0:01
that short like like long introductions
0:04
are no good um Sam knows H all right
0:08
ready everybody I'm not going to ask if
0:11
the mic is working like in every talk so
0:13
far um I'll just assume it's working I'm
0:17
just no
0:21
[ __ ] all right well make it work
0:23
somebody it works it works all right all
0:25
right this is like some kind of class
0:27
tradition um all right all right
0:31
uh I wrote out my talk um and afterwards
0:34
in a couple days I will like turn it
0:36
from a talk into an essay and put it
0:37
online so you don't have to take notes
0:39
just just listen um all right so one of
0:44
the advantages of having kids is that
0:46
when you have to give advice to people
0:48
you can ask yourself what would I tell
0:49
my own kids and actually you find this
0:51
really focuses you um so even though my
0:54
kids are little uh my 2-year-old today
0:58
went asked what he was going to be after
0:59
two said bat um the correct answer was
1:03
three but a bat is so much more
1:05
interesting um so even though my kids
1:08
are little I already know what I would
1:10
tell them about startups if they were in
1:12
college um and so that is what I'm going
1:14
to tell you so you're literally getting
1:15
what I would give my own kids um since
1:18
most of you are young enough to be my
1:20
own kids all right so startups are very
1:24
counterintuitive and I'm not sure
1:26
exactly why it could be simply because
1:29
knowledge about them has not permeated
1:31
our culture yet but whatever the reason
1:33
this is an area where you cannot trust
1:35
your intuitions all the time it's like
1:38
skiing in that way any of you guys learn
1:40
to ski as adults you know when you're
1:42
skiing when you first try skiing and you
1:44
want to slow down your first impulse is
1:46
to lean back just like in everything
1:47
else but lean back on skis and you fly
1:51
down the hill out of control so as I
1:53
learned um so part of learning to ski is
1:57
learning to suppress that impulse
1:59
eventually you get new habits but in the
2:01
beginning there's this list of things
2:03
you're trying to remember as you start
2:04
down the hill you know like alternate
2:06
feet make S turns do not drag the inside
2:09
foot all this stuff um well startups are
2:12
as unnatural as skiing and there is a
2:15
similar list of stuff you have to
2:16
remember for startups and what I'm going
2:18
to give you today um is the beginning of
2:21
the list the list of the
2:22
counterintuitive stuff you have to
2:24
remember to like prevent your existing
2:26
instincts from leading you
2:28
astray the first thing it is the fact I
2:32
just mentioned that startups are so
2:33
weird that if you follow your instincts
2:36
they will lead you astray if you
2:37
remember nothing more than that uh when
2:40
you're about to make a mistake you may
2:42
at least pause before making it when I
2:45
was running y combinator we used to joke
2:47
that um our function was to tell
2:50
Founders things they would ignore um and
2:53
it's really true batch after batch the
2:55
YC Partners warn Founders about mistakes
2:58
they are about to make and the founder
3:00
ERS ignore them and they come back a
3:02
year later and say I wish we'd listened
3:05
um but that dude is in their cap table
3:07
there's nothing they can do um why do
3:10
founders persistently ignore the
3:13
partner's advice well that's the thing
3:14
about counterintuitive ideas they
3:17
contradict your intuitions so um they
3:20
seem wrong so of course your first
3:22
impulse to ignore is to ignore them and
3:25
in fact that is not just the curse of Y
3:27
combinator but to some extent our risone
3:30
Det
3:30
you don't need people to give you advice
3:32
that doesn't surprise you right um if
3:35
Founders existing intuitions gave them
3:37
the right answers they wouldn't need us
3:39
that's why there are a lot of ski
3:41
instructors and not many running
3:43
instructors right like that you don't
3:45
see those two words together running
3:47
instructor as much as you see ski
3:49
instructor um it's because skiing is
3:52
counterintuitive so sort of what um what
3:56
YC is is like uh business ski
3:59
instructors except for going up slopes
4:01
instead of down them um well ideally uh
4:06
you can however trust your instincts
4:09
about people you your life so far hasn't
4:12
been much like starting a startup but
4:14
all the interactions you've had with
4:15
people are just like the interactions
4:16
you have with people in the business
4:18
world so in fact one of the big mistakes
4:20
that Founders make is not to trust their
4:22
intuitions about people enough they meet
4:25
someone who seems impressive but about
4:28
whom they feel some misgivings
4:30
um and then later when things blow up
4:33
they tell them they say you know I knew
4:35
there was something wrong about that guy
4:37
but I ignored it because he seemed so
4:39
impressive um and there's this a
4:42
specific subcase in business especially
4:45
if you come from an engineering
4:46
background as I believe you all do you
4:48
think business is supposed to be this
4:50
sort of slightly distasteful thing and
4:52
so when you meet people who seem smart
4:54
but somehow distasteful you think well
4:57
okay this must be normal for business
4:59
but it's not just like pick people the
5:01
way you would pick people if you were um
5:03
picking friends um this is one of those
5:06
rare cases where it works to be
5:08
self-indulgent work with people you
5:10
genuinely like and respect and that you
5:12
have known long enough to be sure
5:15
because there's a lot of people who are
5:17
really good at seeming likable for a
5:18
while um just wait till your interests
5:21
are opposed and then you'll see all
5:23
right um the second counterintuitive
5:26
point is that uh and this will might
5:29
come as a little bit of a disappointment
5:31
um but what you need to succeed in a
5:34
startup is not expertise in startups
5:38
that makes this class different from
5:40
most other classes you take if you take
5:42
a French class at the end of it you will
5:44
learn how to speak French if you do the
5:46
work you may not sound exactly like a
5:48
French person but pretty close right
5:52
um this class can teach you about
5:54
startups but that is not what you need
5:56
to know what you need to know to succeed
5:58
in a startup is not expertise in
6:00
startups what you need is expertise in
6:03
your own users Mark Zuckerberg did not
6:06
succeed in Facebook because he was an
