Startups for Students Guide : YC Startup Library

Introduction

In his 2007 essay “Why to Not Not Start a Startup,” YC co-founder Paul Graham wrote about how common uncertainty was among people considering starting a company. “There's nothing wrong with being unsure,” he noted. “You’re part of a grand tradition.” When Y Combinator launched in 2005, starting a startup was an unusual career path for recent graduates. It was hard to be taken seriously by investors if you didn’t have an MBA or years of experience in business or tech. To get a sense of how many startups were in the world, look at TechCrunch in 2005. It published about 40 company launches per month, and YC itself only got a couple hundred applications for its first batches.

The world has changed since then. Today we get tens of thousands of applications per year. On any given day you can look on Product Hunt and see dozens of new companies launch. Taking a chance and starting a startup is not the foreign concept it once was.

While it has become more common for people around the world to start startups, there are many more who could consider startups as an option. For example, lots of folks choose a career in finance or as an engineer at a big company without considering other options. Whether you know you want to become a founder or are more interested in finding a job at a startup, we want to equip you with the best resources for getting started.

In this guide, we’ll discuss why you should think about starting a startup and why you should consider not starting a startup. We’ll also talk about what you should do in college and walk-through some tips for applying to Y Combinator. And if it turns out being a founder isn’t for you, we’ll talk about how to choose the right company and the benefits of working at a startup.

1. Why Start a Startup?

Startups are not for everyone. The hours are long, the route to success is often unconventional, and it is certainly not a surefire way to make a large sum of money. Roughly 90 percent of startups end in failure. (YC is an exception; over 50 percent of YC companies that are over five years old are still alive). Why would anyone choose this as a career?

Ask Yourself Three Questions

“There is a certain type of person who only works at their peak capacity when there is no predictable path to follow,” YC alum and group partner Michael Seibel writes in his essay, Why Should I Start a Startup? “The odds of success are low, and they have to take personal responsibility for failure.”

To determine if a startup is right for you, Michael recommends asking yourself these three things:

Do I like being the underdog?

Do I seek hard challenges most people shy away from?

Do I thrive taking personal responsibility for success or failure?

“If you answer yes three times, then maybe starting a startup is for you,” he writes. “I cannot promise that doing a tech startup will make you rich but I can promise that it is one of the most challenging things you can choose to do.” Starting a startup is both awesomely challenging, and often the most rewarding journey you will ever take.

Find a Problem You’re Obsessed With Solving

Some of the most successful companies in YC history formed when founders confronted a real world issue. Airbnb began in 2007 when Brian Chesky and Joe Gebbia were having trouble paying rent, so they bought a few air mattresses and charged people $80 per night to sleep on them during a busy convention in San Francisco. In 2010, Patrick and John Collison began working on the side project that would later become Stripe after Patrick became fed up with how hard it was to accept financial payments on the internet. The founders of Gusto started their company because they were frustrated by the inefficiencies in payroll for small businesses.

You don’t necessarily need to start with a specific idea. Simply take a look at your own life, identify a problem, and then build a solution. You might be surprised how many others have the same problem too.

Be Prepared to Own Every Success and Every Failure

Steve Jobs once said, “It’s more fun to be a pirate than join the Navy.” Part of the appeal of startups is the ability to run fast with a lean team that operates without bureaucracy. But it also means there’s no corporate cushion either. As a founder you’re responsible for every setback when things go wrong, but at the same time, you will stand to gain more than any corporate job could ever offer if your startup is successful.

2. Why Not Start a Startup

You’re Still in School

Startups take an enormous amount of time and energy. If you decide to build one while still enrolled in college, your grades and social life will almost certainly suffer.

That being said, it’s not impossible. The founders of Panorama Education formed their edtech company while they were undergraduates at Yale. Co-founder Aaron Feurer says he spent over forty hours a week building Panorama and, by the time he graduated, they had amassed hundreds of thousands of dollars in revenue.

This kind of success is very difficult to achieve and highly uncommon. Also, keep in mind that if your startup begins to scale, you’ll most likely have to drop out. There are, however, benefits to staying in college, and later we’ll share the best ways to prepare to start a company while you’re in school.

It’s Difficult

Building a company from scratch is mentally and emotionally taxing, and it’s usually too much for one person to manage. The odds are against you too — as we mentioned before, nine out of 10 startups fail in their first year — and the ones that do succeed face immense challenges.

You Have No Co-Founder

If you look at YC’s top companies list, only 7.9 percent were founded by solo founders. A co- founder not only gives you someone to split tasks with, but also helps you bear the emotional weight of building a startup, and can fill gaps in expertise. One co-founder might be a talented programmer while the other is great at sales.

