How to Apply And Succeed at Y Combinator | Startup School

Foreign. Hey, everybody, this is Dalton. I am excited to talk to you today. Topic of today's talk is how to apply and succeed at Y Combinator. So to begin with, let's talk about why it's worth applying to Y Combinator. It's a good idea to sit down and think about your startup. This is evergreen advice, regardless of yc. And so going through and answering the application questions to organize and clarify your thinking. Super helpful, right? Go look at the questions. It'll help you think about your own business and maybe find some edge cases. And so I think that's worth doing for everybody. In addition, if you're sitting there watching this presentation, the odds that YC is a good fit for you is pretty good. And then let's talk about the cost benefit analysis of applying to yc. We very intentionally designed the application to be fast and easy to fill out. And so the downside is you apply and you don't get in, but you only spend a tiny bit of time doing it versus the potential upside being very big man, that's a pretty good trade off. And so those are all some reasons why it's worth applying to yc. I want to talk about luck a little bit. I've spoken about this in past YC talks, and I've noticed a lot of applicants that have gotten into YC reference this talk that I gave years ago. So I want to remind you all of kind of my philosophy about creating luck. Certain people are luckier than others. But one of the ways you can create luck and become luckier is to put yourself out there more. To create this luck, you need to take risks. You can systematically put yourself out there to be in situations where good things can happen to you or surprising upside things can happen to you. On the flip side, if you avoid situations where you face rejection, like applying to yc, you're reducing the surface area to get lucky. And so I think this is pretty good evergreen advice, regardless of what you're doing, which is if you're looking for a startup idea, if you're trying to learn how to do sales, if you're trying to recruit great employees, you want to put yourself out there and take risks. You want to try a lot of different stuff, and the more you can develop this luck creation skill, the better. And deciding to apply to YC itself is a way to create luck. I also want to go through a lot of the weird reasons people come up with not to apply to ic. Again, I've talked to lots of founders, and so these are all coming from many conversations I've had in person with folks. First off, I am too early. This is a very common one. If you look at the history of great YC companies that have gotten in, many of them pivoted after they got in. And so if that's not too early, I don't know what is. Many folks haven't quit their job that get into yc. They haven't written any code. There's honestly no such thing as too early. And so I would not count that as a valid reason. Next, I am too far along. The flip side of I am too early. This one we hear a lot. Again, it's pretty funny because we have folks that get into YC that have, I don't know, half a million dollars in annual recurring revenue. Also a common one here these days is, oh, I'm too far along because I've already raised some money. We have folks that apply and get accepted to YC that have raised literally $1 million, often more depending on their specific situation. And so if you don't have product market fit, as per the other talks you've heard here, there's a good chance that you are not too far along from yc. And much of the help we can give you is to kind of zero in on and focus on finding product market fit. All right? And so I wouldn't say to yourself, well, I'm too far along for yc. I doubt it. Next, this is kind of a new one. A lot of folks have seen our videos like this one and they think this is like a reasonable approximation of being in yc. That is not the case. So let me just run through a few of these reasons why being a real YC founder is different than watching these videos. First off, we are real people, believe it or not. Yeah. And by being in the batch, you get our full attention. You get real time access to us. We text with people all the time and you get to know us in person. Very different experience. And so you get these one on one office hours with your group partners, folks like me. And I'll tell you a secret. There's tons of secrets we tell you that we would never say on the Internet. We have to be, you know, we're careful about what things we say in this format. And there's a whole breadth and depth of knowledge that you will only hear if you're in yc. In addition, there's a bunch of internal tools for founders inside of yc, work at a startup, all of our proprietary fundraising data and tools, our Series A Fundraising tools, et cetera, et cetera. So there's lots of stuff that go on behind the scenes. It could not be more different than watching some videos on the Internet. Another one that comes up a lot is a potential applicant is discouraged by someone in their life. Someone is trying to play the role of gatekeeper, and that person is saying, oh, don't apply to yc. You know, and then there's a. There's a few different reasons why they may say that. You could ask someone that's saying, oh, don't apply to YC some of these questions, hey, so you're saying I shouldn't apply? Spend a few minutes filling out this application and applying and maybe getting