Are there any downsides to being in Y Combinator?
What Happens At Y Combinator
101–110 of 144 posts
Re: What Happens At Y Combinator
#102Earlier quoted context omitted.
No others are quite as bad. We'd be dubious about startups building stuff for the government, for example, because there is such a horrible mismatch between startup culture and government culture. But we'd still fund a startup building stuff for the government if they weren't naive about what selling to the government would entail.
Thanks and agreed. I'm surprised I haven't seen many (any?) medical applications from YC companies given the margins available over consumer applications. Do you think it is the uncertainty of the FDA regulations or just a space that Silicon Valley doesn't tend to mine as frequently? Make something patients want is particularly alluring to me.
Many medical plays require large capital investment. Regulations, bizdev, and long sales cycles are all huge barriers to entry. Advertising to Doctors is incredibly expensive, and it is hard to monetize consumer applications that will scale (some people are trying their hand at medical compliance, but I haven't heard of a great business model yet.)
23andme is a great medical startup, but it is a capital-intensive business that has to spend time and money on Washington.
We (Epocrates) are working on an Electronic Health Record system as an additional product. Our core team is small, but we have the resources and brand of a midsize company. We have 40% of US physicians using our existing reference software and we are going to leverage our brand to provide a usable and moden system that increases the level of patient care and effectiveness of Doctors. We're a mixed RoR/Java/Mobile shop. We're currently hiring RoR developers, so please feel free to contact me if you are interested in this space and want to make a real impact on US healthcare.
Re: What Happens At Y Combinator
#103Earlier quoted context omitted.
x = speed-of-implementation(idea) y = usefulness(idea) rank(x,y) = x*y Something like that I think.
That is accurate parse as written. I think the even more dramatic conclusion suggested by Lean Startup is it is probably max(y1..yN)*C^(90/x), where y1 is the utility of your first idea and x is average number of days it takes you to learn one important thing (a full cycle through the idea, implement, measure, conclude loop). Scary stuff starts happening in any business when you take the limit as x approaches zero. (…
Can you put that in the English? I am too tired to make sense of that math.
I hope you do not think I am stupid for not immediately seeing the point of many seembols.
Re: What Happens At Y Combinator
#104Earlier quoted context omitted.
There's a difference: YC's brand is not based purely on marketing. It's based on the success rate of past YC companies, which is objectively higher than average. From an angel's point of view, YC is a deal refinery. Raw deals come in. High-quality, refined deals come out. Many investors will gladly pay a premium for those, because much of the early risk has been taken out: do the founders get along? Do they crack und…
re: "YC figured out a repeatable, streamlined formula for a process which was previously a black art. They industrialized the gut feeling." That's not my understanding. I don't think they have any formula other than "We recognize great entrepreneurs when we see them" - It's not something they can write down in a book and sell to other people - so, in that sense, not industrialized. Still a gut feeling. I could be wro…
You're leaving out an important part of the equation: the sheer number of deals that went through YC, and the data associated with them. When you know the complete story on 500+ founders, and look at which ones were successful, patterns emerge. These patterns can be used to make better decisions and give better advice.
Anybody who's talked to PG will tell you he is a walking database of startup patterns. "I've seen X and Y do this and they failed. Don't do it". I'm sure as YC scales, that database will be externalized to a medium other than PG's brain :)
So, yes, there is a formula: it's called data.
Re: What Happens At Y Combinator
#105Thanks for the insight Paul. As an outsider, it's quite interesting to understand how (successful) startups get formed. It's funny that in my field (economics/finance) we treat startups as black boxes, and we have no clue about how they work. We argue that they are "crucial to the economy and to growth", but yet we haven't made any progress at understanding [1] them. Do you guys think that we (academy) have any chanc…
Paul was interviewed at CrunchUp this summer, and he briefly talked about what they have learned works and doesn't work. The video can be found on TechCrunch.
- 2 founders is best - founders should have known each other for a while before starting the company - team is much more important then idea
Re: What Happens At Y Combinator
#106Earlier quoted context omitted.
Perhaps, but not necessarily; the YC project is about going big, ultimately -- after all, that's the only way YC is going to make some money. It is possible to bootstrap a company in such a way as to plateau out at, say, 3 people, each of whom gets a decent market salary. However, that company may not have further room to climb for various structural and/or marketing reasons, lack of appropriate connections, funding…
I wasn't so much thinking about the funding provided by YC; but rather that if you've reached a stage where you can raise enough funding to hire yourself into the US, the fact that YC provides connections to angels and VCs is probably not tremendously useful.
I assume for visa waiver countries those 12 weeks can be done in a 3-month visa-free visit, with the purpose of "seeking investment" or so. Otherwise you'd have missed the cycle after going through the "annoying and long" process of getting a visa.
Re: What Happens At Y Combinator
#107It's a bit misleading to call these events "dinners" though, because they last half a day. People start to show up for dinners around 6 pm. This seems wrong, unless the YC dinners conclude at 6 AM.
Many languages have separate words for "day" and "24-hour-cycle" ("den'" and "sutki" in Russian, "yom" and "yamima" in Hebrew). In English the word "day" may refer to both, depending on context. There is a word “nychthemeron”, but it's not used in day-to-day speech.
Re: What Happens At Y Combinator
#108Earlier quoted context omitted.
We're a YC startup going through the visa process right now. Once you raise enough to pay yourself market salary, the situation transitions from "impossible" to "annoying and long". So focus on the product, then on funding and/or revenue: the rest will follow.
Doesn't it defeat the purpose of YC if you have to raise enough money to pay yourself market salary before you can enter the US to participate in YC?
I think you misunderstand. It's easy to get in to the US for 3 months, so getting to YC isn't hard. Then you raise, and raising helps you stay long-term.
Re: What Happens At Y Combinator
#109Earlier quoted context omitted.
Visas are something I don't know much about. The rules seem to vary a lot from country to country. There is a mailing list of YC founders from other countries who exchange advice about the topic. And we've certainly funded startups from a lot of different countries. So if I were you I'd just apply, and if we fund you, you can ask the alumni for advice about immigration stuff.
We're a YC startup going through the visa process right now. Once you raise enough to pay yourself market salary, the situation transitions from "impossible" to "annoying and long". So focus on the product, then on funding and/or revenue: the rest will follow.
I've heard about a startup that had to relocate to London after the YC 3 month phase and then wait a substantial time for the INS to work out their papers. That sounds like it could break a company?
Re: What Happens At Y Combinator
#110Great article, thanks a lot for posting this.
I do have one question: is the goal of all the companies to raise addition funding rounds? Or, do some startups still want to work without raising the extra capital, but rather grow organically (37 signals style). I guess another way to ask is: do you force (or even strongly expect) companies to get extra funding on demo day, do you let them choose (and they always choose to get more funding), or do some startups actually not get extra funding?
I ask because, from your article, it seems like most of the latter part of the cycle is geared towards raising capital, and I had always assumed that not raising capital was also a viable option for startups.