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As we approach the deadline for Y Combinator applications of the Spring 2017 class, founders with great ideas are looking for ways to make their application stand out. Paul Graham, also known as PG, even “pleaded with” his applicants to help encourage them — “Investors are optimists. We want to believe you’re great.”
Back in 2011, Paul also said that the acceptance rate to Y Combinator is around 3%.The percentage of applicants who get interviews is around 7%, according to YC partner, Kathrina Manalac. This means, 3/7 (42%) of the groups that passed the application stage will pass their interviews!
Over the years, countless YC founders, partners, and applicants have written about the YC application process. Here’s a list of 31 of the most important factors to writing a successful YC application.
Back in the day, each YC partner reads every application over a period of about 10 days — that is no longer true. Alumni reviewers do the first pass, and then each partner still reads 70-100 applications per day.
What does that mean for you? Here’s how Jason Shen, co-founder of Ridejoy, puts it:
Assuming an 8 hour day with 5-minute breaks each hour means each app gets about 5 minutes of each partner's time on average. (440mins per day / ~85 apps per day = 5.2 mins per app)
Cut to the chase — impress YC partners with quality, not quantity.
Sounds contradicting? It is a bit. But not entirely.
Quoting Joseph Perla, former VP of Technology at Turntable, a YC alum, and a two-time YC applicant — write everything that is interesting and unique about yourself. The biggest mistake he made in his first round of YC application was keeping it too brief. Instead of adequately showing himself off, he thought he'd save his accomplishments for the interview. But don’t forget, only 7% of the applicants actually make it to the interviews! So write everything that’s impressive about you and only write about impressive things.
One of the most important things to accomplish in your YC application is to answer the questions as clear and succinct as you possibly can. Michael Seibel, YC partner, co-founder, and CEO of Justin.tv, reminds YC applicants that the only way to have a robust pitch for your company is to “eliminate jargon, acronyms, marketing speak, and any ambiguous terms such as ‘platform.’”
Here’s a specific example Harjeet Taggar, YC partner and founder of Triplebyte, gave:
"Revolutionizing the world of digital communication via the social web" gets me no closer to understanding what you're actually doing. Write in plain speak e.g. "a mobile application showing you nearby restaurants your friends recommend".
As Paul Graham said, “they’re immune to marketing-speak; to them, it’s just noise”.
Revolutionize, disrupt, synergy, innovate, groundbreaking, world-class, unique, advanced, cutting edge, exclusive, superior, platform, leverage.
Scratch all of that.
These words can diminish the quality of your application and are not considered as “impressive” as they may seem. YC partners are not interested in reading fluff. Write about your ideas in the clearest (perhaps “dullest”) way possible.
For more words to avoid on your YC application, read this article.
Writing an application for Y Combinator can be a nerve-wracking experience. You might start second-guessing every single word you use and every sentence that you write. Of course, it’s only natural to be cautious; however, the red light should go off if you’re chasing after perfection.
As Paul Buchheit, creator of Gmail and a YC partner, said, “Perfectionism is a disease. It stops progress and drives us crazy. Perfect is unreachable.”
No, applying early does not guarantee that you’ll get a spot, but you will have a small advantage because YC partners will have more time to read your applications.
With that said, if you don’t have a working demo yet, then it would be better to apply closer to the deadline with a working demo and everything in place.
What does it mean to be “formidable?”
“A formidable person is one who seems like they’ll get what they want, regardless of whatever obstacles are in the way. Formidable is close to confident, except that someone could be confident and mistaken. Formidable is roughly justifiably confident.”
-- Paul Graham, Co-founder of Y Combinator
Paul Graham famously said, “If a group of founders seemed impressive enough, I’d fund them with no idea.” This is not to undermine the importance of having strong and convincing startup idea, but every startup and every investor have reasons both to invest and not to invest. If you seem like a “winner”, investors are more likely to focus on the reasons to invest in you.
Why do investors focus so much on the founders as opposed to their ideas?
For most startups at this stage, the best predictor of success is the founders. So, the most important parts of the application for me are the questions about the founders’ backgrounds and the most impressive things they’ve done. We’re looking for evidence that the founders are smart, effective, and determined.
-- Sam Altman, YC Partner
As a rule of thumb, you should not sell yourself short. With that said, don’t pretend to be someone else. If you’re not naturally “convincing,” at the very least, stay sincere.
Being resourceful seems like a rather cliché thing to say about successful startup founders.
What does it mean to be resourceful — or in PG’s words, “relentlessly resourceful”?
