This post has zero to do with our company, so I'll post it here.

There has been an uproar about a recent move by Zynga to effectively "renegotiate" existing stock option plans from long-time employees in order to prevent a cash windfall for people who still have significant stock left to vest, who the company feels are not crucial enough to the business to justify paying millions of dollars to keep around.

To be clear, I'm not defending what they've done.  I agree with Paul Graham that it seems short sighted.  I don't have the visibility into the situation to assume that I know better than Zynga management.  But either way, it just doesn't feel right.

While I am not saying I like what they've done, I think people are failing to look at it objectively.  The comments on forums like HackerNews are that the company and the employee had an agreement.  The employee took on risk.  The employee took a gamble and they won, now pay them the money.  It's not fair to offer them X stock and then, after two years, give them X*.5 instead.  The arguments that it's shortsighted in terms of PR, company culture, or more, are one thing.  But the arguments aren't just that it's bad business - it's that it's not fair.

I can't imagine a scenario where I'd do what they've done.  I'd rather pay someone a few million than look at their face while I tell them I'm not going to.  But I think the comments are very misguided and one-sided.  I tried to explain this point on HackerNews, and as is often the case when I try to play devil's advocate, I was downvoted to oblivion.  But since my previous efforts to simply argue a point haven't proven as effective as my ability to simply paint the picture from a different standpoint, I'll pose the question a different way.

Three years ago I took a job at a startup for 1/3 of the salary I was earning at the time.  It was an exciting company with a solid vision and money in the bank.  I negotiated hard for a decent little chunk of stock in an already funded company.  I was on a four year vesting schedule with a one year cliff.  Nine months later, I felt that I wasn't learning the things I wanted to learn, I wasn't earning what I wanted to earn, and I felt confident enough that the stock options I was going to leave with weren't going to make up for four years of this.  So I left.

Am I a bad guy?  I mean, after all, the employer and I made a four year agreement and the employer was keeping up their end of the bargain.  They gave me the salary we agreed upon, and the stock that I accepted.  I took a gamble - and I was losing.

Are we saying that I'm morally obligated to spend 3.25 more years at the company because I agreed to take X salary and Y stock, even though I now believe the stock to be destined for a price that I don't like?

I highly doubt anyone (beside my old boss) will say that I've done something wrong.  I accepted an offer based on my tolerance for risk, my perceived upside if we're successful, and some estimation of our chance of success.  9 months later, my estimation seemed to be proving wrong, and since I still had cards to play, I played them and walked away with 3.25 years that I agreed to give to the company.

If the comments on HackerNews and just about every article out there about this issue are true, my employer and I had a deal.  I gambled.  I lost.  I should pay.

But that's not the deal.  The deal is that my employer offered me a compensation plan for a four year period.  Each year I was to earn a salary, and vest some stock.  The stock has a chance of paying off big time, which makes my crappy salary and the risk of it turning into nothing worth it.  If two years later the likelihood for reward no longer outweighs the risk, only a fool would stick around.  But two years later, if the company isn't risky to work for anymore and they don't need to pay someone $5M or $10M to "gamble" anymore, why should they?  Because they had an agreement?

Then what about me?  I had an agreement.  I bet.  I lost.  Should I have been required to keep honoring an agreement that I already knew was fiscally irresponsible?

-Joey

Last year, before Yotam and I found Ben, we began doing everything we could on our own to start "building" Earbits.  Mostly, that meant meeting a lot of people and trying to sell them on our vision.  As we began meeting people, everyone continued to tell us the same thing.  "This isn't going to work.  You have a chicken and egg problem."

For those of you who don't know what Earbits is doing, we're building a radio platform designed to market music, music related products and live performances.  Artists, labels and concert promoters will buy airtime to promote a show, to get exposure for a contest, or to secure pre-release orders for a new album, and so on.

The people we spoke to were half right.  Every marketplace has a chicken and egg problem.  Bands can't buy airtime unless we have listeners, and we can't have listeners without music.  The half they were wrong about is assuming this problem can't be solved, and we weren't afraid to tell them that.  Thousands of companies have solved this problem, and yet everybody always tells people it can't be done.

