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We tried to hustle our way into YC after we got rejected
- paulsutter 7y agoThey should put this much hustle into the business for the sake of the business, every week. Not just one weekend for YC.
- jvagner 7y agoMaybe they do. This narrative doesn't indicate they don't.
- jolmg 7y agoBesides the point that the article doesn't indicate they don't, that amount of hustle might not be maintainable in the long run.
- cbetti 7y agoStarting a business gives you a broad enough diversity of things to do that you can sustain 90 hours per week dedicated to the effort for a long, long time. Coding burnout? Refine your pitch deck and cold call materials. Designing burnout? Pick up the phone and sell. Isolation burnout? Go pitch at a local pitch event or find advisors at a business plan competition. When you switch focus like this, you free up exhausted parts of your brain and body to give them a chance to recover without disconnecting from your startup, and you get a cross-pollination effect, where each of these activities informs one another very nicely.
- jvagner 7y ago"venerable" should be "vulnerable", and Mountain View is mis-capitalized in a few places... :-)
- camjohnson26 7y agoThere’s a “where” that should be a “were”
- stOneskull 7y agoa "the" instead of a "their"
- hartator 7y ago> kinda forgot about it At least you didn’t ended loosing one of your dragons because of it.
- samfisher83 7y agoI thought YC main thing was growth not revenue. Why did they get rejected for revenue? Also making someone fly overseas for a 10 minute interview to get rejected really sucks. I hate the all day interview, but if you are coming from overseas then maybe give them more than 10 mins.
- prickledpear 7y agoIt's great that YC provides feedback on why they don't accept (some) companies. However, it's a bit disappointing to see that not having MRR is a reason to reject a company. It seems like a lot of the successful YC companies were accepted way before they were anywhere to close to revenue -- and some were even working on a completely different product when accepted. My hope is that MRR is sufficient, but not necessary for acceptance!
- rococode 7y agoI think they do continue to accept companies without MRR. I suspect they simply value it more in cases where they are unsure if the product is something that can eventually be monetized (i.e. they don't know if people are willing to pay for it).
- short_sells_poo 7y agoMaybe I just don't get the Silicon Valley culture, or perhaps I'm missing something fundamental, but let me just get this straight: 1. Startup has no revenue whatsoever, but ostensibly have good product. They go pitch to investors and get rejected, likely because they have no revenue. 2. They hack around for 1 (!) weekend and get their MRR to $500. Five hundred bucks. They now go back to investors and say: hey look, we now have revenue (peanuts really), can we get funding please? In what world would those $500 be expected to make a difference? How is that a proof of anything? I expect even really inept startups can somehow pull together $500 revenue from friends and family. I suppose I just don't get how $500 in revenue could be seriously considered the tipping point between rejection to acceptance for investment? To my layman reasoning, this is incredibly naive, but I'd like to be proven wrong.
- plehoux 7y agomissiveapp.com and conferenceBadge.com, my two startups, have both been rejected at the interview phase. Our yearly revenue for both now stands in the 7 digits. We are still just a team of 3 + 1 employee, 100% bootstrapped. Life is good. My advice, keep pushing! https://missiveapp.com/ https://missiveapp.com/ https://www.conferencebadge.com https://www.conferencebadge.com
- therealarmen 7y agoConferenceBadge landing page is one of the best I've seen. Nice work!
- cdubzzz 7y agoApropos of nothing, this little marketing page is pretty great -- https://www.conferencebadge.com/why-use-conference-badge https://www.conferencebadge.com/why-use-conference-badge
- throwaway619 7y agoWow, that's fantastic. Clicked on "Try the Slow Way".
- sithlord 7y agoso, it took anna 10 hours, and lets assume anna gets paid 25 dollars an hour, so a cost of 250 dollars. Shelley, used the conference badge, and at 1.79 for the fully shipped version of the badge, it will cost 582 dollars. So, essentially, Shelley paid 332 dollars for QR codes and convenience. Is it worth it? probably. but maybe not.
- plehoux 7y agoBadge printing kits/holders are not free :) https://www.amazon.com/Avery-Badges-Lanyards-Holders-Inserts/dp/B075FXGNN8/ref=sr_1_3?keywords=avery+badges&qid=1560961103&s=gateway&sr=8-3 https://www.amazon.com/Avery-Badges-Lanyards-Holders-Inserts...
