FWIW - We have been rejected 3 times from YC over the last 3 years. We did not take it personally as OP said, put our heads down and got working on our startup.
After lot of hard work, setbacks and near death experiences, we are now currently growing ~10% MoM and generating millions in ARR. YC or any other investor/accelerator should never be the make or break thing for a startup - it should be your own judgement call on whether you want to continue or not based on market feedback.
That would be interesting! I'd also love to see the list of both rejected and accepted applications that failed. BVP's "anti-portfolio" is a list of massive successes they happened to pass on. It wouldn't be as fun to look at the list of actual failures they passed on, or the failures they funded, but that might be even more instructive, right?
> YC or any other investor/accelerator should never be the make or break thing for a startup - it should be your own judgement call on whether you want to continue or not based on market feedback.
Personally, early on, I made the mistake of thinking that an investor rejection somehow reflected on the viability of my ideas or my business, that they knew something I didn't.
Growing past that and realizing that investors mostly don't care about the ideas, nor do they usually even know what's viable before the market responds, was important.
It also helped me to realize that looking for money just to survive was bad for me, looking for money to accelerate before I was moving at all was bad for me, and most investors are not the right partners for me, no matter how much money they have.
*Edit: BTW, I did once apply and was rejected from YC. With hindsight, I know their call was correct. Not because YC isn't the right partner for me, but because I wasn't ready.
Spot on. An idea stage company is a theory. Validation occurs through real users. To become despondent because an investor didn't believe in your theory is not allowing yourself to really test the viability of your project. If users don't buy into your idea then you have a problem, but you have to play the experiment out.
Sequoia, on the other hand . . .
An anti-portfolio is the companies they rejected but went on to be successful.
'It's quite likely, in fact, practically certain, that groups we rejected will go on to create successful startups. If you do, we'd appreciate it if you'd send us an email making fun of us; we want to learn from our mistakes.'
Granted, this year it's been replaced with the less fun/personal:
'It's practically certain that groups we rejected will go on to create successful startups. If you do, we'd sincerely appreciate it if you'd send us an email telling us about it; we very much want to learn from our mistakes.'
Don't take your rejection letter as "You aren't good enough," take it as a challenge to get to the point where you can make fun of them honestly and with a grin.
We applied to YC last winter and got an interview, but ultimately we weren't accepted.
As a founder you're obviously incredibly enthusiastic about your idea and think it's brilliant, and YC is usually an early stop in a company's life. So, to hear a 'no' from a well-respected source before you even really get started is definitely an ego blow.
What mostly sucks about getting rejected is that YC says repeatedly that they accept teams, not products. So when we were rejected, I immediately took it as a personal affront: Clearly they didn't like me, my co-founder, or our dynamic, all of which inspired that (admittedly immature) defense mechanism of "We're great people, so you're dumb and wrong!"
Once we had gotten over it and gone through the ringer of raising funding, you start taking it significantly less personally. Some VCs don't believe in entire sectors of businesses, so it's an automatic 'no' if you're in one of them. People can and will say 'no' because they're having a bad day, or you remind them of someone they don't like, or they had a bad experience with a similar company. Not that there aren't nuggets of wisdom to be gained from the 'no's, because obviously there are, but not every failure is a lesson necessarily.
All that to say, I think it's ok to take it a little personally. Maybe you should, even. But then you have to get back on the horse and get back to it.
I've personally found the YC application extremely gratifying to write. It does help you answer those key difficult questions that you'd have otherwise glossed over because of complacency or over confidence. What I've thought of doing is to fill the YC application for the next idea that I get and keep refining it as I build upon the idea. Kinda use the application as a good idea refining template. If at any stage you feel that you are confident in all the questions, you can either apply - literally no cost or just keep building. Having solid answers to all the questions - means that your idea has some potential of turning into something big. Of course, your idea could turn out to be a better business even without having all the answers. What I've experienced is that as you write the answers, you'll feel really confident if you are doing the right thing.
