Article

How We Pivoted 3 times In The 1st Month of YC

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February 18, 2020

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5 min read

If you ever think about joining YC, be intentional about the value you want to get from it.

3 months go by super fast. Of course, YC will help you phrase your goals, which will depend on the stage of your company.

Our YC goals

Companies that are already selling a product will most often have goals expressed in MRR (Monthly Recurring Revenue). At the beginning of the batch, they will be asked to determine a certain MRR goal to reach by the end of the batch. Then, they will be told – and rightfully so! – to focus intensely on any task that can help you reach these goals. Any other tasks should be postponed till after demo day.

Extreme focus is definitely one of the things that you learn at YC, and this is very important for a startup team to learn.

For pre-idea projects like ours, we couldn’t set MRR goals, and any goal was hard to define early in the batch. We needed to fine-tune our idea and then start implementing it before having Letter of Intents or Paying Customers by demo day. So on our side, we defined one goal for each month:

1st month: 50 meetings in the first 4 weeks to define our project (problem, solution, persona, pricing model...). If we could have had Letter of Intents (LOIs) by the end of the month, that would have been great. It’s a great way to validate your potential customers’ willingness to pay. This is what we call our extreme customer discovery period.
2nd month: Full implementation mode with an alpha version ready by the end of month.
3rd month (that ends with demo day): Either 10 LOIs or 2-3 paying customers. We would prefer paying customers, as it is a stronger signal.

How did YC help us reach our goals?

There are many things that YC brings to the table. A lot of details in the YC process definitely help you. I will list the ones that were the most impactful for us in our quest to reach our goals.

Group office hours: They happen every 2 weeks in groups of 6 startups with 4 partners (one YC partner and three visiting partners). Each session has a theme, for which every startup needs to tell their update and story. These office hours are extremely helpful, as the groups are formed so there is some overlapping between the participating startups. In our case, it was a “pre-idea” group. As everybody shares their learnings, it’s a good opportunity to take a step back to make sure we do things right.
Individual office hours: You can schedule 30-min chats with a YC partner to address any topic that is top-of-mind. The goal is still to help you take a step back and not lose your focus on what’s important right now.
Alumni: There are 3,000+ YC companies now. Being able to reach out to those people (in a valuable and personalized way) enables you to do customer discovery. In the end, we managed to have 45 meetings, just in January.
Startup emulation: There were 260 startups in the batch. You might think that it would dilute the impact of YC; on the contrary, it creates some emulation throughout the batch. You still have access to YC partners (probably a bit less), but the emulation it creates is huge and beneficial for motivation and focus.

So what happened?

Meeting potential customers is the best leverage of your time. Period. We learned so much in this first month that we went through 3 pivots in total!

Our original idea

When we applied, we thought we would build a data exchange platform to make dataset exchange frictionless between 2 parties. We wanted to address the Data-as-a-Service industry.

Our 1st pivot

After meeting with a few data providers and data consumers, we learned that we didn’t need to build software for both providers and consumers. We could solve the problem (and many more) by building a data integration engine that runs in your cloud. Data integration includes data ingestion. So a data consumer could integrate any 3rd-party dataset without friction, but also could move any type of data within its infrastructure (which was still a pain to do for engineering teams).

We got our first LOI at that point (on the same day of this pivot). We felt we had found the perfect product to build: mission accomplished for the 1st month!...We were just so wrong.

Our 2nd pivot

We learned at that point that only a small portion of companies would need our product. Our first LOI just happened to be the perfect audience for this product. But there is a specific kind of data that EVERY company needs to manage: customer data. At that point, we were thinking about building an on-premise version of Segment.

When you think about it, Segment is very expensive and customer data is very sensitive data. A lot of companies don’t want third parties to have access, let alone manage their customer data. Another value proposition is also that all the data wouldn’t be blocked anymore by adblockers. In the end, Segment lets you leverage only 80% of your data, not the whole 100%.

But building this was no easy task, and we wanted to have an alpha version by the end of the second month.

Our 3rd pivot

We needed a hook, an intermediary product that still provides value and could be sold, but that we could build an alpha version of in a month. That hook was about unblocking the blocked traffic on analytics tools (no cross-site tracking or re-enabling ads).

We still iterated and refined this idea until the end of January. But in the end, we accomplished our 1st month’s goals. Regarding the 2nd month – that’s another story for another article!

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