YC Partner Panel at the Seattle Female Founders Conference

by Y Combinator3/13/2018

YC Partners answer questions from the audience at our Seattle Female Founders Conference.

On stage: Kirsty Nathoo, Kat Manalac, Holly Liu, and Adora Cheung.

Moderated by Sharon Pope.


Sharon Pope – So Adora and Holly can stay up here because it’s now time for the YC Partner Panel. Hi, everyone. I’m Sharon Pope, I work at YC, I run marketing programs. And I wanna just remind you that you can submit questions. So go to slido.com. If you don’t have a question, in particular, you wanna ask, you can upvote someone else’s and I’m taking the questions from you. So, please, if you haven’t yet, go ahead and submit and I will just stand. Great.

And the Slido event code is FFC. Thank you, Amy. slido.com, event code, FFC. All right. So, starting off, this was one of the more popular questions that’s come through so far. For female founders who have families, are there remote options for YC? Or what options are available for participating in YC if you don’t live in Silicon Valley?

Kat Manalac – Oh, yeah. So, recently, we put out something called “The YC Family User Manual.” Actually, Amy and Sharon worked really closely on that. And so, it’s essentially…we give it to all our founders when they join the batch, and it’s tips and advice for people who have families, on how to balance that, resources they can use. And so, we’ve seen a lot of both moms and dads come through YC and they’ve all, you know, sort of, made it work in different ways. And so, we’ve seen folks who have, you know, there have been cases where they brought the whole family, there have been cases where they’ve kind of commuted back and forth.

Holly Liu – So, the short answer is, it is not a remote program and part of it is the benefit of building that trust, building that interaction, seeing that, feeling that live. I just think it’s, honestly, the word’s strong but a bit of a lost opportunity, I was gonna say “waste,” if you don’t come there. So, we actually have an international founder in our group. She just had a baby who’s six months old and she is doing a company in Mexico. And we have a ton of international founders that actually fly back and forth, mainly because the business is over there. And then they come over for the dinners and the group office hours because it’s just so much important for her business to kind of, move forward.

So, we have a lot of support stuff like the family user manual that comes. I’ve definitely seen, there’s another group in my batch right now, he brought his three-month-old son, and three-year-old, I’m like, “Here are all the parks you could go to. Here are all the other things you could go to.” Particularly, for women who…there’s a lot of support also, as well, for nursing moms. There’s also a really good blog post by a female founder at YC, who talked about making it work, particularly, while she was nursing. So, it just is a lost opportunity if you’re just not there. I will say that.

Sharon Pope – We’ll make sure that to tweet that article out so people can find it after the conference.

Sharon Pope – So, one other question, what industries or technologies does YC think are extremely promising right now?

Kat Manalac – So, one of the things I think that is exciting about YC is that we get a lot of applications every six months and we get to see, sort of, it’s like seeing into a crystal ball. So, ideas from some of the smartest, most creative people around the world come to us. And so, I think some of the best ideas that we’ve ever funded, and some of the best ideas out there aren’t even things that we would necessarily think of. It’s just, you know, what you’re all working on that we get to get insight into.

That said there are trends, there’s a really great blog post that one of our partners put out. If you look up Startup Zeitgeist, and it shows eight years of data from YC applications. So, it shows, sort of the trends that we’ve seen, like in 2011, we saw a ton of Bitcoin applications, you know. Go back two years ago, everyone was building chatbots or things on top of Slack. And so, I think that’s the most…it’s one of the most exciting parts of what we do. It’s not calling what’s going to be the next big thing, but getting to…I could see into, you know, a little bit into the future of what might be.

Adora Cheung – So, in terms of ideas too that come to mind, one is retail. And in particular, I think Brick and Mortar is trying to go online now, and online crew plays are trying to figure out Brick and Mortar, and there’s, like, a clash of cultures there and no one has really figured that out. I think there’s a lot to do there in women’s retail and all these categories. I think, I mean, obviously, Amazon’s a big player on the online retail and they’re trying to move offline too, but I think there’s a lot of room there for lots of startups to win there.

