To be honest, this idea is really going betting against the current sales model (which is dangerous). Upcall team -- pay attention to this: almost every sales leader I know (in SaaS) wants their SDRs/BDRs to be phoning/emailing. It's absolutely crucial to becoming a great seller. Outsourcing this stuff is a horrendous idea bcs it robs sales reps of cold selling (which is immensely important to their growth).
I could go on and on about this, you've chose a rough path.
Disclosure: I've dealt with almost 250+ SaaS sales leaders in the past 24 months.
Upcall is actually supplementing existing sales team by qualifying leads and setting up appointment (sales enablement). Hiring and training a SDR/BDR takes a lot of time and money and that's why Upcall makes it easier for smaller companies to scale. With the API, companies can easily qualify interest before using internal team to close deals.
Upcall qualifies leads and generate interest. An internal sales team spends weeks to call 1000 leads and qualify them, and that's our sweat spot.
We are a stop-gap solution for large team, but work with over 350 customers (including many SaaS companies) who simply don't have time to qualify their leads that they purchase.
I've noticed a lot of effort over the past year to get more startups interested in YC (deal flow). I'll say what I hear a lot of startup founders saying now -- YC is just not the same anymore. It's lost its appeal and exclusiveness factor. People are just turned off from it.
I hope some of the YC team reads this comment and takes heed.
This is probably a good thing given that the original value proposition (accelerating web startups) makes zero sense today.
Twelve years ago there were an enormous number of people connected to the web but not much good content. The network was primed for hyper virality, so the only viable strategies were to raise huge amounts of money on a deck or an MVP, or else take on five cofounders (and later fire three of them). Any other strategy and you'd get completely destroyed.
These days this is no longer the case. The web is already saturated with content, so there is zero risk of having a competitor's site go super viral overnight. And the fact that consumer expectations are much higher and you need to design for 3+ screen sizes means it takes much longer to reach product market fit.
Being bootstrapped is no longer a huge disadvantage. Neither is not being a genius, the tools are all easy now. There are still going to be new startups that reach the size of Facebook, but they're going to get there by grinding, not overnight by using some party trick.
The new YC makes a lot more sense in this new landscape. Most other investors are still looking for startups that fit the pattern of Facebook and Twitter, and these are the ones who are going to lose all their money.
This is a complete Non sequitur. Yes, all of what you said is correct about a different landscape, but none of that concludes to why YC has to be less prestigious, less exclusive, take many more startups, and make the entire process as impersonable as possible so that they can make the most money from it like a big corporation. YC is just not the same anymore, not in the way you are talking about, in the bad way.
> none of that concludes to why YC has to be less prestigious
In 2005 YC's thesis was that the smartest technical people would make the best founders. That's why when you applied for startup school, they asked you what your favorite technologies were. And while there were certainly Java people there, the expected answers were clearly Python, Lisp, or Haskell.
The reason it may feel less exclusive now is because they're now actively encouraging people to apply rather than (arguably) actively discouraging people from applying. But that's because A) they know the original thesis was wrong B) you can basically now acquire the technical skills needed to build a startup by spending a few hours watching YouTube video about Django, so for most startups there isn't really any advantage conferred by being some sort of technical genius.
While it's true there are more startups now, it's also much harder to get in. Back in 2005 - 2007, probably a third of the startups went out of business without ever even launching. And it was expected that another third would never get any users. The stuff that would get you funded in 2006 not only wouldn't get you an interview today, it wouldn't even get you the email saying you were close to getting an interview.
Great. I agree with you on what you are saying, just like your last post. I agree the bar has changed dramatically for getting into startups and building software, hosting software, and building infrastructure. AGAIN....that doesn't conclude why YC is less personable, getting larger at the pace that it is today to the point that it's not as tight knit as it should be etc. That was really the only thing being mainly criticized in this thread, to which you brought up a true fact of the state of startup ecosystem, but not a fact which properly concludes and addresses the criticism. Anyway, good post so have an upvote at least.
Agreed. I've worked for a couple YC companies, and founders have complained that its really difficult to post jobs on HN, that pitch day is a wash because of so many companies pitching, and access to mentors has evaporated/minimized.
