Sam: Hi, 2
everyone. 3
My name is Sam Altman and this is How To Build a Future. 4
Today, 5
our guest is Jessica Livingston, 6
the founder of Y Combinator, 7
where I now work. 8
Y Combinator has funded 1, 9
500 startups, 10
and they are worth more than $70 billion in total. 11
More than 10 of them are worth more than a billion dollars or more. 12
So, 13
in terms of how to create a unicorn, 14
Jessica Livingstone probably knows more about this and maybe anybody else in the world. 15
So we are super delighted you came here today talk to us. 16
Jessica: Thank you for having me. 17
Sam: What I really wanna get out of you is how founders get on a path to build a huge company. 18
So, 19
you have now, 20
for 11 years seen founders coming when they are just two or three people and an idea. 21
And sometimes, 22
those founders go on to do nothing most of the time. 23
Sometimes they create a small success, 24
and sometimes they create these companies that really transform the world, 25
and YC has been very fortunate to be involved in a lot of these, 26
Airbnb, 27
Dropbox, 28
Stripe, 29
the list goes on. 30
And what I think would be really helpful is to talk about what the companies do during Y Combinator that allows them to go on and build super impactful companies. 31
So what have you observed the very best companies do when they are brand new? 32
Jessica: Well, 33
I've now seen more than a thousand companies go through YC, 34
so I'm very familiar what these companies do during YC. 35
And I'm first gonna 36
say that there is not really one path for everyone necessarily, 37
and a lot of times these successful startups get started almost accidentally. 38
But when they are at the point where they say, 39
"Yes, 40
I am gonna take this company seriously, 41
I am gonna apply to Y Combinator, 42
" and then they come here to Silicon Valley for three months. 43
The most successful founders I have noticed are totally focused on two things, 44
building their product and making something people want, 45
which of course, 46
is our motto, 47
and talking to their users. 48
And they do not let themselves get distracted by anything else. 49
And that seems so obvious, 50
but what's not obvious is how easily distracted founders can be by lots of other things going on, 51
and the most successful startups are like hyper-focused on their product. 52
Sam: What are some of the things that distract founders that seem like good ideas at the time? 53
Jessica: There is a lot of these. 54
And in fact, 55
in a talk that I gave at a female founders conference a couple of months ago, 56
I referred to these things as like the startup equivalent of wolves in sheep's clothing, 57
because they really do seem like, 58
"You are doing business. 59
" A few of them are talking to big companies to try and form partnerships in an attempt to get better distribution or somehow get more users. 60
To do a lot of PR before you nail down a product, 61
to talk to corp dev people. 62
When you are not thinking about being acquired, 63
yet you still have meetings with these people, 64
or you'll take meetings with investors when you are not in fundraising mode, 65
just to sort of build a relationship. 66
Going to conferences, 67
networking events, 68
all these things that seem like important things to do as part of your business are not important in the very early stages when it's critical to build your product. 69
Sam: And how do you know when have hit the product as you just said? 70
Jessica: Well, 71
I think when you have people using it, 72
you can measure your growth and you can measure how many users you get. 73
And are they coming back? 74
Are they paying for your product? 75
That's just the greatest thing of all if you can charge for your product, 76
and that growth rate is going up. 77
Sam: So for all of the YC companies that have gone on to be these sort of household names, 78
do they all do this during YC, 79
where they just focus on their growth rate right or talking to users? 80
Are they the companies that end up ignoring everything else? 81
Jessica: Yeah, 82
pretty much. 83
If I had to think back on the most successful startups, 84
all during YC, 85
they were super focused, 86
and they weren't all over the place in terms of ideas that they were working on or things that they were doing, 87
they were definitely focused. 88
Sam: Did they have big plans even during the YC? 89
Like could Brian Chesky of Airbnb have told you during YC, 90
"Here is how we're gonna be at $25 billion company and here's how we're gonna look like seven years later"? 91
Jessica: I don't think they would have gone that far. 92
I think that all of the most successful founders have ambitious plans, 93