6:09
expert in startups he succeeded despite
6:11
being a complete Noob at startups I mean
6:14
Facebook was first incorporated as a
6:16
Florida
6:17
LLC right even you guys know better than
6:21
that
6:22
um he succeeded despite being a complete
6:26
Noob at startups because he understood
6:28
his users very well
6:31
most of you don't know the mechanics of
6:33
raising an angel round right um and if
6:36
you feel bad about that don't because I
6:39
can tell you Mark Zuckerberg probably
6:40
doesn't know the mechanics of raising an
6:42
angel round either if he was even paying
6:45
attention when Ron Conway wrote him the
6:47
big check um he has probably forgotten
6:50
about it by now in fact I worry it's not
6:53
merely unnecessary for people to learn
6:55
in detail about the mechanics of
6:57
starting a startup but possibly somewhat
6:59
dangerous
7:00
because another of the characteristic
7:02
mistakes of young Founders starting
7:04
startups is to go through the motions of
7:07
starting a startup they come up with
7:09
some plausible sounding idea um they
7:13
raise funding at a nice valuation they
7:16
rent a nice Office in Soma hire a bunch
7:18
of their friends and then the next step
7:22
after uh rent a nice Office in Soma and
7:26
hire a bunch of their friends is
7:28
gradually realize how how completely
7:30
[ __ ] they are because while imitating
7:33
all the outward forms of starting a
7:35
startup they have neglected the one
7:37
thing that's actually essential which is
7:38
to make something people want by the way
7:41
that's the only use of that swear word
7:43
except for the initial one that was
7:44
involuntary um and I did check with Sam
7:47
whether it would be okay um he said he
7:50
had done it several times I mean Ed the
7:52
word uh
8:03
we saw this happen so
8:06
often no I mean people going through the
8:08
motions of starting a startup
8:11
um that we made up a name for it playing
8:15
house eventually I realized why it was
8:18
happening the reason young Founders go
8:20
through the motions of starting a
8:22
startup is because that is what they
8:24
have been trained to do for their whole
8:26
lives up to this point think about what
8:29
it takes to get into college
8:32
extracurricular activities check right
8:37
um even in college classes most of the
8:40
work you do is as artificial as running
8:41
laps and I am not attacking the
8:43
educational system for being this
8:46
way inevitably the work that you do to
8:49
learn something is going to have some
8:50
amount of fakeness to it and if you
8:52
measure people's performance they will
8:54
inevitably exploit the difference to the
8:56
degree that what you're measuring is
8:58
largely an artifact um the fakeness and
9:01
I confess that I did this myself in
9:03
college in fact here's a useful tip on
9:05
getting good grades um I found that in a
9:08
lot of classes there might only be 20 or
9:10
30 ideas that actually had the right
9:12
shape to make good exam questions and so
9:14
the way I studied for exams in these
9:16
classes was not to master the material
9:19
in the class but to try and figure out
9:21
what the exam questions would be and
9:22
work out the answers in advance and like
9:25
for me the test was not like what my
9:27
answers would be on the exam for me the
9:29
test was which of my exam questions
9:31
would turn up on the exam right so I
9:34
would I would get my grade instantly I
9:36
would walk into the exam and look at the
9:38
questions and see how many I got right
9:40
essentially
9:41
um it works in a lot of classes
9:44
especially CS classes I remember automa
9:46
Theory there's only a few things that
9:48
make sense to ask about automa Theory um
9:51
so it's not surprising that after being
9:53
effectively trained for their whole
9:55
lives to play Such games young Founders
9:57
first impulse on starting a startup is
9:59
to figure figure out what the tricks are
10:01
for this new game what are the
10:03
extracurricular activities of startups
10:05
what are the things I have to do um they
10:07
always want to know since since
10:10
apparently the measure of success for a
10:12
startup is fundraising another Noob
10:14
mistake um they always want to know what
10:17
are the tricks for convincing investors
10:19
and we have to tell them the best way to
10:21
convince investors is to start a startup
10:23
that's actually doing well meaning
10:25
growing fast and then simply tell
10:27
investors so um so then they ask okay
10:31
what are the tricks for grilling fast
10:33
right um and this is exacerbated by the
10:35
existence of this term growth hacks
10:38
right whenever you hear anybody talk
10:40
about growth hacks just mentally
10:42
translate it in your mind into [ __ ]
10:45
um because what we tell them is the way
10:48
to make your startup grow is to make
10:51
something that users really love right
10:53
and then tell them about it h so that's
10:56
what you have to do that's growth hacks
10:58
right there um so so so many of the
11:01
conversations the YC Partners have with
11:04
the founders begin with the founders
11:06
saying a sentence that begins with how
11:07
do I and the partner is answering with
11:10
the sentence that begins with just right
11:13
why do they make things so complicated
11:16
the reason I realized after years of
11:17
being puzzled by this is they're looking
11:19
for the trick they've been trained to
11:21
look for the trick so this is the third
11:24
thing the third counterintuitive thing
11:26
to remember about startups starting a
11:28
startup is where gaming the system stops
11:30
working gaming the system may continue
11:33
to work if you go to work for a big
11:35
company depending on how broken the
11:37
company is you may be able to succeed by
11:40
sucking up to the right person um giving
11:43
the impression of productivity by
11:45
sending emails late at night um or if
11:48
you're smart enough changing the clock
11:50
on your computer um because who's going
11:52
to check the headers right um but I like
11:56
an audience that I can tell jokes like
11:58
that too and they laugh um over in the
12:01
business school
12:02
headers um
12:05
okay God this thing is being
12:09
recorded I just realized
12:13
that all right from now on we are
12:15
sticking Strictly To The Script um all
12:19
right um but in startups that does not
12:22
work there's no boss to trick there's no
12:25
how can you trick people if there's no
12:27
one to trick there's only users and all
12:29
