Running a startup accelerator comes with a number of occupational hazards, but “skepticism is the easiest thing to fall into when you’ve seen too many companies,” said Y Combinator President Geoff Ralston, “and it’s the thing you have to avoid the most.”
Ralston joined me last week for an hour-long Extra Crunch Live interview where we talked about several topics, including how YC has adapted its program during the pandemic, why he has “never stopped coding” and what he sees changing in tech.
“We try to not be too smart, because great founders often see things beyond what you’re seeing,” he said. “If you try to be too smart, you’ll miss the Airbnbs of the world. You’ll say ‘Airbeds in peoples houses? That’s stupid! I’m not going to invest in that,’ and you could’ve bought 10% of Airbnb for like nothing back then… 10% of that company… you can do your own math.”
Extra Crunch Live is our new virtual event series where we sit down with some of the top founders, investors and builders in tech to glean every bit of insight they care to share. We’ve recently been joined by folks like Hunter Walk, Kirsten Green and Mark Cuban.
To watch the entire interview with Geoff Ralston, sign up for ExtraCrunch — but once you’ve got that covered, you can find it (and a bunch of key excerpts from the chat!) below.
Advice for getting into YC
I prefer it when an Extra Crunch Live conversation starts out with actionable advice, so we kicked things off with any suggestions Ralston had for folks looking to apply to YC. And he had plenty! Such as:
- Mind the deadline, but all hope is not lost if you miss it: “If you miss the deadline, it’s not the end of the world,” says Ralston. “Don’t tell anyone on the admissions team that I said this, but it’s a little bit of a soft deadline. We would never turn down the next epic company because you missed the deadline… although your odds go down of getting in if you don’t make it in by [the deadline]. Why shouldn’t your odds be as high as possible?”
- Don’t change things up for YC’s sake: “Do whatever you can do to make your company as successful, as real as possible… but don’t try to like, pretty up your company for YC,” he says. “That’s never smart [to do] for an investor. Don’t make bad short-term decisions because you think there’s a deadline that you should do wrong things for. Instead, build your company for the long term, and do the best you can possibly do to find product market fit, to build the right product, to build the right technology, to build the right software or whatever it is you’re building.”
Later in the video (around the 40:55 mark), a question from the audience leads Ralston back to the topic, and he has a few more pieces of advice:
- Stick to the instructions: “The instructions are fairly clear. It says: do a one-minute video, have all the founders there, and talk to us. That’s a good idea! Don’t give us some marketing video, we’re not interested in that. That’s not how we’re making our decision.”
- Hone your pitch: “Think about expressing yourself concisely, with great clarity. It does not help to write a book in the application. Be kind to us! We’re reading, you know, hundreds of applications. Get your idea across as clearly as you can. That’s actually a really good signal to us, if you can describe what you’re doing with a minimum of words. That helps us a ton.”
- Tell your story: “Do not skimp on talking about yourselves!” Ralston notes. “We are super interested in you, who you are, and why you’re doing what you’re doing.”
As for what not to do? Says Ralston: “You know, Paul Graham, our founder, wrote a lot about how you can ‘hack’ systems… like, you can hack school. And we’re kind of a school for startups, so some people think they can hack our school or hack the admissions process. It’s actually quite difficult to hack the process… and it’s actually not a great sign if you’re trying to hack the process.
“You should be working on your company, not on trying to find the right inroads, or the right connection. [When] YC was founded, the fundamental idea was to help people who didn’t have the connections to all those fancy VCs on Sand Hill road, and to give them a chance to start companies. To give hackers a chance to start companies… but hack your code, hack your business, hack your customers’ needs — don’t try to hack YC.”
His path to becoming president of YC
For the sake of context, at around the 8:50 mark we dropped back in time a bit to cover how Ralston eventually found himself leading Y Combinator, after founding (and selling) companies, launching an accelerator of his own (Imagine K12, which focused exclusively on edtech) and then spending years as a partner at YC.
Why he still codes — and what he’d build if he had the time
“I have never stopped coding in every job I’ve ever had,” says Geoff at the 12:20 mark.
“When I was at my startup [Four11, acquired by Yahoo], I built a whole bunch of code for Yahoo Mail. It took them a long time to finally get all that out. They finally, eventually got the last vestiges of any ‘Geoff’ code out, to their great relief.”
“But even when I was a general manager of a division at Yahoo, I’d write all of my own stats code. I did that when I was CEO of a company. I wanted to get into the tech stack, so I did everything I could. I never wrote production code, because you don’t want your CEO writing production code — that would’ve been bad.”
Even today, he codes when he can. “The first thing I did when I was president of YC was I built my own dashboard.”
“Coding is my safe space,” says Ralston. “And I go there when I can.”
“I’m not the best programmer in the world,” he notes. “You could say I’m well past my prime in programming. But now is the best time in the world to be a programmer! It may be the last best time, trust me. One of the interesting things that’s happening is we see cognition being thrown into every piece of technology, and every process. It’s going to be thrown into programming pretty soon… so your ability to do things all by yourself is going to be limited in the future, because you’re going to have some version of AI working with you, building things with you.”
