Founders at Work.pdf

What happened after that first batch?
Jessica Livingston 451
Livingston: The biggest milestone for Y Combinator after the first summer
batch was when we decided to move out to Silicon Valley for the winter. I
remember not being too excited about that idea at first. Paul said, “You know,
we should do this out in Silicon Valley,” and I thought, “Dammit, we just got
everything set up, working well here in Cambridge. Do I really want to uproot
my entire life and move out to California?” But it turned out to be one of the
best things we’ve ever done.
I think we decided to do it in October, so we had only 2 months to renovate
part of Trevor’s Anybot’s office to make space for Y Combinator. We posted the
application and we got ten groups for the winter funding cycle in January. But it
was very last-minute. The paint on the walls was literally wet when we had the
first dinner.
So what happens when a startup comes to Y Combinator? Walk me
through the process.
Livingston: I help them get set up legally. The paperwork can be intimidating
to anyone who hasn’t done it before, but it’s really important to be done right.
Like being sure your company owns all of its IP, or that you have vesting set up
so your cofounder can’t quit 6 months into things and walk away with 30 percent
of the company. Most hackers don’t like to worry about this stuff, but it can
cause real trouble later if it’s not dealt with properly.
My partners begin working with them immediately on their idea. It’s amazing
how much the ideas evolve from the time of the interview to Demo Day.
That’s what we spend the most time on. In some cases, we even encourage
them to ditch the idea and start over. This is hard given the short amount of
time before Demo Day, but it has definitely been done successfully.
The most “formal” parts of Y Combinator besides Demo Day are the weekly
dinners. Each Tuesday, all the founders come to our office for dinner, and
there’s a guest speaker. We bring in experts from all parts of the startup world to
share advice and offer feedback. Talks are always off the record, so the speakers
are very candid. We’ve heard a lot of stories that have never been published.
We’ve found the dinners are really good for the founders’ morale. Paul used
to cook the dinners himself. Usually bean-type dishes, so it’s always very
healthy. Because dinners are the same day every week, they end up being a sort
of milestone. Founders say it gives them an incentive to get something concrete
done—a new feature or something. People bring their computers to show what
they built over the week.
This all leads up to the most important day, Demo Day. This is when the
startups present to investors. They each have about 7 minutes, so they have to
be good. A week before Demo Day, we have Rehearsal Day, which is basically a
dress rehearsal for the next week. We give them feedback on the content of
their presentations as well as the delivery. Hackers aren’t usually the best when
it comes to presentation skills, but we work really hard with them to make sure
they are impressive. I am always so proud of how much effort the founders put