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Our YC Interview: A Scottish Startup's Perspective

27 points by akh 14y ago

akh 14y ago
If you've been through the YC interview process, we would love to get your views on this.
- sim0n 14y ago
  We weren't quizzed much about our numbers (I don't think money was really brought up at all) but asked more about the product (what it does, who uses it, why they use it, etc). That may have been because we're in the enterprise market (project management) and our competitors are quite well known, so they would already have an idea of potential revenue.
paulsutter 14y ago
If you just made up numbers you don't believe, it's no surprise you were rejected. Bullshitting is not a success pattern.
- akh 14y ago
  We didn't just make some numbers up, we made assumptions (e.g. 1% of users would signup to premium version), BUT the problem we had was that we've been brought up in a culture where people look down on you if you say you can make $5M/year, they say that it's bullshit. So although we knew we could make that much, we needed to be more confident in communicating it.
  - lipponlabang 14y ago
    You said you added 10% to the real figures. And you admit it's bullshit. You also admit that you weren't doing this for the money... but the investors are. You sound a disaster all round. Also, borderline lying to potential investors is morally wrong.
  - pcrh 14y ago
    Having been in both SV and the UK, the difference you mention is one of culture. In SV you are supposed to be super-enthusiastic and ambitious, the world is your oyster, etc. Any deviation from that will have investors worried that you don't have enough confidence. In the UK, on the other hand, the approach is more defensive, and encourages you to avoid over-stating your case,in case you are wrong. I always found Dragons Den to be a bit disappointing in terms of the ambitions of the people pitching. A 1/2 million per year business is no bigger than a cafe in a popular spot.
    - deleted 14y ago
      [deleted]
    - paulsutter 14y ago
      Bullshit, this isnt about culture. Read my response above. The only possible cultural angle here may be coming from an academic background and having bizarre/naive ideas about business.
      - pcrh 14y ago
        It is cultural, at least in part... Specifically: the enthusiastic, go-getting, I'm gonna win, we've got the numbers, it can't fail attitude that you encourage ("Get going. Dive in. Make stuff happen.") is not encouraged in the UK, and in the UK is described as "bullshitting" (this may be different from the US understanding of "bullshitting"). The reason being that these projections/ambitions for success are not based on hard facts, but on the ambitions of the presenter. Where SV, and yourself it seems, differ is they accept at the outset that failure is a possibility, but that avoiding failure is not only a matter of soft or hard facts, market conditions, etc, but also of the character of those involved. Thus, an enthusiastic and ambitious UK team may focus too much on why they "won't fail too much" (i.e. their ambitions are not too unrealistic), whereas a US team would focus on how they are going to whip ass.
        paulsutter 14y ago
        That's not the cultural issue he raised. He suggested that Scottish seed investors wouldn't ask about projections or market size because the Scottish just don't talk about such things. Yeah right: http://www.archangelsonline.com/content.asp?Page=399&Menu=395 http://www.archangelsonline.com/content.asp?Page=399&Men... Regarding your comment on SV culture: exaggeration is a losing strategy when dealing with SV investors. They want realistic sobriety, and dislike naive cocky projections. Regarding your interpretation of my comments: there is not one shred of "enthusiastic, I'm gonna win, we've got the numbers, it can't fail" attitude in my comments. Much to the contrary: I was saying he's completely unprepared to do a startup, but the best way to remedy that problem is to dive in head first, start failing, and learn from the school of hard knocks. There are plenty of people in SV who are deathly afraid/ashamed of failure too. They just don't tend to start companies. There are plenty of superb UK born entrepreneurs, both here and in the UK. Where do you think the industrial revolution began? The only bullshit I'm detecting here is the inclination of certain people to hide their shortcomings behind convenient excuses.
  - paulsutter 14y ago
    Sorry I stand by my initial statement. The problem was that you knew the numbers were no good, not that you needed to be a better actor. When I was younger i would have agreed with you. But now that I've been a founder of successful companies and in management at a major Internet company, I know from experience that sales projections can range from a total wild-ass guess all the way to rock solid numbers that you can bank on. Investors love the latter and hate the former. Sobriety is much admired by VCs and cocky posturing is a losing approach. The more experience you have, the more you will understand how to soberly and realistically estimate an opportunity. Some opportunities really are sized with more digits than others, and this fact has nothing to do with culture. Read the recent article titled something like "VCs lie, and I do too". He points out that it's really hard for VCs to give candid feedback about shortcomings in the team. I have no such difficulty: your team is woefully inadequate, today. Get going. Dive in. Make stuff happen. Be extremely realistic and especially honest with yourself about the opportunity you're addressing. I was a naive punk once too, and remain a slow learner. You have a lot to learn but if I could you definitely can.
