Geoff Ralston: Good morning to you guys who are here live, but good day to everyone who is viewing this class online. Welcome to Y Combinator's second annual massively open online course Startup School.
I'm Geoff Ralston.
I'm a partner here at Y Combinator and one of the organizers of this year's Startup School.
Starting today we're hoping that YC's knowledge about entrepreneurship will help spur incredible innovation from all of you here and out there to create enormous value for the societies in which you live, for your friends, your families, your employees, and for yourselves. We're going to cover just a few things before we actually get started on the course, so I hope you'll bear with us. First, more companies than ever before asked to take part in Startup School this year. 27,000 companies from around the world asked to be part of it.
That's a number that kind of blows me away every time I think about it. 15,000 of those companies asked to actually participate in the class, and that's from over 100 countries and over 8000 cities around the world, really extraordinary numbers. Now, some of you may have heard that we had in fact intended to actually only allow about a quarter of those 15,000 to take the class, just because there are actual infrastructure limitations. Well I don't know if you did hear or didn't hear, but there was a slight glitch in our process.
In the end, we accepted all 15,000 companies, give or take. We accepted everyone, it's 15,000 give or take.
This means that this will be, by far, the largest class or startups that Y Combinator, or for that matter, anyone else has ever taught, so congratulations on being part of the biggest class.
I don't know if that's great or not, but congratulations you're still part of it. Let me just do a brief interlude about Startup School. Y Combinator began in 2005 by funding more companies simultaneously than had ever been done before, even though we only started with eight companies in our first batch.
Today we fund over 300 companies every year and work with them in an intense 3 month program, but there are many, many more 1000s who actually apply for those spots. We always knew that there was a possibility of our knowledge having greater reach, so that's why we started Startup School to maximize how many companies we could reach with our knowledge, to get it to as many companies around the world, to maximize, and this is our stated goal as a company, the innovation in the world. We think that is almost always a really good thing. We would like to find a way for every startup to succeed, and yes, there is self-interest here because it would be awesome if one or more of you out there today was the next huge Y Combinator company, and why not, right? We first experimented with the idea of greater reach in 2014 with a course taught by Y Combinator's president Sam Altman called How To Start A Startup.
It was a conventional course taught at Stanford with the difference that there was an online component.
The lectors were videoed and then placed online. Last year, we rethought that course as a massively open online course with the difference that the classes would be coupled with online access, a community, software tools, and of course, most importantly, weekly meetings with groups and check-ins.
This year, we're going to reprise that idea with some notable differences. We're still going to have a combination of in-person and online classes, but we have revamped software.
This year, most of the curricula will be taught by YC partners and YC alumni.
There's, as I mentioned, new software for community and for management.
There's scale, we're scaling larger than we ever have before.
The timing of this class is different. Last year it was taught in the spring.
This year is timed to coincide with the YC batch so that hopefully as many of y'all as possible who want to apply to the YC Winter 2019 batch can conveniently do so.
There's also a $10,000 grant, non-equity grant, available for 100 companies who complete and graduate from the course and in a few minutes my partner, Adora, will go through the criteria for graduation. Also, for the first time we've collected really an extraordinary library of startup content at the URL you see there.
I really encourage you guys to go look at it. You can find that, there's a link to it online when you log in to the site.
It's an open library available to anyone. Also, we have some incredible deals for the 15,000 companies that you can also see when you log in online.
I really want to call out, the folks offering deals were not expecting to offer those deals to 15,000 companies, it was a big surprise, and a number of them really, really, really stepped up. Amazon Web Services is offering $1000 credit to every single, $1000 of AWS credits to everybody.
Thank you Amazon.
Thank you Google for offering $1000 in Google Cloud and Fire based credits.
Two YC companies, Stripe and Clerky, have also really stepped up.
Stripe is offering an incredible deal on Stripe Atlas, 50% off for all of the companies and $5000 of fee free payment processing. Clerky is also giving a fantastic deal, $599 gets you formation, a bank account, and lots more from Clerky. Briefly I'm going to take you through the curriculum here. Our first week kicks off with an introduction to get Startup School and your company off the ground.
