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Rejected from YC (Again)

403 pointsby sabbakeynejadover 5 years ago

40 comments

adim86over 5 years ago
This is a fantastic story! A couple of takeaways here. The team took rejection VERY well. This is not as easy as you may think. This to me shows the founders believe in what they are doing and have a deeper goal than just making money. The ability to take the feedback and double down in just a few days is motivational.<p>Second, The power of positive response to negative situations. Lord knows how long it would have taken them to work on MRR if not for the rejection and they could easily have wasted time fiddling with copy and graphics, but the pressure for YC to re-evaluate them made them release ASAP and now they are already making revenue. At the end of the day, YC rejection allowed them to start generating proper revenue before they would have initially, to me that&#x27;s a win, and they still get to keep the shares YC would have taken and now they have a higher valuation for whomever they apply to next for funding.<p>This is a great framing of a story that could easily be a sob story blog post. Keep it up, guys. You are bound for success.
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fillskillsover 5 years ago
We got rejected 4 years ago and ended up building the company to about 40M&#x2F;yr revenue. And we have many VC rejections to add to it. So dont take any rejections too seriously. Focus on the customer need and building a good team.
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jconleyover 5 years ago
YC is looking at this from the VC&#x2F;startup perspective. &quot;Does this group of people with this company seem like they can make a billion dollar business in the next ~10 years?&quot; They want founders that target a huge (or growing &#x2F; potentially huge) market with stars in their eyes and some insight as to how to own it.<p>If you&#x27;re content with a small business and growing slowly then you are not a good fit.<p>You might have a great business in the end, but still not be a fit for the model. Like others have said, YC partners miss big hits. They&#x27;re not perfect. Keep going and if you have a relentless focus on month over month growth and keep your churn down then you have a chance to get VC-style growth capital. But, if you just want to bootstrap a profitable business you&#x27;ll be better off doing that on your own and getting bank loans or other risk-adverse capital.
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jakobeggerover 5 years ago
It&#x27;s a bit off topic, but I wonder why everyone is so focussed on MRR (monthly recurring revenue). Why are you focussing only on people who want to pay you every month?<p>Especially for a tool that targets beginners. I mean, if someone uses your app enough to keep paying 20€ for it every month, I would assume that they&#x27;ll soon want to upgrade to &quot;real&quot; video editing software. Adobe Premiere isn&#x27;t that much more expensive.<p>Of course, the non-power users can just use the free version with watermarks. But who wants a watermark on their videos?<p>I always wonder why these SaaS companies do not offer something for casual users?<p>If I want to edit just a single video from a special event, why do I need to get a monthly subscription? Why can&#x27;t I just pay $5 or whatever to remove a watermark from a single video?<p>I understand that targeting casual users may seem less profitable than targeting power users. But there&#x27;s probably also lot less competition in that space, and it may help with word of mouth advertising if you don&#x27;t focus exclusively on the most frequent users of your software.
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haolezover 5 years ago
Tech startups and the Angel&#x2F;VC ecosystem feels like a Ponzi scheme sometimes. The goal doesn’t seem to be to create a profitable business, but to make a good exit with the next investor’s money (or the public’s in the case of an IPO).<p>Congratulations on your achievement!
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onion2kover 5 years ago
It sucks to be rejected from anything, especially YC, but as a catalyst to push you forwards and move from &#x27;interesting tech project&#x27; to &#x27;actual business making money&#x27; it sounds like your interview was <i>exactly</i> what you needed. Well done.
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kabachaover 5 years ago
&gt; Video editor in browser<p>But why? YC takes up a lot of risky ventures but I really don&#x27;t see video editor in browser taking off beyond a fun little toy so I definitely get why they refused. Could you elaborate more who&#x27;s your clientele? I&#x27;m very curious.<p>Nevertheless it was a fun read!
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dcchambersover 5 years ago
&gt; So even though we have a great growing company, it is possible YC does not think we will be a billion dollar company.<p>And that&#x27;s perfectly fine. Not every company needs to be a billion dollar unicorn. Not every founder needs to strive for that.<p>Continue to grow the company organically. You have clearly already found a path to success without YC. YC is great, but is not essential to your startup. Not getting in is not the end of the world.
surfsvammelover 5 years ago
I started a company about 10 years ago. We are making money, but not lots. But that was never the point of the enterprise.<p>Me, and my co-founders, created the company for us to be able to work with great colleagues and to limit the work hours. Our employees, including ourselves, are not allowed to work more than 40h&#x2F;week. We have parties and trips where we invite all of our friends and family etc. We make sure our employees have 80% of full salary for at least 9 months for parental leave. Work-life balance is core to our values.<p>Our employee turn-over is basically zero. And if someone leaves we go out to dinner to thank them, keep in touch and they are always welcome back to our events and parties (also to come back to work for us of course).<p>I understand the idea of going big with a start-up, make tons of money. But there are other goals one can pursue with a start-up that, at least to some, is just as fulfilling.<p>Great job! You still have control and ownership and might be better off in the long run.