users care about um is that is whether
12:32
your software does what they want right
12:34
they're like sharks sharks are like too
12:37
stupid to fool you can't like wave a red
12:39
flag at a shark and fool it it's like
12:41
meat or no meat um so you have to have
12:44
something people want and you only
12:46
Prosper to the extent that you do the
12:49
dangerous thing is particularly for you
12:51
guys the dangerous thing is that faking
12:53
does work to some extent with investors
12:55
you if you're really good at knowing
12:57
what you're talking about you can fool
12:59
in ERS for one maybe two rounds of
13:01
funding but it's not in your interest to
13:04
I mean you're all doing this for Equity
13:06
you're playing a confidence trick on
13:07
yourself you're wasting your own time
13:09
because the startup is doomed and all
13:11
you're doing is you're just going to
13:13
waste your time writing it down um so
13:15
stop looking for the trick there are
13:17
tricks in startups as there are in any
13:20
domain but they are in order of
13:21
magnitude less important than solving
13:23
the real problem someone who knows zero
13:26
about fundraising but has made something
13:28
users really love will have an easier
13:30
time raising money than someone who
13:32
knows every trick in the book but has a
13:34
flat usage graph um though in a sense
13:37
it's bad news that gaming the startup
13:40
stops work gaming the system stops
13:42
working now um in the sense that you're
13:45
deprived of one of your most powerful
13:46
weapons and after all something you have
13:48
spent 20 years mastering um it is
13:52
something I find it very exciting uh
13:55
that the that the that there even exist
13:57
parts of the world where game the system
14:00
is not how you win I would have been
14:02
really excited in college if I had
14:04
explicitly realized that there are parts
14:06
of the world where gaming the system
14:08
matters less than others and some where
14:10
it hardly matters at all but there are
14:12
and this is one of the most important
14:13
things to think about when you're
14:14
planning your future
14:18
um got that okay
14:22
um how do you win at each type of work
14:25
and what do you want to win by
14:28
doing so
14:30
um that brings us to our fourth
14:32
counterintuitive Point startups are all
14:34
consuming if you start a startup it will
14:37
take over your life to a degree that you
14:40
cannot imagine um and if it succeeds it
14:44
will take over your life for a long time
14:45
for several years at the very least
14:47
maybe a decade maybe the rest of your
14:49
working life so there's a real
14:51
opportunity cost here it may seem to you
14:55
that Larry pagee has an enviable life
14:57
but there are parts of it that are
14:58
definitely unv viable the way the world
15:01
looks to him is that he started running
15:03
as fast as he could at age 25 and he has
15:06
not stopped to catch his breath since
15:09
every day [ __ ] happens within the Google
15:11
Empire that only the emperor can deal
15:14
with and he as the emperor has to deal
15:16
with it if he goes on vacation for even
15:19
a week a whole backlog of [ __ ]
15:22
accumulates and he has to bear this
15:25
uncomplainingly because number one as
15:27
the company's Daddy he can never show
15:29
fear or weakness and number two if
15:32
you're a billionaire you get zero
15:34
actually less than zero sympathy if you
15:36
complain about having a difficult
15:40
life which has the strange side effect
15:43
that the difficulty of being a
15:45
successful startup founder is concealed
15:48
from almost everyone who's done it
15:49
people who win the 100 meters in the
15:51
Olympics like they walk up to them and
15:52
they're going
15:53
like right like Larry pig is doing that
15:56
too but you never get to see it um all
15:59
right where are we ycombinator has now
16:02
funded several companies that could be
16:03
called Big successes um and in every
16:06
single case the founders say the same
16:08
thing it never gets any easier the
16:11
nature of the problems change so you may
16:14
be you may be worrying about more
16:15
glamorous problems like construction
16:17
delays in your New London offices rather
16:20
than the broken air conditioner in your
16:22
studio apartment but the total volume of
16:24
worry never decreases if anything it
16:27
increases starting a successful startup
16:29
is similar to having kids and that it's
16:32
like a button you press that changes
16:34
your life
16:35
irrevocably um and while it is like
16:39
honestly the best thing in the world
16:41
having kids um if you take away one
16:43
thing from this lecture remember that um
16:47
uh there are a lot of things that are
16:50
easier to do after you before you have
16:53
kids then after many of which will make
16:55
you a better parent when you do have
16:57
kids and so in rich countries
17:00
most people delay pushing the button for
17:02
a while and I'm sure you are all
17:04
intimately familiar with that um
17:06
procedure
17:07
um yet when it comes to starting
17:10
startups a lot of people seem to think
17:12
they're supposed to start them in
17:14
college are you crazy and what are the
17:17
universities thinking they go out of
17:19
their way to ensure that their students
17:21
are well supplied with contraceptives
17:23
and yet they're starting up
17:24
entrepreneurship programs and startup
17:26
incubators left and right
17:29
to be fair the universities have their
17:31
hand forced here a lot of incoming
17:33
students are interested in startups
17:35
universities are at least de facto
17:37
supposed to prepare you for your career
17:40
and so if you're interested in startups
17:41
it seems like universities are supposed
17:43
to teach you about startups and if they
17:44
don't maybe they lose applicants to
17:47
universities who do claim to do that so
17:50
can universities teach you about
17:52
startups well not what are we doing here
17:56
um yes and no as I explained they can
17:59
teach you about startups but this is not
18:01
what you need to know essentially what
18:04
univers if you want to learn French
18:06
universities can teach you Linguistics
18:08
that's what this is this is a
18:09
Linguistics class right we're teaching
18:11
you about how to learn languages and
18:13
what you need to know is like how to
18:14
learn a particular language um what you
18:18
need to know are the needs of your own
18:20
users you can't learn those until you
18:22
actually start the company um and
