Read the application 2 founders who bootstrapped their business used to get into Y Combinator, the startup accelerator that launched Airbnb and Dropbox

Shana Lebowitz

Aug 13, 2019, 18:52 IST

Read the application 2 founders who bootstrapped their business used to get into Y Combinator, the startup accelerator that launched Airbnb and Dropbox

Courtesy of Prolific

Ekaterina Damer (right) and Phelim Bradley, founders of Prolific.

Y Combinator is a startup accelerator that's launched successful companies such as Airbnb and Dropbox.
Prolific is a company that helps researchers find quality data sources. They're part of Y Combinator's summer 2019 batch.
Here's Prolific's successful application to Y Combinator.
Click here for more BI Prime content.

During the first year of her PhD program, in 2013, Ekaterina Damer began to question scientific research standards.

Damer was studying social psychology at the University of Sheffield, in the United Kingdom, and she noticed that behavioral and psychological scientists were increasingly conducting their research online. In particular, many relied on Amazon Mechanical Turk, a crowdsourcing platform where workers can complete short tasks like surveys.

But Damer was troubled by the fact that MTurk workers received a median wage of just $2 an hour (according to a 2017 working paper), as if they were in an online "sweatshop," she told Business Insider. What's more, it could be hard to tell if bots - not humans - were actually completing the experiments, meaning results weren't reliable.

So Damer and her cofounder Phelim Bradley, who has a PhD in genomic medicine and statistics from Oxford University, started a side project: a service that would "democratize access to behavioral data."

Today, Damer and Bradley are the founders of Prolific. It's a startup that helps researchers collect high-quality data by connecting them with the appropriate pool of participants (say, females between ages 30 and 35). Prolific says it takes multiple precautions to ensure that participants are trustworthy - and paying attention during experiments.

Prolific is currently enrolled in the summer 2019 batch at Y Combinator, the famed startup accelerator that's launched the likes of Dropbox, Airbnb, and Stripe.

The company is farther along than some other YC startups. For the past five years, Damer and Bradley have bootstrapped Prolific (i.e., they haven't taken money from outside investors). In that time, they've built a team of 15 people, and registered more than 3,000 researchers and 70,000 regularly active participants across the globe. Participants are paid at least $6.50 per hour.

The founders' main goal in joining YC is to use the capital to start scaling. (YC invests $150,000 in each participating company, in exchange for 7% of the business.)

"Bootstrapping creates stress," Damer said. Because money is always tight, she added, "you can never get ahead of the game," and you don't have much freedom to experiment with different growth strategies.

Prolific recently shared its successful YC application publicly. Damer said she spent about a week filling out the form.

And while she's thrilled to have been selected, Damer told other candidates that writing your application is worth it even if you don't get in. "At the very least," she wrote in a blog post, "it'll help you reflect on where you're at in your startup journey and help you work through important business and strategic questions."

Here's Prolific's original application to Y Combinator. The accelerator is currently accepting applications for winter 2020. (Some data about the company has been redacted, per Damer's request. The rest of the text is being published as provided to Business Insider.)

[Editor's note: Damer said she didn't answer some of the questions below because they weren't applicable to Prolific. She also preferred not to disclose some of the answers she did provide.]

COMPANY

Company name:

Prolific

Company url, if any:

https://www.prolific.ac

If you have a demo, what's the url? For non- software, demo can be a video.

(Please don't password protect it; just use an obscure url.)

https://youtu.be/BQ6dP0JNaNQ

Describe your company in 50 characters or less.

Quickly find research participants you can trust.

What is your company going to make?

We've built a marketplace that connects researchers (from both academia and industry) with instant, high quality, global research participants. On top of that, we've built infrastructure for research: Prescreening tools (from niche segments to nationally representative samples), user validation software (to ensure high data quality), and research tools (e.g., longitudinal functionality allowing researchers to follow up with participants over weeks or months).

We're going to build (1) tools for data reuse (to reduce research redundancy and waste), (2) the infrastructure to experiment with different incentive structures (e.g., micro payments, bonus payments), (3) a mobile app so participants can earn money taking part in research from their phone, when convenient, and researchers can ask the right questions at the right time (e.g., contextual surveys based on location, time of day etc.), and (4) an API platform (so anyone can tap our trusted and diverse participants). We have several customers interested in plugging their experimental/survey software into Prolific to allow their customers to easily access participants without needing to manage their own audience product. The next scale.ai/usertesting.com could be built on top of the reliable participants we already have, allowing for an ecosystem of people-powered tools that wouldn't be built otherwise. Just like Stripe is the go-to financial infrastructure layer for most YC startups, we hope to be the go-to infrastructure layer for "human responses".