You can ignore these people.  There is a secret to solving this problem and I am going to share it with you now.

Hunt Baby Chicks

The first step to solving the chicken and egg problem is this.  Go after the tiniest of baby chickens.  AirBNB is going to disrupt the hotel industry, but do you think they started by pitching the Four Seasons?  Of course not.  Focus on people who are accessible and will listen, and sell them the one thing you have to offer - your vision for a future where their needs are met.

Don't Make Quiche, Boil One Perfect Egg

Once you have some small chicks to talk about with the eggs, don't go crazy and oversell the other side of the equation.  You're either going to spin your wheels and spend too much time with little luck, or you're going to round up too many eggs and many will go rotten.  What you need to do now is find one perfect egg and cook it just right.

We knew that driving people to our destination was not going to happen right away.  So, we decided to take our radio platform to where the people already were by establishing an affiliate station on an existing site.  But of course, we didn't go after Rolling Stone magazine.  We looked for one perfect partner whose needs we would be better equipped to meet.  We found one great country music affiliate partner and sold them on our vision.  While we were courting them, we were scouting appropriate chickens.

When it came time to negotiate our terms with this partner, they asked for a much higher revenue share than we had anticipated.  Frankly, 100% of nothing is still nothing, and this partnership was more about establishing a foundation, so we took it.  And that's another good lesson.  You want to get some success under your belt early and have something to point to when you talk to others.  The value is not in the revenue with your first customers, it's in having actual customers to talk to your potential customers about.  So you take the deal.

As a side note, I was pretty naive about how long it would take us to start charging for our service when we first started going, so it's a good thing I didn't play hard ball with our first partners.  To this day we haven't earned them any money, and I'd look like a pretty big idiot if I fought tooth and nail for those zero dollars.  Because I didn't, they've been patient and flexible.

Play Matchmaker With Your Chicks and Your Single Egg

Now, you may not actually end up with only one egg like we did.  That's the nature of our business, but perhaps not yours.  That being said, the minute we had a country affiliate on board, we shifted our entire focus to finding country music artists.  We took in as many artists as we needed to deliver a good product to this affiliate and we launched.  Voila!

You may need more eggs than just one, but you still need to quickly satisfy one of them at a time by playing matchmaker.

Hey Chickens, We Have Eggs.  Oh Shit, Now We Have Too Many Chickens.  Hey Eggs!

The next lesson in solving the chicken and egg problem is that you need just enough of one to make the others happy.  You need to build one side up and be able to point at all of these potential matches you've created for them.  But once you close plenty of the other, you need to switch, and so it goes for quite some time.  You bounce back and forth building up each side just enough to keep the others happy.  Imagine if AirBNB had 4000 rooms for rent and 6 renters.  Those rooms would sit there forever and those people would think AirBNB sucks.  So, don't over do it with one side.

As You Build, Climb

At the beginning, as I mentioned, we didn't focus on closing Universal Music or Rolling Stone magazine.  We started with bands who were hustling to promote themselves, and a more accessible partner who wouldn't have a bunch of demands and unreasonable expectations.  But as you get your feet wet and successfully start building each side of your marketplace equation, you can begin to focus on bigger partnerships or customers.  Don't aim for the skies, climb slowly and keep proving to your customers that you can deliver.  But do step up.  In our case, we went from only working with unsigned bands, to starting to contact labels.  We went from smaller websites and blogs, to brand name destinations and portals.  Now, we're closing sizable partners and playing well known artists.

This is pretty much the name of the game.  Build and climb.

But Finally, The Secret Sauce

Everything I've said so far might seem like common sense, but those are the basics.  And if you only apply the basics, you're pretty much going to be solving that chicken and egg problem forever.  I'm about to explain the recipe for the marketplace secret sauce, and you will need to apply it consistently during every previous step I've outlined here.

The reason so many people tell you that you cannot solve the chicken and egg problem is because you can't have a chicken without an egg, and you can't have an egg without a chicken.  What they fail to realize is that we're not actually trying to solve nature's wonders here - we're trying to build a business through sales and business development.  It doesn't take a miracle - it takes knowing what you can and cannot do, and selling what you can have before you have it.

