(…So, What the Hell Is ‘Y Combinator?’)
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For the past few months, I’ve had the pleasure of getting to know an important organization in Silicon Valley called Y Combinator (aka ‘YC’). I tweet about them every once in a while and have hipped some of my friends to them when it makes sense to, but wanted to give some more context and detail to others who have asked. They’ve just announced that they’ve opened applications for their next batch, which will take place over the summer, so it inspired me to write a bit about it.
It should be noted (and kinda obvious) that I’m writing this for people who don’t know what YC is or who may not even have much reference when talking about Silicon Valley or tech startups in general. Others reading this may have thought about starting a company/have already started one, but until now haven’t really had much interest in applying to YC. It should also be noted (and will become even more obvious) that I’m in no way an expert on the subject, and am approaching this the same way I’ve done most subjects in my 10+ years of blogging: as a hybrid of an engaged audience member/sometimes backstage pass-holder/uber-fan/frequent critic. This is meant to be an introduction, and I hope to expand on this and other startup topics this year as I learn☺
My interest in tech and the startup ecosystem in general was initially piqued 3 years ago because I’ve always been an entrepreneur at heart and naturally drawn to things that encourage innovation and collaboration. But the reason I think it’s so, so important to spread this gospel and get more people interested right now is that its imperative that minorities, women, LGBT persons, and other underrepresented groups, are exposed to, invited to, and included in this world. This will without a doubt benefit us ALL in the long run. And if you don’t know that a land of opportunity exists, how will you know to go chasing after it? I know from personal experience that my fellow underrepresented peops are the most industrious, motivated, and earnest people on this Earth. We’re tailor made for Silicon Valley!
Also, there’s a reason people like Ashton Kutcher, Nas, Snoop, Ellen, Jay-Z, Jessica Alba, and a ton of other entertainment/sports icons have quietly (and some not-so-quietly) started making regular trips to San Francisco. In Ellen’s case, there may be more than one reason—but I digress. They’re titans in their own industries, and have seen that startups are the new frontier. So they’re learning as much as they can and putting their money behind young companies. This is where you & I come in.
So let’s say you’re sitting at home, and you have been considering launching a startup. What now? First, I’d say, find a partner. It’ll just be easier that way. Find someone who is smarter than you. I ALWAYS do this when I’m looking for business partners or employees☺ Like, if you’re really great at coming up with ideas and motivating people and convincing people that you’re the bomb, and you feel like you’ll be the voice of the company, find someone who is an AMAZING coder who believes in what you’re doing as much as you do. Then offer them a co-founder role and equity. If you’re an engineer but you don’t really like giving speeches or selling things to people, find someone super charismatic who has an amazing mind for business, and roll out!
Make sure this is someone you’ve either known for a long time, or can imagine yourself living with for 10+ years. It’s cliche’ but the truth is, this is like a marriage. There will be a ton of ups and downs. A TON. I wish I would have known this earlier in life. Lots of startups fail miserably. Your startup may in fact fail (which is ok, and even lauded in Silicon Valley, by the way). You need a ride or die partner. Maybe even two.
We’re at a time of renaissance here, and you have an amazing opportunity. Almost anyone can start a company today. Think of a problem that you and other people you know have. Think of a way to solve it. Surround yourself with some cool people who are smarter than you…and go for it☺ YC may not ultimately be your path, but if I can get you to even consider starting something, or taking an idea you already have to the next level, I will have done my job as your online buddy and general gay lady.
So what is Y Combinator? What do Airbnb, Songkick, Dropbox, Stripe, and Teespring have in common? They’re all worth anywhere from $100million to BILLIONS, are changing the world in their own way, started within the last few years by 2 or 3 people just like you…and they all got their big break at Y Combinator.
You can call it an ‘accelerator’ (although YC’s president Sam Altman doesn’t like that term for it), an ‘incubator,’ a ‘co-op’…I call it a ‘goliath,’ but thats just me. Whatever you call it, YC essentially provides 4 things to promising startups:
- seed funding (approx $120k up front in exchange for some equity)
- access to weekly talks with some of the most innovative and successful people in tech (Mark Zuckerberg—the founder of Facebook, and Peter Thiel are just a couple of the dozen or so speakers who visit during weekly Tuesday dinners throughout the program)
- virtually unlimited access to YC partners (including the dude who invented Gmail) + their alumni network of 1600+
- and the opportunity to pitch at DEMO DAY
At the end of the 3-months, they have a DEMO DAY where 300–400 top investors hear each company pitch for a couple of minutes. Some people walk out of DEMO DAY with millions in funding. For some—though they may not be funded on the spot—its a great place to introduce themselves and set up meetings for later. You also get the benefit of being around incredibly talented and driven people who are more or less just like you for 3 months, with seed funding to give you the breathing room to make mistakes, to learn quickly from those mistakes, and to scale faster than you could have on your own.
I’m going to be real with you: YC is highly competitive. I don’t know the exact numbers, but I heard that the last batch had 5,000+ applications and 117 were accepted. Something like 3% of those were startups with at least one person of color on the founding team (which was the same percentage that applied). A higher percentage were women. I don’t know how many were LGBT. But what I do know is that as awesome as it is that the number grows with each and every batch, I want it to be muuuuch better. There are several ways YC is making a huge effort to make those numbers more acceptable. I want to do my small part by telling every founder and entrepreneur I know who is of color, female, and/or LGBT about this opportunity.
