Inside The Hard Tech Startups Turning Sci-Fi Into Reality

You actually can make some significant progress with, like, half a million dollars and three months.

The best hard tech founders do have very high clarity of vision around the future.

For hard tech companies, you have all this technical risk. You don't know if you're going to be able to mine asteroids. But you have no market risk, right? Like, if you can, if you can mine asteroids-

(laughs)

... it's gonna be fricking huge.

I think this is a call to action for a lot of the very hardcore engineers, that this is your chance to build something huge and to really change the world, literally.

So this is the kind of energy we need in society, solving some of the biggest problems that face humanity. Welcome back to another episode of the Light Cone. You probably know Y Combinator for a lot of our software investments like Stripe, Airbnb, or Coinbase. But it turns out YC has a lot of wins not just in the electrons world, where you're slinging bits around. Some of our best companies have actually been incredible at slinging atoms.

So I'm curious what some of the advice you give to the hard tech companies in the YC batch. Like, in particular, how is it different, the milestones they need to hit during the three months and what metrics they might present on demo day? Well, one of the obvious things is they won't be able to build a rocket, let's say-

(laughs) Right.

... in time (laughs) , so they won't have actual revenue. So one of the things we tell them is they still have to show some form of commercial traction. It won't be necessarily actually selling and getting revenue in the bank, but it's a different kind of form. I think we talk a lot about demonstrating that the customers that ultimately they will sell to want this, and it's typically a form of a LOI that is actually significant, with actual values, with actually legit logos.

I've definitely found LOIs, like letters of intent, are something where everybody knows they're obviously not the same as actually signing up a customer. But for the software companies, if a software company says, "Oh, we got a customer on an LOI for a $1,000 MRR contract," like that's not going to be impressive. But if you can get an LOI for like a $100 million contract, that is actually quite impressive.

The way that people tend to get this wrong out there in the world is they, th- they're building some hard tech thing and they're, they're like, "Oh, well, I need like $20 million to build my thing." And then they look at YC and they're like, "Well, YC invests half a million dollars. Well, that's not enough. Like, I can't do YC. Like, how would this make sense at all?" And one of the interesting things that I've learned from working here is that actually YC works extremely well for hard tech companies, and that for every hard tech company, no matter how crazy the thing you're working on, whether it's a supersonic jet or inventing fusion power, there's always, like, some small part that you can peel off that is like the very initial stage that you actually can make some significant progress with like half a million dollars and three months. Like, always.