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How I Got Kicked Out of Y Combinator and Then Raised $1.5m for My Startup
- knowsnothing613 16y agoSo are you like a competitor to shopify? It seemed like you'd disrupt their market with your free shopping stores.
- KMStraub 16y agoThe way I see it, Paul was willing to take a huge gamble on this company from the outset because of a strong gut feeling. Y Combinator didn't have to let them in and was being incredibly generous, going as far as setting aside their own rules for this one special case. They went above and beyond the call of duty. And then, to hear word that they'd have to yet again do things differently than they are accustomed to for this one company probably just didn't feel right anymore. I am happy for the writer and I bet he'll be very successful, but where he went wrong (if my facts are correct) is expecting YC to allow him to stay in the program because of "protocol." They made the first decision based on a gut reaction, and they reserved the right to make a second decision "on gut" as well. Also, to be clear, they didn't kick him out, they respectfully asked the founder to apply again next quarter. My purpose isn't to declare a winner. I have a lot of respect for the author and his perseverance. But I hope he sees just how much he was asking from YC, what an incredible achievement that was to convince Paul to take the first leap of faith, and why he probably should have just swallowed his pride and accepted YC's decision with genuine gratitude.
- dariusmonsef 16y agoGlad I could be a part of this story of boy meets incubator, boy loses incubator... boy still gets the funding. :)
- eoghan 16y agoLove this story and can vouch for its authenticity!
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- micahb37 16y agovision is something Jon is not short on...great post!
- joshu 16y agoAs my cofounders are no doubt tired of me saying: "Keep your hat on, we could end up a long way from here."
- bmull 16y ago+ "but please don't wear your hat inside. That's impolite."
- jeffreyk 16y agoI couldn't be more proud of Jon, Janette and Storenvy. Serious ass-kickers.
- erichurst 16y agoYou can say all you want about resiliency, but I think it was the ninja-moves animated gif.
- aepstein 16y agoJon/Storenvy is a case study in refusing to die.
- dh 16y agoLove Jon and Janette and everything they are doing. I remember getting calls from Jon when all of this happened and so happy to see where he is today.
- jeromec 16y agoI love this guy's writing style. Great read.
- scottkrager 16y agoWow really shows how Y Combinator values co-founders... No co-founder....no soup for you! To be fair, they did get accepted based on having the whole team. Do you think you would have been excepted if you applied as just yourself?
- NewMonarch 16y agoIt's hard to say. To be fair, YC never met the rest of my cofounders. I was the only one they'd ever spoken with. - Jon (The guy who wrote this story. :)
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- shasta 16y ago)
- NewMonarch 16y agoThe smiley face/close parenthesis move is completely valid. (Otherwise you get double lips. :))
- alanfalcon 16y agoActually, then it's time to get all fancy (that's right, I'm talking Reverse-Smiley! (-: ) But then it's like he's bald.
- evandijk70 16y agoxkcd has something to say about that too http://xkcd.com/541/ http://xkcd.com/541/
- elai 16y ago(I just put a space :) )
- chalst 16y ago
- johntmeyer 16y agoAwesome insight Jon. Thanks for the honest look back. I never found you inspirational, but you fake it well, ha.
- johntmeyer 16y agoSorry for the bad sarcasm community. I love Jon and Janette. I met Jon way back in 2009 and he was hustling with just an idea then. As a fellow Midwest entrepreneur it's awesome to see him "graduate" from our area and succeed in the valley.
- sinzone 16y agoImagine how hard could be for foreign entrepreneurs that have to deal with immigration and visa also.
- tianimal 16y agoboo!
- bmull 16y agoGreat story. Happy to know you guys
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- rwebb 16y agoAwesome post!
- physcab 16y agoWe use storenvy at grooveshark (http://www.storenvy.com/stores/3605-grooveshark http://www.storenvy.com/stores/3605-grooveshark and http://store.grooveshark.com/ http://store.grooveshark.com/) and its super awesome. I love the emphasis they place on community as that is something we value very highly internally as well. Great work and thanks!
