After spending a summer in the famous incubator for his new book, The Launchpad, author Randall Stross reveals some highlights.
For aspiring entrepreneurs, technology incubator Y Combinator is the ultimate ticket to a legitimate business and ample capital. Unfortunately for these hopefuls, only a small fraction of applicants are allowed through its doors. This level of exclusivity makes the seven-year-old incubator, which counts Reddit and Dropbox among its prestigious alumni, somewhat of a mystery--a topic of speculation and discussion in Silicon Valley.
But thanks to author Randal Stross’ new book, The Launching Pad: Inside Y Combinator, Silicon Valley’s Most Exclusive School for Startups (which hits shelves tomorrow), at least some of the mystery will fade. Stross, who has already written several books on the start-up world, followed the summer 2011 class of Y Combinator start-ups for the entire three month program.
Here's what he says are some of the most interesting factoids about Y Combinator:
1. Y Combinator isn’t just for newbies anymore. While Stross says that Y Combinator's early classes were mostly made of green-eared entrepreneurs who weren’t looking for a big break as much as they were guidance and experience. Now, those wide-eyed entrepreneurs only represent a fraction of the faces. Of the 2011 class, half the founders he followed consisted of experienced techies. They weren't there for the guidance, but for the high-profile connections the incubator offers. "They’re coming for access to investors, and access to Y Combinator alumni who can perhaps be customers or provide introductions," Stross says.
2. Founders that chow together, stay together. While it isn't exactly mandatory, Stross says he found it crucial for a founder to attend the team dinners held every Tuesday night. According to Stross, teams trade ideas while eating chili and other crockpot dishes. After every dinner, a guest speaker--usually a prominent investor or Y Combinator alum--gives a candid speech about their own experiences starting a technology company. Stross says its a good time for team members to interact.
3. Y Combinator isn't just for Gen Y. When asked what surprised him the most about Y Combinator, Stross says it was the disparity of age. While he pictured a group made of twenty-somethings fresh out of college, he found that older entrepreneurs also took part in Y Combinator. Stross says these older founders impressed him as they balanced family duties with their Y Combinator workload. "You have to tend to your family, so that puts more pressure on you to do well, because you effectively have less time than the founder who is romantically unattached and doing nothing but programming," Stross says.
4. These guys don't get a leg up on everything. Coding and programing is the easy part, according to Stross. The most challenging part for web and mobile developers, he says, is finding initial customers who will try their product (yeah, they have that problem too). "App discovery is a huge problem for mobile developers," Stross says. "How does the world find your app?" He says a majority of teams lacked a marketing budget, which made it even more difficult for their products to find a sizable audience. To combat this, he says, many founders try a “developer to developer line” of marketing, where they sell their product to other Y Combinator founders who might have use for it. This niche audience isn't exactly the best alternative to the mass market, but it's better than nothing.
5. They work hard. Like, really hard. While exclusive, the Y Combinator experience is no cushy gig. Stross says he was astounded by the number of hours that founders dedicated to their products week in and week out. Stross recalls sitting in on a team's hackathon, and hearing that one of the team’s members hadn't had a single day off from his project in weeks. "And I don’t think that was atypical," he says.