Interview with Scott Wheeler, founder of a Y Combinator Backed Startup
Scott Wheeler is 29 years old, he was born in Texas and is a German resident since 2001. After working for 6 years on open-source projects, he quit his job and founded, together with a friend, a startup called Directed Edge. Their project is a recommendations engine that can be plugged into any website and start delivering Amazon-like recommendations in real time.
Scott and his partner, Valentin, applied to Y Combinator as soon as the company was launched but, although they were certain they’d get accepted, they didn’t. After this rejection, the two partners started coding furiously and were soon invited to mini Seedcamp Berlin. A year and 1000 pitches later, they applied again to Y Combinator, and this time, they got in. Scott tells the whole story on their blog, but I wanted to know more about what goes on inside Y Combinator, so I contacted Scott and asked him a few questions.
Eugenia Cosinschi: You were born and raised in the US but you’ve been a German resident since 2001. Why was that?
Scott Wheeler: Mostly just personal reasons, but I was also very involved in open source at that time, and Germany is one of the strongest countries for open source (and doubly so for the KDE project, which I was a part of), so there was also some of a pull there.
E.C.: You’ve started your business in March 2008. What motivated you to take this step, after 4 years of thinking about it?
S.W.: I’d just gotten permanent residence in Germany; previously my work permit was tied to a specific job.
E.C.: Your first step after launch was to apply for Y Combinator, without much luck though. A month later, you were selected for mini Seedcamp Berlin. How useful was Seedcamp to you?
S.W.:The mini-Seedcamp in Berlin helped quite a bit — it got us connected to a group of other startups working in Berlin and to some mentors that we’re still in contact with.
E.C.: You’ve applied again for YC and this time you got in. What did you do there?
S.W.:Mostly what we were doing in Berlin — dealing with customers, building the product. YC isn’t a typical incubator — you don’t spend time working at their offices or anything. There are weekly dinners on Tuesday which usually have a pretty good speaker and you can talk to the YC folks (Paul, Jessica, Trevor) when you get stuck with something. Things change quite a bit towards the end of YC — when demo day is approaching, since there the focus shifts towards thinking about investors as well.
E.C.: How did YC help you?
S.W.:It helped push us back towards the larger vision that we’d started with — of recommendations transforming the web. European startups tend to be generally more risk averse and we’d been infected with some of that. Also with so many startups having gone through Y Combinator, it intrinsically has a really good network of entrepreneurs, investors and potential partners.
E.C.: You’ve been through both an European startup program, as well as an American one. What’s the difference between european and american startups and their mentality?
S.W.:Mini-Seedcamp in Berlin is one day — YC is 3 months, so they’re not really comparable. So most of what we’ve learned about the European startup world came from just … well, being a European startup for a year. A lot of European startups focus on regional markets and are less risk averse. That’s a big difference. Engineers also play a more prominent role in Silicon Valley startups; it’d be very difficult for a founding team to do well there without some engineers on board. In Europe it’s more common to see founding teams that are mostly business folks.
E.C.: What’s the most important benefit such programs provide? Is it the money they invest, the networking, the advice they give…
S.W.:It’s a toss up between the networking and advice. The money wasn’t really a major component of the equation.
E.C.: Most of Seedcamp winners or YC winners permanently move to London/Silicon Valley. Do you think this is necessary for a startup?
S.W.:It certainly helps. I think it gets progressively harder to start a startup the further away you get from the infrastructure for startups.
E.C.: To those not going to Seedcamp, YC or any other similar program, what advice would you give? Can they still make it in the online business?
S.W.:Sure, I mean, most startups don’t go through those sorts of programs, and the set of successful startups is much larger than the set of YC / Seedcamp alumni. In a nutshell, what those sorts of programs provide is a good set of mentors and a good network, but it’s possible to find mentors and to build your own network outside of YC.