And then, the second one is, I actually haven’t…I feel like it’s a little bit like blockchain, but, like, voice apps. So, every home, like, almost every home now has an Alexa or a Google Home, or one of these things. There have been no great applications, like, the biggest thing that people use it for is just information retrieval or reminders or stuff like that, but the UX is quite odd and it’s not how we, as adults, like, are used to using things. So, I think there’s a lot of UX stuff to do there and figure out what those apps will look like. But, yeah, I think everyone thinks that, like, blockchain and voice is the future, but no one has figured out great applications for it, and so, I’m always curious when people are working on that what those could be.

Kirsty Nathoo –: The other thing is, you know, we’ve talked a bit about how we have applications from all sorts of technologies, and we actually put out what we call, “request for startups,” which talk about some of the things that maybe, you know, we’d love to see applications from. But one thing to bear in mind is, just because what you’re working on isn’t one of those, that doesn’t mean that we’re not looking for it. You know, we want you to tell us what we should be interested in, so don’t, kind of, self-select yourself out because it’s not of the things that we mentioned. It’s something that we hear people saying, “Well, YC isn’t looking for companies like mine.” And we totally are, because we’re just looking for great companies.

Sharon Pope – So, related question, a lot of people are asking about what qualities of the companies and founders you find most attractive, and also the red flags in an application? I feel like we addressed the company’s question, but Kirsty Nathoo –, you’ve seen a thousand companies go through. What is it about founders, in terms of what you’ve looked for, but also red flags?

Kirsty Nathoo –: I think because we’re looking at so many of these companies at such an early stage, we’re really, really focusing in on the founders themselves. And so, we want to see people who are determined, who aren’t going to give up the minute that things get a little bit tough. Particularly, where there are teams of co-founders, we want to be able to see that there is some existing relationship there and it’s not just somebody that you met in the coffee shop two weeks ago and brainstormed for two hours, and it’s all gonna be amazing.

You know, as you’ve heard from pretty much everybody today, you know, the co-founder relationship is so incredibly important because it’s something that will get you through the lows and the highs, and you know, they will understand what you’re going through, you’ll understand what they’re going through. And one of the number one reasons that we see startups failing, is actually the founder relationship breaks down. So, a lot of the things that we’re looking for in the applications are around, “Do we think the founding team is going to be that really amazing team that can make this work?”

Kat Manalac – And one tell we have in that way is we look at the equity split. So we like to see teams that have as close to equal equity as possible between the co-founders. And that’s because, you know, even if someone came up with the idea and was working on it six months or so before, you know, sometimes we’ll see, you know, “I came up with the idea, so I have 80% and my co-founder has 20%.” But the reality is, a vast majority of your company’s life is in the future. It takes I think that an average of 10 years now, to IPO or exit so you want co-founders to be on as equal footing as possible.

Holly Liu – If I could sum it up in one word, like, founders that are just formidable. Like, I’m like, “Okay, they’re just gonna do it regardless of what happens here in this room, in the interviewing room.” And I think that that’s one of the things that we find and we love to find.

I will touch a note on two things. One, around the technical co-founders and having teams. We do love teams but we’ve accepted solo founders as well. We’ve accepted non-technical founders as well. But the reason why we anchor against those is it’s only three months that YC is happening. And if you don’t have somebody that can actually build and do something, then you’re losing time on learning, and it’s really, really difficult. And finally, I was talking to actually O’Neill [SP], I’ll pick on you. We were, like, when you’re in a particular space, particularly, if it’s very crowded, I’m very interested in, like, what types of insights do you have. Like, I was talking to Avni about her insights, I was like, “Wow. That totally makes sense. Increasing the village on child care.” And that, I think, is just something, if you’re thinking about it.

Sharon Pope – I have another question for you, Adora, as well. All right. So, the next question, so we’ve talked about knowing your numbers and how it’s so important, but maybe it’s even more important for female founders. So, Adora, when you’re considering an investment or considering an applicant to YC, what metrics are you most focused on? What do you think are the most important ones for their tracking and that they know rock-solid?

Adora Cheung – Well, if they haven’t built anything yet, there’s, I guess, nothing to really look at except for just understanding what the market opportunity is. Two, if they’re starting to build, you know, one of the things that we tell every founder is, “You should, instead of growing really, really, really fast, the first thing you should do is build a product that people will really, really love.” And so, that can be defined as, you know… Then I would say the question is, what are the metrics that define what happy, engaged users, are happy, engaged users getting continuous value out of the product?