Then for the next three weeks we dig in deeply into building something that people want and then figuring out how to get users for that something.
Then, we spend a bunch of time talking about how to effectively run a startup with an interlude by YC partner Dalton Caldwell in week six, which I think you'll find very helpful in terms of thinking through how to apply to YC, how to succeed at an interview with YC, and at YC itself.
Then, we finish up with some lectures on fundraising and with an eye towards the future. Another new aspect to Startup School this year is something I'm really excite about, which is something we're calling conversations.
There's going to be two kinds of conversations, real ones, live, in person, with a notable expert in some useful domain as well as AMAs, Ask Me Anythings, on our forums where the experts will respond to questions, both asked in advance and live. Actually, this week we have an AMA tomorrow and a conversation on Friday that you'll learn more about.
If it's not obvious, we're doing a lot more this year, a lot of new things.
Some of those things aren't planned, weren't planned, so we ask you to bear with us.
This is our small team, we're very effective, very tight, but small, but we'll fix everything that goes wrong as quickly as possible and will respond to you as quickly as possible. Understand that there's a big scale here and there are many companies that are taking Startup School and we are going to do our best to make all of your experiences as successful as possible. Now, Adora, the YC partner with whom I'm organizing Startup School is going to go over some of the details as to how the 2018 class is actually going to work. No need to applaud. [inaudible] .
Adora Cheung: All right, so I am going to talk about the structure of the course.
There are five main components to this course, which you see up here, weekly class lectures, weekly group office hours, company updates, forum, and presentation day.
I'm going to go over all of these and at the end I will demo how it actually works in the software.
Start off, as you already know, each Tuesday we'll be recording around two hours of lectures on a variety of topics related to building and growing your startup, which Geoff already did a good preview of. Before most lectures we will be sending out what we call a prep material, which is like videos and slides to review so that the speakers can get to the good stuff ASAP instead of spending too much time on the mundane basics. Please take the time to review those notes if you can.
If you're in the San Francisco Bay area you will be able to attend these lectures in person. Unfortunately, there's only a limited amount of seats, so we can't fit everyone each time, but we will confirm via RSVPs if you can attend a lecture, so please only come if you get an invite to that particular lecture. We will start at 10 AM each Tuesday, please be in your seat by then.
The speaker will give the lecture and then Q&A will be done afterwards. However, most of you will actually be watching the lectures online. We will posting the lectures every Wednesday after the Tuesday lecture, around 12 PM, or at least by 12 PM each week. We encourage you to just watch whenever you get a chance. Weekly group office hours, as you may or may not know, we've already placed you in groups of 15-30 companies each, mostly based on location.
This is to provide a more intimate experience. Consider this group your immediate support network for Startup School and hopefully beyond Startup School.
These are your go-to people when you need help or you want to discuss something related to your startup. One of the ways we make sure you leverage this group effectively is through weekly group office hours. We think this is actually the most important thing to participate in, even more so then potentially the lectures. You can think of weekly group office hours as two things, one, it's a weekly check-in to keep everyone accountable.
Two, it's like a group therapy session where you can air out your week, ask for help, and get feedback from your peers.
The way that group office hours work is pretty straight forward. Each session is led by a moderator.
The moderator calls the meeting to order and then he or she facilitates a discussion in which one founder from each company says three things, one, their company one liner to remind everyone what they're actually working on, which actually is quite a tough thing to say what you're working on in one line. You should help each other work on that.
Two, is goals for your last week and why you did or did not meet that goal.
Three, your biggest problem or obstacle that the group can help you with.
Then this is followed by discussion in which each company spends about 5-10 minutes, depending on the number of people who actually show up to group office hours that week, and the moderator goes last. Like I said, each group only has one moderator.
Some groups have been already assigned a moderator.
These are volunteers from the YC founder community. Many groups do not have one yet.
These groups will need to select one amongst themselves.
So, if you are in a group without a moderator currently, and you will know this via the software, which I'll show you shortly, your homework is to do this ASAP by Thursday. How to select a moderator for your group, first, ask yourself if you are that person, do you want to do this? This involves extra time, energy, and thought. Just be cognizant of the extra work before volunteering. You will need to set the weekly schedule for your group, encourage and drive discussions, and constantly ask the group for input and guide the conversations.
