YC S20 Remote Batch
blog.ycombinator.comI think people will be surprised how well this works.
There are a lot of great startups that will be born in these times. Many of them will be "remote native" -- operated remotely, remote YC, and potentially tackling problems that have arisen due to the remote world we're living in.
After this crisis is over, some things will go back to normal, but a lot of the changes will endure to varying degrees.
I think people are used to the power of in-person connection and physical reality, and most of us are craving it. But an incredible amount can happen in digital reality, and we are only just beginning to scratch that surface.
At minimum it is an interesting and necessary experiment.
I'm watching it all with some amusement. I've worked remote my whole career, first because it was the only option where I lived, and then later by choice after I returned to the developed world.
I'm trying to start a company, and I wouldn't dream of doing it any other way than remote. There's advantages and disadvantages, but I don't want to be paying SF office rent, SF salaries, SF benefits, and competing with the unicorns and tech giants in the area. I'd rather draw from a global talent pool and focus on how to minimize the drawbacks and maximize the advantages of doing so.
Plus neither my wife or I want to live in SF. We much prefer Vancouver. I'd move if it were really necessary for the business, but I'm glad that doesn't seem to be true.
But I'd just work at a company that pays SF salaries (or almost), but working remotely. Why doesn't everyone just do that? I think that will happen more because right now, SF people are all working remotely anyway.
What are you working on?
Kind of a zapier thing, but aimed at developers ( so different power vs ease of use tradeoff). Will be at apimate.com when I launch it.
Interestingly zapier are a remote company.
I also think that some people are better able to get funding and make up for other inadequacies in their concept or implementation thereof by leveraging their in-person skillset.
Obviously, being good in-person and being able to convince a VC of your competence is a skill that likely correlates well to success with a startup, but I doubt that it is one to one.
Just like there are a lot of excellent engineers that get passed over frequently because they aren't good at white boarding, or interviews in general.
If they now would be able to invest in foreign companies like GmbHs or UK Limiteds it would be perfect. I understand why they don’t want to do that but I think for a lot of companies to which YC could be interesting (us included) it’s simply not possible or very difficult to do a flip to a US company.
That increases complexity drastically for what's basically a third and a sixth of the reward, if even that. I don't think it makes that much sense.
Not sure I understand what you mean by "a third and a sixth of the reward", can you explain?
Population of Germany and the UK, respectively, compared to the United States (probably a little fuzzy because it was recalled from memory, though). Not only smaller pool of applicants, but also smaller markets.
The market of "Germany" is actually the entire EU, which is bigger than the US.
Only slightly bigger, much of it is dramatically more poor, and a sizeable portion of it can't understand English, much less German.
Where do you get the dramatically more poor from?
Wages in Europe are shockingly low from the perspective of an American.
One example: The UK is a reasonably wealthy country. Median household income in the UK is 29,400 GBP (36,000 USD). The poorest state in the US (Mississippi) has a median household income around 43,000 USD
This applies doubly for high-paying jobs (devs in wealthy parts of the US make 2-4x+ what they would in wealthy parts of Europe).
I switched to working remotely for a US company a couple years ago, and while I used to have a "sure why not chat" policy with local headhunters I don't even bother anymore because the offers they can come up with are astonishingly low compared to my already-below-market-for-the-US wage.
That being said, at the low end of the job market (minimum wage or close to it) people can make more here than in the US, and with paid vacation and healthcare to boot, and there's less inequality as a whole, but the fact remains if you're trying to sell something there's less money to chase.
Sure, healthcare is no-cost, you get a month or more of vacation a year even if you're in low-paid work (if it's full time), and quality of life is better in many respects, but once you get away from the nordics, really, there's just a lot less money about.
Also, lack of a common language is still an issue (How many versions of komplett.no needed to be translated?), and not just for sites, but for support, logistics, etc.
If you send physical products Europe is expensive to ship in. I can send stuff to the US cheaper than some of Europe (though customs applies, of course)
I'm in Europe, and would like to start a company, and even I would be using my local market primarily for testing and then focus on the US. On the bright side, devs are a hell of a lot cheaper here.
