Growing a Startup in Egypt Pt. 2: How We Finally Got Into Y Combinator

Instabug is based in Cairo, Egypt and was founded during Omar Gabr and Moataz Soliman's last semester at Cairo University. From graduating college in 2012 to graduating from Y Combinator in 2016, the duo built a team, launched an MVP aimed at customers abroad, developed the core product, expanded into an adjacent vertical, grew Instabug's user base, and secured larger and larger investments.

This article is part of a series of blog posts about Instabug's startup journey — the struggles behind the scenes of the company's "wins" and lessons learned from overcoming them.

Join us on Twitter to follow along on our journey.

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Instabug Untold Stories

Episode 2: How We Finally Got Into Y Combinator

This is not a step-by-step guide for how to hack your way into Y Combinator. Tl;dr—there are no hacks. You just have to do the work, stay focused, try again, and prove yourself."I think we applied four times, maybe more," Moatazo- how we heard def pg's articles like startups=growth and these kind of blog posts that have been around for a long time nad these were the go to articles when we were thinking of something following sam pg and other people in yc that was the first thingsecond was hn knowning about hn in general knowing we need to launch there ychttps://news.ycombinator.com/item?id=5526949https://news.ycombinator.com/item?id=5533748third flat6 within the program they mention yc a lot it is the biggest accelerator...we wanted to be part of a strong network we heard a lot about the program itself we wanted to be there we knew the partners by following them on twitter getting the right advice from people we know are good6k applicants500 interviews90 companies1.5% acceptaince rate

First YC Interview (Rejected)

m- applicationno matter how many recommendations you get you wont get an interview anywayto get an interview without recommendations its really hardyou need a super interesting idea in the areas they are interested in (RFPs)and were not these type of companies buzzwords related products for us we needed to have these recommendationsbut actually the application is v useful thinking through these questions was an exercise in itselfgoing through all the details you need to think about as a companyduring the interview the first thing they asked us why is this product defensibleit didnt go well in any wayfrom the v first question it was v clear we were not getting init was like they had a list of checkboxes and they were crossing no no nono validationproduct was super tinyand we were not monetizing the productthey had all the concerns that made sensefrom their perspective it sounded too risky and it made sensea couple hours we got an email from one of the partners or you get the callGeoff Ralston, Garry Tan, Aeron HarrisThe rejection e-mail from Garry Tan, November 2013: I’m sorry to say we decided not to fund you. You are the kind of thoughtful, talented hacker founders we especially like to fund, so this was a tough one for us since we liked talking with you...  But as I said, we liked you and YC isn’t like applying for college where you only get one shot. We’d encourage you ship software to users and iterate quickly. We’d very much welcome hearing from you again in the future.

Second YC Interview (Accepted)

m- the last application was most focusedwe sent to all people we knew at ycget people to recommend usthe video is the hardest thing about the whole yc app bc you have to say everything in exactly 1 min it was 1:14 we were super rushed in the whole descriptionexplaining the product what we do vision of company current users team answer a lot of questions in only 60 secs which we didnt do

it was completely differentSam Altman, Carolynn Levy, Dalton Caldwellwe got into the roomthey are v friendly sam altman it was crazy meeting them in personsam asking us what do you doomar went into the pitch rehearsed word by word 60 secsthen they asked

first how are we able to ask these big companies to use us although were base din egypt

how much, why, how to increasehow we retain our usersthe fact that we visit all our users and we bring them souveneirs for them it was mindblowing

team, egypto- someone opens the door and khalas it is done10 min talk 5 min to decidem- coming out of the second interview it was clear we did way better than the first one positive paceafter we were done we had a couple of meetings with our users then we went to have dinner at chipotle/panda express then we had the call from samThe offer call from Sam Altman, November 2015:

The 59-second call offering Instabug a place in Y Combinator's Winter 2016 batch. m - by comparing instabug in 2016 to 2013 we had a lot more users, and they were not just users using the product, they were also paying for the product, it might sound cheesy but we were always following the things they say in the blogs and videos and what they usually say is two things talking to your users and writing code. at the time we were doing literally only this. i was the one writing code and omar was the one meeting with the users.