College is an ideal place to find a co-founder. But if you’ve exhausted both your first and second level networks and still haven’t found the right person to start a company with, YC’s new co-founder matching platform can pair you with a co-founder based on skills, interests, and location.

You’re Not Ready for the Commitment

Even if you’re successful, it will take years for your company to have an exit or IPO. While it’s impossible to predict exactly how long, you should prepare yourself to work relentlessly for as long as a decade on your startup. If spending time on things like travel and hobbies right now is more appealing than starting your own company, that's ok. But it’s probably not the ideal time for you to start a startup.

You Need Structure

The structure inherent in large corporations has some benefits. Managers and bosses can act as mentors, and being part of a large collaborative team can sometimes coax out brilliant ideas from smart people. But if you need structure to thrive, a startup may not be the ideal place for you.

You Hate Uncertainty

At a startup, there is no clear linear path to success. If the idea of uncertainty gives you hives, don't do a startup.

3. Bad Reasons For Not Starting a Startup

You Don't Have an Idea

At Y Combinator we put more emphasis on the team than the idea because time and time again we’ve seen companies pivot after they discovered a newer, more urgent problem to solve. Reddit, Brex, and Segment were all accepted into YC as completely different concepts before pivoting into the companies they are today.

If you’re unsure of an idea to work on, we have the following resources to help you begin.

Your Parents Want You to Get a Real Job

Parental pressure seems like less of a problem for startup founders (at least in the US) today than it was a decade ago. When The Social Network came out in 2012, YC got a massive spike in applications. We sometimes joke that The Social Network was the cultural inflection point where parents realized startups could be a viable and lucrative career option. If your parents are still skeptical about a career in startups, show them stories about Brex, Stripe, Embark and Scale AI. These companies, founded by people in their 20s, are all massively successful and now worth billions of dollars.

You Have Student Loans

It’s not impossible to start a company if you have a lot of student debt. But it is a lot harder. Having large student loan payments every month certainly makes a well paying job at a big company more enticing. And once you have steady income, it’s easy to start racking up additional expenses like nice cars, fancy vacations, and luxury apartments. Leaving a salary behind is tough.

While it’s true that start-ups only rarely generate great wealth, it’s also important to remember being part of a startup is typically a force multiplier for experience, knowledge, and ability to execute — all things that will increase earning potential.

4. Why Work At a Startup

There’s no better way to learn about startups than by working at one — especially a YC startup. You’ll gain experience building products that people love, talk to customers directly, and get a transparent view of the business. (And it might just become the next Airbnb, DoorDash, or Coinbase.)

Here’s the best way to gain that experience.

Visit YC’s Work at a Startup

YC’s Work at a Startup helps you apply to multiple startups with the same resume and also allows founders to get in touch with you directly if they think your skills might be a good fit for a role. If you’re looking for an internship, YC companies also list active internships on the YC internships page.

Determine the Right Company

Find a startup that’s solving a problem that’s interesting to you. Are you obsessed with mitigating the impacts of climate change? Or maybe you want to focus on the intersection of robotics and biotech? YC’s Work at a Startup jobs page lists positions at thousands of companies working on the world’s toughest challenges.

If you find a startup that interests you but doesn’t look like it’s hiring, reach out to the founders. A single email can open doors you might not even realize are there. Read here for more tips on what a good outreach message might look like.

Decide What Stage Startup is Right For You

For an internship, we recommend being at a post series A company. There’s more structure and more capacity for mentorship. However, if there’s a particular founder you’d really like to learn from, or if you’re a very self-directed learner and worker who thrives in ever-changing environments, a seed stage company could be a good option.

Ask The Founders These Questions

If possible, get in touch with the founders and ask the following questions. The responses will give you valuable insight on what your experience will be like and what you’ll learn.

What will I work on during this internship?

To maximize learning, get a sense of the projects you’ll be working on and the skills you’ll be developing. This might include contributing to the tech stack, helping increase metrics, or working closely with customers. Bonus if the project ships at the end of your internship — you’ll have something concrete to add to your resume.

Will I get to see how the business is doing? How much do I get to interact with customers?

One of the benefits of working at a startup is the transparency of a small team and being closer to the business. (Many engineers at large companies never even know who their customers are!) Talking to customers not only allows you to see how the business is improving — or not improving — but is also a key skill set when you’re running your own startup.

What will I learn from the people I’m working with?