Poland, Bulgaria, Romania, Greece have a lot of very smart and hard workers, but they are not (yet) wealthy countries. People in eastern Europe simply do not have the disposable income that Americans or western Europeans (usually) have.
Have you been lately in Romania? You would be surprised how much disposable income people have there.
The country is one of the biggest cereal producer of EU, a major car industry player and has big reserves of oil and gas.
Anecdotally, since turism/horeca services is really a minor part of the GDP, the COVID-19 will not affect it too much. Whereas in West going out is a major activity and has much influence.
The average yearly income in Romania is US$8100 per year. The average income in Mississippi (the poorest state in the US) is $42,000.
That's a fair difference in available disposable income!
(Having said that, I've worked with some Romania developers and they were great. I'd hire there, but there are better markets to sell into)
Agree, but the average income does not give any indication of the said disposable income to the respective income ( in % ). Also averages reflect quite poor the distribution of income, since some outliers can move the point quite drastically.
But, yes point taken, there is of course a difference. Corruption is a main point. Also due to the gray or black economy I suspect that the above $8100 are likely double.
Additionally lots of corruption and a large black economy do not make a country an attractive target for startups to target.
I agree it increases complexity, but this argument makes no sense. You don't need to be a German or British company to target those markets - you can do both from a Delaware LLC perfectly fine.
Exactly! So there's no point in accepting companies registered in foreign countries.
There is a point to it: it makes it easier for existing companies. But there are downsides to it too, as outlined in the FAQ.
IIRC they attempted the same approach in China. They tried to take the US strategy and demand a particular legal structure for Chinese startups that was neither normal for domestic startups nor common for international startups beneath the size of a multinational with deep pockets and switched on lawyers. This was probably a significant contributor to the lack of traction in China, and almost certainly removed by the follow-on program.
German notary requirements make investing hell compared to us or uk
Yeah I know that's unfortunate. Maybe we will see some innovation in that area with Covid-19 now, the problem is that the notary system has created a class of wealthy people that will fight vigorously against anything that threatens their income stream, even though many transactions could be done digitally.
The main problem is that you need to appear personally, otherwise it's not such a big deal I find.
My impression was that investments in US entities requires, kind of, a lawyer. So not that much different, if you ask me.
With Germany being in the EU, you can also incorporate in whatever EU country you want. The UK is obviously out for now, but take Estonia for example. Makes taxes a lot more complex for the company, but much less so when compared to YCs way of transforming into a US Inc. with a German / EU local entity. Especially when there are now US based operations.
That being said, there is nothing wrong with sticking to one market. Not the last reason being to avoid the above mentioned entanglements.
From what I understand, The us market is way way easier than most foreign markets you dint need a lawyer to incorporate or frankly to deal with the first few hundred thousand bucks of investment using standard terms, and the amount of bureaucracy and red tape is far far less here. Caveat: I cant speak to Germany specifically and can only speak to my experience with building a company in the us and what I hear from friends in europe and asia
True that, in ermany you legally have to pass through a notary, while in the US it would simply be wise to do so.
The incorporation of my company in germany, including documentation, notary fees and registration, cost me less than 1.000 € and took 7 days from notary to registration. VAT registration took almost 5 weeks, so. But that was independent from the legal entity.
In the UK or USA I can setup a company in a few days and generally legals for a Seed round wouldn't really ever exceed $25k. In Germany there's far far more hassle sadly, German language capability is a must and the notary requirement creates enough inertia I'd rather just never deal with a GmbH unless it's absolutely necessary. One of our deals required reading legal documents out loud in person for 3 hours - that's just not really feasible as an investor at scale.
> My impression was that investments in US entities requires, kind of, a lawyer. So not that much different, if you ask me.
Germany doesn’t kind of require a layer. You actually need a lawyer. In the Anglosphere you would be wise to procure the services of a lawyer if you’re doing anything remotely out of the ordinary and dealing with lots of money but if not you can set up an LLC or Ltd. or some other standard corporate structure using off the shelf documentation and b filling in the appropriate blanks yourself.
Nice, you can now capture that talent pool that would otherwise not want to relocate to California even for a stint. Hope this becomes a trend once normal life resumes, with YC and other investors.
Applications for S20 ended on March 16th, haven't they? I wanted to apply but definitely could not travel, this change makes it interesting/possible again but I'm not sure it's not already too late to apply.