When I started out at an ad network years ago, what we quickly found was, nobody wanted what we had to sell.  We had crappy eggs and our chickens knew it.  So, instead of trying to sell chickens the eggs we had, we just sold them what they wanted.  It didn't really matter what it was, if they were willing to buy anything at a reasonable price, we would sell it.  After we sold it, I would get on the phone with someone who had what we just sold and I would negotiate a better price than the one we sold it for.  Suddenly we had exactly the eggs our customers wanted because we didn't buy our eggs until we knew we had a home for them.  But the catch is, if you can't buy the eggs after you've sold them, you're going to have some very pissed off chickens.

Now, literally selling something you do not have as if you already have it is not advisable.  That ad network I worked at went out of business and pissed a lot of people off along the way.  But the practice of selling what you know you can have before you have it is how you solve the chicken and egg problem, and it's a delicate art.  This does not mean lying about having something.  What it means is one of two things:

• you portray enough confidence that you can get the product your client wants until they believe you and are willing to commit to the purchase knowing you don't have the item, at which time you go get it done; or
• you build demand for the product during one meeting until you are sure you can close that sale once you have the product, and then you go to the other side of the equation and let them know you have a buyer and that you need their committment to sell, returning back to the original person with the committment from the seller.

Whichever one you do, you need to be very certain that you can get the deal done before you ask someone to truly commit.  As long as you are certain, you should be able to sell one or the other person on this.  And that is the secret sauce.

Chicken Omelettes, Anyone?

When Yotam and I started out, we sold a vision of a radio platform to smaller bands.  Once we had enough music, we met Ben and he bought into our vision.  Then, we pitched affiliates that we would soon have technology while Ben built it.  Once we had technology we turned on the affiliates and we went after more well known artists.  We sold them on the affiliates we had, plus the affiliates we envisioned having in the coming months.  Once we had even more reputable artists, we pitched stronger partnerships and said, "Look at all of these eggs we have, and we're only going to get more of them."

At the last partnership I closed, I walked in and said we would bring 8 other partners to the table.  When they asked me how many of those partners we already had, I said none.  They asked me what makes me so sure I can get them.  I told them very directly, "because if you say yes, they'll say yes, and I'll make sure of that."

Sure enough, the partner...a very, very exciting partner indeed, said yes.  And now, guess what time it is?  Time to deliver.  But that is the nature of solving the chicken and egg problem and, frankly, it can be quite exhilerating.  Knowing that you've oversold yourself pushes you to the end of your abilities and it's a very exciting way to grow as a professional.

That being said, we have a big, awesome chicken and we've got a few weeks during implementation to round up some eggs.  Then...

...it's chicken omelettes with secret sauce for everyone!  Enjoy!

--

Joey Flores

 CEO, earbits.com

joey@earbits.com

Listen at www.earbits.com

Connect with us on Facebook: www.facebook.com/earbits

Listen on iPhone: itunes.apple.com/us/app/earbits-radio/id397894402

Twitter: @earbits

Joey from Earbits again.  Well, it's Friday, March 25th.  Demo Day is over and my inbox is flooded with emails from investors, journalists, prospective business partners, and time wasters (no offense, we just don’t need help with hiring right now).  YC w2011 is coming to a close and it is truly bitter sweet.  While it's been an intense program and I am glad to head home to my own bed, my friends, my familiar restaurants and more, I will leave behind the YC Mafia - mi familia nueva.

The Family That Convore Built 

I suspect that other YC sessions had an easier time bonding because there were fewer companies.  With over 40 companies in w2011 I have to admit that I don't even know everybody's name.  That being said, one of YC's w2011 companies, Convore, easily made the most dramatic difference in bringing this YC group together.  Over the past few months the group has “Convored” about everything from whether or not to organize a Dim Sum gathering, to more recent groups like saying fare thee well to Daystilldemoday.com.  For a brief period, it was common knowledge that Jason Corwin from TellFi and I had a nightly Convore stand up session, ragging on each other and trying to entertain the rest of the group.  One night it was someone else and I, and I heard Jason cried.