- dannykwells 7y agoI kinda wonder, if you believe what's missing in your platform is a single feature that can be implemented in 2 days, do you really think YC wouldnt realize that too? So this is likely not the reason for the rejection. I would have even more worries about these founders after this stunt because it shows a lack of self awareness and strategic insight. I'm in no way affiliated but Id guess YC is looking for foundational advantages and paradigm changing ideas in their companies. You can't pivot to those in 2 days.
- strken 7y agoOn the flip side, adding a new feature might demonstrate existing strengths of their product, and help validate the idea to an external observer. VCs aren't infallible judges, otherwise they'd put all their money into Facebook and Amazon and none into Juicero and Theranos.
- deleted 7y ago[deleted]
- adrianmsmith 7y agoI think it's not about the technical implementation of the payment feature (as you say, that's not that hard), it's about if anyone would use it (i.e. if anyone would pay). Before they implemented the feature it was unclear if anyone would pay, after they implemented the feature it was clear that at least some people would pay.
- yellowarchangel 7y agoI feel like you're assuming way too much when the only evidence we have to base YC's rejection is by their rejection email. They clearly wanted MRR and company that moves fast, and the OP clearly showed that both are possible in a measly 48 hours. Also YC even asked to meet them before the next round, so it might have intrigued them.
- auntienomen 7y agoYour goal shouldn't be to get into YC in a year. Your goal should be to not need YC in a year.
- erikpukinskis 7y agoYC is just the gatekeeper to a network of wealth and expertise in scaling. I guess no one really needs it, in the sense that you can look up how to scale. But if you’re a VC-style company, and you’re trying to grow fast (and if you’re not you do not want to go through YC) then your business model is by definition “EAT ALL THE MARKET”. If you’re an early stage company, even if you can bite off a big chunk of market, it’s fairly certain the YC old boys network can help you bite off another big, non-overlapping chunk. Anywhere in the sub-$100M valuation range, that’s probably worth 6% just in terms of getting out in front of other growing competitors (or competitors-to-be). It doesn’t change your path, but it changes the dates on the graph. That’s assuming you are a VC-mindset company (centralize revenue streams around a few owners, grow fast, get liquid). There are other kinds of companies who “will not need YC soon” but mostly those companies shouldn’t want YC in the first place.
- d0m 7y agoSo, that's the dichotomy of YC. YC is an accelerator, and as such, needs to accelerate /something/. If you join too early, then it's almost a distraction to getting the product out and talking to users. However, hit the sweet spot and YC is an invaluable resource to help you grow. On the other hand, YC opens the door to so many opportunities and great people, that even if you're too early, the net result is still a pure positive for your career and startup.
- pauldix 7y agoI don't think of YC as an accelerator, but maybe that's where things are headed since we (InfluxDB) went through in W13? Originally it was enough to have a few people, an idea, and a prototype. I think that was the model for the most successful YC companies currently out there (Dropbox, Airbnb, Stripe, PagerDuty). Some didn't land on their actual idea on product until after the batch (Twitch). There are certainly companies that come in with a baked product and the start of some real users/customers who then use their time in YC to juice their numbers and raise big rounds at crazy valuations right at the close of the batch. However, I think what YC offers that is unique (and a real strength) is that they back completely unknown founders very early in their process of building a product and a company and give them the connections and advice to help build something big. The YC series A program strikes me as more of an accelerator.
- dalton 7y agoHey Dom, we worked together directly when you were in YC, and I deeply disagree with your assessment that having progress helps a startup succeed in YC. The worst case scenario is a newly accepted YC startup with a little bit of traction... just enough traction that they aren't willing to change ideas/markets and not enough traction for them to actually know they have product market fit. It's the uncanny valley of product-market fit. These companies with a little bit of progress can spend months or years of their life chasing what they later realize was a mirage. When a new YC company enters the batch with very little or no traction (and can move incredibly fast) they will longterm outperform companies accepted with small traction most of the time. Based on the hundreds of companies I have personally funded at YC, speed is the single most predictive variable of if a startup will succeed - not traction at time of accept.
