Y Combinator Summer 2008 Demo Day: Best Batch Ever

By Dharmesh Shah on August 15, 2008

 

I just got back from Y Combinator Demo Day, Summer 2008.  For a startup fanatic like me, it’s hard to imagine a more fun use of a few hours.  I got to watch 20 back-to-back, rapid-fire startup demos. 

Here are some of my initial reactions and thoughts on the newest cohort of YC startups.  Note: Like most OnStartups articles, this article focused on the entrepreneurial perspective (not the investor perspective).  The folks that should (hopefully) get the most out of this are the YC startup founders themselves.

Notes From The Y Combinator Summer 2008 Demo Day

1.  Best Cohort Yet:  Overall, in my (highly subjective) opinion, this is the best batch of YC startups yet.  I think I have a bias (which has been tempered over time) for startups that have demonstrated some thinking around things like monetization and revenue, and that might be influencing my thinking.  The current cohort, on average, seemed to have a stronger emphasis on not just making something people want, but something that will yield revenue, and (gasp!) profits.  Good stuff.

2.  Presentations were better than what I’ve seen in the past.  More fluid, more polished, more effective.  My hat’s off to all the YC startup founders that presented today.  You guys did a great job!  Having said that, it’s not a totally fair comparison.  You guys do have the advantage of many more YC founders before you that you can learn from.  I’m guessing that  Paul, Jessica and the rest of the YC crew are also getting better and better at nudging you in the right direction when it comes to Demo Day presentations. 

3.  Tip:  Use your precious minutes:  The Y Combinator team did a great job keeping things moving, and I think the format of Demo Day works well (6 minutes per presentation, no audience questions).  One quick tip for the presenting team:  If you are doing the presenting, you should begin with your message even while your team member is setting up.  Don’t wait for the slide deck to come up on the screen.  Don’t shift the focus to your buddy who is switching out the cabtes and stuff.  Don’t wait.  Just start delivering your messageIn your preparation, come up with introductory remarks that don’t rely on your first slide being up yet.  When you only have a precious few minutes, 30 seconds counts.

4.  Don’t use gender stereotypes:  This one’s going to be a little touchy.  A few of the startups today used examples and screenshots that were um, a little too “gender-stereotypical” (that’s a semi-polite way of saying they were too far down the spectrum towards being sexist).  I can understand and appreciate that most of the YC founders are young males in their 20s.  But, my advice would be to resist the temptation to use scantily clad women in demos.  It’s both inappropriate and sub-optimal.

5.  Answer the question you know people are asking themselves:  Once you start doing presentations a lot, you begin to realize that there’s a “pattern” to the kinds of quesitons people have in their heads.  The same themes recur.  Do what you can to make it as difficult as possible for people to dismiss you because they’ve got that one big “obvious” question/objection/whatever.  For example, I thought the Fliggo team did a smart thing by closing with this nugget:  “I know you’re asking yourself, how are these guys going to make money…I’m glad you asked…”.  You don’t necessarily have to answer the “how do you make money” question (though that’s not a bad thing), and you don’t even have to frame it as a quesiton.  Just try and address the most obvious things people are likely to wonder about.

6.  Tip:  If you’ve got traction, share it earlier in the presentation:  There were several startups that had pretty impressive early traction (like users and revenues).  They didn’t talk about this until later in the presentation.  I’d suggest possibly getting this message out earlier in the presentation, because it will grab people’s attention and cause them to listen more intently to the rest of your story.  Imagine an opening sentence that is something like this:  “Hi, we’re XYZ.  We launched just a few weeks ago and we’re getting some encouraging early evidence that we’ve built something people want…Here’s what we’ve learned from our 14,000 users…”.  I’m not suggesitng you use that exact sentence, just a thought.  When dealing with investor types, remember that folks have short attention spans and you’re best served by grabbing them as early as possible with something they care about. 

7.  Memorable sound-bites are not just for TV:  I’m generally not a big fan of over-preparing for presentations (more often than not, sounding natural is more important than sounding polished).  Having said that, some clever, funny, well-crafted sound-bites thought of in advance and added to the presentation are a good thing.  They’re particularly good for bloggers and media types that might cover you.  For example, the PopCuts folks had this great snippet:  “The only way to get famous on BitTorrent is to get arrested.”  Simply brilliant. 

8.  Audience participation/engagement works:  A couple of the startups were able to work their demo such that the audience was “involved” in the demo itself.  Although this is hard to do, it’s valuable.   It also helps a lot when you get audience members to do something (instead of just sit there and listen). 

That’s all I have for public consumption.  However, I have notes from each of the presentations.  If you were one of the startups that presented today and want my quick thoughts or feedback, feel free to email me. 

I just noticed a great summary write-up of today’s event on Scott Kirsner’s Innovation Economy blog.  If you’re not yet reading Scott’s blog, you should be.

Best wishes to all the Y Combinator startups.  It was great to see you all and chat with many of you at the close of the event.  Knock ‘em dead next week.  In the meantime, some closing advice:  Get some sleep!

