SocialBias :: a Digital Abstraction of Michael Parkatti

Yup, another edition of the epic 1000 part series, the Y Combinator Diaries.  Full text below:

Last week I chronicled about how our startup refined our idea to build a new product. Over the last 10 days, we’ve started from scratch and grown confidence in what we’re building again.

In that time-span we’ve been able to create the core product in terms of basic functionality — this includes the functionality that any iteration of our final offering will need. It’s a pretty well-oiled machine of planning, building wireframes, development, final design/interface decisions, and user-flow integration. The focus of YC has allowed us to build something in 10 days that might have taken us a month in a different setting. We essentially have a month before we demo our product in front of investors, which is a major motivation in itself.

The Y Combinator dinners have been fairly helpful over the last few weeks. We had Hutch Fishman come in to talk to us about finance in technology startups. Hutch is an experienced Founding CFO with a lot of different successes on his resume including Sonus Networks and Winphoria. He basically walked us through everything we needed to know about financing, equity, liquidity events, and budgets. I have a business degree on my resume, but he still managed to clarify concepts I always found confusing, such as the reasoning behind issuing both common and preferred stock in a startup.

Last week Jonathan Seelig came to chat with us about his experiences as a Co-Founder of Akamai (which is quietly one of the largest tech success stories of the last 10 years). He’s a venture capitalist now, but his talk was delivered from the perspective of a successful entrepreneur to a roomful of aspiring entrepreneurs. We heard at length about the initial months of Akamai and what they did to achieve their enormous success. He gave us some tips on what to watch out for as we begin looking for investment and business development deals. To say that the room was rapt with attention would be an understatement.

Finally, this week we had a talk with Steve O’Leary, an investment banker with a long history of giving advice on some of the highest profile M&A deals in technology. His talk centred entirely on liquidity events, and mostly on acquisitions. The art of doing a deal is complex and highly nuanced, so he gave us some advice on what to look out for, what signals to expect from acquirers, and how to stay focused during the distractions of success. He took a lot of questions from a roomful of us who obviously like thinking and talking about reaching liquidity.

YC also held its ‘Prototype Day’ session in which every founding team presents what they’ve built in the last month to the other startups. It’s not supposed to be a presentation per se, but simply 5 minutes to show off your developed technology. Mike and I had chosen to switch products only 44 hours beforehand, so instead of demoing the old product we built, we decided just to give a quick pitch on what we were going to build.

I think it went pretty well, if not a bit challenging to describe a product that doesn’t exist yet. I’m not the kind of entrepreneur who likes to spout empty rhetoric about what we’re doing, so it was nice sharing some of the details of our product plan with our fellow founders and get some feedback. Everyone was actually really supportive of our plans to change our idea and seemed excited about the new direction we are taking.

Paul Graham mentioned that he was surprised at the quality of all of our demos and pitches, saying that we were perhaps the most prepared groups he’s seen for the prototype day presentations. I agree — I’m really proud to be a part of this session of founders, as the groups are all very strong. Some groups are further along than others, but everyone is extremely talented and ambitious. It’s fun following as we launch our products one by one.

And it should be our turn in a few weeks to do just that.