- deleted 14y ago
  [deleted]
splatzone 14y ago
I don't think bullshit is the answer, just appreciating the difference in scale between the UK and the rest of the world.
- akh 14y ago
  Completely agreed about a difference in scale between US (your comment said UK, typo?) and rest of world. We knew we could make money but it seems like YC is after more consumer-oriented startups that can scale to huge numbers. So if you're like us from the UK, where the culture is much more conservative, what choice do you have? We spoke to groups that were telling us they could make upwards up $20M in 2-3 years! How can you justify that when you've just launched 2 months ago and have made 0 so far.
  - lipponlabang 14y ago
    Perhaps you should have asked them that, instead of us.
mrkurt 14y ago
I think one of the most common problems incredibly smart hackers have is working on "businesses" with no real viable... business. They probably don't expect you to know everything there is to know about a given market, but it would be a little silly to make an investment in a group that can't think through money and evaluate how worthwhile something could be.
- hkh 14y ago
  We had gone through our business case and it was solid. We based our numbers on what we had achieved in the first two months of launch (with 0 marketing budget). We had been approached and offered investment as well as a global IT company asking for an exclusivity deal. However, I think the numbers that the Valley works on is on a different scale and that's what we are trying to convey in the blog post (not bulshitting without basis).
- webwright 14y ago
  THIS. I'm not clear what business the OP thinks that YC is in that they'd be interested in companies that don't have a story about how they could get huge. This doesn't have to be bullshit if your idea is a beachhead for something bigger. Not all startup ideas can have a story-- but I think most can if the founders are ambitious/imaginative enough. Example: If you had a hot social site for a single college in 2004, do you think you could spin a credible story on how it could be big? And, once it was big, how it might make money? Or if you sold books on the web in 1994, could you craft a story about how that get huge?
  - akh 14y ago
    Here's our vision, do you think it will be huge? Cloud computing is fundamentally changing the way that companies buy computing, and our vision is to be the one-stop-shop for computing in the future. The cloud's pay-as-you-go billing model is very different to what most people are used to, and we're developing tools to choose providers and deployment options. And we're just getting started... So like you said, it's something that's not big now, but could be huge in say 5 or 10 years from now.
camtarn 14y ago
It's great seeing the Scottish startup scene represented on HN :) Well done for getting the interview, even if you didn't get in.
- akh 14y ago
  Thanks! Were you at TechMeetup in Edinburgh last night by any chance?
  - camtarn 14y ago
    Unfortunately not - the programme looked interesting, but I skipped out on it to go watch the Olympic torch go by :) I don't regularly make them, but I was at the one at the Amazon offices a while back.
akkartik 14y ago
As someone who's been there, it's super interesting how different everybody's interview experience is. I get the sense they tailor their strategy for each company, whether it's advance prep or just going with their gut. YC seems to have a nose to sniff out the most likely place a startup will raise a red flag. (One failure mode for them is if the interviewer guessed wrong.)
- akh 14y ago
  You're right, they go through so many interviews (around 370 in our batch) that they probably develop gut feelings about which startups to pick. But like you said, they might have guessed wrong in our case.
  - akkartik 14y ago
    Sorry I wasn't clear. The guesswork I was referring to was to figure out the most probing question to ask of each startup. If you guess right you just learned something relevant to the decision. But if you guessed wrong, if you could have asked a more probing question, you might end up accepting a startup you shouldn't have. I don't know enough about your situation, and I wasn't implying any judgement either way. I was just trying to put myself in their shoes.
dariusmonsef 14y ago
