I imagine the quality of applicants to YC has gone up considerably in the last five years, and many of the applicants who were selected then may well have struggled to get through the current rounds.
> We are going to build an infrastructure that will allow consumers to order food from their cell phones (via a text-interface, rather than voice), drive to the restaurant and pick up their order.
That sounds like a much more promising business than "a site where users submit news and sites, vote them up and write comments about them". I don't mean this is in a snarky way, I'm a reddit user too. Am I missing something?
This was like five years ago, before mobile internet was available to most consumers. Also, writing mobile apps before the App Store was a real pain, and involved dealing directly with carriers, I believe.
This was like five years ago, before mobile internet was available to most consumers. Also, writing mobile apps before the App Store was a real pain, and involved dealing directly with carriers, I believe.
J2ME apps involved no carrier participation (though often you had to target all of the profiles), and most devices, including standard Nokia feature phones, could run it. Windows Mobile apps...well that was always completely open and with little carrier control.
And of course...WAP. Largely forgotten now, but the Gopher-like WAP was usable on pretty much every feature phone, optimized for limited displays and input technologies. It was a giant dud for a variety of reasons, but it was always an option back to the turn of the century. And you didn't need a data plan, which remains the #1 impediment to the mobile revolution, though you did get charged usurious rates for the packets you did use.
But how many people really used these things? I consider myself pretty techy and I can count on one hand the number of J2ME apps I've used (heck, I can use my other hand to count the number of times I used them).
One requires significantly more overhead. Also, the whole thing about submitting, voting, and commenting came much later. Reddit didn't even have comments for the first 5 months or so.
Technical challenges integrating with existing restaraunt ordering systems; probable need for active field salespeople. They acknowledge possibly even needing hardware...
It might stand a chance of being a more profitable business than Reddit, but it's a tough and expensive route to market without experience or a large chain desperate to try the system. Probably pg had good reason to be more risk-averse about the types of business he invested in back in 2005.
But it seems like more of a risk to think a social news site (of all things) will be a successful business. Without Condé Nast to be the "greater fool" (in the sense of the "greater fool theory" http://en.wikipedia.org/wiki/Greater_fool_theory) it's really questionable even today whether Reddit could have been profitable.
Something that actual businesses can use to sell things to people? Sure, there are risks, but at least it can make money.
But still, the sales challenge is immense, especially for 3 guys with no sales experience and no money (remember that back then it was nowhere near as easy to raise a bunch of money after YC). Individually talking to every restaurant you sell to doesn't scale at all, and signing on big chains would have been very hard, especially before they had proven that it works and makes restaurants money.
Plus, the problem he mentioned about integrating with other restaurants' systems is a major one. I'd guess that there are many different order-tracking systems. They'd probably have to customize that hardware solution to each restaurant that already had an electronic order-tracking system.
Now, they could have started out with restaurants that were just using paper (with the hardware appliance just printing stuff out), but that would pretty much exclusively mean small non-chain restaurants, which, again, doesn't scale.
Here is what Alexis had to say answering this question in the comments section of his site:
alexis ohanian said...
I believe the biggest thing was the dangers of dealing with both cellphone carriers (this is pre "AppStore," remember) who are notoriously closed and slow-moving as well as restaurants, which aren't typically very tech-curious (all the ones I spoke with were taking online orders via fax).
I like Steve's answer:
"Steve: Ten years from now I hope that we would have either sold the company for gazillions of dollars, or realized we could not do so and tried to come up with something new."
The application content seems remarkably normal. Even the Restaurant idea. Nothing stands out other than the 'Animal' question. Like, within the realm of most of us at HN (even if the quantity of YC applications has raised the bar since Summer 2005). Thanks for posting this.
That is one of my favourite youtubes. Big kudos! I couldn't stop laughing the first time I watched it. It's amazing how most of it still applies after ~5 years
I was telling team YC during interview week that I miss the "animal" question, partially because I really love our answer (the "we're a freaking zoo" line is pure Huffman).
Well, Reddit didn't exist yet (on account of Reddit being a YC startup) and HN didn't exist because Reddit hadn't gotten to a state that HN needed to be created. So the evolution seems natural, assuming they wanted to know whether you made any intelligent comments on tech news sites.
You can still get to the application form to apply late, but they seem to do some session stuff making the direct link not work (which means you have to acknowledge that you're applying late).
When PG offered us a chance to be in YC, we agreed to hop off the train in CT and grab the next one back to Boston to brainstorm with him about a new idea. From that ~1hr conversation came the idea for reddit. PG summed it up well: we were building a "front page of the web."
Way ahead of you. I wrote the script after spending 30 min reading blog posts that interview reddit founders. Than I realized the movie wasn't Hollywood enough, so I added frat parties, cocaine, and made PG 30 years younger and more eccentric and more of a ladies man.
I think I'm on to a blockbuster here. Does YCombinator invest in film productions?
> We were rejected after our interview, but Paul called us the next morning as we rode back to Charlottesville to say we could join YC if we came up with a new idea. That idea was reddit.
this is actually pretty close to an already existing service in Denmark called just-eat.dk, except it focuses mostly on fast-food, and you order over the internet.
So pg missed the boat on this one. Fortunately I haven't seen this anywhere in the us and it will take some times before these guys will branch out of the country, if at all.
Just-Eat is the largest player in the market (revenue of around 700 million dollars/year), SeamlessWeb in the US are the next closest competitor but they're a long way behind.
SeamlessWeb are doing a pretty poor job in the US, someone could probably build a decent competitor for the US market and then sell out to Just-Eat fairly easily.
From personal experience (lived in 3 Just-eat.com "countries") I would say Denmark is the biggest. In the cities, there's a really high coverage of restaurants -- and not just fast-food either.
The problem for restaurants is pretty interesting, and reminds me of the disintermediation RoundTable is doing in the US.
This supports that investors invest in the founders and not the idea. This isn't the most compelling application/idea however the founders made an impression and that got them a slot.
I actually have been planning to send an application in with this exact idea. I came to the site today to check in case the next application round is open, and to conceivably fill an application out with this information in it.
I'm not sure what to do, at this point. We still think this would be a success but, good god.
Edit: In the opinion of anyone reading this; do you think it's a better idea to put our application in as planned (using this exact idea...), or to try to differentiate ourselves somehow?
I find the number of poeople who end up not working on the startup interesting. We also saw that on a few of the other yc posted apps recently. As a college senior I try to put myself in their shoes. I think a good barometer for startup success could be how good the offers they are willing to turn down to start it. If nothing else, the need to validate their decision could add extra motivation
This is totally a service I've discussed building recently. With 3rd party payment aggregation, you could totally take payment and dispurse funds to restaurants fairly easily.
Could do native iOS/droid apps or even SMS ordering with twilio
Interesting idea for the time. God aweful business plan though. I hope that they had a thorough document with much more market reaserch before courting investors.
ie. is this really a sample of a "winning" YC application?