On December 4th, 2019, we had an interview in Y Combinator for winter batch 2020. Unfortunately, we got rejected. Here I will talk about our path from application to in-person interview in Mountain View.
Apphud is a platform for iOS apps with subscriptions where you can:
- Easily integrate and manage subscriptions in your iOS app.
- View key subscription metrics and send subscription events to third party analytics and marketing platforms: Amplitude, Mixpanel, AppsFlyer, Branch, Adjust.
- Grow app revenue using rules – a powerful feature that lets you increase app revenue by automatically offering a discount to a user at the specified moment. Rules also lets you receive tons of valuable cancellation insights.
Why we needed Y Combinator
Y Combinator is number one accelerator in the world. There are many advantages:
- Direct access to any YC alumni, who might become your client, including Airbnb, Dropbox, Stripe, Reddit. The list of top YC alumni can be found here.
- YC alumni status. You automatically increase your startup’s trust level. This also dramatically increase startup confidence level in the eyes of investors.
- Demo day, where 80% of startups get funded.
- Great opportunity to relocate your business to US.
- YC gives you $150K for 7% of equity. For this money you can live a few months in the valley.
To get into Y Combinator, you need to:
- Submit an application on YC website. The last day for winter batch 2020 was September 25, 2019.
- If your application is chosen from several thousands, you will receive an email. It may have additional questions, invitation for video or in-person interview.
- Pass in-person interview with YC partners.
Majority of startups are being dropped out at this stage. Basically you need to tell about your project and answer a few questions.
- Short description of what you do.
- Current progress and traction.
- Who are your competitors and what’s your advantages.
- Tell about your team and your skills.
- Tell about your personal achievements. How have you successfully “hacked” some non-computing system.
While filling up application you should write very short and concrete. Partners view each application manually (there are over 10K applications each batch), so please don’t make them waste their time.
We finished filling up our application and sent it on September, 3.
Questions in YC application are very straightforward and concrete. Even if you don’t want to apply to YC, you can fill it up: that’s a good exercise. Good questions require good answers, so you might probably rethink your vision.
Thanks to application and its questions we changed our focus. Previously, we considered Apphud as competitor of RevenueCat (YC 2018 alumni), now we decided to position ourselves as a platform for analyzing and increasing your app revenue and getting customer insights. We changed the focus to become a mix of subscription management (RevenueCat) and marketing platform (Braze, Leanplum, Airship).
On October 6 we got an email with invitation for a video interview. A few days later we got a video call right from their website. It took 11 minutes. The main questions were about current stage, number of registered users, and how are we getting new ones.
After interview has finished, we were sure that we failed. We couldn’t give a clear answer on a question: “How are you going to become a billion dollar company?”. It obvious that Y Combinator is interested only in startups, that can grow into a unicorn.
Here is a video of Y Combinator’s CEO Michael Seibel’s speech, in which he talks about how to get backed by YC:
A few other startups we were getting in touch with, said, that they got an email with additional questions instead of invite for a call. Others didn’t even have a video call. They got direct invite for in-person interview.
However, video interviews or questions do not increase your chances to get through. On the contrary, it means that they didn’t understand something in your application.
Invitation for in-person interview and preparation
On October 16 we already were in San Francisco. We decided to travel to California right after the interview, to get investments to the project. We were sure we won’t get an invitation.
However, YC has changed our plans: we got an invitation for an interview in Mountain View. We decided to stop our investments finding journey without actually starting. We knew that if we got through, we could get a better deal.
The nearest slot for an interview was on December, 4. In person interviews this year are being held in France, India and US. We were invited to the head office in Mountain View. I think, this large amount of time was given intentionally for foreigners, because they need to get US visas and buy tickets.
Y Combinator covers travel costs for the founder, one night at the hotel and a taxi. The sum depends on your location and number of founders. In our case (we are 4 founders) – it was almost $5,000.
In the email we also had a short recommendation about how to prepare for an interview. The main thesis – focus on the product, not on the interview. The best indicator of your success – is to show the traction between your application and interview.
We decided to follow this recommendation. For those three months from sending an application to an interview, we had increase number of users from 37 to 180. And we got our first paying customers. We continued to work hard on our platform.
We began to prepare for interview a week before by doing mock interviews and answering on frequently asked questions. Mock interview – is a test 10 minutes interview, typically with YC alumni. They keep asking you questions and you have about 15 seconds on each one.
Y Combinator doesn’t recommend you doing mock interviews. However, every startup does that. Some of them even do 20 or 30 mock interviews. We had 4 mock interviews with YC alumni. Now I realize that we needed more.
Here is what was helpful for us:
We arrived at the head office at Mountain View 15 minutes before scheduled time. There we registered and got badges with our names. The interview took place in a nearby office across the road.
There were 4 YC partners interviewing us. One of them was taking a video interview a couple of months ago. By the way, these partners that take an interview will actually become your mentors in case of being accepted.
The atmosphere wasn’t nervous, we weren’t interrupted, there wasn’t hard timing on answering questions. It was like a business talk. At the beginning of the interview they asked us to tell about the project, asked about number free and paying customers. Most of the questions were about dealing with competitors.
They were asking how are we different from our competitors and why do we think they couldn’t implement our features. And what will we do if they implemented them. They also asked about one of our competitor RevenueCat, are we going to be replacement for them or not.
Then they asked what are our business benefits, not feature advantages. How are we going to fight with Braze and Airship?
The interview was exactly 10 minutes.
Why we failed and results
Later this day we were at the bar when we got an email. In the message they said, that the market is too competitive and it’s unclear about our advantages.
Honestly, we think that we just couldn’t convey our value. We think, RevenueCat had a big impact on decision, because it was already in their portfolio. Also, we are 4 founders, which is not good actually. Even if we work together since 2012.
Here are main results that we learned from all of this:
- If you’re planning to apply to YC, don’t hesitate to do this. Current startup stage – is not key factor.
- They are looking for billion dollar companies. If you are a good startup but on small market – you will fail. Think about expansion.
- Write and talk about your project as simple as possible. Prepare good and short answers for frequently asked questions.
- Know all key metrics and numbers about your startup and your market.
- Do mock interviews while preparing for an interview.
However, it was a really great experience for us. By the way, YC application for summer 2020 is currently open. If you have a startup, you should definitely try to apply there.
Also, I will leave a link to Apphud here. If you have iOS apps with subscriptions you may try our platform, this is must-have tool for any iOS project with subscriptions.