in, and I get half a million dollars up front. And so if it's an investor discouraging you, you should ask the investor, oh, so are you going to invest? On what terms are you going to invest? Again, this is a tip for you, because if the investor is not willing to invest themselves, they're simply saying they don't want to see you raise, but they themselves are not going to invest. You can call them out on that. Next, Sometimes folks are in some market or some city or somewhere, and there's folks saying, stay small, Stay in this country, Stay in this city. Don't think of this on a global scale. YC is too big. It's too far away. And again, we fund people from all over the world, from every city, from every country. And you want to ask them if they're discouraging you from actually dreaming as big as you can dream. Because sometimes they are. And I don't think that's great. And then finally, sometimes folks suggest not applying because some other theoretical thing might happen, like, maybe you'll do this, maybe you'll raise a Series A, maybe you'll raise a seed round. And again, I want you to think about asking the person, are you discouraging me from seizing an opportunity right in front of me for some theoretical thing that might happen? And I think you'll kind of see where they're coming from. So, anyway, I think these are questions you can ask someone that's discouraging you from applying to yc. And again, maybe they'll have something good to say. Maybe they'll want to invest. I don't know. Next up, a few other reasons people sometimes don't apply. One, they think their company is too different or unique for YC to understand. Again, if you look at our Top companies list, you'll see we fund companies in every vertical from every country. And so again, I doubt it. Sometimes people are based in a location and they're not sure if we fund people in that location. I assure you we do. If you look at all the countries for companies we fund, we fund them all over. Sometimes people are worried that we funded a startup in the same space. It's pretty common, especially if it's a great startup idea to have multiple companies in the same space. And so we don't hold that against someone. Okay. And then finally, people that have applied before are upset about it and don't want to apply again because they feel upset about not applying again. We're going to talk about this more later, but I can't stress enough that it's actually a plus to have applied multiple times and not a negative. And so don't let that hold you back. I think my last point on this section is a simple piece of advice. Don't overthink this. Just like anything with your startup, don't overthink the decisions. If something seems like it might be a good idea, give it a shot. It's as simple as that. And we see a lot of people with these really complex ideas about the best time to apply to YC or when to apply to YC or what startup ideas to apply to YC with. You know, don't overthink this. Certainly not conducive with folks we've seen build big companies. And look, a lot of the reason people don't apply to YCE is because they're pretty confident they won't get in fair. I would just suggest to everyone get used to doing things that you think probably won't work and get comfortable being uncomfortable in this way. I think it's a really good lesson to set yourself up to do things that are kind of a long shot. And the fact is, most of the folks in the most recent YC batches are not first time applicants. There's some folks that applied five times, six times, seven times. Those folks had persistence, they showed character and it worked for them. And so use this just is just one little lesson on not being afraid of doing something that you think has a relatively low odds of success. Here's a few good reasons not to apply to yc. One is you don't want to work on the company for very long. Say you want to just work on it for the summer or six months and then go get a job. Okay, yeah, you know, don't, don't apply. Another one is if you don't think venture capital is a good route to take all right, that's fair. I mean, because YC investing is a form of venture capital, right? And so if you don't want to pursue that type of business, probably a good reason not to apply. And then also, if your business is not a technology startup, say it's more of a traditional business where there's no technical component, there's no programming, there's no biotechnology. Okay, that's probably a good reason not to apply. That's not really our sweet spot. Let's shift gears and let's talk about the application. And let me give you some tips for your YC application. First off, you apply on our website. You don't need permission, you don't need to email us, you don't need to send us a deck. You just apply on our website. It really is that simple. Let me give you some tips on your application. First, fill the whole thing out. Fill out the founder biographies. A lot of the worst applications say worst, but the ones that are just not strong, the founders did not take the time to fill them out. Okay, that's obviously someone that didn't put much effort in. And so actually fill it out. Pay attention to little things like grammar, punctuation, capitalization, little stuff like that. If you don't, if you don't do it certainly shows to us that you may not be that serious about applying to yc. So do that stuff. Make a founder video that follows directions. We