Y Combinator Startup School: Week 3 Takeaways
Week 3 was incredible, not just for the lectures, but because I went all-out this time…
Quick recap:
Y Combinator is a company that invests in and mentors early stage startups.
They also offer Startup School, an enlightening 10-week online course that teaches Y Combinator’s secret recipe to building rapidly-growing startups. It covers topics like general entrepreneurship, creating a Minimum Viable Product, getting customer feedback, marketing your venture, and much more.
In an attempt to take my own startup to the next level, I’ve enrolled in Startup School, and I’m sharing my insights and key takeaways with my readers.
In case you missed it, check out my highlights from last week here!
Customer feedback & founder video meetup
Every week, in addition to reviewing the lectures and of course working on our startups, Y Combinator highly encourages participants to talk to customers, and attend a virtual meetup with other founders in your area. This week I spoke with 10 prospective customers (previous personal best was 1…) and attended an amazing video meetup.
The customer feedback was informative and really motivating, because it provided insight into how they make purchasing decisions and reinforced the fact that there’s a serious desire for my products.
In the video meetup, there were 3 other entrepreneurs in attendance, all of which shared awesome feedback and a ton of encouragement. One of the attendees was actually a serial entrepreneur that had sold several businesses and was running several more. He dropped some serious knowledge on us, and as a first-time founder, it was incredibly inspiring to talk to someone with his track record.
If you can’t tell, I’m fired up! The most energizing things for me are taking initiative, and pushing through discomfort to do valuable things for my ventures.
I would encourage all my readers to do something TODAY that is uncomfortable but valuable (“UBV!”). Sometimes the thing you’ve been avoiding is the key to rising from your current plateau. Tim Ferriss explains it perfectly:
“That phone call, that conversation, whatever the action might be—it is fear of unknown outcomes that prevents us from doing what we need to do. Define the worst case, accept it, and do it. I’ll repeat something you might consider tattooing on your forehead: What we fear doing most is usually what we most need to do. As I have heard said, a person’s success in life can usually be measured by the number of uncomfortable conversations he or she is willing to have. Resolve to do one thing every day that you fear.”
I’ll be making a resolution to follow this advice, and do at least one thing weekly that is uncomfortable or intimidating, but valuable (UBV). I’d love to hear how you implement this advice as well – shoot me an email at jon@bringambition.com, or DM me @CopywritingPro and tell me about your UBV action(s) this week!
Lecture 6: Nine Business Models and the Metrics Investors Want
For the first Week 3 lecture, my approach to sharing notes is a bit different this time around. The main lecture was “Nine Business Models and the Metrics Investors Want,” hosted by YC partner Anu Hariharan. It was a great follow-up to last week’s discussions on KPIs and startup analytics. Hariharan did a better job of summarizing the key lecture info than I ever could, so I would just point you toward her actual slides here.
They also did a Q&A, which had some great takeaways as well:
1.) What do investors look for in a startup?
Investors evaluate a startup's team, product-market fit, and market opportunity. They ask themselves a few specific questions during a pitch:
Why are you working on this idea?
Do you have clarity of thought when pitching?
What unique insight do you have?
How good are you at convincing investors?
How good are you a conveying the nitty-gritty details and educating investors about the space?
If an investor gives you capital do you know what to do with it?
Are you capable of moving fast (growing and iterating week-by-week, not monthly or yearly)?
Thinking back to prior lectures, investors are almost asking themselves "is this startup actually a startup?" Because again, startup = growth, and requires a unique insight that helps you iterate and grow and make customers love you.
2.) “Don’t do things to satisfy investors. Build a company you want. If you build a great company with lots of users, wherever the investors are, they’ll come.”
When a fighter goes into a fight expecting a knockout victory, they usually leave disappointed, or worse, defeated. Any decent baseball coach will tell you not to go for the home run every time you're up at bat. And once a band starts catering too much to what "people" want to hear, they lose what makes them unique and end up working at McDonald's.
The point is to trust in your idea and insight, follow the process, and do what you think is right to grow and make customers happy. Investors will come. But if you cater only to what you think investors want, chances are you'll strike out.
3.) Tips for solo founders
There are times when I’ve been demotivated and I wished I had a partner in crime to help me bounce back. It was incredibly energizing just to attend this week's virtual meetup – having other ambitious founders provide encouragement was a huge boost.
Without a co-founder, you have to rely on other methods of staying focused and inspired. Hariharan points specifically to the merit in building a community of founders to support one another through those difficult periods. (That helps explain why the video meetups are mandatory for graduation!)
She also explored what investors look for in a solo founder - which isn't any different from what they look for in the head or CEO of a team. The most important things are clarity of thought around your venture and insight, plus the storytelling ability to get others excited about it. Without locking this down, how can you convince employees to take a risk and come onboard, never mind get people to give you money?
On that note, Hariharan recommends an exercise: imagine how you would pitch the company to an early hire, how you would convince a high performer who's comfortable at their big corporate job to join your scrappy, risky startup. This will help inform your investor pitch as well.
Those are my key takeaways from an invaluable Week 3! I hope you enjoyed, and it would mean the world if you would help hold me accountable for graduating Startup School - please be the hokey, inspiring teacher to my wayward inner city kid! Feel free to pester me via DM, email, Insta comments, etc.!
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