18:25
starting a company which means that
18:27
starting a startup is something and you
18:28
can intrinsically only learn by doing it
18:31
and you can't do that in college for the
18:32
reason I just explained that startups
18:34
take over your entire life if you start
18:37
a startup in college if you start up
18:38
startup as a student you can't start a
18:40
startup as a student because if you
18:41
start a startup you're not a student
18:43
anymore you may be nominally a student
18:45
but you won't even be that for much
18:46
longer so given this dichotomy which of
18:49
the two paths should you take be a real
18:52
student and not start a startup or start
18:54
a real startup and not be a student well
18:56
I can answer that one for you I'm
18:58
talking to my own kids
19:00
here do not start a startup in college
19:04
uh I hope I'm not disappointing anyone
19:06
seriously honestly um starting a startup
19:10
could be a component of a good life for
19:12
a lot of ambitious people but this is
19:14
just part of a much bigger problem that
19:16
you're trying to solve how to have a
19:18
good life right and though starting a
19:20
startup could be a good thing to do at
19:22
some point 20 is not the optimal time to
19:25
do it there are things that uh that you
19:28
can't there there are things you can do
19:30
in your early 20s that you cannot do as
19:32
well before or after like plunge deeply
19:35
into projects on a whim that seem like
19:37
they'll have no payoff um or travel
19:40
super cheaply with no sense of a
19:42
deadline in fact those are really just
19:44
isomorphic shapes in different domains
19:46
um for unambitious people this sort of
19:49
thing can be the dreaded Failure to
19:51
Launch but for the ambitious ones it's a
19:54
really valuable sort of exploration and
19:57
if you start a start up at 20 and
19:59
sufficiently successful you will never
20:01
get to do it Mark Zuckerberg will never
20:04
get to bum around a foreign country he
20:07
can if he goes to a foreign country it's
20:08
either as a de facto State visit or like
20:11
he's hiding out Incognito at the George
20:13
the George sank in Paris right um but
20:17
he's never going to get to just like
20:18
backpack around Thailand if that's still
20:20
what people do um do people still
20:23
backpack around Thailand Okay well there
20:26
that's the first real sign of enthusiasm
20:28
I've seen from this should have given
20:31
this talk in Thailand
20:35
um all right he can do things that you
20:38
can't do like Charter Jets to fly him to
20:41
foreign countries really big jets um but
20:45
success has taken a lot of the
20:46
Serendipity out of his life he uh
20:49
Facebook is running him as much as he's
20:51
running Facebook and while it can be
20:53
really cool to be in the grip of some
20:56
project you consider your life's work
20:59
um there are advantages to
21:02
Serendipity and uh among other things it
21:06
gives you more options to choose your
21:08
life's work from there's not even a
21:10
trade-off here you're not sacrificing
21:12
anything if you forego starting a start
21:14
up at 20 because you'll be more likely
21:16
to succeed if you wait in the unlikely
21:19
case that you're 20 like astronomically
21:21
unlikely case that you're 20 and you
21:23
have some side project that takes takes
21:26
off like Facebook did then you face a
21:28
choice either running with it or not and
21:30
maybe it's reasonable to run with it but
21:33
usually the way startups take off is for
21:35
the founders to make them take off and
21:36
it's gratuitously stupid to do that at
21:41
20 so should you do it at any age I
21:44
realize I've made starting a startup
21:46
sound kind of hard if I haven't let me
21:49
try again starting a startup is really
21:53
hard H what if it's too hard what if
21:56
you're not up to this challenge the the
21:59
answer is the fifth counterintuitive
22:01
point you can't tell your life so far
22:05
has given you some idea what your
22:07
prospects might be if you wanted to
22:09
become a mathematician or a professional
22:12
football player um and boy it's not
22:14
every audience you could say that to you
22:17
H but unless you have had a very strange
22:19
life indeed you have not done much
22:21
that's like starting a startup meaning
22:23
starting a startup will change you a lot
22:26
if it works out so what you're trying to
22:28
estimate is not not just what you are
22:29
but what you could become and who can do
22:31
that well not me for the last nine years
22:35
it was my job to try and guess whether
22:37
people would guess I wrote predict in
22:40
here and it came out as guess um that's
22:42
a very informative Freudian slip
22:46
um seriously it's easy to tell how smart
22:50
people are in 10 minutes you know hit a
22:52
few tennis balls over the net and do
22:53
they hit them back at you or into the
22:55
net um but the hard part was and the
22:59
most important part was predicting how
23:00
tough and ambitious they would become um
23:03
there may be no one at this point who
23:05
has more experience than me at doing
23:06
this and I can tell you how much an
23:08
expert can know about that the answer is
23:10
not much I learned from experience to
23:13
keep a completely open mind about which
23:15
startup in each batch which startups
23:17
would turn out to be the Stars the
23:19
founders sometimes thought they knew
23:22
some arrived feeling confident that they
23:24
would Ace y combinator just as they had
23:27
aced everyone of the few easy artificial
23:30
tests they had faced in life so far
23:33
others arrived wondering what mistake
23:35
had caused them to be admitted and
23:37
hoping that no one would discover it um
23:40
but there is little to no attit no
23:43
correlation between these attitudes and
23:44
how things turn
23:47
out I've read the same is true in the
23:49
military that the swaggering recruits
23:51
are no more likely to turn out to be
23:53
really tough than the quiet ones and
23:55
probably for the same reason that the
23:57
tests are so different from the tests in
23:59
people's previous lives if you're
24:02
absolutely terrified of starting a
24:03
startup you probably shouldn't do it
24:05
unless you're one of those people who
24:07
gets off on doing things you're afraid
24:08
of um otherwise if you're merely unsure
24:11
of whether you're going to be able to do
24:13
it the only way to find out is to
24:16
try just not
24:19
now so if you want to start up one day
24:23