put directions on how to do the video. Sometimes people don't follow the directions for whatever reason. And I just want to give you a little tip. Our entire application process has these detailed instructions, and we definitely take into account if you follow them in our selection criteria. This is one of the ways to tell how detail oriented someone is if they just follow directions. And so pro tip, read all the stuff, follow the directions. We definitely weigh that in our decision. Next, your written answers should be clear and concise. Don't write a novel. More words is not better. Right? You don't get bonus points for writing something that's so long we can't scroll down the screen. Be clear, be concise. Answer the question directly. Let me talk to you about what it's like to be on our side of the table, someone that reads applications. And so here are the questions that I ask myself when I'm reviewing someone's YC application. First off, who are the founders? What's their backstory? How do they come together? How do they know each other? Who on the team is doing what? Okay, I ask myself that. Next, what is their Idea, what are they working on? Do I understand what they're doing? Does it seem interesting? Have I heard this before? What exactly do they have today? Right today, at this moment in time, is it built? Are there users? I really want to know what the current state of the union is on the product. In addition, is there any evidence that people want this? Do they have customers? They have users, Are they using their own product? In addition, is there evidence that the founders are serious? And serious in this, in this sense is the following, that they really want to do a startup, right? For instance, if someone has left their job to work on this full time, that's an evidence of seriousness. If someone has applied multiple times and every time they apply, they make more progress, that's evidence of seriousness. You see what I'm saying? It's trying to get the sense if they're just throwing in the application for fun, or if they really are serious about doing a startup. And then finally, I look for what's impressive or unique or special about the application. This could be different things. Sometimes the founders are unique, sometimes the traction is unique, sometimes the idea is an idea I've never heard before. And so I really look for something that really stands out about the application. What I do with this data that I just told you that I read as an application reader is I tell myself a little story. And so I might say something, again, this is all in my head, but I might say something like, oh, this is the story of two friends who are both programmers working on infrastructure at Facebook, and they quit their jobs three months ago to build a new cloud hosting company. They built a basic demo and have one first customer. And that customer is using it on this website. And I can go look at the website and our plan is to become the top hosting company for all regions react apps. Great. Do you see how that's a story? It has characters, it has a beginning, it has an end. I understand what's going on. If I can tell this kind of story about your company by reading your application, it means it was a good application. On the flip side, weak applications obfuscate everything. And so I, as a reader, can't tell what's going on. I don't understand what the idea actually is. I don't understand the backstory. Like, why do these people know each other? How do they meet? I can't tell if they built it. I have no idea. You know, I can't see a demo. Maybe it's built. I don't know. I can't tell if they have customers. They might have customers, but I can't actually tell. And so it's basically impossible for me to tell a story about you because I don't even understand the basics. To me, this is actually a deep truism for all aspects of your startup, which is if I can't even understand the basics of what you're trying to communicate to me, you're not even the ball in the ballpark of convincing me, right? Like if I don't even know, if I can't parse what you're trying to say, the odds of you convincing someone is basically zero. And so you want to really make sure people understand the basics. Here's an example that I threw up. There's a company called GitLab. It's publicly traded. You can go buy their stock. It's a multi billion dollar company. This is from their YC application. I just pulled it off to give you an example of what a clear description is. Do you see? They're very concrete about what it is, what it does, who uses it. They say 100,000 organizations use it. They say programmers at Apple use it. This is really well done. So me as a reader reading this, crystal clear, what GitLab is great application. And look, they did it in just a few sentences. Very well done. Here is a fake thing that I wrote because I don't want to shame anyone. And I put this together. I don't even know if this is really exaggerated. These are, these are the kinds of things I read in applications. Sometimes where there are words. Here the words say things. There's. There's words I recognize. But if you ask me to summarize what these three or four sentences are and tell a story about what you do or what it is or how it's different, I would not be able to tell you. This just turns my brain off. So there you go. Please don't submit stuff like this. I still don't know what they do. I