[timr]

His answers are convincing rebuttals to a superficial criticism. In particular, I can tell you that if this startup can measure that it has a positive viral coefficient, it's already light years ahead of Yelp. And he's right that Yelp has basically no market share outside of a few US cities -- that's why they had to buy a much smaller competitor (Qype) just to get a foothold in Europe.

But to your point, I believe it was a YC partner (or three) who said that big businesses tend to start in a niche where a small number of people love you. If this guy really walked into a room and said "we've got a small, revenue-generating product with a positive viral coefficient and a growing user base", the line "fine, but you'll never beat Yelp" is not a compelling counterargument -- it's a lot like telling early AirBnB that they'll never beat Hilton.

I don't know if that's what actually happened -- there could be any number of reasons why a startup gets rejected after a ten-minute interview that aren't captured in a polite rejection email -- but in general, criticizing small startups for being small is not a winning strategy.

[subdane]

I actually read the blog post as a team that hadn't pitched a lot of investors. What you suggest here is being very forward in a setting that had been set up as a passive "interview". He was expecting them to set up the right question and probably wasn't experienced enough to just start telling them what he wanted them to know. There might be some cultural (U.S., S.V., "pitching") aspects to this dynamic as well.

[shaolin69]

Here's something we didn't share in the blog post. It's some of the print outs we brought along with us to the interview. No reason not to share it I guess. It shows some graphs illustrating virality, connection clusters (just one of them) and revenue growth. http://www.yogatrail.com/yogatrail-stats.pdf

[emmett]

Hey, just a quick piece of feedback on this. You define virality as "the percentage of users invited by other users". That's a very non-standard definition.

Usually virality is measured as "the average number of new users invited by any given user". I'd strongly suggest using that as your definition.

[shaolin69]

In that case, we're hitting it out of the park - over 4 invites sent per user, but these invites convert at ~25%. There's also "k factor" (invites sent x conversion rate), and the interval between user #1 bringing on user #2 is also important... guess there are many ways to present virality :)

[emmett]

That kind of info (4 invites on average per user, 25% conversion rate) is THE critical information. If you want to talk about virality at all, the fact it's not in your presentation is a serious defect you should correct.