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huffmsaover 5 years ago
I think you were rejected this go around for your own good.<p>You don&#x27;t necessarily <i>need</i> YC. You&#x27;re growing at a growing rate. You&#x27;re not at any kind of impasse, you&#x27;re not making a transition. You&#x27;d be giving up 7% for a lesson you already got for free.<p>Bootstrap until you can&#x27;t.
taytusover 5 years ago
Hello there! I was rejected today for 7th time I believe.<p>We started selling our product in January, We just signed a contract with Accenture, we are on track to have 1 million websites using our technology and we are about $20k MRR (which we know will be a much more thanks to some partnerships we are about to sign.<p>YC is an amazing opportunity, but it&#x27;s just one of the many tools we have as entrepreneurs. Keep working, be better and more important than anything, be permissionless.
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kvmover 5 years ago
&quot;Over the space of a year, we had a 60% MoM Growth Rate, 35K MAU and a great team!&quot;<p>60% MoM growth = 281x growth in a year. So you had 35k&#x2F;281 = 125 users a year ago? This seems like a disingenuous growth rate unless I&#x27;m missing something
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tomxorover 5 years ago
&gt; even though we have a great growing company, it is possible YC does not think we will be a billion dollar company.<p>This is a very positive take away: Y combinator is not for the vast majority of startups (and that&#x27;s ok). They are not destined to become billion dollar companies, yet they will still go on to provide huge value to a large number of people and turn a big profit - they should still exist, and may even be vital for many.<p>&gt; “Whatever you do will be insignificant, but it is very important that you do it.”
xiphias2over 5 years ago
The most important take for me was that YC gave great free advice even in the rejection email.<p>When I was working at Google I was not allowed to give detailed feedback to the person whom I was interviewing and I hated that, because I think people deserve to know why they weren&#x27;t hired.
tpaeover 5 years ago
This is why I stopped applying to YC. I feel I&#x27;ve learned most of my startup skills through trial and error by now, and don&#x27;t have the need for them. I&#x27;m able to raise funding, build a product, and grow the business. You guys have already proven to be better than most of the applicants in my opinion.
Fragoel2over 5 years ago
Moral of the story is: there&#x27;s more than one way to found a company and the current startup model ( place hundreds of bets, hope a few win big) doesn&#x27;t work for all of them.<p>This story and others ( like the one of Gumroad: <a href="https:&#x2F;&#x2F;marker.medium.com&#x2F;reflecting-on-my-failure-to-build-a-billion-dollar-company-b0c31d7db0e7" rel="nofollow">https:&#x2F;&#x2F;marker.medium.com&#x2F;reflecting-on-my-failure-to-build-...</a>) that show that success can be achieved even when others consider you a failure are refreshing and should taken as an inspiration from those who wish to become an enterpreneur (and possibly by everyone to be applied to life in general).
m10iover 5 years ago
How did office hours between the two batches go? That was left out of the blog post.<p>Similar to when you&#x27;re in the lunch round during a job interview are told &quot;oh don&#x27;t worry, lunch is not an interview, just relax&quot;, I imagine attending office hours after you got rejected last time is in the same boat - it&#x27;s another hidden interview. It&#x27;s possible that there were indicators during that time period that indicated how the next batch might go for you guys :&#x2F;.<p>Best of luck regardless
billconanover 5 years ago
I can’t understand some of the YC invested companies. They don’t seem to be billion dollar companies to me. For example, why is a form builder a billion dollar company?