if you want to start a startup one day
24:25
what do you do now in college there are
24:27
only two things you need initially an
24:31
idea and co-founders and the mo
24:34
forgetting them both is the same which
24:36
leads to our sixth Sixth and last
24:39
counterintuitive Point um the way to get
24:42
startup ideas is not to try to think of
24:44
startup ideas I've written a whole essay
24:46
on this and I'm not going to repeat the
24:48
whole thing here um but the short
24:50
version is that if you make a conscious
24:52
effort to try and think of startup ideas
24:54
you will I think of ideas that are not
24:56
only bad but bad and plausible sounding
24:59
meaning you and everybody else will be
25:01
fooled by them and you'll waste a lot of
25:02
time before realizing they're no good
25:05
the way to come up with good startup
25:07
ideas is to take a step
25:09
back instead of trying to make a
25:11
conscious effort to think of startup
25:13
ideas turn your brain into the type that
25:16
has startup ideas
25:18
unconsciously in fact so unconsciously
25:21
that you don't even realize at first
25:23
that there startup ideas this is not
25:25
only possible Yahoo Google
25:29
Facebook and apple all got started this
25:32
way none of these companies were even
25:34
supposed to be companies at first they
25:36
were all just side projects the very
25:39
best ideas almost have to start as side
25:41
projects because they're always such
25:42
outliers that your conscious mind would
25:45
reject them as ideas for
25:47
companies okay so how do you turn your
25:51
mind into the kind that has startup
25:53
ideas unconsciously one learn a lot
25:56
about things that matter two work on
25:59
problems that interest you three with
26:02
people you like and respect that third
26:05
part incidentally is how you get
26:06
co-founders at the same time as the idea
26:10
the first time I wrote that paragraph
26:12
instead of learn a lot about things that
26:14
matter I
26:15
wrote become good at some technology but
26:19
that prescription though sufficient is
26:22
too narrow what was special about Brian
26:25
chesky and Joe gbia from Airbnb was not
26:28
that they were experts in technology
26:30
they went to art school they were
26:32
experts in design and perhaps even more
26:35
importantly they were really good at
26:37
organizing people and getting projects
26:39
done um so you don't have to work on
26:43
technology per se so long as you work on
26:45
things that stretch you what kind of
26:48
things are those now that is very hard
26:50
to answer in the general case history is
26:53
full of examples of young people who
26:55
were working on problems that no one
26:57
else at the time thought were important
26:59
and in particular that their parents
27:01
didn't think they were were important um
27:03
on the other hand history is even
27:06
Fuller of CA of examples of parents who
27:09
thought their kids were wasting their
27:10
time and who were right so how do you
27:14
know if you're working on real
27:17
stuff I mean when Twitch TV switched
27:20
from being uh Justin.tv to Twitch TV and
27:23
they were going to broadcast people
27:25
playing video games I was like what but
27:28
turned out to be a good business um well
27:32
I know I know how I know real problems
27:35
are interesting and I'm self-indulgent I
27:37
like I'm always interested in working on
27:39
interesting things even if no one else
27:40
cares about them and I find it very hard
27:42
to make myself work on boring things
27:44
even if they're supposed to be important
27:46
my life is full of case after case where
27:48
I worked on things just because I was
27:50
interested and they turned out to be
27:52
useful later in some worldly way um why
27:55
combinator itself is something I only
27:56
did because it seemed interesting so I
27:59
seem to have some sort of internal
28:00
compass that helps me out but this is uh
28:03
for you not me and I don't know what you
28:05
have in your heads maybe if I think more
28:07
about it I could come up with some
28:08
heuristics for recognizing genuinely
28:11
interesting ideas but for now all I can
28:14
give you is the hopelessly question
28:17
begging advice um incidentally this is
28:20
the actual meaning of the phrase begging
28:22
the question the hopelessly question
28:24
begging advice that if you're interested
28:26
in genuinely interesting problem
28:28
problems gratifying your interest
28:30
energetically is the best way to prepare
28:32
yourself for a startup and for that
28:34
matter probably the best way to live but
28:37
although I can't explain in the general
28:39
case what counts as an interesting
28:40
problem I can tell you about a large
28:43
subset of them if you think of
28:45
Technology as something that's spreading
28:47
like a sort of fractal stain every point
28:50
on the edge that's moving represents an
28:52
interesting problem steam engines not so
28:55
much although maybe you never know um
28:59
so one guaranteed way to turn your mind
29:01
into the type that startup ideas form in
29:04
unconsciously is to get yourself to the
29:06
Leading Edge of some technology to to as
29:09
Paul buite put it um live in the future
29:12
and when you get there ideas that seem
29:15
uncannily precient to other people will
29:18
seem obvious to you you may not realize
29:21
their startup ideas but you'll know
29:22
there's something that ought to exist
29:24
for example back at Harvard back in the
29:26
mid90s a fellow Brad student of my
29:29
friends Robert and Trevor wrote his own
29:31
Voiceover IP software um it wasn't meant
29:34
to be a startup he never tried to turn
29:36
it into one he just wanted to talk to
29:38
his girlfriend in Taiwan without paying
29:40
for long-distance calls um and since he
29:43
was an expert on networks it seemed
29:46
obvious to him that the thing to do was
29:48
turn the sound into packets and ship
29:50
them over the Internet for free why
29:52
didn't everybody do this well because
29:53
they weren't good at writing that kind
29:55
of software um he never did anything
29:59
with this he never tried to turn it into
30:00
a startup but that is how all the best
30:03
startups tend to happen um so strangely
30:06
enough the optimal thing to do in
30:08
college if you want to be a successful
30:09
startup founder is not some sort of new
30:12
vocational version of college focused on
30:16
entrepreneurship it's the classic
30:18
version of college is education for its
30:20
own
30:21
