The Definitive Y Combinator Demo Day Debrief

“ for small businesses.” “Foursquare for sports games.” “Facebook without Facebook.” Comparing your idea to some existing and fabulously successful service, then saying why it will be even better, seems to be one of the modern formulas for pitching a startup—and it was on prominent display yesterday at Y Combinator‘s Demo Day, the culminating event in the Mountain View, CA-based venture incubator’s summer session.

Such comparisons may be convenient and arresting. The problem is they often mask what makes a startup truly interesting. In the last few weeks I’ve had the opportunity to spend time with the founders of eight different Y Combinator startups, and I’ve learned that each one has a unique story and a special passion for their chosen product or service. I’ve been writing up what I’ve learned in an ongoing series of in-depth profiles examining where each founding team got its business idea and what makes them believe in it.

At the same time, though, I’ve been looking forward to Demo Day, where each company is forced to boil down their story and their passion into a two-and-a-half minute pitch to an invitation-only group of venture and angel investors and journalists. It makes for an intense afternoon—made more exhausting this time around by yesterday’s sweltering heat in Silicon Valley, by the faltering air conditioning system at Y Combinator’s warehouse on Pioneer Way, and by the fact that this summer’s class, with 36 startups, is the largest cohort ever to pass through the program.

“YC S10” may also be the most successful Y Combinator class ever, at least if you measure in terms of early revenues and seed-round support from angel investors. Several of the companies are already profitable, and many have already lined up angel support beyond the basic Y Combinator investment (roughly $11,000 plus $3,000 per founder). The name-dropping also was rife yesterday, with Silicon Valley celebrities like Paul Buchheit, Mitch Kapor, Dave McClure, Keith Rabois, and Naval Ravikant mentioned over and over as early investors as the pitches progressed. (There were some real celebrities in attendance, too—Ashton Kutcher and his wife Demi Moore, apparently there trawling for startups to invest in, just like everyone else.)

“I was just floored by the quality,” Rich Aberman, co-founder of San Francisco-based group payment startup WePay, told me after attending a practice pitch session at Y Combinator on Monday. WePay was part of the summer 2009 class at Y Combinator. “A lot of these companies are building real, sustainable businesses,” Aberman says. “In our batch, we had some good companies, but nothing compared to the companies now.”

Of the three dozen companies in this summer’s class of Y Combinator companies, 22 have launched their services publicly, and 14 are still in stealth mode. Of those 14, one didn’t present at all yesterday, and the other 13 gave off-the-record presentations, so I can’t even tell you their names. But I can tell you that they’re just as interesting as the companies described below. I’m looking forward to covering them as they emerge into the open.

Below are summaries of the on-the-record presentations, based on my Demo Day notes. For the companies I’ve already profiled in depth, I provide briefer descriptions, along with links to the published articles.

Jonathan Good, Brett Huneycutt, Rudy Adler

Every year, Americans spend $30 billion on funerals and other arrangements for the deceased. Placing a single obituary in the San Francisco Chronicle costs $1,300. 1000Memories hopes to tap into some of that consumer spending by offering a freemium online site where people can create “memory pages” in honor of their lost loved ones. Basic online memorials are free, but the company may eventually charge for services such as custom domain names, design templates, and extra storage. For the full story behind the startup, see my August 16 profile, “1000Memories Confronts Death by Celebrating Lives.”

Antonio Garcia-Martinez, Matthew McEachen, Argyris Zimnis

AdGrok wants to make it easier for average mortals to manage their search engine marketing campaigns. For most people, search engine marketing means one thing—bidding to place keyword-based text ads on search result pages through Google AdWords. So AdGrok, which launched a private beta test two weeks ago, has started out with an expandable browser sidebar, the “GrokBar,” that lets people manage their Google AdWords campaigns all in one place. The sidebar shows how much traffic each keyword is bringing to the user’s site, and lets users add or remove keywords, edit their ads, or change their bids. “You’ll never log into AdWords again,” says founder Antonio Garcia-Martinez. Almost 750 companies have signed up to use the service since its launch, including quite a few advertising agencies, Garcia-Martinez says.

Steve Sprang, Kurt Revis

Brushes is unusual for a Y Combinator company in that it had a widely known product before it even joined the incubator. In fact, Brushes is the best selling art application in the iTunes App Store, and paintings produced using the app have appeared on covers of The New Yorker magazine. The company has over 250,000 paid users, and holds the record for the most profitable Y Combinator startup as of its cohort’s Demo Day. Now the company wants to grow into “the Adobe of touch computing,” in the words of co-founder and Apple veteran Steve Sprang, who gained fame for his onstage appearance with Steve Jobs at the iPad launch event on January 27. “The mouse really shook up user interfaces thirty years ago, and multitouch is creating a similar shakeup now,” Sprang said. “There will be new opportunities and new winners.”

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Wade Roush is a freelance science and technology journalist and the producer and host of the podcast Soonish. Follow @soonishpodcast

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5 responses to “The Definitive Y Combinator Demo Day Debrief”

  1. Your ballsy article title made me read this and simultaneously question did you earn the title? Definitive? Yep. You did. I felt llike I was almost there and your base of knowledge claimed the day.