and they certainly start a lot smaller, 94
like they seem much less important when they are first getting started, 95
but I think the founders do have a grand plan. 96
I have to believe though that when they are all in the earliest phases, 97
none of them can predict just how big they'll big they'll be. 98
I don't think Brian Chesky knew that they'd be where they are today. 99
Sam: And how much strategizing do you think the companies the do about how they are going to get from here to the next step and the step after that? 100
Like, 101
during are YC they really just focused on trying to make a few users really happy, 102
or are they thinking about, 103
"Well, 104
we need to build up a monopoly. 105
And so in Airbnb's case, 106
we'll have that because we'll have one marketplace"? 107
Or, 108
is it really just like, 109
"Let's build this product people love and see where it goes"? 110
Jessica: I really do think it starts as, 111
"Let's build this product and see where it goes. 112
" In some cases, 113
"Let's solve our own problem and see where it goes. 114
" I'm specifically of Stripe. 115
I mean, 116
they built that product because it was a pain is the ass for themselves. 117
They were solving something for themselves. 118
So I do think that they are saying, 119
"Let's build this and see where it goes. 120
" However, 121
I think that the most successful ones do have that grander vision. 122
I remember specifically during YC, 123
Airbnb said to themselves and I think to investors, 124
"We plan to become the eBay of space. 125
" Like, 126
they were nowhere near eBay of space at that point, 127
but they had that vision and they were working towards that. 128
Sam: How much does the idea matter? 129
You said Airbnb came with this idea that turned out to actually be the eBay of space. 130
But a lot of founders I think don't get started because they don't yet feel like they have the idea that can be that $100 billion company. 131
So how important do you think it is to get the idea just right at the beginning, 132
or to just get started with something and then figure out where to take it? 133
Jessica: I am of the mind of just, 134
"Get started with something. 135
" And that's because we are funding companies at such an early stage that we're really finding the companies for the founders and for the attributes of the founders. 136
Do they seem determined? 137
Have they been able to ship something in the past? 138
Do they seem open minded about things? 139
Are they domain experts? 140
A lot of times, 141
they don't get the idea right the very first time. 142
They might be in a general vicinity of being right, 143
but then they have to adjust their idea. 144
Some founders totally fail with their idea and have to change completely, 145
but I think it's more important to get started with something, 146
build it. 147
Because your idea is always gonna evolve. 148
I mean, 149
Airbnb is like to me one of the most famous examples of an idea that has evolved. 150
They came to us with their idea, 151
which was at the time renting out airbeds in your home while you were there during conferences. 152
Like, 153
that's pretty focused, 154
right? 155
And then they said, 156
"Okay, 157
now we're gonna rent out airbeds in your home but not during conferences. 158
" Then it was renting out your own home. 159
So it morphed. 160
Sam: And did all of that morphing happen during the YC program? 161
Jessica: No, 162
it did not happen specifically. 163
Sam: How long did it take? 164
Jessica: I think it... 165
I wanna say it took about a year. 166
I'm not 100% certain, 167
but I remember what happened specifically was Airbnb was always very strict about the hosting homes so that they can provide breakfast because there was there was airbedandbreakfast. 168
com. 169
And then the famous story is that Airbnb's one of their hosts was Barry Manilow's drummer, 170
and he had this great place in New York City. 171
And he contacted them and said, 172
"Barry is going on tour, 173
I'm gonna be gone. 174
Can I just rent out my apartment while I'm not there? 175
" And like, 176
the Airbnbs were like, 177
"That doesn't really fit what we do. 178
" That's how they figured out how to rent out whole spaces. 179
And to this day, 180
I think that that's like the majority of their business. 181
But it took something like that to get them to even consider doing it. 182
Sam: Could you tell the story of what you felt the first time you met the Airbnb founders when they came in to interview for YC? 183
I know they were kind of a rough place, 184
they were totally out of money. 185
Every investor had said no to them. 186
Jessica: Yes. 187
