Thanks for your supporting comment and good luck with your business! Besides the money more of an issue was possible distraction for us. We are 3 co-founders. For us all going there would mean several hundred hours of flight and travelling. So we made the decision to only send one person (after consulting with Y Combinator).
However we should point out that Sven & Alex were on stand by via Skype during the interview to answer any possible questions that might have come up.
The decision you all made is very logical because it doesn't make sense if all of you leave your business for pitching to a fund. I am not saying that the pitching part is not important but you are already running your company for 2 years and all of your leaving your office for such a long time would make your business suffer in some way.
I'd love to; I'll be permanently in Bangkok from October, but happy to head North for a little while. It'd be great to pick your brains about the BOI process too...
... Sven here (sharing this acccount with Alex). I'm full-time on YogaTrail. Besides me there are 2 full-time employees (Drupal Developers) on board, plus we use lots of free development resources from BUZZWOO!, a digital agency I co-founded. I consider this a huge advantage compared with other bootstraped start-ups and it enabled us to actually produce lots of software. Other than the main website YogaTrail has a very successful facebook app (we use for content marketing), several mobile apps and a bunch of very cool tools we use for marketing and growth hacking.
I'd like to offer an analogy: fast food chain franchise vs boutique restaurants. It seems to me that your startup is a boutique restaurant and so is not a good fit for a McDonalds-style franchise contract. However, at the end of the day, running a boutique restaurant is a lot more satisfying, at least in my opinion, and most of the time, more financially rewarding too. On the other hand, you do need authenticity to be a successful boutique restaurant owner, not the attitude "we are disrupting XXX", "we are changing YYY, one ZZZ at a time".
What to make of Chipotle? They basically took the SF burrito joint from a boutique/local food dive to a viable biz franchise. Hugely successful at scale...
True - I hope I didn't come across as bitter, overall this was an awesome experience and the people at YC are amazing. I actually do think that they can probably tell if a startup is a good one or not in a matter of minutes.
| so you'd think they would know almost instantly what they're looking for.
What they are looking for is probably a subset of good startups, ie. your startup can be good but it's not what they are looking for.
To some extent it must be a statistics game for them. The investment they make flying founders out must have a good return for them in terms of potential investments. Since they have been doing it for a while now the numbers must be close to optimal.
The bulk of our user growth is due to viral loops we've built into things - we're pretty much getting each new user to successfully invite another at this point. Unlike Yelp, we're very "yoga-centric", and while Yelp is all the rage in San Francisco, that's not the case in the rest of the world... so we don't think that Yelp will be the place people will use to find their yoga, especially their yoga teachers. One persons 5 star is another's 1 star.
That's not to say we're neglecting SEO; we're working on strategies to get more search traffic (and in many places we're doing very well with that) and convert it into registered members. It's just not our main and only strategy.
But the real answer is: we're planning a feature (not there yet) that will solve a big pain point for millions of people (getting the schedule of their yoga teachers at a glance), and which will provide an even better viral loop (yogis inviting their teachers, and teachers using our site for their online presence).
Personally I believe that niche products are the way of the future and that general platforms (Facebook, Yelp, etc.) will not last in the long run. But from what you described I don't think you made this (implicit) assumption clear, and it's not clear whether that's the sort of business they want to invest in (in the short term, the general platforms will be where the money is made, and it will be the aggregate of the niche platforms - a much more profitable investment than a niche product).
His answers are convincing rebuttals to a superficial criticism. In particular, I can tell you that if this startup can measure that it has a positive viral coefficient, it's already light years ahead of Yelp. And he's right that Yelp has basically no market share outside of a few US cities -- that's why they had to buy a much smaller competitor (Qype) just to get a foothold in Europe.
But to your point, I believe it was a YC partner (or three) who said that big businesses tend to start in a niche where a small number of people love you. If this guy really walked into a room and said "we've got a small, revenue-generating product with a positive viral coefficient and a growing user base", the line "fine, but you'll never beat Yelp" is not a compelling counterargument -- it's a lot like telling early AirBnB that they'll never beat Hilton.
I don't know if that's what actually happened -- there could be any number of reasons why a startup gets rejected after a ten-minute interview that aren't captured in a polite rejection email -- but in general, criticizing small startups for being small is not a winning strategy.
I actually read the blog post as a team that hadn't pitched a lot of investors. What you suggest here is being very forward in a setting that had been set up as a passive "interview". He was expecting them to set up the right question and probably wasn't experienced enough to just start telling them what he wanted them to know. There might be some cultural (U.S., S.V., "pitching") aspects to this dynamic as well.
Here's something we didn't share in the blog post. It's some of the print outs we brought along with us to the interview. No reason not to share it I guess. It shows some graphs illustrating virality, connection clusters (just one of them) and revenue growth.
http://www.yogatrail.com/yogatrail-stats.pdf
Hey, just a quick piece of feedback on this. You define virality as "the percentage of users invited by other users". That's a very non-standard definition.
Usually virality is measured as "the average number of new users invited by any given user". I'd strongly suggest using that as your definition.
In that case, we're hitting it out of the park - over 4 invites sent per user, but these invites convert at ~25%. There's also "k factor" (invites sent x conversion rate), and the interval between user #1 bringing on user #2 is also important... guess there are many ways to present virality :)
That kind of info (4 invites on average per user, 25% conversion rate) is THE critical information. If you want to talk about virality at all, the fact it's not in your presentation is a serious defect you should correct.
Hi, "YT Premium" has been live for a few months and is the main source of revenue (we've actually doubled revenue nearly every month since January). Ads are there too, but they just started and are making only a small dent in our budget :)