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xtractoover 5 years ago
I would not sweat it. I was an early employee in a startup that got rejected twice from YC (because it was from Mexico) and nowadays is one of the fastest growing FinTech companies in LatAm and just raised their series B.<p>You know, lots of VCs maintain a good list of anti-portfolio, the most famous being the BVP one (<a href="https:&#x2F;&#x2F;www.bvp.com&#x2F;anti-portfolio&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.bvp.com&#x2F;anti-portfolio&#x2F;</a> ).
greenie_beansover 5 years ago
Maybe for you next YC app, take or leave this idea... Put Wibbitz out of business by developing AI that can create short videos based on text from written content. For instance, the video at the top of this page, which was adapted from its attached article. <a href="https:&#x2F;&#x2F;www.realsimple.com&#x2F;food-recipes&#x2F;recipe-collections-favorites&#x2F;desserts&#x2F;wine-candy-pairing" rel="nofollow">https:&#x2F;&#x2F;www.realsimple.com&#x2F;food-recipes&#x2F;recipe-collections-f...</a><p>I don&#x27;t know the first thing about AI or video, but I do know the humans who make those sorts of videos just read the article and search Getty images. You could prolly train the AI to have the right &quot;taste&quot; based on all the content created by Meredith Corp lifestyle brands, like Real Simple, Food and Wine, etc. Meredith now owns Time Inc, and I know that they and every other media company are doing whatever they can to compete in the digital space. One way is by adapting their written content into short, digest-able, social media-consumed videos.
maannjover 5 years ago
&gt; it is possible YC does not think we will be a billion dollar company<p>Most VCs always emphasize that they invest in the team and not just the idea. Ideas always evolve for startups. You guys not only monetized your MVP very quickly, but also have shown that you are hustlers and work very fast. Even if your idea &quot;in current form&quot; doesn&#x27;t generate billion dollars, but you have high potential as a team to find a path to success.<p>I worked in early stage startup few years ago, their original idea didn&#x27;t show huge success but they kept improving until they eventually found a path to huge success and then acquired by large company. The improvement all revolved around the same concept (which was an audio app)<p>IMO, the fact that YC didn&#x27;t even invite you for the second round means that they need to really work on their selection process.
silasdavisover 5 years ago
This has come up before here: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=20224157" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=20224157</a><p>Posting because I found the analysis of filmgirlcw in that discussion interesting.
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mscastsover 5 years ago
I don&#x27;t understand. If they make money from the app, why not simply just keep working instead of letting go of a portion of the company?<p>Sure, it is a lot of money they will get but it seems like they don&#x27;t really need it?
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cryptozeusover 5 years ago
Great story and lots of positive messages here so let me take a different view and get downvoted here. Obviously you want to be as big as airbnb and box otherwise you will not be applying to YC year over year. Point here is that don’t settle for these small wins of 100k revenue..and no it is not ok to NOT be hugely successful company if you really want that go be that. Now there are many other VC companies out there who have helped many others companies do the same so Yc rejection is a blow but there are other options too. Don&#x27;t stop until you get into one.
kovacs_xover 5 years ago
Sounds to me that being reject was super valuable to you guys anyway and instead of being &quot;accelerated&quot; you&#x27;ll be able to go in your own speed the way you want with your product, not as YC, VC&#x27;s or anyone else wants, which can easily &quot;accelerate&quot; you into the void and add extra level of stress to the one already, because imo investors are more like all-or-nothing types, when for you building &quot;normal&quot; sustainable business, that can later be sold for some X-XX million amount, is viable option as well.<p>Good luck and keep building! :)
Rainymoodover 5 years ago
I remember reading the article when it got first published in June 2019, this is the same article but with an update at the end. YC W20 batch just got all their letters.<p>Good luck, I hope you guys succeed and keep grinding!
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cristinaibuneaover 5 years ago
Oh, wow. Funniest thing. I started reading your blogpost, got to the part where you mention the overpriced Airbnb, looked at the picture with the white truck and then realised MY TEAM AND I HAVE BEEN LIVING IN UNIVERSE Z for the past 4 months. Moved here when we got into YC and I&#x27;m currently writing this message from here. Your story is truly fantastic.
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mrieckover 5 years ago
And how did you feel about Kapwing recently getting $11 million funding for the same thing?<p>This is how I felt:<p><a href="http:&#x2F;&#x2F;www.superanimo.com&#x2F;animos&#x2F;mfw-competitor-gets-11-mil-and-im-stuck-in-my-dayjob" rel="nofollow">http:&#x2F;&#x2F;www.superanimo.com&#x2F;animos&#x2F;mfw-competitor-gets-11-mil-...</a>
soulchild37over 5 years ago
If you can have 100k ARR organically already why do you still need YC?<p>Nevertheless, great job and execution!
_0o6vover 5 years ago
If your business is that good, you&#x27;ll be able to find $150k in seed funding elsewhere.
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elmarover 5 years ago
Wonderful story Thanks for sharing it with details and updates. A little question is funding the current bottleneck for your growth? If you receive $X Million how would you spend it to increase the growth?
