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Reflections on my time in Y Combinator

chrisfrantz.com

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Re: Reflections on my time in Y Combinator

#61

Post by edgyquant »

intelVISA wrote: post #44
bko wrote: post #9

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…

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.

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.

Re: Reflections on my time in Y Combinator

#62

Post by coderunner »

alixanderwang wrote: post #31

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…

Did Notion focus on selling before they had the any semblance of a product? I thought the founders holed up in a Japan for months to get an early version implemented before things started taking off.

Re: Reflections on my time in Y Combinator

#63

Post by alixanderwang »

coderunner wrote: post #62
alixanderwang wrote: post #31

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…

Did Notion focus on selling before they had the any semblance of a product? I thought the founders holed up in a Japan for months to get an early version implemented before things started taking off.

Sorry for the ambiguity, I meant I shared the feeling with OP that it felt like people around me were selling while I was building, but it can't be so wrong since there's success stories of companies like Notion that similarly focused on building.

Re: Reflections on my time in Y Combinator

#64

Post by jrvarela56 »

swyx wrote: post #34
yurisagalov wrote: post #32

Earlier quoted context omitted.

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 disagr…

Can we just, like, start a gofundme right here in HN and get in on the round? Calling dibs here.

Re: Reflections on my time in Y Combinator

#65

Post by snowmaker »

dheera wrote: post #25
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…

S16 here. I think the greatest value add was actually being able to work heads-down for 3 months knowing that you would almost certainly get investment on Demo Day. Almost all companies got investment, since YC was extremely selective back then (batch sizes were much smaller) and investors generally trusted YC's judgement. Prior to S16, this was probably even more true. If it weren't for YC one would have to spend 50…

Actually, the percentage of companies that raise money at demo day has remained constant from S16 to now.

Re: Reflections on my time in Y Combinator

#66

Post by edgyquant »

adam_arthur wrote: post #22
bluelightning2k wrote: post #20

Earlier quoted context omitted.

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…

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.

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.

Re: Reflections on my time in Y Combinator

#67

Post by swyx »

jrvarela56 wrote: post #64
swyx wrote: post #34

Earlier quoted context omitted.

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 disagr…

Can we just, like, start a gofundme right here in HN and get in on the round? Calling dibs here.

lol i wish i know what i was starting man but you'll hear about it when i do

Re: Reflections on my time in Y Combinator

#68

Post by seibelj »

falsemove wrote: post #42

Thanks for sharing. It seems like everyone was mostly focused on sales and some were doing quite well. Were there any strategies that stood out to you that were working? Was there some leg up provided to companies in their sales efforts who were in YC?

Everyone in YC sells to each other. It's quite encouraged to buy from other YC startups and test out their tech as alpha customers because it increases the valuation of the YC network (including your own company). It's a very interesting model because as a SaaS getting the first enterprises to sign up is extremely hard, yet those add enormous equity value and provide the proof and case studies for growth at scale.

YC can be thought of as a tech startup affinity network. The"shocked-pikachu face" attitude of the author, from being surprised a napkin worked for funding to being amazed that YC-affiliated startups gave him revenue before a product is live, is a testament to the YC model. Either the author is unaware of this obvious inside-network effect or they are pretending it doesn't exist. In the real world no random enterprise cuts you a check for untested, pre-live, alpha software. It is the SaaS cross-selling YC scheme that enables this.

I'm not even saying this is necessarily a bad thing. It's just a very unique model that is a warped inversion of real-world economics, and it decreases the risk for investors provided the whole network can continue selling into each other.

Re: Reflections on my time in Y Combinator

#69

Post by adam_arthur »

edgyquant wrote: post #66
adam_arthur wrote: post #22

Earlier quoted context omitted.

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.

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…

If the founding team can't build the actual product without immediately hiring outside consultants, the whole thing is doomed from the start.

Re: Reflections on my time in Y Combinator

#70

Post by petesergeant »

taaron wrote: post #54
alixanderwang wrote: post #31

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…

I think one downside is that because you are optimizing for sales in the short-term, it can lead to product design/architecture decisions which unknowingly constrain the direction or limits of future development/innovation (or at least make it very expensive to retrofit). I think Notion is potentially suffering from this now as users try to push its limits into more complex applications.

> it can lead to product design/architecture decisions which unknowingly constrain the direction or limits of future development/innovation (or at least make it very expensive to retrofit)

As my beard starts to grey, I've come to the conclusion that needing to drop a lot of money to retrofit is an infinitely better problem than not having captured a large segment of the market.

As someone who did Perl commercially from 2001-2019, most of my career was spent working at companies who'd done a large Perl build-out some time between 1995 and 2005, made a lot of money and captured a large amount of market share, and were now expensively retrofitting a lot of very, very nasty code that inexperienced programmers had smashed together in a rush.

Much better to be in that position than a company with a beautiful codebase who didn't capture the market

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