The Exchanges

Q Can I ask, when you see these very early stages of the company and see those Founders with such conviction. How do you think about the balance between vision for such a world and a product that they want to create and then stubbornness when something really isn't working? Often founders aren't hitting product market fit. How do you determine between vision and stubbornness?

A You know, I think stubbornness happens when you're maybe too attached to like tactics, right? You have to be flexible in terms of your approach. And so if you see something's not working and There's some phrase like, you try the front door, that's locked. You try the back door, that's locked. You smash the window, you go in the side window, right? You find another way around, and so the mistake, I think, with stubbornness is that you get fixated on a single particular path, and so although people have, like, a strong conviction and vision about what it is they're trying to do, I think, in a more general sense, you don't want to get fixated on just a very specific tactic or a Feature that you just absolutely have to launch, because that can be deadly. I don't know if you remember Friendster, but they could have been maybe Facebook, but they got fixated on this idea that when you browse through profiles, it had to show you kind of the six degrees of separation between you and this person, and so that feature, it turns out, is sort of computationally impossible at scale, but they became so fixated on it that they actually basically let the product die while they were trying to figure out How to do this impossible thing when what my space at the time did was they just, if it wasn't your friend, they just said they're in your extended network. They just took sort of like the stupid …

AI assessment note: “stubbornness happens when you're maybe too attached to like tactics”

Q Can I ask, when you see these very early stages of the company and see those Founders with such conviction. How do you think about the balance between vision for such a world and a product that they want to create and then stubbornness when something really isn't working? Often founders aren't hitting product market fit. How do you determine between vision and stubbornness?

A You know, I think stubbornness happens when you're maybe too attached to like tactics, right? You have to be flexible in terms of your approach. And so if you see something's not working and There's some phrase like, you try the front door, that's locked. You try the back door, that's locked. You smash the window, you go in the side window, right? You find another way around, and so the mistake, I think, with stubbornness is that you get fixated on a single particular path, and so although people have, like, a strong conviction and vision about what it is they're trying to do, I think, in a more general sense, you don't want to get fixated on just a very specific tactic or a Feature that you just absolutely have to launch, because that can be deadly. I don't know if you remember Friendster, but they could have been maybe Facebook, but they got fixated on this idea that when you browse through profiles, it had to show you kind of the six degrees of separation between you and this person, and so that feature, it turns out, is sort of computationally impossible at scale, but they became so fixated on it that they actually basically let the product die while they were trying to figure out How to do this impossible thing when what my space at the time did was they just, if it wasn't your friend, they just said they're in your extended network. They just took sort of like the stupid …

AI assessment note: “I think stubbornness happens when you're maybe too attached to like tactics”

Q No, I completely agree. What's your favorite book and why? What must I be reading next like, Paul?

A I don't really follow all the business books that much. I was thinking about this Earlier, probably the book that I find myself going back to the most often is actually Eckhart Tolle. It's something that I just pick up. I don't know when I first picked that up, you know, it was at least 10 years ago, and I just, you know, it's not a technical thing at all, but a lot of times the greatest challenges are not technical. It's more just whatever's going on in my head. I'm making myself crazy. I'm caught up in some thought pattern or something like that, and so I think being able to have a clear mind and And not just be caught in those endless mental loops is incredibly important for everything, whether it's your personal life or you're working on something. If you can't have that clarity, you're not going to be able to see the solution.

AI assessment note: “probably the book that I find myself going back to the most often is actually Eckhart Tolle”

Q things going slightly off course and now taking the mental role with many YC companies. How do you look to rectify it? A lot of VCs from operator backgrounds, maybe like yours, say it's so difficult not to jump into the trenches and help. How do you think is the most constructive way when things go off course to look to rectify them and insert your knowledge without being overbearing?

