Y Combinator Founders' Playbook: 12 Videos for Startup Success!
- Jasaro.in
- Sep 26
- 14 min read
Updated: Sep 27
As a first-time founder, when you’re building a startup, it often feels like you’re flying blind. You’re able to find the right idea, even build the right product, and then ... stuck. Let's say you're also able to convince people/companies to buy & use it, or if you’re lucky, also able to grow revenues, fast ... but then unable to raise funding for your startup to scale up. Only, if you had a "secret playbook" to guide you at every step ... Well, now you've it.
Y Combinator's Playbook for Founders.
Who better than Y Combinator, as a global, most sought after accelerator, who’ve guided more than 5,000 startups through a unique process, thereby creating over $800 billion in value. The framework (playbook) they often share with their portfolio founders is hard-earned, battle-tested, and remarkably practical guide for startup success.
In this article, I’ve curated the top 12 Y Combinator videos for early-stage founders to learn: how to build, get users, achieve product-market fit, scale up fast, and raise millions in funding. This is the exact framework they use in the accelerator programs to help their YC startups to go from 0 to 1, and then from 1 to 10. Link to YC videos is in the headers below.
AI has changed what’s possible. This video on 'startup ideas' in the AI era shows how to use emerging models to uncover the opportunities that no one’s tackling yet. The key is not to chase hype but to look for pain points AI can solve in ways that weren’t feasible 5 years ago. If you’re struggling with “what do I build?”, this is where to start.
Most founders build too much, too soon.
Building an MVP needs a different approach: start with a single painful problem, then strip your solution down to its simplest testable form.
Start with a core problem validation: Focus on solving one specific problem really well rather than building multiple features.
Build the smallest (or least) testable MVP: Include only essential features needed to test your core hypothesis with real users.
Prioritize learning over perfection: Design experiments to gather user feedback and validate assumptions quickly.
Use existing tools and solutions: Leverage existing tools (no-code platforms, APIs), and services to minimize development time (move fast.)
Measure and iterate rapidly: Define key metrics upfront and iterate quickly - be prepared to pivot based on user feedback and data.
Your MVP’s purpose isn’t to impress the crowd, it’s to test or validate your idea.
Paul Graham once said, “Make something, many people want.”
Customer Discovery & Validation: Talk to users relentlessly to understand their pain - conduct extensive interviews with potential customers to understand their pain points and validate that your product/solution addresses a real, urgent problem.
Tracking Key Metrics: Track the user retention, usage frequency, and organic adoption these metrics indicate if the customers find genuine value proposition.
The "40% Test": Survey your users/customers to see if at least 40% would be "very disappointed," if fewer than 40% would be “very disappointed” if you disappeared, you don’t have PMF yet.
Iterating based on Feedback: Continuously refine your product/solution based on customer feedback until you've achieved strong traction (MRR/ARR).
Identifying Your Ideal Customer Profile: Narrow down your ideal customer profile and focus on them to drive sustainable growth.
Until you've Product-Market Fit (PMF), nothing else matters.
Revenue isn’t a side effect, it’s proof you’re creating value.
Business Model Validation: Before setting prices, startups must validate their core value proposition and whether the customers are willing to pay for the solution. This involves understanding customer pain points deeply and confirming that your product creates enough value to justify payment. Don’t optimize features, until you generate traction.
Value-Based Pricing Over Cost-Plus: Startups must price their product/services based on the value they deliver to customers rather than simply marking up their costs. This means understanding how much money or time your product/service saves for the customers, or customers' problems it solves, and then pricing is done accordingly.
Freemium vs. Premium Strategy (Ideal): Choose between offering a free tier to drive adoption (freemium) or charging from day one (premium). Freemium works well for products with low marginal costs and network effects, while premium is better for high-value, specialized solutions with clear RoI.
Pricing Experimentation and Iteration: Treat pricing as an experiment, not a one-time decision. Use A/B testing, customer interviews, and cohort analysis to continuously optimize pricing based on customer behavior, willingness to pay, and retention metrics.
Unit Economics and Scalability: Ensure your business model has positive unit economics, where CLV > CAC (details below). This foundation is critical for sustainable growth and attracting investors.
Great startups don’t just acquire users, they acquire paying users sustainably.
If you’re not measuring, you’re guessing. Metrics are essential, and without them a startup is simply directionless. You need them to know what’s working and what isn’t.
Focus on Leading Metrics: E.g. Customer usage, onboarding success, leading ones help predict future growth, not just lagging ones like revenue.
Track Retention and Churn Religiously: Acquiring customers is costly, so how many you keep (and how often they churn) deeply impacts scaling.