We actually did not know what a rough place they were in. 188
I know that now from hearing stories, 189
but they were... 190
Sam: And this was, 191
2009, 192
right? 193
Jessica: This is actually in the fall of 2008. 194
We did the interviews in November. 195
And for people that weren't around in the fall of 2008, 196
it was really a grim time to be doing a startup in Silicon Valley. 197
Sam: Because the macroeconomic conditions had collapsed? 198
Jessica: The macroeconomic conditions had collapsed, 199
no one knew what was gonna happen, 200
Angels were closing their checkbooks, 201
people all were gonna hold off on investing. 202
It was really sort of a scary time. 203
And so I do remember we went into interview saying, 204
"We are only gonna choose companies that we think could make it to profitability really quickly on their own and then they can live as a cockroach. 205
"Sam: Because you just weren't sure they'd be able to raise any money at all? 206
Jessica: Right. 207
We weren't sure that they come march at demo day that we had no idea what investors would be doing. 208
And so we were really sort of frightened. 209
If would be a disaster if we have this big demo day and none of the startups could get more funding. 210
That would be bad. 211
So we're very strict. 212
So, 213
the Airbnbs came in. 214
They were sort of a last minute addition to the interview process. 215
I remember Michael Seibel, 216
one of the partners here, 217
said, 218
"Hey, 219
can you slot these guys in? 220
They are really good. 221
Please have them come in. 222
"So we said, 223
"Fine. 224
"And I remember during the interview, 225
Paul tried to change their idea. 226
"We've had this idea of like renting out airbeds was a little weird. 227
"Sam: What did he try to change it to? 228
Jessica: I don't even remember, 229
it's embarrassing. 230
Sam: Or do you think he didn't? 231
Jessica: I know, 232
I know. 233
But he did try like pitch them a new idea, 234
and they're like, 235
"No, 236
no. 237
" And that's just one of those things they knew they were on to something because they themselves were hosts. 238
And that is one of the key things about founders is that, 239
when you are using your own product or solving your own problem, 240
you have all these insights that no one else has. 241
And the Airbnbs were renting out their room in their apartment because they couldn't pay their own rent. 242
So they had a lot of insights into this idea. 243
Sam: It's sort of funny given the current controversy on the Airbnb. 244
The Airbnb started as an affordable housing company. 245
Jessica: You know, 246
it's outrageous. 247
So they were using their own product. 248
They had these insights that it was this wonderful experience when someone comes out of town to have hosts that can help them and show them around and they knew they were on to something. 249
So, 250
they convinced us that their idea had legs and that their users, 251
the few users they have, 252
love them. 253
I remember more about the founders, 254
though. 255
I really like the founders. 256
They were really convincing when they spoke. 257
You could tell they had thought about this problem a lot. 258
They didn't have all the answers by any means, 259
but they just seemed like that they had thought about this a lot. 260
And I remember also they brought in as a gift the cereal boxes, 261
Obama-O's and Cap'n McCain's or something. 262
Sam: This was the 2008 presidential elections? 263
Jessica: This was the 2008 presidential election, 264
and they had made these cereal boxes with like Cheerios and Captain Crunch in them, 265
which sounds so silly because they're cereal. 266
But I remember they said, 267
"Oh, 268
yeah. 269
You know, 270
we design these, 271
and then we went out and got Cheerios, 272
and we stuffed in there and glue gunned the boxes together, 273
and we've been giving them lien. 274
" I thought, 275
"Oh my god, 276
these guys are l ike glue gunning the cereal boxes. 277
"Sam: Why were they doing this? 278
Jessica: They really were doing this because they were out of money. 279
And this is like a Hail Mary for them. 280
And they didn't wind up making a lot of money from these. 281
But to us, 282
they were doing it as sort of a fun thing because they are Airbnb, 283
they provide breakfast, 284
coincided with the presidential elections. 285
Sam: But the original driving reason was just like they couldn't raise any money. 286
Jessica: They couldn't raise any money. 287
Sam: And they just did anything that they could to survive. 288
Jessica: Oh my god. 289
Again, 290
during the interview we did not know these stories but when you hear the stories of the problems that they had trying to fund raise prior to YC, 291
