It's interesting to me how a simple-seeming bit of technical infrastructure (a blog -> auction site for a specific vertical) can become a vector for delivering and monetizing an expert service like fashion authentication. There are lots of "little" expert services like that which aren't well served with the professional services model, but are maybe hugely valuable when plugged into some kind of e-commerce or online fulfillment service.
Also: is this the first demo day video that's ever been published by YC? Wow are those short. What does a "good" audience reaction look like? Can you get a read on the room while it happens?
I attended every demo day session (and the practice sessions before demo day) for about 2 years* and the real difference between the audiences depended on time of day. I think a "good" presentation had a lot of people writing things down, vs BlackBerry / iPhone reading.
Also, back when there were more sessions and they happened at YC HQ, the time of day played a big difference. The later sessions (I think they started at 4?) had people actually laughing at jokes, whereas the earlier sessions some of the exact same jokes, seemingly delivered the exact same way missed really badly. (I remember people actually cheering for Hipmunk's presentation. It felt like a home run.)
I don't know what it meant for follow up, but two notable presentations at least generated some memorable notes that I spied over people's shoulders. Jason Shen from Ridejoy did a cartwheel on the way in (he's a former collegiate gymnast) and I saw a lot of people drawing stick figures cartwheeling. Also, during SiftScience's presentation, one of the founders punctuated his presentation by saying something to the effect of "We're going to stop people from fucking with our customers." A lot of people wrote down "fuck" next to their name :)
I don't know what happened to most of the companies post demo day with their applicable raises.
*: I did behind the scenes work with YC as the audio / video guy for a bit, before they went to the CH museum.
Searching for "ycombinator demo day presentation" on YouTube returns a couple other YC Demo Day pitches.
I wasn't the one giving Lollipuff's pitch (it was our CEO, Fei, who has lots of experience from speech competitions). And yet standing just off stage, I was too nervous to judge audience reaction. Perhaps the YC partners standing in / around the audience would be better calibrated to make that determination?
I wonder how the YC guys feel about the abundance of "how to get accepted to YC" articles. Just as you can prepare for the SAT you can now prepare for the YC tests -- there are a lot of examples of accepted applications, videos, thoughts from founders, etc. just like this very submission. The point is, there is probably less differentiation in the new pool of applicants in terms of their submission applications which makes YC's job more difficult. My theory is that now they're going to place more importantance on filters like past work experience (I've noticed a considerable amount of acceptees having ex-Googlers in their teams) and academic pedigree (I've noticed a high amount of acceptees having big-name school people in their teams).
Such articles can be good. It depends on their focus. It wouldn't be good if people wrote articles talking about how to trick us. But if they tell applicants how to avoid mistakes that will make it harder for us to appreciate them, that's great.
I share your concerns -- I don't want YC to get inundated with masquerading applications.
However, while you can prepare for the SAT, those scores alone are insufficient to guarantee you admission into top universities. You need something unique. In the case of YC, this will be either team, traction, or idea. It's pretty hard to fake a history of making (or pedigree), numbers, and wild ideas.
Although I can't speak for YC, I can provide some info from the applicant side, specifically those outside the existing community.As an Aussie putting in an application for W13 we're geographically and somewhat ideologically separated.
We've spent the last 3 months getting to beta and reading these articles is what's spurred our interest to apply. For those outside the immediate community, it's a great bridge, plus what zeckalpha said!
I doubt any of these articles make or break an application. They're just good publicity, for both YC (for appearing difficult to get in) and the author(s).
Outside the Bay Area, few people know about YC. An article in 2006 by pg made me plan for 3 years to finally move to SF in 2009 (I had googled "how to start a company"). There are a lot of ambitious people out there that don't even realize people here compete for not having a job. Articles like this can change lives if they can raise that awareness through the right channels. Thanks for taking the time to publish it.
Having no qualifications whatsoever about such things, I'd fund them. To me, this application (including video) make Lollipuff's success seem inevitable. Everything is stated just so matter-of-factly, but without bravado. They've found a market with customers, and have a product that appears to serve their needs, and to an outsider, it appears that the business will happen whether or not YC (or Silicon Valley at large) gets on board.
I don't know if the YC reviewer(s) for Lollipuff's application is hanging around, but it'd be interesting to hear if their reaction matches mine.
Agreed. Success breeds success. This is an attempt to pivot from an existing ad-hoc business into an accelerated & more formalized business. There are customers, there is money coming in, the brand (CEO) is known in the field.
IMO, the only question is if it can grow beyond the existing niche, and how far it can grow.
OT: Just a heads up to the lollipuff team if you're around, the meet the co-founders blog you link to in the OP shows up like this for me in FF 23 on Windows 7. http://i.imgur.com/db4Lr48.png
Great insight, though! I really like lollipuffs concept, I would also have funded you guys; I love it when the perfect solution for a pain point takes off.
Lollipuff was in the Winter 2013 batch. We also released our YC application materials -- see the HN link.