wrote this and I have no idea what this is. Okay, let me give you some other tips. Our entire system rewards honest people acting in good faith. If there's some hint somewhere in your application or elsewhere that you are being misleading in your answers, your application will be rejected. We're sympathetic to honest mistakes, but anyone that's doing intentional obfuscation or misrepresentation of things in their application like revenue or traction, your founder background, your educational history, you name it, that just, that's disqualifying. You know, it's pretty common to see people kind of try to misrepresent revenue or make it look like it's monthly revenue when it's really annual revenue. So just don't do things like this. We notice, and we really don't like it that as an application reader this is like automatic disqualification. Okay? In addition, I want you all to understand extraordinary claims on your application require extraordinary evidence. And so if your claims are, hey, we have no users. Cool. Like, there's not a lot of evidence you would need to show there. But if you want to argue that some big impressive company is one of your customers, you should be prepared to back that up or demonstrate that they are actually one of your customers. Shouldn't be a problem. In the case of GitLab, it wasn't a problem for them to demonstrate who their customers were. Next, a lot of people ask questions around what their odds are of getting an interview at yce. It's very hard to answer this question question, but I'm going to do my best because it gets asked so much. Probably the biggest variable for if someone is selected for interview is the quality and quantity of the technical talent on the founding team. So if there is a team that's applying, or at least one of the founders is at a skill set level to be hired into a technical role at a top YC company, they have 5x better odds than teams that don't. And quick note on this, internships are okay, so say you were an intern at Stripe or Airbnb or a place like that. Okay? That counts. And so it's very helpful to have technical talent on the founding team. And this, this includes biotech, hard tech, things like that. Right? This isn't just software, but definitely something we look at. And then as per this talk we did earlier in Startup School Dispatch about tar pit ideas, teams where there aren't technical founders and they're working on an unlaunched tarpit idea, those folks have the lowest odds. That's a fact. How can you improve your odds of getting an interview? Well, first off, add technical talent to the team. And so this is why we have co founder matching. There's a number of folks even in the current batch that met via co founder matching. And it works. We love it. What a great way to add technical talent to your team. Hooray. Quick note on this, the entire YC model was built to not require networking. We don't want warm intros, we don't want pitch decks, we don't want to hop on a quick call. That is not how YC works. In our funding decisions, we built a system that is optimized for funding complete strangers that fill out a form on our website. There's no tricks here. It really is that simple. And if you ask alumni, the folks that I fund are complete strangers that I have not met before. So beware of folks out in the world that claim they can help you get into yc. They claim they're connected with some other investors and they want something. They want equity, they want money. They're basically scammers. And so you should be aware that there's lots of folks out there in startup ecosystems that kind of victimize aspiring founders. Giving these kinds of people equity or whatever in your company does not help you get into yc. I'm sorry. Let's talk about the interview. Let me give you some interview tips and preparation. How do YC interviews work? If you're selected for interviews after applying, there's just a 10 minute Zoom call with us. We expect all the founders on your side to be there. There's usually two to four folks from YC on the call on our side. And you should assume during the interview that we have the application that you applied with open on our screen and we're looking at your application while we're asking you questions or taking notes. All right. This is how our workflow works on our side. Now, the first thing to understand is that interviewers are trained to ask basic questions. Help us understand your startup. These are not trick questions. These are basic simple questions. And these questions are highly context dependent. Some folks over prepare for interviews in a way that is not relevant to them and they're surprised by the questions we ask. You shouldn't be surprised. So for example, if you are pre launching, we often ask questions that are relevant to a prelaunch company. When are you gonna launch things like that. If you are in a regulated space, say fintech or insurance or things like that, we're gonna ask you questions related to your regulatory strategy. If you're in a space where there's many competitors, we're gonna ask you about your differentiation. These are all very basic questions. And so I'd encourage you to walk into the interview with an open mind and expect to begin the interview and answering these basic questions. And hopefully this will turn into a quick conversation about different topics once we understand the basics for our initial questions. Probably the