5 ms·

This was a great read, but after reading it and how the group got funded with just an idea and a mock-up that took 15 minutes to make would make me less likely

by bko 4y ago

This was a great read, but after reading it and how the group got funded with just an idea and a mock-up that took 15 minutes to make would make me less likely to apply for YC in the future. Imagine you're building a business and put a lot of thought into the the product and start building it out. And you're basically getting the same deal as someone who just came up with an idea and wung the whole process? Sure, you're investing in the person, but you either have the right experience or not. If you had the right experience and a product, you should probably look to bootstrap or other funding options. A stat I read before is that 29% of the batch has just an idea while 10% had more than $50k of monthly revenue when accepted. Imagine being that guy that grinded to create a business that's generating a million a year and getting the same terms as some dude with just an idea and "the right experience"? https://www.ycombinator.com/blog/meet-the-yc-winter-2022-batch/ https://www.ycombinator.com/blog/meet-the-yc-winter-2022-bat...

chrisfrantz 4y ago
I understand the sentiment. The reason the mock-up was quick to create was because the entire thing was already done in my head. There were plenty of folks with very little experience and some with quite a bit of experience. I can’t say that I have any real idea what goes on in the minds of the folks making the decisions, but they do seem to pick an outsized number of winners. Whether we’re in that bucket or not remains to be seen.
- kevingadd 4y ago
  Selection bias is a tricky question when evaluating "they do seem to pick an outsized number of winners." Does that mean that the people they pick off personal traits and a 15 minute demo are intrinsically winners, or is it just possible for YC to turn almost anyone with the right skills into a winner?
  - chrisfrantz 4y ago
    Great question, I imagine there is some truth in both statements. The failure rate in the startup world, especially when success means a billion dollar exit or IPO, is incredibly high though.
- bko 4y ago
  Yeah I get it, I don't mean to disparage what you did and it looks like it worked out great for you. But how many hours would you say you've spent sketching it out, in your head at least? It's just odd to me that someone can compare a million dollar ARR business with a cocktail napkin business sketch and give the company's equal terms.
  - chrisfrantz 4y ago
    Yep, it’s a fair critique and I agree it’s odd.
dontich 4y ago
Note : Chris is selling himself short by a large margin -- he has a shit-ton of expertise on the growth hacking side of things. (We were also in W22 batch and he was great for getting advice from on various things)
ipaddr 4y ago
Who cares what someone else received vs what value they give? What I care about is what I receive vs what value I sell makes sense at my stage. This is about making your startup succeed not beating other companies in the program on terms. If an investment of 7% for 750,000 makes sense go for it. Who cares if someone else gets 8% or 6%.. it's not your money.
- bko 4y ago
  If you think having a product/revenue is valuable and you have a product/revenue and someone offers you some terms and they don't care about your product or revenue, then you're probably not getting the best deal you could get. It could be the best deal, sure, but that's the floor, because that's the deal you could get without a product or revenue. So that's a big indicator that you're getting a worse deal than you could from someone who cares about product/revenue. It's not even consistent with YC philosophy about the idea doesn't matter, MVC, get to revenue fast, etc
  - whiddershins 4y ago
    It’s the best deal you could get from YC, which might be the best deal you can get. It remains irrelevant what deal others are getting.
bluelightning2k 4y ago
This is a fallacy. The deal other people get has no bearing on your company. Yes. If you compare what you did vs what they did. But really it's like winning the lottery and complaining that some other winner bought less tickets. Imagine actually getting into YC and turning it down because someone you think is less worthy also got in. Tbh it sounds quite entitled. At worst those other companies are unrelated. At best they are inspiring.
- bko 4y ago
  I think its entitled to think that your idea is worth a multi-million dollar valuation without a single thing to show for it. If you get into YC and you actually have a product or revenue, it's almost certain that someone else would give you better terms because they care about product or revenue. It's like getting a 1600 on your SATs and going to a school that doesn't check your SATs. Is it the best school for you? Maybe, but prob not.
- adam_arthur 4y ago
  Just a signal that quality of the investments appears low these days. Obviously a big win can erase a lot of misplaced bets, but I wonder how many of the pure idea, low effort startups ended up reaching major success. To me it speaks of a non serious/committed entrepreneur, because the amount of cash that Y combinator supplies makes no material difference in the ability to actually bootstrap the project.
  - edgyquant 4y ago
    I don’t agree with this. What I do think is there are lots of “firms” that suck up all the money and efficiency from a project. They have no real desire, or skill a lot of times, to build a successful app but instead to game jira and enjoy a steady stream of suckers. I’ve been through multiple YC companies now (arriving right after they were funded) and they all pretty much throw money to these code monkey shops that target YC and work with them. Not just that but I’ve met “scrum masters” who’s entire schtick was consulting YC firms (or other early stage startups) and brought to the table senior engineers of below or equal to mid level quality. I’d really hate to see how many founders with good ideas saw there time and effort wasted due to a trusting of firms like these.
intelVISA 4y ago
We considered YC at my last venture but these stories seem too frequent nowadays, we opted to just grind out an MVP instead and pitch directly.
- edgyquant 4y ago
  It’s a trade off. YC is second to none for someone who is just an engineer (or even entry level) to be able to get very real funding and a couple of years to give their dream a shot. If that doesn’t fit where you’re at in your career that’s understandable but all systems of decent scale will have horror stories.
renewiltord 4y ago
That's how YC works, but you can pitch to other investors if you want to. Yep, YC is flat rate.
dustingetz 4y ago
startup valuation milestones are based on how well you can communicate why/how you will win to the next set of investors, what your next set of risks are and how a few more data points remove them and extrapolate to an inevitable future business. present cash flows don’t matter, only future cash flows do. we can only invest in what we understand, so more clarity = more prospective investors = more competition for your round. traction numbers are super helpful to communicate that certain risks are cleared but are not necessary early if your story of how/why you will win quickly is crystal clear without them. this applies from concept stage all the way to public cos like Tesla.