- alexophile 16y agoI was kind of hoping this would be a story of Yuri Milner tracking down the one that got away.
- rokhayakebe 16y agoCan you please explain?
- alexophile 16y agoWho downvoted this? That's not cool. Asking for an explanation is always ok. Anyways, Yuri Milner (with Ron Conway) recently announced a blanket offer to all YC companies: $150k in no cap convertible debt. The title could have been to a story where a YC company dropped, presumably forfeiting the offer, only to be tracked down specifically and offered much more. [edit: typo]
- marcamillion 16y agoLove your name alexophile. I also love the explanation for it in your profile.
- rokhayakebe 16y agoThank you. I was thinking maybe one of the companies ended up not taking Yuri's money.
- mdoerneman 16y agoAwesome story! I am building a startup in a small town in Nebraska (not too far from KC, MO) so I feel like I can relate to a lot of what you said.
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- zackattack 16y agoAren't you a single founder? What makes you special?
- mlinsey 16y agoYC accepts single founders, the bar is just higher. Applying with co-founders and having them disappear is probably worse than applying as a single founder, because co-founders jumping ship is one of the things that often happens shortly before a startup dies. I'm sure YC was acutely aware of this pattern, and that makes the Storenvy story all the more impressive.
- zackattack 16y agoCool story bro. I was asking Ray what made him an exceptional single founder.
- rgrieselhuber 16y agoI'm pretty much good at only one thing: not giving up. The rest just seems to work itself out.
- tianimal 16y agoReally inspiring story. I can attest you and Janette were experiencing "the trough of sorrow".
- boredguy8 16y agoGood job. I'm curious why you list SF as the location, giving how well everything started out for you even though you were spread out geographically.
- Timothee 16y agoIn 2010, I got accepted and kicked out of Y Combinator, lost my cofounders, and raised $1.5M from A-list investors Sounds like it was more "our team was accepted even though they had no idea what I was up to, I subsequently lost my cofounders, and Y Combinator revised their decision based on that." I'm surprised that YC accepted "them" after meeting just one of the co-founders. Also, what is not very clear is why he went by himself to get money and how he continued the company by himself without his cofounders. Meaning that it sounds like it's just that they didn't want to move to SF with a week-notice, not that they gave up completely on the startup...
- NewMonarch 16y agoI came to SF the first time by myself because I was the hustler in the group. I talked to my team members every day. They knew I was in SF talking to investors and they knew I was interviewing for YC. They just hadn't heard of it until I was already doing the interview. As to how I was able to continue, as I explain in the article, they spun off a t-shirt printing business that we had been running. It was a more predictable business. Less risky for them. More of a 9-5 thing with a steady income. To be fair, they still believed in the business. They just didn't want to tattoo it across their face and sell their first born son like I want to.
- joh6nn 16y agowhat's your asking price for your first born?
- electromagnetic 16y agoThat's what I'm wondering, I bet there's good money in child-flipping. You know buy a 3 month old, get them to the walking+talking phase and boot them off to someone willing to drop top dollar. (FYI for the downmodders: that's what's called a sick joke)
- joh6nn 16y agowell, thanks for posting that publicly: there goes the idea for my YC '12 entry.
- run4yourlives 16y agoThe article makes it sound that PG and co allowed this guy to pick up and move to SF only to tell him to suck it the next day. If that is what happened, they deserve some scorn for playing with a person's life like that. That's just not on. If, however, they were clear about their reservations and just wanted to meet the guy again to discuss, it was really stupid of him to transport himself from his home to a hotel. Such a cavalier attitude to risk actually might be a very good reason that this guy should not be running anything, and YC made a sound choice. Either way, don't know any of the actors in the story and wish them all the best. Thanks for sharing this rather strange story.