"And we’re still accepting late applications if you’ve always wanted to do YC but couldn’t move out to the bay area" - Aaron from YC.
https://twitter.com/aaron_epstein/status/1252267533555470338...
How many companies from those late applications get accepted every batch?
Now that ycombinator takes over a hundred startups it does seem more promising to get in, eventually.
"And you can submit after the deadline - though keep in mind that if you apply late, we can’t guarantee the exact date of when you’ll hear back from us with a decision."
https://www.ycombinator.com/apply/
Do it!
I wonder if this changes the number of companies that can be accepted. I also worry that this will turn into Startup School 2.0.
I understand circumstances are forcing this to happen, but if online batches are now a possibility, the FAQs should be updated:
"Can we do it without moving to where you are?"
Sorry, no. We tried this once, and by Demo Day that startup was way behind the rest. What we do, we have to do in person. We would not be doing a startup a favor by not making them come to YC events in person.
However, you don't have to be in silicon valley 24x7. If you have a business that requires that you be somewhere else, we will work something out so you can participate in YC events while also being attentive to your business. Usually the founders will rotate between locations, or fly back and forth.
Of course, after the 3 month program, you can go wherever you want.
It's sort of crazy to make such a sweeping decision based on one case - especially when remote collaboration tools are improving on a quarterly basis.
Of course statements like this are just rationalizations - not arguments employed to arrive at objective conclusions.
Yeah, looking back at it there's definitely a question raised by how it was just one data point, especially considering that this also means there likely wasn't a lot of institutional support on YC's end for the one remote startup as well. It wouldn't be deliberate but if you've just got that one remote startup you aren't going to be really trying to make remote programming work and making all the resources remote-friendly.
For other experiments, YC has discussed publically (fellowship, accepting people with no idea, early decision) there were what seemed externally at least to be well-run experiments with multiple accepted and some longer-term tracking to see how that worked. No remote seems to finally be getting that proper experimentation and treatment, I guess we'll see how that goes.
There are a lot of benefits to in person, I personally prefer working on things in-person to remote (in biotech, in-person really matters), but it'll be an interesting experiment this batch to see how much room there is for fully remote startup development across all the sectors they invest, both in terms of the batch itself and the companies individually.
Ya, that's exactly what I thought when I read that. I guess if that one single company had been an amazing success, they would have just dropped everything, shit down the offices and gone fully virtual at that point?
Thanks, I'll update that.
Please clarify: a) whether Demo Day is mandatory for a batch startups, in general, and b) whether Demo Day will be fully online as the rest of the batch program. Thank you in advance.
Demo day is never mandatory, and for this summer batch it will be fully online.
I see. Much appreciate your prompt response.
Hi Jared, I found another field that might be worth updating. There is a question in the Founder's profile asking if you are willing to relocate to the bay area, which doesn't feel applicable for this batch.
I've worked remotely for the past 3.5 years. As one of two employees at a small statup, at a startup that started remote friendly and then revoked it, and now at a startup that is moving towards being remote equal (25% and rising).
Not that long compared to others here, but long enough to have seen things that work and seen things that don't work, and with sufficiently varied approaches. I think there's reasons why this will work, but I also wonder if they would have screened the startups slightly differently if they knew they were going to do the whole batch remotely. Working in an all remote environment require different communication skills than working in an office.
I also wonder how easy it'll be for founders to put in 16+ hour days while working from home. It's easy to 'stay late at the office', but I think it is harder to contain myself in my office while doing that. Maybe that's just a me thing, but I think it can be a real issue... I wonder if founders will simply hole up in the same living space somehow during quarantine; I could see that working, that's basically I've seen friends who've been in YC do anyway. It just might be harder to do in this environment.
> I also wonder how easy it'll be for founders to put in 16+ hour days while working from home. It's easy to 'stay late at the office', but I think it is harder to contain myself in my office while doing that. Maybe that's just a me thing, but I think it can be a real issue...
Yeah, I think that's just a personal preference thing. I've always found offices to be much more distracting, and actually I tend to put less time in overall when there's an office involved. Mostly that's because commuting (even if it's a relatively easy commute, like a 15 minute walk) takes extra time, effort, and planning - and because there are more auditory and visual distractions to tune out in an office, which makes me fatigue more quickly.