Should you choose to accept this mission we will be running a moderator training session this Friday.
It's going to be livestream at 9 AM Pacific. We'll be posting the recording of it afterwards if you can't attend. You should immediately get together with the group via the two channels we provide, which is video chat and group forum, or some other way that's best for you and figure this out. One easy way to figure this out is whoever volunteers first gets the role so there's no arguing there. Please submit your choice by Friday so that the right person knows to attend the training session. Here is the link to submit. We will send this out to you afterward so you don't really need to write this down now.
The obvious question might be what if no one in your group volunteers to be a moderator? Well, the answer is if no one volunteers then no one in the group can participate in Startup School. Your entire group will be auditing the class instead.
This seems harsh, but for this to work we think having a moderated group office hours, just based on experience, is very important, maybe the most important thing for this entire class, so we've made this a requirement to stay in the course. Weekly company updates, sometime this week you should actually sit down and think with your other co-founders about a goal for Startup School that is at least one key metric that defines what success is to you by the end of the 10 weeks.
This might just be launching your product, but hopefully it's some kind of key metric like monthly recurring revenue, number of active users, and so forth. Each week you will be asked to submit an update of your company, in particular whether you've achieved your weekly goal for this key metric. We find that submitting this adds an extra layer of useful accountability and will help you to drive to accomplish more than you would have otherwise.
So please submit this by Tuesday end of day Pacific, excluding this week.
The first day I believe is September third. One of the things we're doing new this time and which I'm personally excited about is the community and forum, which some of you may have logged in and already started posting.
This is the place where you can talk to fellow founders like yourself, you can poll on for opinions on a variety of matters related to your startups, and ask for help for things like what's the best way to XYZ, and so forth. We've also created a private channel for your group and we think that most of the conversations you'll have will actually be in these private channels.
Talking to 10s of 1000s of people will be almost usually ineffective and tough for many topics. One of the first things you do if you haven't already done is log into the software which is live now and introduce yourself to your own group. Basic forum rules apply, be nice, don't spam.
I've already had to delete some posts, so try not to do that. Only post things that will be helpful to you and everyone else.
If you break these rules we unfortunately will have to remove you. Finally, at the end of the course you will have a virtual presentation day where you'll pitch your company via video and slides.
This is where telling the story of your startup is important. Geoff will go over how to do this and how to think about it in a few minutes. While presentation day is actually optional, it's a good way to use this day to set an ambitious goal of what you would like to show off to others in 10 weeks from now.
There will be many of you who if you take this seriously will be amazed in 10 weeks but what you can accomplish and what you will be able to present by just setting a goal, holding yourself accountable each week by one, submitting updates and talking about your progress with your group during group office hours.
To help us keep the community tight and on track together we will be removing inactive companies unfortunately.
So if you don't submit updates and skip group office hours in the first two weeks you will be auditing instead. We want to work with you if you're serious about startup and making progress. Now, some of you may decide this is not the right time to do your startup and that's obviously totally fine.
To officially complete the course, [inaudible] to graduate, you just need to do two things, one is to submit 9 of the 10 weekly updates.
Two, is to participate in 9 out of the 10 group office hour sessions and that's it. As you know, as Geoff already mentioned, we are giving out 100 $10k equity-free grants to the most promising startups. Course completion is the minimum requirement to be eligible for these grants. Regardless, if you're aiming for this or not, we believe the success of your startup will increase if you actually complete the course, so regardless, we encourage you to just complete the course. Finally, Geoff kind of already mentioned this, but while Startup School is completely independent from the YC core program, we would love for as many of you to apply to it as possible.
In this vein, as Geoff has pointed out, we have a lecture dedicated to how to create the best application possible and the best practices for the in-person interview should you get one.
The course just happens to finish just in time for you to apply on time, so we hope to see many of you do so.
Geoff Ralston: I just wanted to spend a couple of minutes talking about something that I think is absolutely vital to startup success, but although it's fundamental, is often somewhat overlooked.
