We can’t really believe that we’re halfway through Startup School already. A lot of work has been accomplished so far but we assure you that the best is still yet to come.
We won’t waste your time and attention on empty words. Instead, let’s go and learn what week #5 and week #6 of the Startup School (SUS) program looked like.

Learning Session #3:

Week #5: Sales and Building a Sales Team + Building an Engineering Team + How to Apply and Succeed at Y Combinator:

If you’re trying to convince someone to buy your product, to work with you or to invest in your startup and you don’t even undersand what you’re talking about, you have already lost! Simply going for coherent undersanding should always be the first thing you do before trying to sell someone!”

 

              – Dalton Caldwell, Partner @ Y Combinator

I. Lecturers: Tyler Bosmeny, Harj Taggar, Ammon Bartram, Dalton Caldwell.

II. What was discussed this week:

The week started with Tyler Bosmeny’ s presentation which was actually a short talk about things he’d picked along the way, observations, and practical tips about how to run sales in a startup.

To us, two things were critically important from Tyler’s presentation.
The first one being Tyler’s “almighty” sales funnel, which is consisted of the following 4 steps:

– Prospecting;

– Conversations;

– Closing;

– Promised land (revenue).

How did Tyler define each step in the funnel and how did he explain how the 4-step process actually works is something as interesting as it’s worth learning about first hand. That’s why we won’t dive in details in here but simply will recommend you to watch his entire lecture that can be accessed here.

The second thing from Tyler’s presentation that seriously caught our attention was the “Religious Follow Up” process that illustrated that every startup founder has to have an inhumane willingness to keep pushing through in order to close a deal successfully. The example that Tyler provided was based entirely on his practice of a 2-month enterprise software sales cycle consisted of 28 steps (!!!). We advise you to take a look at the video to convince for yourself that sales is not an easy, cold-calling job that everybody can do.

Harj and Ammon, the co-founders of TripleByte, continued on with teaching us how to recruit and interview our first startup hires. Besides providing a thorough overview of the standard hiring process in companies today, Harj and Ammon discussed 4 main topics that are important for founders looking to hire their first employees: where to look for engineers, how to use recruiters, how to evaluate technical skills, and how to make an offer and close your key hire successfully.
A special attention was paid to the hiring process. To be more specific, 7 proper tactics were provided in order to reduce noise in the interview process. Here there are:

– Decide what skills matter;

– Use structured interviews (ask every candidate the same questions);

– Use good questions;

– Ignore credentials;

– Think about false negatives;

– Look at MAX skill;

– Think about the candidate experience.

Lastly but definitely most importantly when it comes to offering and closing a deal with the interviewee is the remuneration package that you are going to offer. The full offer – as explained by Harj an Ammon – is going to include two main things:

– Salary: base salary + signing bonus (if applicable), health insurance details + link to policy docs,  401(k) and vacation policy details.

– Equity: a total number of options, total shares outstanding, exercise price, last round valuation, % ownership.

How to get accepted into the Y Combinator, why is it worth applying to the program at all, and how to succeed during the program are probably the most interesting and discussed topics among all the participants in the Startup School program. Dalton Caldwell, the head of admissions at YC, led the entire lecture himself and answered the most frequently asked questions regarding how to get into the program.

The properties of a good application were firstly outlined:

– Fully filled out. Attention to grammar and punctuation;

– Good founder video that follows the directions;

– Clarity on thought;

– Clarity on who is building the product: #1 applicant tip: make it clear that there is at least 1 person on the team who can make the thing that you’re working on (domain expertise)!

According to Dalton’s expertise and experience in evaluating thousands (literally) of applications, a great application tells a story. Thus, he provided a 5-step framework teaching us how to tell our story more concisely when applying to YC:

– This is who we are;

– This is what we are working on;

– This is why we are working on it;

– This is what we have accomplished thus far;

– This is why we are going to make this work.

III. What were the key takeaways:

1. Selling is the process of talking to users in order to understand them. Sales is about understanding the customer problem. In order to make this happen, you have to listen! This is a core responsibility of every startup founder.

2. You as a founder should be spending every moment of every day doing one of tho things: building a product and talking to users.

3. As founders, you also have very unique advantages that can make you actually incredibly powerful at sales. The two advantages are a passion (about the product you’re building) and an industry expertise (you know this problem better than anyone, you know why it needs to exist).

4. One of the founders must own sales! One person needs to be thinking about this every day all day long.

5. When you’re a startup, you’ve got to figure out where to spend your time and energy. You can’t take a pipeline of hundreds and hundreds of deals going at one time. You can’t be able to do it. That’s why there is a lot of value to drive the conversation to a decision (“Yes” or “No”) quickly and move on.

6. Redlining is the process of changing the sales agreement in enterprise sales.

7. Don’t do free trials! When you’re starting a company and trying to make your startup work, you need things like commitment, validation, revenue. Free trial doesn’t get you any of those things. Use a 30-day cancellation period on an annual contract instead.

