Reflections on my time in Y Combinator • Hacker News Board

Re: Reflections on my time in Y Combinator

#31

Post by alixanderwang » Mon, Aug 22, 2022, 9:20 PM UTC

We could easily have slammed together off the shelf components and potentially grown at a similar rate. Also potentially not, sales is hard!

Seeing founders with less care for detail and more for the sheer growth of their user base was impressive and deflating.

It felt like everyone I compared myself to, they were devoting 90% of their time to selling and 10% to building.

I share the feeling. There's success stories of companies doing the same (e.g. Notion, Replit), so I know it's not completely off-book, but I constantly wonder whether there is downside to that approach of focusing on sales in the beginning. I can guess things like less likely to be innovative, but is that true? Maybe since they average being alive longer than the ones that focused on product in the beginning, any potential downsides are negated in the long term (e.g. just innovate later with the infinite runway they now have). Would love to see some study/survey on this.

Re: Reflections on my time in Y Combinator

#32

Post by yurisagalov » Mon, Aug 22, 2022, 9:23 PM UTC

swyx wrote: post #19

this was a great ad for YC :) i think where people are more borderline is if they can raise at a decent seed valuation elsewhere already (eg based on existing revenue or prior reputation/technology being far more established). It's well understood that YC has some value add. So the fun question is - what is the valuation you can raise at which it does NOT make sense to enter YC? YC values you at ~2m when they invest…

I think it's really hard to put a purely monetary value on YC, but I think it definitely does a disservice to say that the program only adds $5-10M worth of value.

If you speak to YC alumni, you'll hear from many of them that YC made them dream bigger. There's a founder in the comments here who said YC was an "ambition multiplier" for him[1]. How do you value that?

[1] https://news.ycombinator.com/item?id=32556060

Re: Reflections on my time in Y Combinator

#33

Post by therusskiy » Mon, Aug 22, 2022, 9:26 PM UTC

dheera wrote: post #28

chrisfrantz wrote: post #26

Earlier quoted context omitted.

Nowadays you start with $500K though, which puts you in a much better position when speaking with investors as your initial runway isn’t as close to nil.

Yeah. It's better, though $500K is still low for a couple founders plus company expenses, given how much rents and cost of living has gone up in the past 6 years. Especially if your startup isn't purely software, and involves some operational or hardware expenses, $500K is a no-go. It's also the ballpark of what 2 technical founders could easily make by working for ~6 months in the bay area, and not have to give away…

Isn't running a business and especially a startup is supposed to be risky?

"We have an idea that's not materialized yet, give us money so we can live comfortably and reap all benefits it it works out and not lose anything if it doesn't." - sounds like a wishful thinking.

Re: Reflections on my time in Y Combinator

#34

Post by swyx » Mon, Aug 22, 2022, 9:28 PM UTC

yurisagalov wrote: post #32

swyx wrote: post #19

this was a great ad for YC :) i think where people are more borderline is if they can raise at a decent seed valuation elsewhere already (eg based on existing revenue or prior reputation/technology being far more established). It's well understood that YC has some value add. So the fun question is - what is the valuation you can raise at which it does NOT make sense to enter YC? YC values you at ~2m when they invest…

I think it's really hard to put a purely monetary value on YC, but I think it definitely does a disservice to say that the program only adds $5-10M worth of value. If you speak to YC alumni, you'll hear from many of them that YC made them dream bigger. There's a founder in the comments here who said YC was an "ambition multiplier" for him[1]. How do you value that? [1] https://news.ycombinator.com/item?id=32556060

right, sure, that is a huge value. but it's not, for example, $1B worth of value. should John Carmack do YC? no. etc.

the goal of rational decisionmaking is to try to convert all factors into some kind of comparable numbers, and $ is just one utility function on which to project all these nonmonetary qualities. call it "utils" if you like (https://en.wikipedia.org/wiki/Utility#Cardinal).

so fair point if you disagree with 5-10m of nonmonetary value equivalent. Is it more like 50m? 100m? what is the lowest you can make the upper bound?

a fun academic question for most, but for me personally, i have been offered a $2-3m seed pre product so that suddenly became a lot more real.

