Will Y Combinator fund a service Company?

#1

Post by khurrams » Fri, Oct 03, 2008, 4:39 PM UTC

Hi We are a Lahore, Pakistan based software startup that focuses on developing Mobile2.0 ( IPhone and Android ) application. I wanted to know, can i apply for YCombinator or only product based startups get funded ? www.geniteam.com

Re: Will Y Combinator fund a service Company?

#2

Post by rwalling » Fri, Oct 03, 2008, 4:58 PM UTC

YC funds startup with great growth potential; companies that can "scale" well. Service companies scale linearly, and require you to hire additional personnel to grow, whereas product companies scale exponentially compared to personnel.

So my guess is YC will not fund a service company.

Re: Will Y Combinator fund a service Company?

#3

Post by davidw » Fri, Oct 03, 2008, 5:09 PM UTC

As a service company, would it be feasible for you to move to the US for three months, away from your team?

Re: Will Y Combinator fund a service Company?

#4

Post by rokhayakebe » Fri, Oct 03, 2008, 5:15 PM UTC

Yes you can apply. But.

If you want to develop software for clients at their request, then it will be hard for YC to invest in your company.

If you develop proprietary software and license it to other companies that will need support, and customization, then it should be fine.

If your service allows clients to outsource customer service operations or IT support and you show you can easily scale it, then it should be fine.

Re: Will Y Combinator fund a service Company?

#5

Post by khurrams » Fri, Oct 03, 2008, 5:29 PM UTC

davidw wrote: post #3

As a service company, would it be feasible for you to move to the US for three months, away from your team?

Yes, this would be possible. But , see its extremely important to move to USA and learn about ecosystem.

Re: Will Y Combinator fund a service Company?

#6

Post by khurrams » Fri, Oct 03, 2008, 5:32 PM UTC

rokhayakebe wrote: post #4

Yes you can apply. But. If you want to develop software for clients at their request, then it will be hard for YC to invest in your company. If you develop proprietary software and license it to other companies that will need support, and customization, then it should be fine. If your service allows clients to outsource customer service operations or IT support and you show you can easily scale it, then it should be…

We have a mixed model : We have developed few reuseable components for quick IPhone development. However, people using those would be developers. I dont have the numbers though. You might consider reviwing our startup at (www.geniteam.com).

Re: Will Y Combinator fund a service Company?

#7

Post by khurrams » Fri, Oct 03, 2008, 5:34 PM UTC

rwalling wrote: post #2

YC funds startup with great growth potential; companies that can "scale" well. Service companies scale linearly, and require you to hire additional personnel to grow, whereas product companies scale exponentially compared to personnel. So my guess is YC will not fund a service company.

This is right analysis. However, ROI might be lesser but risk of failture would be lesser as well ? But, there is chance that we *"might" become a brand for IPhone apps development. If you can build reuseable libraries, then i beleive you can scale faster ?

Re: Will Y Combinator fund a service Company?

#8

Post by pg » Fri, Oct 03, 2008, 5:47 PM UTC

khurrams wrote: post #7

rwalling wrote: post #2

YC funds startup with great growth potential; companies that can "scale" well. Service companies scale linearly, and require you to hire additional personnel to grow, whereas product companies scale exponentially compared to personnel. So my guess is YC will not fund a service company.

This is right analysis. However, ROI might be lesser but risk of failture would be lesser as well ? But, there is chance that we *"might" become a brand for IPhone apps development. If you can build reuseable libraries, then i beleive you can scale faster ?

Venture investors are not looking for things with a low risk of failure. In fact, all other things being equal, we're looking for the things with the highest risk of failure-- like starting a new search engine in 1998.

Re: Will Y Combinator fund a service Company?

#9

Post by vaksel » Fri, Oct 03, 2008, 5:50 PM UTC

what exactly do you hope to achieve with a mere $15K? Even in pakistan that can't be a lot of money

Re: Will Y Combinator fund a service Company?

#10

Post by khurrams » Fri, Oct 03, 2008, 6:02 PM UTC

vaksel wrote: post #9

what exactly do you hope to achieve with a mere $15K? Even in pakistan that can't be a lot of money

Hi I think basic reason would be learning from Technoprenuers and mentors, because we dont have much success stories within Pakistan. With 15 K US $, we can support a team for 3 months. However, more important perspective is : Can we become a brand for building IPhone Applications faster, better and cheaper ? Can we build applications and charge subscription for maintiance ( we already are charing small amount ) ? Is the segment lucerative enough to make good profits for next 2-3 years ?