- camjohnson26 7y agoThese founders haphazardly threw a new paid feature into their app just to try to impress the YC team? They should have taken the time to do market research and do it right rather than risk alienating their user base. I wonder if getting rejected was a big enough blow to their ego that they couldn’t see clearly, just like college applicants will go to top ranked colleges with no concern for the price or the risk/reward profile of that decision, but instead so that they can brag about being the best. YC is “the best”, but that doesn’t make it right for every startup.
- cheez 7y agoUmm... No, they built something for years and gave it away for free without knowing if it was worth money to anyone. It was worth money. Therefore, they have left a lot of money on the table. In my opinion, they're still not charging enough but they'll work that out. Keep at it OP.
- GraffitiTim 7y agoThey took the feedback to heart, built fast, and got paying users! Where's the big mistake there? I think one of the good things about YC, is if you try to optimize for getting into YC, you're actually building your startup in a constructive manner.
- albertgoeswoof 7y agoThey might have just killed their MAU growth potential Imagine if FB had a premium plan in 2008, they wouldn’t have made it. In this case it probably makes sense to charge early on, but it doesn’t look like they did much research on the decision
- closetohome 7y agoYeah it sounds like they basically eliminated their free tier. I already have access to a half dozen video editors that don't watermark their output.
- StephenCanis 7y ago
- stOneskull 7y agothis ticks all the buttons, ha
- deleted 7y ago[deleted]
- rococode 7y agoI wonder if the results thus far actually validate the concerns raised by YC ("hard to know whether people are willing to pay")? $250 MRR strikes me as rather low for 35K MAU - assuming that's 50 users it's just over a 0.1% conversion rate, and a little over 2 weeks in I'd expect most of those monthly users to have come across the option to pay at some point by now. Nonetheless, wish you guys the best of luck in figuring out the monetization!
- deleted 7y ago[deleted]
- emcrazyone 7y agowhy stop with YC? There are other VCs that might pull the trigger, no?
- dalton 7y agoI would recommend “hustling” for a period of time before the interview, rather than as a reaction to the outcome of it :)
- natch 7y agoSort of an aside but it’s really impressive to see the level of care the YC team puts into the feedback provided in the email. It would be easy to just have a generic rejection. Considering the number of teams they are interviewing, it’s even more impressive. Kudos.
- wenbin 7y agoThanks for sharing your YC story! Some personal experience: I applied to YC for 8 times over the past few years. Got one onsite interview (late 2017). Got rejected. I documented that onsite interview experience here: https://broadcast.listennotes.com/my-y-combinator-interview-experience-w18-c12e6d98c1d0 https://broadcast.listennotes.com/my-y-combinator-interview-... Probably YC is not a good fit for everyone. I stopped applying to YC since then. My small startup is doing well now, so I'm happy :)
- djsumdog 7y agoHmm. Some rapid development. I wonder if they wrote test cases for the subscription functionality. When they had that test-payment gateway go to production, did they add safeguards to prevent that from happening again? I mean, it seems like an impressive story, but when I read it, all I see is potential technical debt. I don't think I'd like to be back in startup culture. I really like solid testing, and I hate moving so fast that we don't create that safety net.
- slap_shot 7y agoYou can't assume they didn't. More importantly, I work very closely with subscription providers can tell you that many of them fail to create these basic safety nets with large teams, slow release schedules, and lots of funding. But yes, startups may not be for you.
- Permit 7y agoThis sounds a bit like "Taking out a loan to pay your medical bills is imprudent financial advice". On the surface it might be true but it doesn't matter if the alternative is you (or your startup) dying. Ultimately only the authors know their circumstances and the trade offs they have to consider.
- essive 7y agoToo much emphasis on YC - there are others
- whiddershins 7y agoAt first I was with them, but when they summarized at the end I think they missed the underlying point of the feedback. The feedback was “why have you waited so long” not “this was too early for you to apply” The fact that the founders bent that around in their heads after changing their actions, to me, indicates they aren’t quite getting what the email implied. But what do I know, I’ve never gotten in to YCombinator or launched a successful startup.
- kaybe 7y agoI might have missed the point too, could you expand a little?