That is really the invention, the creation of the story of your startup.
This mind sound obvious or basic, but it turns out that getting this right is actually non-intuitively important.
The reason it is so important is because startups are so hard.
They're so very, very hard.
It is almost certainly going to be the hardest most difficult thing you will do in your professional career.
If you don't create a story, the right story that you can tell yourself to keep going when things go wrong you'll quit and your startup with die, so it's worthwhile. My YC partner Aaron Harris, who's going to be giving a lecture later on in Startup School thinks and talks a lot about stories and I'm indebted to him for a number of the ideas of what I'm about to say.
There are stories and there are stories and the famous author, E.M. Forster, maybe said it best many, many decades ago when he gave this example. "The king died and then the queen died," is certainly a story, but it's not a very interesting story, is it? It's not a story that grabs you, it's not a story you necessarily care about. But, "the king died and then the queen died of grief," well, there's something there.
There's something to grab you, there's something human there, there's something in that story that seems to matter.
It turns out, founders spend a lot of time tell stories.
They tell stories about what they're doing.
They tell stories about the future that they're trying to create.
They tell stories may originally to their parents, to their friends, to their family, eventually to co-founders, potential customers, partners in the company, investors. But, most of all, they need to tell a story that resonates with themselves.
It's a story of your startup that will nourish you, that will keep you going through hard times and setbacks.
It's a story that will persuade you to actually do this crazy thing and it's a story that will maybe just for those others persuade them to join you on your journey. How crazy it is to convince someone else to follow you on such an uncertain path.
It's not easy, so we actually spend a lot of time at YC helping people craft and sometimes even reimagine their stories.
I'd strongly recommend that you do these things during these 10 weeks.
Start with your idea and then as Adora mentioned, create a preferably one sentence, maybe two sentence explanation that is so easy to understand you could stop anyone in the street and they wouldn't just look at you blankly when you're telling them what you do. Create what we call your vertebrae, the framework of your story that captures really what it's all about, and if you were to tell your story you would expect hope that people might just remember because the will not remember your entire story. Create a two minute demo day like pitch, it doesn't have to be exactly two minutes, but create a pitch that captures the essence of your story and communicates those vertebrae in a memorable way. And, last but not least, work with your co-founders so that you're on the same page, so that you all share the same story and can all relate that story, tell that story in a way that's compelling and believable because when you have it right it will be believable. Equally important, it will be memorable and it will I hope sustain you as you go through your path and your journey. Good luck to everyone.
I hope that Startup School helps everyone realize the dream and the company you're creating has a ton of success.
So Adora, come on up. We are going to do a quick Q&A.
I just want to say one thing about one part of what Sam talked about which is we'll figure it out. Don't minimize the importance of getting that as part of the fundamental culture of your team.
In fact, as an example, Y Combinator may not appeal to you guys like a startup but it always feels to us like it's a startup even though we're 15 years old now. A week ago, everything went to hell. We had a pretty big problem with Startup School and we weren't quite sure how to deal with it. Our small team sat down together and everyone said, "Well we'll figure out. We're going to let everyone in and we'll figure out how to make it work." Now, you guys will be the judge of how good a job we do figuring it out. We're going to do our very best, but that sort of attitude, this default towards positive action, makes for great startups. Any questions you have we're going to take whatever questions you have, if any.
Then we're going to take a short break and then we'll continue with the second lecture today on startup mechanics led by our incredible legal team from Y Combinator who's hiding in the corner over there. Any questions for Adora or myself? Audience: When should we submit the weekly updates? Should we do it nice and early or should we try to get as much done as possible and wait as late as possible, and submit them close to the deadline if we need?
Geoff Ralston: Well, look, the updates are for you.
The updates are to drive progress in your company.
It's usually better to have an update that is better than worse.
If you think you're going to get five sales between now and the deadline, well get the five sales and have a better update.
I would actually, in general, recommend doing them on a pretty consistent temporal basis because that gives you some clue as to your progress, like every week we're going this much. But look, they're a week apart.
The importance of a few days is not going to make or break your startup.
