1. Short, tight answers.
Founders often have proximity blindness, and everything about their business can be explained in granular detail that they could talk about for hours. The problem is that YC partners see literally hundreds to thousands of pitches in the span of a few days, and they don’t have time to totally understand your PhD research turned startup.
When asked a question, answer it directly in your first sentence, ignoring grammar or context. Just answer the question.
Q: “How do you do what you do?”
A: “We do it by making it easy for X to do Y, saving time, and charge Z dollars”
THEN start with context. Keep context to 15-30 seconds if possible, and be prepared to be interrupted.
YC is measuring if you’re a clear communicator who can get people to understand your business in a few seconds.
2. Know your numbers.
Knowing your numbers and KPIs shows that you know your market and the way your business operates. Obviously this will change in the early days of your business, but state what is true in that moment that day, and show that you can be decisive and have a strong perspective on the world.
Ex. “Our expected annual fee is $1,200 at a 75% margin, and our bottom up total addressable market in the US is $50bn. We got there by multiplying the ~41.5m customers times $1,200 a year”
3. Know how your business makes $100mm in revenue
Know a clear and concise revenue model that gets your business to a net revenue of $100M. Tech companies “generally” get a 10x multiple in VC, and thus $100mm gets you a $1bn valuation. Aka unicorn. VC’s jobs are to invest in at least one unicorn a year.
4. Pick a number to grow.
YC’s metric of success is helping early stage startups get funded. On day one at YC, you’ll have a meeting with your partner where you’ll pick a metric, set a goal, and do everything within your power to hit that goal. If you go into your interview having a number that you know you can or have grown, make sure you show that and demonstrate that clarity of focus.
5. Demonstrate that you’re in an A market.
An ugly truth is that “B” teams in “A” markets can have “A” outcomes. “A” teams in “B” markets will have a “B” outcome. When investors talk about product, market, team, this is what they’re referencing. Make sure you know and can show that you’re an “A” team in an “A” market.
6. Show why you’re the team to do it.
You may have an amazing idea, but if your team isn’t equipped to solve the problem because you’re missing a CTO, or are fighting and talking over each other, or can’t get through a stressful interview in peace, that’s a giant red flag. The biggest reason startups fail is because the team can’t get it together. Put your egos aside and understand it’s you and your team against the problem, not you vs each other.
Photo credit: Daniel McCullough