What Happened in Between

m- i think it was different at each stagewhat does the company do - we refined the pitch each time we appliedwhat progress - each time we had more progressthe constant thing was that we really like the brand and pg and that was the thing that was constant across the wayand i think we matured a little bit between the first and second oneo- there was a lot of valid points yes thats a risk there are a lot of other riskswe were v close to customers at that time so we knew that this is something actually needed and people would actually use and we knew there was a demand and the challenge of people using it for a long time thats a problem that could be solvedok lets try again maybe were not at the right phase maybe we need to actually prove the model so we did that

   
• November 2013: First YC Interview (Rejected)
   
• December 2013: Raised $300,000
   
• January 2014: Inevitable Re-Write
   
• March 2014: First Big Company Signed Up: SoundCloud
   
• April 2014: Second Application (No Interview)
   
• August 2014: Launched Android for Instabug
   
• August 2014: Partnered With GitHub, Zendesk, Atlassian, Freshdesk
   
• November 2014: Third Application (No Interview)
   
• January 2015: Monetizing Instabug
   
• October 2015: Became Profitable
   
• November 2015: Second YC Interview (Accepted)

m - by the time we got in, we were planning to raise anyway and we planned to do yc and we timed a specific release to do it during yc and we planned to raise during demo day

we made sure it was going to fit the plan we were going to do anyway

Read part one to find out what happened behind the scenes of Instabug's $1.7 million fundraising round, which it closed just three days after completing Y Combinator's Winter 2016 batch, and stay tuned for the next episode: The YC Days.