So wait. You note that nowhere in your YC application do they specifically ask you about money stuff. But, you talked to some YC Alums before the interview and they all asked you about $. And since you didn't get selected you now assume that the YC partners really only care about the $? Sorry, I think that's a leap in thinking that might be in the wrong direction. I applied with a website that let people name & share color... There wasn't billion dollar company sitting in front of them. There were a few guys with a passionate community and the ability to build great product. We were never asked in our interview about $ and didn't need to bullshit anything. Yes, the Valley hype scene is heavily influenced by who's the next billion dollar company and puts little success on people making $5-10M/year in great businesses... But that isn't YC. PG has on a number of occasions given me advice that is all about us as the founders being happy. Not about YC getting the biggest return possible. So yeah, hopefully your idea could be a big business. But I would argue the opposite of what your post says. YC mostly cares that your idea is big and that you are a team that might be able to pull it off. And IMHO... Try not to bullshit. It'll eventually catch up to you.
- akh 14y ago
  > You note that nowhere in your YC application do they specifically ask you about money stuff. Sorry maybe I was slightly vague in the blog post, the YC application form has a specific question on money [1], but as I said in our post, we answered it with by just described the ways in which we might make money in the future (our revenue streams and potential exits). We got the impression that YC is after startups that it can parade in front of VCs on demo day for their series A, and for that they need to be more than $5-10M/year. [1] "How do or will you make money? How much could you make? (We realize you can't know precisely, but give your best estimate.)"
- BadCookie 14y ago
  In the most recent application round, they did specifically ask about money in the application. And they asked my team about money in the interview as well (with a visibly negative reaction from an interviewer when the number we gave was smaller than he apparently wanted to hear). Please don't assume that your experience is the same as everyone else's. Perhaps the fact that you already have a strong community gave you a free pass with regard to money issues.
tylermenezes 14y ago
As someone who's both conducted interviews for an incubator, and been through the YC interviews, I think you're focusing on the wrong thing here. "The team" goes a lot beyond paper qualifications, and I think a lot of your shortcomings are there if anywhere: * You changed your answers quickly before your interview because you hadn't thought them through before-hand. * You weren't confident. * You weren't committed. This is the big one for me. If this is a great idea, why is putting your PhD on hold conditional on getting into YC? YC often accepts startups with ideas they don't like. We got a phone call right after walking out the door even though half the partners still weren't convinced of our idea. The important thing isn't having amazing figures at the start, it's being able to think things through. The YC partners can help with tuning to get the most impact. (It honestly doesn't seem like this is the biggest issue for them, either.)
- akh 14y ago
  As I mentioned in the post, we changed our answer because we were overwhelmed by the YC Alumni placing an important emphasis on the figures. You can't advise someone to put their PhD on hold if it's a great idea without knowing the status of their PhD progress. I'm very close to finishing, I only have to write my introduction and conclusion chapters, the rest is all done, and I have published several papers. So I don't think it would be wise to put it on hold when I'm so close to finishing. If I was YC, I'd be placing my bets on the companies who say they can give me bigger returns. So I think YC's final decision might be heavily influenced by figures.
  - paulsutter 14y ago
    tylermenezes is utterly right - I would up vote his reply 10 times if I could. Dude you need to stop ignoring all the good advice you're getting. PG says the single most common trait to unsuccessful teams is that they get defensive and object to suggestions. Grow up.
  - tylermenezes 14y ago
    I understand wanting to get into YC, but if your figures were wrong, you should have known that long before the interview. If your figured weren't wrong, and you changed them for the interview, that's also a pretty big problem. We got in with half the partners disliking our idea. I don't know how they can make it more clear than the "no idea" application - they care about the team so much more than the idea. The biggest thing for me is this: if you were willing to put your PhD on hold with YC, you should be willing to put your PhD on hold without YC. The fact that it changes your answer is probably one of the biggest reasons you weren't selected. pg has stated before, YC doesn't want to make companies succeed. They want to make companies which _will_ succeed more successful. Successful teams know they're going to be successful with or without YC. If you were turned away for low numbers, they would have said so in the rejection email. I find it unlikely that they did, or you would have posted it, I'm sure. The fact that so many people are giving you advice as to actual problems, and that you're ignoring them, is a pretty big issue.

