Ask PG: Do you review rejected YC apps to find startups who then made it big?

91 points by vishnupr 12 years ago | 28 comments

Just wondering.

pg 12 years ago |

Whenever a startup we rejected seems to be succeeding, we go back and try to figure out why we rejected them. Occasionally we change the application process as a result.

We don't start from the applications though. We hear from news stories when startups are doing well, and then we go back and look at their application.

ivankirigin 12 years ago | |

You're going to miss startups that might have succeeded if you had invested this way. You take a percentage of the companies you invest in because you make it more likely for them to succeed.

Given the funnel of startup failure, there are probably more startups that didn't succeed because you passed than startups that succeed despite your passing.

pkinsky 12 years ago | | |

But what metric can track might-have-beens?

tobylane 12 years ago |

Answering as if your question said "And does that make you want to change your application process", because the first time I read it I thought it did.

My understanding of the essays I've read is that there wouldn't be much point in it. Ideas evolve or change entirely, and more importantly people improve. If the gut feeling was no then, all you know is that something changed.

namenotrequired 12 years ago | |

all you know is that something changed.

Or you missed something that was already there - IMO more likely, considering how little you can learn about someone from the application, and that the founders at least had the potential to become what they are today.

baldajan 12 years ago | | |

I disagree, founders and products change, and can make the difference between lifestyle and $1B. Having had multiple rejections for years from different sources (then accepted with the same idea), I know this to be true. It's less about having a "great idea" and more about having the vision and ability to execute on it - that's what needs to be proven.

itsprofitbaron 12 years ago |

Based on a question answered by PG on Askolo, YCombinator track them[1]:

Q: Have there been any startups you've later regretted rejecting from YCombinator? A: Sure, several. But I can't name names because it's not for me to disclose that they applied.

Additionally they also mention about contacting them on rejected applications[2]:

"If you do, we'd appreciate it if you'd send us an email telling us about it; we want to learn from our mistakes"

Here are some that are known to have been rejected by YC and have gone onto raise funding (which is not a perfect metric by any means since funding ≠ success) or have been acquired:

- SendGrid - http://sendgrid.com/ - Raised $27.4M[3]

- CouchOne - http://www.couchbase.com/ - Raised $56M[4]

- AfterTheDeadline - http://afterthedeadline.com/ - Acquired By Automattic

- LightSail Energy - http://lightsailenergy.com/ - Raised $42.8M[5]

- SignPost - http://www.signpost.com/ - Raised $15M[6]

- Storenvy - http://www.storenvy.com - although they were kicked out of YC[7] Raised $6.5M [8]

[1] https://web.archive.org/web/20120814111130/http://askolo.com...

[2] http://ycuniverse.com/yc-applying-interviewees

[3] http://www.crunchbase.com/company/sendgrid

[4] http://www.crunchbase.com/company/couchbase

[5] http://www.crunchbase.com/company/lightsail-energy

[6] http://www.crunchbase.com/company/signpost

[7] http://joncrawford.com/post/20378314843/how-i-got-kicked-out...

[8] http://techcrunch.com/2013/02/12/storenvy-goes-from-getting-...

presty 12 years ago | |

Here's another one: Buffer

https://www.quora.com/Y-Combinator/Whats-it-like-to-get-reje...

bound008 12 years ago |

Yes. This has been mentioned by PG numerous times in numerous places.

001sky 12 years ago |

Useful context> http://graphics.wsj.com/billion-dollar-club/

Edit: with older data included> http://tctechcrunch2011.files.wordpress.com/2013/11/unicorn-...

adamgravitis 12 years ago |

It would be a difficult study... How many YC companies would have failed if they had not been accepted to YC? Certainly, a number of rejected companies who later failed may have thrived under YC.

pervycreeper 12 years ago |

Presumably, if they were to 'make it big' he would probably hear about this through other channels without having to constantly monitor a large pool of rejected applicants.

colinbartlett 12 years ago | |

Sure he would hear about it, but would he remember that they had applied.

Presumably, someone on the YC staff monitors the success of companies both in the program and out of the program and uses that data to improve future acceptance decisions.

hack_edu 12 years ago |

Why so much 'Ask PG' lately when he never replies, let alone read them?

daniel-cussen 12 years ago | |

Seriously. I guess for him these kinds of posts have, overall, low signal vs. noise.

zt 12 years ago | | |

He has answered this question so many times in so many places. In fact, he mentions the fact that YC tracks the companies they reject quite often -- including here on HN and in essays. Given that, I find it likely he has read the comment but find it unlikely he'd take the time to respond since it's so obviously asked by someone who isn't paying enough attention to even do ten minutes of research on their own.

mindcrime 12 years ago | |

He replied to this one.

HowardJ 12 years ago |

I'm starting to think "Ask PG" are linkbait titles disguised as "Ask HN".

hnriot 12 years ago |

what a stupid ask. why wouldn't a vc do this? Isn't this something that would be a big part of the iterative application process. I doubt the process has remained unchanged over the years. As new feature vectors of success are identified it would be a very inept investor who didn't consider how to integrate that back into their process. And PG is not an inept investor.

phaus 12 years ago | |

There really isn't any need for such hostility, especially since you are wrong. OP wanted to know if YC searched through applications looking for rejects that ended up being successful. That's a very specific question.

PG says that's not how it works. I guess you think the way YC works is stupid.

Hoozt 12 years ago |

Hashtag PGQuestionOfTheWeek

aashaykumar92 12 years ago |

Reviewing rejected apps would be a waste of time given how many apps YC has received. Also, what does 'big' mean? I doubt a startup exists that was rejected by YC then grew to a $1B valuation--someone would probably have heard of that by now, made a big deal of it, and those of us on HN would know. But I don't doubt that YC-rejected startups have gone on to raise a few rounds of funding and/or may have even made <$100M exits.

namenotrequired 12 years ago | |

Reviewing rejected apps would be a waste of time given how many apps YC has received

Only a small number of those will have made it big since then, though (by whatever definition). So they'd only have to look at a small amount to see if there were any indicators that they might have overlooked.

lquist 12 years ago | |

Reviewing rejected apps would be a waste of time given how many apps YC has received.

A script could probably do the most time consuming bits.