I want to start by saying that I loved Y Combinator (YC). It was a great experience for me personally and for my company. That said, YC is not for everyone or for every company and applying should be a careful decision. So how do you know if YC is right for you?
First, some background. YC is based in Mountain View, California and twice a year, they invest $120,000 in multiple startups. These startups then move to Silicon Valley for three months and work intensely on their companies. The experience culminates in “Demo Day,” a day full of nonstop pitching to investors.
Here’s a guide to help you decide whether or not you should apply:
First, Consider Your Goal
Know what you want to get out of YC. Do you need to learn about operations: sales, account management, quality control? Or are you struggling with user acquisition and growth? By knowing what you want to get out of the program, you’ll better understand how YC can help you achieve those goals. Your understanding of YC and your knowledge of your goals will be reflected in your application, and prepare you for success in the program.
How can you know if YC will help you meet your goal(s)? Check out past companies who have gone through the program and look for ones similar to yours. If you’re a B2B software company, find recent grads in your industry and speak with them. If you’re an offline to online marketplace, find an alum that’s been there and done that. Another person’s experience in the program may be relevant to you and will help you evaluate if YC is the right move for you and your company.
Talk To Alumni
On the subject of alumni: if you find similar companies, reach out! But don’t do it blindly. Find existing connections using LinkedIn or Facebook. You’re more likely to get honest answers if you get an intro from someone you both know. Ask them questions about their time with YC. How did it help? Or maybe it didn’t help? That’s important too.
Don’t be afraid to ask them tough questions. Ask them what they wish YC had helped with. Is there anything they wished YC hadn’t helped with? It’s important to understand what YC can’t do for you too. Make a pros and cons chart, fill up as many as you can on either side.
Do You Have Traction?
YC’s go-to saying is “make something people love.” Makes sense, right? If you have a product that reaches people, you should be able to prove it through traction.
Since YC is designed around Demo Day at the end, you need to be able to pitch your company and show growth to potential investors. It’ll be tough to get accepted if you don’t have proof of concept and good results. Traction varies by company, but you’ll know it if you have it.
Do You Have a Team?
If you get in, YC is strict about the program being for founders only. Is your company just you and your co-founder(s)? Or do you already have a team? If you aren’t based in the Bay Area, are you and your cofounders relocating? You’ll have to weigh this into the process. If you are relocating, would the entire team come with you? It’s a lot to ask of them, especially since they won’t be participating in the program directly. But if they stay home, then you’re managing a team remotely, and at the early stages of a company, this, too, has implications.
You Land an Interview…
It’s an interview, so prepare. First and foremost, know your business cold. This means you need to know your most relevant numbers (your KPIs). You should be confident in your traction and what you’ve accomplished thus far. It helps to research the partners and to know who they are.
At the end of the day, YC is an investor, so think of them as one. They will assess your company as an investment and look at the market, reach, competition, and what makes you the right team to solve this problem. Be prepared with lots of questions. And practice (alumni are great practice interviewers!)
If you know all of the answers here and feel confident — apply! If you aren’t sure, don’t get discouraged. There are probably many companies that aren’t “100% ready” that get accepted into the program. Just make sure it’s the right decision for you.
Do your research and wait until the next applications are due. Or research others that may fit your company better. There are plenty of options. Weigh them and do what’s best for you and your startup. Good luck!