I also felt just emotionally on edge from going to the office every day. For example, I would feel very resentful when I was phoned outside of work hours, because I felt that my limited time to enjoy myself and re-coup my energy with my family was being threatened. Now that I've been working primarily remotely now for about 3 years, I don't feel bothered when I need to step up and do extra work outside of normal hours. I'm less grouchy in general because I control the environment I work in and don't have the overhead of a commute looming over me.
I think most of the YC Founders will be able to do fine, since learning to work effectively remotely is a skill like any other. From my experience too, remote working is 10x better when every person involved is remote. The worst-case scenario is to have a split group of people (part remote, part in-office), because it leads to the in-person group having side convos that leave out the remote people, which harms the remote people's ability to bond with the in-person group and generates resentment when the remote workers inevitably get left out of a conversation that matters.
If you're a parent, it's possibly the _only_ way you can do long hours (responsibly)
Looking forward to this if we are accepted, I think on the company's end, a lot of us worry about transmission of covid 19 and this just provides a safer environment.
This crisis is a test of a company's flexibility, since the lockdown started we had to do a hard pivot from onsite to remote services and we're just getting traction.
Remote work is here to stay and so is remote services. It's a new frontier/market to explore.
I'd love to apply for 20-things.com. Would this be a waste of time, given the interest YC board has in Reddit?
You should apply. Whether there are companies we've already funded doing something similar is not a factor in our decisions.
Thank you, glad to hear it, that helps a lot!
They've invested in reddit competitors before. Such as 9Gag.
Makes me wonder, does YC still have any Reddit equity?
They sold to Conde Nast and the spun out, so probably not, actually!
How is VC sentiment during the pandemic? My first assumption is that they're more hesitant than usual to invest, but I've heard from peers that some VCs are now working even harder to make sure their most promising companies have the resources to survive past the crisis. Something about lessons learned from the startups that came out of the Great Recession.
Currently fundraising. From what I have been hearing, VCs are mostly doubling down on their portfolio and reducing the number of new companies they invest in. Sentiment is strong for companies enabling remote work though.
Good! I have a potential job that I am quite interested in taking, so I may not end up applying after all, but should that fall through I'll be applying.
We have specifically built airsend (https://www.airsend.io/) to solve remote collaboration use cases like this (especially if the use case involves collaboration among multiple teams across organization boundaries). We will be thrilled if YC could check us out. AirSend will be a great addition to YC's online platform, video conferencing and founders forum.
As a Bay Area native I wish this hadn’t happen, but sometimes radical change creates radical results.
This is a single cohort, and they make no indication that they are changing their policy for future cohorts. No one in the Bay Area should care about this one-off change unless they applied to this batch and are worried about the extra competition.
Why do you wish so?
Well I understand deeply that there's nothing more powerful that in-person connections.
I've witnessed that multiple times when I sneaked into some "exclusive" events in silicon valley.
It erodes some of the Bay Area’s attraction for new talent and new companies.
As someone who doesn't yet own property here, I'm okay with that.
What are the odds of this being reversed mid-batch if covid isn't as big of a deal in say July?
Thanks for all the great work! Keep it up, and remember to wash your hands! :D
Emails out?
Yes
One of the best things about YC is being there at the silicon valley. Otherwise, it would lose one of the most important benefits it offers!
Save your time and do not read this rant:
If they know the application is sure to be rejected, why don't they reject it fast? I really don't understand why can't people reject things fast enough! University takes 5 months to reject the application, interviews take 2-3 weeks to reject. If they just happen to know, reject immediately. This whole process is too slow.
The thing that gets me is the whole "apply early to have a better chance" is almost certainly not true. My team's unlisted video had all of two views from mid-february, when it was submitted, and that's it. The world is a very different place today due to covid, and I regret not waiting til closer to the deadline to submit so we could factor that into the plans.
Edit: Also because we made a lot of progress between February and March, and while I was able update the application with some of the biggest stuff, I recognize that the initial impression was still the important one. If and when I apply to the next batch, I might start he application early again - but I don't think I will submit it more than a week before the deadline.