YC CEO Michael Seibel opens up about his accelerator’s first online-only Demo Day

'We do know that we're gonna be funding companies this summer'

Y Combinator’s Demo Day has historically drawn crowds of investors and journalists into a big warehouse to watch hundreds of startups come out to the public for the first time ever. Think two minute pitches, a big audience, and tons of networking opportunities after. 

This year, citing COVID-19 concerns, the accelerator canceled its in-person Demo Day and moved it to online-only, a week earlier than expected. You need to be pre-approved to access the list of companies, and more than 1,200 investors RSVPd. 

So while there won’t be the usual flurry of live tweets and on the ground reporting, TechCrunch caught up with YC CEO Michael Seibel to go the behind-the-scenes on this year’s batch, nonetheless. It’s Seibel’s second equity appearance, so we skipped the housekeeping and got right into the good stuff.

SAN FRANCISCO, CA – SEPTEMBER 07: Y Combinator Partner Michael Seibel speaks onstage during Day 3 of TechCrunch Disrupt SF 2018 at Moscone Center on September 7, 2018 in San Francisco, California. (Photo by Kimberly White/Getty Images for TechCrunch)

Click below to listen to a clip; you can hear the entire episode after the jump. 

Seibel got into how YC’s scrappiness led them to Demo Day’s new format and how investors weighed in on changes within the incubator. Other topics we got into include his advice for what companies are thinking about applying, and what in the world a YC post-mortem is.

Seibel, recalling his early days in startupland in 2006, also hinted at a sector he thinks might be making a comeback soon: software.

“Once people realize that getting software up and running and getting customers is faster and cheaper than almost any other startup idea, they’re going to rush to that. And so it’s going to be really exciting to see what people do on their nights and weekends and what products people start working on,” he said. 

A programming note

Seibel kicked off by discussing changes to Demo Day, which included getting rid of the classic two-minute pitch and replacing it with an option more apt for investor perusal. He said investors told YC that they want an easy-to-use website to scan companies quickly, dive into the ones they’re interested in and set up video conferencing calls for dealmaking accordingly. 

While obviously time will tell how the change impacted investor interest, Seibel weighed in by noting that many deals are closed before Demo Day even happens. 

Outside the Mountain View bubble

While Seibel wouldn’t name names of favorite batch startups, he broke down some international trends within this batch. 

For example, I noted that a few India startups cite WhatsApp as a key to their business strategy. It’s a theme that Seibel says shows the market that Indian startups are targeting: “The number of people who are on smartphones who have come online in the past year and are coming online in the next five years.

“We’re seeing a lot of companies that are attacking that group and trying to make sure they have the same quality of goods and services that the folks who are rich have access to,” he said. 

International trends also impacted the cohort’s diversity, Seibel said.

Expanding batches to include international companies has “made people around the world and locally realize that they can get into YC, too. I think that there are all… these kinds of historical truths about who gets to access Silicon Valley,” he said. 

This year, 21% of the batch’s startups have a female founder and 11.3% of its founders are women. This is down compared to the previous batch, in which 28% of companies had a female founder and 16% of all founders were female. Diversity statistics were also comparatively higher than last year for black founders and Latinx founders.

“YC’s message has always been that we want to make Silicon Valley accessible by having an open application and accepting anyone who qualifies.”

As for what’s ahead for YC

“Whether it’s partially or fully remote, there are so many details that we have not figured out. But we do know that we’re gonna be funding companies this summer.”