The important thing for the updates is to have a measure that you hold yourself to that really tells you whether you're making progress or not. A startup that doesn't make progress is going nowhere, that's redundant but true. When Chesky, and Nate, and the folks at Airbnb were at YC they used to wake up every morning and see their revenue graph on their bathroom mirror.
That drove them and it helped, and it worked out for them, so why not you? Questions? Audience: [inaudible] , but I was wondering [inaudible] ?
Geoff Ralston: The question is about AWS credits. You probably missed the beginning, but if you log into the site you can see all of the deals that the companies who are following Startup School get.
There was a $1000 of AWS credits for all of the participants. Audience: What about the group office hours, there's a lot of people in the room who are all from here, so is there a way for us to physically do that? Then, further, we're in San Francisco, so coming down here is harder.
I get more out of being in a room with other people than I do on the internet.
Adora Cheung: If you just look at who's in your group and see where they are-
Geoff Ralston: Can you repeat the question because I'm not [inaudible] .
Adora Cheung: Sorry, so the question is should we be doing group office hours in person, and if so, how do we go about doing that. We encourage, because most people are distributed, is to do them through the video chat online.
That assures we just click it and you're in.
If you do want to do in person that's up to you, but that's something you should work with your group on.
Geoff Ralston: Yes? Audience: If you're having issues with your account who should you contact? So [inaudible] .
Geoff Ralston: If you're having issues with your account, who should you contact.
Adora Cheung: If you're having issues with your account you should email [email protected].
Geoff Ralston: Yes? Audience: How will you evaluate who gets the $10,000?
Geoff Ralston: The question is how will we choose the 100 companies who get the $10,000. As Adora pointed out, the first criterion that we'll look at is did you actually complete the requirements of the course.
If you do that then we're going to take a number of measures to see who's the most promising.
It's kind of what we do at Y Combinator, we're always trying to judge who's the most promising.
So we're going to look at everyone who graduated and everyone's status updates and we'll talk to moderators and we'll look at the information we have about the company, and then make judgments as to who we think is most likely to be able to take that $10,000 and do something useful with it. Yes, in the back? Audience: I'm [inaudible] and we have [inaudible] job and on this.
Adora Cheung: Can you stand up-
Geoff Ralston: Can you stand up and speak more loudly please? Audience: [inaudible] .
So [inaudible] I just want to understand [inaudible] .
Geoff Ralston: I think the question was if you're working part-time on your company because you have to work full-time how do you stack up.
I think the hard answer is there's few startups that are successful working part-time. Eventually, if you're not full-time the likelihood that you're going to create an epic company by working a few hours a week, even if you're amazing and you're working 40 hours a week at one job and 40 hours a week in another, your probability of success is pretty low. Can you guys think of any company, any amazing company where part-time founders actually made it amazing? So I think the question really isn't to us, it's to you, how successful can you make your startup working part-time? I think you can get it going, but at some point in the evolution of your startup you're going to have to commit to it if you want to make that startup real. Yes? Audience: [inaudible] .
Geoff Ralston: There is really no such thing.
The question was about the advisor track program.
There's really no such thing.
There's one program with all 15,000 companies and we're going to try to make the program as identical for everyone as possible. Everyone's going to have a group.
Some groups have a built-in moderator, some don't and have to add their moderator. Look, we think that's going to work out very well. We'll find out.
It's going to depend on you all, for the folks who choose to be moderators to take it seriously and to create a community and a useful group that actually helps folks as they have their encounter sessions, as they talk about progresses, they talk about problems. We think that one of the most important things for startup success is actually to have a community of folks to whom you can talk. Just having that community can be one of those things that does, with your story, sustain you as you build your startup. Yes? Audience: About the weekly progress metric, do you have any good examples for metrics of companies that are far from [inaudible] ?
Adora Cheung: The question is if you haven't launched yet what should be a good weekly metric.