I believe the Accelerator model can scale, 500SU is a good example, but I'm not sure the value that YC offers can scale.
BUT - if you're going to take $100K Angel from someone - who would you prefer it to be?
YC is still the top. You get 'some brand', 'access to a lot of investors' - and some residual benefits from network access.
That's more than you get with most entities.
So if you're not 'hooked up' into investor networks, or are from an area that does not have good 'startup zen' - then YC is still probably the top choice.
And FYI I have no specific love for YC, and not relationship to them. And yes - though I think they are pretty good, I also think they aren possibly a little 'over-hyped', but that's not their fault. (Please don't ban me :) )
Agree, as someone that's applied to YC multiple times in the past, I've decided that I will not be applying because I increasingly feel that there's a disconnect between YC's orginal purpose and what it's become.
Do you mind elaborating on what that change of purpose? As a two-time alum and now a partner my goal is to preserve YC's goal of supporting early stage founders. How do you think our goal has changed and what thoughts do you have on reversing that change?
Thanks for asking, it's a few things, most of which are most likely a bias on my part.
(1) YC has a bias against solo founders; research shows this is not a signal of future success and to me it feels like I'm giving up 17-53.5% of a venture just to get in; YC gets 7% of any venture it funds and YC requires a cofounder have at least 10% equity, but suggest going 50/50.
(2) I personally don't agree with YC doing R&D and feel like this is YC admitting the yield it's getting from backing startups is under performing it doing its own thing, which to me is not a good signal.
(3) Majority of YC's billion dollar startups have all gone through a single VC; why not just deal with them directly?
(4) YC should focus on enabling mentors to expand it's deal flow.
(5) YC should have campus within 60-miles of the Bay Area with free housing, food, super-speed internet, etc. so startups don't have to spend the funds on commodities like this and are able to focus on growing. Free healthcare for a year for founders would be impressive too.
(7) I'm opinionated, largely do startups to learn, not be the next billionaire; personally, done more startups than 99% of founders, do it full-time, and have spent 15-mins plus mentoring 1000s of founders.
(8) YC should set the precedent for making the Bay Area not be the center of the universe for startups.
Surely with those numbers, YC doesn't give you anything and never would? You have all the experience. You've mentored so many founders that surely at least a couple can set up access to VCs. Why even bother applying in the first place?
While if someone asked, I would likely disclose my startup experience, generally speaking I leave it off standard requests for information like YC's app; more interested in being judge on the matter at hand than my past.
My guess is that my pitches might be too off the wall or they have a bias against anonymous users. Or more likely, my pitch is not a good fit for YC. Who knows, as anyone that applies knows, they do not say why they decline to interview a given founder or fund them, and no one really should expect a reason for why either, that simply is unreasonable.
As for why I would apply, I am positive that I would get more value out of it than what they are taking, that I would provide a return on their investment, I love doing startups, and enjoy being around talented founders. Most of all, given I would be taking on funding, it would force me to change the way I normally fund & run startups; that being I normal do not have the objective of selling the startup or being a multi billion dollar company.
As for VCs, while I do not have anything against them and believe they provide value based on a well defined situation, I prefer to focus on doing startups, not building businesses; meaning all of my startups make money while I am working on them, when I am done, I move on to the next startup, since I value my time more than the money I would make finding a buyer, dealing with all the due diligence requests, and supporting the handoff too.
1) the batch sizes might have something to do with it i.e. larger batch sizes don't foster the same community feel as smaller ones. I think maybe ~20 might be the sweet spot.
2) Current leaders don't have as much of a "visionary/thoughtleader/mentor" feel that pg used to. Don't get me wrong, they seem to be super nice and relatable, but don't give off the same vibe of wisdom/hard core technical skills.
I think you nailed it when you said exclusiveness: with so many companies per batch, there's less incentive for a startup to be one of the hundreds of companies in the YC portfolio now over any other VC firm. Yes, YC carries some brand weight still, but with less of the benefits it looked to have had before.
I think the underlying issue is a misalignment of interest between YC and startup founders but not exclusive to YC but to all Venture Capitalists: you are nothing but one of YC's many hedged call options where they have a good chance of recouping the investment where as you really cannot time travel or demand YC pay you for the time wasted.