- whiddershins 7y agoThis is obviously speculative, I’m not in anyone else’s head. I interpreted that they were concerned about the thinking that went in to making the decision not to begin charging people sooner. I felt supported in that interpretation when the founders ended the article by saying perhaps their company was at too early a point for the program. The feedback seemed to imply they were too far along to have not started charging, so interpreting that to mean they were not far along enough could mean the feedback was responded to with direct action but the underlying thinking remains unchanged. Like I said, I have no idea if I’m right, but if I am then the last conclusion paragraph validates the YC interviewer’s concern that there’s a deeper problem about how the company is being approached.
- cloverich 7y ago(same boat as OP, just hazarding a guess) -- What is the plan? Why were they waiting? Wanting to capture a larger segment of the market to out compete a rival company before monetizing could be an answer. There's others, sure. I think the point was there should be a strategy. The entire post felt like a couple kids waiting to turn in their next assignment, and wanting to know what to do for extra credit. Which is likely unfair, its just the vibe I got. It sounds like they have a product people like, which is great. My next question might be -- what do they want to do next, and how will YC help them? Probably things they've covered, but maybe not.
- staunch 7y agoThis kind of feedback is not to be taken at face value. YC says very clearly that the point of the interview is to judge the quality of the founder(s). Whatever excuse they invent to write in the rejection email is really nothing more than that: a polite excuse. They don't feel that they can be frank and just say: "We think you're probably bad founders based on the fact you have been very slow to charge customers." Just remember that they're attempting to judge the potential of a team of human beings in 10 minutes. Realize how fundamentally flawed (and demeaning) that concept is. It's quite possible, and even likely, that their interview selection process is worse than random chance. Of course, they think they're good at picking. But this belief is based on the theory that the companies that they don't pick will succeed even without YC's help i.e. that there would be an embarrassing anti-portfolio. Since many of YC's most successful founders acknowledge that they wouldn't have succeeded without YC, that theory is obviously bunk. IMHO the YC application and selection process is reasonably good. It's something approaching a crowdsourced process. The interview is them injecting their egos into the process, to the detriment of themselves and founders. The problem is perpetuated because the people that do luck their way in are then immediately convinced that the system works. After all, it did select them, it must be pretty darn good. This is the destructive power of ego. Someone could beat YC at selection simply by copying them and removing the interview part of the process (i.e. just accept the top N applications). Crowdsourcing is going to most closely approximate the customer point of view, and that's what ultimately matters for startups. It's okay that YC is kind of bad at their core function. They're still good enough to stay in business and it's their prerogative. It's just a shame that they're not improving and that there isn't anything better, yet.
- slap_shot 7y ago> In March, we submitted our application, and kinda forgot about it. > Two months later we got an email saying that a partner would like to speak to us. This is a tangent, but I want to share something about my YC interview experience for anybody ever in this position. I filled out my application in February for the NYC interviews. They passed on me for the early NYC interviews, but ~2 months later I got an email for Mountain View interview. During my interview, I was asked what my revenue was two months ago, and what it was last month. When I gave my answers it created immediate disarray between the three interviewers. I walked through my numbers and could tell something was visibly wrong, but time was ticking and I had to steer back to the product, vision and growth. When I got my rejection email, the lead-in reason was that the revenue wasn't clear (and to clarify, we are doing VERY well with revenue growth). A bit perplexed, I went back to my application and realized what had happened. The YC application asks for "what was your revenue last month, two months ago, three months ago, etc)" The partner was trying to get me to talk about what caused a 100% revenue spike (and again, we're not talking about small revenue here) between February and March. But when filling the answers out in February, those questions are anchored to December and January. That spike was just onboarding customers. As I personally had to live through the hell of onboarding these customers from December to January, it never occurred to me that he was asking about that spike while looking at my "last month" and "two months ago" revenue. I read my application a lot the week leading up to my interview. It never occurred to me change my answers to realign with the two month gap between when I filled it out and when it was accepted. I'm not sure I would even do that now, knowing what happened. So the upshot is this: if you fill out your YC application well in advance, be prepared to speak to your financials (and company as a whole) both as are they are today, but also as they appear in your application, because the answer to "what was your revenue last month" is different depending on whether the partner is referring to your application, or the last calendar month.
