How to Interview (for YC)

For the Winter 2013 class we interviewed and were rejected. We went back Summer 2013 and got in with the following advice for interviewing:

1. Know these 5-6 things about your or company.

customer/potential customer (or user)
problem
solution
traction
market
BIG (how this gets to be big)

2. Know concise, < 30 second summaries of each of these.

3. All their questions lead back to these 5-6 things. Doing this will avoid going down rabbit holes and wasting precious time.

For example:

Are you sure you’re charging enough?

We are, because the market is enormous. Last year alone Company X had $XB revenue in the US alone. And they’re only 15% of the market.

Do people actually want this?

To date we’ve had over 10,000 signup and 36% WoW revenue growth. And we continue to sign bigger and bigger customers, like: ….

4. Lastly, don’t make them work. They don’t want to ask questions all day, they want you to tell your story. So start off and tell them who you are, and if they start firing off questions (good sign), then use each one to go back to the 5-6 things you know about your company.

This will work for almost any big interview you have. Your prep is much easier, because you only know 5-6 glowing things about your company.

NSA Rejection of Digital FOIA

I got this in the mail today. The good stuff starts on page 2. 

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New Gmail Ads?

Don’t ask why I still subscribe to Google Offers… (I like to see their marketing.)

GET YOUR FUCKING SHIT TOGETHER, GOOGLE (IO)

645am 

Jarring alarm. Wake up and get ready to register for Google.io (for Jon, I lose less sleep waking up at 645 (about 30 minutes) than he would waking up at that time). 

659.59am

The fucking second it turns 7 I click register. 

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There’s all this shit at the bottom about what not to do to try to get a ticket. Reminder: I’m not the guy with 50 modems in the closet trying to get a ton to scalp on craigslist.

Just the one that woke up in the dark to get a ticket for my cofounder. 

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702am

Hmm, okay, taking a while. But it’s Google, I mean, they’re used to handling lots of traffic. Hell, this happens every year with Google IO. 

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706am 

"Sorry, we couldn’t find a ticket." it tells me. 

Weird, because I hit register the second it went live…and you’re fucking Google. 

I go through selection “General” admission and I agree to their terms. 

At one point I get a 500 error. 

It’s now fucking 719am. That 30 minutes extra sleep I was going to get by going back to bed, I’m not going to get. 

FUCK YOU, GOOGLE! USE TICKETMASTER!

Why You Shouldn’t Wait to Incorporate

TL;DR: If you have potential customers or are at least all in on your idea, go to Clerky right now and incorporate. NOW!

TL;DRR: The agents in Delaware will swear they can’t email the articles of incorporation to you—like when they screw up and don’t overnight them to you because they didn’t actually look at the docs you sent three times. In that case, THEY WILL EMAIL THEM TO YOU! (This will require either a screw up on their part or you being highly persuasive.)

I’ve heard this before in lean posts/books that you should wait to incorporate. Take that with a grain of salt. Yes, you should wait until say after you’ve proven there are customers willing to pay for
your product (ie some landing page got you signups). But that’s as long as you should delay it.

Why? Because we’re not talking about an online form that immediately gives you an EIN (like if you file for a sole proprietorship). It’s a legal doc that must be faxed in. Yes, Clerky and HelloFax make this easy as possible, but it’s still non-trivial.

Let’s say baseline is a week round trip without paying the 5x idiot price. But what if your form has an error? What if say you sign your name CEO but at the bottom it has your name as Incorporator? That won’t fly with Delaware and…they won’t email you right away. That goes in the “people to call” bucket and you’ll get a voicemail sometime. (Note: they’ll still honor the original date you submitted
it, but that will bring up issues later which I’ll mention.)

Okay so instead of them completing it and sending it out you get a voicemail and now have to redo the forms. So you redo the forms but now you’re delayed at least a day. Meanwhile, you’ve got actual customers wanting your product and are considering, despite future tax issues, just using your personal EIN for your payments.

What if then you have another error on your docs? What happens then? Well, it goes back in the “people to call bucket” and you’re delayed at least another day or two. Unless of course it’s a weekend, then it’s a three day delay.

So at this point you’ve tacked on a full week to an already week long process. Oh and if you have to redo the docs you’ll run into another issue. Since they give you the bro deal of honoring your initial submit date YOUR NEW DOCS MUST BE DATED THE SUBMIT DATE OR EARLIER. Is this an issue anticipated by anyone? No. Does this mean you’ll sit there staring at the pdf and playing with the cropping tools for 30 minutes trying to figure some way to edit the date? Absolutely. (Secret: they will accept strikethroughs, so just strikethrough the entire date and add a date BEFORE OR ON the day you submitted.)

Okay, sweet. So now you’ve spent like five hours of your time and added stress (this part is a function of how bad you need to setup payments and a business banking account, so it could be anywhere from annoying to extremely stressful) for a task you thought was merely bureaucratic and non-trivial.

That, my friend, is not lean at all. Oh and on top of that, you’ll be setting up a FedEx account so that they can overnight the docs (regular mail would have worked but you screwed up so many times you can’t wait any longer). Which brings up EasyPost, you should check us out…

(Note: there are also potential tax benefits to filing them as early as possible. Once they’re filed you can do your formation docs. And once you do your formation docs you can be issued founders preferred stock (which easily converts to common stock). And say you’re Fab.com and you raise massive amounts very quickly, you may want to take some money off the table. If your shares were issued > 1 year ago, you’re at long term capital gains, otherwise it’s income tax.)

Why You Shouldn’t Raise a Friends and Family Round

Okay, so you send the email to your friends and family asking if they want in, then what? Then they start asking questions like this:

What are the terms?

(You have no clue) Uh, standard terms…

What happens if you get acquired?

(Again, you have no clue) Uh, standard shit…

Before long maybe you’re sending out links to Clerky or docs. They start mixing up things like valuation and cap. They start asking when they’ll get their money back. Eventually you realize that these people have no business investing in your startup, and you have no business taking their money.

Remember that part in The Big Short where the hedge fund manager that bet against sub-primes was right and all his investors made a killing? Remember how they still weren’t happy with him, because of drastically misaligned expectations?

That’s going to be you. Why? Because they don’t have any clue about venture capital returns.

Save yourself the trouble. More importantly, save these people who believe in you the trouble. Tell them they can invest as much moral support as they want. But don’t take their money.