Another aspect in the application that I had a conflict with my co-founder at the time was the amount of time to spend on the application. He was anal about getting every aspect of the application right. We shot the video like a 100 times. I contented that was unnecessary but eventually agreed to disagree. I feel that if you are on the right track, you shouldn't spend more than a couple of hours on the final application, regardless of the stage you are applying at.
It takes some practice to get the video right. This again depends on the co-founder dynamics. I would use the video prep as a proxy to estimate the efficacy of the co-founder dynamics. If you took really long to nail the video - I'd spend some time introspecting. All said and done, if you take a really long time just to nail a video, how would you fare in dealing with more complicated company decisions.
So IMHO there is a lot of value in writing the YC app, regardless of whether you make it or not.
I came to really appreciate it, having someone who can maintain that obsessive focus on pitch decks usually translates quite well into an obsessive focus on product. If a person is obsessive and has had a lot of past success, they're probably obsessive about the right things.
We got a rejection letter this morning. Definitely not going to quit. We hit a quarter million in our first year, cracked a tough technical problem, and are significantly growing end-user usage every week. We got one video view, so it's prompted to me to dial back the confidence and write a list of all the reasons our application was thrown out and that process has been very helpful.
Also, remember YC has open sourced a ton of its knowledge (Startup School, Stanford Course, PG essays, Sam Altman Playbook), so if you read a bit every week you have their guidance for free. And maybe you'll be better prepared for a Series A 9 months from now after getting into the next batch. Life's about good timing.
I know someone who literally spent a year finding roommates and living with them in advance in order to cultivate a better YC application.
It's competitive, and 99.9% of the rejected will end up failing.
It's hard to listen and put in the effort but it's worthwhile, having a chip on your shoulder doesn't really make you more productive often it slows you down because you're working in circles to address your emotional needs rather than really listening to the business feedback.
OK, just some ranting from someone who has been rejected by YC for over 10 years now (not really something I want to brag about) but has been fortunate enough to receive investment and grooming from other fine people in the business community.
Keep at it (I kept at it and I'm honestly loving the results) but maybe really change and listen.
It's now mostly "YC stamp of approval" that increases your brand and access to good investors on demo day.
Everything else (e.g. educational value, sense of community) gets degraded due to huge batch sizes (294 founders in S17) and most of the things YC teaches becoming public knowledge.
I have experience with small business, although not with YC. Those benefits are MASSIVE and should not be underestimated.
IMO investors ability to invest in startups have improved. If top investors are not able to find you on your own, you are not likely to get the check from them anyway. I speak it from position of not going to YC, but doing in-person pitches with half of "top 10" VCs, and some of those with partners.
The only exception may be if you are not outside of current investment trends, but you are making lots of revenue. In such case you probably shouldn't get VC money anyway.
> YC stamp of approval
That would indeed have helped in some situations. It's case by case call whether it's worth the equity. Just be sure you don't do it for vanity to show off your friends that you got into YC.
Our company now does over $100M ARR and still growing. We learned a lot along the way, to be fair, I don't think I would have accepted us either at the time. Just take it as a learning experience and get better, don't let rejection stop you. I couldn't tell you how many "NOs" we've gotten in our company's lifespan.
It's emotionally hard even with YC Family supporting you.
If you change your mindset from, "Oh we got rejected, we must be doing something wrong." to "Oh we got rejected, it just means we're now closer to getting accepted by some other incubator, VC, angle investor, etc."
The guys I worked with in several startups took rejection as a badge of honor. It just meant you were getting closer, not further away from your goal.
I still believe the idea has merit, so I keep poking at it here and there. I spent money on design work and it's incorporated, but I don't have a partner or support mechanism.
I had a BizSpark account, but I "graduated" in February, so I can't host the API for free anymore. I was considering redeveloping the API in serverless AWS, but that will take time. I have a working API in .NET Web API.