Re: Reflections on my time in Y Combinator

#35

Post by dheera » Mon, Aug 22, 2022, 9:39 PM UTC

therusskiy wrote: post #33

dheera wrote: post #28

Earlier quoted context omitted.

Yeah. It's better, though $500K is still low for a couple founders plus company expenses, given how much rents and cost of living has gone up in the past 6 years. Especially if your startup isn't purely software, and involves some operational or hardware expenses, $500K is a no-go. It's also the ballpark of what 2 technical founders could easily make by working for ~6 months in the bay area, and not have to give away…

Isn't running a business and especially a startup is supposed to be risky? "We have an idea that's not materialized yet, give us money so we can live comfortably and reap all benefits it it works out and not lose anything if it doesn't." - sounds like a wishful thinking.

> Isn't running a business and especially a startup is supposed to be risky?

No, it is risky, and you want to actively eliminate as many of the risks as possible. Having a decent sized pile of cash is one way out of several of the risks. Supply chain shortages, founder medical expenses, mishaps and accidents, rising costs of living, personal emergencies happening to founders or employees requiring leave, there are a million things that will bite you if you don't have cash and runway.

"Supposed to be risky" isn't a good way to think about it, IMO. A lot of the time you'll hear people romanticize a couple of fresh graduates living on couches in a garage, living on ramen, and building a unicorn, but the reality is that most billion-dollar companies weren't actually built that way, and it isn't the best way to optimize your chances of success.

Re: Reflections on my time in Y Combinator

#36

Post by chrisfrantz » Mon, Aug 22, 2022, 9:53 PM UTC

therusskiy wrote: post #30

Very strange hearing such stories. I remember a company I worked for went through a YC interview. We were rejected with "we are not sure you can deliver". At that point, we had built 2 mobile apps, a big customer wesbite, rich portals for partners, contractors and admins, had thousands of customers, were almost profitable. Our CEO had a history of delivering in that he sold his previous startup. I must sound bitter,…

I could be wrong here, but it sounds like you would have been further along than anyone I met in the batch. The majority of folks I spent time with were starting from scratch.

Re: Reflections on my time in Y Combinator

#37

Post by upupandup » Mon, Aug 22, 2022, 9:54 PM UTC

therusskiy wrote: post #30

Very strange hearing such stories. I remember a company I worked for went through a YC interview. We were rejected with "we are not sure you can deliver". At that point, we had built 2 mobile apps, a big customer wesbite, rich portals for partners, contractors and admins, had thousands of customers, were almost profitable. Our CEO had a history of delivering in that he sold his previous startup. I must sound bitter,…

I'm willing to bet race has some underlying influence whether they like to admit it or not.

Re: Reflections on my time in Y Combinator

#38

Post by nkotov » Mon, Aug 22, 2022, 10:04 PM UTC

I had a similar experience (S20) and one of things I wished I did more of during the batch was to connect with more people, not for the sake of selling something but to just meet people from all over the globe. I'm working on a new idea now and most likely will apply for YC again as well.

Re: Reflections on my time in Y Combinator

#39

Post by therusskiy » Mon, Aug 22, 2022, 10:04 PM UTC

upupandup wrote: post #37

therusskiy wrote: post #30

Very strange hearing such stories. I remember a company I worked for went through a YC interview. We were rejected with "we are not sure you can deliver". At that point, we had built 2 mobile apps, a big customer wesbite, rich portals for partners, contractors and admins, had thousands of customers, were almost profitable. Our CEO had a history of delivering in that he sold his previous startup. I must sound bitter,…

I'm willing to bet race has some underlying influence whether they like to admit it or not.

The founder was jewish in his late 30s :-)

Re: Reflections on my time in Y Combinator

#40

Post by chrisfrantz » Mon, Aug 22, 2022, 10:06 PM UTC

nkotov wrote: post #38

I had a similar experience (S20) and one of things I wished I did more of during the batch was to connect with more people, not for the sake of selling something but to just meet people from all over the globe. I'm working on a new idea now and most likely will apply for YC again as well.

Good luck!