A I always just look for the sort of stupidly simple solution and say, okay, why don't we just try this thing first, right? Because there's almost always a worse solution, right? There's always, there's always a crappier way of solving a problem, a hackier way. There's always some shortcut and it may not be the thing that you're going to do in the longterm, but if you try it out, you'll at least learn something. And a lot of times people think that they need some really complex system, but they really don't. They just need something very basic that will work right now. And so it's really just working with them to kind of figure out what is that basic thing and then just pushing them to let's try this first. And then we can do something more complex and more difficult.

AI assessment note: “I always just look for the sort of stupidly simple solution and say”

Q Career highlight for you. What is it, do you think, and why?

A Obviously, it's kind of hard to compete with launching Gmail. That was pretty cool. At least in terms of one day. But, you know, being at YC, I get at least in sort of the borrowed glory of Of being involved with these thousands of companies at a very early stage and actually seeing what it was like at the beginning without hindsight, which again, you know, when you look back on something after it's a huge success, you say, oh, of course that company was going to succeed. It's so obvious, but to be there on day one, and especially a lot of times the founders are not very impressive when you first meet them. There's a lot of development that goes on. And so, and that's also very rewarding. It's great to see Someone who comes in very raw and unsure of themselves really evolve, and a couple of years later, they're this super impressive CEO or something.

AI assessment note: “Obviously, it's kind of hard to compete with launching Gmail.”

Q And then- So we have a hundred happy, if we have a hundred happy users, is that the next step? Is that the inflection point?

A That was actually sort of our goal for launch. We just had to get a hundred people who were happy. So that was kind of like the milestone for when the product we thought was good enough to take out to the broader news of the world. Inevitably, there's always, there's kind of the core of people who are really happy, and there's the people- Whose needs are so far away from what you're doing that they're never going to be happy, but there's always people at the margin. And so generally you just kind of look at those people on the margin. And my approach is always one of just kind of looking for low hanging fruit. Cause a lot of times, again, it might be something simple that brings them over. And sometimes it's just a matter of time. There's also obviously early adopters who are just excited to try something new out. And then other people who are just going to wait. But if they hear from their friends, wow, you've got to try this thing out. Yeah. That's the best. For consumer products is if people are excitedly telling their friends, you've got to try this thing out. Cause if you've got three different friends telling you, oh man, you've got to try this new product. I love it. There's nothing more powerful than that, right? No advertising or anything like that is going to have the same impact. And again, that comes from building that depth of appeal, right? If people are like, oh …

AI assessment note: “That was actually sort of our goal for launch. We just had to get a hundred”

Q and your career now. Being the investing element and founder assessment in particular, we had Peter Fenton on the show from benchmark and he said the best founders make him feel uneasy. And you've said before that what excites you and changes the world is the patterns in founders heads. So what patterns excite you? And one from Justin Kahn, how do you really pick and differentiate between the best?

A Well, obviously it's really hard. That's the one thing I've learned as I, you know, I've been doing the seed investing for 11 years now. Close to 12 years, and as a full-time partner at YC for seven years. It really is not an easy thing. There is no simple task, but I can tell you one of the things that really stands out to me, having worked, I didn't mention earlier, after Google, I didn't go straight to YC. I started a social network called FriendFeed, which we ran for a couple of years, and then sold to Facebook in 2009, and so I was at Facebook for a year as well, and got to really, you know, work with Mark Zuckerberg, and kind of see how that That company was both similar and different from Google. And one of the things that really strikes me about both Larry Page and Mark and, you know, a lot of the YC founders like Patrick Collison or founders of Airbnb is they just have a level of conviction that I think ordinary humans just don't have. They believe in their view of the world to an almost unrealistic extent. And this is clearly the case for someone like Elon Musk too, right? He might be like the most extreme.

AI assessment note: “they just have a level of conviction that I think ordinary humans just don't have”

Q I'd love to get started this day with a little bit about you and how you came to be a partner at YC, so what's the backstory leading up to today in a very succinct three minutes or so?

