A quick intro:
This is the first post I’ve written in quite a while, but it’s also the first time I feel like I’ve had a chance to breathe this year.
I’m on a “vacation”, although it stops feeling like that when you have a toddler and a very pregnant wife. I also managed to get a bit of a sinus infection on day 1 of the journey.
My wife likes to joke that I always get sick on vacation as my body needs to acclimate to the sudden drop in cortisol levels that comes with running a company.
Anyway, she’s napping, toddler is napping, our dog is napping and I’m hopped up on a sudafed and diet coke.
Here goes something.
We sold our first company last year in early 2021.
We had build it over the pandemic and grew it astonishingly quickly in about a year. We sold (probably too early) and then soon after migrating it into the acquiring company, got the itch to build something new.
We had another company in us.
We applied late to Y Combinator, for the second time.
My cofounder has a screenshot of our text he’s fond of sharing because of how nonchalant we were about applying compared to the first time we had applied.
Late that same night, we knocked out the application over Zoom, I picked a name from my list of domain names I already owned and we hit submit. Then we promptly forgot about it.
A few weeks passed and we received an email to schedule an interview. That was further than we had gotten previously.
We booked the call for the next day and with zero prep and no product, we entered the Zoom call to pitch a round of YC peeps for the first time.
And we waited. And waited. We waited long enough that I started wireframing out the product in the Zoom waiting room. I even sent an email asking if we were in the right Zoom room. Of course, seconds after the "undo send" toast disappeared, the room was suddenly full.
They had arrived and we started to pitch.
It went terribly.
Like soul-shattering, omg I’m an idiot how did I even get on this call, bad.
My one moment of wisdom was when they asked if there was anything else we had to show them and I offered to share my screen.
I walked them through the 3 screens I had just created while waiting for them to join the call, grimacing through the copy errors and incredibly sloppy UI.
After seeing the product at least somewhat laid out, it was like a switch flipped in the conversation and suddenly they were curious.
Questions started coming in about the actual product, how we would approach the market, how we planned to edge out incumbents.
It went from an incredibly painful, stare at the clock level conversation to actually ending on a positive note. We had gone way over our allotted time (sorry to whomever followed us!).
I was still filled with dread, so I called my cofounder up immediately afterwards and started apologizing because I was sure I tanked the interview. The flow felt better with just one of us talking and I was sure that by sucking up all the oxygen in the room that I had killed our chances at getting in. He said it was fine, but I could tell he knew it didn't go as well as it could have.
Weeks passed without a word. I apologized several more times to my cofounder over different mediums.
Then one night, we got a phone call and they let us know we were in!
I, reacting very poorly, said I needed to ask my wife and I would call them back.
They laughed and we hung up. I told her and her face was everthing I needed to see. I immediately called back with a yes. They laughed because nobody ever says maybe!
So we were in YC, what now? Well we got in a bit late, so the program was kicking off soon. I cleared my schedule and started reading through all the docs that YC had sent us ahead of time.
Our previous business was bootstrapped and this one was to be VC funded initially.
The amount of prep to actually get it off the ground was a bit mind-numbing, there’s much more to be done to actually prep a business for VC funding.
We were in the Winter 22 batch and it was still planned to be entirely remote, as YC had transitioned to full remote during the pandemic.
That worked great for us as both my cofounder and I were on the otherside of the country and we each had a family that would have been difficult to spend much time away from.
YC kicked off and I was immediately impressed with the breadth of businesses admitted.
I’ve spent most of my career in SaaS and more specifically lately, B2B SaaS, so this was the most I had ever been exposed to other types of companies. I was very impressed with some of the revenue numbers our batchmates were posting up very early. Part of that was due to the international admittance being exceptional and the other part was many of the businesses were further along than I realized.
Quick aside, the international companies admitted to YC are truly on another level. Was never more consistently impressed than when I was speaking to teams in Latam, India or other locations outside the US.
The batch kicked off Jan 1 and all of a sudden, we were thrust into a very different pace.
We were expected to have revenue within a few weeks. But we hadn’t even incorporated the company, built a landing page or let alone actually built the thing we were supposed to be selling! I was gobsmacked.
We went heads down and began to build. What we realized however, is that what we were building (Loops, a full email sending platform for early stage B2B SaaS startups) required much more infrastructure and "table stakes" features than we had initially realized.
We either had to pivot, or prepare to build while our teammates were selling and fall behind. We ended up doing a bit of both.
We vastly narrowed scope to focus on a specific niche, then changed our value prop to start getting users in the door, even if it wasn't for the initial product we had hoped to build.
A bit of context about the app might help explain this decision-making here, but if not, skip ahead a paragprah!
Our goal is to build an email sending platform that fits SaaS companies like a glove. You should be able to flip a few switches and have excellent deliverability, notifications, newsletters, templates and integrations with your existing services in seconds. It should also be priced in a non-prohibitive way so we can stay true to our early stage users. Turns out that doing all that well actually takes quite a bit on engineering. So much so, that some of our competitors, even publicly traded ones, actually license their email editor instead of building their own. We wanted to build everything from scratch as we wanted a solid foundation to build a business on, not a foundation built on leased software from third partied.
So we were never going to build all of that in 2 weeks. We decided to narrow expectations and just create the easiest and simplest way to send an email to a group of people. We became the best place to quickly write a product update or investor update. We could ship that, or so we thought.
