dalton

For those curious, YC funded an open source financial ledger company in S21: https://github.com/formancehq/stack

Hi there - this is not a pro-rata investment, we are investing this 375K right away

I realize that this is likely to be less illuminating than you would hope, but the Retool founders were relentlessly focused on getting their first users, building quickly, and getting to profitability as if their lives depended on it. Witnessing them go from 0-10K MRR was to witness someone walking through walls.

To give a perspective on how much of an outlier this team is, my recollection is they got to ~1M ARR very quickly and with just the 2 cofounders and one employee. That is rare.

Congrats to Retool!

I worked with Retool when they were in the YC W17 batch. They were previously working on a p2p finance app for the UK, and I remember sitting in the conference room when they told me they were pivoting to Retool.

The Retool idea made immediate sense to me because at my prior startup we used django-admin to crank out internal pages and it was amazing. So it seemed clear to me that having something along those lines that was available in every programming environment would be useful, but it was harder for me to wrap my head around competing with free. This sort of reminds me of Algolia competing with Apache Solr - as it turns out can be a great business if you build a great product and really understand your customers. Also I did not appreciate the power of having a drag-and-drop interface, all of the integrations etc.

David and the whole Retool team have done a truly brilliant job executing since then, excellent work.

I don't have much to add to all of the other YC-related information out there - I think having a cofounder is generally a good thing, but not every company we fund does.

My colleague Jared put together some great advice for hard tech/bio founders and we talk about a number of the companies we have funded here: https://www.startupschool.org/videos/78 He talks specifically about what these companies do during the batch and fundraising milestones, etc

I haven't heard that term before - but excellent advice!

That's a fair point, and there are a number of situation dependent factors. I wrote this letter to myself because I know what I would do differently 12 years ago and I have the benefit of hindsight now. Obviously the crisis is different today, we didn't have a pandemic in 2008, there is definitely no one-size-fits-all advice, and every company needs to be figuring out the right thing to do right now. But keep in mind what ended up happening 12 years ago is that everyone lost their jobs. The letter is my thoughts about what could have prevented that outcome back then, at least partly.

For large dollar value contracts you usually have an account rep/point of contact you can get on the phone.

You can explain to your rep what you are dealing with, what your budget is, and make a concrete ask. I get the sense that the larger of a customer you are for someone, the more willing they are to work with you.

Hi, I am the author of this post. As I said at the top my intent was not initially to publish it widely, but here we are. If anyone has questions about what I wrote I'm happy to answer them here.

Hello HN, I am the author of this - it's part of a series of short posts about startups I that worked directly with at YC. This is the first one I have posted one to HN.

Let me know if you have any questions. Also I would love to hear if you are working on something ambitious like the Culture Biosciences founders are!

Hi, I am the partner at YC who funded PostHog, though originally for a different idea.

I think this can be a great business, we have funded startups following similar models like Gitlab, Mattermost, etc. Excited to keep funding more :)

Tons of examples of no traction/fast moving teams out-performing, ie Brex pivoted and had no growth or traction at demo day and it worked out pretty well for them :) https://twitter.com/daltonc/status/1138952277404790784?s=21

Doing YC at their early state was perfect because it was the perfect environment to come up with an idea like Brex.

imagine we are talking about CPU clock rate - the rate at which founders are able to make progress - which means everything from how many customers they can talk to in a day, how fast they learn from running a test, how fast they can build a prototype, how quickly they internalize feedback from customers, etc.

Hey Dom, we worked together directly when you were in YC, and I deeply disagree with your assessment that having progress helps a startup succeed in YC.

The worst case scenario is a newly accepted YC startup with a little bit of traction... just enough traction that they aren't willing to change ideas/markets and not enough traction for them to actually know they have product market fit. It's the uncanny valley of product-market fit. These companies with a little bit of progress can spend months or years of their life chasing what they later realize was a mirage.

When a new YC company enters the batch with very little or no traction (and can move incredibly fast) they will longterm outperform companies accepted with small traction most of the time. Based on the hundreds of companies I have personally funded at YC, speed is the single most predictive variable of if a startup will succeed - not traction at time of accept.

From the feedback from YC, lack of MRR isn’t the takeaway, and I think both OP and a lot of people on this thread aren’t getting that.

I would recommend “hustling” for a period of time before the interview, rather than as a reaction to the outcome of it :)

Yes, you are off. Our apps submitted metric is growing.

The reason we started sending out emails to remind people of the deadlines is the sheer # of founders we talk to in person and over email that complain that they missed the application deadline and they didnt know when the date would be.

Questions about when the app deadline is, if you can submit late, when the deadline is for the following batch, etc is the #1 most common type of question in our support queue, and sending out reminders seemed like the best solution.

I'm the head of admissions at YC and I can assure you that a huge percentage of the companies that we interview and fund are at idea stage.

One explanation I have for why it my appear the startups we fund are "far along" at demo day is that the startups moved so quickly during the batch. For example, the startup Inokyo in the current batch recently put out a video of the autonomous store they built in Mountain View: https://techcrunch.com/2018/08/16/inokyo/ When we funded this startup 3 months ago it was for a different idea and so they quite literally started from scratch.

Startups moving fast should hopefully seem far along by demo day, irrespective of their starting point :)

that is correct.

If you have already submitted your application and then your startup has material changes to the idea, new cofounders, huge progress, etc. you can email us using this form https://www.ycombinator.com/contact/ and we will make sure to make note of what has changed since you submitted.

Is Medium forcing sign-in to view blog posts a new thing, or have I just never noticed it before? https://i.imgur.com/VreES7R.png

I appreciate both of your sentiments, thank you.

I continue to be at least somewhat optimistic that non ad-supported models are worth trying. It seems like Patreon is doing really well and is perhaps something we can all learn from.

somewhat related: someone on facebook pointed out that XCP is pushing a lot of small transactions on the network and pointed me to this link: https://www.blockscan.com/charts_transaction_all

that is correct, I went from part-time partner to fulltime partner

I think we are going to offer it under backer.app.net/project-name. It's something worth testing I think.

fwiw I have personally witnessed a significant percentage of consumers accusing a crowdfunding project of being a "scam" if it is hosted on their own domain rather than an impartial 3rd party like Kickstarter. I think that is one of the reasons consumers like Kickstarter vs self-hosted crowdfunding.

Additionally, in the Bitcoin use-case, if you have a page on your subdomain powered by Backer that accept Bitcoin, consumers will be confused and angrily say that you already accept Bitcoin because that page exists. That is also something we learned first-hand.

My instinct is that trying to run multiple Backers at the same time might make it harder for any one of them to succeed, and thus it might make sense to run them serially.

We are certainly open to trying things like this out, and sharing the best practices of what works best with the public.

Thanks

We are using it (and plan to continue using it) for our own market validation tests, and so yes it is connected. We are also making use of a few App.net API features to power it.

App.net is a subscription service. We have a subscription state machine that works great with Stripe. We have systems to deal with upgrades, downgrades, proration, shifting to different plans. Additionally this requires us changing our accounting systems and wading into new tax complexities.

It's fascinating to me that people think that for any retailer to accept Bitcoin it's as easy as embedding a widget on their site. I have been comparing notes with other companies that are also considering adding Bitcoin support and these are the sorts of questions that come up.

There are lasting legal, technical and support operations that we are willing to take on long term if the market's big enough to support it. Otherwise, it's not worth the effort to implement those long term.