Inside story: How Vancouver startup Matidor got into Y Combinator
How the two-year-old startup breached the virtual walls of the world's top Silicon Valley-based accelerator.
They say the third time's a charm. The saying rings true for Vancouver startup Matidor and its quest to breach the walls of the world’s most famous startup accelerator.
A month ago, co-founder Sean Huang excitedly announced his company’s acceptance into Y Combinator, the Silicon Valley-based seed investor that has backed companies like Airbnb, Dropbox, Zapier, DoorDash and Instacart. “It has been a long journey through trials and tribulations and here we are,” Huang wrote on LinkedIn, before sharing the news.
Last week, Matidor wrapped up its formal experience by taking part in YC’s legendary Demo Day. It’s a one slide, one-minute presentation—and then, if YC has done its job, multiple conversations with investors.
Matidor is building a platform for consultants and engineers to collaborate and keep track of projects and geospatial data in a single dashboard. Their product caters to professionals and companies in the energy and environmental services space, among other sectors. And while co-founders Huang and Vincent Lam told me their (virtual) experience at Y Combinator has been “transformative,” without the duo’s hustle and persistence over the past year, it may have never happened. It took them three attempts to get in. Here’s how they did it.
The pair first applied last summer for the ‘S20’ cohort. They had traction and a robust product and wanted to take advantage of an anomaly—YC’s first-ever fully remote batch. As the social, business and health spheres of our lives went online last year, so too did YC’s startup programming.
The YC acceptance process requires a series of interviews, and for those who progress, travel to San Francisco. “In the past, once you get accepted for an interview, you’d have to fly to San Francisco, and whether or not you get accepted, that's a different story. But then after you do get accepted into a program, you have to fly down, relocate to San Francisco for three months, or how much the program length is. And you basically have to figure out your own rent, figure out your office space,” Huang explained.
“The point of doing that is two fold,” Huang noted. “They wanted to bring companies into Silicon Valley where everything kind of happens, where they want to gravitate startup towards that ecosystem, so that there's more opportunity for funding or capital.” In addition, bringing founders to the Valley tests founder meddle and grit, he believes. “Because of the high rent and high cost of living in San Francisco, you as a startup, you’re literally lighting a fire under your butt for those three months to try to either make it or break it.”
YC’s summer 2020 cohort founders would arguably get things a bit easier. They had the chance to gain the benefits and funding of the accelerator—YC invests USD$125,000 into companies—while avoiding the added stress of travel and finding accommodations. So Huang and Lam applied. But they didn’t get in.
They did the traditional five-minute interview to start with one of YC's partners, the people who advise startups throughout the program. Questions surrounding product, revenue and traction usually come up. To put it kindly, Huang and Lam weren’t prepared. Huang puts it more explicitly: “I think back then we—excuse my language—just didn't really have a lot of shit together.” They had MOUs signed, some revenue, but the business wasn’t solid. The YC team liked the product, but they wanted to see more traction.
“We got a general rejection email saying, ‘We decided not to move you to the final interview. Please try again later,” Huang told me. “And then we applied again.”
Huang remembers the day like it was yesterday. He had flown to Toronto to help his fiancée move out of her apartment. It was hectic. It was raining. He had issues with the car rental. “It was an extremely bad day,” he recalls. But good news turned it around. No, it wasn’t a message from YC. It was from TechCrunch.
The message: Matidor had been selected for Startup Battlefield, Techcrunch’s early stage startup competition that features companies pitching to judges in front of a massive live audience.
The experience has startups go through an intense mini-accelerator for 8 weeks before each event. They then pitch, which is followed by an intense question and answer session with investors and entrepreneurs. Prominent companies that launched at Startup Battlefield include Trello, Mint and Dropbox.
Matidor entered, and two months later they nearly won the thing. As runner’s up, they missed out on the first place prize money—an equity-free check for $100,000—but they gained much more in other ways, such as attention and exposure to people who mattered. One of those people was Michael Seibel, who was a panel judge for Startup Battlefield. He was taking some time away from his day job, which is, if you can believe it, managing director at Y Combinator. So Matidor’s deep competition run put them back on Seibel’s, and by extension, YC’s radar.
“So right after TechCrunch, we're like, ‘You know what, let's give YC another shot.’ We sent in an application again and this time, lo and behold, we actually got to the full interview,” Huang explained.
But they still didn’t get in. Their customer acquisition game still wasn’t where it needed to be, he remembers.
They got back to work, building out the product and their processes—and then applied a third time. The third set of interviews went significantly different. Since Huang and Lam were already well acquainted with the YC team, their interactions this time around had more of a more “How’s it going?” feel than “Nice to meet you.”
“We had actually been in touch with the partners throughout since our second application,” Huang told me. “The interview went a bit different because it was more of a status update rather than seeing whether or not we're qualified, in a sense.”
After the interviews, applicants to YC get bad news, a rejection email, or they get good news in the form of a call at 7pm.
Huang and Lam got a phone call. Finally, Matidor was in.
What’s changed about the company between their first application and now? “Before YC, we were very distracted,” Lam explained. “You know, we were experimenting… like a lot of startups, right, like you wanted to kind of test and learn. And we were kind of trying to leverage partnerships and channel partners. Through the program, the [YC] partner was telling us that, ‘Hey, you guys are way too early on to deal with partners, right?’ Because I think the thing about dealing with partners is that you're kind of being lazy and trying to leverage them to do heavy lifting for you to get their clients in the door for you. But at the same time, you should just directly be talking to clients, right? Using the same amount of energy, why go through a third party where you can just be directly talking to your clients. So very early on, we've learned to focus on how to talk to customers, how do you essentially get them to keep using our product, and then just improving that interaction and increasing that frequency. Everything else is just noise.”
As part of helping founders optimize their growth, YC forces them to choose a core metric to focus on. Heading into YC, the Matidor team focused on the number of projects that were being managed on their product. But it turned out a word like “project” was not the language most investors would relate to.
“We started off with the number of projects because we were project management and software,” Lam shared. “But they were like, ‘It's gonna be hard to explain to the investor if you pick something that they're not familiar with.’”
The team ended up changing their core number to the well-known metric of annual recurring revenue, often shortened to ARR. But they’re also tracking the number of pilots that they’re able to engage in as a marker of interest and of future growth.
When asked what would have to happen to consider their experience a success, Huang and Lam said that simply having gotten in is enough.
“I think just getting into YC itself is already an achievement,” boasted Lam. “Being a part of that community for life is really very rewarding.”
“Going through the batch has been nothing short of transformative, to say the least,” Huang also shared online. “Vincent Lam and I went into the batch thinking we have many things figured out but nothing could be further from the truth.”
Matidor is currently taking part in the New Ventures BC Competition, for which the winners will be announced in a couple of weeks. The first time they took part they made the top 25. This year they’re already in the top 10. It wouldn’t be a stretch to say that they’re favourites to win this year’s top prize… stay tuned.
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