All joking aside, were you to peek inside of YC's w2011 batch on Convore, you would see the real YC at work.  There are threads dedicated to helping each other craft the perfect Demo Day pitch, some threads talk about how to deal with technical issues, others discuss legal concerns.  What it represents is the truly communal nature of Y Combinator and how willing everyone is to help one another, despite being under incredible stress and time constraint.  This is the true power of YC - the network.  In 6 months, when I need help with X, I will call upon another YC company and I will get help, no matter what it is, in fact, that happened today with an alum I met at Alumni night.  This is what PG built.

Paul Graham and the March Toward Demo Day 

Throughout the YC program, Paul Graham and the entire YC team make themselves available to the batch, and every former batch.  I still see friends from old batches coming in for office hours.  Despite having 40+ companies on their plates, the YC team makes time for enrollees and alumni alike.

Last week, though, help for alumni was mostly put on hold in preparation for Demo Day.  First, PG and crew help the last minute launches go public in the media, and then it’s Rehearsal Day.

PG tells companies not to focus on their pitches until the day before Rehearsal Day, keep working.  A better company makes for a better pitch more than a better pitch does – or at least that’s the thinking.  (I happen to think this might be different from company to company, but that’s neither here nor there.)

On Rehearsal Day, something amazing happens.  After 3 months of hanging out with 40+ companies on a casual basis, many of whom seem like average companies on the surface, suddenly the curtain is pulled back.  Regardless of what amazing feats your company has accomplished, you come to the shocking realization that you are not the only one.  When you finally sit down to see what the other companies have built, you truly know what YC inspires in people.  You are just one awesome company in a sea of awesome companies.  I can say this with confidence, because the YC alumni would come to tell us that this batch was by far the most impressive yet.

Pitching a No-Hitter

Awesome companies or not, the pitches are not all awesome on Rehearsal Day.  Why?  Because some companies take the “wait till the last minute” advice to a new level and craft their pitch that day.  One company asked ours to trade time slots with them so that they could write their pitch during the rehearsals.  Everyone is truly scattering to get work done, pitches done, and their delivery perfected in a very short period of time.  And who wouldn’t?  We’d come to find reporters from the Wall Street Journal, Mashable, TechCrunch, Xconomy, and heavy weights like Scoble in the Demo Day crowd.

So, for several days PG leaves the YC offices in presentation layout and lets the companies come in to practice their pitch.  On certain days he and the team are there to listen to your pitch and fix it.  My company didn’t come in to practice, mistakenly thinking we’d be just fine without practice.  Admittedly, I was practicing plenty at home.  Finally, on the day of the Alumni pitch, where you present to the former YC companies, PG emailed us and asked us if we were coming in to practice.  So we did.

Alumni Day

We showed up for Alumni Day, which starts at 7, around 11am.  At least 10 companies were around practicing, and Paul and Harj are in the crowd giving everyone feedback.  “Speak so slowly that it seems unnatural,” is the most common advice.  “You sound like a car salesman,” is what I got.

“That’s because I was a car salesman,” I fired back.  Chevys and Nissans, in case you were wondering.

The pitches were noticeably different from just days before.  People who previously sounded like they were trying to turn you into a customer were suddenly pitching you like you had a few million dollars to invest.  The whole dynamic had changed in the days since Rehearsal Day.  PG had whipped the mafia into shape.  It was remarkable to watch.

That night, we pitched the Alumni.  I would hear that our batch seemed more impressive than any prior, and we would mingle with founders who now run well-oiled companies.  It was solid practice and good times.  I’d like to thank Art from FanVibe for sharing some amazing secrets of game mechanics with us.  You will soon see them on Earbits.

Demo Days and the Strength of the YC Mafia

For two days following Alumni Day, we would pitch over 350 investors – from major VCs, to minor angels, to some of the smartest people you’ll meet.  It’s energizing, nerve-racking, and exhausting.  After you’ve spent all day practicing in the parking lot behind the YC offices and then executing stylishly for your 2 minutes and 10 seconds, you spend another hour or more mingling with people who expect you to be at your best.  After just one session on Tuesday I went home, collapsed, and would later find myself amazed that it was only 10pm.  With two sessions to follow on Wednesday, it seemed impossible to stay upbeat.

