Summaries Entrepreneurship and Startups Expert Advice for Hard-Tech and Biotech Startups: Fundraising, Product Testing, and Revenue Generation

This is a summary of a YouTube video "Jared Friedman - Advice for Hard-tech and Biotech Founders" by Y Combinator!

4.7 (59 votes)

The video discusses the challenges and opportunities of starting a hard tech or biotech company, highlighting the importance of creative fundraising, testing versions of products, and setting specific milestones to generate revenue.

• 💡
  00:00

  Starting a hard tech company can be easier than starting a company with market risk, but building the first product takes significant time and money.
• 💥
  02:34

  Building a supersonic passenger jet and starting a hard tech company are easier than ever before with the help of YC, but turning a mobile shopping app into a successful company is still a challenge.
• 💡
  06:28

  Hard tech and biotech startups struggle to build their first product due to high costs, but can make progress by finding creative ways to showcase their idea and raise funds, as demonstrated by a team who built computer simulations and a plastic model to secure funding for a new plane design.
• 🧬
  08:47

  Solute uses synthetic biology to produce hydrogen peroxide, starting small and scaling up, while 🩺 Air X launched a basic version of their medical device service using existing FDA-approved technology to quickly get live during YC without FDA approval.
• 💡
  10:38

  Startups can attract investors and customers by creating test versions of their products or services, such as Estranja's test satellite and Ginkgo Bioworks' contracts for genetic engineering.
• 🚀
  12:55

  Jetpack Aviation used a pre-sale campaign to sell flying motorcycles and proved demand with non-binding letters of intent.
• 💰
  14:35

  Create a smart fundraising plan with specific milestones to generate revenue for hard tech or biotech products, as most companies will need to raise money from investors.
• 🚗
  17:38

  Cruz, a YC AI company, built self-driving cars and was acquired by GM for $1 billion in less than 3 months during YC, proving the potential success of moonshot ideas early on.

Detailed summary

• 💡
  00:00

  Starting a hard tech company can be easier than starting a company with market risk, but building the first product takes significant time and money.

  • Jarrod talks about starting hard tech and biotech companies, defining what a hard tech company is, discussing the two most common problems they face and how to solve them, and fundraising specifically for hard tech companies.
  • Building your first product takes significant time and money, and it may not be possible for all companies, regardless of whether it is a physical product or not.
  • Starting a hard tech company may seem daunting, but it can be easier than starting a company with market risk.
• 💥
  02:34

  Building a supersonic passenger jet and starting a hard tech company are easier than ever before with the help of YC, but turning a mobile shopping app into a successful company is still a challenge.

  • Boom is a YC company building a supersonic passenger jet to replace the Concorde, founded by Blake who had previous experience in starting companies.
  • Building a mobile shopping app is easy, but turning it into a successful company is difficult due to challenges in attracting press, talented employees, and investors.
  • Starting a hard tech company has become easier than ever before, as evidenced by the success of Boom and its ability to attract top talent.
  • YC has a high demand for funding ambitious ideas, including hard tech and biotech companies, and while it may be intimidating to start such a company, it is actually easier to get started and has a higher acceptance rate at YC.
• 💡
  06:28

  Hard tech and biotech startups struggle to build their first product due to high costs, but can make progress by finding creative ways to showcase their idea and raise funds, as demonstrated by a team who built computer simulations and a plastic model to secure funding for a new plane design.

  • The YC startup school curriculum has more relevant lectures than irrelevant ones for hard tech and biotech companies, but the biggest problem for these companies is building a first product that requires millions of dollars, so they need to find ways to make progress on their idea without spending that much money.
  • They assembled a team of advisors, built computer simulations and a plastic model to show airlines, in order to raise money to build a new plane design.
• 🧬
  08:47

  Solute uses synthetic biology to produce hydrogen peroxide, starting small and scaling up, while 🩺 Air X launched a basic version of their medical device service using existing FDA-approved technology to quickly get live during YC without FDA approval.

  • Solute uses synthetic biology to produce hydrogen peroxide and started with a small beaker to prove the concept before scaling up to a large plant.
  • Air X planned to create a medical device, but instead launched a basic version of the same service by using an existing FDA-approved device and writing software around it, allowing them to get live during YC in less than 3 months with no FDA approval.
• 💡
  10:38

  Startups can attract investors and customers by creating test versions of their products or services, such as Estranja's test satellite and Ginkgo Bioworks' contracts for genetic engineering.

  • Startups can generate revenue and credibility by creating test versions of their products or services, such as Estranja's test satellite and Ginkgo Bioworks' contracts for genetic engineering, to attract investors and customers.
  • Pre-sales are the best way to prove to yourself and investors that people want your product before you build it.
• 🚀
  12:55

  Jetpack Aviation used a pre-sale campaign to sell flying motorcycles and proved demand with non-binding letters of intent.

  • Jetpack Aviation ran a pre-sale campaign to sell flying motorcycles and to prove that people would want them, but for products that require FDA approval, a non-binding contract called a letter of intent can be used instead.
  • Getting a customer to sign an LOI is a valuable way to determine their seriousness about buying your product, and a good LOI should include specific information.
• 💰
  14:35

  Create a smart fundraising plan with specific milestones to generate revenue for hard tech or biotech products, as most companies will need to raise money from investors.

  • Build a smart fundraising plan to generate revenue from your hard tech or biotech product as most of these companies will not be able to bootstrap and will need to raise money from investors.
  • The speaker plans to pitch to investors to raise 50 million dollars for their idea, despite acknowledging the difficulty of such a large fundraising goal.
  • Create a fundraising plan with specific milestones that start small and gradually increase in size to achieve the necessary progress for raising larger rounds of funding in hard tech companies.
• 🚗
  17:38

  Cruz, a YC AI company, built self-driving cars and was acquired by GM for $1 billion in less than 3 months during YC, proving the potential success of moonshot ideas early on.

  • Cruz, a YC AI company that built self-driving cars and was acquired by GM for $1 billion, is a great example of a hard tech company that was built in less than three months during YC.
  • Getting an LOI is difficult but valuable because it indicates that you are solving a critical pain point for a company.
  • The speaker explained that there is no difference between hardtack and moonshot ideas, and emphasized the importance of proving the potential success of disruptive ideas as early as possible to reduce perceived risk.
  • The LOI process can help hard tech companies navigate complex sales processes by uncovering stakeholder incentives and providing valuable feedback early on.
  • Hard tech companies have an easier time recruiting talented people due to their crazy and ambitious ideas, but finding them is still a challenge.