How to plan for Y Combinator interview

Yes, we were invited by the Y Combinator for the interview, but didn’t have time to write about it back then. Right after we came back we did the final product and infrastructure improvements, and started testing for the official 1.0 release. Now, after having released the product, analyzed the feedback, issued the first invoices, we can sit back for a moment and relive the adventure once more. The article will hopefully be useful for future applicants by sharing our experience from the trip.

TL;DR: An Estonian startup who applied to YC. Was invited to YC interview. Was rejected in the end.  Still spent a week in the Valley and got tons of interesting meetings, ideas and contacts in return.

Why US?

Plumbr grew out of a scientific research project. Well, at least one of the founders is going to do his PHD on the subject, so at least for us marketroids its definitely science.

But from the moment the founders decided to earn money along doing the science we knew that if we wanted to become a big company, we needed to raise money. In case you’re living under a rock then a quick reminder – the money is in US. And most of it sits in Silicon Valley.

Another thing that we’ve always known, is that we needed to keep close contacts with the US:

• Large part of our customers will come from there. We knew from our friends from Zeroturnaround that the biggest country revenue-wise would be the US. Our current stats also  show that close to 40% of the early adopters and 100% of the first paying customers are from US.
• A vast expertise in distributing and monetizing software, which we do not have in Europe, is also in the US.

Those aspects combined definitely gave us a good reasoning to look towards US.

Why Y Combinator?

All founders are over 30. With kids. Geographically located in the middle of nowhere. And trying to launch their first company. With all those odds stacked against us, we decided that the boost from an accelerator would be definitely helpful.

Looking into the bubbling landscape of accelerators we quickly decided that we were too good to apply anywhere but for the very best. The numbers in the referred article show the hard truth – the chances of becoming successful increase a lot through Y Combinator.

Just when our thoughts reached the conclusion that we should look into YC, their summer ‘12 application round opened. We filled in the application form and some weeks later were invited to the interview in the Valley. Our egos got a nice boost: thousands of companies had been rejected, but not us. $$$ was already sparkling in the eyes of the founders.

The Preparation

But we knew we were not there yet. So we reached out in our contact network to find out how the interview is going to look like and what should we expect from it. Found a lead-tracking software company from Estonia who also got to the interview. Met with the founders and learned from their experience. We also talked to the founders of the Swedish-Estonian startup Zerply. This, added to a bunch of reviews and blog posts available online gave us an initial impression of what to expect.

1. Be prepared to describe every aspect of your product, customers, team, business, growth, etc;
2. Take as many founders to the interview as you can;
3. Definitely bring the technical founder(s). (This was especially emphasized by the guys who’d only sent the business founders);
4. Don’t only go for the interview, but organize other meetings with interesting people, go to the events taking place in the Valley;
5. Relax and don’t forget to enjoy the process – it is a cool adventure for everyone.

A week before the interview we stumbled upon a tool called “iPG” in the internet that contained a set of questions likely to be asked in the interview (it has disappeared from James Cunningham‘s website by now… I still have it on the hard drive, so contact me if you’re interested Edit: it’s available again! Get it here). It was set up in a way where you had 20 seconds to answer to a question before the next question popped up. We went through the questions. Oh boy how we went through them. I still have flashbacks from the nights back then when I woke up in the middle of the night screaming “We have verified traction. As of now we are preparing for 1.0 launch with paid plans”.

Practicing paid off big time. Without it we would have started every answer with the typical Estonian “umm …” for 20 seconds. Another important aspect that we discovered was that we needed some preparation time to start speaking English instead of Engrish. So our decision was that for the whole trip we would be communicating in English between ourselves as well.

We also decided to take a longer trip. Not only because of the better climate in California, but as we were going to fly 20 hours in both directions we decided to pack as many meetings in addition to the interview in the trip as possible. After all – if we weren’t approved we had to prove the benefit of the trip to ourselves via some other means. After hundreds of e-mails, phone calls and skype conversations we only got six meetings though. It seemed like we failed but – as the trip itself proved – one meeting led to another, and the calendar was completely filled during the trip.

