Applied for the first time this round (S11) with http://interstateapp.com and have been invited for an interview.

If you told me the idea, I'd say it was needlessly entering an already crowded market, but when you actually see it laid out -- it's fantastic. You have a great concept and a slick presentation. If I ever have multiple people working on one of my projects alongside me, I already know where I'll be looking for this service.

Congratulations on this. I have no doubt that it's going to be big!

Thanks so much! It's honestly amazing to hear you say that, we're super excited to see where we can take Interstate :)

One question I do have, what advantage do you feel Y Combinator gives you over going straight to round A funding? It looks like your product is fairly mature with existing traction and customers. Perhaps connections in the valley?

Most definitely the advice of the alumni and the connections which YC would give us. We value the network we'd receive as a result of YC as much higher than the actual investment.

What an important point to note!

Money is good, but you can work around financial needs much of the time. It is almost impossible to place a real value on advice and connections, though and it's difficult to know what you don't know (if you did, you could figure it out for yourself). Even if you stumble upon the right questions to ask, it's sometimes impossible to find someone who can truly answer it.

Personally, if presented with the option of cash injection or access to an adviser, I'd choose an adviser, every time. Hell, apply this to all aspects of life. The older I get, the more I realize knowledge and experience are the real commodities.

I completely agree. I'm in the planning stages of a startup right now and we think we can get investment from family that will match or exceed what Y Combinator offers. To me what I really want isn't so much money as access to people, smart, well-connected, people that can help get things off the ground.

Of course I understand that typically those people want a piece of the pie in exchange for their advice.

In my case, I really need programming (read: technical co-founder) help to get the project started, that's my primary obstacle right now more than money.

Best of luck, the bay area is awesome and you can't beat the weather, cultural diversity, and proximity to great geography (beaches, mountains, Monterey/Carmel, Mendocino, etc). Make sure you guys spend at least a couple of days exploring if you do make it out here this summer!

If you get the chance, you should swing down to Palo Alto and check out Stanford University. It's the birthplace of silicon valley, the campus is beautiful, and if you're lucky you'll catch some co-eds frolicking in the fountains :)

We've already booked an apartment for 2 weeks in the Mission District of SF for the interview and to see some of our friends at companies based there. Looking forward to really getting to see SF - I've wanted to go for years!

If we can get a Visa then we'd like to, yes (doesn't have to be the Bay Area though). Most of our users are US based so being there ourselves would make things a lot easier.

Makes sense, are you considering relocating to the bay area permanently?

Congrats on the interview! Interstate looks very cool, I can already see how the roadmap feed would improve my life and that of my developers!

This looks like a fantastic app. How much traction do you have?

We've had about 1100 invitation requests so far (we've done no advertising yet) and our monthly growth rate (page views) is actually averaging 100% at the moment which is great. We've also got some great companies already using the app such as Virb, MediaTemple, The Next Web, Dailybooth, Squarespace and many others :)

congrats, I think you're just about the nearest startup to me (I'm in Leamington) - so I'm "routing" for you! (pun intended)

Oh cool! I was also based in Coventry myself for a year prior to working on Interstate :) Thanks, aha!

you should ping me @ed_lea if you ever attend http://www.multipack.co.uk/ - would be interested to hear how it goes

Ooh, that's just down the road from me (I'm on Temple Street). Looks interesting.

Looks interesting, I signed up for an invite.

Looks slick! Good luck.

(doing a startup, but not an option nor interested) should be (doing a startup, but not an option or not interested).

I have a theory for why people don't apply more, (a) the startup has grown to a point where YC doesn't make sense and (b) the team decided to not pursue the idea because they didn't get YC, and (c) the team pursued the idea, but it failed and the founders moved on.

I enjoy watching other people's startups, but have never applied at YC, because I assume I am outside of their accepted demographic. I'm in my early thirties. I'm a solo-entrepreneur (I would love to have a partner, but I don't know a single person with the interest and ambition to be part of anything - they just want to work until 5pm to pay the mortgage and then go home) and, mostly, because none of my ideas have ever demanded enormous quantities of funding to get off the ground. Spending $10k or $20k on an unsure thing would ding me, but I'm fortunate enough that I'm in a career where I could cut a check for that amount if I had enough faith in my own project and enough necessity for the funding.