In the startup world, most obstacles are external and these obstacles come in all shapes and forms. In order to be successful, you would need to find your way around them or find tools to help you plow through them. The last thing you want to be is “hapless” and passive. If you want investors to believe in you, you must find ways to show that you won’t let the world have its way with you.
Are you a rule breaker? Are you always looking for creative ways to solve everyday problems? That’s what being “naughty” means.
One of the questions on the Y Combinator application asks applicants to describe a time when they hacked something to their advantage. The whole purpose of this question is to find “naughty” founders who enjoy and are good at beating the system in one way or another.
Like being relentlessly resourceful, naughtiness is a rare quality to come by. These qualities are not encouraged or rewarded in big companies or in most schools. However, investors need to know that you will survive without that kind of authority. They need to know that you’ll be capable of paving your own road and “hacking” the system.
Going solo may sound compelling for many reasons (i.e. owning more of the company and complete control of the decision-making process), but Y Combinator rarely invests in solo founders. Though there are exceptions, like Drew Houston from Dropbox, it is pretty rare.
Here are some of the reasons why it’s better for your company and for investors if you have more than one founder:
If you’re looking for a co-founder, read what Ashu Desai, founder of Make School, had to say about how to find a co-founder, who you should look to, and how to set up the equity structure. For a technical co-founder, make sure to read this post on how to earn yourself one.
Yes, it’s important for you to be formidable, resourceful, and naughty. However, don’t pretend to be someone you’re not. All the qualities we’ve listed above may manifest themselves differently in different people.
Lee Lin and Li Zhou, the co-founders of RentHop, YC alums from the class of S09, are good examples of “atypical founders.” According to Lee, both he and his cofounder are not very outgoing people. Both of them are quite shy and not the “typical” confident type. During the interview, Li barely talked. All the questions were directed towards Lee and that didn’t turn out to be much of a problem.
It’s ok if you don’t fit the “outgoing, cheerful, confident model” — not all startup founders are like that. Show your formidability, resourcefulness, and naughtiness in your own quirky and authentic way.
In 2015, PG published a post titled “Why It’s Safe for Founders to Be Nice.” He began his post by painting a picture of a successful businessman he grew up believing in, “a rapacious, cigar-smoking, table-thumping guy in his fifties who wins by exercising power, and isn’t too fussy about how.”
This is the exact opposite of what PG and his team at Y Combinator are looking for. In fact, in his other piece, Mean People Fail, the number of mean people who fail as startup founders is strikingly consistent.
In the same post, PG argued that mean people fail because being mean makes them stupid. They may be so busy fighting that they don’t get anything important done.
Don’t try to act tough — it’s ok to seem a little bit “softer”, as long as you’re genuine, authentic, and capable of dealing with difficult problems.
Don’t hold back any of your accomplishments, especially as a team. It is important to showcase all the projects you’ve worked on and successfully implemented individually; however, if you could showcase projects you’ve worked on as a team, that’d be even better.
If you and your co-founders have different strengths, it would be smart to demonstrate how your strengths and domain knowledge complement each other through projects you’ve worked on together.
According to The Top 20 Reasons Startups Fail, a study conducted by CB Insights, not having the right team ranked number three. Investors are aware of the fact that if the founding team were to split up, the startup would most likely fail. It is important to demonstrate to YC that you and your co-founder(s) can persevere together.
A rather extreme example is the founding team of Enplug. The founding team was so close, they actually lived under the same roof!
No, you don’t have to live in the same apartment, but you should demonstrate how close your team is on your YC application. You will have your fights, but don’t fight in front of YC!
Here’s a helpful article for some of the conflicts you might run into and how you and your co-founder can resolve them.
Whether you’re a techie or not, if you’re passionate about something, show off what you’ve done to pursue that passion. In addition to working on projects related to your area of expertise, contributing to conversations online can showcase your passion and domain knowledge.
Whether that’s on GitHub, Hacker News, Medium, or any other platform, any evidence in your online presence that you are active in any way can improve your chances of being accepted.
Unlike other startup investors, Y Combinator is all about the valley. Even though YC spends half of the year in Boston, the second biggest startup hub in the U.S., PG believes that any startup that’s serious about becoming successful should move to Silicon Valley.
The reasons are clear:
If you’re serious about working with YC, you should be prepared to move to Silicon Valley. (Of course, if you can’t enter the U.S. because of its immigration policies, there’s not much you can do...)
This is Y Combinator’s motto for a reason. As PG wrote in Organic Startup Ideas, “the worst ideas we see at Y Combinator are from young founders making things they think other people will want.” For instance, if you want to build a WhatsApp clone simply because it’s the most popular messenger app in the world, you’re probably not going to persuade YC.