So I'm I'm missing a place to deploy my API (and an Identity Server implementation for OAuth2) and an iOS developer to implement the designs.
Looking for advice...and sure, it may sound like I don't care enough and that's the death of many a startup, but I do care. I want to see the app completed and get a chance to work on the business model (and since it's a social networking app, that's no small thing).
All the good and bad advice is welcome.
It's all about context. A system of advice and recommendations curated from a social network, heavily moderated and limited to short Twitter-sized pieces of text could help people solve problems in under a minute.
As it is now, you often have to "manage" your search process because you have to wade through all of the subjective material or you really don't know the right question to ask or what your root need is.
How about this? "I need SSL on my stage website."
Good luck finding the answer on google if you can't get SSL to work and you didn't know there was a load balancer stripping it out.
Quora and Yahoo Answers are a bastion of redirected content, incoherent answers, and they're really just entertainment. They provide a largely hit or miss solution.
With Wizely, for each Topic, the network gets to continually add context they see relevant.
The proposed business model is that there could be ads found contextually. "I need to replace a patio door" could lead to ads from Home Depot, Lowe's, and Menard's. There would be an opt-in click-through to advertisers websites with hard warnings about being tracked. All ads would be heavily moderated (no 100% self-serve advertising).
I have a friend who got into an incubator with a crypto idea and very positive feedback on the idea. Six months after funding, the whole thing imploded due to personal conflict. At the time, my friend had recently up with his girlfriend of five years and the venture ran out of steam. They ended up returning the money to investors. When the crypto bubble hit he was kicking himself having just missed out.
After that, he took a break to go overseas and recuperate. As I write this, my friend has just closed a $1m seed round for his next project and is well on the way to rolling it out. Last night he popped the question to his now fiance. It's important to remember that startups are a marathon, not a sprint. Roll with the punches, learn from your mistakes and keep on hustling :).
Funding just means more resources to execute the idea, but doesn't ensure success at all.
As you might infer from the title the thesis is that Grit is a very powerful force. My comment in our discussion was that this whole body of social science research and life/career advice comes into conflict with other bodies of advice about cutting one's losses, the value of killing 'failing' projects early, avoiding the trap of sunk costs.
How do we personally know or offer advice to others about whether current difficulties are likely to be overcome by renewed effort and persistence and when do we say it isn't working, try something very different?
The question of when to persist, how long to persist and how to pay the bills while you persist are very personal to me.
In 2000 I and a friend did research and the very beginnings of development on a semantic analysis technique that was notably better than anything we could find at the time including from Google and other search engines. But we couldn't find money fast enough and we both had families to support so we went our separate ways and did other things that were more commercial.
About 7 years later VCs started funding similar technologies. And, somewhere around 2010 to 2013 technology seemed to have caught up to where we were at in 2000.
So should we have persisted? It kind of seems like we should have. But, I have seen enough of life to know that sometimes a group of people have a lot going for them, winning awards, raising funding, rolling out product and still end up running into a roadblock on the way to commercial success that sinks them.
My cofounder and I don't regret applying. We did it mostly for publicity. We already have pretty good traction and funding so the rejection doesn't really slow us down. I never thought we had much of a shot getting accepted anyway just because our team and product are really out of the norm.
Let your haters be your motivators.
Keep pushing on and don't let a YC rejection bother you too much. As mrburton said, if it slows you down, you're probably doing something wrong.
Honestly, bootstrapping can be very advantageous to your startup because it keeps you on your toes.
If you quit, you'll never make it ( and that's ok ) but if you keep working, keep honing your craft, you might just make it big. Take every failure as a lesson that something needs tweaking. When you play a game, you only get better by dying lots and lots and lots of times.
They have a very strong community that will help you post graduation.
I do suspect a lot of people who apply to YC believe it's a golden ticket, due to all the hype around some of their more successful companies.
The connections seem nice and everyone is talented obviously.