Adam Smith

Courage to Change Direction, Letters to Graduating YC Companies, Letter 1

July, 2007

(The latest group of Y Combinator companies graduate in two weeks. There are some thoughts I’d like to share with them. This is the first of a few letters.)

Dear YC Graduate,

First, I hope you’re excited. I remember the rush of the super early days. Wow, what a rush!

It’s important for you to focus on your demo for the next 10 days before demo day. Focus focus focus, and you’ll do great.

Hong Kong at night After demo day, though, I think you should consider where you’re taking the company in terms of its market/product/positioning. You applied to YC with a promising technology and a vision for the future. After working on the company for three months, now would be a good time to do some introspection.

We worked on a product called Xobni Analytics over the YC summer. It was a great product, but not the right product for our market. We scrapped [1] that product and are now working on something much better.

The YC company that became Scribd was working on something totally different over the summer. They realized it wasn’t going to pan out and had the guts to change direction completely.

Do you need a direction change, or are you already on the right vector?

Well, do you still believe that your market is large and addressable? Does your product solve a real pain? Does it create lots of tangible value? [2]

It's worth plowing through on your product over the summer without too much thought to the question Is this a $300M dollar company? But the time has come to ask yourself such questions.

This letter boils down to: Have the courage to say We need to change something. We were wrong about this or that. Be agile; don’t be stubborn.


[1] I spoke more about this in the 'Idea Due Diligence' paragraph of this post.
[2] All of these questions equal, ironically: Is it something people want?

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