it's crazy. 292
They had one investor like leave in the middle of the pitch, 293
just walk out without eve say goodbye. 294
No one believed this idea was good or certainly would be big. 295
Sam: Did you know at the time that the idea could be great, 296
or was it for you really just to vet on those three guys as founders? 297
Jessica: I have to admit, 298
it was more of a vet on the three founders. 299
They seemed really good. 300
I did sort of like the idea of being able to stay in people's home, 301
but I have to admit I was not thinking it was going to be huge. 302
Sam: Just because that story was so interesting, 303
what was it like the Collison brothers? 304
I think they were in 19 and 17 when they started Stripe. 305
And they came in and said, 306
"We're gonna do this crazy thing and we're teenagers and we're going to take on the financial system of the world. 307
" How does that conversation go? 308
Jessica: Well, 309
I have to admit, 310
we met Patrick years earlier when he was 16 or 17 still living in Ireland because he looked at Paul and we had him over for dinner. 311
So, 312
it wasn't like we first met them at a YC interview. 313
I think Patrick was working on some other idea first or something. 314
We had high regard for him. 315
He certainly was good at building things and he had like a Wikipedia app, 316
so we knew he was like a talented programmer. 317
He introduced us to his 16-year-old brother. 318
He was 16 when we meet him, 319
John was. 320
And I am trying to remember when they said, 321
"We're gonna take on the financial industry. 322
" I think we were kind of like, 323
"Do you realize how hard this is? 324
You don't have connections. 325
" But they weren't trepid. 326
They were like, 327
"Well, 328
we don't have connections, 329
we'll find connections. 330
" And they just... 331
That is actually a really good question that you bring up because it shows how determined they were and how focused they were. 332
I mean, 333
you think like the head of a bank is gonna take a 19-year-old startup founder seriously? 334
It seems pretty implausible, 335
right, 336
but they were good enough that they were able to convince these banks to work with them. 337
Sam: Are there other traits in the founders that go on to really change the future, 338
besides determination that separates the very best founders from the mediocre founders? 339
Have you noticed any other traits that kind of founders should aspire to that really wanna have a big impact? 340
Jessica: Yes. 341
If I had to say the most important traits of the most successful founders, 342
I've already mentioned determination. 343
That is by far the most important. 344
Sam: More than intelligence? 345
Jessica: More than intelligence, 346
more than previous success, 347
you, 348
know in school. 349
I mean, 350
remember when we started Y Combinator, 351
our hypothesis was, 352
"We'll just fund all the best hackers from MIT and Harvard, 353
and they'll turn out to be great sort of founders. 354
" That is not true. 355
That is absolutely not true. 356
A lot of them are good. 357
In fact, 358
Patrick was from MIT, 359
but it's not true for the most part. 360
Determination is the most important thing. 361
Again, 362
sort of understanding your users and building a product with a great user experience is second most important. 363
Not being distracted, 364
not getting lured down these paths that aren't gonna be important for building your product. 365
Being flexible minded I've always felt this very important, 366
because you have this idea and you test it out, 367
and it doesn't always work the first time. 368
And so you have to be able to say, 369
"Okay, 370
I thought I was gonna do this, 371
but let's try this. 372
Even though I have like a lot of energy invested in this, 373
let's try this direction. 374
" You really have to be open-minded. 375
And then, 376
ultimately, 377
you have to be a good leader. 378
You have to be convincing and a good leader because you are gonna be convincing employees to join you, 379
you are gonna be convincing investors to invest in you. 380
When you do get to the point where you are doing deals with bigger companies, 381
you have to convince them. 382
Like, 383
your whole world is convincing people. 384
And so you have to be able to communicate your idea and convince people why they should care about you more than any of the other hundreds of startups out there. 385
Sam: So now I'd like to talk about your startup Y Combinator and how you started that. 386
Could you tell us the story of starting Y Combinator? 387
Jessica: Yeah, 388
it was very much. 389
It started in the same was as startup is started. 390