- roymurdock 7y agoWhy didn't the partners immediately ask you to clarify the discrepancy between the numbers you stated on your app and the numbers you were telling them? Is there not enough time to have a bit of a back and forth?
- harrydry 7y agogreat read
- ricardobeat 7y agoI don't think this looks very good for them. They suddenly added watermarks over their videos to 'encourage' users to sign-up. A pro plan with added value would have been more considerate, or even a full switch to paid users with a notice period. They are also displaying company logos under 'Trusted by thousands globally' that obviously are not paying customers since they didn't have subscription plans before.
- truthwhisperer 7y agoso what's your point? free publicity. Make a video i would say on youtube how rude YC was on you
- teilo 7y agoHow many of those paid subscriptions are the result of people stuck in the middle of editing projects that they suddenly could not finish because of the watermarks?
- filmgirlcw 7y agoI don't want to be a jerk to kids in their early 20s who are bootstrapping their startup idea, but reading this account would actually confirm for me why this team wasn't ready to be accepted into YC or a similar program. A big part of the onus of the original product, at least, as it was launched, was that it was "watermark free" and the way it was "sold" to end-users was that it was a free service. Now, I can understand the initial rationale here -- you want to get users, you start with free, and assume you'll pivot to paid options/add-ons at some point or get sponsorship or other revenue streams, or pretend it's still 2009 and that startups with no revenue can obtain ridiculous valuations and then be acquired by Yahoo or whatever. The problem is, it's no longer 2009 and investing strategies have changed. Revenue has replaced users as the important growth metric for lots of investors. (There are exceptions, I'm aware, but this is a general trend we've seen over the last few years. Don't worry founders, the pendulum is bound to go back in the other direction in another few years.) Now, I don't know what the team's original business plan was for this service, but based on the YC letter, it appears that they said "we'll start charging eventually" and that led to the question about why you aren't already trying that now, when you have 35,000 MAU. A fair question -- and one that really represents more of a question about business plan rather than lack of MRR. But the team read this as "if we can show MRR, we can prove we're ready" -- except that wasn't and isn't the problem here. Yes, it's impressive that the team was able to hack together a payment gateway and offer a pro product in a weekend and obtain $500 in revenue (should be noted that this isn't recurring and it won't be clear what the actual recurring revenue is for several months), but the fact that it was done so haphazardly, and honestly, for what looks like the wrong reasons (it wasn't about "this is best for the business" it was about "this will get us into YC"), is the biggest red flag. If you want to change a fundamental part of your product (no watermarks) and make it a pro feature to entice users to pay, you're welcome to do that. It may or may not work for existing users, and it's possible there are better ways to extract revenue/add value. The truth is though, this was an idea done at the last minute to try to secure placement in an accelerator, it doesn't appear to be born out of actual business rationale for the product.
- zergblush 7y agoAs a heavy app user, I absolutely abhor the bait and switch, on top of annoyances such as in-app subscriptions (I don’t mind one time in-app purchases for keeping permanent feature upgrades). In this case, it sounds like their users may have been feeling baited and switched, having invested their time into the product only to have to pay to continue using it without watermarking. If my understanding of the above is accurate, then they may have already destroyed their trust relationship with their current users..
- mychael 7y agoAnyone else get the impression that this team is more excited about getting into YC than building a successful business?
- Animats 7y agoThere are tons of video editors, all the way back to Adobe Premiere. OpenShot, which is free and open source, isn't bad. What do these people have that they don't? (Yes, it's "in the cloud". So?)
- edjrage 7y agoI almost can't believe I had to scroll this far to find a sensible comment. Honest question (as someone very ignorant about the business world), why do people spend money on this stuff? And why do so many people (based on the comments here) act like it's OK to create such products (i.e. products that bring literally nothing innovative or useful to the table)? By OK I mean ethically, considering that there are so many more pressing problems in the world.
- arkades 7y ago> And why do so many people (based on the comments here) act like it's OK to create such products (i.e. products that bring literally nothing innovative or useful to the table)? By OK I mean ethically, considering that there are so many more pressing problems in the world. Just to be clear, I want to understand that you're asserting: 1) It is morally unethical to create a non-innovative product and 2) It is morally unethical to work on something other than "a pressing problem" in the world, as you define pressing problems ? Or are you saying, 1) In a world with "more pressing problems", it is unethical to work on something as low-value as a non-innovative product ? And for context: what projects do you feel are ethically acceptable ways for people to spend their time on, and what do you do?
