♞ What makes YCombinator members’ pitch decks so compelling?

What makes YCombinator members’ pitch decks so compelling?

YC companies, since 2005, have provided an annual return of 176%; this far exceeds the 9.52% from the S&P 500 in that same time period or the average of 15.15% by Venture Capitalists from 2010 to 2020.

For many founders, YCombinator is the holy grail of startup accelerators; according to the company’s stats, over 10,000 companies apply each year to join the program, with only 1.5-2% being accepted.

As someone who has worked in the early-stage tech startup space for nearly a decade, I wanted to dive deeper into what makes YCombinator companies unique. While there are advantages to having the YC network, such as mentorship, advice, philosophy, etc., For a company to succeed in the long term, it must fundamentally be better at something than its competitors. No amount of networking or mentorship would propel a company that the market was rejecting to unicorn status. 

With this perspective in mind, I analyzed 50+ pitch decks from YC companies (pre-seed and seed decks exclusively) to find what made these companies so unique. After just three decks, I had already seen a trend, and by the end of my analysis, it was evident what made these companies so unique. Let’s explore the secret that makes YCombinator members’ pitch decks compelling. 

The secret: A clear understanding of their customers and their pain points. 

Many companies build technologies for the sake of technological advancements, while others build solutions for problems they don’t fully understand. YC companies have a unique understanding of the market they are building for. 

Here are some examples: 

In this slide from Castle (YC W16), you can see a clear representation of the pain point for their customer. The company was building software to help automate property management.

Having seen pitch decks for similar companies, the “problem” slide often focuses on efficiency and pricing. In an attempt to make their markets bigger, founders often say that individual landlords or property management companies can use their software. Instead of following this path, Castle focused explicitly on individuals who purchase investment properties. They understood that when a doctor, lawyer, etc., purchases a real estate investment property, they are left in a difficult position; they must either hire a property management company or deal with all the problems and risks independently.

Their pitch, therefore, is targeted towards these individuals and creating a system for them that makes being a DIY landlord much more manageable by automating most of the tasks. It’s clear that they have a specific customer in mind and deeply understand the pain points of that customer.

Here is another example of a YC company, who solved a problem with which they were intimately familiar. They had specific pain points in mind that they were aiming to solve. Today, three years after exiting YC, they are building an all-in-one platform for managing hotels and vacation rentals, but at the pre-seed stage, they had a narrow focus that allowed them to connect with their target market.

Anja (YC W22) uses this slide in their deck to effectively communicate the problem people were facing and help investors relate to it. This slide also effectively shows the importance of preserving stem cells, communicating to investors why consumers will pay to preserve their child’s stem cells. In a single slide, the company, through an understanding of the pain point faced by their target customer, can communicate more to investors than most founders can throughout a 15+ page pitch deck.

Zestful (YC W17) uses this slide to detail a study they ran to demonstrate their understanding of their target market. They show a unique understanding of what employees want and how they can help employers save money by providing benefits instead of pay.

Overall, what makes YC companies unique is their focus on understanding their market, and the pain points their core consumers face. While other companies focus on opportunities, technologies, and features, these companies narrow their focus to solve real problems that real people face.

Are you looking to grow your business? Here is how I can help:

📢 Promote your startup to 2,000+ VCs including investors from a16z, YC, Techstars, Rarebreed, Sequoia and more.

📱 Book a Strategy Call to get 1:1 feedback on your pitch, pitch deck and/or fundraising strategy. (If you need general startup advice, then reply to this email, and I’ll let you know if/how I can help.)

📺 Access FundraiseOS, the ultimate fundraising course with video lessons and practical worksheets helping with everything from deciding how much to raise to understanding a term sheet.

💸 Promote your product or service to 100,000+ entrepreneurs.

🌐 Connect with me on LinkedIn or X (formerly Twitter) to get access to new content about startups, fundraising, venture capital and more every day.

Liam’s Exclusive Partner Discounts:

• Startups get six months free of Zendesk's industry-leading customer support solution that's scalable and easy to use.

• Get 20% off Keap's automated sales and marketing solutions, tailored to boost business growth with automation tools and coaching.

• Get 40% off Mobly's lead capture app that enriches data and pushes to your CRM instantly for their first year, worth up to $3,000 in savings.

Onwards and Upwards,

Liam Gill