My First Y Combinator Application that got me the interview

When I was first interested in doing a startup and getting funded I used to google everywhere looking at what type of applications got funded. Since I was funded twice (sorry spoilers), I wanted to pay it forward and make my applications public.

The application has probably changed a lot since I applied. This was from 2014 and I think at least twice as many people apply these days.

Individual Founder Page

Please tell us about the time you most successfully hacked some (non-computer) system to your advantage. (i.e. meeting hard to reach people, getting free stuff or money, getting out of a punishment, etc)

Praful – For my last company (Amp Idea), I found a free way to sign 350 cab drivers out of 1800 total cabs (2nd largest marketshare). The other players paid exorbitant rates to set up operations at repair shops for their market share. We simply had a cabby sneak us into the Airport Holding Area (AHA) everyday (non-cabbies are banned). It was declared an unfair advantage and the city temporarily allowed companies to pitch at the AHA which we had won by then. 

Shawn –  parking is troublesome, so I acquired a free permit from a department (Professional Science Masters) and used it to frequent a new on-campus Makerspace. I did so by requesting it for in-person consulting, and utilized the permit’s expanded access to visit the space. The department even gave a warm introduction to the Makerspace.

James – I got the highest rewards no-fee credit card (according to http://www.nerdwallet.com/) despite having $0 of income this year. I was instantly rejected by their application online and over the phone with a representative. However, I scoured the internet looking for the contact info of the executive board and eventually found the email of the CEO. I emailed him my case explaining I have never missed a payment on any credit card ever and quickly got approved.

Please tell us in one or two sentences about the most impressive thing other than this startup that each founder has built or achieved.

Praful – Recently, I was listed as an expert for autonomous vehicles in NJ along with professors, insurance company representatives, and car company lobbyists. I heard Senator Kean was introducing a bill for autonomous vehicles so I created a meet-up group dedicated to Self Driving Vehicles that had 100 members show up for the first event. Then I created a hackathon where I had the Senator listed as a mentor. The popularity of those events got his office interested and I was invited to testify at the autonomous vehicle committee. My testimony convinced the rest of the NJ State Legislators that small companies in NJ can coordinate resources more effectively than established companies to solve large problems and increased overall confidence in Bill S734 which was passed unanimously. 

Shawn – At a Kinect hackathon, I managed project development between team members from three different companies to win second place. We were able to create a robot hand that uses a Kinect to mimic human hands.

James – Built an autonomous battle bot for Boston’s first ever “Autonomous Combat Robots” competition at the Artisan’s Asylum. We had two weeks to get it ready. My team and I created a rising platform mechanism to flip the other robots and ended up placing in the Top 10.

COMPANY PAGE:

Company name:


derivative/d

Company url, if any:

http://www.derivatived.com

If you have an online demo, what’s the url?


(Please don’t password protect it; just use an obscure url.)

http://shipping.derivatived.com/#/dashboard

What is your company going to make?

Stripe for managing Supply Chains. We handle the post-manufacturing supply chain to the customer for small to mid-size product companies by connecting directly to manufacturers.

We have developed a standard process to manage the supply chain for many product companies and allow for some flexibility during key points of the supply chain.

If this application is a response to a YC RFS, which one?

Internet Infrastructure

Where do you live now, and where would the company be based after YC?

Now: Jersey City, NJ. After YC: We’ve seen growth in NYC & Boston, will evaluate our experience in the Valley.

FOUNDERS

Please enter the url of a 1 minute unlisted (not private) YouTube video introducing the founders. (Instructions.)

As you can see, they literally do not care about the presentation of your video. We had a big free ad for the split screen recording software running through the middle of the video the whole time.

Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together. Include urls if possible.

James & Praful:
http://www.northeastern.edu/entrepreneurs/programs/northeastern-io/
In 2010 we co-founded iMadeIT (now NU.io), an entrepreneurial club that teaches students of all levels and backgrounds to create their own websites. Our members were primarily composed of business majors with lots of ideas and no background in programming. Within 2 years, we became the biggest entrepreneurial club at Northeastern. The club still runs successfully today and grew to over 100 active members by the time we passed it over to other student leaders.

How long have the founders known one another and how did you meet? Have any of the founders not met in person?


James & Praful have known each other since 2010 at Northeastern University. They worked on building iMadeIT together and built small projects together.

Praful & Shawn met through a Self Driving Vehicle meet-up that was setup to build prototypes of autonomous vehicles in April 2013.

James & Shawn met in May 2014 at our old office in New Brunswick.

All 3 of us have been working together full time on this as roommates in Jersey City since June 2014.

PROGRESS

How far along are you?