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iamleppertover 5 years ago
Forget whatever YC tells you about how they accept and vet startups. YC is highly biased in their process. For an investment company of their size, it strikes me as odd that they seem to mostly &quot;wing it&quot;. There&#x27;s no apparent (or at least nothing they make public) structure and no real or apparent analytical process that goes into their application process. I&#x27;m sure they do have a process, but you can glean a lot and read between the lines on those rejection emails that give very little evidence as to their actual decision making process. It&#x27;s probably opaque for a reason, right?<p>I&#x27;ve had friends who literally have gone through them multiple times, taken their money, and failed with multiple different business ideas, that, on their face were both poor ideas and poorly executed. Only to see them get accepted again. Your chances of being accepted greatly increase if you know them personally, or went to MIT&#x2F;Stanford and part of that crowd. The other case is where you are part of their current focus and just happen to get lucky. What they fund and are interested in seems to change based on their moods and personal interests more than any overall strategy that is more complex than a blog post.<p>You&#x27;re far better, at this point, to simply take on debt. With that revenue you could qualify for a loan from any number of banks. Most banks have a small business division and would be very eager to start working with you. Just go in with your current Stripe dashboard and a simple plan of what you&#x27;d spend the money on (marketing, development, etc). It doesn&#x27;t need to (and shouldn&#x27;t) be complicated, a single page is enough. More than likely, you&#x27;ll be offered many different types of financing and the terms are almost guaranteed to be better than any VC could offer. If they decline you, they&#x27;ll give you directly actionable requirements, which, once you&#x27;ve full-filled you can re-apply and they will give you the money as long as you have met those requirements. Unlike a VC, who may have been out the night before drinking and simply decline you for no other reason than their own hangover. Banks make their money in interest, they want to lend you money, they stay out of your business. They do not make money by holding a percentage of your company hostage and pumping up the value (real or imaginary) and then selling to the next guy (which is exactly how a VC operates).<p>Or look for funding and mentorship in the software community in which you are operating -- from Adobe or one of the other video editing software companies. Start attending conferences attended by people in the video production industry. You might be able to find a niche for your product in a large video production company that could optimize their process or save on licensing costs. One or two of those deals is really all you need.<p>And the value of the YC network is greatly overstated. If you&#x27;re building anything other than run-of-the-mill SaaS software, it&#x27;s almost useless. They can give you money, but they can&#x27;t write code for you or (in my experience working with other VC&#x27;s) help you with recruiting, beyond having someone send out blind emails on LinkedIn and adding you to their jobs page.
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dreamer7over 5 years ago
Off topic, but I really like their blog site. Seems very similar to Medium. Does anyone know if they used a template or blogging platform with custom domain?
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newguy1234over 5 years ago
I don&#x27;t know why you tech&#x2F;software startups fight so hard to get funding. Just self-fund it and keep your equity for yourself. If your idea has potential, you should be fighting to keep as much equity as possible, not selling it off to the lowest bidder - VC firms. Only go to VC firms as last option as in literally the startup will die if it doesn&#x27;t get funding.<p>The bigger value proposition I see from Y Combinator is simply the networking and community. A lot of the advice I see given during startup school is spot on from my experience.
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foobarbecueover 5 years ago
I had to Google MAU, and MRR. Monthly Active Users, Monthly Recurring Revenue. (Couldn&#x27;t you just say users access revenue on this case?)
erikigover 5 years ago
Awesome effort and thanks for sharing the ups and downs. Quick question - why aren&#x27;t you guys on mobile yet?
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craze3over 5 years ago
You posted the same exact article 4 months ago: <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=20224157" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=20224157</a><p>I was rejected too, so I feel your pain. But come on... This is such a low-effort post. It seems like all you did was update it with 1 paragraph saying &quot;we got rejected again.&quot; What&#x27;s the point? Why does this belong on HN?
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tapatioover 5 years ago
Meh, YC is so 2010.
elkynatorover 5 years ago
Let&#x27;s be honest. Even solely from money and evaluation point, being accepted to YC increases your evaluation for your startup significantly. I&#x27;m not advocating that this is why you need to apply, but FOMO on YC companies is real among VC&#x27;s. On demo day same companies who are pre-seed or just started get new rounds on $15Mil+ evaluation. From what I have heard and seen the biggest value is advice, but getting so much hype to raise big money is not bad for founders.
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diminotenover 5 years ago
&gt; We are now at $5,000 in monthly recurring revenue<p>You&#x27;re doing it. Very impressive&#x2F;cool. YC isn&#x27;t the end-all, nor is HN. It&#x27;s <i>objectively</i> impressive that you got rejected, saw something you can fix right away, and executed. Not only that, but you continued to execute&#x2F;grow from there to $5k.