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D Murphy: One of them was a huge venue back in Atlantic City They started using Jackie s software, and then they wanted to expand it to their whole operation So there were so many things that we did to customize it for them that it s just a separate program Smolin: So then you did another product instead of J Murphy: As if that wasn t painful enough Smolin: instead of laying down until the feeling passed, you have a product called Show Producer And is this a modification of the Wedding Management, or is it based on it, or is it a brand new, fresh thing, what is it J Murphy: It s the bastard child, is what it is.

Livingston: I help them get set up legally The paperwork can be intimidating to anyone who hasn t done it before, but it s really important to be done right Like being sure your company owns all of its IP, or that you have vesting set up so your cofounder can t quit 6 months into things and walk away with 30 percent of the company Most hackers don t like to worry about this stuff, but it can cause real trouble later if it s not dealt with properly My partners begin working with them immediately on their idea It s amazing how much the ideas evolve from the time of the interview to Demo Day That s what we spend the most time on In some cases, we even encourage them to ditch the idea and start over.

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This is hard given the short amount of time before Demo Day, but it has definitely been done successfully The most formal parts of Y Combinator besides Demo Day are the weekly dinners Each Tuesday, all the founders come to our office for dinner, and there s a guest speaker We bring in experts from all parts of the startup world to share advice and offer feedback Talks are always off the record, so the speakers are very candid We ve heard a lot of stories that have never been published We ve found the dinners are really good for the founders morale Paul used to cook the dinners himself Usually bean-type dishes, so it s always very healthy Because dinners are the same day every week, they end up being a sort of milestone.

Founders say it gives them an incentive to get something concrete done a new feature or something People bring their computers to show what they built over the week This all leads up to the most important day, Demo Day This is when the startups present to investors They each have about 7 minutes, so they have to be good A week before Demo Day, we have Rehearsal Day, which is basically a dress rehearsal for the next week We give them feedback on the content of their presentations as well as the delivery Hackers aren t usually the best when it comes to presentation skills, but we work really hard with them to make sure they are impressive I am always so proud of how much effort the founders put.

in. You can tell they care a lot. As they should, since it s their introduction to pretty much the whole investment community. After Demo Day, we work with the founders to help them get more funding. It s a tricky thing to do, and the founders need a lot of advice in this area. Even though we stop the dinners, our relationship never stops with the founders. This is why we re so busy even in the off season between cycles. Is there one idea that s the key to Y Combinator If a VC asked, What s your secret sauce what would you say

Actually what happened was I had wedding planners that called me and said, You know, I m trying to use Wedding Management to help me plan a bridal show A lot of them live in little towns, and when they do bridal shows, they bring in the vendors that they like to use, and then everybody wins The brides come in, and they select vendors So they have these little bridal shows And they were trying to use Wedding Management because it had all their vendor lists in it to do these bridal shows So we said, OK, fine So we started working with someone who does a great big bridal show We came up with Show Producer So if they have both software packages, they can use one vendor list, or they can keep them separate Smolin: So they share a database J.

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