Where do you live now, and where would the company be based after YC?

(List as City A, Country A / City B, Country B.)

We're currently based in Oxford, UK. After YC, the company would be based in San Francisco & London.

CONTACT

Email address of the founder who is filling out this application:

[Redacted]

Phone number(s):

[Redacted]

FOUNDERS

Please enter the url of a 1 minute unlisted (not private) YouTube or Youku video introducing the founder(s). (Follow the Video Guidelines.)

https://youtu.be/l1oq3NavalE

Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together. Include urls if possible.

Phelim and I have worked together on my latest research project around diversity and whether it can spark curiosity and creativity. The experimental setup was complex because it was designed longitudinally and required follow-up with participants: Every 2 days over the course of 14 days I'd ask participants to complete a 5-min study session. Phelim wrote python scripts to help me to combine, manage, and analyze the data sets (there are no good tools to automate this, yet...). Interestingly, in this work we found that exposure to diversity can spark curiosity, but not necessarily creativity.

How long have the founders known one another and how did you meet? Have any of the founders not met in person?

Phelim and I have known each other for 6+ years. We met in 2012 while studying for our Masters at the University of Cambridge. Phelim was doing a Masters in Computational Biology and I was studying Social and Developmental Psychology.

CATEGORY

Which category best applies to your company?

Marketplace

You're being asked the following questions because you are a biotech, healthcare or hard tech company.

Describe the next few stages in developing your product. For each stage, how much time and money will it take?

If you were accepted into YC, what could you accomplish by Demo Day in late August?

Does your product need regulatory approval (i.e., FDA)? If so, what is the approval process? What is your plan to get approved, and how much time and money will it take?

Please describe the scientific basis for your product. How does it work?

(It's best if you address your answer to a scientist, but one who is not a specialist in your field)

What experimental data (if any) do you have showing that this would work?

If appropriate, link to relevant academic papers providing additional support for your idea.

For each paper, please briefly describe it and how it relates to your company, and whether it was by your team or by others.

PROGRESS

How far along are you?

We've had [redacted] in GMV in 2018 and [redacted] of that was revenue (200% YoY growth). We're already profitable. We've achieved this by building a great MVP that users shared with friends and colleagues. We're a tight-knit team of 13 (4 devs, 3 support reps, 2 data analysts plus CFO/advisor, COO, CTO, and CEO). The two co- founders worked on this part-time until 8 months ago. We have not raised any money so far.

How long have each of you been working on this? How much of that has been full-time? Please explain.

Both of us have been full-time only the last 8 months and part-time (during PhDs) for the preceding 4 years. We've effectively used our PhD programs as incubators to get Prolific off the ground.

Are people using your product?

Yes

When will you have a prototype or beta?

How many active users or customers do you have? If you have some particularly valuable customers, who are they? If you're building hardware, how many units have you shipped?

We have 2000+ active researchers (paying customers) and 30,000+ monthly active participants. We have dozens of customers who have spent over $10,000 with us, and a few who have spent over $100,000, including [redacted] (in collaboration with [redacted], a major grocery store in the UK), respectively.

Do you have revenue?

Yes

What was your revenue in the last full calendar month?

(Please use USD. If none, enter '0')

[Redacted]

Your revenue 2 months ago?

[Redacted]

Your revenue 3 months ago?

[Redacted]

Your revenue 4 months ago?

[Redacted]

Your revenue 5 months ago?

[Redacted]

Your revenue 6 months ago?

[Redacted]

Anything else you would like us to know regarding your revenue or growth rate?

We have over [redacted] in deferred revenue which will be booked from prepaid funds going forward. We have seasonal effects (primarily due to the academic calendar). December to February are typically the slower months and we expect stronger growth in the coming months (we're projecting [redacted] in March).

If you've applied previously with the same idea, how much progress have you made since the last time you applied? Anything change?

We haven't applied previously.

If you have already participated or committed to participate in an incubator, "accelerator" or "pre-accelerator" program, please tell us about it.