Also, I appreciate what YC does and offers, but my personal philosophy is that a lot of ideas which seek out funding don't need it.

I started a transaction (user to user) based service in 1998 and my only expense was $10/mo for hosting. When I needed more resources, I moved it to a community shared server at a colo for $20/mo. And by its fourth year, I was paying $100/mo for a 1U rack rental at May West in SF with a dedicated pipe. The cost never went higher than that. The only additional expense was around that same time when I custom-built a 1U heavy duty server (running primarily qmail, apache, postgres) with hot-swapping and redundant PSUs and storage. That was a one-time $5,000 expense that lasted the rest of the project's life.

With no more cash investment than the above, I grew it over twelve years to more than 100,000 members and millions of transactions. It even had its own annual (or so) user-arranged gathering. People formed their own businesses through the service. I learned of many life-long friendships people made on it. I've even received thanks from people who were able to support themselves through tough times and -- some -- even put themselves through school.

And it was all funded out of my pocket. The real investment was my time (as the sole designer, developer, customer service person, marketer, etc -- I did everything from write the underlying engine to designing the interface, to mediating customer problems). So much so that, eventually, I had to quit last year, so I could have free time again to keep up with my actual career. And try to maybe have a life. And focus on my health, which deteriorated over a dozen years of 60-80hr work weeks plus 40-60hr weeks on this service.

I learned a lot from the experience. Mostly, I learned what not to do. Things I would advise others to be aware of. One of the primary things I learned, however, was that you can do a lot more with a lot less than people might think. That doesn't apply to everyone who might apply here, of course. But it applies to anything I have ever bounced around in my head. And I'm kind of stuck with this "if I can't do it on my own and make it support itself, then it's probably not worth my doing" mentality. I suppose that if I didn't have the technical knowledge, I'd have a different view since even the basic work would necessitate involving paying someone just to get things off the ground.

By the way, if I were to start this project in 2011, instead of 1998? It would probably cost far less and I would have had far fewer scalability problems (I never did any advertising, but as soon as people started hearing about the service, it quickly exploded and fell over a few times while I tried to keep up). Specifically, I would forgo the expensive hardware investment four years into the project and I would forgo the monthly shared servers and other standard hosting. I would go straight to a scalable cloud service (Amazon, Rackspace, etc).

Anyway, that's my far-too-long version of why I've never submitted anything to Y and why I probably won't at any time in the future -- but I'll always dig watching them help other guys with great ideas pursue things. With great envy at their successes, of course! :)

Edit: I completely spaced on the whole "value of advice/community/exerience" aspect of what YC offers, which of course is of great value itself. My comments above are related to the financing only.

What did you do with the startup after you quit. Did you sell it?

I'm sorry for responding to such a simple question with such a long ramble. I got carried away. This isn't something I've really ever discussed before and while it's not exactly germane to the overall topic, maybe someone out there will get some use out of it?

Short answer: No, didn't sell it. Yes, had offers. Why? I was a misguided(?) idealist.

I started coding the project on a whim before I was old enough to drink. It was actually just my attempt to teach myself Perl (which was probably a poor choice of a first language, the way a 160mph Ferrari is probably not the car to learn to drive in). To facilitate my learning, I took an existing open source engine and played with it a bit. I pointed a few friends to it for kicks and didn't think anything of it again, for a few months, when I went back to delete everything. Except, when I went to wipe everything, I noticed that the access logs were really active. So I logged into the admin interface and saw that people were actually using the service. I never expected that.

Very soon after that, the limited software and its flat-file database had trouble keeping up with the user demand. It was a great opportunity to dig even deeper and learn by undertaking a big project -- dumping the open source solution and writing my own from scratch, which taught me all about Apache, SQL, Perl, etc. I didn't realize what I was getting myself into at the time, but in the end my first real Perl project (my first real coding project at all) was eventually a large 15,000 line program with a full accounting system, threaded hand-written forum system, authentication system, private messaging system, transaction system, etc.

