In early 2020 the entire world underwent a transformation. The planet was consumed by a pandemic that altered life as we knew it. Most of our normal routines changed immediately. At YC, like most businesses, we closed our offices. We were forced to rethink the end of our Winter 2020 batch and transformed its demo day to an online-only event.
None of us knew how long the remote conditions would last, although we suspected it could be quite some time. Now, after nearly ten unprecedented months of working from home, we are finding our rhythm and even enjoying some aspects of this new style of work. With the strangeness of being separated from our colleagues comes certain advantages. Commutes are short: from bedroom to home office. Pets are ecstatic. Dress is…pretty much anything you like. Pandemic hairstyles and facial hair of all kinds have emerged. Admittedly, I’m not sure if this last is an advantage or merely a notable side-effect.
2020 has been a challenging year for much of the economy, but companies focused on the digital world often flourished. The year was particularly notable for YC because of a series of exits by YC companies. Machine Zone (W08) was acquired by AppLovin in May. Segment (S11) was acquired in a blockbuster $3.2 billion transaction by Twilio in October, and in the same month Stripe (S09) announced it would acquire Paystack (W16). In November, Mystery Science (S17) was acquired by Discovery Education, and in December both Airbnb (W09) and Doordash (S13) had impressive IPOs. Also in December, Coinbase (S12) filed its S-1. There are plenty of other exits within the YC community to celebrate, but I won’t list them all. Huge congratulations are due to the founders and employees and, indeed, all the stakeholders of those companies.
Many YC healthcare companies took on the challenge COVID represents by joining the search for a vaccine, a therapy, and more. These companies are listed on our COVID hub. Other YC founders and their startups have adapted extraordinarily well. They have transitioned to remote operations seamlessly. Of course, companies like Zapier (S12) and Gitlab (W15) had it easier since both companies have always been fully remote. All made changes to their product strategy as necessitated by the new market conditions. Many YC startups were already well positioned since their very purpose is to create a digital revolution. Companies like Doordash, Instacart (S12), and Stripe are thriving as more of life moves online — but other companies have had to shift their business. For example, Faire (W17), an online supply chain for boutiques and other small retailers, recognized an opportunity as in-person events were cancelled across the country. In response, they built an online trade show with shoppable livestreams. The event resulted in wins for both brands and retailers.
We determined early in the year that S20 would have to be an entirely virtual batch, and as I describe in more detail below, we completely re-engineered our program including Demo Day. The S20 batch is remarkable. The founders of the over 200 startups who joined the batch chose to build their companies during a pandemic and take advantage of an entirely remote batch. In fact, 2020 is YC’s 15th year of operation and we have now funded over 2,500 companies. Those 2,500 companies represent over 5,000 founders and over $200 billion in market value.
In fact, every part of YC had to evolve in order to respond to the pandemic. Here are some details as to how we changed how we work during 2020.
The batch program, around which YC was built, runs twice a year in the winter and in the summer. During this three month program, YC group partners work with startups to improve their chance of success. We push founders to evolve their ideas, find product market fit, develop their strategy and their story. They also learn how to pitch their startup to investors, customers, employees. The program culminates in Demo Day, a two-day event where the founders present their companies to investors. When the pandemic hit:
- We rethought how we connect with our founders and used technology to decrease the virtual distance between partners and founders. For example, YC group partners could chat with founders in real time, and they sent and received over 250,000 Slack messages.
- We prioritized and invested in building software that supported our founders, made scheduling office hours and events simpler and more efficient, and made connections between founders as easy as possible. YC group partners worked with companies in over 15 time zones and held 50% more individual and group office hours than in previous batches — 3600 hours in total.
- We also focused on documentation. It turns out that this is often an afterthought when most meetings are in person, but is a requirement when all sessions are remote. We’ve improved everything and put it in writing, and we are sure that these improvements will carry over to future batches and be helpful even when we return to in-person events.
The Winter 2020 Demo Day was entirely virtual, as was the entire Summer 2020 batch and Demo Day. In fact, the S20 Virtual Demo Day was extremely successful and out-performed many in-person Demo Days from years past with over 28,000 introductions made between investors and founders. With the changes described above, both demo days and the summer batch ran flawlessly.