And with that we come to perhaps the most fulfilling part of the YC process.  On Wednesday, when everyone is running on fumes, the presentations are at their best.  From behind the walls of the main room in YC’s offices, you hear what seem like professionally written jokes hit the crowd just right every time.  And as founders walk “off stage” to applause from some of Silicon Valley’s finest, it is high fives and fist bumps in the back room.  This is the YC Mafia and it’s awesome.  While Robert Scoble is taking pictures from the front row, the YC is taking pictures from backstage, joking, and congratulating each other’s pitch abilities and more.  They’re exchanging stories about their pitches, things that worked, things that didn’t.  They’re letting the next presenter know whether the joke that worked on the last crowd will work on this one.  It must be like being backstage at a comedy club.  Still, many people are piled into the back room with their laptops open working their asses off.  It never stops.

And after everyone has presented, it’s open bar time.  I, for one, had to take the edge off.  A drink or two to loosen up, and of course, you meet the most interesting people by the bar.  I started following up on my business cards today and found one that just said a person’s hand written name and “Awesome” next to it.  Apparently I thought this guy was awesome.  I looked him up online and remembered that we had been chatting near the bar and talked about music and little else.

PG is All Business

As you’re navigating the crowd at Demo Day, mingling, trying to relax, thinking about our pitch, and so on, there is Paul Graham with a fistful of paper.  On it – notes.  While everyone else is enjoying themselves and chatting with potential business partners, Paul is walking around with notes about your presentation and waiting for a moment to tell you to extract this line, clarify that one, enunciate that one, or in general just say “Thank You” at the end of your pitch.  It is so awesomely obvious that PG loves what he does, that he cares about his crew, and that he knows exactly how to run this program.

When the notes have been distributed, and sometimes before, Paul will run around making introductions.  Earlier on day one he came up to me and said that a reporter was looking for a company who would be controversial (he used another word), and that he thought I should talk to her.  On other days, he says, “Do you know who that is,” and points to some old guy, and then explains that the person basically invented the universe, because there are people there who did things like that.  (Yeah, I know…after my Marine article, I am sure to hear an earful about saying PG mingles with the creators of the Universe.)

At any rate, that is PG.  From the interview before you know you got into YC, to the final moments of Demo Day, he is figuring out whether you have what it takes to be successful, and helping you improve in any way he can.  No matter how frustrating it can be sometimes, by the end you can’t help but feel overwhelming gratitude.  The guy does love this job and it shows.

And that, to all who care, is a behind the scenes look at Y Combinator's Demo Day.

--

Joey Flores
CEO, earbits.com
joey@earbits.com
Listen at www.earbits.com
Connect with us on Facebook: www.facebook.com/earbits
Listen on iPhone: itunes.apple.com/us/app/earbits-radio/id397894402
Twitter: @earbits

I have been considering starting a personal blog to talk about my experiences as a startup founder for awhile now.  A recent request by Paul Graham to elaborate on what YC looks for in its founders and their YC applications was enough to push me over the edge.  Sometime soon, I will back fill this blog with other madness from our first year building Earbits.  In the meantime...

What YC looks for in its founders and their applications

One of my w2011 colleagues Wil C just wrote a great article about the diversity in YC founders from batch to batch, and within each batch.  So, if you're curious what the makeup of a YC founder looks like in terms of past experience, current status, age and more, you should check that out.  Either way, you should check it out.  The cliffnotes are, no two YC founders look alike and all comers are welcome.

Wil also talks extensively about the characteristics a YC founder has to have, and how your application should effectively portray that you have those characteristics.  The takeaways there are that you need to truly understand the problem you're trying to solve, be persistent, resourceful (relentlessly so), and you need to get along really well with your co-founders, which basically means you both have to be good people that are fun to work with.  And these are exactly the things you need to get across with every answer in your YC application.  But rather than say all of the same things that Wil already said better than I'll be able to, I will tell you WHY Paul Graham and the YC team look for the traits they do in founders.

