I understand but Paul Graham really makes an emphasis on the team, and that a demo is not required. I mean there has to be a way to prove that that the team can produce what they claim: past work, past startups, etc right?
I think YC is sufficiently competitive that teams without a demo (on the application) will not even get an interview. Also (I believe it has been said), the two weeks from when you're notified to the weekend of the interview should be sufficient to produce some kind of early stage demo. Your startup idea might be unfit for YC if you can't at least have something to show in two weeks of fervent work.
Thanks for the advice. I was under the impression that the demo would be unimportant, and since I'm in school right now, I thought I'd go slow at it unless I am accepted.
I can whip up something in two weeks easy (even with school), but I didn't submit a demo in the application because I didn't think it would be necessary, so I focused on developing the idea instead.
I guess what my situation was that I could balance school and the application, or school and the prototype. While I had an urge to work on the prototype I always felt guilty because frankly the application has a deadline, the prototype does not. Actually after the application deadline I was able to get back to the prototype.