27 points by akh 14y ago

akh 14y ago

If you've been through the YC interview process, we would love to get your views on this.

sim0n 14y ago
We weren't quizzed much about our numbers (I don't think money was really brought up at all) but asked more about the product (what it does, who uses it, why they use it, etc). That may have been because we're in the enterprise market (project management) and our competitors are quite well known, so they would already have an idea of potential revenue.

paulsutter 14y ago

If you just made up numbers you don't believe, it's no surprise you were rejected. Bullshitting is not a success pattern.

akh 14y ago
We didn't just make some numbers up, we made assumptions (e.g. 1% of users would signup to premium version), BUT the problem we had was that we've been brought up in a culture where people look down on you if you say you can make $5M/year, they say that it's bullshit. So although we knew we could make that much, we needed to be more confident in communicating it.
- lipponlabang 14y ago
  You said you added 10% to the real figures. And you admit it's bullshit. You also admit that you weren't doing this for the money... but the investors are. You sound a disaster all round. Also, borderline lying to potential investors is morally wrong.
- pcrh 14y ago
  Having been in both SV and the UK, the difference you mention is one of culture. In SV you are supposed to be super-enthusiastic and ambitious, the world is your oyster, etc. Any deviation from that will have investors worried that you don't have enough confidence. In the UK, on the other hand, the approach is more defensive, and encourages you to avoid over-stating your case,in case you are wrong. I always found Dragons Den to be a bit disappointing in terms of the ambitions of the people pitching. A 1/2 million per year business is no bigger than a cafe in a popular spot.
  - deleted 14y ago
    [deleted]
  - paulsutter 14y ago
    Bullshit, this isnt about culture. Read my response above. The only possible cultural angle here may be coming from an academic background and having bizarre/naive ideas about business.
    - pcrh 14y ago
      It is cultural, at least in part... Specifically: the enthusiastic, go-getting, I'm gonna win, we've got the numbers, it can't fail attitude that you encourage ("Get going. Dive in. Make stuff happen.") is not encouraged in the UK, and in the UK is described as "bullshitting" (this may be different from the US understanding of "bullshitting"). The reason being that these projections/ambitions for success are not based on hard facts, but on the ambitions of the presenter. Where SV, and yourself it seems, differ is they accept at the outset that failure is a possibility, but that avoiding failure is not only a matter of soft or hard facts, market conditions, etc, but also of the character of those involved. Thus, an enthusiastic and ambitious UK team may focus too much on why they "won't fail too much" (i.e. their ambitions are not too unrealistic), whereas a US team would focus on how they are going to whip ass.
      - paulsutter 14y ago
        That's not the cultural issue he raised. He suggested that Scottish seed investors wouldn't ask about projections or market size because the Scottish just don't talk about such things. Yeah right: http://www.archangelsonline.com/content.asp?Page=399&Menu=395 http://www.archangelsonline.com/content.asp?Page=399&Men... Regarding your comment on SV culture: exaggeration is a losing strategy when dealing with SV investors. They want realistic sobriety, and dislike naive cocky projections. Regarding your interpretation of my comments: there is not one shred of "enthusiastic, I'm gonna win, we've got the numbers, it can't fail" attitude in my comments. Much to the contrary: I was saying he's completely unprepared to do a startup, but the best way to remedy that problem is to dive in head first, start failing, and learn from the school of hard knocks. There are plenty of people in SV who are deathly afraid/ashamed of failure too. They just don't tend to start companies. There are plenty of superb UK born entrepreneurs, both here and in the UK. Where do you think the industrial revolution began? The only bullshit I'm detecting here is the inclination of certain people to hide their shortcomings behind convenient excuses.
- paulsutter 14y ago
  Sorry I stand by my initial statement. The problem was that you knew the numbers were no good, not that you needed to be a better actor. When I was younger i would have agreed with you. But now that I've been a founder of successful companies and in management at a major Internet company, I know from experience that sales projections can range from a total wild-ass guess all the way to rock solid numbers that you can bank on. Investors love the latter and hate the former. Sobriety is much admired by VCs and cocky posturing is a losing approach. The more experience you have, the more you will understand how to soberly and realistically estimate an opportunity. Some opportunities really are sized with more digits than others, and this fact has nothing to do with culture. Read the recent article titled something like "VCs lie, and I do too". He points out that it's really hard for VCs to give candid feedback about shortcomings in the team. I have no such difficulty: your team is woefully inadequate, today. Get going. Dive in. Make stuff happen. Be extremely realistic and especially honest with yourself about the opportunity you're addressing. I was a naive punk once too, and remain a slow learner. You have a lot to learn but if I could you definitely can.
deleted 14y ago
[deleted]

