Sam Altman’s tips on how to get funded by Y Combinator

These are some of the understandings I borrowed from Sam Altman’s lecture on how you can get your startup funded by Y Combinator

Video Link — https://www.youtube.com/watch?v=kVKaMHgOTP4

1 “The most important thing to do at the beginning, is actually take the time to figure out what you are going to do. And let it be a project before it’s a company. Have the idea first and then the company. Have the company be the way to support this thing that you think is really awesome to make it happen”.

2 “ Once you get started. Once you are building it and eventually sort of develops into this company. Then, I think, the most important thing is to have, a focus on growth. We talk a lot about this at YC, how startups and growth are incredibly inter-related. And the best startups, have growth goals from the very early days. The AirBnb guys, used to draw a graph they wanted to hit. A forward looking projected graph. And then they would put it up on a mirror in their bathroom. And on their fridge door and everywhere. Every week they would try and grow ten percent. And our best startups do this. And it’s so important in the function that it shapes the company.

3. “You have to have conviction behind what you are doing. Until you have conviction, you probably want to run it as a project.”

4. “Once you have conviction behind what you are doing, the hours matter.”

5. “The best founders, they execute so quickly”.

6. “One of the ways that we can identify that are really great, is how much progress they have made, between when we meet them. The bad or mediocre founders, you meet them a week later and they have excuses (paraphrasing). The best founders have a list of all the things they have done. The founders that execute slowly, always have such great excuses.”

7. “The way we recruit the best people in the world is by reaching them via multiple channels. So the alumni work is really important, hacker news is really important, putting great content online is really important, I taught a class, that got millions and millions of views. Our applicant rate went up 40%.”- Mathematical/computer science definition of ycombinator: “A function that starts other functions”- Actual definition of ycombinator by Sam Altman: “A source of funding and advice and network for startups.

8. “Many great founders that we meet, really want to come to the Silicon Valley…for a little while. They may not want to stay. But come for three months, develop a network here. People move their family here for 3 months.

9. “Since Bloomberg, New York has not produced a $5B company” (Explains reasons and draws comparisons to Silicon Valley. In New York and other places, the onus seems to be to have startup success turn into relatively quick riches (paraphrase). Where as in Silicon Valley, it is okay to wait 8, 10 years and it is cool to have equity in the startups. And startups are the #1 thing here. It is not the number 2 to Finance or #2 to the movie industry. I still think that Silicon Valley is the best place to start a startup”.

10. “Generally you want to raise capital, either when, you have to or when it (raising capital) is really easy.”

11. “I think that it is still an incredible win for startups, to be able to operate on small amounts of capital, build their own product (not have to hire developers to build it). And this is somehow gotten really screwed up”. — “We are here to help founders” and “funding important companies” “making stuff happen”- “If we can’t get growth back in this country, we are in a really bad place. I think it breaks everything down”

12. “Fund the smartest, most intelligent people you can find. With the clearest vision. Even if you do not understand why it’s going to be a big deal. … we try to fund companies that are working in markets that could be huge in ten years. We try to fund companies that other people don’t like right now, but may like in the future. But that’s hard to predict”

13. On executing each week “I think I said EACH HOUR and that is an important difference”

14. “10% weekly growth rate is optimal”

15. “We can take someone who is a slow mover and kind of limp. To someone who is a fast mover and really fearsome.” — Continues “this is teachable. a lot of time you can focus on this and learn to be decisive and fearsome. I think that’s a good thing to strive for.”

16. “Work with a technical co-founder. Don’t just pick someone random off the street that you don’t know. But, spend whatever time it takes, work another job, develop a working relationship, someone to find a company with. I think, not everyone has a desire to learn to code, that’s fine, people shouldn’t. But it’s very hard to have a company that has no technical co-founders. It’s not impossible. But we are talking about significant head-wind. And there are all these reasons we have talked about…..companies with no one technical on the team, have a much harder time getting the product built cheaply and much harder time hiring engineers, because it’s hard to evaluate who they want to work with (without a technical founder) — so my advice to anyone male or female is to find a technical co-founder”.

17. On entrepreneur bringing about change in the government space: “first that’s great, the government is the largest enterprise customer in the world, as any other enterprise customer goes — the bigger they get the slower they move and you have to find ways to not have that killer startup, which is what usually happens. So figuring out ways to move quickly and start with smallish — bite sized projects, is kind of what government agencies can act on quickly. Seems to be really important. But in general, this is one of those areas, where I think in a few years, will be big and that people aren’t paying attention to. We have funded many government related startups, last year or so.”

18. “How do you choose how a startup gets accepted at YC in ten minutes: “The first answer, we can’t always and the interview process for the companies is not pleasant. It’s pretty harsh, it’s pretty quick. Often, founders are sort of not super happy with us afterwards. Here is the deal with YC. Here is what works, is that we don’t have a filter. We don’t require intros, you don’t have to be in our network. You don’t have to have in with us. And so we see tens of thousands of startups per year. We have to spent 90% of our time advising founders. So there is a limit to how much time we can spend selecting the next batch. And so we have learned as much as we can, what makes a great company. And we try, to make our best guess, in then minutes. And we try to learn, sort of, what the characteristics of a founder are. a. Clarity of vision b. Clarity of explanation. c. Determination d. Passion. e. Some evidence that they have done something great in the past or they have in this company. But, honestly, it’s really hard and we screw it up all the time, I am sure. And I know, for certain that there are these great companies that we have rejected. That had we accepted, would have become great anyway. The hard part about our model is that the top of our funnel is so huge. And so, we have’t figured out a better way yet.. Yeah, it’s not a perfect science.”