biggest mistake I see in folks preparing for their YC interview is to treat it like an adversarial process. They treat it like, I don't know, applying to college or I don't know how to explain it, but they, you know, we're like the other team, and their job is to, like, work against us. And there's a lot of YC interview advice out there that I think is pretty bad because it treats this as an adversarial process. And like, let me make something super clear to you. The people on our side of the zoom call when you interview are likely the people that are going to be working with your company. If you're accepted, if you act weird to them or mean to them or adversarial to them, that is completely going to backfire on you because these are the folks you're going to be working with. And the fact is, interviewers ask themselves this question, do I believe I can have a productive working relationship with these founders? Okay, so to give you some examples, founders that recite memorized speeches where they have some memorized paragraph, they just shout at us, oh, man, do we not like that. Founders that don't listen to the question we're asked, and they did all this preparation so they think they know what we're going to ask, and they recite back some thing. Man, do we not like that. And then finally, founders that seem to be stretching the truth, right? Like, if we ask very simple questions and we get the sense that you're trying to fool us or lie to us, that's going to get you low scores, right? Because we're the people you're going to be working with. And if you don't seem trustworthy, that factors in. Okay, so when you're preparing for this, remember this stuff in terms of preparing for the interview, most of the folks that get into YC read the instructions, provide a lot of instructions. We also have official videos. Like, this particular video is an official video put up by yc. Some folks do extra interview practice with other folks, which can be helpful if it helps you build confidence so that in the moment you're not super nervous. But I just want to know. It can backfire if you train yourself, if you do too much preparation and you just give us nonsense robotic answers. So if you've done so much interview preparation that every time we ask a question, you immediately spout off some memorized answer that will frustrate us. And again, watch out for being coached by people to be intentionally confusing or misleading about what your company does, what the market is, what your revenue is. We've heard a lot of horror stories out there of someone being coached in an interview preparation to basically try to fool us, and that's not helpful. Be thoughtful about what you say and don't take anyone's advice too seriously, especially if it's not advice that we're putting out ourselves. Okay, so let's talk about a successful interview, someone that gets into yc. A good interview is one where all the basic questions that we ask are answered well. In a good interview, the founders can demonstrate a mastery of their own business. They understand their own numbers, they understand the risks. They have a crisp idea on what to work on next. They have a really fleshed out view of the whole business. In our opinion, the founders are credible, they're honest, they're self aware about what the real challenges are. Right? Like they're not in denial about this, but they still are confident when they are speaking about their business. And then finally, we successful interviewees know how to be themselves. And I know this is like annoying when people are, oh, be yourself. What does that mean? Let me explain what mean by be yourself. It means we want you to show up in an authentic way and not act like you're on a Shark Tank episode or a pitch competition. There's few things more awkward for us on the other side of the table when we, you know, we get on a call and we want to talk to you and you're like, hello people, we are here to tell you about our. Oh man, that really is rough on us, the interviewers. And so try to just be natural and try to have a good conversation. And remember, we're people that want to see you succeed. We're people that are looking for folks we're excited to work with. Try to show who your real self is for us to get excited about working with. If someone interviews at YC and they are not selected, we send you an email and have some quick feedback. We do our best to make it actionable and focused on the most important factors in our decision. Internalizing this feedback and demonstrating that you've addressed it in a future application is heavily weighted in your favor. You see what I'm saying? For folks that apply and don't get in and then they address the feedback from the interviewers the next time they apply. Wow, does that help? We really keep track of this stuff. I promise we do. And for folks that really internalize it and address the feedback, that helps. In closing, applying to Y Combinator is simple. It's well documented. It's a pretty good bet in that applying to YC is a tiny time commitment with uncapped upside that could change everything for you and your startup. So it's high roi. And then I just want to encourage everyone out there to nurture this mentality of creating luck, which means putting yourself out there over and over and over again. Bring this to all aspects of your startups, because it's a great lesson. That's it. Thanks so much, everybody.