We recently helped with a VentureBeat article about "writing a winning YC application" [1]... I personally believe the most useful thing (besides "being really good already") is to look at other successful applications. Most of the applications found online are from already-successful companies (eg. DropBox and Reddit), so we figured a more-recent, rising company should share theirs too. This might be useful to folks who aren't doing "pure tech" startups -- as Lollipuff is a women's fashion company.
Not trying to be a downer, but how are you an interesting company to invest in when your entire opportunity, if you take 100% of the market, is $5M/year?
Not trying to be even more of a downer, but top-down market sizing is almost always off by significant orders of magnitude.
It's great to say that the total size of a market is, on paper, $77 million (or $100 billion). But not only does this fail to reveal how much of it is realistically addressable, the overall number itself is more easily overestimated than underestimated.
I'm not saying that Lollipuff is a bad idea, or can't be successful, but one thing to note is that a lot of individuals who buy fake luxury goods do so knowingly.[1] There are various reasons for this. For many, the real product is too expensive. For others, a counterfeit purchase is based on the recognition that an average person can't tell a decent knock-off from an authentic item (so why pay full price to impress friends and passers-by if you don't need to?). Some opt to buy counterfeit items for "everyday use." Net-net: a not insignificant number of the counterfeit sales are intentional transactions.
Lollipuff's real market consists of women who want to purchase authentic (used?) luxury items online and who can afford them and who are sufficiently concerned about counterfeits and who seek out alternative purchasing channels to address this concern.
Is this a large enough market, and will Lollipuff be able to capture enough of it to have a viable business? I don't know, but I do know that taking the total value of online resales for certain product categories and brands and using those to size the market will produce market size figures that are way too large to be considered realistic.
Fantastic comment! Allow me to weigh in with two thoughts...
(1) Our numbers are based on authentic designer resale. We don't have anything against people knowingly buying knockoffs. Better still, there's an entire new industry in fashion for building "clone" items under a new brand. The real problem arises when people unknowingly get duped. It's like buying a "Aple" computer that epicly fails in 6 months of use.
(2) The irony of designer resale is that you can get a pre-owned, lightly used designer item for approximately the same price as an off brand... and yet the quality will be better and it will last longer. Our CEO is notoriously frugal -- that's actually how she got started in the field.
Our MVP launched with just 3 of the hottest brands, which had that level of transactions on eBay alone. Across all women's fashion brands and all designer resale, there are roughly $100B in transactions per year (see the Demo Day video at the link). Start small and grow outward. ;)
Is there a reason you want/need to be the commerce platform on which these resale transactions take place?
Two-sided markets are generally more difficult to crack, and displacing eBay in particular is going to be challenging. I'd expect your cost of customer acquisition to grow quite significantly once you've tapped out the low hanging fruit.
If your core competency is your ability to detect counterfeits, however, maybe there's an opportunity to convince legitimate vendors to pay you to certify that their items are authentic, something that they then promote to prospective customers in all of their sales channels. You'd probably need to offer a buyer money-back guarantee for this model to be viable, but if you did this, you could try tying your pricing to the vendor's sales price (i.e. it costs more to certify a handbag being resold for $750 than a dress being resold for $250).
If you're wedded to the idea of running your own commerce platform, you could provide vendors that certify their goods with you a free listing on your site, and reimburse the certification fee from the sales commission if their product sells through you. By getting listings this way, you can avoid some of the questions you're bound to be asked if your only proposition is that you're an eBay competitor (think "How many sales do you generate a month?"). And you avoid having to grow your buyer base to make money.
I'm really surprised by the "auction" foundation. That seems like a really dated internet fad, at this point.
I built and ran a large (not eBay large, but 100k+ members and maybe $6m in transactions) niche auction site and community for about a dozen years and I recognized that interest in the whole "auction" thing was dying out about the same time eBay probably did. Only difference is eBay had the resources and interest in trying to pivot (something they're still trying to do) and I was ready to move on to something else entirely.
If you can still find just the right niche, there's probably an avenue, but for the most part, I think there's an uphill challenge against the bias of most users against auctions (what with so many other cheap outlets that have usurped everything short of collectables).
Will be really curious to see how this plays out, in and after 2013.
It is great to see a YC fashion/e-commerce company getting traction. High fashion authentication makes a ton of sense, and is definitely a valuable service. The sealed auction model is interesting. It is a good model, but misses on all the engagement that real bidding offers. I think it is a good fit for them. Standard auctions are full of tasteless bullshit such as sniping.
Standard auctions offer the best available price. It would be interesting to see if they A/B test vickrey auctions where the price paid is the second highest bid. That prevents buyer's remorse, and could generate higher prices as people would bid higher without worrying about doing something "stupid".
I'm surprised to notice (perhaps it's always been there) that the YC app asks for facebook and twitter ids. Are these just additional contact mechanisms, or used for anything more?
Also: is this the first demo day video that's ever been published by YC? Wow are those short. What does a "good" audience reaction look like? Can you get a read on the room while it happens?