[INTERVIEW] Y Combinator scouts next Memebox in Korea
[THE INVESTOR] Y Combinator, the Silicon Valley-based accelerator behind Dropbox and Airbnb, is out to lure more promising Korean startups to hop on its prestigious nurturing program, according to its partners.
“We don’t have enough Koreans on the program,” Eric Migicovsky, partner at YC told The Investor in an interview earlier this week. “We are excited about getting more Korean startups in YC and we are making ourselves available by being here.”
Y Combinator partners Eric Migicovsky (left) and Tim Brady.
Migicovsky and another YC partner Tim Brady were in Korea to meet with startups that are interested in the accelerator during the networking event held at the office of Memebox, the first YC-backed Korean startup.
“People generally associate going to YC with going global. And while that’s true, YC can also help tremendously even if you are just focused on your own country’s market,” said Brady. “A lot of advice we give is applicable to all startups that can be used and applied in your own market.”
YC is an early stage accelerator that has invested in more than 1,900 startups since initiation in 2005, with the combined market value of all funded firms exceeding US$100 billion. It selects two batches of startups every year for its flagship program, where firms receive seed money of US$150,000 and are put through an intensive training process for three months, in exchange for 7 percent stake in the startup.
Five Korea-based startups have graduated the program, including beauty startup Memebox, B2B chat API provider SendBird, photo, video app Lollicam operator SeersLab, home cleaning startup Miso and service marketplace Soomgo.
“Memebox is a great example,” said Migicovsky, who found smartwatch startup Pebble in 2012 that was later sold to Fitbit in 2016. “They were a Korean brand and their founders were Korean. They came to YC and then later started the US office and expanded to other countries. Now, sales from the US operations account for a lot of their revenue.”
“Starting a company is hard enough. So you want to have as many advantages as possible, and take the easy path. And YC is that easy path. Our knowledge, advice and best practices are kind of like a cheat code for startups.”
YC’s strength, according to the partners, is its 13 years of experience that is evolving and extensive network made up of most prolific startups under its belt.
“It’s like machine learning,” said Migicovsky.“You need to have a larger data set to be better at something and we have the largest data set possible with combined knowledge of over 13 years.”
“We also have the attention of investors,” said Brady. “We probably have the best group of investors coming to our Demoday and interested in our companies. It makes it easier for startups to raise money so they can get back to building the companies more quickly.”
Then how does YC pick startups that are still in the nascent stage to nurture them to become the next tech darlings?
It’s all about people, emphasized Brady, who was the first employee of Yahoo and was the chief product officer for eight years. “Ideas are important and we look for teams with good ideas, but we are more interested in the teams than the ideas,” he said. “Largely because we know no matter how good an idea is it’s not probably 100 percent right when the team first starts off. So they are going to need to alter it or evolve. And the ability to evolve is really based on how good the team is.”
And only one of the 12 partners who vet the startups has to say yes for startups to get a green light for the program. This gives authority to the partners -- who have all started a company at some point -- to bring in a diverse pool of startups. The latest batch, which was completed in August, invited 140 companies from 19 countries.
Now, YC is going after Chinese startups, to hunt the next Alibaba, Tencent and Pinduoduo.
It launched YC China, the first overseas office outside the US, tapping Qi Lu, a tech veteran who most recently served as Baidu’s COO. It will start investing in companies beginning next year.
“China has over the last 10 years demonstrated a tremendous ability to create value, both in terms of new ideas as well as new companies,” said Migicovsky, who worked to establish the branch. “But what we realized is that YC needs to have a physical presence there.”
By Ahn Sung-mi (firstname.lastname@example.org)