Week 3 in Y-Combinator: Three Things YC has changed our minds on

Here are three assumptions we had invalidated by YC.

Hello! My name is Val and I’m a co-founder & CPO at Warmly. My fellow founding musketeers (Alan, Carina, Max) and I are going through YCombinator this summer.

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Something YC does really well is accumulating thousands of data points about startup activity. When they give opinions on what you should be doing, it is usually based on the experiences of scores, if not hundreds, of companies before you.

Here are three assumptions we had invalidated by YC.

1. “Our pricing matters”

We came to our partner meeting with a question of “how should we be pricing” and the answer was a literal ‘LOL’.

Pricing is irrelevant at our stage. Choose something decent and go with it, it’s a colossal waste of time to try to optimize pricing while our user base is in the double-digits and our monthly revenue is the quadruple-digits. Our primary focus is now purely on getting paying customers at the price point we have.

2. “We need to anticipate backend errors and have robust code that is unlikely to break”

As a team of mostly former Googlers, we are the Queens and Kings of optimization. We know how to take something that’s decent and make it awesome. In a startup, however, you need to take something that’s nothing and make it decent. For a crew of Type-A overachievers, making something “decent” can be extraordinarily painful.

We learned to not try to optimize our product. We are not Google. Startups need to take giant swings and then see if they work. Don’t bother fixing code unless it’s breakage is impacting your ability to get more sales and keep churn low. If customers are tolerating a suboptimal experience, great. Don’t touch it. Work on what is preventing new sales or what is going to make people quit your product in the next two months. Don’t plan features further out than that. Why? Because being slow to launch = delays in getting user feedback = less understanding of users and the problem = you’re slow to iterate solution = startup death.

As a former designer, I had to learn to be content with a “not atrociously terrible” UX. It wasn’t easy. Our YC partners, Gustaf and Eric, really drove home the idea that “if people aren’t complaining, then you’re wasting your time fixing it”. Focusing on “delightful” UX is a luxury for businesses more developed than ours.

3. “A lost sale is a failure”

If a prospect didn’t want our product it’s a “gosh darn it, well better luck next time”.

NO. If a prospect didn’t want your product, document exactly what it was about them that made them a bad fit. Track this. Celebrate disqualifying certain demographics because that helps you narrow in on your actual ideal customer.

If you do this documentation and still feel like the prospect would have benefited from your product, then you’re a crap salesperson and you need to get better. Record your sales calls. There is nothing quite as cringy as watching a recording of yourself, do it. You’ll catch all of your “likes” and see how terrible it is when you don’t make “eye-contact” with the person on Zoom.

Gross salesguy/dad from Matilda, my favorite childhood movie. I literally used to try to make things move with my mind. It never worked. :(

What happened in Week 2 of Y Combinator?

Check out my cofounder Carina Boo’s post Week 2 in Y Combinator.