Where Paul and I had this idea, 391
we really felt that the investment world was broken. 392
If you are in early stage startup and you just wanted to like test something out, 393
you either had to go OVC and get $5 million, 394
which is virtually impossible at that early stage, 395
or you had to know someone who is rich and could give you money. 396
And we thought there could be something better. 397
We thought there could be like a standardized branded form of funding. 398
So, 399
if you wanted $25, 400
000 or whatever, 401
you could come to Y Combinator, 402
and we'd make it very easy for you. 403
So, 404
we thought, 405
"Okay, 406
let's start an investment company. 407
" And it was just gonna be Paul and me, 408
and then we sort of lured in his old co-founders, 409
Robert Morris and Trevor Blackwell, 410
to be part of this, 411
even though they were full time of something else. 412
And we said, 413
"Gosh, 414
none of us know anything about angel investing, 415
well, 416
let's learn. 417
So, 418
how should we do that? 419
Let's fund a whole bunch of companies at once and learn a lot. 420
" So we set up a website and we said, 421
"Come join the summer founders program. 422
" It was back in Cambridge, 423
Massachusetts and it was for the summer of 2005, 424
and we started working on it, 425
let's just say in January, 426
and we posted an application. 427
We wanted to change a few specific things. 428
We wanted to make it very easy for people to find us and apply. 429
They didn't have to have a connection to us. 430
We had an application of like 20 questions. 431
We wanted to make it very simple on our side. 432
We're giving you $12, 433
000 for a startup, 434
or 18, 435
000 if you had three founders, 436
but it was very specific amount for this amount of stock, 437
and our paperwork is gonna be real straight forward. 438
You can see it in advance, 439
and we're gonna make the decision that day. 440
We'll interview you and tell you that night. 441
And that never happened back before us. 442
No one got a same day decision for the most part. 443
So, 444
200 people applied, 445
they had known about Paul because of his essays, 446
you were one of them? 447
Sam: I was. 448
Jessica: Came out from Stanford. 449
I remember that interview very well. 450
And we found eight companies to fund that summer. 451
And we learned very, 452
very quickly into the three months that funding startups in a batch was incredibly powerful. 453
And it was powerful in that you could teach them all sort of the same things at once, 454
and they became colleagues. 455
Because starting a startup as one or two people is very lonely and very isolating, 456
and back then in 2005, 457
there was no information online about early stage startups at all. 458
So no one knew what they were doing, 459
so it was sort of a nice atmosphere. 460
Sam: So, 461
even Y Combinator was an example of this, 462
"Start with an idea you don't know much about. 463
Tell me something so many people want to iterate"? 464
Jessica: Yes, 465
yes, 466
yes. 467
And we started small... 468
Sam: Do it light and start small. 469
Jessica: Do it lightweight, 470
start small, 471
and evolve. 472
And we realized we had dinners on Tuesday nights, 473
which actually we still have to this day, 474
and we have guest speakers coming in. 475
We had paperwork that we gave them. 476
I personally helped everyone incorporate their company. 477
Sam: What else did you spend your time on that first summer? 478
Jessica: Oh my god. 479
What didn't I spend my time on? 480
Like, 481
as any startup there is like too much for everyone to do. 482
Paul spent his time advising the startups on their ideas because I didn't really know that much about startups. 483
I was doing everything to get Y Combinator up and running. 484
I mean, 485
we had to get our office, 486
we had to cook dinners, 487
I was going grocery shopping, 488
and Paul was cooking the dinners. 489
We were recruiting speakers to speak that summer. 490
Sam: This is now how most people picture doing when they think about starting a really important company. 491
So I think it's good to note that this is, 492
in fact, 493
just like... 494
Jessica: Oh my god, 495
there is so much unglamorous work that founders have to do early on, 496
and you just have to do it. 497
I was delivering air conditioners to different people. 498
We had eight startups in that batch and they were all living scattered around the Harvard Square area, 499
and there was a heat wave. 500
And we are like we can't our founders not being able to work. 501
So, 502
I went to home depot, 503
and I bought like 10 air conditioners and delivered them to everyone. 504