splatzone 14y ago

I don't think bullshit is the answer, just appreciating the difference in scale between the UK and the rest of the world.

akh 14y ago
Completely agreed about a difference in scale between US (your comment said UK, typo?) and rest of world. We knew we could make money but it seems like YC is after more consumer-oriented startups that can scale to huge numbers. So if you're like us from the UK, where the culture is much more conservative, what choice do you have? We spoke to groups that were telling us they could make upwards up $20M in 2-3 years! How can you justify that when you've just launched 2 months ago and have made 0 so far.
- lipponlabang 14y ago
  Perhaps you should have asked them that, instead of us.

mrkurt 14y ago

I think one of the most common problems incredibly smart hackers have is working on "businesses" with no real viable... business. They probably don't expect you to know everything there is to know about a given market, but it would be a little silly to make an investment in a group that can't think through money and evaluate how worthwhile something could be.

hkh 14y ago
We had gone through our business case and it was solid. We based our numbers on what we had achieved in the first two months of launch (with 0 marketing budget). We had been approached and offered investment as well as a global IT company asking for an exclusivity deal. However, I think the numbers that the Valley works on is on a different scale and that's what we are trying to convey in the blog post (not bulshitting without basis).
webwright 14y ago
THIS. I'm not clear what business the OP thinks that YC is in that they'd be interested in companies that don't have a story about how they could get huge. This doesn't have to be bullshit if your idea is a beachhead for something bigger. Not all startup ideas can have a story-- but I think most can if the founders are ambitious/imaginative enough. Example: If you had a hot social site for a single college in 2004, do you think you could spin a credible story on how it could be big? And, once it was big, how it might make money? Or if you sold books on the web in 1994, could you craft a story about how that get huge?
- akh 14y ago
  Here's our vision, do you think it will be huge? Cloud computing is fundamentally changing the way that companies buy computing, and our vision is to be the one-stop-shop for computing in the future. The cloud's pay-as-you-go billing model is very different to what most people are used to, and we're developing tools to choose providers and deployment options. And we're just getting started... So like you said, it's something that's not big now, but could be huge in say 5 or 10 years from now.

camtarn 14y ago

It's great seeing the Scottish startup scene represented on HN :) Well done for getting the interview, even if you didn't get in.

akh 14y ago
Thanks! Were you at TechMeetup in Edinburgh last night by any chance?
- camtarn 14y ago
  Unfortunately not - the programme looked interesting, but I skipped out on it to go watch the Olympic torch go by :) I don't regularly make them, but I was at the one at the Amazon offices a while back.

akkartik 14y ago

As someone who's been there, it's super interesting how different everybody's interview experience is. I get the sense they tailor their strategy for each company, whether it's advance prep or just going with their gut. YC seems to have a nose to sniff out the most likely place a startup will raise a red flag. (One failure mode for them is if the interviewer guessed wrong.)

akh 14y ago
You're right, they go through so many interviews (around 370 in our batch) that they probably develop gut feelings about which startups to pick. But like you said, they might have guessed wrong in our case.
- akkartik 14y ago
  Sorry I wasn't clear. The guesswork I was referring to was to figure out the most probing question to ask of each startup. If you guess right you just learned something relevant to the decision. But if you guessed wrong, if you could have asked a more probing question, you might end up accepting a startup you shouldn't have. I don't know enough about your situation, and I wasn't implying any judgement either way. I was just trying to put myself in their shoes.