Like war, everything in startups is life or death

I'll just come out and say it.  For most people who lead ordinary lives without crisis, starting a startup is by far one of the hardest thing you can ever do.  It is incredibly intense.  One day, I woke up to our site being down for close to 4 hours.  By hour 3, I was headed for the Golden Gate bridge ready to leap to sweet relief.  Later that day, we forged a partnership with two record labels with incredible rosters and were all patting each other on the backs.  And even later that night, Yuri Milner and Ron Conway showed up to YC and handed out checks for $150,000.

It's like being on a rollercoaster except that the lows feel like you just lost all of your investors' money, which in our case will leave us with no friends or family to speak of, and will have to go begging your old colleagues for a job.  And the highs feel like someone just handed you $150,000 without even knowing what your company does, because they did.  And in terms of lows, the site going down is only a 1 compared to some of the 2s and 3s we've had, which all felt like 10s or worse at the time.

I can only imagine that the road ahead makes these things pale in comparison.  When our site went down, 100 people probably noticed.  In the future, we obviously hope that number is in the millions.  Everything will be amplified in the future.  Fearing that your errors will lose your team their jobs will be worse when that team is 200 employees strong.  Fearing that Google will enter your market will be worse the day they actually do.  When millions of dollars have been put into your company, and more people rely on you, and more people have heard you say how you're going to be the team who changes an industry, failing sounds like the worst thing that could ever happen to you.

Everything about running a startup seems like life or death.  And so you are at war.  You are at war against the clock.  You are at war against your competitors.  You are at war with anything and everything that stands in your way.  And that means that, most of all, you are at war with yourself.

YC beats some of the bad you out of you

I feel fortunate to have worked in several startups long before I ever called them startups.  They were just companies to me, some smaller, and some bigger.  As it turns out, I have been working at startups for 13 years now without knowing it until last year, when I decided to "do a startup".  Then you start reading about running a company and you start calling it a startup.

The reason I feel so fortunate for my experiences at those companies is because I have worked for some amazing people, and some crazy, destructive ones, from which I have learned a tremendous amount about how and how not to be a leader.  The irony is, the amazing ones probably think I am calling them destructive, and the destructive ones probably think they're the amazing ones.  That is why it is incredibly challenging to be a successful founder, because it's easy not to know that you're the problem.  That is where YC shines.

At YC, there are two things that will help you know whether you're doing things right or being destructive.  The first is PG and team.  Paul, bless his heart, is not going to sugar coat anything and neither will anybody else.  One day, I will happily share my funniest stories about this.  In the meantime, just know that Paul is going to tell you if you are wasting time, going the wrong direction, or otherwise making a big misstep.  It's in his and your own best interests, but believe me, it can be brutal.  You will walk into the YC offices feeling like you've made tremendous progress, and then one comment will make you feel an inch tall.  But this not only means that you're going to build a better product, but you're going to develop the thick skin that is so crucial to running a company.  For all of my past experience, I am still being told I am screwing up pretty frequently.

The other thing that is going to let you know if you're sucking, is the other companies in your batch.  Not because they're going to tell you.  But they're going to be kicking your ass and it's going to feel terrible.  They're going to be building faster than you, getting customers faster, closing bigger funding amounts than you, and otherwise kicking the crap out of you.  What's worse, even if you're doing things right, that's going to happen anyway.  At the very best, you should hope to be doing one thing better than all of the other companies.  If you think you're doing a bunch of things better, wait until Demo Day when they finally pull back the curtain.  You're going to feel like a mental midget.  But again, this is all incredibly powerful at helping you strive to be amazing.

YC crams a year of experience into 3 months, and it feels like it

So, if running a company is war, and YC prepares you for that, it could easily be the Air Force, or the Navy, right?  Wrong.