sake if you want to start a startup what
30:23
you should do in college is learn
30:26
powerful things and if if you have
30:28
genuine intellectual curiosity that's
30:31
what you'll naturally tend to do if you
30:33
just follow your own inclinations the
30:35
component of Entrepreneurship I can
30:37
never quite say that word with a
30:39
straight face um that really matters is
30:43
domain
30:44
expertise Larry pagee is Larry Page
30:46
because he was an expert on search and
30:49
the way he became an expert on search
30:50
was because he was genuinely interested
30:52
in it not because of some ulterior
30:54
motive at its best starting a startup is
30:58
merely an alterior motive for curiosity
31:00
and you'll do it best if you introduce
31:02
the ulterior motive at the end of the
31:04
process so here is the ultimate advice
31:08
for young wouldbe startup Founders
31:10
reduced to two words just
31:13
learn all right how much time do we have
31:15
left 18 minutes 18 minutes of questions
31:18
good god um do you guys have the
31:21
questions uh sure we'll start with uh
31:23
two questions online or we can start
31:26
with audience you guys are in charge
31:27
whatever you want want to
31:29
do uh okay um so to start with online
31:34
questions uh the most voted question
31:36
today was do I have to repeat them by
31:38
the way how can a non-technical Founder
31:41
most effectively contribute to a startup
31:43
how can a non-technical Founder most
31:45
effectively contribute to a startup um
31:48
well if the startup is if the startup is
31:52
working in some domain um if it's not a
31:54
pure technology startup but is working
31:56
in some very specific domain
31:59
um like if it's Uber right and and the
32:02
and the non-technical founder was an
32:04
expert in the limo business then
32:06
actually the non-technical founder are
32:08
probably doing most of the work
32:10
recruiting drivers and doing whatever
32:12
else Uber has to do right and the
32:14
technical founder would be just writing
32:15
the iPhone app which is probably less
32:18
well iPhone and Android app um which is
32:21
less than half of it um if it's a purely
32:24
technology startup the the non-technical
32:28
found ER does
32:29
sales and brings coffee and
32:32
cheeseburgers to the
32:34
programmer okay
32:36
nice oh audience okay audience yes do
32:41
you see um any value in business school
32:44
for people who want to pursue
32:46
entrepreneur entrepreneurship do I see
32:49
any value or if so what value I guess
32:51
I'm hoping we probably won't have to get
32:53
to the second
32:55
question which I suppose is the answer
32:57
to your first first question um okay so
33:00
the question is is there any value in
33:02
business school if you're interested in
33:04
entrepreneurship and if so what um so
33:08
basically no I mean it sounds
33:10
undiplomatic but the the point B what
33:12
business school was designed for is to
33:15
teach people management right and
33:18
management is a problem that you only
33:20
have in a startup if you're sufficiently
33:22
successful um so really what you need to
33:26
what you need to know early on to make a
33:28
startup successful is developing
33:30
products you'd be better off going to
33:32
design school um if you want to go to
33:34
some sort of school although frankly the
33:36
way to learn how to do it is just to do
33:37
it you know one of the things I got
33:40
wrong early on uh is that I advised
33:43
people who were interested in starting a
33:44
startup to go work for some other
33:46
company for a few years before starting
33:48
their own but honestly the best way to
33:50
learn how to start a startup is just to
33:51
try and start it you may not be
33:53
successful but you'll learn faster if
33:55
you just do
33:56
it so not
33:59
really um Business Schools are trying
34:02
really hard to do this but honestly like
34:05
they were they were designed to train
34:06
the officer Corp of large companies
34:09
right which is what business seemed to
34:11
be back when it was a choice of either
34:13
the officer Corp of large companies or
34:14
Joe's shoe store and and then then there
34:17
was this new thing Apple which started
34:19
out as small as Joe's shoe store and
34:21
then like turns into this giant mega
34:23
company um but they weren't designed for
34:25
that world and like let they're good at
34:27
what they're good at they should just be
34:28
do that and screw this whole
34:30
entrepreneurship thing just because it's
34:31
cool yes you said management is a
34:35
problem that you have only when you're
34:36
successful so what about those first two
34:39
or three people as a Founder that you're
34:40
trying to manage okay so management is a
34:43
problem only if you're successful what
34:45
about those first two or three people
34:47
well ideally you're successful before
34:50
you even hire two or three people right
34:53
um didn't didn't you say sam that Airbnb
34:55
took five months to hire their first
34:58
employee um so ideally you don't have
35:02
even two or three people for quite a
35:04
while uh when you
35:07
do you can you can sort
35:09
of the the first hires in a startup are
35:13
almost like Founders they should be
35:15
motivated by the same things they can't
35:18
be people they can't be people you have
35:20
to like manage right um this is like
35:23
that this is not like the office or
35:25
something like that these are your these
35:27
have to your peers really um you
35:30
shouldn't have to manage them much so is
35:32
it just a big no no like someone has to
35:34
be manag no way they can be on
35:37
the uh well Never Say Never the qu I
35:40
should repeat all these questions so if
35:41
someone has to manage no way they should
35:43
be on the founding team um in the case
35:47
where you're doing something where you
35:49
need some sort of super Advanced
35:50
technical thing and there's some bofin
35:54
um if you know that word who knows this
35:56
thing and nothing else in the world
35:58
including like how to wipe his mouth um
36:00
then it may be to your advantage to hire
36:03
said bofin and wipe his mouth for him um
36:06
but
36:08
uh as a general rule you want people who
36:11
are um sort of selfmotivated early on
36:15
they should be just like
36:17
Founders yes questions in the far back
36:21
do you think we're currently in a bubble
36:23
do I think we're currently in a bubble
36:25
um okay so I'll give you two answers to
36:28
this question uh uh one ask me questions
36:33