Yes, it’s important to YC that your startup idea could potentially succeed and bring in some profit; however, if you're not passionate about your idea, how can you expect to convince the YC partners to be? Instead, start with what's missing or broken in your daily life and work from there.
Take PG’s advice: Focus more on the idea and less on the startup itself.
Having an amazing team and an amazing idea will impress YC partners. However, being able to show traction will take you to another level. Traction shows investors that your startup idea is viable — it’s valuable, and people want to use it.
There are many types of business traction. You can show traction through revenue growth, average sales or gross margins, customers, average return visits/customers, virality etc.
Here is a trick on how you can do gain traction on the customer end from David Chen, co-founder of Strikingly and YC alum:
One hack I recommend is to create a landing page to collect signups even before the product release. You can attract signups by promising beta access or exclusive deals. Then share the page around social media. If what you’re working on is actually valuable, you shouldn’t have any problem getting some signups. That’s exactly what we did with Strikingly. We got 800 signups in 1.5 weeks before writing our first line of code on the actual website builder.
Growth defines a startup. It is the core of every startup and the compass for almost every decision you make. To track growth, you should pick a metric that matters to your startup.
As a general rule of thumb, this is how you can prioritize different metrics:
Here’s an example from Stringkingly’s Y Combinator application
We launched our most recent private beta on August 15th and opened it to the public on September 5th. We have 5500+ users and our paid users are well about 1% (40% selecting annual subscription) We had about 600 users by the end of August 2200 (277% increase) users by the end of September and 4500 (104% increase) by end of October. Our revenue was $26 in August, $1998 in September, and $4550 in October (127% increase).
Whichever metric you pick, stick with it, and show growth one way or another.
Will you continue with your idea if YC rejects you?
This is not an official question on the Y Combinator application, but you should be able to answer this before you even begin your application.
Many startups have experienced some sort of failure in fundraising. If Facebook gave up after being rejected by a VC in Boston, it would not be what it is today. It is precisely because the founders are passionate and relentlessly resourceful that they were able to become so successful.
Investors can tell if you’re not 100% in. If you’re holding onto your high-paying job at Google or Goldman Sachs, you’ll most likely be rejected because you lack the necessary determination to succeed. If you’re not 100% in, when you run into one of those “oh sh*t, we’re going to fail” situations (and you will!), it’s likely that you will give up.
We tackled this point briefly when we advised you to stay away from marketing lingo. The idea is to help YC investors understand exactly what your product will do and why it matters. In other words, be as concrete as possible.
Here’s some practical advice from Jason Chen, co-founder of YC-funded Ridejoy:
Write as if you were explaining to a smart friend. Be specific about the problem you are trying to solve and how exactly your product will do it. It’s ok to talk in stages — first, we will build X to do Y, and over time we can turn that into a Z that does A, which is a bigger problem/market.
The idea is to have a big picture in mind. Your product must have a strong product/market fit for it to be successful. With that said, since you’re still in the beginning stages, it’s more important to show how your product would cater to the market.
A good way to show that you understand a specific topic is to address and tackle potential counterarguments.
The same thing applies to your product. To show that you know your product, its market, and domain knowledge well, you should be able to pinpoint the flaws of your products. Ideally, you should also have preliminary solutions to these problems. Think about all the potential “counterarguments” that could be thrown at you, and be ready to address them in the application, the interview, and in your startup journey.
We’ve talked about the importance of presenting yourself as an expert for your product and its market. Lee from RentHop contrasted a domain expert with a typical consultant. If the investors asked, "how many rental units are in the US?" here are the ways a consultant and a startup founder/domain expert will answer the question:
[For consultants], the answer is "40 million according to the US Census." [If you’re a startup founder/domain expert], the answer is "Gee, there are 300 million in the US, and out of my old college hallway, 1 owns a house, another moved abroad, and the remaining 3 of us rent. The typical household is 4 people, and the top 2% of wealthiest households probably own a vacation home, so a first-order approximation is 40 million."
Another way to show your domain knowledge is to show a thorough understanding of who your competitors are and the risks of entering a specific market. If you enter a particular market without doing this research, you will most likely fail to compete with more established companies.
Understanding your users is the key to creating wealth for startups. It is such an important factor for YC investors, they included three questions in the application just to gauge your level of understanding.
These questions were designed to help investors figure out how engaged you are with your potential users.
Once you’ve found product/market fit, it’s time to talk about distribution. Since acquiring users is one of the hardest things to do, investors do not expect you to have the answer. They want to see that you’ve thought about this and have done your share of research. Here are some common ideas:
Here’ s a great resource to learn more about distribution methods.