Since I never expected to make money from it (I had the same spirit most BBS sysops of the previous decades had, which was that I just wanted to do something for the love of doing it and providing something I could watch people actually find useful), I didn't look at it as a commercial venture. I never advertised it. I never placed advertising on it. It was free. It was clean. It benefit users and not my pocket. (Just my ego).

After about five years, we had received some coverage in scene magazines and I began to receive inquiries from some established businesses. One of the best offers came from a company that has a chain of stores in malls for a demographic not too unrelated to that of my site's community. Think of the mall outlet that caters to mopey kids and its sister outlet that caters to plus-sized mopey kids . . .). I was never talking millions of dollars, but it would have been enough to buy a really nice house out-right in my early 20s.

But . . . I had my principals. I felt that letting a commercial entity take over the site would devalue the community. I didn't know what they might do and I didn't know if I could count on a new owner wanting to serve the community altruistically. Don't get me wrong -- I could have been bought, but I wasn't going to sell-out unless it was for a truly crazy amount of money (which didn't seem to happen as much back then as it did a few years later, when we started to see the Myspaces and Twitters pop up).

So, I turned them down. I also turned down the offers to sell my code to other people who wanted to run similar sites (mostly because I would rather have made it open-source one day, but being an amateur coder, I never felt secure enough to throw my mess of spaghetti out into the world and embarrassing myself).

There was one time when I considered trying to make money from it. I provided most of the services for free, but had some additional features for something like $10/yr. I had 2,000 paying subscribers in the first five days. Not bad right out of the gate. It was just a test and I made the community aware of that. My thought was to use the cash flow to expand the site and service. Perhaps to other niches and perhaps to expand to other elements of this niche community (beyond the user to user transactions). Maybe a sort of media empire that catered to this sub-culture. It wasn't long before I felt like the money wasn't necessary, though. Maybe it was just a poor estimation of self worth. That my time wasn't worth it and that I should be grateful anyone wanted to use my service and that trying to make money off my "hobby project" was somehow dirty. I no longer recall my precise rationalization, but I did eventually stop the paid service. More, I refunded 100% of what members had already paid.

The site continued on for another six years beyond that, before I started to lose interest in it and feel burned out.

At that point, I let the site linger on about two more years. Longer than it should have. It reached the point where I could not keep up with the sheer amount of work needed (primarily mediating user to user problems and responding to emails which were in the hundreds per day). Just the thought of even opening my email made my stomach churn. I stopped participating in my own forums. I essentially disappeared. I felt like I created a monster and was now at its mercy. The only reason I kept at it, at all, was out of a sense of obligation to the community. I knew people had vital friendships from it and either were or had in the past made a part of their living from it. I didn't know anyone trustworthy enough to hand the reigns over to, either and I figured commercializing it would destroy it eventually, anyway. So the only option in my head was to continue and make myself suffer or finally end it all.

After a year of working myself up to the point that I could say "goodbye" to it (by this point it had consumed literally 30% or more of my entire existence for my entire adult life and was like ending a very long relationship with a girlfriend), I posted a notice that I would be shutting things down in six months, with an explanation that I needed to regain my life so I could focus on other things. Work. Personal life (I only finally got around to buying a home after shutting it down). Not to mention, other projects. I was so focused on this project for over a decade that I didn't allow myself time to be creative and pursue other projects that I might have gone commercial with.

And, when the day came, I powered it down. That was almost exactly a year ago. The community has renewed itself via a Facebook group, apparently and I've been taking a much needed breather. Now I'm keeping my mind open for "the next cool project". Only, this time, with the experience under my belt from this former altruistic project. I may not have exploited it for the money it could have made and it may not have been a commercial success (though it was still a success in as much as it was heavily used by a ton of people) . . . but I gained a lot of value from it. Value in the way of experience. Of knowledge. Of things I can apply next time. How to better manage a community. To avoid taking everything on by yourself. To having specific goals in a project. To allowing yourself to set a price for your service and not feel obligated to do it for free "just because".