We have a web app with a beta customer and a beta warehouse. In the warehouse, our software manages 50,000 orders per month. Our beta customer has prepaid and is shipping out 1103 orders in December.

If you’ve already started working on it, how long have you been working and how many lines of code (if applicable) have you written?

~5000 lines

If you’ve applied previously with the same idea, how much progress have you made since the last time you applied? Anything change?

N/A

Which of the following best describes your progress?

Taking Preorders

When will you have a prototype or beta?

Currently testing our beta with customers

How many users do you have?

1 Beta Customer

Do you have revenue?

Yes

How much revenue?

$110.30

What is your monthly growth rate?

(in users or revenue or both)

http://en.wikipedia.org/wiki/Undefined_(mathematics)

If you have already participated or committed to participate in an incubator, “accelerator” or “pre-accelerator” program, please tell us about it.

N/A

IDEA

Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you’re making?

We are passionate about solving logistics problems because they have a large societal impact and require small investments in technology to gain leverage.

Originally, we were making software to increase storage density in warehouses to dramatically lower storage costs. That led us to learn a significant amount about warehousing and the supply chain process and why warehouses have so much trouble investing in technology. Additionally, Praful’s previous startup developed hardware and he knew the difficulties of managing his supply chain.

Finally, James and Praful knew the problems that product companies have based on their experience mentoring startups and within 2 weeks of switching to the new business, we were able to get our first check.

What’s new about what you’re making? What substitutes do people resort to because it doesn’t exist yet (or they don’t know about it)?

We want to make it as easy as setting up an API account with us to get started with fulfillment. No one else has made it that easy to start providing fulfillment solutions for companies.

Typically, start-ups go two different routes.

1. They do the fulfillment themselves. This means a large portion of their effort is taken away from product development and marketing.
2. They find a 3PL. Often times, they are overpaying and the facilities are initially misinformed about the product which delays shipments.

To find warehousing today is a long and arduous process of calling individual facilities to see if they can manage a given product. Each warehouse has a slightly different pricing structure, different process of fulfillment, and different understanding of the same product.

Who are your competitors, and who might become competitors? Who do you fear most?

Competitors: ShipWire, SymphonyCommerce, JaggedPeak, Amazon

Fear the most: Amazon

What do you understand about your business that other companies in it just don’t get?

Our competitors and the experts in the field focus too much attention on the differences between each company’s fulfillment operations. For our first account, it took over 200 phone calls and 10 days to get a handful of quotes. Most facilities refuse to work with startups due to inconsistent volumes. We found by aggregating products under a major account, providing a standard procedure, and packaging requirements, we eliminated 80% of the fulfillment differences. There will still be custom operations which will be beyond our scope but most startups have similar requirements and dimensional-weights for their products.

How do or will you make money? How much could you make?

(We realize you can’t know precisely, but give your best estimate.)

We charge 10 cents per order.

The average crowd-funded customer has 2000-3000 orders in the first month so we will make $200 – 300/month per customer. The successful companies increase to average 5000 orders/month by the end of the year, providing $500/month in revenue.

There are 500 successfully crowd-funded hardware projects on KickStarter and Indiegogo since November 2013. This number excludes other product companies such as apparel, non-hardware physical goods, and food-related projects. The number of orders/customer and number of new products are expected to increase every year.

How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won’t be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?

We currently get customers by reaching out to recently over-subscribed, crowd-funded projects on KickStarter & Indiegogo. We have found startups by partnering with TechStars, Northeastern IDEA, and Kairos Society. We are also working to become preferred vendors for KickStarter & Indiegogo.

As our customer base grows, we will continue to optimize the process of fulfillment for even higher cost-savings thus increasing our ability to close more customers.

Please tell us something surprising or amusing that one of you has discovered.

(The answer need not be related to your project.)

Have you seen how many bathrooms some warehouses have?? They have some of the highest densities of bathrooms in a workplace. One union negotiated a clause that every employee must be less than 90 feet from a toilet at all times.

Here are some other apps I read at the time that helped me (some of the links may be broken now):

bedrock: http://blog.zactownsend.com/our-yc-s13-application

FlyteNow: https://docs.google.com/a/derivatived.com/document/d/1AULcH93OJdBoexazc5VizdI_FKTC7iWqdfqxE1jXhCk/edit

WatchSend: https://medium.com/p/289c58a2ca89

Lollipuff: https://www.lollipuff.com/blog/102/lollipuffs-ycombinator-experience

Seeing Interactive: http://www.scribd.com/doc/111078156/Yc-Application

Reddit: http://alexisohanian.com/our-y-combinator-summer-05-application-what-w

Dropbox: https://dl.dropboxusercontent.com/u/27532820/app.html

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