What Y Combinator Looks for in a Startup
Want to know what Y Combinator partners such as Sam Altman are looking for in the next multi-billion dollar startup? We asked them for you.
1. There’s a Long Road Ahead
“Most startups are a long slog. The founders have to have the skill sets to work on one problem for the period of time.” - Qasar Younis
Get ready to focus all your time and energy on nothing but your startup. If dedicating yourself to a single idea for five to ten years sounds hard, dull, and even crazy, that’s because it is. As a founder you are in charge of taking your idea from infancy to adulthood.
Younis says one of the most important factors he looks for in a startup is determination, which he defines as, “The resistance to be slowed down by obstacles, enthusiasm for the mundane, and appropriately being aggressive.” If you’re determined, you’ll finish the marathon.
2. Prepare to be Humbled
“Even when you’re a known quantity, even when you’re famous, even when you have infinite money, you will be humbled.” - Dalton Caldwell
You will be humbled constantly. Dalton Caldwell says no matter how many blog posts you read or how many people you talk to, you simply “don’t know ‘til you know” the volatile ups-and-downs of entrepreneurship.
Caldwell does, however, say that those who have never experienced heartbreaking failure in their lifetimes “crumble in startups.” He says failure and humility are almost synonymous with the startup experience and if you’re not prepared, if you’re not equipped with the tools to deal with those pitfalls, “you’re going to freak-out.”
3. Worry About Product, not Press
“Who’s actually doing well and getting traction doesn’t always correlate with who’s getting good press. There’s a lot of companies who get great press all the time and are failing.” - Dalton Caldwell
According to Qasar Younis, there are some entrepreneurs who are so infatuated with the process of building the company—the corporate entity, the fundraising, the interviews—they forget the company itself is merely a “vehicle to take a solution to market.” What people are saying about you doesn’t matter; what matters is what you’re building.
Dalton Caldwell says Y Combinator (re)educates founders on the most important basics: do you have a good company, a good product, and good growth? Those are the things that matter. What’s less important is who’s blogging about who. “Don’t fall in love with the narratives that are put out there and confuse that with success,” Caldwell says.
4. You Need Diversity of Thought
“What diversity of thought allows you to do is to look beyond your initial view of what you think is the truth.” - Qasar Younis
Qasar Younis recalls instances where two companies attacking the same problem, at the same time, end with wildly different results. One succeeds, the other fails. Younis says this is due to an incremental difference in a company’s approach to product and to market—one addressable by diversity of thought.
“It’s almost foolish when founders don’t want that diversity of thought,” Younis says. “Why wouldn’t you want people who are thinking about the market in very different ways on your team?” If your team is composed entirely of 23-year-old Stanford CS majors who all grew up in the Bay Area, Younis says, that’s not a good thing. Different location, education, ethnicity, and age all contribute to your company’s perspective. The more different eyes you have, the more you will see and the less you will miss.
5. Tackle Everyday Problems
“If you have to choose between two problems, choose the problem that people have more often. ” - Michael Seibel
Seibel uses Uber as an example of an idea he’s crazy about. “Are you going to use Uber everytime you need to get into a car? No,” Seibel says. “But how many times do you have to get from A to B in a given day? Everyday.”
Startups addressing everyday problems for everyday people are the multi-billion dollar companies. Seibel says he encourages startups to always choose to solve the problem that people have more often. It goes back to Y Combinator’s founding manifesto: Make something people want.