- ghshephard 16y ago"Such a cavalier attitude to risk actually might be a very good reason that this guy should not be running anything" I read this story very differently. Jon was fearless, took a calculated risk, and, when the initial outcome didn't role in his favor, just kept plugging in the face of obstacles - to his success. If you think that "Flying out to Silicon Valley on a reasonable chance that Y Combinator was going to fund his startup that already had a community, but with several months of cash regardless of that funding" is a cavalier attitude to risk, I would love to think what your thoughts about what some of the _really_ hair brained things that startups do to become successful. The sheer _act_ of deciding to create a startup is easily one of the most risk prone acts one can take - so, ironically, per your logic, anyone who does so should not be running anything. :-) I loved the story, loved how he rolled with the punches, and loved his positive attitude at the end towards everyone. I have almost no doubt that he's going to deliver great things.
- BalancedThought 16y agoIt was risky. But, I also believe that there are two key points from the story that made it easier. 1. He married a woman who is extremely supportive and dialed in. 2. He had a savings that he could fall back on. So, getting kicked out of Y Combinator was heartbreaking but not soul crushing. Basically, he had some good protective factors which made it possible for him to take risks. Congratulations and best to you and Storenvy.
- budu3 16y agoWow. Your wife was really supportive.
- NewMonarch 16y agoShe's amazing.
- thematt 16y agoWhy did you have to move to San Francisco? I understand the benefits, but I thought YC funds companies based outside CA, so was that a condition of the funding that they made?
- btilly 16y agoA startup batch has to all be physically present for the YC period. That is because they meet in person frequently. So for 3 months you have to live where they are holding it. Originally YC alternated between Boston and Silicon Valley. However they have now changed to always operating out of Silicon Valley. So you have to live there for that period. This does not stop companies from moving there for 3 months and then moving back. As a notable example, Wufoo is based in Florida.
- michaelpinto 16y agoIs there a way that I can apply to be kicked out of Y Combinator without being in Y Combinator?
- pg 16y agoEvery batch there are some groups that fall apart between when we agree to fund them and when YC starts. Sometimes we tell them not to worry about it and do YC anyway, and sometimes we tell them they should take some time to repair the damage and reapply for the next cycle. It depends on how bad the breakage is. If a team of 3 loses 1 person, that's no problem. Whereas if a team of 3 loses 2 people, that's bad. In this case, the breakage was not only on the bad end of the spectrum, but we weren't told about it till the last moment. IIRC Jon told us an hour before he got on the plane here. That affected our decision more than the breakage itself. At the scale we operate on, we can't afford to have people around who aren't upfront with us. I'm glad Jon got funded though. As he says, I was quite enthusiastic about what they were working on.
- MortenK 16y agoTo be fair, the guy had to manage an unscheduled move from kansas to sf, including family in one week. At the same time he had to figure things out with the cofounders. In such a short timeframe, isnt it understandable that YC werent notified earlier?
- jedsmith 16y agoI can see the other side. YC's requirements are not a surprise (and are quickly Googleable). If Jon's cofounders weren't on board with YC's requirements (namely, moving to San Francisco), that's something he should have been aware of before pitching and getting accepted, and probably should have come up during his pitch -- to YC, it could have been a sign that he didn't know his cofounders well. My knowledge of this is limited to reading the comments here and Jon's blog post, but it's fair to see YC's side as well on feeling a bit blindsided. That's what I read between Paul's lines, anyway, specifically since he used the phrase "up front with us". Not pointing fingers or anything, just understanding both sides and responding to you specifically.
- NewMonarch 16y agoA big life decision like that takes at least a few days to process and decide. We had 7. Things got pretty crazy in that week, understandably.
- ztan 16y agoI'm curious in how things would have turned out had he not been kicked out of YC. My guesses are he probably wouldn't have been that much better off. My analogy for this would be the situation of a Harvard drop out. You've already accomplished the toughest task - getting ACCEPTED. Whether you graduate or not seems pretty insignificant since it's so much more unlikely for an average high school student to be accepted into Harvard, compared to an average Harvard student finishing the program he was accepted in. Ultimately he was able to demonstrate his ability to network and raise fund despite not completing YC. What I don't know is how much did having that YC stamp of approval (despite being taken away later) helped in those endeavors. Edit: rephrased my question a bit, still seems awkward...