And so, it’s different for every single company, but usually, you can get, like, three to four key metrics that, kind of, give you a 360 overview of what that means. So, it could be like weekly active users, NPS, retention’s a huge one, you should always be looking at retention. Meaning, you know, 100 people came this month, how many stayed the next month, and so on and so forth. And so, that’s a quantitative way to look at it, and so we would always probably ask for those kinds of metrics.

And then, the more qualitative is like when you’re talking to people, you can, kind of, get the feel of, you know, how good your product is already, or how much they value it. So, for example, if you ask them, “Oh, what do you think?” And they’re like, “Oh, that’s pretty cool.” That doesn’t feel like, you know, they’re happy, engaged, but if they’re like, “Oh my god, Holly, how can I get an invite link so I can send it to 20 of my friends? Now!” Like there’s a huge difference there, and so that’s more of a qualitative thing that you can get out of that.

Sharon Pope – And I think to Avni’s point, earlier, she was saying, “You have seven weeks until the application deadlines, so start, and start tracking, and make some progress. Do you think that there is…is there a period of time you look at in terms of the metrics? Or is it more flexible?

Adora Cheung – It’s this entire period when you started building and started using, and just, you wanna see some growth in terms of, you know, your NPS is getting better, your weekly active users are getting better. I mean, the metrics tell you the “what” end, but you need to deep-dive and know what the “whys,” so you that you can continue doing the things that keep working.

Sharon Pope – So, maybe, unsurprisingly, a question, maybe Kat will answer. This room wants to know if YC will ever have a Seattle office or accelerator.

Kat Manalac – You know, I think for now, and I travel a lot, internationally, around the U.S., and I think, at this point in history, it still helps most companies to spend three months in the Bay Area. It’s just so easy to raise money there. There’s a huge, I mean it’s…relatively, relatively. I mean, you know. It’s hard, but it’s much easier than pretty much anywhere else in the world. And then there is just, you know, a huge network of founders. And so, spending three months, building that network of investors and other founders who can help you as you grow, I think, makes sense. And then you can come back and bring that network and all that knowledge with you back here, or back, you know, wherever your users are.

The one thing I…my, sort of, hope is the way that we get, you know, organically get YCs all over the world is that we founded a really incredible company, you know, they grow. Poppy, I’m looking at you, or Shift Labs. They grow, they become billion dollar companies and their founders start reinvesting in the ecosystem, so that, you know, they start investing in the founders here. And so that’s, I think, the most…my dream for YC long-term is that it’s the alumni in each of these regions that, sort of, grow the whole community.

Sharon Pope – I think that’s great. So, question, and obviously, we’ve seen some great YC alums on stage today. How does YC interact with founders after YC?

Kirsty Nathoo –: So, it’s a fairly common misconception that people think that YC ends after the three-month program. And actually, that’s not true at all because we are still investors in your company and we’re here to help, you know. We want to help the founders that have been through the batch already. And so, we’re here as a resource, we’re always available to answer questions whenever founders come back to us.

And so, some examples of things that we helped with after the batch are, you know, maybe the founders have raised a million dollars out of demo day, and they’re now a year past that, and they’re thinking about starting to raise their Series A. And we can come and we’ll help them pull together a pitch deck, we’ll help them with their practice pitches, we, you know, we’ll introduce them to people who could be helpful. And then, continuing on, we also now have a later stage program where we work with companies who, maybe, have 50 employees or 100 employees, and how do those companies scale, and how can they, you know, what sort of problems are they coming across that we can help with.

And so, the idea is that we are always a resource for, you know, everybody who has been through YC. And so, any of our experience, if we could be helpful, we want to be helpful to you.

Kat Manalac – And on the backend, we’ve built a lot of software. So we have something called “Bookface.” It’s like Facebook meets LinkedIn, meets Quora where all of our founders, sort of, every day, are, sort of, talking to each other asking questions, helping each other out. And I think, more often than, you know, founders will come to us occasionally, if they have questions, especially around fundraising. But I think, more often, they’re asking their community, the community of founders to help each other out. So, that’s… I think those touchpoints happen on a monthly basis, if not more.