8. You’ve got no business hiring salespeople until you’ve done a lot of sales on your own. This is because you don’t even know what kind of people to hire, you don’t know what the core skills you need from your sales representatives will be.

9. There is no topic that should occupy your minds more as you build your company than bringing on a team that is going to make your company successful as you move forward.

10. Hiring [your first startup employees] sucks because it takes a lot of time, involves a lot of repetitive work, and your heart will be broken because the most wanted candidates will probably not come to work for you.

11. The true most important skills for the first few hires are productivity and ownership.

12. If it’s difficult to have a productive 10-minute conversation with someone, it’s likely to be hard to work with them for the next 10 years.

IV. What we liked and what we think could be improved:

We had a pretty busy week preparing our YC application materials and recording the video as well. What we liked was that the YC staff are pretty responsive when it comes to answering important questions related to the application. Michael Seibel himself answered a few questions of ours via e-mail as well as Adora who helped us figure out a question that we had regarding the video.

At the end of the week, the result was obvious: we had our applications filled in and we applied to YC. We will definitely keep you posted about our progress on how it went and whether we will prosper further in terms of getting accepted into the YC original program.

What we didn’t like is the fact that YC SUS program turned out to be a testing product that they currently experiment with. We don’t mind testing hypotheses with users, though. However, we don’t like initiatives like changing the equity-free grand criteria at the middle of the course, which resulted in a great miscommunication and dispute among participants, and AMA in the forum threads which are not being answered properly.
As we already mentioned, our team is very critical and we take this course very seriously. We did find great friends and professional opportunities so far but we also experienced discomfort with being a marionette in the hands of people who turned out are not 100% sure of what they’re doing.

What could be improved in order to prevent such kind of events to occur:

1) Set up expectations, evaluation criteria, and established procedures up front and don’t change them until the end!

2) Communicate clearly and responsibly what are the pre-requisite to enter and finish the program so that a startup can be considered eligible for winning the grand and/or successfully completing the course.

3) Don’t mess up the SUS program with the original YC one.

These are our proposals that we believe could be of help if followed and executed professionally.

V. Additional resources to this topic:

1. Y Combinator’s additional resources:

How to Get Into Y Combinator by Michael Seibel;

How to Get Funded by Y Combinator by Sam Altman;

The Secret to Getting Into Y Combinator by Justin Kan;

Sales and Marketing; How to Talk to Investors; Investor Meeting Roleplaying by Tyler Bosmeny, Michael Seibel, Quasar Younis, Dalton Caldwell;

Why Startups Need to Focus on Sales Not Marketing by Jessica Livingston;

Convincing Engineers to Join Your Team by Harj Taggar;

How to Hire Your First Engineer by Harj Taggar;

Common Misconceptions About Applying to YC by Craig Cannon.

2. What we believe could be of help:

How to Apply and Get into Y Combinator by Inside Silicon Valley;

The Sales Handbook by the Intercom team;

Close.io CEO Steli Efti on the Rights and Wrongs or Lead Qualification by Adam Risman;

How to Interview Engineers by Ammon Bartram;

Does it Make Sense for Programmers to Move to the Bay Area by Mark Lane;

Visualizing a Job Search or: How to Find a Job as a Software Engineer by Kelly Sutton;

If you don’t hire juniors, you don’t deserve seniors by Isaac Lyman;

How to Make Sure Agile Teams Can Work Together by Alia Crocker, Rob Cross, Heidi K. Gardner;

Employment tenure at startups by Miguel Socias and Ry Sullivan;

The Startup Sales Resource Bundle by Steli Efti and the Close.io team;

21 Powerful, Open-Ended Sales Questions be Mike Schultz;

How Gusto Build Scalable Hiring Practices Rooted in Tradition by the Round One team;

Growth at All Costs is Perilous – This is How to Scale Sales Sustainably by the Round One team.

VI. Evaluation of the week:

Our past week was extremely dynamic and active in terms of talking and meeting with investors, executing important tasks, and engaging with the SUS community. We’re happy with the progress we’re achieving so far and we’re confident that will be successful although an extreme level of patience and persistence is definitely required in order to do so. We’re glad about the accomplished results and we’re ensured more good news is coming soon.

Because we’re already halfway through the course, for us it will be interesting if the YC staff comes up with an evaluation report providing some general information regarding the course stats such as teams engagement level or the number of active teams, for example. Also, an idea that just came to mind is that they could have sent us a survey to fill out so that they gather participants’ feedback and make the necessary tweaks (if any) regarding the course mechanics and educational content to be uploaded in the incoming weeks.

Week #6: Running Your Startup + A conversation with Elizabeth Iorns: Advice for Biotech Founders:

People always ask me who are our [Science Exchange] main competitors and how do I think about competitive differentiation and all that. And still to me, our main competitor is status quo.”