Whether it’s an internship or your first full-time position, bosses, coworkers, or even the founders are a great resource for helping you grow and learn. Carefully study their strengths — are they good at analytics, product development, building MVPs, or performing customer interviews? — and use that to understand what skills you’ll need to cultivate.

Lastly, if you’re looking for a full-time role, we also recommend asking about runway and burn rate. This will tell you if the startup is in a good funding situation and show how transparent the founders are. You can read more about both here.

5. Startup School

If you’re interested in starting a startup but haven’t decided on what to work on, you can explore Startup School’s Aspiring Founders track. This free, online course runs for six weeks and is designed for anyone thinking about founding a startup — students, engineers, creatives — but not actively working on one right now.

The curriculum features lectures like “How to Get Startup Ideas” and “How to Plan an MVP”. It also includes exercises that can help put what you’ve learned into practice.

Once you’re ready to start working on your company in earnest, a good next step is to check out the rest of Startup School’s curriculum. This program, which we also offer for free, consists of founders who can help you learn about startups, build a product, and track growth. They also run periodic build sprints that many founders utilize as a catalyst for launching a company.

Additionally there’s also a free repository of content at the YC Library, which includes more than 15 years worth of startup advice, podcasts, and essays.

6. Applying to YC

YC funds two batches of startups per year. One in the winter and one in the summer. While we take applications all year long, we have an early and a regular submission deadline for specific batches.

Once you’re ready to work on your startup full time, you can apply for the next batch of Y Combinator.

Why Y Combinator?

Lifetime Support

The Y Combinator program doesn't end on demo day. We continue to assist founders from idea through IPO and beyond. YC starts with teaching founders the basics of starting a company, finding customers, raising angel investments, and hiring their first employees. Then we help founders secure Series A and B funding scale their companies, and hire an executive team. Once a YC company has scaled to a certain level, we may invest in later stage rounds.

Community

Y Combinator boasts the strongest and deepest founder community in the world. For the 6,000+ YC alumni, there’s always someone to help guide them through every stage of their business; and with over 3,000 companies funded, founders have a built-in cohort of customers ready to try their products and services.

Well Known Resources

Being part of Y Combinator will give your company numerous advantages in a highly competitive market. YC companies tend to raise more money from better investors and achieve higher valuations. Our applications are open to anyone — you don’t need to be well connected in the tech or investment world to be accepted. Our team dispenses meaningful advice on everything from growth strategies to overcoming technical hurdles to communicating with press and media.

Secret Resources

Some of the lesser known advantages to being part of Y Combinator are access to the massive, vibrant YC alumni network, the YC-only hiring platform, Work at a Startup, plus better deals and more customers.

What is a day in the life of a founder in the batch?

Every day will have its own unique chaos. In general, expect to be writing code, talking to users, solving problems, and participating in weekly batch events, group activities, and office hours.

What does YC look for in companies and founders?

There’s no magic template for creating founders or companies. We do, however, often find these qualities in the most successful ones.

Technical Ability

We like to see teams that have the ability to build, usually that means having a technical founder.

A Drive to Build

We do fund ideas. About 60 percent of the companies we fund don’t have a launched product, but we like founders who have an inclination for action and are making fast progress on what they’re working on.

Persistence and Resilience

A number of companies apply to YC multiple times before being accepted. These days, about 50 percent of the companies we fund have applied more than once. If a founder applies a second time, it’s important they show they’ve made progress on their company. This signals a founder is serious about building a startup.

What stage and sector does YC invest in?

We have companies in each batch that don’t have a fully formed idea and companies that have millions of dollars in revenue.

We invest in companies from a broad range of industries ranging from consumer apps to biotech to SAAS. See the whole range of companies and industries here.

What are the requirements to apply to YC?

Y Combinator is open to everyone and the application is free.

Are there different requirements for international founders?

There are no different requirements for international founders. For the Summer 2021 batch, about half of the companies were internationally based.

Do I need a business plan?

You do not need a business plan to apply to YC. Our application process usually helps founders understand more about why and what they are trying to build.

Tip: Be concise and explain your idea simply.

7. Alternatives to Starting a Startup

If you’ve decided that being a startup founder isn’t right for you, there are still many other avenues open in the tech industry. Here’s a few resources that can help.