The Trip

TLL-FRA-SFO. Here we go. During the flight, when we were leaning over my computer and doing the 100th practice round on the YC sample questions we suddenly had an arm reaching to us from the back row. In the hand was a piece of paper. On the paper we saw a printout of the very same questions that we were practicing. It really is a small world. Right in the back of us there was a German/Austrian/French/Finnish (well.. very multinational) startup who was also flying to the same round of interviews. So we had a nice chance to compare our expectations and get to know fellow founders.

In San Francisco we had a first day off for getting rid of the jet lag and on the second day we had the interview itself. We were present two hours before the meeting, ate in the cafeteria nearby and felt the moment approaching. On the premises, the excitement grew as we learned that Paul Graham himself was interviewing our batch (there were so many companies invited to the interview that 3 interviews were held in parallel) – not everyone got a share of PG advice.

YC really has built a machine for building companies. When we had some doubts before the trip, now it was completely clear. Each group had exactly 10 minutes for the meeting. An office assistant guides the groups in and out. Three minutes before the time runs out you are reminded to start wrapping up. A minute before the finish you have to start packing. 10 seconds before the next team starts you are literally pushed out of the room.

So were we. The 10 minutes came and went. No surprises in questions. No truly helpful feedback which some other companies have stressed out to be really valuable. A check (really – US, try to adapt some modern payment options) handed out by an assistant that covered part of our travelling costs.

And then… waiting. This was the worst part of the trip. Besides getting rejected of course. Which we did. At 7:15PM we got the following mail. Seeing a mail from Paul Graham in the inbox already gave us the hint of the verdict – YES decisions come via phone call, NO decisions arrive via e-mail:

I’m sorry to say we decided not to fund you guys.  It was a hard decision because you’re clearly good hackers and you’re working on an important problem.  What deterred us in the end was (a)  we worry that people don’t like to pay for software tools, and (b) your big advantage is running on production machines, and it will take a long time for customers to trust you for that, and that will in turn slow down your growth.  We would not want to discourage you from working on this idea because it definitely has potential, just not, we fear, potential to grow as fast as startup investors want to see.

Oh boy. The next 15 hours were truly gloomy. We literally had to drag our asses to the prearranged meeting the next day. But two hours later we were rolling again. The next meeting with a very experienced angel was truly interesting and led to three new meetings. The next four days went like a breeze – in total we had 15 meetings – with VCs on the Sand Hill Road and off, with other accelerators, a customer of ours from the Valley, with marketing geniuses, angel inverstors, etc. Every evening was also filled with networking events – in some cases we had even two events to attend during an evening.

To give you an idea of how busy we were – here is a sample from the GPS log we were carrying during the trip. 314 miles was the distance travelled during the trip:

And the time was to pack our bags and fly back home. With no accelerator to attend. But with bazillion new ideas and sparkling eyes. A hundred new contacts in our skype, e-mail and phone. And a hope that we are still doing something relevant and interesting.

The Conclusion

We failed on our main goal. We are still in Estonia and have to regroup and try again. But we did learn a bunch of things, five of which we feel are worth outlining:

1. Prepare. We felt truly confident during the interview and to this day believe that the performance at the interview did not the contribute to the rejection.
2. Prepare for more than the interview. As there is always a chance of getting rejected – squeeze out more from the visit to the Valley. Especially when you are 5400 miles away from it. The meetings with potential investors, customers and advisers were stunning. We got enough feedback to change our business model and filled the product backlog for years to come. And built some very good connections with interesting people.
3. Leave some room. If we had succeeded in getting more meetings in advance we would have failed in following up the really good leads we got from the first meetings.
4. Listen and learn. There are literally hundreds of people out there who are ready to give you the best possible advice. Be careful though, the advice is oftentimes conflicting and can lead you off your path.
5. Polish your spoken English. If English is not your native language it might take time before you really start speaking fluently. For us it took two full days.

The final thought? Getting rejected gets you down. Whether you succeed or not depends not so much on getting approved on the first date but on how quickly you will get back on your feet. We surely did recover quickly. Sitting on your sofa back home is comfortable. Traveling and getting rejected is not. But nobody has changed the world from their sofas. We will change the world of software development. And are ready to leave our comfort zone.