Eh everyone I know in YC answered this in an ethical way. In fact, I suspect YC keeps this wording to catch people admitting to something unethical while rewarding people who see something in a system that could be different.
My answer that got me accepted was that there was a lip syncing competition at my college that was dwindling because everyone had to submit a CD and sign up in advance. It also was held in an auditorium.
When I took over, I moved it to Spotify and moved the venue to the lawn, and we went from ~20 people the previous year to 1.2k the year I ran it.
I left out that the rule at the time was all songs had to be reviewed by the administration, which I didn't comply with. I'm not saying my story is the greatest; quite the opposite. I was trying to show that "hacking" isn't inherently unethical or even particularly interesting.
My answer that got me accepted was that there was a lip syncing competition at my college that was dwindling because everyone had to submit a CD and sign up in advance. It also was held in an auditorium.
When I took over, I moved it to Spotify and moved the venue to the lawn, and we went from ~20 people the previous year to 1.2k the year I ran it.