The Launch Pad

About The Launch Pad

Number of teams that applied to Y Combinator’s summer 2011 batch: 2,089

Teams interviewed: 170

Minutes per interview: 10

Teams accepted and funded: 64

Months to build a viable startup: 3

Possibilities: BOUNDLESS

Investment firm Y Combinator is the most sought-after home for startups in Silicon Valley. Twice a year, it funds dozens of just-founded startups and provides three months of guid­ance from Paul Graham, YC’s impresario, and his partners, also entrepreneurs and mostly YC alumni. The list of YC-funded success stories includes Dropbox (now valued at $5 billion) and Airbnb ($1.3 billion).

Receiving an offer from YC creates the oppor­tunity of a lifetime — it’s like American Idol for budding entrepreneurs.

Acclaimed journalist Randall Stross was granted unprecedented access to Y Combinator’s summer 2011 batch of young companies, offering a unique inside tour of the world of software startups. Most of the founders were male programmers in their mid-twenties or younger. Over the course of the summer, they scrambled to heed Graham’s seemingly simple advice: make something people want.

We watch the founders work round-the-clock, developing and retooling products as diverse as a Web site that can teach anyone program­ming, to a Wikipedia-like site for rap lyrics, to software written by a pair of attorneys who seek to “make attorneys obsolete.”

Founders are guided by Graham’s notoriously direct form of tough-love feedback. “Here, we don’t fire you,” he says. “The market fires you. If you’re sucking, I’m not going to run along behind you, saying, ‘You’re sucking, you’re suck­ing, c’mon, stop sucking.’” Some teams would even abandon their initial idea midsummer and scramble to begin anew.

The program culminated in “Demo Day,” when founders pitched their startup to sev­eral hundred top angel investors and venture capitalists. A lucky few attracted capital that gave their startup a valuation of multiple millions of dollars. Others went back to the drawing board.

This is the definitive story of a seismic shift that’s occurred in the business world, in which coding skill trumps employment experience, pairs of undergraduates confidently take on Goliaths, tiny startups working out of an apart­ment scale fast, and investors fall in love.

About The Launch Pad

Twice a year in the heart of Silicon Valley, a small investment firm called Y Combinator selects an elite group of young entrepreneurs from around the world for three months of intense work and instruction. Their brand-new two- or three-person start-ups are given a seemingly impossible challenge: to turn a raw idea into a viable business, fast.
 
Each YC session culminates in a demo day, when investors and venture capitalists flock to hear pitches from the new graduates. Any one of them might turn out to be the next Dropbox (class of 2007, now valued at $5 billion) or Airbnb (2009, $1.3 billion).
 
Randall Stross is the first journalist to have fly-on-the-wall access to Y Combinator. He tells the full story of how Paul Graham started this ultra exclusive institution, how it chooses among hundreds of aspiring Mark Zuckerbergs, and how it teaches them to go from concept to profitability in record time.