i think we applied 4 times, maybe more, because for us it was just a matter of filling out the application and sending it2 interviewsi think the first one was for winter 2014 batchinterview first2 more applicationsinterview 4th time when they got inpart of it was we really liked the brand so when we were first starting we really like the content they were writing we were obsessed by pg himself and his blog posts about startups and doing things that don't scalehis blog is v famous when it comes to advising startups and we had a couple of friends who were part of yc as wellwhen we decided to move from egypt to sv we decided to try to go and get into the network of svthe first thing we did was go through the egyptian companies who were part of yc to try to talk to these founderswe got in touch with 2 ex yc founders khaled hussein mahmoud abd el --tylt acquired by airbnbbalance acquired by stripewe got advice about filling in the application and how we can get in and we asked them to recommend us to ycthe product was super tiny at the time and there was almost no user base im not sure actually why we got an interview on that daywe had no users no big companiesi think it was the recommendation at the time was the peak of both companies both were v connected to the partners thats pribably what wasduring the interview the first thing they asked us why is this product defensibleit was super tiny v basic f their concern was why wouldnt anyone build a clone of this product the feedback they sent us was that we lack market validation we dont have any companies worth mentionining using the productat the time omar wasnt in the states at the time he went back to egypt for a couple monthsi couldnt because of the armyso i stayed over therepart of the application was shooting a video omar was in egypt so i had to do the video on my own which was slightly a problem with omaronce we sent the appl and we got the interview omar traveled from egypt to the usit didnt go well in any wayfrom the v first question it was v clear we were not getting inwe were not monetizing at the timethey had a list of checkboxes and they were crossing no no nono validationproduct was super tinyand we were not monetizing the productthey had all the concerns that made sensewe had a tiny spike in usage and that was the thing that got us the interviewa couple hours we got an email from one of the partners or you get the callfeedback: not monetizing, no market validationjeff rolston and jerry tanat the time we were just closing our super seed fund weve been raising several since then that was our firstafter we were getting the money from people who had committedi think i did expect itomar being the optimistic one he didnt expect it for surethat was the same thing with the second interview im always the pessimistic onetrying to be objective about it it made sense we didnt have anything validation and it wasnt a product that wasnt going viral its or saas comapnies we need to have validationwe were too early to applyno plans for whats next to build in the productno usersfrom their perspective it sounded too risky and it made sensei think it was different at each stagethe constant thing was that we really like the brand and pg and that was the thing that was constant across the wayat the v beginning we thought that all the successful companies went through ycby the time we got in, we were planning to raise anyway and we planned to do yc and we timed a specific release to do it during yc and we planned to raise during demo daywe made sure it was going to fit the plan we were going to do anywayyc for us was we have to go if we dont we will def fail and the company wont exist anymorelater on we found out that this shouldnt be the way we talk to investors in generalif the investor got that the feeling that you really need the money itll be harder to closeyoull always get the money if you dont need itthe second and third we sent the exact same applicationsecond we didnt monetize yet but we had 3 or 4 logos - users soundcloud, asana... that was the thing for us same application plus few more logos no interview as wellthird a couple months after we started monetizing f a couple more logos and a tiny figure for mrr, no interviewfourth time, the application was in 2015 a couple months after i finished the army, this time i was much more serious2nd and 3rd i wouldnt be join - one of the questions i couldnt go because i had the army at the time4th time we had a lot more logos, we were already cash flow positive, revenue increased and expenses increased, these 2 facts were what we talked most about in the interview (based on their questions) - how do you get these companies to start using the product while you are in egypt? how are you breaking even with 38k mrr? (off the record)the last application was most focusedwe sent to all people we knew at ycget people to recommend uslater we found that this is something that gets into the ranking algorithm - the fact that you were able to reach xyz alumni to recommend your applicationhttps://www.youtube.com/watch?v=CigCYlynE4othe video is the hardest thing about the whole yc app bc you have to say everything in exactly 1 min it was 1:14 we were super rushed in the whole descriptionexplaining the product what we do vision of company current users team answer a lot of questions in only 60 secs which we didnt doapplicationno matter how many recommendations you get you wont get an interview anywayto get an interview without recommendations its really hardyou need a super interesting idea in the areas they are interested in (RFPs)and were not these type of companies buzzwords related products for us we needed to have these recommendationsbut actually the application is v useful thinking through these questions was an exercise in itselfgoing through all the details you need to think about as a companyinterview #2it was completely differentwith sam altman and carolynn levy and sam was mostly running the interviewinterestingly jeff rolston was supposed to be at the interview since he was in the first but thankfully on that specific day he had to run errands for his family so thankfully he wasnt therewe're not good losersbut sam was super nicewhat we talked about most was the way we operate from egypt that was one of the many times we were