Finding the Right Career Path

Three Paths in the Tech Industry: Founder, Executive, or Employee by Michael Siebel

Career and Resume Advice: Student Edition by Ryan Choi

Advice for Job Seekers on Resumes and Reaching Out by Ryan Choi

Advice on Choosing a Startup

How to Pick Which Startup to Work At by Justin Kan and Sam Altman

Choosing a Startup to Work At by Harj Taggar

Why You Should or Should Not Work at a Startup by Justin Kan

Salary + Equity

Think about Equity by Jessica Livingston

Roles at Startups For Recent Grads

Work at a Startup Internships

Work at a Startup Jobs

Ultimately, you should join a startup if learning trumps stability, if experience beats structure, and if building things wins out over a steady paycheck. It doesn’t matter if the company succeeds or fails, when you join a startup you’re going to gain knowledge and experiences that you will find nowhere else.

8. Frequently Asked Questions From Students

What Classes Should I Be Taking in College?

There are no specific classes where you will learn to be a founder. Take courses you enjoy and work on projects that interest you. These experiences will likely teach you more than anything in academia.

Does it Matter What Degree I Have?

Not really. If you enjoy coding, having a computer science or engineering degree is the best way to set yourself up for success. If engineering is not something you want to focus on, college is a great place to find people who have skills that are complementary to yours. That being said, if you want to run a software company, we recommend teaching yourself the basics of coding, even if you’re not planning to be the CTO. Understanding how software works is a critical part of building and running a technology company.

What Skills Should I Be Learning?

You don’t need to go to a specific school or have a specific degree to be a good founder. However, developing these three skills in college will undoubtedly help in a career as a founder later on.

Coding

Learn to code and become friends with technical folks. You can’t build a software enabled company without software.

Communication

Learn to convey your ideas clearly and simply. Think of it this way: even if you’re working on something enormously complex you have to be able to explain it in a way your grandparents will understand.

People Skills

Build your network. Meet potential co-founders. Gain a deeper understanding of what people's needs are. As a founder, it’s crucial to talk to users so you can better solve their problems.

How Should I Spend My Time at School?

For most, college is a one time experience and we encourage you to enjoy it. It’s the ideal period to explore subjects that fascinate you and find like minded people you enjoy working with.

College is one of the best places to meet a potential co-founder. Build your network and become friends with people who you could potentially work with in the future.

Also, don’t forget that you also have access to the entire world. Experts in all kinds of fields — technology, business, science — are usually happy to help college students.

For more advice on how to spend your time during university read A Letter to College Students by Michael Siebel.

Can I Still be a Founder Without a Technical Background?

YC has funded some startups that don’t have a technical co-founder. Roughly ten percent of the companies in every batch are founded by a non-technical founder. However, if you look at YC’s Top Companies list you’ll only see 3 companies founded by a non-technical founder: Flexport, SnapDocs and UpKeep. If you are non-technical, we highly recommend finding a technical co-founder if you’re building a software company. With someone technical on the team, you can move quickly and have a greater chance of success.

How Do I Meet a Cofounder?

The most common way people meet their co-founders is through school and work. We looked at the top performing YC companies to see how the founders connected with each other. Here’s the breakdown:

YC’s TOP COMPANIES (68 entries)

We also looked at how women met their co-founders >>

WOMEN FOUNDERS (78 entries)

*A good way to get started is working on projects or extracurricular activities with your classmates.

YC’s Startup School also recently launched a co-founder matching platform. We pair you with co-founders based on your preferences for interests, skills, location, and more. While we don’t suggest you immediately start a company with someone you meet on this platform, it is a great way to connect with like-minded people who are interested in starting a company. You still need to do the hard work of building a strong, trusting relationship.

For more on transforming a school project into business, read From Student Side Project to Startup by Paul Dornier co-founder of Meetingbird.

How do I decide on the idea?

When landing on a concept for a startup, keep these three items in mind. But as we’ve said before, ideas can easily be changed.

How to Build the Future with YC’s Sam Altman

I’ve built something. How do I get my first users or customers?

Should I charge for my product?

Charge for your product as soon as possible. The amount doesn’t need to be very much, but charging will help you understand how much value you’re creating and how much people are willing to spend on what you’re building.

How do I convince my parents that starting a startup is a smart idea?

Share stories of successful young founders. John and Patrick Collison were 19 and 21 respectively when they started Stripe. Alex Rodrigues of Embark Trucks was just 19 when he founded his company.

Inform them how startup experience is valuable, even if the company fails. There will always be corporate jobs and many YC founders join big companies when their startups shutter.

Also remind them startups are easier when you’re younger. It’s true you can start a startup at any age, but when you have lots of energy and little commitments, it’s much easier to spend time building.

Should I finish my degree or dropout and pursue my startup?

We tell most students to finish their degree. But if the only thing you can do is think about your startup and you’re spending all your free time working on it, it might be worth considering dropping out.