Founders Notes on YC Startup School

After being rejected from the YCombinator incubator program, we were offered by Kevin Hale YC partner the opportunity to participate in YC Startup School (SUS). Aten-week online program that you have to follow and submit weekly updates. Preparing startup founders for the life of a startup.

Being an entrepreneur means being an “infinite learner,” a term coined by Reid Hoffman Linkedin, Co-founder. Even though it is not my first time around the startup block, it is the first time for me working on a startup in this market segment. I decided it is worth to join the program for its training and knowledge.

So far, we are only three weeks in the program, and we had made tremendous progress, as a direct result of the lectures and sessions.

First, they gave me an understanding and perspective on rejection. In the past nine months, since I started working on SHTAR, I have been rejected and said no to, more than in the past four years combined. I have been told no by friends, on the question if they want to join my startup, as co-founders or as employees. I have been told no by dozens of Incubators, Angel investors, Seed Investors, and early-stage VCs. I have been told not yet interested to integrate or partner with you guys by numerous Banks.

It is something that I learned implicitly. The first-week lecture was on topics of Startup evaluation and how to talk to users. SUS is trying to teach the founders what’s truly important and how to approach it, to achieve success. Then I realized that the reason for the rejection from YC is a direct result of where we are not, and what we are not focusing on or doing.

Suddenly I started seeing the trend of all professional rejections we experienced as just a misalignment in either timing, positioning, or market segment.

No one likes rejection, and having perspective and understanding is extremely helpful; however, for me, it was something way more than that just that.

Let me explain! When I successfully exited MongoTEL last year, I wasn’t sure what to do next I met with other entrepreneurs and local investors. One Hasidic Investor/entrepreneur whom I have a good deal of respect told me. “No Orthodox Jew has the chance of raising professional VC funds, especially on new products” rationalizing his sentiment, that “VCs invest in the unknown with relatable people, or in known with unknown cultures.” In his mind, it is only the culture difference rather than any Anti-Semitism or hate.

As much I wanted to ignore his sentiment when our rejection list kept piling up, reaching to over 30 already, it started creeping in, that maybe he has a point? So, for me to get perspective on all the rejections we got, means a great deal more than the average entrepreneur. We have studied all our rejections again to make sense of it and use it as feedback, and we learned from it.

Second is user feedback and planning the MVP. I always spoke with users, asked for feedback, constructive criticism as a part of our continuous improvement model. However, the user feedback model delivered by YC Partner Eric Migicovskyand planning the MVP framework by YC CEO and Partner Michael Seibelis something next level. From initial user conversations to understand pain points and testing solutions. To understand the WHY of the problem, without getting distracted into discussing solutions or features. Why users behave the way, they do.

Which part of the problem to solve first. This was so critical for us, as we’re building a three-sided network, figuring out which side of the network has the most significant pain and we can deliver a solution the easiest.

In the first week, after following the simple steps given in the lectures, we realized how we could move up to launch our MVP launch date by ten weeks ahead of the planned schedule. We removed from the MVP release all features that did not solve the most significant pain points, on the side of the network we are currently trying to win.

The third is pretty simple to say, but very hard to execute, “Understand Your Audience,” entrepreneurs need to understand that a user needs an entirely different pitch than an investor. It is common for an entrepreneur to use the same lines or elevator pitch when selling to potential users or investors. This comes from not having a clear understanding of the person you are talking to, what incentivizes or drives that person. One example, a user knows the problem you’re trying to solve, yet an investor generally has no clue what you’re trying to solve. Another example, a user wants a simple and straightforward solution; on the other hand, an investor wants a big vision of a large market with huge impacts. A potential user may get excited with fluff; however, an investors’ job is to filter out all the fluffiness and jargon, so what’s the point of annoying him by adding more.

As much as I knew that, the framework of how to walk through the process was priceless.

Fourth, KPIs. I always worked with metrics without it we don’t know when, what, or how we need to change in our business. However, let’s not kid ourselves; it is pretty hard to find the right metrics, and make sense of it, to get actionable results out of it. In one of my previous companies, we had eight metrics to look at each week, and it was a daunting task to come up with a number or to make sense of it. So when YC Partner Adora Cheung elegantly said, “if there’s a way to get 90% of the job done with just one variable, that’s better than having a bunch of variables that get, let’s say, 91% of the job done.” No startup needs more that one primary metric, to get the job done. Then she walked us through how to find the right metric, and, where and how to use the primary metric was a real eye-opener.

About me: A serial Entrepreneur, started and successfully exited multiple companies, a newbie in the payments, now Founder of SHTAR, a B2B payment processing solution, that bridges the gap between software applications and payment solutions, bringing transparency, security, and convenience to payment automation for the payor, bank, and payee.