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Inside The Hard Tech Startups Turning Sci-Fi Into Reality

Apr 11, 2024· 49 min· 92K views·Watch on YouTube

Y Combinator hosts discuss how hard tech founders can make rapid, low-cost progress and prove technical feasibility and customer demand, drawing on YC companies and current batch examples.

Prove progress in a three-month batch

Hard tech companies may not reach revenue during YC, so they can show commercial interest through substantial letters of intent with credible buyers. The hosts argue that even ambitious projects can isolate an early step that makes meaningful progress with roughly $500,000 in three months. Founders should plan to demonstrate that progress on Demo Day instead of assuming they need tens of millions upfront.

Show what makes the team credible

The hosts say hard tech founders often have a clear vision and an obvious reason the timing is right, so investors focus on why this team can execute. They recommend pairing customer evidence with a technical milestone that proves a small part of the idea works. One suggested pitch is a timeline and cost comparison showing how the startup reached proof of concept faster and more cheaply than a typical company.

Use focused milestones to build ambitious companies

Boom sought an airline commitment for its supersonic jet, and Virgin signed a $100 million letter of intent shortly before Demo Day. Cruise started with an Audi driver-assistance retrofit, while Astranis built a small satellite and Relativity Space demonstrated a 3D-printed rocket engine. These examples show how a narrow first product or technical proof can support a much larger plan.

Scale by finding an early customer and a practical first step

Heart Aerospace used airline letters of intent to validate demand for regional electric planes, while Solugen sold small batches of hydrogen peroxide during YC and avoided selling at a loss. Current batch examples include K-Scale Labs, which plans to open-source humanoid robot designs to build a community and gather data, and Astro Mechanica, which is focusing its new engine on launching payloads. The hosts emphasize choosing a manageable milestone that advances the broader vision.

Balance technical risk with clear demand

The discussion frames hard tech as carrying substantial technical risk but sometimes less market risk when the customer need is already clear. Founders can break a large engineering challenge into staged milestones, reducing how much risk they take on at the start. The hosts also point to lower prototyping costs and growing engineering ecosystems as potential tailwinds for fields such as robotics.

Takeaways

  • Break a capital-intensive vision into a milestone you can reach within a few months.
  • Pair technical proof with credible customer evidence, such as a substantial letter of intent.
  • Explain why your team can execute, using a concrete comparison of time and cost.
  • Start with one focused use case or product that can fund and inform the larger plan.
  • Stage technical risk so each milestone demonstrates a path to the next.

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Inside The Hard Tech Startups Turning Sci-Fi Into Reality · WhoBuilt