able to capitalize on being from egyptwe mentioned it in the app every time we appliedthat was nov and in dec 2015 was riseup and sam might have come (jared freedman came)super intensethe setupthey literally fly us from egypt to mt view to attend a 5-10 min interviewthey are super experienced in this that they whave a way of telling the trhuth or not if theres harmony they have been doing this for years and thousands of companies and they can spot patterns and are able to decide accordinglywe were reading a lot how to prepare everyone says that you have a single sentence at the bginning and you dont control anything so you have to pack everything in this sentenceone of the partners asks "what do you do"we prepared for this the pitchwe got into the roomthey are v friendly sam altman it was crazy meeting them in personsam asking us what do you doomar went into the pitch rehearsed word by word 60 secsthen they askedfirst how are we able to ask these big companies to use us although were base din egyptanswer: growth - omars efforts, yasmine still in collegehow we retain our users, the pyramidsthe fact that we visit all our users and we bring them souveneirs for them it was mindblowingnext q how are you able to break even on 38k mrrwe explained the cost of living in egypt - for them was mindblowing as well - at the time it was much much less than now - $200/month for a devhow much are these companies paying youstrategy - current pricing, plan to raise pricing, told them about launch, bug reporting to in app chat and planned to release it during yccoming out of the second interview it was clear we did way better than the first one positive paceand i think we matured a little bit between the first and second onefor ex the second interview we werent that rushed like the first one we went and had breakfast before we were more relaxed compared to first oneafter we were done we had a couple of meetings with our users then we went to have dinner at chipotle then we had the call from samcall 0:59 seconds - youve been accepted, would you be interested to joini didnt reply for a couple seconds i was literally silent, moataz im asking you, i replied sure i didnt show any excitement it was mostly in deniali think that was on saturdaythen we had an orientation on sunday or monday - v brief about the program and how it would be once we joined and a couple intros from the partners then we found out we would be in the group with sam altman and jeffthey split the batch into 4 or 6 groups and we were in the group that sam was working onby comparing instabug in 2016 to 2013 we had a lot more users, and they were not just users using the product, they were also paying for the product, it might sound cheesy but we were always following the things they say in the blogs and videos and what they usually say is two things talking to your users and writing code. at the time we were doing literally only this. i was the one writing code and omar was the one meeting with the users.im not sure if this is something that helps or not is did you ever apply before every time we were just incrementing the number once, twice, three times, four timeseither were pathetic or perseverancemost of the companies dont get in the first time they applyso i think this is a sign that youre taking the company as a serious thing and not just a side projectwhat does the company do - we refined the pitch each time we appliedwhat progress - each time we had more progress27. something that were always talking about is there is . alife cycle for products a product starts v small and it keeps adding more features to satisfy wha thte users need and most of the itmes it ends up su er cluttered (jira) and when it comes to big and too cluttered this opens up a new opportunit for a new yc company super focused on a specific thing fixing a specific problem in a specific product and it starts another wave. what we discovered is that its v hard to do both. grow in terms of users and to be able to stay as lean and clean as much as possible in terms of functionialuty ui etccode - at interview 10 then we were 15 between interview joining donia and nagyyasmine before appliedat the time that we went to the yc interview no one knew - we didnt want them to be demotivated in case we didnt get through and we had a history of rejections so we werent super confident that we made it throughonce we came back omar made one of the best presentations of the company he told them about yc and our planthese two were superthe first one no one knew why were having a meetingit was in a room that big (emoji) and bean bags on the floor, so not even a meetingthe expectations were nothinghe told the team about the yc interview and how it works and the fact that we got accepted and that we would be working with sam altman and he ended with the plan for the next few monthsthe time between interview and release we worked super super hard that was one of the toughest times that we worked throughout the companies historythe way we won the mit business plan competition i was in the army the way he did he looked at the profiles of the main judges and get any company that could be related to them and their app on the app store and negative reviews and showed it to them and told them that instabug solves this exact problemthe judges were one of them was a friend of omars mother and the other one was the founder of aramex he downloaded the app and the rating and got a negative review and took a screenshot and showed it to the judges during and after the presentation and third judge we actually met before the competition and we started to know him and he introduced us to a company that he was working us annd they used the sdk and he was advocating for us during the competition and th eproduct was useful and he already invested in the company who was using usand we also told them abou tth emini pyramidsi needed a tool like htis. a bug part of my day was reporting bugs. ios sdk boom everyone was doing mobile apps. the sdk had enough apis tha tcould make a lot of things easier when it comes to reporting abug bc you could get a lot of f details about the device and environment that was par to fit and the othe rpart when we were working on our own the v first idea of instabug the app and the way of beta testing it that