Avni Patel Thompson – So, I will just chime in and say another misconception is that YC is about the three months. And so…and this doesn’t necessarily…you don’t have to take them up on it, but office hours are open for any partner afterward. And so, for me, two years out of YC, I actually take way more value out of that than even during the period when it was very intense and there’s a lot of stuff and you’re mostly working with your group partners. There are people that have experience across the board. There are former venture partners, there are former founders, obviously, they are from everything across the board. And so, for me, when I talked about mentors, most of my mentors are actually YC partners. And so, the ability for me to, every month, or whatever it is…own reaching out to them, and having that has been so invaluable. So for those of you that are, kind of, evaluating YC as a program, don’t ever think about it as just, like, a three-month thing, it’s, sort of, like lifelong. You get into this tribe of people and founders. That, I think, is just so invaluable.

Sharon Pope – Thank you, Avni, the founder of Poppy. I love that. So, I think that…and this is obviously, something that… Actually, I think if Holly and Adora wanna take this one. So, as a founder, how do you keep the momentum going when the funds are running dry and growth is getting really challenging? Or maybe, I guess, if it would help to put a finer point on it, can you talk through a time where you felt that crunch, and how you were able to push through it, whether it was fully dry or…

Holly Liu – Super depressing. So, we started a company in 2006, exited in 2017, and 2008 was the worst year ever for all startups everywhere around the world, but particularly at Silicon Valley. A big venture capitalist called Sequoia Capital had sent out a deck, said, ” RIP, good times, get to cash flow positive,” and there was just no money anywhere.

So, for us, what we did, so, A, it’s obviously, super… I have a co-founding team of four total, and the good news is we got along, which was great. And we were pretty cheap, so we got even cheaper. We cut our burn drastically and we basically hunkered down, all of us. In some ways, because we were smaller, it felt really good that we were all on the same boat together.

For about two to three years, our Christmas party was basically an office party with board games. But nobody really complained too much, so that’s pretty good, with a gift exchange, which is great. And I think the other thing that we did that was for us, and I’m not saying it’s for everybody, but we did change our business model during that time because we saw, basically, $3 million contracts just disappear overnight. We said we just cannot, kind of, function with that.

And we were just stupid enough to just try to continue to exist during that time until funding came in about a year later, and that’s when we just walked down to the pub and had a drink after the money goes in the bank. So, by the way, term sheets are signed, that means nothing. You gotta wait till money is in the bank.

Adora Cheung – I mean, being a founder is a little bit of an irrational choice. So, the first three years that we were around, we actually only were able to raise $100,000. And so, for the Bay Area, that’s not a lot of money. So, I mean, the number one rule in a startup, before…especially if you don’t have product-market fit yet, it’s just to keep your personal burn low. So, you gotta, you know, yeah, you can’t spend money on anything, only on the must needs. So, I mean, we couldn’t afford board games, like…

Holly Liu – I guess you could borrow. There’s the library check out, you could check it out from the library. Just joking.

Adora Cheung – Library? Okay. But honestly, it’s just keeping your personal burn low, and just having a good relationship with your co-founder, and just be on the same page of where you’re going, and keep trying. And just like you, guys pivoted, we actually… It’s funny because we pivoted also into the thing that started growing. Then got us venture capital during this time when we were just, like, on credit cards and barely making it.

Holly Liu – We pivoted into games.

Adora Cheung – Yeah. Like, that mentality, it’s like that mentality of, like, you don’t have anything, really makes you be really efficient with what you do, and it really makes you think what you can do with very little. And I think that’s actually when some of the better ideas come about. So, even if you raise money, you should always keep that in mind and keep that mentality and mindset, and always keep your burn low.

Sharon Pope – Okay. So, another interesting question, especially for this conference, are there differences that you’ve seen in interviews between male founders and female founders in terms of how they present, etc.? Kirsty Nathoo –, do you wanna start? You are the most recent interviewer. Do you have any new insights?