Sam: What did you know that summer that Y Combinator was going to work? 505
Jessica: We had a feeling pretty early on. 506
Sam: Like the first couple of weeks? 507
Jessica: I would say within the first month. 508
We were like, 509
"This is really interesting. 510
" And people are working on very interesting ideas. 511
I mean, 512
you are working on location stuff on your phone, 513
Reddit was in there, 514
we're very interested in Reddit. 515
The Justin TV and Twitch guys, 516
Justin and Emmett, 517
were working on a calendar. 518
Unfortunately Google Calendar launched and killed them. 519
I mean, 520
these were interesting things. 521
So, 522
we were very excited about the ideas. 523
Sam: It's a great story about investing in people, 524
that it was Justin's third Y Combinator startup, 525
I think, 526
that ended up being a billion dollar exit? 527
Jessica: Yeah, 528
yeah. 529
Sam: [inaudible 00:23:25] three times, 530
and it worked out on the third. 531
Jessica: And it worked out the third time, 532
it's a charm, 533
yes. 534
I mean, 535
this is, 536
again, 537
going back to funding the people. 538
Justin and Emmett were a great team. 539
I'll just... 540
This is a bit of a tangent, 541
but it's important to remember they were college roommates and like best friends all growing up, 542
and so they had known each other for a long time and have like this great trust. 543
And so, 544
when they wanted to build something, 545
they were both excellent programmers, 546
and that's as good of a bet as you can make. 547
Sam: How important is it that to have co-founders at all? 548
And then how important is it that the co-founders have a preexisting relationship like that? 549
Jessica: I think it's critical. 550
I think there have been cases of successful startups with one founder, 551
but I'm sure they will tell you it's extremely hard and overwhelming, 552
emotionally draining. 553
You have no peer who you can rely on for moral support and holding all of that. 554
It's a big burden for people emotionally, 555
I think. 556
Also, 557
at the very early stages, 558
there is so much to get done that you need more than one person doing it. 559
You can't be out fundraising and building the product at the same time. 560
So, 561
yes, 562
it's important to have a co-founder. 563
It's not impossible. 564
I will say it's critical that you know your co-founder well. 565
Because if you don't, 566
and if you're like me at a hackathon and things you get along... 567
Sam: Do you ever see that workout? 568
Jessica: Rarely. 569
I'm trying to think of an example and off the top of my head I can't think of an example of two people who were introduced, 570
or sort of bolted on to each other the last minute ever working. 571
I'm sure there are examples of it having worked, 572
but I can't think of them. 573
The relationship becomes so stressed as the startup goes on its path. 574
I mean, 575
you have like, 576
you could get sued and you have to deal with this, 577
or you'll get an acquisition offer that's really tempting and that can cause friction. 578
So many things can cause friction and tension. 579
It's really like a marriage, 580
and I know we all laugh at how we compare founder relationships to marriage, 581
but in many ways, 582
it's kind of like that. 583
Sam: There is a lot of issues to that? 584
Jessica: Yeah, 585
yeah. 586
Sam: So, 587
you said about within the first month, 588
you could tell YC was on to something. 589
But when did you first realize that YC was going to be as big as it just turned out to be? 590
Did you have any idea of that summer? 591
Jessica: I don't think we had any idea of that, 592
that summer. 593
We knew we were on to something, 594
and after that summer, 595
we knew we had to come out to Silicon Valley. 596
That was an important next decision for us. 597
We knew that people could easily copy us, 598
and we didn't want someone else to be the Y Combinator of Silicon Valley. 599
We wanted to be the Y Combinator of Silicon Valley. 600
And I remember Paul saying, 601
"We got to go out there. 602
" And I remember thinking like, 603
"We have two months to do this. 604
"Sam: Was that really driven by not wanting to be copied? 605
Jessica: Yeah, 606
we did not want somebody else to be the Y Combinator at Silicon Valley. 607
Sam: You noticed that with great startups a lot, 608
that they really hate getting copied. 609
I think that's an interesting point. 610
Jessica: Well, 611
you know, 612
I think no one likes getting copied. 613
It's unpleasant, 614
I am used to it by now. 615
And you just can't worry about it. 616
If you are building something great, 617
you're gonna get copied. 618
So anyway, 619
