When people learn that we were part of a recent YC batch I usually get one of two reactions: "Cool… what is YC?" or "Was YC worth it?".
Y Combinator (often just “YC”) is the top startup accelerator in the Bay Area, and arguably the world. It runs two “batches” each year – one in the Summer and one in the Winter. These batches last 3 months and consist of a kickoff retreat, meetups, talks from alumni, partner office hours, and regular group check-ins. (more about what happens here)
They also provide funding. The YC standard deal usually equates to $500k for around 10% of the company. This is why people ask the second question.
So… was YC worth it? For us, absolutely!
I understand why people ask. 10% is a meaningful chunk of a company. While $500k sounds generous, many startups with traction could easily raise that money on much better terms. For companies in this position, there’s a difficult calculation to decide whether or not the benefits that come with YC are worth the less-favorable investment terms.
We, however, were not in this position. Eric and I still had full-time jobs when we were accepted. While we had been meeting regularly for a few months to discuss different ideas, we had absolutely zero traction, no working product, and very little validation. When we completed the application process, we thought of it more as a mental exercise than an actual chance at getting in. Luckily we did get in. This was much more due to our experience (technical background, worked at startups, friends/coworkers for 2+ years) than what we were working on (we pivoted anyway!).
So what did we get out of the experience?
Ability to go full-time
Starting a company takes a lot of time and energy. Doing it while having an existing job usually isn’t possible for any significant amount of time. So you’re kind of left choosing between two bad options: not making progress as quickly (working nights and weekends) OR not making any money while you figure out what you’re doing and attempt to fundraise. With YC, we were able to avoid this decision. When we applied and interviewed with YC, we still had our full-time jobs. Once we knew we’d have $500k to kickstart the company, the leap to founding was much less daunting.
Overcoming imposter syndrome
Even with a stereotypical founder background, I absolutely struggle with imposter syndrome. Am I really smart enough to be starting a company? Do I have the technical skills to hold my own with “10x engineers”? How am I going to figure out how to actually sell this thing? These are doubts I bet most founders experience when starting their journey.
YC is full of extremely bright founders, many of whom already have impressive achievements. That being said, they’re all trying to figure out the same things. Commiserating with batchmates on a weekly basis normalizes the challenges that you’re facing. Pivots no longer seem like a massive failure and instead feel like part of the process. Listening to raw, unfiltered stories directly from well-known alumni makes you realize that they faced similar challenges throughout their journey.
Answering boring questions
A critical part to founding and running a company is the business operations. This includes incorporating, tax filing, banking, working with lawyers, hiring contractors, configuring HR systems, and much, much more. With each one of these categories, there are likely dozens of decisions that will need to be made. Some of those are important decisions, others are easily updated in the future and don’t matter that much.
If you’re going at it alone, you’ll need to figure out which things matter and which don’t. And for the things that matter, you’ll need to figure out what the tradeoffs are between the available options. Most of these decisions are not exciting. They’re not fun to research. It probably ends up in most people Googling for hours and finding conflicting advice. With YC, all of these questions have come up before. After seeing thousands of companies, the YC partners typically know the tradeoffs and have clear recommendations. For the questions that aren’t already documented, you get access to the YC legal team for assistance.
Attaching the YC brand to your name, both at a company and personal level, provides an immediate level of legitimacy to what you’re working on. Similar to how students from top universities get immediate recognition based on the strength of their program, YC founders also benefit greatly from their association with the accelerator.
It’s relatively easy to say you’re a “founder”. YC adds legitimacy by confirming that they interviewed you and believe your company is in the top percent of startups that applied. Additionally they have committed to providing $500k, a supportive community, and a wealth of other resources. For anyone looking to measure a company’s likelihood of success (investors, prospective employees, customers, concerned parents), having this additional support makes the company seem significantly more attractive.
The YC community is often referenced as one of the program’s biggest selling points, and this is for good reason. During the batch, we forged strong friendships with many of our batchmates. We continue to meet on a regular basis to share updates, ideas, and provide support to each other. Having other people that can listen and empathize with the challenges you're experiencing goes a long way. While my family and friends have been extremely supportive, they can’t identify with many of the ups and downs of being a founder.
Not only are you kicking off the startup journey along with hundreds of other founders in your batch, you also have the support and contact information for thousands of alumni. This extremely valuable network provides an opportunity to connect with potential customers, investors, advisors, and future employees. Generally, YC founders are quick to give their time or respond to an email from another founder. This “pay it forward” mentality is part of the magic that makes the YC community so special.
So, for us YC was a no-brainer. We were able to take the leap to founding our company, met brilliant batchmates and alumni, and we’ve already benefited greatly from the added legitimacy of being a “YC Company.” Beyond all of this, the founder experience has been more fun and less daunting by having the support of a world class community behind us.