Holly Liu – Let’s see. So, I guess, of the women that have come in, and the women that we have taken. So, I don’t know in terms of pitching, but I do realize there’s one thing that I’ve realized, not just from this one, but over time, is partly for… I’ve heard this advice given to men about, in order to sound very smart, is just speak slower. But I feel like that advice doesn’t help for women. I actually think the ones that just bowled us over with the numbers of like, “This is this, this, this, and this.” And we’re like, “Wow. Okay.” And those were the ones that we ended up taking. It was like, okay, like, they just didn’t even give in edge-wise in some ways. It’s not like they weren’t listening either. You definitely have to be open to listening, but I’d have to think a little bit. Was there a difference in terms of pitching?

Sharon Pope – Or maybe as founders who have pitched investors, were things that you kind of had to coach yourself on that you had to improve upon?

Holly Liu – Yeah, definitely. I know some of the stuff sounds really silly, but doing those Superman poses, like, getting your head in the game, the visualization pieces, practice, practice, practice, and know your numbers. Well, I’ll let you talk about that one.

Adora Cheung – Honestly, I think it’s, like, knowing your numbers…I don’t know. That’s just the number one thing. I always just knew my numbers and was able…if you ask me anything, I could tell you in a split second. And I think that’s super important. I think confidence, just going in, and even if it’s, like I said before, even if it’s super awkward feeling, just being confident.

In the beginning, it was really funny because when I was asking for money I’d always, like, smile weirdly. Or like, almost crack up because it was just so awkward for me. So, I just had to get out that phase because there’s always a silence also, after you ask, and you should just pause. Don’t start…like, some people just start rambling after that because the other person hasn’t spoken yet, but it’s, you know, just pause and wait for the reaction.

Kat Manalac – So, I’ve been talking to a lot of the international founders, and one French founder, actually, a man, a male French founder, you know, came up to me and said, “You know, demo day is coming up and I have to say I’m really uncomfortable because, you know, American men pitch themselves in such this, like, overblown bold way, and we’re not taught to speak like that in France. I mean, it’s very embarrassing and uncomfortable.”

And so, it’s just something that we had to practice so that he, you know, could fight past that discomfort. Because you have to, you know, a lot of investors are, sort of, used to seeing these, you know, kind of, bold, confident pitches. And so, that is something that I think, you know, international founders, but also, I see some women, like, kind of, undersell themselves.

I was reading hackathon applications a couple of years ago, it was the first time I noticed it would be teams, mixed teams, male, female. And, you know, the male on the team would say, “Hey, we built this world-changing, award-winning hack at this last, you know, hackathon. We’re an incredible team. We’re the best on the planet,” stuff like that.

And his female counterpart, who had built that same, you know, hack with him, said, “You know, I contributed to this product.” And it was really, like a stark contrast and it’s something that I saw over and over again. And so, it just made me…whenever I talk to women, I’m like, “Don’t undersell, you know, what you’re doing or what you’re bringing to this team because you’re an important piece of it.” And so, that’s, I think, the main thing that I tell women over and over again before they go out and pitch.

Kirsty Nathoo –: And don’t apologize.

Kat Manalac – I’m practicing that.

Sharon Pope – I’m sorry, I have one more question. I have a couple more questions, but I just wanted to do that. So, what would be the advice? So, we at YC have obviously seen a lot of companies go from that early stage to the growth stage. So, what do you think some of the best advice is for a company as they’re getting to that next phase? Or maybe, they’re, like, getting over 30 employees, approaching 50 employees?

Holly Liu – So, there’s two sides to it. There’s one, the product side, in terms of how do you grow your product? And the most important thing is knowing your unit economics. Like, at the one unit level, how much money are you making on each piece or each person that comes in? Because then you could dump a bunch of money in there and it’s gonna be smart how it’s gonna be spent.

So, on your product side, you should definitely know how your unit economics are, and they should be positive. Just in case, anybody does not know, it should be positive. And I know it might be a little different for an advertising-based company, and even B2B, it looks at ARR, annual recurring revenue, and all that, but for the most part, if you could get your unit economics right, then that is something that’s important.

As you grow, there’s something that changes also from product-market fit, the organization changes. And I think people don’t talk about that as much, but that is incredibly important to be able to enable your product to grow. And from that stage, it’s almost like, I’m pretty sure, the CEO gets hit first, in terms of feeling that, kind of, like, “Okay, it’s time to scale. Like, I don’t even know where the keys to the building are. Like, how do I even get in there?”