As early as 2006, Paul Graham wrote a piece called How to Present to Investors. In this post, he mentioned that specific numbers are good. Here’s what he said:
If you have any kind of data, however preliminary, tell the audience. Numbers stick in people's heads. If you can claim that the median visitor generates 12 page views, that's great. But don't give them more than four or five numbers, and only give them numbers specific to you.
These can be lines of code, number of beta releases or beta users, your total addressable market, your pricing…
It is tempting (and falsely comforting) to take the top-down approach when you’re predicting how much money you could potentially make. For instance, if you take the top-down approach, you could be thinking “if I only capture 5% of this 300 billion dollar market, I could make 15 billion dollars!” Well, this would be an inaccurate and largely pointless prediction. Instead, take the bottom-up approach. Here’s how Zain Shah, an alum of the YC S13 batch and cofounder of Watchsend would do it:
We will charge customers the ordinary cost of a repair plus a 15% convenience fee. Ralph’s currently operates over 50 repair shops in each state for a grand total of 290 stores. Each one operates on only 10 customers per day because others call in and are turned off by the 2 week wait time.When new repairmen were hired last year, the average cost of a repair went up 50%, but the volume of repairs also went up 100%, tripling revenue. Operating profits went from $1.2 billion/year to $3 billion/year. From this, based on the volume of repairs in San Francisco alone being over 150 per day, and the average cost being about $400, we could be operating at about $70k per day in just SF.
Show YC investors that you’re practical and realistic. Show them you know what it takes, on a concrete level, to make money.
One of the questions on the application states,
If you’ve already started working on it, how long have you been working and how many lines of code (if applicable) have you written?
This is somewhat of a trick question. What YC investors want to see is that you’ve started working on your project, and you’re not building it just for YC. If you haven’t started working on it yet, they might not take you seriously. On the other hand, if you have been working on a project for an unnecessarily long period of time, you should be worried. Essentially, YC investors are also testing your execution speed — you should be able to demonstrate efficiency and effectiveness.
Why should you include alternative ideas? We’ve mentioned how important it is for YC investors to like you. If they like you, even if they don’t love your ideas, they will try to help you out. If you have alternative ideas that seem more attractive to them, they will guide you in a different direction because they genuinely want to see winners win.
By presenting alternative ideas, you’re essentially increasing your chances of getting into YC. If you’re not sure about this, just look at RethinkDB — this is why they exist.
Now that you’ve nailed the rest of your application, it’s time to talk about the one-minute-long video. As PG said, the whole purpose of the YC video is to get a better sense of how the founders communicate and relate to each other.
Keep in mind, this is not a video contest. Don’t spend time on making your video fancy. Do exactly what the instructions say: please introduce yourselves, explain what you’re doing and why, and tell us anything else you want to about the founders or the project.
Here are some tips from a three-time YC applicant, Derek Andersen, founder and CEO of Startup Grind:
- Keep it 1 minute long (unless you’re Zenefits)
- Upload to YouTube
- Allow embedding
- Only founders should talk
- Don’t add any fancy effects
- Don’t read off a script
- You’re not making an MV - don’t add music to your video
- Make sure your audio is clear
Here are a few examples:
If you have a good relationship with someone who’s gone through YC, you should leverage that. Here’s a negative and positive example of endorsements from Harjeet Taggar:
An example of a low-quality recommendation would be "I met this team at a networking event and they seem like good people". While that is another data point we'll take into account, it won't significantly move the needle on our decision to interview a company or not.
An example of a high-quality recommendation would be "I worked with X at my previous company, they are one of the most determined and productive people I've met and I tried hard to hire them for my current startup but they're set on doing their own thing".
Keep in mind, it is far more impressive if you have one very good recommendation as opposed to 10 shallow recommendations from alumni you barely know. If you don’t have a close relationship with any YC alumni, don’t bother with this.
Congratulations on finishing your nerve wrecking YC application!🎉 The next thing you want to do is to make sure someone else reads over your YC application.
Ideally, this person would be somewhat familiar with the startup scene. However, if you can’t find someone like that, it’s fine! In fact, if you can find someone who has absolutely no idea what your product is about, that might be a plus. If he or she is confused about your product after reading your YC application, you should consider revising your answers until he or she can easily understand what your startup is all about.
As a team made up of Y Combinator and Techstars alum, we know how nerve wrecking the application process can be. Hopefully, these tips from YC alumni will help you write a successful application. If you’re feeling nervous and stressed out, check out the YC Company List and imagine what it’ll feel like when you see your startup on that list!
After all, our mission at Codementor is to help you succeed!
P.S. May the odds be ever in your favor.