YC is the Marine Corp.  It is crawling on your belly through mud with bullets whizzing over your head intense, with a looming deadline that feels like it's going to make or break your entire existence.  You are not serving next to people who are in it for the college money.  To recap Wil's awesome summary, you are serving next to "a core creator of Django, a 19 year old that had already sold his first company, and a pair that owns a chain of Beard Papa's."  In fact, pretty much everyone in the current batch is equally impressive, and if they didn't have a track record before this, they do now, because I have seen everybody's pitch and they have all built something pretty amazing.

I don't know if other batches did this, but someone in our batch was kind enough to build a webpage with a countdown to Demo Day.  I made it one of my numerous homepages.  Every day I log on and see that one more day is gone, and Demo Day approaches.  Everyone here understands the significance of Demo Day.  You're going to pitch some VC's, you're going to be measured against other companies; it's important.  But for someone who spent a fair amount of time last year trying to raise money in Los Angeles, there is nothing quite like the idea of Demo Day.

As a first or second time founder, (like most people in the YC) you'll be lucky if you can get a meeting with more than one out of 10 investors you email.  And, it is probably not going to be Sequoia Capital, Andreesen Horowitz, or Charles River Ventures, unless you have some incredible connections.  Which means, if you want a shot to pitch 300 investors of this caliber without emailing over 3000 of them, Demo Day is that shot.  So, when every day you log onto your computer and see that there are 18 days left, then 16, and so on, it puts the weight of the world on your shoulders.  Everything you do between the starting of your company and that day will change how easy or difficult it is to raise money, and what value they put on your company.  Effectively, if YC is Marine Corp Boot Camp, Demo Day is the day we go on our first real mission with live enemy fire.

At the beginning of the program I thought I would probably make time to head back down to L.A. at least one time during YC to see friends.  Then I sat for a moment and thought, "Hmmm...if my company as it is right now might be valued at $4M on Demo Day, and I could potentially raise that to $12M by working really hard and firing on all cylinders for the next 88 days, that means every day that I am here and working hard could be worth $90,909 to the company."  Needless to say, I have not been back to L.A. this entire time.

And so, after having spent one year building my company before YC, and now three months in YC, I can honestly say that YC has felt like the entire first year crammed into three months.  We are currently 4 people living in a 3 bedroom house (shhhh, don't tell our landlord).  We wake up and make our way into the dining room area where there are 4 computer monitors for three people, and another two in the other room.  We work all day, stopping only for coffee, lunch and dinner.  At some point, you feel you're hitting a wall and you tell youself to take a break.  But then your phone buzzes and it's an email, so you go back to the computer and answer it, and before you know it you're working again.  We have basically been working non stop for 3 months, putting in almost as much time on the weekends as we do every other day.  It has been amazing for the company and, frankly, maddening for us as humans.

But this is what it takes to prepare for what's coming, and I don't mean Demo Day.  I can't speak for the others, but our company wants to raise about $2M and build a global empire.  And, we want to do it quickly so that we're still young enough to enjoy our spoils when we go public.  When you call yourself the next Google in your investor pitch, you'd damn well better be prepared to work your ass off and put up with a little insanity.  This is what it means to be a founder, and YC is like a stress test for whether you're founder material or not.

What does this all mean?

I guess what I am getting at is this: Wil's post will assure you that anyone can apply to YC regardless of age, status, experience or other unimportant factors.  And, it tells you effectively what PG and the YC crew are looking for in their founders, and their applications.  But if you want to know why they look for relentless resourcefulness, or for people who are going to get along in the toughest of situations, it is because you are applying for the Marine Corp Boot Camp for startup founders.  It is not summer camp.  It is not the Harvard of startups.  You are about to get your ass handed to you by everybody from the creator of Gmail to a 19 year old who has already sold his first company.  You're going to have customers tell you your product is awesome, and then someone from a massive VC firm tell you it's crap.  You're going to think that your company is awesome, and then you're going to see everyone's Demo Day presentations and wonder if there is any way you'll ever raise a single dime in investment when you're up against these guys.  If you think you're ready for that, convey exactly why you think so in your application.  If you can convey that you are the kind of person who won't just make it through this torture, but will love it, you have a pretty good chance of getting accepted.  If you don't know how to do that, you're not ready.

Best of luck.

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Joey Flores
CEO, earbits.com
joey@earbits.com
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