A Well, I guess the backstory is I've had an interest in startups, I guess, my whole life, but You know, I went to school in Ohio in the nineties, so there really was no startups back then. So all I knew to do was to move to California and take a job out here. And after I graduated from college, I moved out, worked for Intel for a year, and that wasn't really a great fit for me. Very much a big company. And it just so happens that I had been reading about a little startup that was using Linux, which I was really into at the time. They based their whole system on Linux. So I applied there, got a job, In 99, and that startup turned out to be Google, which was good. I was at Google for about seven years.

AI assessment note: “Well, I guess the backstory is I've had an interest in startups”

Q I'd love to get started this day with a little bit about you and how you came to be a partner at YC, so what's the backstory leading up to today in a very succinct three minutes or so?

A Well, I guess the backstory is I've had an interest in startups, I guess, my whole life, but You know, I went to school in Ohio in the nineties, so there really was no startups back then. So all I knew to do was to move to California and take a job out here. And after I graduated from college, I moved out, worked for Intel for a year, and that wasn't really a great fit for me. Very much a big company. And it just so happens that I had been reading about a little startup that was using Linux, which I was really into at the time. They based their whole system on Linux. So I applied there, got a job, In 99, and that startup turned out to be Google, which was good. I was at Google for about seven years.

AI assessment note: “that startup turned out to be Google... at Google for about seven years.”

Q things going slightly off course and now taking the mental role with many YC companies. How do you look to rectify it? A lot of VCs from operator backgrounds, maybe like yours, say it's so difficult not to jump into the trenches and help. How do you think is the most constructive way when things go off course to look to rectify them and insert your knowledge without being overbearing?

A I always just look for the sort of stupidly simple solution and say, okay, why don't we just try this thing first, right? Because there's almost always a worse solution, right? There's always, there's always a crappier way of solving a problem, a hackier way. There's always some shortcut and it may not be the thing that you're going to do in the longterm, but if you try it out, you'll at least learn something. And a lot of times people think that they need some really complex system, but they really don't. They just need something very basic that will work right now. And so it's really just working with them to kind of figure out what is that basic thing and then just pushing them to let's try this first. And then we can do something more complex and more difficult.

AI assessment note: “I always just look for the sort of stupidly simple solution”

Q and your career now. Being the investing element and founder assessment in particular, we had Peter Fenton on the show from benchmark and he said the best founders make him feel uneasy. And you've said before that what excites you and changes the world is the patterns in founders heads. So what patterns excite you? And one from Justin Kahn, how do you really pick and differentiate between the best?

A Well, obviously it's really hard. That's the one thing I've learned as I, you know, I've been doing the seed investing for 11 years now. Close to 12 years, and as a full-time partner at YC for seven years. It really is not an easy thing. There is no simple task, but I can tell you one of the things that really stands out to me, having worked, I didn't mention earlier, after Google, I didn't go straight to YC. I started a social network called FriendFeed, which we ran for a couple of years, and then sold to Facebook in 2009, and so I was at Facebook for a year as well, and got to really, you know, work with Mark Zuckerberg, and kind of see how that That company was both similar and different from Google. And one of the things that really strikes me about both Larry Page and Mark and, you know, a lot of the YC founders like Patrick Collison or founders of Airbnb is they just have a level of conviction that I think ordinary humans just don't have. They believe in their view of the world to an almost unrealistic extent. And this is clearly the case for someone like Elon Musk too, right? He might be like the most extreme.

AI assessment note: “they just have a level of conviction that I think ordinary humans just don't have.”

Q 2005. So how have you seen them change as leaders and kind of visionaries of the space?

