YC rejection stings less after speaking with unicorn founder

[enliven]

Like many, we were rejected from YC after our third or fourth attempt.

What surprised us, was not even landing an interview.

I'd previously been reached out to by a YC partner saying my application was strong, but just needed a co-founder. We had customers, 4-digit MRR, market validation in an area they've invested in before, etc.

After another accelerator started by an ex-YC partner (Pioneer) also said this, I found a co-founder, and we were accepted into Pioneer, who thought we had a strong chance at YC this batch.

But, despite being further than some YC companies on demo day -- we received the dreaded "top 10%" rejection email.

After the rejection, I reached out to a unicorn founder I'd met (who'd also been rejected from YC) asking for advice, who helped me realize something.

The things we'd been hoping to get out of YC were:

1. the $500k seed capital to bring my co-founder full-time
2. vetted founder network
3. investor intros
4. YC "stamp" for purposes of easier fundraising

But over the past few months two things had changed:

• We'd met several YC founders and learned that far from being this mythical group of powerhouse founders, many were lost, had no idea what they were doing, and/or not as far as we were -- in short, not necessarily better than our current accelerator's founder network
• We'd joined an accelerator with similar investor connections

With #2 and #3 already satisfied by Pioneer, the main benefit (in our case) was basically reduced to fundraising -- which, while certainly much easier if through YC, is something we can do ourselves

Don't get me wrong, we would have been thrilled to get into YC, and are disappointed to not even merit an interview. Being non-FAANG, non-Ivy engineers, our in-person meetings tend to convey an ability our backgrounds and videos do not.

But recognizing the prevalence of average founders and reduced benefits after going through another accelerator has really made us okay with not getting in

Why do we think we didn't get an interview?

Anyone's guess, but based on differences w/ our prev. application and who we see getting into YC, fundamentally I think it's because we took an intellectual approach based on what we'd done/seen, rather than an emotional story-based approach based on what we could be, manifested in three choices:

1. depth vs conciseness - didn't know whether to provide insights we'd discovered at the cost of being longer, or whether to sacrifice details to keep things short, so went w/ former after Daniel Gross told me the important thing was to just "write well"
2. progress vs grand vision - we left out our grand vision to make room for added insights discovered through our progress
3. content vs personality in video - I think we focused a bit too much on what we were saying, and it came off a bit flat -- our natural energy and personalities weren't really shown.

I think if we ever apply again, we'd sacrifice more depth, prioritize conciseness even further, and focus on having a compelling story. Basically reduce cognitive load + increase emotional resonance with someone reading thousands of applications.

 

[bill34]

@enliven I think some people take YC rejections to seriously.

I don't know the exact numbers, but I'm just going to make some up.

Let's say they get 100,000 applications and have 100 spots open. Let's also assume they have a magic algorithm that ranks all 100,000 applications from most likely to be a unicorn to least likely to be a unicorn.

If they only have 100 spots, what's the real difference between a startup that ranked in the top 100 under this magical algorithm and one that ranked number 305?

Does it mean they should work on their pitch more and wait for the next batch? Or, maybe they should spend more time networking with former YC Batch participants?

I would say no. I don't know, but I believe it is said that 90% of YC startups will fail. So for most startups, getting into YC is not going to be that thing that makes or break their startup. Only a tiny fraction (I'm guessing) get into YC and have a real exit when they would have failed had it not been for YC.

Being rejected is not a categorical statement that you suck (or probably in most cases it is not). I would guess that in many cases, it's completely arbitrary who made the final list and who didn't.

To my knowledge, YC doesn't really take moonshot cases and these are probably the ones that need YC the most. Other than the colonization of Mars startups, I think in most cases, strong founders are going to go on to be successful irrespective of whether or not they get into YC.

I do think there are founders who are struggling from a personal finance perspective who otherwise would go onto having a big exit a decade from now if they just could survive and work on their startup for 6 months to a year. That is a tragedy, but from my observations, those are not the ones getting into YC either.

 

[halltc]

@bill34 When you look at the numbers you have to come to the conclusion that YC is somewhat of a lottery. You could do everything right and still be passed over. The best thing you can do is keep applying and don't expect to get in.

 

[enliven]

@bill34 well said

 

[oleaster]

@enliven What accelerator you joined eventually? Was it TechStars?

