This is the first week of interviews for the Y Combinator Winter 2017 batch! So I thought it'd be helpful to folks to get down in writing my lessons from being a partner doing interviews at YC for almost 5 years.
Congrats on getting the interview. You've made it past the most significant cutoff in the YC applicant process. Based on your team, idea, and traction, you've made it into the top 5% of all people starting startups at this time. You're one 10 minute interview away from being in the top 1.5%.
Here's the list. You'll notice that each of these is usually addressable through practice, and preparation. When you pitch an investor for half an hour or an hour, you have a margin of error. With 10 minutes, you don't.
Use plain-spoken language and start concrete
You don't have a lot of time to explain what you do. Ten minutes is not a lot of time. Don't let your desire to fit some idea of what a startup should sound like obscure what you actually do. If you're making software that connects retailers with consumers, that's fine, but that's not specific enough. Better to say that you help brands like Gap or Aeropostale directly sell to customers online through YouTube stars.
...Then zoom out, and be sure to show why that could be something much bigger
The best founders are able to start off with very concrete and real progress, but then once they've established themselves as real, they can zoom out to show what the product could become. So you might be helping Gap sell through YouTube now, but because Gap is such a great lighthouse customer, it means that the Fortune 1000 is now willing to sell direct through you as well, and that could be very big.
Traction gets you in the door, the big future gets you the check
Smart investors never fund things because of what you've done so far. What you've done just gets you in the door. What makes people get out the checkbook is how big you can become.
This fact is important because the top broken pitch problems end up being related to exactly this. Some pitches start with the grandiose future, but the team has nothing rooted in reality or what they've done so far to show that they're the folks to make it happen. Others focus almost entirely on talking about the traction now, but never talk about what it could become.
It takes both.
Know your numbers
What is the cost of what you're doing? How much does it cost to acquire a user? How much does it cost to service one customer? How much money do you make per unit sold? It's fine if you're not profitable initially, as long as you have some story where you can certainly be profitable down the road.
The most obvious way to tell if someone is serious is that they've thought through the costs and pricing of their business. Great founders never neglect that part, because at the end of the day, the bottom line is how you tell if a business is good, or a business at all.
What do you understand that nobody else does?
Having big dumb competitors is good because it shows that there's a real market or problem that's being solved, and YC partners have a long history of seeing firsthand small teams of smart people outperforming big dumb companies for years. It's a well known playbook. But it's not enough to call them big and dumb. What can you do that those incumbents can't or won't?
If you don't have competitors, that's OK too. What do you replace? What were people doing before using your product or service? One thing this question tends to capture is whether people actually want it.
The tricky part is when there are actually smart competitors who already exist. Then you've got to be even more direct about why you are better. These are cases where in particular you have to be 10X better, not just 10% better. The road to startups is littered with many failed teams that have a product that is only marginally better.
These tips work great for all pitches (including pitches to us!). Being prepared in the above ways is helpful for founders in the same way the 12 question YC application helps founders of all stages because these are the things that naturally help people make things people want.
YC remains the best place in the world for eminent founders to create new things and join one of the most valuable founder communities, and we've been lucky to have a front row seat to the great things that have come through. Let us know how we can help.
Best of luck to all the interviewees.