What it’s like to apply – and be accepted – for Y Combinator

Paul Graham

The following is an edited excerpt from The Launch Pad: Inside Y Combinator by Randall Stross. The excerpt is provided by Portfolio Publishing. You can buy a copy here.

Kalvin Wang and Randy Pang are hackers, the ones who write software. Jason Shen isn’t, but he’s a self-described “startup sales guy” and has a general-purpose ability to persuade. His personal blog is “The Art of AssKicking.”

The three are about twenty-four years old, recent graduates of Stanford and Berkeley, roommates living in San Francisco, and fast friends. They would like to start their own startup together. What the particular business will be is not firmly settled – it changes day to day. In the meantime, they have been selected as finalists who are being considered by Y Combinator for the summer 2011 batch of investments.

They are one of about 170 teams – it seems a bit early to refer to them as “companies” – that have been invited to Mountain View for a brief interview. Kalvin and company possess nothing more than an idea for a startup, and a transitory one at that. The “seed” in seed-stage investing doesn’t get much smaller than this. At this early point, the teams do not need to have a name for their proposed company. Most do not. Informally, YC partners will refer to the team by pluralizing one founder’s first name or whatever was used as a user name when setting up an online account at the Hacker News Web site, which also receives applications for YC.

Kalvin Wang is the principal contact person on the application, so the company is referred to as “the Kalvins.” It’s late April 2011 and the Kalvins are led into the small conference room at Y Combinator’s headquarters in Mountain View, California. Five men and one woman are arrayed on the other side of the table and along the sides. These are the YC partners, who range in age from a few years older than the Kalvins to two decades older. They all have open laptops and are peering at the application that the Kalvins have submitted online. The Kalvins know their chat at YC will last only ten minutes. Then a beeper will go off, seemingly almost as soon as the session starts, and they will be ushered out to make way for the next group. The session will be led by Paul Graham.

The other three founding YC partners are present – Jessica Livingston, Trevor Blackwell, and Robert Morris – but interview time isn’t carefully apportioned in even increments. It’s mostly Graham’s show. The Kalvins sit down. Graham continues to stare at his laptop, then greets them, without preamble. “OK. We liked you guys more than the idea.” The “idea” – the product or service that the startup will offer – often mutates between the time the applicants submit their application and the time of their interview. This is the case here.

The idea that the Kalvins had submitted a few weeks earlier was encapsulated as “past memories sent to your in-box.” In a preinterview via Skype with a YC partner the week before, they had been encouraged to think of something else. “We pivoted the idea a little bit,” says one Kalvin – Jason Shen in this case, but in the eyes of the YC partners, the finalists are a blurry succession of faces without individual names. “We’re going to be the Mint.com for photo books. We organize and rank your Facebook content, allowing you to easily create a printed photo book, featuring the best photos of you, your friends.” Another Kalvin adds, “In college, every dorm – dozens of dorms at Stanford – they have a historian, somebody who makes these books. They have to do this. They usually end up half-assing it. Or they don’t finish it. This would be an easy way to get started.”

“You guys still have connections in college?” Graham asks. They did; they had graduated two years earlier. Graham is much more interested in the founders than in the proposed business idea. When he sees a strong team of founders with the qualities that he believes favor success, he will overlook a weak idea.

“I believe this could be Altair BASIC,” he tells the Kalvins, who all were born many years after the first microcomputer, the Altair, was introduced in 1975. “Do you know what Altair BASIC was? Microsoft’s first product, right?” Printing photo books could be their start, their Altair BASIC, but Graham wants to know: “What do you expand into from this?” “We basically believe in the power of memory, nostalgia. We could go into lots of physical products – ” a Kalvin begins. Another YC partner jumps in. Sam Altman is an alumnus from Y Combinator’s inaugural batch, summer 2005, and holds a day job as the chief executive of Loopt, the company that came out of that experience.

But he’s also a part-time YC partner and sits in on the finalist interviews when he can. “I believe you on the memories and nostalgia,” says Altman. “But are people still printing books like that?” “Yeah. Last year, the photo book printing market was over $1 billion. Europe grew by 25 percent last year.” Another Kalvin adds, “It’s been steadily increasing since 2005. The numbers have been going up.”

The Kalvins are attempting an improbable thing, making a case for a nondigital product: “Having a physical product that you flip through and have on your coffee table and show your friends – it’s really valuable! We’ve actually bought photo books for our friends and family. It sucks because you have to spend hours making them, finding the photos.” Every dorm has to prepare one each year, pay a printer twenty dollars a copy, and buy at least a hundred. Graham returns to his still unanswered question: “Where does this expand?”

A Kalvin suggests offering a book based on your personal calendar and Foursquare check-ins. Or your tweets for the year. “You’re not serious, that people are going to print up tweets from last year?” asks Trevor Blackwell, who is forty-one, about the same age as the other three founding partners. He too has a day job, as the chief executive of Anybots, the robot company that shares its building with YC. The Kalvins are unfazed by the generational distance that has left the older YC partners unacquainted with the combination of social media and printed books. “Actually, I have a tweet book,” says one. “Tweet books have been going around since 2007. There’s a business that basically aggregates the last two thousand tweets you have and prints them out into a book.”

Jessica Livingston could picture this. “Kind of like a diary of your tweets,” she offers. “Blurb.com is that book publishing company that went from $1 million to like $30 million in two years. They basically print out blogs, turn them into books,” says a Kalvin. “But their software is super clunky – super slow.” “Maybe you can replace yearbooks,” Graham says, answering his own question. “High school yearbooks. I feel like it’s about time. If you could replace high school yearbooks, that could be a lot of money. It’s so clearly waiting for someone to come along.”