 

 

– Elizabeth Iorns, CEO @ Science Exchange | Expert @ Y Combinator | Angel Investor

I. Lecturers: Patrick Collison, Elizabeth Iorns.

II. What was discussed this week:

There were 2 interview talks this week that were both led by the YC partner Adora Cheung.

The first interview was with Patrick Collison, the founder of one of the most well-known YC-backed startup Stripe. The discussion mainly revolved around the topic of how a startup should be properly run towards success. What was mostly being discussed was the pre-product-market fit stage in which startups often struggle to get out of and start scaling. During the interview, Partick provided some practical tips and shared a lot of his professional experience since he and his brother started Stripe almost a decade ago.
You can find a link to the lecture in the next section so we advise you to go and watch the entire talk yourself in order to hear best tips for how to run your startup as a founder first-hand.

The second interview was with Elizabeth Iorns, co-founder and CEO of Science Exchange. Her talk revolved around two things in particular: running a marketplace company and discussing what’s going on in the biotech space in terms of scientific startups bursting out. Elizabeth shared the opinion that biotech startup industry is flourishing right now. Reasons for being so are access and amount of capital going into biotech companies and the evolutionary state in which the biology as a science currently is at. Moreover, differences and similarities between a biotech and software startups were also discussed. Definitely, this talk was a bit different than all the previous ones as the biotech industry was the main focus. This interview is a must-watch for every biotech engineer who intends to become a startup founder in the near future.

III. What were the key takeaways:

1. The story of a startup is two stories: the story of getting to product-market fit and the story of what happens subsequently.

2. It’s definitely helpful to have competitors with not very good products.

3. The key quality that a founder should look for in employees are intellectually honest, cares a great deal, and just loves getting things done.

4. Biotech is different than doing a traditional [software] startup because the founder can’t really change the outcome of the science. So, something either works or it doesn’t. There is no pivots, iterations, etc.

5. As a CEO, when you grow the company, one of the key skills you must have is admittedly recognizing what you’re good and bad at and where you should be investing in bringing in top talent.

IV. What we liked and what we think could be improved:

What we liked about this week was that there were no formal lectures on any particular topic. Instead, the format was a bit different where YC alumni were interviewed for the purpose of knowledge sharing and proving practical advice on various topics. The videos were very engaging and educating in themselves so we’ll be personally glad if more are about to come in the remaining weeks of the course.

V. Additional resources to this topic:

1. Y Combinator’s additional resources:

How Scientists Can Thrive in the Startup World by Colleen Taylor;

Biotech Companies at YC by Elizabeth Iorns;

Athelas: Our Road From Hack to Product by Tanay Tandon;

Founder Stories: Ambika Bumb, Founder of Bikanta (YC14) by the Y Combinator team;

Founder Stories: Jessica Richman, Founder of uBiome (YC14) by the Y Combinator team.

2. What we believe could be of help:

Running Your Startup by Patrick Collison by the Y Combinator SYS team;

A Conversation With Elizabeth Iorns by the Y Combinator SUS team.

VI. Evaluation of the week:

Different than the previous weeks, the video content lessons were interesting to watch. However, although we started a few forum threads, nobody engaged. In addition to that, our group moderator was running late with organizing our group office hours as well as two of the AMA professionals couldn’t engage well enough with the community and as a result, they didn’t answer all of the questions being asked. That signifies for the declining interest of the participants and the lack of personnel to handle all the SUS-related work.

Learning Session #3 Conclusion + What we learned in the previous session + What Follows Next:

We’re having a great time so far. We applied to the Y Combinator original program, we’re marking a significant progress towards getting contacted and negotiating with investors. Our product concept is being finally defined (due to the help of our group moderator and the rest of the most active participants in our group), we’ve got featured in 4 media in total already. So, all that makes us feel proud of what we achieved so far and we’re definitely going forward with full power.

Last week we learned about how to design and grow our product as well as how important content marketing and PR are to a startup success. Get a sneak preview of the last session by clicking here.

What’s even more, during the next two week (read more about them in the next blog post session), we’ll be talking about fundraising and investor relations. Topics that are more dear to us than any other ones at the moment.

So, stick with us to continue learning in this awesome educational adventure.

NOTE: Privacy is the most critical part of the Startup School. All content discussed or shared during the course, office hours, weekly progress, chat, forums, etc. is considered confidential unless otherwise stated. That’s why we’d like to inform that the entire “Startup School Diary” series is based on our experience and point of view that purposefully excludes data and information regarding other participants’ thoughts, views, and opinions.

2nd NOTE: We have no authorship nor we claim any copyrights and/or ownership on any of the additional resources that we recommend to be checked along with the Y Combinator ones. Our goal is to support the reader by providing her with reliable sources of knowledge we believe could be of help for her fast advancement on a particular topic.

Leave a Reply

Your email address will not be published. Required fields are marked *