that are useful to this audience because
36:35
these people are here to learn how to
36:36
start startups and I have in my head
36:38
like more data about that than anybody
36:39
else and you're asking me the kind of
36:41
questions a reporter does because they
36:42
can't think of anything interesting to
36:44
ask um but I will answer your question
36:47
um there is a difference between prices
36:50
merely being high and a bubble a bubble
36:53
is a very specific form of prices being
36:55
high where people knowingly pay high
36:57
prices for something in the hope that
37:00
they will be able to unload it later on
37:01
some greater fool right and that's what
37:04
happened in the late '90s like in VCS
37:06
knowingly invested in [ __ ] startups
37:09
thinking that they would be able to take
37:11
those things public and unload them on
37:12
the retail investors before everything
37:14
blew up and I was there I was there for
37:17
that um at the epicenter of it all and
37:21
that is not what's happening today
37:22
prices are high valuations are high but
37:25
valuations being high does not mean a
37:27
bubble every every commodity has prices
37:29
that go up and down in some sort of sine
37:31
wave um definitely prices are high uh
37:34
and so we tell people if you raise money
37:36
don't think the next time you raise
37:38
money it's going to be so easy who knows
37:40
maybe between now and then the Chinese
37:42
economy will have exploded and there's
37:43
another giant disastrous recession who
37:45
knows assume the worst um but bubble
37:50
no yes I'm noticing a trend among um
37:54
young people and successful
37:56
entrepreneurs um where they don't want
37:58
to start one more great company they
38:00
want to start like 20 and so you're
38:03
starting to see the rise of these Labs
38:05
attempts where they're going to try to
38:07
launch a bunch of stuff I don't know a
38:09
really Stellar example yet but like
38:12
ideal like no like like like IDE lab
38:17
like gar Camp's new one there's North oh
38:20
yeah yeah okay so there's this new thing
38:23
where people start Labs that are
38:25
supposed to spin-off startups um it
38:28
might work that's how Twitter started in
38:31
fact it I meant ideal lab not Ideo that
38:33
was another Freudian slip um because
38:36
Twitter was not Twitter at first Twitter
38:38
was the side
38:40
project side project at a company called
38:43
Ideo That was supposed to be in the
38:45
podcasting business you're like
38:47
podcasting business do those words even
38:49
grammatically fit together um the answer
38:51
turned out to be no as Evan discovered
38:54
um but like as a side project they spun
38:55
off Twitter and boy was that uh dog
38:58
wagging tail um so people are starting
39:01
these things that are supposed to
39:02
spin-off startups will it work quite
39:04
possibly quite possibly if the right
39:06
people do it um you can't do it yet
39:09
though because you have to do it with
39:10
your own money um yes far back I think
39:13
so much um I hate to step into sort of a
39:15
gendered pitfall but what advice do you
39:17
have for female co-founders as you're
39:19
pursuing funding female co-founders when
39:22
you're pursuing funding well it probably
39:24
is true that women have a harder time
39:26
raising money right um I've noticed this
39:29
empirically and um Jessica is just about
39:33
to publish a bunch of interviews with
39:34
female Founders and a lot of them said
39:37
that they thought they had had a hard
39:38
time a harder time raising money too um
39:42
so what I would you remember I said like
39:44
the way to raise money make your startup
39:47
actually do well well that's just
39:49
especially true in that case if you have
39:52
any if you if you miss the ideal Target
39:55
from the VC's point of view in any
39:56
respect the way to solve that problem is
39:59
make the startup do really well um so in
40:01
fact there was a point like a year or
40:03
two ago when I tweeted this growth graph
40:05
of this company and I didn't say who
40:07
they were um but I knew it would start
40:09
people asking and it was actually a
40:10
female founded startup that was having
40:12
trouble raising money but their growth
40:14
graph were stupendous and so I tweeted
40:16
it knowing that like all these VCS would
40:18
start asking me who who is that right
40:21
and like growth graphs have no gender
40:23
right so if they see the growth graph
40:24
first let them fall in love with that
40:26
right um
40:29
so do well which is good advice for
40:31
startups generally yes what would you
40:33
learn in college right now what what
40:35
what would you learn in college right
40:36
now what would I learn in
40:39
college
40:41
H literary Theory no just kidding um
40:46
let's see
40:48
um well you know honestly I think I
40:51
might try and study Physics I feel
40:53
that's the thing I feel like I missed
40:55
for some reason like I was all excited
40:58
when I was a kid computers were the
41:00
thing maybe they still are right so I
41:01
sort of got very excited about writing
41:04
code um and you could do things with you
41:06
could do you could write real programs
41:08
in your bedroom you can't like build
41:09
real in your accelerators maybe you can
41:12
um so maybe maybe physics I feel kind of
41:15
I always I have I sort of look long I
41:17
notice I sort of look longingly at
41:19
physics um so maybe but I don't know if
41:23
that's what am I saying I'm saying I was
41:25
about to say I don't know if that's
41:26
going to be helpful starting a start up
41:28
and I've just told you to follow your
41:29
own curiosity so who cares if it's
41:31
helpful it'll turn out to be helpful
41:34
questions uh another question online uh
41:36
what are your recurring systems in your
41:38
work and personal life that make you
41:40
efficient ah boy okay so what are my
41:43
recurring systems in my work and
41:45
personal life that make me
41:47
efficient um well having kids is a good
41:50
way to be efficient because you have no
41:52
time left um so if you want to get
41:54
anything done um the amount of done you
41:56
do per time is high hi um so uh actually
42:01
many parents many startup Founders who
42:04
have kids have made that point
42:05
explicitly it causes you to focus um
42:08
because you have no choice uh let's see
42:11
but that's not I wouldn't actually
42:12
recommend having kids just to make you
42:14
more
42:15
focused so
42:18
uh let's see um you know I don't think
42:24
I'm very efficient I have two ways of
