of this is because everyone is heads down, focused on their own companies. You get out there and you’re like, “Well, I’m really not here to get best friends. I’m trying to build great products for my customers.”

A lot of the folks were very, I don’t know … very heady, very intellectual, kind of low EQ. I’m kind of higher on EQ. I had a hard time kind of relating to these people on a super close friend level. That wasn’t to say that they aren’t great people and people in our batch are gonna be really talented and successful, but in just a couple hours a week, it was hard to connect and hard to make really good friends. I’ve only got a few friends that kind of came out of there out of 150 companies.

3. The advice will inspire you

Third off, I think what I realized is that the mentors are incredibly blunt. I was really kind of taken aback.

Proof at Y Combinator

More reality of YC

I’ve talked to several other founders that feel this way, too. When you’ve got 20 minutes with Michael Seibel — who I really trust and respect—he’s gonna shoot you incredibly straight.

I left some of these conversations thinking, “This guy’s a huge jerk.” Again, Michael, if you’re reading this, I don’t think you’re a jerk.

In hindsight, I realized they just really care about helping you. A lot of the conversations I had — honestly I didn’t really enjoy a lot of those conversations at Y Combinator — very blunt, very direct, not delivered with a lot of fluff. It was kind of like taking a cold bath, talking to a lot of the mentors at Y Combinator.

But, it was really helpful. I kinda got to learn to say, “Okay, I don’t need that. I’m not here for therapy. I’m not here to make best friends. I’m here to build something great.”

Y Combinator changed my thinking

At one point, I was inside one of our meetings with one of our mentors, and I was pitching our vision. They said, “You know, I could see how this could become a 10 billion dollar company, but I don’t see how it could get past that.”

Obviously, that’s huge thinking. I’m over here thinking, “A billion dollars is kind of the biggest value of a company I could think of,” and he says, “You know, I think your ceiling is 10 billion. I think you need to figure out how to get past that.”

The Google campus during our YC time

Our team at the Google office

There were a lot of moments like that, where it’s like “Okay, this is on a whole different scale than what we were thinking before and a whole different goal.”

This is a really great thought experiment to think through. Ask yourself, “how could we shift our company to go doing that?”

The other big thing that I learned and what I really experienced there was just this laser focus on building for the customer. In the talks, in the conversations, in the mentorship, they don’t talk to you about how do you form LLCs and how do you do marketing.

They say, “Go back. Talk to your customers. They’re gonna draw the product out of you. Build for them. Lather. Rinse. Repeat.”

It was just this laser focus on building for the customer that was frustrating at times, because I wanted to talk about some of the extra things, but it was really challenging and I think really focuses and helped us build a much better product. It’s a very customer-obsessed culture that is driven there.

So, is Y Combinator worth it?

At the end of YC, we basically got a $120,000 investment, gave up seven percent of our company and went to demo day.

Demo day was at the end. There were about a thousand investors in attendance. We pitched for two minutes. Then we decided we wanted to raise money out of that. It was really cool.

Over the course of a couple days, we were able to raise about two million dollars from a series of seed funds and angel investors. It happened incredibly quickly. Part of that is because we had great metrics and great vision. Also, Y Combinator just makes it really easy to raise money. They kind of flip the script where the founders have a lot more control than the investors do at that moment.

Was it worth giving up that money?
Was it worth giving up that equity?
Was it worth moving the team across the country?

Well, my answer is: absolutely yes.

Absolutely and I would do it over again. Whenever we exit Proof and I start another company, I will strongly consider taking another company through Y Combinator as well. That’s because having that Y Combinator brand opens so many doors. It really is like having Harvard on a resume.

When I cold email people, if I say we’re in Y Combinator, they open and respond. When we launched our podcast, Scale or Die, I could kind of reach a whole new level of guests because I said, “We’re in Y Combinator. We’re launching this podcast.” Every investor will take a meeting with us from that brand. Everybody wants to talk to a Y Combinator company.

Our team post Y Combinator in Austin

Our team in Austin

We moved to Austin, Texas after Y Combinator and there’s a small community of Y Combinator companies here. We help each other out. Any of those people will answer my emails, we’ll get together, meet up, help each other. We’re not all best friends or anything like that, but it’s a network that will help you.

I think that’s the huge benefit of it is just this network after Y Combinator. It’s not that day to day my life is really different from being at Y Combinator. I’m not thinking about it all the time. I’m not constantly referencing it. I’m not going to meetings or events or anything like that, but whenever I need to I can always say, “Hey. We were in YC.”

If you’ve got a startup and you are growing it, scaling it, consider getting into YC. I am super thankful for Y Combinator and kinda what that’s meant for us. I’m glad to be a part of the community. For me, I think Y Combinator’s one of the most powerful growing organizations on earth. I think this network is massive. I think a lot of the industry-defining companies are coming out of there. It’s gonna be a much bigger thing in the future than it is right now. I’m really glad to be a part of that.