The Admissions team leads the all-important process by which we select founders and startups to fund. Typically this process includes an online application, followed by in-person interviews in Mountain View and select locations around the world. In 2020, we:
- Switched to an all remote interview process and ran more interviews this year than any previous year.
- Reviewed more applications than any previous year, and according to our internal quality measures, apps were as good or better than previous batches.
- Added four new people to the Admissions team.
- Created systems for more robust startup tracking and early detection.
The result was an admissions process as efficient and well-managed as any during my ten years at YC — despite the huge increase in the number of applications over the past two years. Where the rubber meets the road here is the companies we fund and the success they find. That takes time, but every indication we have is that 2020 batches are looking very healthy.
Other YC programs responded in a variety of ways to the pandemic. Those programs include Startup School, our free online program on starting a company, Work at a Startup, which makes it simple for founders to find their next employee, the Series A Program, designed to help YC founders plan, prepare, and pitch their Series A, and YC Continuity, our investment fund dedicated to supporting founders as they scale their companies. In 2020, Startup School:
- Worked with an extraordinary 90,000 founders and aspiring founders.
- Relaunched Startup School as a continuous course to better help founders on a flexible schedule.
- Expanded Startup School to aspiring founders, complementing our existing offer for current founders. Over 30,000 people have already participated in the course.
In 2020, Work at a Startup:
- Ran the How to Hire Conference for W20 and S20 founders, where we covered topics like sourcing, recruiting, interviewing, closing, and more; we also met individually with 100+ founders.
- Ran six other hiring events (compared to one in 2019) that over 1000 candidates attended.
- Drove 240 hires to YC companies in 2020, more than two times the hires in 2019.
In 2020, the Series A Program:
- Has seen more than $650M raised over 61 rounds from 54 different investors, including a16z, Sequoia, Lightspeed, and Accel.
- Wrote, designed, and publicly released YC’s Guide to Raising a Series A, which has received over 120k unique views and has since been translated into Japanese, Russian, and Korean.
- Launched the first ever Scaling from A to B Program, a 5-week bootcamp to help our companies that raised Series A rounds learn best practices in this new phase of the company.
In 2020, YC Continuity:
- Saw their first growth-stage exit with Segment and first company IPO with DoorDash.
- Invested in Podium, Snapdocs, and Groww (our first major growth investment in India).
- Ran the first remote batch of the YC Growth Program, a ten-week dinner series for founders who are leading rapidly-growing companies approaching 50 employees, with founders participating from as far as Singapore and Lagos.
- Launched a wiki for growth-stage founders to learn and share best practices on things like hiring executives, building a great people team, and late-stage fundraising.
I’m proud of how YC responded to the shock of COVID-19, but of course, there has been so much more that happened this year. All of us at YC were deeply affected by George Floyd’s death and the BLM protests across America. We have begun a conversation within the YC organization and community about what we can do to help improve racial and social justice in America.
The first action we are taking as a community is to collect a list of organizations that are making a serious impact in this space. The YC community has come up with over 75 organizations and YC partners, staff, and alumni have made donations to every one of them.
We’re also thinking hard about our own ecosystem, and how to make a difference there. We have begun by working with a couple of organizations, ColorStack and CodePath, that are helping to develop computer science majors within underrepresented minorities and underserved populations.
Also, we launched pages that highlight the Black, Latinx, and women founders in our community. We hope this new directory becomes a resource for investors who are actively seeking out Black, Latinx, and women founders to support. And for prospective founders, we hope they discover founders who have experiences that reflect their own.
The COVID-19 pandemic of 2020 will go down in history as one of the great disasters to befall the planet. It has been a stress-filled and complicated year, and a tragedy for too many families. However, it has also been a year of learning and change. And I am proud of the way YC employees and founders have responded. YC and the YC community remains healthy and strong, and I wish the same for you all as 2020 comes to an end and we look forward optimistically to a new year.