To me YC was a largely branding move. It's fashionable to be able to say "yeah we are YC backed".
Too many people in the industry are so caught up with being a "Startup" that they forget that they are just like any other "Businesses" but with far less control over your own destiny and even far less likely to win much money than working at a large company where you have high probability of becoming a millionaire in the same amount of time you spent on your startup.
People are biased and self select their dumb luck as insight that gives them an edge which obviously does not translate or is repeatable-take a look at the graveyard, techcrunch won't get any views reporting anything but hyped up PR pieces.
I'm not sure I understand your point here. I'm currently working very hard with Adora (my co-group partner) to support the companies in our YC group. Advice, office hours, motivation, community build, and general availability. Are you saying that this work is simply a branding exercise? If so now that the application process if over - why am I not on vacation?
This reply is disingenuous. It is clearly written what he meant:
>To me YC was a largely branding move. It's fashionable to be able to say "yeah we are YC backed".
Reply to the actual comment instead of setting up a strawman. And, you may want to touch on the other point the parent made, namely incentives being misaligned between YC and startups. Indignation isn't doing the brand any good.
Unfortunately (I say unfortunately cause I wish this wasn't true), you are not correct. It is harder to get into YC now than it ever was before. While you are busy looking at the numerator (number of companies in the batch) - you are ignoring the denominator (number of applicants).
I think the concern may be that people who care about the prestige (VCs/employees/acquirers, mostly) also will ignore the denominator. Saying "we're a YC company" holds more cachet when there are 10 companies per batch and you can name all of them than when there are 120 companies per batch. There seems to be a mental switch that people flick when the set of options goes from "can hold all of them in my short-term memory and understand what's special about each of them" to "oh, this is just an instance of X", and it's the same switch as between monopoly vs. commodity businesses or between founders vs. employees. People are arguably wrong for having that switch, but they have it nonetheless.
While the percentage of companies accepted may be shrinking, aren't the size of the batches increasing?
Regardless, with every batch that graduates YC, you are effectively splitting the amount of time Partners and Mentors can dedicate to each individual company by an even greater amount. And while YC has added new Partners and Mentors, I'm not convinced that your supply of expertise is growing fast enough to meet the demand that you are creating with each new batch. Then again, maybe you are. I'm sure my perspective isn't the greatest.
I don't want to seem overly-critical, I'm still a fan of YC and I continue to recommend it, but I'm not sure the class of '17 will get the same value that the class of '07 did.
It seems like there is a much larger group of mentors too, so the mentor time per team is probably constant. Also, there's a network effect of YC companies helping others. It's kind of like McKinsey getting added benefit from being the largest strategy consulting firm. More partners to reach out to.
(I have no horse in this race - no affiliation with YC or YC funded companies)
Well I was in the class of '07 and I can tell you that this is simply not true. Over the past 10 years YC has added many more mentors, there are many more alumni to help you and to seel to, their is significantly more experience behind the advice, and the brand is significantly more powerful.
So you feel that the ROI is greater for companies going through YC now than it was 10 years ago? I suppose it's true that the network of founders has grown significantly, but it's hard for me to imagine that a founder in the class of '17 becoming the head of the YC Accelerator.
It has nothing to do with the current class. You're missing my point. You could have the next Elon Musk or Marc Andreessen in the current class, and given that you guys are YC, you probably do.
My point is this: for every person added to a network of individuals, the opportunity to create strong bonds with each person in the network is reduced, even while the value and strength of the network itself is increased.
A larger network means more opinions, more expertise and more connections (every person added to the network brings their own network of connections). Thus making the network more valuable to each individual member. However, once networks reach a certain size, that value is often extrapolated indirectly. Someone asks someone else to ask a third person a favor, because the second person knows the third better than the first. Thus, the likelihood or ability for each member to form strong relationships with everyone, or the more VIP members of the network, decreases.
This not a knock on YC or the current cohort. I'm a big fan of YC and I'm fully confident the W17 class is as quality as every other class that's gone through, but network dynamics shift as quantity increases.