Unit Economics Matter: Things like Customer Acquisition Cost (CAC) vs Customer Lifetime Value (LTV), gross margin etc. to ensure each new customer is adding value rather than just cost.
Focus Early: On growth and product-market fit; later on efficiency, profitability, and operating leverage.
Key Principles:
Start Small: Stick to 4–5 core metrics initially (rather than dozens), so you don’t get overwhelmed or distracted.
Consistent Definitions: Make sure everyone on the team agrees what each metric means, and measure them the same way over time. Changing definitions/indicators midstream can hide whether you're truly improving.
Avoid Vanity Metrics that don’t reflect real progress: Big numbers that look good but don’t correlate with business health (e.g. gross merchandise value, impression counts, “unique users” without revenue or retention) can mislead.
Your numbers tell the story of your company, make sure you’re reading the right ones.
The fastest way to fail (a startup) is to stop talking to customers.
Talk to users early and often: The best founders keep a direct connection with users from very early on (even before there’s a product) and throughout the startup’s life. This helps them learn what problems are real and whether their assumptions match reality.
Choose the right people to talk to: Don’t limit yourself to acquaintances, use your network, LinkedIn, forums, Slack groups, in-person meetups, etc. The goal is to reach people who are likely experiencing the problem you want to solve.
Don’t pitch, listen to problems: Focus on understanding the problem, not pitching your solution. When interviewing, ask about what users are doing now, what is hard, how often they encounter the problems, etc., rather than asking if they'd use your product. Avoid talking about your idea too early, as that biases answers.
Ask specific, open-ended questions and follow up: Good questions include: “What is the hardest part about X?”, “How do you do this now?”, “When was the last time you faced this issue?”, etc. Also, follow-up questions are crucial to dig into motivations and details.
Turn findings into hypotheses and test/validate with MVP / prototype: After talking to users, collect your notes, look for patterns, form hypotheses about what problem(s) are worth solving. Build something minimal (an MVP or prototype), show it to users, observe how they interact with it, and iterate based on feedback.
Startups live or die based on how deeply founders understand their users.
Your first 10 customers will teach you more than any spreadsheet.
a. Do Things that Don’t Scale.
In the initial stages, you need to do manual, hands-on things to get your first customers, recruiting them, talking to them, helping them learn your product.
Don’t assume that a good product or code alone will make people come; founders must actively reach out and engage.
Founders need to understand their customers deeply: what problems they have, what motivates them, etc. This is essential for building the right product and for convincing people to buy.
Don’t outsource your early sales efforts; until you’ve done it yourself, you won’t know what “good” sales looks like.
c. Build and Use a Simple Sales Funnel.
Steps: Make a list of potential customers → List / Reach out (email/LinkedIn etc) → Run demos or meetings → Talk pricing → Close → Onboard.
Track everything with simple tools (spreadsheet or basic CRM), know how many prospects respond, how many convert to demos, how many demos convert to paying customers. This helps you forecast and improve.
d. Charge Early (if no one will pay, you’re not solving a real problem.)
Charging (or at least having customers pay) signals real value. If no one will pay, maybe what you’re offering doesn’t solve enough of a problem.
Use options like money-back guarantees, opt-out terms, rather than always free trials especially in B2B. And increase price until customers push back but still purchase, that helps you find the “right” price.
e. Work Backwards from Goals & Embrace the Numbers Game.
Growth doesn’t start with ads. It starts with hustle.
To reach the goal (say, 10 paying customers), you need to estimate drop-off at each stage of the funnel, then plan how many prospects to reach out to, how many demos, etc. Without this, founders misjudge how much outreach or work is needed.
Also, don’t get discouraged if early outreach gives few responses. Many people are not early adopters; you must find and prioritize the ones who are.
Measuring Product-Market Fit (PMF): One of the first things a startup needs to do is confirm that it has PMF, that customers genuinely want what it’s offering. This is often measured through metrics like retention, repeat usage, and willingness to pay. Confirm PMF before chasing growth - Without PMF, scaling growth becomes ineffective. And, once you’ve found PMF, you need to scale.
Choosing the Right Growth Channel: Not every growth channel works for every startup. Experiment with different channels, find channels where your product can acquire customers efficiently. Picking a channel (viral loops, paid marketing, partnerships, etc.) that aligns with your product and target audience is crucial.
Understanding Key Metrics: Track key metrics like Customer Acquisition Cost (CAC), Lifetime Value (LTV), Retention Rate, Churn, Activation, etc. These metrics help you to identify what levers to pull, what to optimize, and when scaling is sustainable.
Run Constant Tests & Refine/Reiterate: Growth doesn’t come from one big step but from continuous experiments. Test hypotheses, try small changes, measure results, and learn what works. This allows bootstrapping growth in a way that is cost-efficient and adaptive.