dariusmonsef 14y ago

So wait. You note that nowhere in your YC application do they specifically ask you about money stuff. But, you talked to some YC Alums before the interview and they all asked you about $. And since you didn't get selected you now assume that the YC partners really only care about the $? Sorry, I think that's a leap in thinking that might be in the wrong direction. I applied with a website that let people name & share color... There wasn't billion dollar company sitting in front of them. There were a few guys with a passionate community and the ability to build great product. We were never asked in our interview about $ and didn't need to bullshit anything. Yes, the Valley hype scene is heavily influenced by who's the next billion dollar company and puts little success on people making $5-10M/year in great businesses... But that isn't YC. PG has on a number of occasions given me advice that is all about us as the founders being happy. Not about YC getting the biggest return possible. So yeah, hopefully your idea could be a big business. But I would argue the opposite of what your post says. YC mostly cares that your idea is big and that you are a team that might be able to pull it off. And IMHO... Try not to bullshit. It'll eventually catch up to you.

akh 14y ago
> You note that nowhere in your YC application do they specifically ask you about money stuff. Sorry maybe I was slightly vague in the blog post, the YC application form has a specific question on money [1], but as I said in our post, we answered it with by just described the ways in which we might make money in the future (our revenue streams and potential exits). We got the impression that YC is after startups that it can parade in front of VCs on demo day for their series A, and for that they need to be more than $5-10M/year. [1] "How do or will you make money? How much could you make? (We realize you can't know precisely, but give your best estimate.)"
BadCookie 14y ago
In the most recent application round, they did specifically ask about money in the application. And they asked my team about money in the interview as well (with a visibly negative reaction from an interviewer when the number we gave was smaller than he apparently wanted to hear). Please don't assume that your experience is the same as everyone else's. Perhaps the fact that you already have a strong community gave you a free pass with regard to money issues.

tylermenezes 14y ago

As someone who's both conducted interviews for an incubator, and been through the YC interviews, I think you're focusing on the wrong thing here. "The team" goes a lot beyond paper qualifications, and I think a lot of your shortcomings are there if anywhere: * You changed your answers quickly before your interview because you hadn't thought them through before-hand. * You weren't confident. * You weren't committed. This is the big one for me. If this is a great idea, why is putting your PhD on hold conditional on getting into YC? YC often accepts startups with ideas they don't like. We got a phone call right after walking out the door even though half the partners still weren't convinced of our idea. The important thing isn't having amazing figures at the start, it's being able to think things through. The YC partners can help with tuning to get the most impact. (It honestly doesn't seem like this is the biggest issue for them, either.)

akh 14y ago
As I mentioned in the post, we changed our answer because we were overwhelmed by the YC Alumni placing an important emphasis on the figures. You can't advise someone to put their PhD on hold if it's a great idea without knowing the status of their PhD progress. I'm very close to finishing, I only have to write my introduction and conclusion chapters, the rest is all done, and I have published several papers. So I don't think it would be wise to put it on hold when I'm so close to finishing. If I was YC, I'd be placing my bets on the companies who say they can give me bigger returns. So I think YC's final decision might be heavily influenced by figures.
- paulsutter 14y ago
  tylermenezes is utterly right - I would up vote his reply 10 times if I could. Dude you need to stop ignoring all the good advice you're getting. PG says the single most common trait to unsuccessful teams is that they get defensive and object to suggestions. Grow up.
- tylermenezes 14y ago
  I understand wanting to get into YC, but if your figures were wrong, you should have known that long before the interview. If your figured weren't wrong, and you changed them for the interview, that's also a pretty big problem. We got in with half the partners disliking our idea. I don't know how they can make it more clear than the "no idea" application - they care about the team so much more than the idea. The biggest thing for me is this: if you were willing to put your PhD on hold with YC, you should be willing to put your PhD on hold without YC. The fact that it changes your answer is probably one of the biggest reasons you weren't selected. pg has stated before, YC doesn't want to make companies succeed. They want to make companies which _will_ succeed more successful. Successful teams know they're going to be successful with or without YC. If you were turned away for low numbers, they would have said so in the rejection email. I find it unlikely that they did, or you would have posted it, I'm sure. The fact that so many people are giving you advice as to actual problems, and that you're ignoring them, is a pretty big issue.