by bko 4y ago

chrisfrantz 4y ago

I understand the sentiment. The reason the mock-up was quick to create was because the entire thing was already done in my head. There were plenty of folks with very little experience and some with quite a bit of experience. I can’t say that I have any real idea what goes on in the minds of the folks making the decisions, but they do seem to pick an outsized number of winners. Whether we’re in that bucket or not remains to be seen.

kevingadd 4y ago
Selection bias is a tricky question when evaluating "they do seem to pick an outsized number of winners." Does that mean that the people they pick off personal traits and a 15 minute demo are intrinsically winners, or is it just possible for YC to turn almost anyone with the right skills into a winner?
- chrisfrantz 4y ago
  Great question, I imagine there is some truth in both statements. The failure rate in the startup world, especially when success means a billion dollar exit or IPO, is incredibly high though.
bko 4y ago
Yeah I get it, I don't mean to disparage what you did and it looks like it worked out great for you. But how many hours would you say you've spent sketching it out, in your head at least? It's just odd to me that someone can compare a million dollar ARR business with a cocktail napkin business sketch and give the company's equal terms.
- chrisfrantz 4y ago
  Yep, it’s a fair critique and I agree it’s odd.

dontich 4y ago

Note : Chris is selling himself short by a large margin -- he has a shit-ton of expertise on the growth hacking side of things. (We were also in W22 batch and he was great for getting advice from on various things)

ipaddr 4y ago

Who cares what someone else received vs what value they give? What I care about is what I receive vs what value I sell makes sense at my stage. This is about making your startup succeed not beating other companies in the program on terms. If an investment of 7% for 750,000 makes sense go for it. Who cares if someone else gets 8% or 6%.. it's not your money.

bko 4y ago
If you think having a product/revenue is valuable and you have a product/revenue and someone offers you some terms and they don't care about your product or revenue, then you're probably not getting the best deal you could get. It could be the best deal, sure, but that's the floor, because that's the deal you could get without a product or revenue. So that's a big indicator that you're getting a worse deal than you could from someone who cares about product/revenue. It's not even consistent with YC philosophy about the idea doesn't matter, MVC, get to revenue fast, etc
- whiddershins 4y ago
  It’s the best deal you could get from YC, which might be the best deal you can get. It remains irrelevant what deal others are getting.

bluelightning2k 4y ago

This is a fallacy. The deal other people get has no bearing on your company. Yes. If you compare what you did vs what they did. But really it's like winning the lottery and complaining that some other winner bought less tickets. Imagine actually getting into YC and turning it down because someone you think is less worthy also got in. Tbh it sounds quite entitled. At worst those other companies are unrelated. At best they are inspiring.

bko 4y ago
I think its entitled to think that your idea is worth a multi-million dollar valuation without a single thing to show for it. If you get into YC and you actually have a product or revenue, it's almost certain that someone else would give you better terms because they care about product or revenue. It's like getting a 1600 on your SATs and going to a school that doesn't check your SATs. Is it the best school for you? Maybe, but prob not.
adam_arthur 4y ago
Just a signal that quality of the investments appears low these days. Obviously a big win can erase a lot of misplaced bets, but I wonder how many of the pure idea, low effort startups ended up reaching major success. To me it speaks of a non serious/committed entrepreneur, because the amount of cash that Y combinator supplies makes no material difference in the ability to actually bootstrap the project.
- edgyquant 4y ago
  I don’t agree with this. What I do think is there are lots of “firms” that suck up all the money and efficiency from a project. They have no real desire, or skill a lot of times, to build a successful app but instead to game jira and enjoy a steady stream of suckers. I’ve been through multiple YC companies now (arriving right after they were funded) and they all pretty much throw money to these code monkey shops that target YC and work with them. Not just that but I’ve met “scrum masters” who’s entire schtick was consulting YC firms (or other early stage startups) and brought to the table senior engineers of below or equal to mid level quality. I’d really hate to see how many founders with good ideas saw there time and effort wasted due to a trusting of firms like these.

intelVISA 4y ago

We considered YC at my last venture but these stories seem too frequent nowadays, we opted to just grind out an MVP instead and pitch directly.

edgyquant 4y ago
It’s a trade off. YC is second to none for someone who is just an engineer (or even entry level) to be able to get very real funding and a couple of years to give their dream a shot. If that doesn’t fit where you’re at in your career that’s understandable but all systems of decent scale will have horror stories.

renewiltord 4y ago

That's how YC works, but you can pitch to other investors if you want to. Yep, YC is flat rate.

dustingetz 4y ago

startup valuation milestones are based on how well you can communicate why/how you will win to the next set of investors, what your next set of risks are and how a few more data points remove them and extrapolate to an inevitable future business. present cash flows don’t matter, only future cash flows do. we can only invest in what we understand, so more clarity = more prospective investors = more competition for your round. traction numbers are super helpful to communicate that certain risks are cleared but are not necessary early if your story of how/why you will win quickly is crystal clear without them. this applies from concept stage all the way to public cos like Tesla.