42:25
getting work done one is like
42:27
ycombinator the way I worked on YC
42:29
combinator is I was forced to right like
42:31
there there was an I had to set the
42:33
application deadline and then people
42:35
would apply and then there were all
42:36
these applications that I had to respond
42:38
to by a certain time so I had to read
42:39
them and I knew if I read them badly we
42:42
would get bad startups so I tried really
42:43
hard to read them well right so I set up
42:45
this situation that forced me to work um
42:48
the other kind of work I do is like
42:49
writing essays and I do that
42:51
involuntarily I'm like walking down the
42:53
street and the essay starts writing
42:55
itself in my head um and so really I
42:59
either force myself to work on less
43:02
exciting things um or the I can't help
43:06
working on um on exciting things and I
43:10
don't I don't have any useful techniques
43:12
for making myself efficient sorry um if
43:16
you work on things you like you don't
43:17
have to force yourself to be efficient
43:19
yes I'm think it's a good time to turn a
43:21
side project into a real startup when is
43:24
a good time to turn a side project into
43:26
a startup you will know
43:31
right it starts you you when you okay so
43:34
the question is when do you turn a
43:35
startup into a side project into a real
43:38
startup you will know that it's becoming
43:40
a real startup when it takes over an
43:42
alarming percentage of your
43:43
life right um like when you find like my
43:46
god I've just spent all day working on
43:48
this thing that's supposed to be a side
43:49
project I'm going to fail all my classes
43:51
what am I going to do right um then
43:54
maybe it's turning into a startup yes
43:56
wait I already answered your question I
43:58
should ask I should let somebody else
43:59
ask I may get back to you yes so I I
44:02
know you talked a lot earlier about
44:03
you'll know when you're started was
44:05
doing extremely well but I feel like in
44:06
a lot of cases there's a bit of a gry
44:08
line where it's like you know you have
44:09
some users but maybe not it's explosive
44:11
go chart isn't up to the right how what
44:14
would you do or what would you recommend
44:15
doing in those situations considering
44:16
you're allocating time and resources how
44:18
do you balance and okay when to Startup
44:21
is sort of growing but not much um
44:24
didn't you tell them they were supposed
44:25
to redo things that don't scale you sir
44:28
have not done the readings and you are
44:29
busted therefore because I wrote a whole
44:31
essay and answer to that question and
44:33
that is it do things that don't scale so
44:35
just go read that um because I can't
44:37
remember everything I said but it's
44:40
about exactly that problem yes back
44:43
there what kind of startups should not
44:45
go through incubation in your opinion
44:47
what kind of you mean do you mean
44:48
incubation LC no yeah YC or what kind of
44:52
startup should not go through YC um
44:55
definitely any that will fail
45:00
um and or if you'll succeed but you're
45:03
an intolerable intolerable person um
45:06
that also Sam would probably sooner do
45:08
without um short of that I I cannot
45:13
think of any because a large percentage
45:16
Founders are often surprised by how
45:18
large a percentage of the problems that
45:20
startups have are the same regardless of
45:22
what type of thing they're working on
45:24
and those tend to be the kind of
45:26
problems that YC helps with the most not
45:27
the ones that are domain specific so I
45:30
can't is there do you can you think of a
45:32
class of startups that YC wouldn't work
45:34
for I can't I mean we had like fision
45:37
and fusion startups in the last batch or
45:41
they had um yes um you mentioned that
45:44
it's good advice to learn a lot about
45:46
something that matters what are some
45:47
good strategies to figure out what
45:49
matters well if you think of okay so how
45:52
do you figure out what matters um if you
45:55
think of Technology as something that's
45:57
spreading as a sort of fractal stain
46:00
anything on the edge represents an
46:02
interesting idea sounds familiar um so
46:06
how do you figure out um like I said
46:09
that was the problem you have correctly
46:11
identified um the thing where I didn't
46:13
really answer the question or I gave
46:14
this question begging answer I said like
46:17
that I just like I'm interested in
46:18
interesting things if you're interested
46:19
in interesting things work on them and
46:21
things will all work out right um but
46:23
how do you tell what is a real problem I
46:27
don't know that's like important enough
46:28
to write a whole essay about and I don't
46:30
know the answer I probably should write
46:31
something about that but I don't know I
46:33
don't know um I figured out a technique
46:36
for detecting whether you have a taste
46:38
for genuinely interesting problems um
46:41
which is whether you find working on
46:42
boring things intolerable right and
46:45
there are known boring things like
46:47
literary Theory and working in middle
46:49
management in some large company so if
46:51
you could tolerate those things then you
46:52
must not you must either have stupendous
46:54
self-discipline or um you don't have a
46:57
taste for genuinely interesting problems
46:59
um and vice versa yes one more question
47:02
okay one more question it better be good
47:04
I was just wondering how like Snapchat
47:06
like makes money refs to do so Snapchat
47:09
what do I know about
47:11
Snapchat we didn't fund
47:13
them can I have about another
47:16
question all right go
47:19
ahead talking about hiring people that
47:23
like but it seems like that could lead
47:25
to a monoculture and there a lot of
47:26
benefits culture but how do you deal
47:28
with the blind spots that arise okay so
47:31
if you hire people you like you might
47:32
get a monoculture and how do you deal
47:34
with the blind spots that arise um
47:36
starting a startup is something where
47:38
many things will be going wrong you
47:39
can't expect it to be perfect and the
47:41
advantage is of of hiring people that
47:43
you know and like are far greater than
47:46
the you know the small disadvantage of
47:48
disadvantages of having some monoculture
47:50
you look at it empirically all the most
47:52
successful startup someone just like
47:54
hires all their Pals out of college all
47:56
right you guys thank you
48:00
[Applause]