With “now being the best time in the world to be a programmer” in mind: What would Ralston build today, if he had the time? After a bit of brainstorming, at around 19:00 he throws it back to his days running an education accelerator.
“If there’s a startup that I would start,” Ralston sys, “it’s something that would be transformative for education. That’s why I did Imagine K12. I’d like to find some way to not only close the education gap that exists in the United States, but to help use technology to rethink what education means.
“In so many ways, the world has moved beyond our educational system, and we haven’t caught up with it. I think it’s devastating to future generations, and we need to get it right.”
Demo Day’s sudden shift
At the beginning of March, Y Combinator was in the final stages of preparing for its Winter 2020 Demo Day, where they’d bring the hundreds of companies from their latest batch together to pitch in front of a room full of investors. This, of course, is also right as the severity of the COVID-19 outbreak was becoming clear. Just weeks before the event, YC opted to take Demo Day W20 entirely virtual — and, in a surprising move, push it forward a full week. Ralston shares a bit about that experience at the 29:00 mark.
“We got together and said… it just doesn’t feel right to bring 400, 500 founders together in a single room with this weird coronavirus thing out there.”
“It became crystal clear to me that things were gonna only get worse,” he says. “The first thing we decided was to move Demo Day up a week, because we figured the next week was going to be worse than the previous week. We counseled all of our companies to start fundraising earlier than we normally would, and we immediately started coding up a remote [Demo Day] site.”
“It was, in a word… traumatic. And exciting.”
Taking the rest of the YC accelerator program remote
After the W20 Demo Day went virtual, YC had to figure out how to take everything else remote for the batch that followed. From the initial interview on through, the (currently ongoing) Summer 2020 program is the first to occur entirely online. At the 35:00 mark, Ralston walks us through what that’s been like.
“I’ll preface it all by saying it’s not that different,” Ralston starts. “Working with companies, creating a network, imparting knowledge… you can do it like this! In some ways, I’ll even argue it’s better.”
Their biggest surprise? After many years of requiring applicant interviews to be done in-person, virtual interviews mostly work.
“We did Zoom interviews and… they worked really well. Surprisingly well. We were concerned because a lot of what we do is we kind of read people. We look at the applicants and we try to decide… we’d look you in the eye, Greg, and say ‘Can I see Greg ringing the bell in the Nasdaq some day? Can I see that? Will he be able to hire the kind of team that will create a thousand-person, or a multi-thousand-person company? It’s hard to do!”
“In-person, we thought, mattered a lot,” he adds. “And I still think we’ll come back to in-person, but [remote interviews] actually worked remarkably well. The technology is way better than it used to be in the past.”
Does YC stay remote for the long haul?
Whenever we eventually get COVID-19 under control… does YC go back to being done in-person? Or has the remote approach proven itself? Ralston lays out his thoughts just after the 52:00 mark:
“I firmly believe that it’ll have more remote aspects than it does now, but it’ll also have an in-person component.”
“I don’t think we’ll ever lose the need to kind of ‘press the flesh’ and see you live,” he clarifies. “It’s not the same here [over a video chat]. We’re just flat representations of ourselves. It’s hard to get that same sense of one another, and get to know each other in the same way.”
“So we’ll always have an in-person component, but we’ll have a much increased remote component. That’ll be especially true for companies whose businesses are far away, overseas. It’s way easier for them, for sure, to spend time with their customers near their customers.”
He tells a story about Airbnb going through Y Combinator in 2009, and how they really found the most traction when they were spending more time in their home city of New York. “They’d travel back every week for dinners and office hours; they were kind of remote, and on a plane all of the time. I can imagine us saying now: just stay in New York. Stay where your business is, and come back once a month and we’ll get together.”
“I don’t know exactly what it’ll look like [moving forward], but I’m persuaded it’ll be some hybrid like that.”
What makes a strong company in 2020?
“Has what YC looks for in a company changed at all with the pandemic?” asks an audience member at around 54:18.
“I think, on the margins, it probably has,” says Ralston.
“For a startup to survive through an inevitable recession, it has to have certain qualities. Startups that require massive infusions of cash that they’re unlikely to get… aren’t gonna make it. It depends on the kind of startup; certain hard tech startups, certain life sciences startups will be able to raise that kind of money.”
“I think we’re looking for companies that […] really have a path to sustainability on their own. Those are the best kind of startups to make it through to the other side. That’s not to say that all [these] startups will get profitable immediately, that’s not the point. The point is: if you have sustainability within reach, then you’re always in a powerful position, because you can always survive regardless of whether you’re successful at fundraising.”
At around the 56-minute mark, we wrap the interview by talking about what technologies Ralston — as someone who, through the many thousands of companies that apply to YC, has an incredibly wide-angle view of what people are working on — is excited about on the horizon. Check out the video above for that!