YC Fellowship Application – Future Employee Benefits

Y Combinator announced the YC fellowship program earlier this week.

YC Fellows will receive a $12,000 grant and advice from the YC community for 8 weeks (from mid-September to mid-November) to go from an idea to a startup. Fellows need an idea or a prototype and the ability to work on this full-time for 8 weeks.

If you are unfamiliar, Y Combinator is a seed investment firm targeting startup companies. The combined market capitalization of all the firms YC has invested in is over $30B.

I have replicated the YC fellowship application questions here on my blog. (Keep in mind there are 120 word limits on every question.) Below are my answers where I outline a company called Assure.

What is your company going to make?

This company provides benefits to employees of the sharing economy.

Independent contractors miss out of the benefits that come with full-time employment. Assure changes this.

Assure bridges the gap between full-time employee and independent contractor. Assure provides retirement contributions, medical insurance, and general liability insurance to members of the sharing economy.

In two sentences, say the most impressive thing about this team / startup.

I want to do something important. I want to create something of value.

Please tell us in one or two sentences about the most impressive thing that each founder has built or achieved.

I dropped out of college when my mom was diagnosed with lung cancer. A month later I was hired full-time as a web developer with skills I taught myself.

Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you’re making?

A lot of my peers are oblivious to the benefits that come from being a full-time employee. (Something I have learned only recently after being hired full-time). Retirement contributions (401k), medical/dental insurance, and general liability insurance are the three areas I have a touch of experience in.

The sharing economy is expanding. A large number of jobs are tied to this industry. That number will continue rising.

Assure provides the safety and security employees need to maintain the growth of the peer to peer sector.

What’s new about what you’re making? What substitutes do people resort to because it doesn’t exist yet (or they don’t know about it)?

Providing benefits to employees who are independent contractors is not new.

Currently a contractor at Uber has scattered benefits. They have an IRA for retirement savings. Then, general liability insurance to protect their interests while working. And finally medical and dental insurance from their parents.

Assure brings these three interests together. Contractors wish to legitimize their employment. They will turn to Assure when they want their retirement contributions matched. When they want more protective liability insurance. Or when they turn 27 and no longer qualify for their parents medical coverage.

Who are your competitors, and what do you understand about your business that other companies in it just don’t get?

Companies that hire full-time employees are competitors. As are insurance companies that cover individuals.

Companies that hire full-time employees limit potential customers. While Insurance companies provide similar coverage to what we offer.

Our competitors are too slow to adapt to the sharing economy. Assure is agile enough to adapt as the peer to peer employment market grows.

How will you get users? How do or will you make money? How does this become a giant company?

Assure must educate people to turn them into users. Assure must provide information that allows millennials to see the value of working in a sharing economy while also receiving traditional full-time benefits. There is a knowledge gap.

Assure collects monthly premiums from members. Premiums are aggregated and invested. Profit is made from investment income, not premiums.

Assure is a component of the sharing economy. Employment opportunities are changing. Workers in this new economy will want benefits, Assure makes sure that happens.

Applications for the YC Fellowship are due by Monday, July 27th, two days from the time this post was published.

If you have feedback, please share it. I would appreciate hearing it before I press the submit button on Monday!

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5 thoughts on “YC Fellowship Application – Future Employee Benefits

  1. I liked you have the guts to make this public.

    I’d suggest you read the How To Apply guide, particularly the section on Matter of Fact answers: http://www.ycombinator.com/howtoapply/#matteroffact

    I have trouble understanding what you plan on making by reading your answer to the first question. Write web software that records benefits? Make phone calls to insurance companies to figure out the best plans?

    If the answer is you’ll make a web-based payment system that aggregates and automatically invests premiums, I would put that in the first or second sentence.

  2. Hey Zach,

    Thanks for posting this publicly. I also applied and it’s interesting to read other applications.

    I do have a bit of feedback for you. I’ve shared my blunt thoughts below, hopefully they’re useful. I don’t

    > “This company provides benefits to employees of the sharing economy.”

    You reference the “sharing economy” a lot but I’m not really sure what you’re talking about. People who work for themselves?

    My understanding is that you’re selling benefits to people who don’t work full time (and don’t currently have them). I feel like your first answer could be more straightforward.

    Keep in mind that pitching to YC isn’t like writing a press article, they want very straightforward, transparent, clear answers, not buzzwords. (eg. “bridging the gap” felt like marketing)

    > “I want to do something important. I want to create something of value.”

    I’m sure there’s something way more impressive about you. What have you accomplished so far? Why are you the right person to start this company? Put some more time and effort into the answer.

    > “Companies that hire full-time employees are competitors. As are insurance companies that cover individuals.”

    No other company offers a “benefits” package to the self-employed? No other startup is working on it? There’s no existing large corporation that could expand in this direction? I felt this answer could have included more research.

    > “Premiums are aggregated and invested. Profit is made from investment income, not premiums.”

    Hmm, won’t the premiums need to be paid to whoever is offering you the insurance service? If so then you won’t have very much of the premium left to invest.

    Or are you thinking of offering the insurance services yourself? If so that would take a TON of capital to get started.

    Either way I have some concerns about your monetization plan. Just do a bit of napkin math. Let’s say you have 1 million people paying you $300 a month ($3.6B annually). If you aren’t making any profit on the premiums, that means you’re spending $3.6B paying out claims and on other company costs. I don’t see where the remaining money is to invest on.

    And it’s hard to invest money without risk. You can’t really afford to lose a huge chunk when the economy tanks or else you’re company could go bankrupt. You’re probably looking at a low single digit percentage annual return.

    Anyways, hope I didn’t come off as harsh. This is just my opinion, take it or leave it! Thanks again for posting.

    1. Andrew,

      Thank you for taking the time to write out your comment. I really appreciate reading your feedback. I’ll address your notes below.

      You’re correct that I approached some of my answers with “marketing copy”, rather than straightforward thoughts. I received a lot of feedback before the submission deadline that echoed this sentiment, and I made extensive changes to many of my answers. Someone on /r/startups linked me to this page: http://www.ycombinator.com/howtoapply/#matteroffact which helped me understand what answers YC are looking for.

      My answer to the “impressive” question changed considerably as well. I agree with your feedback.

      “No other company offers a “benefits” package to the self-employed?” – I did more research. You are correct, other companies are working on similar solutions.

      “Hmm, won’t the premiums need to be paid to whoever is offering you the insurance service?” – You bring up valid points. This Quora answer provides more detail into how large insurance companies make money. My answer for this question changed as well before submission, but the idea remained similar. You are right, a lot of capital would be necessary, but I do think large profit is possible.

      Thank you again for taking the time to write all of that out!

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