Well, we kind of did!
But, we got to the 2 week mark with 0 revenue and we still didn’t have a completed product. That’s not really an excuse that flies in YC and every week expectations are ratcheted up, so we had to think of something. That something was sales and doing that thing that I think many founders hate doing, asking for money.
I started selling something that didn’t exist, and much to my surprise, people started giving us their credit cards and signing up for a product based on us promising that we would have it ready soon.
We finally got some revenue, along with a bit of wind in our sails. More importantly, we were finally talking to users and the full idea, along with the simple version we were selling them on today, both resonated.
We might have a thing.
YC began to fly past.
Fast forward a month and revenue was increasing, although not as much as we would have liked, but the app was slowly coming together.
I had created the world's largest figma file that would occasionally crash due to size, even on an M1, but I had an instinct around the UX of this product that I needed to flesh out.
I was so impressed with other batchmates along the way.
A few pivoted and found more success almost immediately. I couldn’t help but be jealous when a founder built a technically less complex piece of software, with a generic template of a landing page then suddenly went from 0 to $10K MRR in a few weeks.
Those same founders are now approaching 1M ARR 6 months later.
It forced me to face some misconceptions around building and selling software.
Our focus this second time around was to create a fine, hand-crafted piece of tech.
We’re putting real hours into the minutiae, into every nook and cranny of the product. I think users are expecting that when you’re attempting to replace not one, but 6, heavily-funded and publicly traded incumbents in your space.
Seeing founders with less care for detail and more for the sheer growth of their user base was impressive and deflating.
We could easily have slammed together off the shelf components and potentially grown at a similar rate. Also potentially not, sales is hard!
It felt like everyone I compared myself to, they were devoting 90% of their time to selling and 10% to building.
However, we started to see some external factors come into play that I think some other folks may have missed.
We were approaching February and we started to hear that later rounds were drying up. Not great news for us as we'd be raising a round soon. Later round funding always trickles down, which meant that in 3 months time at Demo Day, we might be in trouble.
But funding was still brisk at the time, so we needed to move. We started the fundraising process in mid-February ahead of the majority of our batch and were pretty much done a few weeks later.
One of the things that doesn’t get mentioned enough is the sheer amount of incoming VC interest we had once we publicly announced we were in YC. I won’t say it was easy, but I’ve been inside other companies with 1000x our revenue but having trouble raising at the terms we were able to raise with.
Unfortunately, fundraising did take a big chunk of our time and we felt we were slipping behind batchmates who had been laser focused on growth. We started to wonder if we had really jumped the gun and maybe everything would be fine in the fundraising world. Should we have waited?
We know now that was not the case. While everyone I stayed in contact with post-YC was able to close their rounds, things were definitely sketchy in late March and early April and it only got more difficult from there.
While we did not end up hitting our demo day goals, but we were well-funded and made a few intelligent decisions around tech to build on that continue to serve us well today.
Thanks to the YC network, we also had our initial user base of customers.
I was irrationally nervous on Demo Day, even though our fundraising was complete. There’s just something in the (virtual) air. We made it through Demo Day, which pretty much completed our YC journey.
So, would I do it again? Probably!
There were far more successful folks than I in our batch that certainly didn’t need the YC check. There is an absurd amount of talent and knowledge on the YC side alone, let alone the shared knowledge of your batchmates to source encouragement, valid critiques and constructive feedback.
Another understated metric from YC, and perhaps because it’s impossible to quantify, is the caliber of personality of our batchmates.
Put another way, everyone was incredibly nice. And that wasn’t just our batch - I could email anyone at any previous YC company, and get a call with them or at least an answer via email. The power of that network cannot be understated.
I also met some lifelong friends, even though I have yet to meet them in person. I’m used to working remotely, so I didn’t have some of the trouble that I think others potentially had with connecting with their batchmates in an entirley virtual batch.
However, if I were to do it again, I think I would want to create a different product. Not because I don’t love the one we’re building, and I do and you should go check it out here, but because it would have been more fun if we had chosen to play the same game around chasing revenue.
Maybe because it was our second time founder mentality, but we were ok with slower growth at the beginning while we focused on securing the next few years of runway, making the right technical choices and choosing to build instead of buy off the shelf software.
But I do still wonder what we could have built had we decided to play the game and ran straight for revenue. Would we get to Product Market Fit faster, raised more then we rebuilt the entire stack? Who knows.
What I do know is that Loops didn’t exist for the last 30 years while our incumbents built their businesses, so taking a bit of time to strategize around the market and approach it meticulously and decisively, instead of running full force at it with a sales team, still feels like the right decision.
Finally, should you do YC? This is the question I now get asked as a “YC alum”.
Well, probably, yes.
It is, unequivocally, one of the most important career decisions of my life.
It’s free to apply, you're encouraged to continue to apply if you don't get in initially and you by no means have to build the product you apply with. You can build anything you want!
Heck, you can even choose to skip Demo Day entirely and take that initial $500K (yes, it’s $500,000 now), and just bootstrap it from there. I wouldn’t recommend it, but hey, it’s not against the rules.
I guess what I’m trying to say is, yes, you should do YC.
The people inside and outside of the current batch are awesome and the partners you get to interact with and act as your mentors are experienced and knowledgeable.
You might even make some lifelong friends.
Edit: Join the discussion on Hacker News