Scale Only When Core Levers are Working: You should not pour resources into growth (e.g. heavy marketing spend) until the core product works well: you have satisfied users, retention is good, and you understand your unit economics. Scaling prematurely can lead to waste or chasing vanity metrics.
Premature scaling kills more startups than slow growth.
9. How to Sell?
a. Founders Must Own Sales Early:
Founders have unique advantages, passion for the product, deep understanding of the problem/market.
Initially, don’t hire any sales team, one of the founders should own the sales process.
Block off time weekly for prospecting, conversations, and closing, treat sales as a core function, not an afterthought.
b. Build & Track a Simple Sales Funnel: Prospect → Conversation → Close → Revenue
Prospecting means finding the early adopters/innovators (only ~2.5% of companies will try something from an unproven startup).
Conversations are about listening more than talking (70% listening / 30% talking).
Closing involves having agreement templates ready, avoiding drawn-out negotiations over small details, and being cautious of “just one more feature” demands.
Create a simple spreadsheet or CRM to track: Prospects (who you’ve reached out to), Conversations (calls/meetings booked), Opportunities (in negotiation/trial), Closed Won/Lost.
Aim for consistent progress through each stage, not random wins.
b1. Prospect Systematically - Prospecting tactics matter: To fill the top of the funnel, we emphasize 3 main channels:
a. Your personal network.
b. Attending/conferencing (focused/specialized ones) and pre-reaching out to people who will attend.
c. Cold emails (but done well, personalized, brief, relevant).
➡ Write down your top 50 dream customers, start with warm intros via your network.
➡ Pick 1–2 industry conferences and pre-book meetings before attending.
➡ Draft 3–5 personalized cold email templates (short, tailored, outcome-focused).
b2. Conversations: Great salespeople are great listeners - listen more than you talk, don’t pitch. Listening, persistence, and knowing when to push forward or cut losses:
Ask open- ended questions, understand the buyer’s problems, their current solution, what “ideal” looks like.
Persistence in following up is crucial. Deals often take time and multiple steps. It’s not rude to follow up, often necessary.
Also, move quickly to get a “yes or no”, if someone keeps asking for just one more thing (feature etc.), it may be a stall or polite pass. Decide whether to accommodate conditionally or move on.
➡ Prepare 5–10 open-ended questions to ask prospects (e.g., “What’s the hardest part about X today?”).
➡ Record objections and patterns, this helps refine your pitch and product roadmap.
c. Close with Clarity and Confidence - Structuring closing and pricing wisely:
Have agreement templates ready. Don’t let the contract negotiation drag over minor points.
Be wary of free trials; they may reduce commitment. Better options include annual contracts with a trial or cancellation period.
Price with confidence initially (guess), then adjust based on feedback. Don’t undersell.
➡ Draft a lightweight, standard agreement template to use with all customers.
➡ Decide upfront: Do you want to offer annual pricing, pilot programs, or limited-time discounts?
➡ Push for clear yes/no decisions, don’t let deals linger indefinitely.
Review and Adjust Weekly:
Track metrics like # of new leads contacted, # of meetings booked, # of closes.
Revisit pricing and pitch regularly as you learn.
The goal is to land your first 10–20 paying customers before even thinking about hiring a sales team. Once you’ve proven repeatable sales, you can think about hiring a sales team.
Fundraising isn’t just about getting money, it’s about protecting your equity dilution (cap table).
A SAFE (Simple Agreement for Future Equity) is an instrument by which an investor gives money now, and promises are made to grant shares in the future, typically when there is a “priced equity round” or other triggering event (e.g. a sale or IPO).
Valuation Cap & Discounts: SAFEs typically include a valuation cap and/or a discount to incentivize early investors. The cap limits the valuation at which the SAFE converts (so the SAFE-holder gets better terms if the company’s valuation rises). Sometimes there’s a discount so the SAFE converts shares at a lower price than what new investors pay in the priced round.
Dilution & Cap Table Implications: Founders need to understand how issuing SAFEs will affect their cap table and ownership, especially after conversion. When SAFE holders convert in a priced round, founders’ and previous investors’ ownership gets diluted. Also, things like option pools (for employees) might be resized in a priced round, further affecting dilution.
Trade‐offs between simplicity (SAFE) vs. Clarity (Priced Rounds): SAFEs are simpler and faster to negotiate (fewer moving parts, fewer terms to debate) than priced equity rounds. But priced rounds give upfront clarity about share ownership, investor rights, board seats, etc. With a priced round you agree on valuation (pre‐money / post‐money), issue shares now, and define investor protections more comprehensively.
