A non-founder’s guide to the galaxy of Y Combinator
Even before knowing anything about the pains and gains of building a startup I was already a huge fan of HBO’s sitcom Silicon Valley. A story of an elegant life with elegant problems. A year after my story began with Veriff I have only a slight clue of what it is truly all about. What we’re truly building. The trick is to aim for the stars and find solutions to keep you on track. Don’t get me wrong we have always believed that we are building something big. Something big = make online identity verification even more secure than physical face to face verification. So this is a story how we aimed for the moon and landed in Silicon Valley which is still pretty amazing. So buckle up your seat belts and I’ll take you through the story of how a 2 year old Estonian startup, despite the young age, celebrated their birthday on the other side of the Atlantic ocean in the Bay Area.
How I Built this
It all started with downloading Overcast in October with one clear thought in my mind. I wanted to learn and understand what is there so special about the founding stories of the holy grail companies like AirBnB and Reddit. Back in the day they were people just like us- and they still are just a bunch of guys with a clear vision and a dream. “How I Built this with Guy Raz” whispered Kaarel (CEO & Founder of Veriff). He pinched me out of daydreaming. “Listen to the AirBnB story”. Sounded interesting enough to look into.
“Listen to the AirBnB story on How I Built this”
It was a perfect walking-track to the office through old town of Tallinn. AirBnB was actually dying before applying to YC. Michael Seibel (Y Combinators current CEO, Partner and our beloved interviewer) offered them to apply to YC to save their company (by that time AirBnB was in a lot of credit card debt — as they called it the Visa Round — and were selling Cereals to have funds in their company). Veriff had a Near-Death Experience as well. We humans try to find signs in what life throws at us.
Meeting the partner of YC
A couple of weeks later our CEO heard that one of the YC partners is actually doing Office hours in Estonia at Lift99. Actually not many days apart when I found the building story of AirBnB. It’s a lot easier to stand out in Estonia than in the Bay Area and we got accepted to the Office hours. Kaarel had a chance to pitch us to the partner — Gustaf. We didn’t give Gustaf a box of Cereals (if you haven’t by now then please go and listen AirBnB’s founder stories) but our own Veriff’s coffee cup — as a token of appreciation. Who knows, maybe at some point to get funds we’ll pivot to another sector as well — for example start growing avocado trees (Wink-wink).
Gustaf told us we should apply to YC and that he would give his endorsement (“Wow — could it be? We’re still from Estonia and because of that the odds are against us. There are only handful of companies in Estonia who have reached that point in the US.”).
YC Application
We decided that there’s nothing to lose and to our minds the office hours already was a success. Y Combinator (or at least Gustaf) saw the potential in Veriff — he believed in us and in the vision we have. The same vision which thrived the entire team to pull those all nighters to get us exactly to this point and will get us beyond. Yes the same vision which accompanies you as the days pass and inch by inch you can see it coming a reality. This wasn’t an opportunity to move an inch towards that vision. This was the opportunity to pack the vision to a suitcase and spread it using the best possible tools Silicon Valley can provide. We only had to transcribe our vision and paint it on the 5 pages which Y Combinator requested from us.
I won’t go much into the details of the application. We have a wonderful team, I know it, Kaarel knows it and by now I know that even Y Combinator knows it. It was a team effort to get our 5 star application ready by the deadline.
A week — this is how much it took us to get every little detail in the application as perfect as we knew how. There is a correlation between Medium posts popularity versus time spent on it. The same applies to YC applications. Don’t try to get away with something that is less than your absolute best because YC is looking for the absolute best. Quoting from the back of my head one of my all time favourites from “The Rock”
“Your best? Losers always whine about their best. Winners become an Unicorn.”
“What do you mean we got in? Where?”
It was a Wednesday early morning and I was following my every morning routine. I usually start off with e-mails (yes, it’s destructive, I, too, am working towards perfection). There are a couple of things you’ll remember for a long period of time. Your first sales meeting, your first client and definitely the first time you receive the e-mail that you were accepted to the Y Combinator interview. I dialled Kaarel and the response was somewhat like this:
“What do you mean we got in? Where?”
After realising what had just happened we knew that we still had much to do. Y Combinator interview isn’t something that you can hack like I hacked most of my university presentations — ”improvise and just talk about something related to the topic”. As a metaphor you have 10 minutes to prove that you are the next Elon Musk, explain that you already are building the next SpaceX, persuade the interviewers that they should be the ones stepping on the first rocket ship built by you and that you have a team who can land the missile while the interviewers are onboard. Sounds simple? Now let’s add that the ship is built next-door to Skype, TransferWise and Guardtime in a far-far land called Estonia which by the way offers e-residency.
What we did for preparation?
We spent hours and hours of prepping our story. From analysing all the questions that are relevant to building up the interview with questions just to increase stress. We put Kaarel in front of an anonymous jury who’s identity he was totally unaware of. After stepping into the room, Kaarel realised that the pop-up jury was formed of four native English speaking PE & VC professionals. Later he found out, it included the COO of TransferWise Wade Stokes, American-Estonian PE investor David Coolidge, the CEO of Meduza.ai and start-up advisor & pitch coach Calum Cameron and SEAF Global Investment Committee’s Member & CEO Gary Dodge. We analysed the feedback and improved the story to the last sentence. We cycled through the questions again and again, got mentors from previous YC applications to give us insights about the process. Our preparation was as good as it could get with such limited time. We also have a wonderful and one of a kind partners from the communication agency JLP who made everything that we and they could think of to happen in a very short notice.
The interview
We had done everything we could with the time we were given. I knew that if somebody could make it then it was Kaarel. We arrived to the YC building 2 hours before our interview. I thought we could use the time to get used to the atmosphere there. I’m glad we did — as we stepped inside we saw Gustaf who was just taking a short brake from the interviews. We registered our presence and what a surprise Gustaf was actually our interviewer.
What I, as a non-founder, was doing in the YC you ask. I thought I could make most of my time by networking with some of the super nervous applicants. The friendly gate keeper in Y Combinator brought me back to reality. “You shall not pass to the building. You have to stay outside” After a couple of times failing to negotiate on the matter I understood that I am not yet able to sell snow to Eskimos (note to myself — need to work on that).
You have to ask from Kaarel what exactly happened during the interview (how to turn a series of events into an comedy-like ice-breaker). My summary from the feedback would be that our product oriented team has been building and will continue building a marvellous rocket ship. The management has a clear vision of the coordinates where we are headed. Our team can actually land the rocket ship.
But, there is a but! If there wouldn’t be one we would have a non-disclosure which wouldn’t allow — you guessed it.. disclaim our YC experience via Medium. Our due diligence for the rocket ship failed. We’re glad that we didn’t fail because of our solution, but our cap table structure. Veriff is already in the Scaling Phase. In order to get there we have raised funds and therefore the current structure wasn’t a perfect match for the YC. It was something we could have figured out in a couple of days, but because the competition in the Y Combinator is as strong as it could get we didn’t have those days. We were notified via e-mail that due to clause that you weren’t chosen for the W18 patch you may disclaim your experience as a blog post for future applicants. At least that’s what I heard.
What does it mean for us and Veriff?
We got the best feedback from the YC partners we could have hoped for. Y Combinator, whose portfolio consist of companies who have combined valuation of $80B+,certified that we’re building something which stands out. We got invited to Silicon Valley for a 10 minute interview out of thousands of applicants from all over the world. It was more than enough to gain confidence and to unlock our next milestones which will help us to reach Bay Area. Which ones? You’ll see rather sooner than later.
