Ask HN: Is applying to Y Combinator worth it if you aren't an insider? | Hacker News Reader

Ask HN: Is applying to Y Combinator worth it if you aren't an insider?

22 pointsall212 comments

I see the application button on the bottom of HN occasionally. I even created an account and started filling out an application.

But I'm hesitant. The upside is a potential initial seed round into my business. The downside is... wasted time?

In terms of cost/benefit, it seems pretty straight forward. But I get the general impression that applying without knowing someone or being an advantaged class means it will be a complete waste of time to bother applying.

These threads come up from time to time, and I see the smattering of responses, "totally worth it" and "not worth it at all". I also see the kinds of companies that get funded and they aren't typically the focused, practical, cashflow positive in short order sorts of companies.

I'm torn.

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There are other things which might make more sense without strings attached in the same way. If you can come up with a research idea, there is the SBIR Small Business Investment Research grant which can be combined with Innovation Grants. In NY, this is the NY Star Innovation Grant. My understanding is that about 20% who apply get them. In a way this is as good or better odds of getting funding than VC money if you are high tech company with a patentable idea and want to start. Plus there are other grants and funding which are more local.

Do you want to play the VC game? Where you push for high growth, whether or not that is what makes sense for the business? Where failure is preferred over growing into a small sustainable business?

Because if you answer to that is "No", then you should not apply, no matter who you are. YC plays a very specific game. It is not the best game if your goal is to build a company. It is the game to play if you want a high-risk, high-reward experience where a small handful of people get rich, while most other people do not.

Some people want to play that game. If you are one of them, apply. I have no idea if the odds favor you or not, but I guarantee you will not get accepted if you don't apply.

At the same time, if you choose not to apply, or do not get in, don't worry about it. Many people have no interest in that path, and lead quite fulfilling lives being completely outsiders to all of it.

> At the same time, if you choose not to apply, or do not get in, don't worry about it.

Not only that, but rest assured that while YC is pretty good at what it does, it still has a very high false negative rate, and plenty of companies that it passes on will go on to succeed. See https://www.bvp.com/about#anti-portfolio for a VC that talks about the companies it passed on. My favorite:

> Incredibly, Bessemer passed on Federal Express seven times.

> I also see the kinds of companies that get funded and they aren't typically the focused, practical, cashflow positive in short order sorts of companies.

Cashflow positive is fundamentally at odds with VC money in general, for most businesses. The VC model fundamentally requires your startup to be a huge success in a short amount of time. Usually that means throwing money at hiring people and at other growth hacks, in the name of growing as fast as possible. If you want to start a practical, cashflow positive business, SBA loans are for exactly that.

Was going to say a similar thing.

Raising VC money makes VC the customer. Like any business you then need to know your customer, including their needs, wants and goals.

If you are looking to build a profitable business with some other kind of customer then VC is not for you. Rather you need to tailor your business to that customer.

Most disappointment comes from seeing the VC as a partner rather than a customer. That is not their model. Rather they are a customer looking for suppliers who will deliver a very specific product to them. Most of their suppliers (95%+) will go broke trying to supply them. But some will succeed. A few suppliers will get very rich.

Since you are starting a business you get to decide who your customers are and see if you want to take the risk providing what they want.

Several years ago, I tried, made it to interview and was then rejected. I was initially sad to not make the cut, but both enjoyed and learned A LOT about venture capital and start-up land in the application process. Later, I was quite relieved as I came to understand that venture funding was a poor match for my values and what I was trying to achieve.

YC takes the least amount of time to apply among most VC. Even if you are insider, most VC will have 3-5 calls before deciding which takes 3 hours at the very minimum. If you have pitch deck, YC application requires 2 hours to fill and 15 minutes for interview.

And based on experience, almost all early stage VCs give heavy benefit to insiders or credentials, including YC.

they aren't typically the focused, practical, cashflow positive in short order sorts of companies.

Maybe there’s not a correlation between people who commit to building that kind of company and the kind of people who will take funding to build and light a rocket.

I get the general impression that applying without knowing someone or being an advantaged class means it will be a complete waste of time to bother applying

The kind of person who might build a rocketship probably won’t be daunted by the idea of some random strangers’ rejection.

But to be clear startups aren’t for everyone and that’s ok.

Conventional businesses are ok too. Good luck.

Not worth (I'm an insider)

Less competition? :D

your username's not orange.

Make great things that helps people. Customers, investors, and $ will come.

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