Navigating the Y-Combinator Application: Insights from a Newbie
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Chapter 1: Understanding Y-Combinator
Y-Combinator (YC) is renowned as the oldest and possibly the most influential startup accelerator globally. For those unfamiliar with the startup ecosystem, accelerators typically take an equity stake in budding companies in return for capital, mentorship, resources, and networking opportunities to enhance their likelihood of success. YC, in particular, acquires 7% equity for an investment of $125K, along with an optional additional commitment of $375K on MFN SAFE terms. Many entrepreneurs agree that the value of YC lies not in the financial investment but in the expansive network, tools, and resources that facilitate the creation of products that meet market demands.
To date, YC has invested in over 3,000 startups, amassing a collective valuation exceeding $400 billion. Their portfolio features industry leaders like Coinbase in cryptocurrency, Airbnb in hospitality, Brex in payments, Cruise in AI, and Truepill in healthcare. Each year, more than 18,000 companies apply, but less than 2% gain entry into the program. Last summer, I participated in the application process for the Summer 2021 batch, which encompasses two main elements: the written application and the interview. However, my journey included several challenges.
Despite my acceptance—I'll elaborate on how I narrowly made it—there were numerous aspects I could have improved upon as a first-time applicant. Here are some reflections and advice for those contemplating applying.
Section 1.1: The Application Process
Get the Basics Right
YC provides precise guidelines on how to fill out the application. It’s crucial to adhere to these instructions, utilize proper grammar, and avoid any creative deviations. For instance, YC once received a 20-minute spiritual journey video instead of the concise 1-minute video they requested. Such missteps can hurt your chances. Much of this guidance is echoed by Dalton Caldwell, the head of admissions, in his video, "How to Apply and Succeed at Y Combinator."
Reflection: I would rate myself a 5/10 for two reasons. Firstly, I overlooked essential instructions, such as including all co-founders in the video portion of the application. I was surprised we even secured an interview. Secondly, I began my application just three days before the deadline, which created unnecessary stress that could have been avoided.
Simplicity and Clarity
With over 18,000 applications per batch, YC partners are human, with limited time and attention. It’s essential that your application is straightforward and comprehensible. Dalton emphasizes the importance of "clarity." From my experience screening CVs and applications elsewhere, I can affirm that the quickest way to be filtered out is through lack of clarity.
Applications should be lucid and not resemble a mystery novel. Think of it as a funnel: understanding the application → evaluating the application → determining results. Avoid being filtered out at the first stage by using jargon, buzzwords, and ambiguity.
Reflection: I would rate myself an 8/10 here. My language and ideas were presented clearly enough for someone intelligent but unfamiliar with the specific industry to grasp.
Crafting a Convincing Narrative
Every part of your application should weave together to create a compelling narrative. You control the story. To be persuasive, your claims must be substantiated with facts. For instance, if you’re developing a gene-sequencing product that’s significantly more affordable than existing options, your story should include claims such as having expertise in gene sequencing and a strong network for distribution, supported by factual evidence like relevant degrees and previous experiences.
Claims are essential for storytelling; facts lend credibility to your narrative. Both elements are crucial for a persuasive application.
Reflection: I would give myself a 7/10 here. While many of my claims were factually supported, being pre-product limited the evidence I could provide regarding execution.
Standing Out Among Thousands
In any evaluation process, once you’ve met the basic criteria, evaluators often look for a distinctive trait. What unique aspect makes you memorable? Focus on one standout feature rather than several less impactful ones.
Reflection: Without feedback from all my interviewers, I can't assign myself a meaningful score. However, I emphasized my experience in fintech as an investment professional, which may have stood out.
The Importance of Applying
While there may be valid reasons to avoid applying to YC, such as feeling too early or lacking a specific background, I strongly encourage you to apply anyway. I was pre-product and pre-revenue when I applied, assuming my chances were slim. Ultimately, applying provides an opportunity to receive invaluable feedback from seasoned professionals, which can enhance your future prospects.
Reflection: I rate myself a 10/10 for simply applying, which was a significant step in itself.
Chapter 2: The Interview Experience
As a first-time applicant facing time constraints, I didn’t expect to receive an interview invitation. My excitement was evident when I saw the invite in my inbox. I knew I had to make the most of this opportunity, and I hope to share insights from my preparation and interview experience.
Preparing for the Interview
Practice delivering concise answers. The interview lasts only 10 minutes, making it essential to communicate effectively. I used practice questions from iPG to help me formulate answers in under 15 seconds, which improved my skills. Although I've conducted numerous interviews at leading firms, I still found myself blanking on the first few practice questions—demonstrating the importance of preparation. In hindsight, I would have benefited from practicing with 1-2 YC alumni.
Understanding the Questions
While not every question can be predicted, they often fall into thematic categories. Understanding why specific questions are asked from an investor’s perspective can help you prepare. Investors aim to get to know you and minimize potential risks associated with their investment.
The types of questions typically include:
- Users: Investors seek to understand your insights from direct interactions with users.
- Founders/Team: They want to ensure your team has the right skills and dynamics to succeed.
- Idea/Company: They are interested in your current hypotheses and the evidence supporting them.
Post-Interview Reflections
Post-interview, I faced more uncertainty than most. After the interview, I scoured the internet for news on the outcome, encountering rumors about likely responses. Contrary to expectations, I received an email within 24 hours, which was not the accepted phone call I’d hoped for.
In April 2021, I received an initial email thanking me for my time and suggesting a follow-up call. This led to further discussions about key risks and evidence supporting our claims. I shared essential materials promptly, reinforcing the importance of honesty and transparency during the process.
Eventually, after navigating additional questions about founder-market fit, I received the long-awaited phone call welcoming me to YC. Despite the extra hurdles, I’m grateful for the experience, as it provides a unique story to share with others.
Had I faced rejection, I would have taken a day to process my disappointment, but I would also recognize the courage it took to apply and the valuable lessons learned throughout the process. Investors, including YC, acknowledge they sometimes make mistakes, and many successful startups have thrived without YC's backing.
Best of luck to all future applicants!