With all due respect, even though that might be true, that still doesn't necessarily conclude why YC has to continue to grow and take a larger and larger number at the pace that it is. It's clear what you're saying is true. Startups are trendy now and part of popular culture, therefore demand for doing them and number of applicants, as well as quality, go up. That still doesn't mean YC has to expand at such a massive and incredible pace. However, I do think you guys know more about it obviously than us from the outside. Keep up the good work. :) Just giving my .02
I've applied to YC several times (more than 4, over the course of 7+ years). I never got accepted. In fact, I've never encountered a human during the entire application process. Everything was very automated: submit an application, then rejection with zero feedback.
In my opinion, early startups are very fragile in nature. The team, product, and goals have to be aligned in order to make progress and move forward. Having rejected from YC without any feedback is equivalent to "not worth our time"
If I could do all my startups again, I'd definitely avoid applying to YC. In most cases, rejection is so hurtful enough, that even strong teams fall apart. Sometimes, even with proper validation from the market, having that rejection is a big burden on team morale.
I think instead of focusing on RFS, YC should re-evaluate their business model. Application process shouldn't be based on acceptance/rejection, but rather a process. Startups should be encouraged to apply, and continue to update their progress with YC.
YC can monitor these startups, and offer guidance if deemed necessary. It creates a record of their progress, and how they are doing over time. Evaluations should not focus on a given point in time, but rather as a lifecycle of the team, product and goals.
If I could show you what I had to go through, to get to that stage, and is seeking your help, would you lend me a hand?
I think this comment "In most cases, rejection is so hurtful enough, that even strong teams fall apart." may hint at the success of the vetting process. If your team can't withstand not getting into YC, I'd suggest it may not be able to stand the rigors of the start-up process.
I'm in a similar boat as you having applied a few times, and never been accepted, but that never remotely affected progress on the projects.
On the one hand we're to believe that applying and being rejected resulting in a team falling apart is proof the system works, on the other, applying and being rejected caused you to keep going.
Doesn't that second case prove that the evaluation doesn't work?
Personally I feel that if you're going to do a startup not getting accepted into an accelerator is the same as not winning the lottery so assume you won't get in and try anyway if you can do so without spending a lot of time (which is a finite resource).
On the other hand I can see how people from various countries with an environment less geared towards start-ups would benefit from being in YC to the point that if they can't get in the whole thing is lost for them.
I wouldn't take that as proof that the vetting process works.
That's not what I'm saying "not sure how you got there", what I'm saying is that YC wants to fund strong teams that are going to see things through. If a small bump in the road like not getting into YC is such a proof to the team that the idea didn't work, that is 'A' proof that the team was not strong enough. It obviously isn't everything.
Not getting in and continuing is not proof that you are a strong team, all it says is that you're focused on the business/project not everything is weighted on how one group views what you're doing.
Does that make more sense?
I strongly disagree that not getting accepted to an accelerator is the same as not winning. I can't tell you how strongly I feel that way, and I've been through an accelerator before (not YC).
It's like saying not getting investment is the same as not winning, and that is also not true. What does it even mean. Not getting into an accelerator or getting funding isn't boolean. It's a 'yet'. You met with an investor and they didn't invest. You don't stop and give up.
My very first customer call I had an amazing target tell me they "didn't want to use my product and wanted to ensure that nobody did!". That sounds like failure to me.
The next 10 customers I spoke to couldn't wait to use the product. We've had 30k+ users and millions of visits. This was only one persons opinion, and you need to look at getting accepted by accelerators and investors in the same light.
You have to find your own confidence. Listen to their feedback if you can get it, but I'd hope you take their acceptence as a weak signal.
Yes. I agree with you, but I think team dynamics are more complicated than that.
It's very difficult to find decent and/or experienced co-founder(s). Given you are lucky enough to find them, and expect them to work for free. Given the rigors of the start-up process, when should they expect to give up and move to something new?
I've worked on a project for 3 years without pay. I filed bankruptcy. My partner had a divorce. We had traction and revenue, but not enough to support ourselves. We ended up closing down.
Getting into YC is tough. It also gives you an indication that something is going right. YC also gives you enough padding to make sure you are not distracted from harsh realities of life.