And then it starts hitting the next layer. Perhaps, like for us, it was the other co-founders, such as myself, but I don’t even know where the files are, the design files because I hired another designer. And at that point, you start thinking about, well, about managing all of this stuff, you’re like, “Oh my god, this is big corporate stuff. I’m here to get shit done.” Right? And what people don’t realize is when you get shit done, sometimes you just end up with a lot of shit. Oh my gosh, this is being recorded. I’m so sorry.

The problem with that mindset, especially as you’re growing, is you end up with just a lot of crap. And you have people doing the same thing in, like, three or four different places. And you’re just, like, “What is going on?” And so, you have to start moving into a mindset of making it happen, like, looking at it as a whole organism. Particularly, those that are leading the company. And then, you, as founders, which, I think, is incredibly a difficult, special, and probably irrational place to be, is that you have to learn how to scale yourself. And that’s something that takes a lot of confidence and pride, and that you’re a founder, and we all know that you’re learning on the job, and every day you’re failing. Every single day, the learning curve is like…like 50% is a phenomenal score because it’s on a curve.

So, those are things that you have to, kind of, learn, in terms of, like, how do you start managing through people? How do you start knowing delegation? And how you, yourself, like, how do you, yourself recharge and be able to work with other folks. But there’s a lot of other pieces on setting up an organization, but that’s something that you start thinking about. You know, you’re building an organization, and then a company, right? So, probably mark that first.

Adora Cheung – Just one thing to add…when we see startups that don’t work out, one of the things that they always do is they run out of money because what they’ve done is, while they’re growing, they’ve just thrown humans out with the problems. Like the human band-aid solution is not the thing you should do. Meaning, you know, you just hire as many engineers as you can because, you know, you have all these features you wanna build, and your product raw mat is behind, or, you know, you don’t have enough leads, so go and hire more marketing people. You should not do that and just think of other ways to be more efficient and get back, like I said, to the startup mindset of being super efficient.

Sharon Pope – Awesome. Another question, and maybe, Kirsty Nathoo –, you could take this one. How does YC feel about companies that have already raised the money as they’re applying and they, maybe, have… Is there an amount that’s too much for them in their cap table before they apply to YC?

Kirsty Nathoo –: So, we have companies apply and companies that we accept who have raised…have millions of dollars in the past. It’s a real spectrum, and another misconception is people will say, “I’m too early for YC,” or “I’m too late for YC.” And actually, neither of those things are true.

So, you all apply, and we’ll do our job and figure out whether, you know, you’re the right fit. And so, you know, we do have companies that have come to us having already raised on SAPs, some companies have already raised seed rounds, you know. And we think that the three-month batch, in particular, you know, we can be really helpful to any companies who are, sort of, up to series A, and sometimes, even having raised the series A.

So, you know, I think it’s less about the dollars that you’ve raised, and more about where are you in the process, and, you know, how can you leverage YC in the three months that you get as part of the program, to actually make the company as much of a success as it possibly can.

Sharon Pope – I’ve just the last question, we have a lot of versions of, kind of, the flip side of that question. So, we’ve talked a little bit about, like, how someone can show progress early, but what are, in terms of early-stage companies, what are some of, like…how early can you possibly get into YC? And I think, maybe it would help to just give us some examples of founders who have gotten on a little bit on the earlier side, and what the reasons might have been.

Kirsty Nathoo –: So, we definitely have companies who are super early, you know. We’ll often have people who come in and we agree to fund, who haven’t even incorporated yet, so they’re that early, you know. And it depends on what’s the idea, and what’s going on in terms of the company, but also, bear in mind that even companies or founders can come in with an idea that they’ve been working on for six months, or for a year, and during the three months of the batch they decide to pivot into something entirely different. So, they’re starting from absolute zero as well.

So, you know, it doesn’t always just have to be at the point of the application. And any early usage or any early indicators of people really loving what it is that you’re building is often enough for us to be able to take that bet on you.

Holly Liu – And I’ll just plug that YC has a program called Startup School, startupschool.org, and there’ll be another program later this year, which is literally, anyone who has an idea can participate in that and watch that content.

Sharon Pope – I guess I’ll have the last word. Thank you so much to the YC partners, and thank you to everyone.


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