We participated in Oxford University's Startup Incubator for 6 months in 2014/15, which helped point us in some useful directions (e.g., in terms of learning about business, finding great hires). However, we're now facing the challenges (and opportunities) of scaling - things like growth & product strategy, organizational scaling - so we're hoping to find mentors and investors via YC that can help us take Prolific to the next level.

IDEA

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?

In the first year of my PhD I had a hard time finding participants for my research - there simply wasn't any decent site or service that could meet my needs. We then realized that my colleagues, and my broader network, had the same problem.

I've recently completed a PhD in this area. In fact, being a PhD student was a great help to building the business, because I was the target customer. I was going to conferences, constantly learning what the biggest pain points were and what the ideal solution would look like. I also spent time at various institutions abroad, including at Columbia and Stanford Universities, developing deeper insight into what researchers care about. Our MVP, and many of our early Prolific researchers came from these in- person conversations, and the MVP quickly gained traction as a result, and has now spread far beyond my network!

I know people want the product because: 1) I need it! (I've published research using data from Prolific, which I couldn't get anywhere else) 2) we have thousands of paying customers who are advocating for us and referring colleagues and we're seeing the resulting network effects: Researchers recommend Prolific at conferences, in their results, and online, without any Prolific staff being involved (just search for "prolific.ac" on Google Scholar) and 3) we're seeing new market segments we haven't explicitly targeted using our product. 20% of our customers now are from companies running market and user research and they're getting in touch regularly to request features specific to their use case.

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)?

"People research" is broken: Finding participants is difficult and slow and with other platforms data is biased, low quality, and incentives are misaligned. Researchers want participants and data they can trust, but they resort to platforms which provide disengaged people who signup for pennies, fraudsters and bots, leaving them crying out for higher quality solutions.

We're tackling this by obsessing about trust, data quality, and "truth". We use proprietary user validation, statistical algorithms and machine learning to weed out bots and bad actors which plague the rest. Competitors have no minimum pay policies and often pay next to nothing to their participants leading to misalignment, disengagement and bias or fraud. We have a variety of incentives built in to our platform including pre- qualification for studies, two-way feedback, and guaranteed minimum pay. In addition, researchers can transparently explore the marketplace and get in touch with participants directly. As a result, both sides of the marketplace trust our platform, which means that participants provide high quality data and researchers conduct high quality research.

Our platform also creates virtuous cycles for our community. Demand from researchers attracts further participants to our platform. We leverage our increased supply of participants to innovate, for example enabling researchers to collect nationally representative samples at the click of a button! This virtuous cycle powers our growth. At the moment, many use non-dedicated solutions like Amazon's Mechanical Turk (MTurk), which were not developed to solve these problems, and as a result suffer from poor quality and limited feature innovation.

Who are your competitors, and who might become competitors? Who do you fear most?

Right now, our biggest competitor is Amazon's Mechanical Turk (MTurk) - it's been the primary solution for academic researchers in the past 10 years. Smaller competitors in the academic space include TurkPrime, Positly, and Testable Minds.

The wider "people research" space (including market and user research) is a much bigger market, and more crowded. The largest potential competitors include Nielsen, Dynata (formally Research Now SSI), YouGov, Cint, IposMori, Qualtrics, and SurveyMonkey Audience.

We see the greatest growth in on-demand online platforms that give researchers direct control over data collection. So we fear other fast-moving startups the most, such as panel aggregators ([redacted]) and platforms for user research ([redacted]).

We hope that our upcoming API will allow us to be the "people research" infrastructure layer of some of these companies, turning them into partners/clients instead of competitors.

What do you understand about your business that other companies in it just don't get?

1. TRUST. Researchers aren't willing to pay if they can't be sure the data will be good. Participants aren't willing to answer thoughtfully and honestly if they can't trust their efforts will be fairly appreciated. Other companies in our space don't treat their users well - they underpay participants, randomly kick them out of surveys, and don't help mediate or resolve disputes between the two sides of the marketplace (researchers <> participants). As a result, trust is low, data quality is bad, and research progress is way slower than it needs to be.

2. INCENTIVES. Competitors in our space don't get that it's important to align incentives to achieve high data quality. On MTurk, the misaligned incentives create a race to the bottom: Winners are those who complete the most "HITs" per hour, or those who spin up bots to complete "HITs" on their behalf. It's a constant battle between researchers and participants, and it's slow and difficult for the researcher to screen the data for quality.