The obvious number one thing you could go after is number of days until public launch, that way the way you make progress over the weeks is the technical milestones that you need to hit, like one, two, three, and four to get to that. Hopefully, by the end of 10 weeks you're able to launch it to either a set of private beta users or to the world. Beyond that, someone asked this in a forum too, in you're in private beta right now what's a good metric, also number of days to public launch, but also, for example, number of active users using or some engagement metric that shows that people are loving what you're building.
Geoff Ralston: Just to follow, one good rule is just to launch earlier than you think you should. Now, there are exceptions to that.
If you're Theranos and your thing doesn't work, not a good idea.
So there are exceptions, but in general, you should launch sooner than you think you should. Yes? Audience: For the weekly updates, can you explain what you mean by value and growth percentage? I guess value's just a number, right, so it's very arbitrary.
Geoff Ralston: The question was on the weekly updates and what we mean by value.
I don't think it's arbitrary at all.
If it's revenue it should be a real number, if it's users it's a real number.
The reason we're not prescriptive about what that should be is because it depends so much on the stage of your startup, the sort of startup you have. What we encourage you to do is try to figure out what metric is most likely to be representative of success. What actually tells you that things are going well? It's not a fake one.
The number that happens to be the biggest every week, but actually doesn't really represent whether things are going well, you're getting a ton of registrations, people are signing up for your product but no one's using it, so you use registrations as your metric, you might think that's impressing us, but in the end, you're just waving your hands around something that's not working.
In that case, for example, maybe active users was a better metric to use. Yes? Audience: Sorry to ask another question, we're a hardware company, so the nature of what we're doing is that we're making something physical. What is a useful hardware metric that you've seen over time that might be different than we've already talked about?
Geoff Ralston: The question was what metric makes sense for hardware companies. Look, we fund lots of hardware companies. One of our partners, Eric Migicovsky founded Pebble. He'd probably be much better than I would be at answering that question, but every company, hardware, software, hard tech, if you're building YC company boom, a supersonic airplane, still makes progress.
If you're not making progress what exactly are you doing? It might be that you're trying to find a factory in China to manufacture your product, so maybe you've made progress on that deal. Maybe it's in the design of the product, so the milestone is we've completed the design of the wing or the engine. Again, I will default to what I've said before, there is some way that your project, your company, your product is proceeding on a path towards success. Along that path there will be important milestones, those should be your metrics. We have a lot more questions.
I'm just going to take, I apologize, a couple more questions because I want to give everyone a bio break and I want to move to the next section, so just a couple more. Yes? Audience: [inaudible] do you think that a lot of feedback we can get from [inaudible] can be helpful.
Is there [inaudible] can be very helpful for our startup?
Adora Cheung: The question is how can you connect with YC alumni and partners to get feedback. A lot of alumni, at least over 100, are actually in the forum and they'll be answering your questions. Jeff and I will also be in the forum. We are YC partners, so hopefully that covers that. We'll also have AMAs with other YC partners, for example, Eric from Pebble will be doing something for the hardware startups, so we'll have those interactions as well.
Geoff Ralston: Look, it's a great question.
There's a lot of you out there.
There's 15,000 companies, so we can only give so much feedback, but the whole point of startup school is to try to give YC knowledge to everyone who can make use of it. We'll do our very best to do exactly that. All right, one more question, yes? Audience: Can you repeat what you meant by vertebrae regarding the [inaudible] ?
Geoff Ralston: Yeah.
The question is, can I repeat what I meant by the vertebrae of your story.
The way I usually think about that is let's say you meet an investor and give them a little two minute pitch for your story, you have to remember that they're going to hear lots, and lots, and lots of pitches.
They're not going to remember your entire two minute pitch.
They're probably going to remember three or four things from that pitch.
The vertebrae, the three or four things you want them to remember, if you build a story and the focus is on something like they walk away saying, "Oh, he's from San Mateo," who cares? What you really want them to remember is we're growing at 30% every week and this market is a gigantic market and our product solves an incredibly important problem for somebody.
The vertebrae are the key elements around which you build a story.
The vertebrae are the elements that are the memorable ones of what you're building and that comprise really the essence of your story. Hope that helps. Look, we're going to take a 12 minute break and start again at 11:20.
There's coffee and snacks in there and the bathrooms are over there.
Thank you.