‘Silicon Valley’s Y Combinator demands teamwork and a viable product’: Chinese alumni give local start-ups some hot tips
World-class incubator screens funding applications for elements of success
A viable product and a capable team are the two key factors to be admitted to one of the most prestigious incubators in the world, according to mainland Chinese alumni of Y Combinator.
The Silicon Valley programme provides each team it incubates with US$120,000 of funding, introductions to investors, and three months of mentorship. Success stories include some of the biggest names in technology such as Airbnb, Dropbox and Reddit.
Webpage editor start-up Strikingly succeeded at its second trial in 2012 after they made their product profitable. The company was established in the US by a team of three mainland Chinese graduates from universities in the US and Hong Kong.
“The idea was the same [for the second time], but we proved we were on the right track by having traction to our product,” founder and chief executive David Chen said. “They care about whether the applicants can get stuff done.”
A month after “graduation” from Y Combinator in March in 2013, Strikingly bagged US$1.5 million investment for its seed round funding.
Beijing-based mobile operating system start-up Raven Tech shares a similar story with Strikingly. It graduated from the programme last March and received more than US$10 million of investment two months later.
“Having a good product is the most important [factor to be admitted],” said Lu Cheng, founder and chief executive of Raven Tech. The company had already rolled out its product and demonstrated it during the Y Combinator interview.
“The product is a reflection of the capability of the team,” Chen said. “What Y Combinator is really investing in is the team.”
Chen advised fellow applicants to do their homework before making a pitch. Remember to illustrate a track record with the team members as well as friendship and team work between founders.
“You should assign who’s responsible for answering what type of questions[during interview], and one person should do most of the talking,” Chen advised on a blogpost. “This shows that your team is effective and aligned on the message.”
“Y Combinator has included us into a community of awesome and helpful people,” Chen said. “We are able to find experts on any field we want to get into.”
“It is like joining the Phoenix club,” Lu said, referring to the famous all male undergraduate social club at Harvard University.
Y Combinator has incubated more than 900 companies but there is currently only one from mainland China.
Lu said the lack of “pure innovation” is the reason why there are few mainland Chinese companies got accepted.
“Most Chinese companies are making just another ‘Chinese version of [existing product in the west]’,” Chen said.
“Y Combinator is not interested in copycats,” he added.
Total market cap of companies participated in Y Combinator surpassed US$ 30 billion, the community said on blog post last March. Applications for its current funding cycle closes on Thursday.