That all sounds aweful tpae, and I'm sorry to hear you're having such a rough go of it.
Everybody always says start-ups are hard, and there is no guarantee of success. In fact, most people say the there is almost a guarantee of failure. What keeps us going is the unfortunate promise of something better.
> Application process shouldn't be based on acceptance/rejection, but rather a process. Startups should be encouraged to apply, and continue to update their progress with YC.
I've been rejected 4 times too. It doesn't feel good, but you need to be able to take these things in your stride and keep going. Startups are a grind.
> In fact, I've never encountered a human during the entire application process. Everything was very automated: submit an application, then rejection with zero feedback.
I can guarantee you that multiple people look at every single application. This is actually part of the reason it's hard to give feedback to everyone who applies (let alone the sheer volume) - the reasons for rejection can vary between reviewers. After all the scores are tallied, there's no single individual who can speak to why a given application didn't make the cut.
Sounds as if you are proposing that they put a lot more time and work into nurturing the top and middle of their funnel. Do you believe that this incremental (but not small) investment of their limited resources would yield them better outcomes for themselves?
I have to agree. I applied to YC a few years back, failed, and subsequently shut down the business. If I ever start another company, I doubt highly that I would apply to YC. I'm not even really sure why. I just don't equate it with prestige anymore.
It's probably due to the higher number of YC backed companies that it's losing that exclusive nature coupled with the market correction in the startup labor market-people are becoming increasingly less obsessed with playing lottery with their time and more likely to bootstrap to control their own destiny or find a stable job-we've seen enough of what "acquisition" really means.
1) Reduce your burn rate.
2) Save up enough money to live off of for a year.
3) Bootstrap your startup off your savings.
I am going to make a guess that many of the strongest startups will be produced from this procedure.
Getting funding, from YC or elsewhere, has a way of changing your startup in a way that makes it much less likely to succeed. They have said so in fact -- they want you to fail quickly.
That might work for some people but in my case having enough cash to burn for a year of runway was a significant contributing factor to why my startup failed - it took focus away from getting traction. We spent too long making our product "perfect" because we didn't need to be out there selling right away. Having no money makes you pick up the phone, which puts you in front of customers getting feedback. By the time we started hustling we'd built the wrong thing (well, the right thing to fix the pain we wanted to solve, but the wrong thing for our market), and it was too late to rescue the company.
My advice, if you can do it, would be to start now rather than saving up to give yourself a year of cash in the bank. It's harder but that's not always a bad thing.
Another aspect of it that I don't really want to go into right now... when an outsider looks at your company, they don't really understand what's going on. But they do have a bunch of rules of thumb that they like. They may or may not apply to your company. But in their minds, you're a bad company if you do not adhere to them.
VCs admit to thinking this way. They call it "pattern matching."
Yeah. Agreed. In case you missed it, I retracted my statement in a follow-up reply.
Some modification to my earlier statement is accurate. :-) Unfortunately, I don't have time right now to iterate on it. If you're interested, you'll have to discover it yourself.
Actually, it is not true that Instagram had not received funding at the time the story took place. I am referring more to typical pressures, some of which founders place on themselves.
"That doesn't make you more likely to fail though"
Actually, it does. They want you to fail quickly so they can (in)validate your initial business plan. But business plans for start ups that don't fail quickly often evolve through one or more pivots.
It dramatically changes how you run a business when people who invest in your startup treat it like an ICO (initial coin offering)-"if my 1,000,000 shares today is worth a cent imagine when I find another dumbass to buy it for a few dollars in a few quarters and I sell half to cover my initial investment and let it run I'll be rich".
You aren't in the business of solving problems and making money anymore but how to inflate share price as quickly as possible by focusing on KPI that will get other suckers wet.
> I am going to make a guess that many of the strongest startups will be produced from this procedure.
What's your definition of "strongest"? In terms of success measured by exit size, it's empirically untrue. Perhaps if you are measuring by failure rate, but even then, I doubt it.
Re: "empirically untrue," my guess is about the future, for which there is no data, so I don't think it can be "empirically untrue." If you figured out a way to collect data from the future, I am very interested!