Note that I could have made money if I made that a priority. Either by going commercial over the long term or by selling out in the short term. Not "Web 2.0" money, but enough to make life a bit different. However, the way I started it up and maintained it and the expenses and investments involved are definitely relevant to any modern startup, I feel. If I could keep something this complex going for so long with so many people for what comes down to about $100/mo, then someone starting a site with less complexity than, say, an eBay -- should be able to do much more for possibly even less. This is why I am always baffled when someone requires millions of dollars to startup a site that . . . oh, I don't know . . . relays 140 character text messages to a group of followers. A service that has very little complexity at the heart of it and only really needs to deal with scaling (no small task, of course). Or sites that need tens of millions of dollars to start a blog that posts stories every day. Something that you could reasonably start for a few bucks and a little bit of your time. (I suspect it's because those investments are for people who want to start a company and a business rather than start a service - because the technical aspects always seem to be the cheapest element of the whole project!).

Thanks for letting me ramble. If you bothered to read the entire tome above, then I hope you took at least something tiny from it. One of these days, I should write some sort of a "learn from my mistakes" book for the web.

I hope one of the things you took from your experience is that you massively underestimate yourself, your worth and what you do--because reading what you wrote it certainly seems that way.

If you want to do YC but talk yourself out of it--I'd seriously suggest stop listening to yourself on that one. :)

Awesome post. I took away a lot from your experience. Thanks for sharing. Keep us updated on your next project.

There should be an option for: "0 (interested and thought about it, maybe someday)".

Great idea, the 0 was limiting as is.

There should also be an option for: "0 (doing a startup, not interested in YC or YC not an option"

Would be interesting to see how many people have also applied to other programs (Techstars, etc.)

While I read the book and love TechStars I think for me coming from Australia and our particular situation it doesn't make a load of sense. We either really need the StartFund money or the big push YCombinator give to make it worth the relocation, personally I'd apply to tech stars but for my cofounder I think the risk vs rewards isn't worth the relocation.

Don't know how many others applying from overseas would have the same issues. In Australia we recently got a seed fund, "StartMate", although it being in Sydney and us in Melbourne it may as well be SanFrancisco.

Excellent insight. It seems that YCombinator is really in a league unto itself. For incubators/accelerators, the choice is really two buckets: YCombinator and all the mojo it gives you on the one hand, and all the other incubators on the other, which offer relatively similar value propositions to each other. It's interesting how this dynamic has worked out -- much like in most industries, the distance between the top player and maybe #2 and the rest of the field is significant.

VERY interesting numbers. We applied first time and have not been chosen, which is surprising but expected. We've got a team of 6 founders who have sold past ventures to companies, a patent attorney and IP but it's probably not in a space they understand. We were willing to give YC equity for connections (we need 2.5million not 20k) and a blessing but were already prepared to go straight to A-line money. That's ok, we've been here before and know the drill.

I guess their is a limited window going down the same path, I applied this time and while I can't rule it out, I think I'd be more likely to apply again if I started something new. Going down the current path with the app it will either be less attractive in 6 months time to us or we haven't gone places with it and we are unlikely to be more attractive to YC next time round.

We will either be quite successful by the time the next YC application deadline rolls around, or we'll have determined that the concept isn't viable and will be doing something else.

We might apply again, but my tendency is to do things that don't seem to fit the YC sweet spot.

I think the the sweet spot has expanded, there are more startups getting in that are further away from the cool viral social web app or the common subscription productivity and analytics apps. At the same time though the competition keeps going up meaning that even though more ideas further away from the core competencies are getting in for any one startup there is a lower chance.

I think the only real hard criteria is that you can make an impact on the market in 3 months with up to 3 people with $20K.

Yes, it certainly limits the more capital intensive projects, but I think there is plenty of other capital infrastructure in place for those kinds of ideas.

Seriously, why would you not apply if it fits your capital requirements and time schedule? It's not very arduous.

2nd application, 1st for http://www.chorusindex.com and was invited for an interview

Every single session save 2.