Dear YC Company, How To Use Your $150K Uncapped Note To Your Advantage

http://blog.eladgil.com/2011/01/dear-yc-company-how-to-use-your-150k.html

by eladgil • 15 years ago

29 5 15 years ago

blog.eladgil.com

swombat• 15 years ago

Not to put your article down, but I'm sure YC startups have at least this advice, and probably much more (more detailed, more sophisticated and contextually aware of the specifics of the startup and its market) from YC (PG, Jessica, Harj, Garry Tan, Paul Buchheit, etc) themselves... so I'm not sure who this article is targeted at.

eladgil• 15 years ago

I had two audiences in mind:

* General interest. I.e. what are the implications to YC companies themselves? The letter format was intended as a fun way to frame it :)

* The YC companies. From talking to a handful of them, I am much less certain than you are that every founder has completely digested the full implications of the note (various ways to use it, and what to think about avoiding).

As you point out, the YC team has some great people on it, who can undoubtedly support their startups in navigating some of these issues.

starfishjenga• 15 years ago

Having raised cap and interacted with a bunch of YC alums (hired 2 and friends with others), I can strongly second Elad's points. Just because they're in YC and exposed to some very accomplished people doesn't imply that they already know these things. They have a lot to think about when they're starting up their companies, so it's hard for them to absorb everything at once, despite being super smart.

austinB• 15 years ago

I feel this is a valuable post for us individuals who are not a part of YC but follow the companies and aspire to be. I've played out in my head and discussed with others what I would do were I presented with the 150k. For the most part, the points in the post are all valid, although I would place a stronger emphasis on bootstrapping if one is able to do so.

il• 15 years ago

If I were a YC company suddenly getting $150K, I would set aside at least a small part of it for testing different user acquisition strategies and business models.

Take as little as $15K and make that your testing budget, money you're not afraid to lose learning what works and what doesn't.

Create a few different landing pages testing different price points, appeals, targeting different customer segments, etc.

Or take the patio11 approach and create a few highly targeted mini-sites centered around a very specific niche or customer.

Then test every traffic source out there, carefully documenting the traffic volume, CPC, CTR, conversion rate, CLV, etc from each one. AdWords, Facebook, media buys, buying backlinks, it doesn't matter. You're just testing.

The goal when testing traffic sources/acquisition strategies is to move fast and fail as quickly as possible. And that's a lot easier when you're not constrained by a $10/day budget and worrying about every penny.

Don't worry about getting an immediate ROI on that money just yet- you're paying for valuable data that you can show investors and use to scale your business. Don't think about the money as wasted- every paid click brings you more data you can use to refine your campaigns.

Dear YC Company, How To Use Your $150K Uncapped Note To Your Advantage

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