3. CONTROL. Researchers want transparent access and control over the data collection process because *how* the data is collected will affect the results. Traditional vendors do not realize this - they act as gatekeepers who slow down the research and reduce its quality.

How do or will you make money? How much could you make?

(We realize you can't know precisely, but give your best estimate.)

We currently charge a 30% commission to individual customers for the core service of finding and screening research participants. Going forward, new products and services (e.g., representative samples, external API) will add additional revenue streams and enable upsell. And we're currently working on a SAAS hybrid model (subscription + participant rewards) for institutions and enterprises.

The market opportunity is huge. The "people research" space alone (we which we define as behavioral science + user research + market research) is a $100B+ global opportunity, but this is just the beginning as this market is nascent and growing. Fundamentally, we're developing a broad solution to a worldwide problem (learning about people).

How will you get users? If your idea is the type that faces a chicken-and-egg problem in the sense that it won't be attractive to users till it has a lot of users (e.g. a marketplace, a dating site, an ad network), how will you overcome that?

We will grow our users by continuing to enhance our core product through user research and nudging users towards referring friends and colleagues. We will accelerate virtuous growth cycles by building tools for data reuse, sharing, and collaboration. We'll further enhance network effects and lock-in by developing an API platform and an ecosystem of tools and a community around it. Plus, we'll start doing direct sales to reach new institutional and enterprise customer segments where we have low penetration.

As a marketplace, balanced growth of both sides of the platform is important, and we've already solved the first stage of the chicken-and-egg problem with 30,000+ monthly active participants and 2000+ monthly active researchers. We have an allocation algorithm which distributes studies evenly to participants ensuring balanced platform growth.

EQUITY

Have you incorporated, or formed any legal entity (like an LLC) yet?

Yes

What kind of entity and in what state or country was the entity formed? (e.g. Delaware C Corp)

Limited company in the UK.

Please describe the breakdown of the equity ownership in percentages among the founders, employees and any other stockholders. If there are multiple founders, be sure to give the equity ownership of each founder.

[Redacted]

Have you taken any investment yet?

List any investments your company has received. Include the name of the investor, the amount invested, the premoney valuation / valuation cap, and the type of security sold (convertible notes, safes or stock).

How much money do you spend per month?

How much money does your company have in the bank now?

How long is your runway?

(e.g. 5 months)

If you have not formed the company yet, describe the planned equity ownership breakdown among the founders, employees and any other proposed stockholders. If there are multiple founders, be sure to give the proposed equity ownership of each founder.

(This question is as much for you as us.)

Please provide any other relevant information about the structure or formation of the company.

[Redacted]

LEGAL

Are any of the founders covered by noncompetes or intellectual property agreements that overlap with your project? If so, please explain.

Who writes code, or does other technical work on your product? Was any of it done by a non- founder? Please explain.

100% of our code was written by my co-founder (Phelim) and the four engineers we've hired (all still employees). No work was done by anyone outside the company. Phelim built the entire MVP, and we've hired using revenue to date.

Is there anything else we should know about your company?

(Pending lawsuits, cofounders who have left, etc.)

OTHERS

If you had any other ideas you considered applying with, please list them. One may be something we've been waiting for. Often when we fund people it's to do something they list here and not in the main application.

Please tell us something surprising or amusing that one of you has discovered.

(The answer need not be related to your project.)

Did you know that most claims about human psychology and behavior in the world's top journals are based on WEIRD samples (i.e., from Western, Educated, Industrialized, Rich, and Democratic societies)? This is a big problem as you can't generalize most findings to the broader population or to other countries!

CURIOUS

What convinced you to apply to Y Combinator?

We hope to learn from the best of the best. We've learned so much from YC podcasts, YC Startup Class, essays, and other YC founders, so we would love to have the opportunity to get advice from YC partners first-hand. We admire many YC alumni building world-changing marketplace and infrastructure companies (e.g. Airbnb & Stripe) and we can see the impact of being part of a community of ambitious, optimistic people motivated to solve fundamental problems at global scale. We have strong traction, and now is the first time we could go to YC for the full-time program.

How did you hear about Y Combinator?

I heard about YC through my cofounder Phelim (psb31), who had heard about it from his friend Mark Moriarty (mbym).