- bootload 16y ago"... Still, a couple hours later, I boarded a plane with my wife, dog, and all the necessities for the summer stuffed into a suitcase and flew to SFO and hoped for the best. Seven days isn't nearly enough time to find a proper housing setup in SF, so we checked into an extended stay hotel where we would end up living for an entire month. The next morning, Paul emailed and arranged a meeting with the entire YC team for us to discuss the future of Storenvy in YC. Since we didn't have a car, and I didn't have enough time to figure out something better, Janette and I took a $100 cab ride down to Mountain View. ..." Anatomy of determination.
- jacques_chester 16y agoYes, he pretty much burnt the boat on this one.
- marcamillion 16y agoThis is awesome. One thing about storenvy though, if I were to trust my business with you guys, I would want to know that there is a future and you aren't just figuring it out as you go along. I would say figure out a way to monetize it in the short-term (perhaps transaction fee on all the sales), that way, your sellers can be confident that you are a going concern. Just my $0.02.
- NewMonarch 16y agoThis is covered. We'll be releasing loads of new stuff involving $$ in the coming year. But it's still free!
- micahb37 16y agoIts important to note that YC isnt "at fault," or "did something wrong." They did what they thought was best, and that decision drove Jon down a different path. The end result (at least at this point) is net-net positive for both. Being in YC as a single founder would have been really hard on Jon, and would have probably netted a different short-term result, given the learning and potential shift in direction an accelerator can bring (YC, TS, etc.)
- wmboy 16y agoGreat story! And guys, I personally think the discussion should focus more on "...and Then Raised $1.5m for My Startup". He clearly has no hard feelings for YC and even said "they did the right thing". To me the story speaks of the rewards of true hustle. That and making sure you're family is 100% involved in your start up too, as his wife sure helped too!
- NewMonarch 16y agoCouldn't agree more. This is about the future! We could sit around and dissect events from the past all day long, but I'm way more interested in building a team and destroying the e-commerce space together. If you're a UI designer or Ruby hacker, please get in touch! :) http://www.storenvy.com/jobs http://www.storenvy.com/jobs
- tm65atcolumbia 16y agoAn enthusiastic +1 for you. Not only do you possess the open mind to see all these business decisions as rational as humanly possible (I envy that in a startup founder ;-)), you also turn that experience towards strengthening your business in multiple ways. Class act @NewMonarch. @vocabgenii @tm65
- jacoblyles 16y agoYCombinator has a very narrow niche for the kind of companies they fund. They reject many companies, not because they aren't good companies, but because they don't fit the YCombinator style. This isn't a bad thing for YC. Everybody needs to specialize. And it means there are plenty of good startups out there that aren't getting funded by PG/Yuri Milner.
- luckymurari 16y agoThe most intriguing point is "Why doesn't Storenvy accept other payment modes than Paypal??? "
- NewMonarch 16y agohttp://www.storenvy.com/help/articles/can-i-use-any-payment-systems-other-than-paypal http://www.storenvy.com/help/articles/can-i-use-any-payment-...
- kajecounterhack 16y agoOn another note, storenvy.com is really well-crafted. I just spent an hour browsing the products on the many stores. The UI is really a job well done.
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- phatbyte 16y agoAmazing storry. I just wished I was one of his co-founders, I would never say no to that. But I guess this just goes to proof that not everyone has a startup goal in their minds. I wish you the best of luck on your project, it is a true inspiring story. Congrats
- Mistone 16y agoIMHO - one of the very best HN posts ever. no way for YC to be right about founders every time but the rejection feels devastating (we got interviewed then rejected for Winter 2010). But truth is that the vast majority of startups don't do YC or other incubator programs. Hustle, more than anything stands out as the factor that turned a rough situation into a success. good stuff Jon!
- JohnMaloney 16y agoGreat post, Jon. This mix of tenacity/hustle/risk can't be learn. DNA. After reading this I'm even more excited to be an investor
- marcamillion 16y agoI would love to know what the traffic is like on this article - because this has just shot through the roof.