so we came out here and now was also very important for us, 620
because we didn't have relationships in Silicon Valley, 621
we didn't know the investors out here, 622
and that's when we started to meet the investors. 623
And that's an incredibly important component of Y Combinator that we have great relationships with investors, 624
and they come to our demo days, 625
and hey invest in our startups because, 626
again, 627
we're like first gear for startups, 628
we're helping them get started, 629
and then we want to introduce them to like wonderful later stage investors. 630
Sam: So once you got to Silicon Valley and started running the program out here, 631
then did you know it was gonna be? 632
Jessica: Not yet, 633
not yet. 634
I think when we had a feeling that it was gonna be really good was when Reddit got bought, 635
and that was very exciting news for us. 636
But, 637
I think like when Dropbox started getting some traction, 638
then we thought like, 639
"Whoa, 640
this could be a contender here. 641
" This is someone doing it really, 642
really well, 643
and you were funded on our.... 644
So, 645
if companies were sort of flourishing, 646
that's when we knew I think this could be... 647
Sam: And what is it like looking back now? 648
Y Combinator has become this pretty influential thing that has impacted a lot of people on a lot of industries. 649
Looking back, 650
is there anything you are like, 651
"Well, 652
if I know YC was going to be as important as it's become, 653
I would have done this differently or anything that... 654
any lessons that you take away or is it just like, 655
"Well, 656
this happened, 657
and I was only ever looking one step ahead at a time.? 658
"Jessica: You know, 659
there is always things that you do a little bit differently. 660
Possibly, 661
we would have hired more partners earlier on so that we could have accomplished more. 662
I mean, 663
for many years it was just Paul and me full time. 664
And so, 665
there is only so much we could do. 666
So we didn't do so much outreach, 667
and we... 668
You know, 669
I wish maybe we could have done more of that earlier on. 670
But, 671
in the grand scheme of things, 672
there is no like massive, 673
massive mistake, 674
I think. 675
We sort of grew organically. 676
Sam: And what is it that you did as you were growing organically that has made YC work so low? 677
Someone recently told me there are now 2, 678
500 accelerators around the world. 679
However, 680
every billion-plus dollar companies so far effort [inaudible 00:29:19] I think is 11, 681
have been part of YC. 682
So, 683
that's a great credit to you and Paul, 684
but what did you do in your early days that set up YC to do this? 685
Jessica: Well, 686
there are a couple of things. 687
And, 688
you know, 689
sometimes I would be nervous about sharing some of our secret weapons. 690
But I'm gonna share one because it would be great if people copied this, 691
but they won't. 692
One of the most important things is that Y Combinator always started to be founder friendly. 693
We were not doing this to make money. 694
We were doing this to see if we could encourage more startups to get started. 695
Because we felt that would be good for the world, 696
like more people starting startups, 697
more innovation, 698
that's good for the world. 699
And so, 700
we didn't do it thinking we could make money, 701
and we weren't trying to like squeeze out the best deals in every situation. 702
We were always driven by what's best for the founders, 703
what's best for the startups, 704
our times in our investment paperwork are very founder friendly, 705
and I think that attracted good founders who wanted to be treated fairly and not be taken advantage of. 706
Sam: It's interesting you see that many of YC's most successful founders. 707
They wanna make a lot of money, 708
but that is far from the primary motivation. 709
Jessica: Yes, 710
you cannot be the most successful startup founder if you are driven by money. 711
You have to be driven by a greater purpose. 712
Sam: So, 713
YC's version of this was just like, 714
it'll be good for the world to treat founders better and have lot more startups? 715
Jessica: Yes, 716
yes. 717
Now, 718
we hoped we made some money because we couldn't keep self-funding for the rest of our lives. 719
We couldn't be self-sustaining if we didn't make some money. 720
And by the way, 721
for years we didn't make money. 722
It takes even a long time. 723
Sam: I remember, 724
people forget that. 725
Jessica: People forget how long it takes to make money as an investor. 726
So we were always driven by like this benevolence. 727
And I think it's still part of our DNA, 728
