Out of curiosity, I reviewed the application of the most notable incubation firm, Ycombinator.com. Forbes ranked Ycombinator as the most successful incubation program in the U.S. http://www.forbes.com/sites/tomiogeron/2012/04/30/top-tech-incubators-as-ranked-by-forbes-y-combinator-tops-with-7-billion-in-value/. I wanted to see how a start-up applies for this program and what types of questions the application addresses throughout its form.
In reviewing YCombinator’s application form and Paul Graham’s introduction, “How To Apply to Y Combinator”, I was pleased to see that its application for its incubation program underscores each and every suggestion I have written on the writing of a business plan and preparing the start-up company for funding. Of course, the YCombinator application is a more concise format, but I noted that every question hits every element of a well drafted plan – from writing style to competitive analysis. And to emphasize the right responses, Ycombinator provides a real-life example of a successful application.
More to the point, Mr. Graham states that communication on paper is key when there are 100 applications to read every day! He even implies that there could be good businesses that did not make it through the application process. Writing style is therefore important. And I myself stated that a business plan executive summary must persuade the reader. Even Graham emphasizes “What is your company going to make?” as an example of a key message. Mr. Graham hones down immediately to that response.
What might seem peculiar to a new entrepreneur is more common in a business plan. A plan discusses in the beginning the management team, highlighting experience, schools, etc. Down to what the management team receives in compensation, an issue raised by my most recent blog, has to be inserted in the application. There is no question in the application that directly or indirectly refers to every element that must be included in a business plan.
Now, granted that a fully drafted business plan seems like a lot of work, I cannot overemphasize that the full draft of a plan prepares the entrepreneur to apply for such incubation programs such as YCombinator. As Mr. Graham relates, he reviews about 100 applications a day. There is no room for any mistake in such applications. A start-up only gets one chance to bat when a handful is selected every six months.