Importance of knowing which SAFE you are using (pre‐money vs post‐money, etc.): The terms and structure matter a lot; whether the SAFE is a “pre‐money” or “post‐money” SAFE, whether there are terms like “most‐favoured‐nation” clauses, how conversion is triggered, how the option pool is handled. These details affect how much ownership SAFE investors end up with, and what founders/other investors are diluted by. Having clarity on those mechanics ahead of time helps avoid misunderstandings.
11. All About Pivoting.
Persistence is good, blind stubbornness isn’t. A pivot means changing your product/business strategy in response to feedback, poor results, or changing circumstances, rather than sticking rigidly to the original plan.
Why Pivot? You should consider pivoting when metrics/indicators prove that the current approach/path isn’t working. Pivoting can rescue or improve chances of success rather than continuing down a failing path.
When to Pivot? Timing is crucial: wait long enough to have meaningful data, but don’t wait so long that you waste resources or lose opportunity. Use metrics and feedback to decide when to pull the trigger.
How to Evaluate Possible Pivot Directions? Use user feedback and strengths to guide direction. Evaluate what your users really need, what parts of your current product are working vs not working, market signals/trends, and alternative ideas that leverage your strengths.
Risks & Trade-offs: Pivoting isn’t free; there are costs (time, resources, possible loss of momentum), and there’s risk in changing direction too early or multiple times. You need to balance between persistence and adaptability.
The best startups often look nothing like their first version.
More here: Why BukuKas collapsed despite pivoting 4 times?
Money can extend your runway or shorten it.
Founders should do early sales themselves: In early stages ($500K–$2M or so), founders doing sales and outreach directly is far more efficient than hiring sales/marketing early. You get closer to customers, learn what works, and avoid costly mis-hires.
Avoid overheads early-on: Spending too much on lavish offices, big teams, fancy branding etc. before finding product-market fit is a common waste. Keep fixed costs low, stay lean until you validate demand.
Spend on what directly improves product or customer growth: Put your money into what directly grows customers, improves the product, or reduces churn. Marketing, product improvements, or hiring key people matter - don’t spend on things whose returns are vague or indirect.
Track burn rate and runway constantly: Make sure you can survive “default heavy” periods. Track whether with current burn + growth you’ll survive until profitability or next funding. Be disciplined with spending to avoid running out of money.
Hire only when justified by need: Only bring on people when there’s a clear role that adds value you cannot do yourself. Avoid hiring ahead of need; mismatches or overstaffing cost more than just in salaries - they pull focus, dilute culture, increase complexity.
✅ Do’s (To Spend Money On)
Capital is fuel. Don’t waste it.
Customer acquisition & learning → Founders selling early, experiments that bring real customers.
Product improvements → Make the product better, reduce churn, and add value people will pay for.
Critical hires → Only when the role is essential and adds clear value.
Runway protection → Keep burn in check so you always have enough time to grow or raise more.
❌ Don’ts (Wasteful Spending, Avoid)
Premature hiring → Bringing in sales/marketing before you know what works.
Lavish offices / perks → Status spending that doesn’t help customers.
Overhead too soon → Big teams, branding, or consultants before product-market fit.
Unmeasured marketing → Spending without clear ROI or customer growth.
Bonus: Fair Co-Founder Equity Splits.
A startup’s culture often starts with how fairly its founders treat one another.
Be generous early, it keeps everyone motivated: It's better to err on the side of generosity when splitting equity among co-founders, so that everyone is heavily motivated to work very hard.
Recognize non-obvious contributions: Things like vision, ideas, domain expertise, or networks are very important and deserve equity recognition.
Clarity of roles & responsibilities: Clarify who'll do what, who is going full time vs part time, who carries what risk, etc., helps make splits more fair and defensible.
Use vesting schedules to protect long-term commitment: Ensuring that equity vests over time (rather than being granted immediately) protects the startup and aligns long-term commitment among co-founders.
Document agreements early to avoid conflict later: The sooner co-founders have an explicit, written agreement about splits, roles, contributions etc., the fewer misunderstandings and conflicts later on.
Conclusion
What makes these Y Combinator videos so powerful isn’t just that they come from the world’s top accelerator, it’s that they distill the messy, uncertain journey of startups into actionable steps. From generating ideas to finding product-market fit, from getting first customers to raising millions, the advice is both timeless and tactical. But remember: watching isn’t enough. The founders who succeed are the ones who take these lessons and apply them relentlessly, day after day.
If you’re early in your journey, I’d suggest starting with “How to Build an MVP” and “How to Talk to Users.” Those two alone will prevent most of the common mistakes. Then move to metrics, sales, and fundraising as your company grows. The startup path is chaotic, but YC’s advice gives you a compass. Use it well.
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