Our idea sucked. That was probably the biggest reason. Other factors include: we had no prototype, no users, no traction and no revenue. We went to YC NYC and asked Paul Graham, Harjeet Taggar, Fred Wilson, Jessica Livingston, one of the founders of Airbnb, and some other really smart people about the space we were trying to get into and they didn't turn us off right away. They didn't say we had a great idea, but they didn't say we had a horrible one either. I suppose they knew what we all know, which is that an idea is worth very little. (Also, YC is accepting applications without ideas now.)

We didn't think for too long about the reactions we had received at YCNYC. Instead we went home and continued working on the prototype, landing pages and doing research on competitors. We spent the next couple of weeks polishing what we had, getting the demo pretty and the YC video just right. We crossed our fingers and hit the submit button.

Getting into YC might be pretty amazing, but the value of applying should not be underestimated. Even if you aren't sure about YC, if you are sure about starting a business the YC application process is a great exercise. Going through the questions is an experience that will re-shape your ideas. You might go into the application thinking you are going to make a location-based mobile chat app, and come out with an enterprise tool for software developers.

Which is exactly what we did. Seriously. And in retrospect it makes 100% sense to me that YC would not want to invest in something boring like development tools. I think it may still be a good market though. But not only was our idea boring, it was half baked.

YC alumni told us a bit on how the application process works. They said your app goes through a pre screen carried out by YC alumni who vote up or down. Kind of like a really important Hacker News. I bet our app didn't make the first cut. (We also heard that it's great to know YC alumni when applying. I think I know why, so you can get some sweet upvotes. There are a lucky few who have been through YC several times. I wonder how much of that is in thanks to an upvote crew that consistently gets them to the 'front page'.) 

But any audience will respond to something that is truly great or interesting. An interesting product is hard to ignore by anyone, and that is what you need to get into YC. Of course after you spend all that time building a great product with traction, revenue and consistent growth, you may not want to give 7-10% to Y Combinator. But it's hard to put a price on PG and his network.

If I were to apply to YC again, I would think differently about the idea, and focus on something that brings value to an investor (quick, huge returns). I still love what YC and all the other incubators are doing, and can't wait for when I can try again.

If you are interested in Y Combinator, they have extended the application deadline till March 29th 8pm PST. And this is the best compilation I have seen of YC resources: https://kippt.com/karrisaarinen/yc-application

Good luck!