I truly believe that. 729
I think we gave great advice. 730
You know... 731
Sam: Surprisingly hard to get from investors. 732
Jessica: Yes, 733
yes. 734
There are some great investors out there that do give great advice, 735
but for the most part getting really good advice is hard. 736
I think Paul Graham's exceptional giving startup advice and helping people with their ideas. 737
And quite honestly, 738
telling people like, 739
"Hey, 740
you are doing this, 741
you're it wrong. 742
Don't do it that way. 743
" In a way that's very straightforward, 744
and founders can respond to that pretty quickly. 745
What else? 746
You know, 747
what the important things about us? 748
We've always attracted from the very first batch that you are in. 749
I believe we attracted talented founders. 750
And they've gone on to be role models and attract other people that are talented, 751
like, 752
kind, 753
intelligent founders. 754
And so I think it's sort of grown organically and spread, 755
and we've kept a pretty great community of founders over the years. 756
Sam: So there are a lot of people that have realized startups are really great ways to impact the world and get new technology built and distributed. 757
At a young age now people are realizing they may wanna start a startup some day. 758
So, 759
if you are an ambitious teenager or college student, 760
what should you spend on if you know someday you wanna start a startup? 761
Jessica: Well, 762
there is a lot of things you can do to sort of prepare yourself to be a startup founder. 763
The first is learn to code. 764
There is a lot of great online courses now, 765
if you don't already know how to code, 766
but I would strongly recommend that everyone learn to code. 767
Even if you are not great, 768
we don't know how to do it, 769
and it helps you sort of judge other programmers. 770
Build stuff with people. 771
It doesn't have to be like the next Facebook, 772
which by the way did start out obviously as a little side project when it got started. 773
But just build something that you might like to use. 774
Try to solve your own problem. 775
Work with other people, 776
especially if you are in college, 777
that is just the best place to meet potential co-founders and get to know people and talk about interesting problems and try to solve them. 778
It does not have to be the next startup, 779
but it will at least get you to thinking about problems, 780
it will get you like practicing, 781
launching something and listening to users and talking to users. 782
And after that, 783
if you are not ready to start a startup right away, 784
go work in an early stage startup. 785
You can learn so much working at an early stage startup that you wouldn't working on a big company. 786
So, 787
that's probably my best advice of what to do to practice to become a startup's founder. 788
Sam: Great. 789
Okay, 790
last question. 791
You are probably the most successful female founder in Silicon Valley at this point. 792
So do you have to advice for other female founder or aspiring female founders about what to do? 793
Jessica: Well, 794
it's definitely a subject I think about a lot because when we first started Y Combinator, 795
there were very few female founders. 796
They were scarce. 797
And I am pleased that there are more these days, 798
and they are just continuing to be more. 799
And so I spend a lot of time trying to help the women that we've funded to become more successful so that they can go on to inspire people. 800
Because you have to have those role models so that you can think that, 801
"Gosh, 802
maybe I could start a startup. 803
" But I will give some advice based on my own experience. 804
You can't worry too much about what everyone is saying and all the noise and like, 805
"It's so much harder as a woman. 806
" Yes, 807
it's harder as a woman. 808
I've been discriminated against, 809
but I have always kept focused on my product and what I'm doing. 810
And I don't listen to all of this stuff going on, 811
and I'm like building a product that people love. 812
And I think that the women we funded would say the same thing. 813
They're startup founders. 814
They are not like necessarily like female startup founders. 815
They are first and foremost startup founders, 816
and they are caring about their product and their users, 817
and they are totally focused on that. 818
And so my advice is like, 819
just do it. 820
Start a company, 821
apply to Y Combinator, 822
and, 823
you know, 824
build something people want. 825
Sam: Great, 826
Well, 827
thank you so much for joining us and funding my company in hiring me. 828
That's great. 829
Thanks a lot. 830
Jessica: Thanks, 831
Sam.