 

[enliven]

@oleaster https://pioneer.app/

 

[jazzino]

@enliven Got rejected by YC twice and still went on to grow our business and raise a Series A and B from highly respected VCs. So not the end of the world. Keep pushing and focus on your business. They produce so much free content you can get a lot from YC without ever attending. And VCs don't care if you have great traction

 

[wingnut0731]

@jazzino Yeah, please share your vision with the pre-seed VCs who are demanding (!) traction. We were trying to raise pre-seed (somewhere around 500k) and every single VC wants to see traction. They are not ready to invest even 50-100k.

 

[mc25]

@enliven Are you even a founder if YC hasn’t turned you down?

 

[wynelle]

@enliven

We'd met several YC founders and learned that far from being this mythical group of powerhouse founders, many were lost, had no idea what they were doing, and/or not as far as we were

I have now met countless YC founders, somehow all in the past 12 months. Unsure if that is because of my own career growth or because they need customers/investors. But same exact conclusion as you -- I used to look up to YC until I met their clueless founders.

 

[chadchad]

@wynelle 100%. Most I’ve met are dilettantes and not real builders.

 

[hadler]

@enliven Remember, the majority of the best, the most prolific companies are NON yc companies. Go build a great company.

 

[perdedoras]

@enliven I think of YC as corporate chain. Lot of under paid workers and under trained staff members.

Everybody use YC to find co founders and use it as practice run.

You take everything you developed so far. Take it to different venture groups.

To be fair they are legacy company but competition is getting better with better VC popping up everywhere

 

[wynelle]

@perdedoras I love the way you put it.

 

[lakersfan4life24]

@enliven You honestly probably got more value going through the application process than you will ever get from the program itself.

Keep in mind that only 10% of YC startups will be successful. Let’s say 100k startups apply and they have 100 slots to give out.

And let’s also assume they are exceptionally good at picking the most viable businesses.

Since they are only picking a fraction of startups to attend YC, statistically the majority of these startups should be successful businesses. Maybe not all unicorns but at the very least 90% shouldn’t go to zero.

So why do so many fail? The VC model is designed to find unicorns. That’s it. The ugly side of VC is that this results in a high percentage of dead companies that would have been successful had they not raised a bunch of cash.

And YC is a funnel for VC’s.

Given your current traction and the fact that you got rejected from YC, I would take this as a sign that you have a real business that is not the best fit for the VC unicorn or die approach.

Building a healthy business to 5, 10, 50M in ARR is life changing for you are your founder. It doesn’t have to be a unicorn.

 

[sharkdive1]

@lakersfan4life24 You hit the nail on the head. VCs only care about big exits, but I wonder if that's a feature or a bug. I think of it in terms of like investing in a bunch of small businesses, like a plumbing company or one pf those junk hauling companies you see on TV ads. You can grow these companies but they're not going to grow hyperbolically. Nothing wrong with 2x, 3x, 5x an investment vs 100x.

I bet if a VC decided to focus on investing in companies that can grow and profitably sustain themselves organically after a certain point of growth that they'd be just as successful of an investor. Just look at Amazon growing 25% a year for 2 decades.

 

[lakersfan4life24]

@sharkdive1 I absolutely agree that a more holistic approach to investing is probably a much healthier overall but managing 100x portfolio companies doing 2-5x is MUCH more difficult than managing a handful of unicorns producing the same or better overall results.

This is just how VC is and I don’t see it ever changing as it is proven to work out for the firms and their LP’s.

There are other investment options out there but everyone seems to gravitate towards VC and it’s statistically the worst method of funding for a business. I think we need a culture shift in terms of what founders seek out in terms of investment vs trying to change how VC’s approach investing.

 

[linda7050]

@enliven Bro, we have more than a 1M in revenue and no internet view. We have applied like 10 times, we got 3 interviews and all rejections. I feel you, but just keep pushing. Your goal is to build a game changer company, with or without YC.

 

[enliven]

@linda7050 Yeah we're actually cool with it after that convo -- and honestly a bit excited since realizing we're not missing out on some huge value locked behind a gatekeeper

 

[niasia]

@enliven Was your rejection from the early decision applications? (from yesterday)