- dannylandau 7y agocool video editing tool!
- rsweeney21 7y ago> We had positive feedback from YC... There was a time when I thought positive feedback from a VC meant something. 2 startups and $16M in VC funding later I've realized that it doesn't. Having a VC tell you your startup is awesome is like having your mom tell you your startup is awesome. They have no incentive to be honest with you and every incentive to have you walk away with a positive impression of the firm. Founders REALLY need to stop looking to venture capitalists for validation of their business. Your metrics are all the validation you need, especially if those metrics are profit or revenue. Putting confidence in the feedback of a VC can cause you to ignore warning signs. Even if they write you a huge check, it doesn't mean you have a good business. All it means is that you are good at fundraising.
- davnicwil 7y agoThis is a really great comment. Positive feedback from any third party, VC or otherwise, is information that can be factored into your own 'model' of whether your business is a good one but it seems to me the overwhelming factors ought to be either the real numbers you mentioned and your own (hopefully) more complete and considered analysis of your market and opportunity, using the information and hypotheses that only you have. Positive feedback is nice but it should have zero effect on whether or not you pursue a business idea - if you weren't going to pursue the idea without it, there are probably fundamental reasons for that, that should probably override the reasons behind the positive feedback anyway.
- dheera 7y agoRaise from another VC (if you need) and keep moving. Don't raise if you don't need to, obviously. Like dating, if they don't want you, it's their loss. Hounding them will only make you sound needy, and unfortunately people (especially investors) are wired to give to the people who least need it, in general.
- csomar 7y agoCheck this out: https://techcrunch.com/2019/03/18/here-are-the-85-startups-that-launched-today-at-y-combinators-w19-demo-day-1/ https://techcrunch.com/2019/03/18/here-are-the-85-startups-t... Many YC startups don't charge anything. Here is one that seems still to be figuring stuff out (https://www.54gene.com/ https://www.54gene.com/). One that seems to be figuring out who and how much to charge (https://ultralig.ht/ https://ultralig.ht/). In fact, I'd like that someone goes through the startups and deduce how many of these are making any money or have strategies to make any money. Here is what I think is going on: YC is trying to be polite (bullshitting) about the rejection. They won't straightforward tell you: You suck. Or you are not sexy enough to be in bed with. And it's fair enough. When was the last time a potential hookup told you they won't have sex with you because your face is ugly or you have an ugly belly. YC probably picks up on intuition. You can't judge a dog for 10 minutes. They are using subconscious cues based on their experience. They are looking for founders. The startups with high MRR are probably suckers for scaling that made it at monetizing a product to market. YC takes them (expensive %7 for cheap mentoring) because they can afford that. You can't change the built-in neural networks inside YC brains. They might be going against their intuition on the diversity front because data has suggested they should or they are trying to look cool. What this team did is basically show up next morning and have a black t-shirt because they figured out that I don't like guys in white t-shirts. That's not going to make me like them. Probably hate them more. It shows lack of consciousness and maturity. This is not a government position with cold requirements where you need to check the boxes.
- Matticus_Rex 7y agoThe fact that many YC startups don't charge anything doesn't mean that this startup has a good reason not to be charging. I think the assumption that YC gave them a BS reason is absolutely unwarranted. Personally, I love the hustle. It was absolutely worth a shot, and by the next batch they'll have a lot of data to show. Most great first-time founders have no idea what the hell they're doing, and it's totally forgivable for them to have waited a bit longer than necessary to start charging. They responded to feedback from smart people who know what they're talking about, and are moving ahead.
- 7y ago
- simonebrunozzi 7y ago> Over the space of a year, we had a 60% MoM Growth Rate, 35K MAU and a great team! I smile when I read "X% MoM growth" and the starting numbers are obviously very little. I think it's a BS metric when presented this way. Besides that, congrats on hitting 35k MAU. Not a small feat.
- jacobsenscott 7y agoI hope you start making enough money before next YC round that you don't need to sacrifice a percentage of your company to investors - remember vc funding should be a last resort, not a goal.