Here’s a short profile Techcrunch did on YC recently:
Here are some FAQ’s that aren’t FAQ’s at all because I’m making them up as I go along in a draft…but might be helpful:
What’s the YC application process like?
It’s thankfully pretty straight forward and doesn’t take a ton of time. You don’t need to send them a business plan or a deck. It’s great if you have a prototype website, but if you don’t thats ok too. You apply here. They have 2 batches per year and JUST opened their Summer 2015 batch applications this week. The earlier you apply, the better advantage you have because it gives them more time to get to know your startup and talk themselves into saying yes☺ You have until the end of March to apply and they’ll let people know in April if they made it or not. The reality is this: most will hear a ‘no.’ In each batch there are more and more applicants as word gets out, and only something like 4–5% are asked to fly in and interview (they reimburse travel). Of those, only half or so are asked to join the program. They say its harder to get into YC statistically than Yale or Harvard. But I still think being one of the 5k companies that had the guts to apply should be considered an accomplishment of its own. Plus, the application process itself helps you really figure out what it is you’re doing. It’s a free way to tighten up your pitch and in some cases, figure out if what you’re doing is something you really WANT to be doing.
If I’m not ready to apply for YC, what can I do first?
If you’re a student and interested in coding, engineering, or helping me figure out how to set my iphone’s alarm clock, etc, and you’re a person of color, I think your first stop should be the CODE2040 website. It’ll be like an oasis in the desert for you if you’ve never heard of it. I have another 20 or so organizations I think you should check out, but I’ll write about those in another post later. What you should know now is that it was started by this dude named Tristan and this chick named Laura and they’re doing AMAZING, life-changing work for minorities in tech. If you’ve got the talent and the drive, they’ll help you get into the front door of the biggest tech companies in the world. No seriously…I’m talking Google-level. They’re based in the Bay area, but they just announced an EIR (‘Entrepreneur in Residence’) program in 3 pilot cities: Austin, Chicago, and Durham. There’s cash, office space, mentorship, and bragging rights involved. Get on it: http://www.code2040.org/entrepreneurs/
There are LOTS of other things you can do now to start/continue to process. More on that soon…
Like, what is life EVEN?
Watching Katharyne Mcphee do anything while eating caramel icecream with sea salt in front of a fire in your pajamas. You’re welcome.
I want to point out some things for full disclosure:
- YC is not the only organization like this. There are dozens really, in cities around the world, and of various magnitude. YC was one of the first, they have their own brand and way of doing things that has proven incredibly successful, AND it has been extensively documented that they have the best track record of financial success so far. But there are some other notable ones who are awesome as well, like Techstars and 500 Startups in several cities worldwide. A brand new, personal fav of mine is one in central Texas called Seed Sumo, which is now accepting applications for its 2nd batch.
- Since September 2014, Sam Altman and Kate Courteau have provided me with advice and cheerleader-type support on a diversity initiative that I’ve started that goes way above and beyond their call of duty. They have bent over backwards to do things for me like make introductions and offer a kind word when its obvious that they are two of the busiest, hardest working people on the PLANET. I believe they do this not thinking they’ll ever get credit for it, but because they truly want to see the needle move on diversity in tech, and because they are rad people.
- I don’t agree with everything everyone at YC says all the time because thats the nature of the beast, and I agree with some people who have said that they need a tooon more diversity in their batches and on their partner list—but they are indeed making great strides and I want to support that. I hope this post somehow helps push that forward in even a small way. Those of you who know me know that I always give my unfiltered opinion, even to my own detriment (and certainly even when not asked), and will keep it real with you fo LYFE. Same goes here. I genuinely, and emphatically believe today that applying to YC as a budding founder will make you a better founder, whether you get invited to interview or not.
- Sometimes my mind exchanges “full disclosure” for “full exposure” and I imagine naked people opening trenchcoats in public. I’m seeking help from a Starbucks barista in Burbank named ‘Charm.’
I didn’t have space to delve deeper into certain topics, so I will try to do so in future posts. Soon, I will discuss:
- The difference between an accelerator and an incubator and what options for each are available worldwide*
- How to choose a program (based on: investment, network, reputation, location, etc)*
- How the trajectory of a startup differs, especially in the early days, if it doesn’t have YC-level resources/access*
- More on what you can do now if you aren’t quite ready to apply for YC or another program
- How diversity drives innovation and profit & which organizations are working to take advantage of these opportunities
- How working for a GREAT startup as one of the first 50 employees can be even better for you than starting your own company
- What “on fleek” means and how you can stop it from happening…
- & mooooore!
I’m the founder and managing partner of Backstage Capital, a seed investment fund that backs high-potential, underrepresented startup founders. I am also a tour manager, currently working with New Zealand Music Award winner Janine & the Mixtape. Not braggin’, but I have been called the “Lebron James” of venture capital (by my brother).
For interviews or to set up one-on-one “office hour” sessions at your event, email ARLANhamilton@gmail.com with the subject “interview request,” or “conference appearance request,” etc.