FWIW, it can't be empirically true either. :-)
What I am saying is that starting off one's journey by taking money or going through an accelerator enters you into an efficient machine for building a startup in a specific way.
From what I have observed, entering this path often traps founders into thinking this is the one true way to build a startup. In reality, the paths to product-market fit are unknown. You often discover them through serendipity. Being rigid can cause you to miss them.
I am not saying a startup should never take money. Once a startup has discovered their magic, i.e. achieved product-market fit, then taking money and using it to scale is the right way to go.
To actually answer your question, I do not think the next Google will have gone through an accelerator. Maybe they will take funding at some point in their lifetime, but their success will not be owed to entering a rigid assembly line for startups.
Techstars is one of the best accelerators and they still have about 10 companies per batch. They have expanded beyond the original location in Boulder which is how they have chosen to scale rather than having 100s of companies in one location.
AngelPad [1] is probably the only "top tier" highly exclusive accelerator program left. All of the rest have (entirely reasonably) scaled as businesses. At ~12 companies per batch you won't get a more personalized experience. Thomas Korte and Carine Magescas care deeply about their founders and the entire experience is very, very personal - I can't recommend them enough.
>I'll say what I hear a lot of startup founders saying now -- YC is just not the same anymore. It's lost its appeal and exclusiveness factor. People are just turned off from it.
Surely they're also saying why as well? Not much help without the why, otherwise just hearsay.
not sure if this was a successful exit. LinkedIn shows the employee count being cut in half over the last little while. Also 2 of the other cofounders left?
They have slightly different usecases. I used them both extensively and one is intended for adding a sidebar style chrome extension ala Streak, while Gmail.js is a simpler event based system.
I personally found both to be lacking in different areas, too bad they weren't merged together to cover a broader base.
Founder of Streak here (we make the InboxSDK). Would love to know which use cases we don't cover but do agree, both libraries were targeted at different layers.
Gmail.js lets you avoid doibng the DOM hacking yourself but is still fairly low level. The InboxSDK was targeted for people who are building apps inside of Gmail. We assume multiple extensions to be running and make sure they play nice, we handle auto updates to handle changes in Gmail and we try to guide developers to using standard Gmail UI styles. We have inbox support coming soon which will let you write your app once and have it work in Gmail and Inbox.
I had more clarity in my thoughts regarding this but it's been a year since I worked on the chrome extension and the startup folded. Thanks for your contributions to OSS.
absolutely amazing talk. This needs to be watched several times. My favorite takeaway: Get your users to their 'magical' moment with your product as fast as possible.
Not really. It happens to be that most 'image viewing' tech like this is bundled with the hardware hospitals buy. Example: If you buy a GE/Fuji/etc PACS your usually stuck with their image viewer.
MedXT is not a viewer. It's an exchange product with a viewer. Large COs like GE (Siemens), Fuji, McKesson, are not even close to having the exchange capabilities like MedXT. It's a super strategic move for Box to buy them, Radiology is slowly moving into collaboration, and Box is now the largest vendor of collaborative Radiology.
collaboration in radiology requires at least a viewer, up to this point they partnered with companies like DICOM Grid to provide that functionality. The other thing you'd need is to reach into the infrastructure, behind the firewall and get the images off the legacy PACS (Picture Archive and Communication Systems). This is done via the DICOM protocol. Box didn't have this part, instead, they asked doctors to UPLOAD images to Box to view them. In the above press release, Levie specifically talks up legacy integration. This is what he's talking about. Being able to reach in and get the images, most of the time automatically, view them in the web, add to that already existing collab features Box has been building (documents, notes, etc), and you've got what could become the next-gen radiology platform - at least a more effective medical image exchange.
Disclosure, I was chief architect at DICOM Grid and built similar functionality there.
Admirable case study. Seriously, this takes a lot of courage and discipline to pull off. Kudos to the management team!
However I'm really beginning to doubt the legitimacy of the claim that Email is the root of the productivity drain. People complain to me about SMS and phone calls the same way they do about email. I highly doubt the solution is to shun the medium/tech. The best way is to simply tweak the people who use them :)
I could go on and on about this, you've chose a rough path.
Disclosure: I've dealt with almost 250+ SaaS sales leaders in the past 24 months.