You should. I was under the apparently mistaken impression that people who get into YC at least have a functioning demo, and generally have users already. So when my friend and I were applying, we limited ourselves to ideas for which we could create a semi-functional demo in the few weeks before the application deadline. We ended up getting rejected because of the idea that we chose, and rightly so, but I wonder what ideas we would have come up with if we had not felt so time constrained. (I am glad that we were rejected because I don't think that we were ready to start a company yet, but I am curious anyway.)
[Edited for clarity.]