Topics: ycombinator
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6 Y Combinator Startups I Would Have Invested In Back Then

By Dharmesh Shah on August 1, 2008

I have been tracking Y Combinator (a new kind of venture firm for early, early stage startups) for several years.  They have a distinctive approach to the early-stage funding process and have funded some interesting companies.  YC is in the news again because of Google's recent acquisition of Omnisio, a YC investment. 

Thinking back on several years of YC history, I dervied the below list of companies that I would have funded had I had the opportunity to do so.  I tried not to cloud my judgement with hindsight (that is, I'm not just picking the ones that ended up being successful).  Also, note that these are not what I think to be the best YC companies — just the ones that I’ve thought about in the past.

1.  Reddit:  I remember the day I first encountered Reddit.  They were presenting the product at one of the early Web Innovators Group meetings.  I was still a grad student at MIT at the time, and went to the meetup with a few of my classmates (we were working on a paper about “Web 2.0” for one of our classes).  Interestingly, Kiko (remember them?) was one of the other companies presenting that evening.  I’ll be honest and admit that on the first evening, I didn’t quite “get reddit” (the category of social news was very new at the time).  But, reddit showed up on my radar pretty quickly a little while later.  I noticed a bunch of traffic coming to OnStartups.com (this blog) through reddit.com.  It caused me to take a second look, and I’ve been following them ever since.  I don’t know Steve Huffman that well (he might actually be even quieter than I am), but Alexis is about as nice a guy as you can find and has a weird, quirky creativity that is magnetic.  To build a successful startup, it helps a lot if people actually like you. 

2.  Xobni:  I met Adam Smith for lunch at a Thai place in Coolidge Corner (Brookline) a long, long time ago.  Long enough that it was before the exceptionally talented Matt Brezina joined as co-founder.  Even back then, I liked Xobni for one simple reason.  It complies with my notion of “the problem you solve should be ugly, the solution should be beautiful.”  There are few things less fun to develop these days than desktop applications for Windows.  It’s ugly.  What’s even uglier is developing desktop software that has to integrate as a plug-in to something else — like Outlook.  That’s one ugly problem.  Further, the fact that millions of people still use Outlook made it in an interesting commercial opportunity.  Plus, I really like Adam.  He’s super-smart and listens.  [Matt, I like you a lot too, but I didn’t know you back then and I’m trying to talk about my early, early thoughts on the company].

3.  Pairwise:  I saw the pairwise guys present at the YC Demo Day (the big day following months of furious coding that is the core of the YC experience).  Of all the companies in that cohort that presented, I liked Pairwise the most.  It appealed to my data-driven nature and they had something that I felt had commercial opportunity.  More importantly, unlike many startups, it seemed they were actually thinking about the “how do we make money” part very early in the process.  I haven’t kept up with Pairwise much since then, and they haven’t written on their blog since November, 2007 — so I’m guessing things didn’t take off like they had hoped.  Regardless, I thought the guys were great and the idea was a good one.

4.  Wufoo:  I’ve been dealing with the frustration of web-based forms for a long, long time.  It’s a common enough problem that lots of people try to solve it by creating a “form builder” of some sort.  It’s an appealing problem to try and solve (unlike what Xobni is doing, it’s a fun problem to work on).  We even built one as a part of our landing page application at HubSpot (not because it is fun, but because it is a necessary part of what we do).  Back to Wufoo.  The thing I like about them is that they are exceptionally good at the UI/UX thing.  I’m not a designer myself, and don’t play one on TV, but I know great design when I see it.  I also know how hard it is to do right and how rare it is to find people that have that gift.  What’s even rarer is the notion of great UI/UX design talent intersected with a strong business sense — which the Wufoo folks seem to have. 

5.  Disqus:  Of all the startups from YC that I’ve seen, I feel like I understand Disqus the best.  Having been a blogger myself for some time, I get the notion of centralized comments and the tradeoffs therein.  This is why I met with Daniel Ha — coincidentally, at the same Thai restaurant in Coolidge Corner where I met Adam Smith.  (Yes, I’m a creature of convenience and the place is 2 minutes from where I live).  Daniel’s one of those entrepreneurs that makes a great early impression.  He’s clearly smart, but also recognizes there’s stuff he needs to learn that’s going to increase his odds of success.  I like the general notion of Disqus (always have) and even back then, there was some early evidence that folks were going to use it.  Disqus is also one of those companies that likely benefits most from an association with YC and Paul Graham. 

6.  RescueTime:  Tony Wright (the founder of RescueTime) probably doesn’t even recall this, but he and I first had online contact years ago.  He reached out to me way back then as a reader of my blog and reported a problem with the commenting system.  Since then, Tony and I interact sporadically (mostly through each other’s blogs).  Tony’s one of those guys that I’d bet on simply because he has an uncanny knack for how the startup game is played.  Intersect that with an interesting idea that could get massive appeal, and you have a great startup.

So, there you have it.  6 Y Combinator startups that I probably should have been more aggressive about investing in.  But, that’s not my style.

My best wishes to all the Y Combinator founders.  Particularly those that are working away furiously on their products in preparation for demo day coming up soon.  I hope to see/meet many of you there.

By the way, if you're not in YC, but you're a superstar web developer (take 5 minute quiz) and looking for a fantastically fun startup gig, I'm recruiting for HubSpot.  Just drop me an email.  I'm easy to find.

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