A You know, that's a good question. They've always had, I think, a very clear idea of what they wanted to do in terms of just like the values of Y Combinator being very much just focused on doing the right thing for the founders, and that's been there from the start. So sometimes it's almost surprising, you know, the degree to which they just automatically will say, okay, let's do this thing, because it's clearly right for the founders, even if it's very much maybe not in our own self-interest. And I think that's really the magic, or part of the magic of YC, is that attitude. And PG, you know, I, I think one of the things that's most remarkable is just the level of enthusiasm that he can have for other people's ideas. I still struggle to, to reach that level. Someone will have what seems like a very small idea, and he kind of thinks about it, and he says, wow, this, this is huge. This is the analogy he always uses is the, uh, Altair Basics. So I don't know if you know about, about Microsoft. Microsoft's first product was, was Altair Basic, which was a little basic interpreter for, or compiler for this computer called the, the Altair that had probably several hundred or maybe thousand possible customers. So just tiny niche product, but of course what they were really doing, it was getting in early on microcomputer software, which turned out to be pretty lucrative. And so that abil…

AI assessment note: “They've always had, I think, a very clear idea... that's been there from the start.”

Q And then- So we have a hundred happy, if we have a hundred happy users, is that the next step? Is that the inflection point?

A That was actually sort of our goal for launch. We just had to get a hundred people who were happy. So that was kind of like the milestone for when the product we thought was good enough to take out to the broader news of the world. Inevitably, there's always, there's kind of the core of people who are really happy, and there's the people- Whose needs are so far away from what you're doing that they're never going to be happy, but there's always people at the margin. And so generally you just kind of look at those people on the margin. And my approach is always one of just kind of looking for low hanging fruit. Cause a lot of times, again, it might be something simple that brings them over. And sometimes it's just a matter of time. There's also obviously early adopters who are just excited to try something new out. And then other people who are just going to wait. But if they hear from their friends, wow, you've got to try this thing out. Yeah. That's the best. For consumer products is if people are excitedly telling their friends, you've got to try this thing out. Cause if you've got three different friends telling you, oh man, you've got to try this new product. I love it. There's nothing more powerful than that, right? No advertising or anything like that is going to have the same impact. And again, that comes from building that depth of appeal, right? If people are like, oh …

AI assessment note: “that was kind of like the milestone for when the product”

Q 2005. So how have you seen them change as leaders and kind of visionaries of the space?

A You know, that's a good question. They've always had, I think, a very clear idea of what they wanted to do in terms of just like the values of Y Combinator being very much just focused on doing the right thing for the founders, and that's been there from the start. So sometimes it's almost surprising, you know, the degree to which they just automatically will say, okay, let's do this thing, because it's clearly right for the founders, even if it's very much maybe not in our own self-interest. And I think that's really the magic, or part of the magic of YC, is that attitude. And PG, you know, I, I think one of the things that's most remarkable is just the level of enthusiasm that he can have for other people's ideas. I still struggle to, to reach that level. Someone will have what seems like a very small idea, and he kind of thinks about it, and he says, wow, this, this is huge. This is the analogy he always uses is the, uh, Altair Basics. So I don't know if you know about, about Microsoft. Microsoft's first product was, was Altair Basic, which was a little basic interpreter for, or compiler for this computer called the, the Altair that had probably several hundred or maybe thousand possible customers. So just tiny niche product, but of course what they were really doing, it was getting in early on microcomputer software, which turned out to be pretty lucrative. And so that abil…

AI assessment note: “that's been there from the start”

Q Are you not proud? Are you not proud of the evolution of your creation of the light button?

A I don't know. I'm not going to think about it in those terms, maybe. And actually, to be clear, it was my co-founder, Brett Taylor, who really did the work on that. I think it is more just the overall evolution of the networks. The incentive structures are a Twitter. You can score a lot of points by attacking someone, calling someone out, you know, starting a war essentially, but if you put something kind of insightful or kind up, you're not going to get a lot of points, and so if you think about it just from an incentive standpoint, I actually think it makes people into worse people when they're on these networks, and so I'm very interested. I still believe in the potential of social networks to, you know, be a force for good as well, And so, I'm still interested in ideas for how we can actually make this into something that helps people treat each other with greater compassion and understanding instead of just this warfare that you see on Twitter where it's, I mean, it's spilled over into our everyday life, right? That society is becoming very polarized, and everyone is a hundred percent certain that their side is right and that the other side is wrong, which is obviously very dangerous.

AI assessment note: “I'm not going to think about it in those terms, maybe.”