was the evolution of the prouctease of use dev tools and at the time the product was v minimal the sdk shake to send feedback super simplehttps://technode.com/2011/03/18/y-combinator-application-questions/how we heard def pg's articles startup=growth these kind of blog posts have been around for a long time nad these were the go to articles when we were thinking of something following sam pg and other people in yc that was the first thingsecond was hn knowning about hn in general knowing we need to launch there ycthird flat6 within the program they mention yc a lot it is the biggest accelerator...initially was pg's articlesit is the elite of the elite it is the most elite network thats there sv is a v nice helpful area but there is you need to be part of a strong network that was the network we wanted to be part ofwe wanted to be part of a strong network we heard a lot about the program itself we wanted to be there we knew the partners by following them on twitter getting the right advice from people we know are goodastarapps - not sure if that was first one or not - summer 2012if not winter 2013 sure about the one we applied towe got rejectedinterview nov 2013 for winter 2014 batch2 batchesthe first interview we were probably 4 people in the company at that time no one knew that we were travelingwe were staying at pacific euro - the 3 months we spent there3 people gerry tan, jeff rolston, erin harris?rejection emailwhat are you doing what are you building would people actually use that open source demo team users money no why business model prev exp how long did you know each otherquick 10 min interviewwe performed ok it is a v hyped convo from the beginning from the ambience the place itself there is 3 doors in front and one is open and you go inside the whole setup was already intimidating and not intended but its a yc demo its 10 min and you know the decision would be done now so its an important 10min theyre super nice they intro themselvestheres a lot at stake it wasnt good it wasnt bad we shared what we have i didnt have anything different there isnt anything special they rejected us in the first one and im not sure if it was tense or not beta or not?the first one they didnt ask for the demo we planned to show itthe 4th it made sense we had a lot of things we raised money solid team big companies enormous progress compared to first one 1 paying user to 400 - 400x justifiable that we get inim not sure what specific thing that intrigued them to talk to us we applied we put everything in the app im not surewe didnt even have a compelling egyptian story we didnt emphasize that we didnt know we could use it to our advantagei remember we were done with the interview there was a github repo with a mock interview we talked with a few yc founders they were v generous with their time founder of chartio watchsend that we emailed and asked dave fowler so we talked with him to do a mock interview and we kept revising and make sure we understand everythingthey covered the costs of the travel they handed a check for 1500 we went back after 3 lunch email around maybe 7-8the rejection email was v nice and we read a lot that drew houston got rejected and accepted the second time and it was positioned online quora hn that was a usual thing and the email was v clear we went back continued what should be done and reapplied i had a v long reply to gerry tan about the points and he didnt reply backapplied again same reasons - network, learn from the besti respected the decision but i didnt agree. ok lets try again maybe were not at the right phase maybe we need to actually prove the model so we did thatit was a valid point there was a lot of valid points yes thats a risk there are a lot of other riskswe were v close to customers at that time so we knew that this is something actually needed and people would actually use and we knew there was a demand and the challenge of people using it for a long time thats a problem that could be solvedit was with sam altman, jeff rolston, dalton caldwell, jonathon levywe went in they stood up said hi we started talking within 30 seconds exactly under yoru control after that it could go anywherefirst question: what do you dowe mentioned that lyft is payinghow much$49why, low, how to increaseyes, other products, in-app chatunicornwe have a v good leverage early in the funnel integrate and dominate the whole area of mobile development. the wedge getting into the companies upsell diff things and multiple ARPU by 10how long have you known each otherwhy in egypt - 7 ppl teamwould you leave team how would that worksam coming to egypt riseupsomeone opens the door and khalas it is done10 min talk 5 min to decide~20 companies per day5 hourswe were eating and then we got a call from sam saying hey we'd love to fund you guyswestfield mall panda expressit was v loud and there was a narrow corridor right beside itits a place we still gowe went multiple times food courtabsolutely we would love to be part of that someone would be following with next stepswe'd love to invest in instabug do you accept it absolutelywe got emails invitions to that google group that bookface multiple toolsin a week orientationthat was amazing we called all our friendsthere was a lot of people who helped us recommendations mock interviews we emailed them thanks v much for the support we got inorientationtold team jan-mar travelingprobably nov 2015im not sure what exactly convinced them we were in a better position if we got rejected at that time if we applied later then we have better chances we proved ourselves more and eliminated more risks 2 years between 2 interviews and we did a lot of progress at htat time focusing on building th ebusiness product do what we do bestcriteria to get into yc is the same as building a big business so we just focused on building a good company and thats what got us into yc.6k applicants500 interviews90 companies1.5% acceptaince rate120 for 7%goal: acquisiton, fundraising,, instabug 3.0, 10m company

• moataz: old applications

scribd jarred freedman user came toe gypt after acceptance spent a day at the office talked to teamyc companies using us and used them as a reference and we asked them to recommend usoffice hours with pg and it was one of the most insightful 30min ive ever had in my life