The Exchanges

Q I believe this thing, but I haven't found my people yet. Like, is that delusion? You know, what, is that actually maybe even a gate that you would propose people have? It's like, well, you need to find, you know, five people who might believe that, or even one, like a co-founder, you know, people, maybe that's one of the explanations for why we like co-founders at YC so much.

A Yeah, I think if you can't find anybody else that shares your belief, you should pay attention to that. Um, and it's also very hard to do a startup on your own and very lonely, but I don't think you need to find a lot of people, and in fact, if everybody believes it, that's also like a bad, a bad sign. Um, the question, I don't know if this is still what feels like the limiter on more startups, but five or 10 years ago what felt like Was limiting the number of good startups YC could fund is figuring out how to solve the co-founder matching problem. Like, a lot of really talented people, and they just couldn't find their tribe, they couldn't find their people. Um, you know, it used to be very heretical that YC told people they had to move to San Francisco. And looking back, it was clearly right. Like, I think, I don't know if this is still gonna be true for the next 10 years. I suspect it will be, but the best thing you could do if you wanted to, like, find your people to do a startup with was to move to the Bay Area. You just, like, magic happened. You got a lot of, like, lucky chances and collisions. Um, I still think that's probably good advice, although I feel like I have less of an intuition for it now. Um, I also think that I can say this. Gary probably can't. I, I think the premium on doing YC is bigger now than it's like ever been before. Uh, the distance between like YC…

AI assessment note: “if you can't find anybody else that shares your belief, you should pay attention”

Q What was that experience like? You ended up selling that company Uh, it was probably the first time you were managing people and, you know, doing enterprise sales. All of these things were useful lessons from that first experience.

A I mean, it obviously was not a successful company. Um, it was. And so it's a very painful thing to go through, but the rate of experience and education was incredible. Another thing that PG said or quoted somebody else saying, but always stuck with me is your twenties are always an apprenticeship, but you don't know for what, and then you do your real work later. And I did learn quite a lot and I'm very grateful for it. It was like a difficult experience and we never found product market fit really. And we also never like really found a way to get to escape velocity, which is just always hard to do. There is nothing that I, that I have ever heard of that has a higher rate of generalized learning than doing a startup, so it was great in that sense.

AI assessment note: “it's a very painful thing to go through, but the rate of experience and education was incredible”

Q Do you want to talk about level three, four, and five briefly?

A Yeah, so we realized that AGI had become this, like, badly overloaded word, and people meant all kinds of different things, and we tried to just say, okay, here's our best guess, roughly, of the order of things. You have these level one systems, which are these chatbots. There'd be level two that would come, which would be these, this, these reasoners. We think we got there earlier this year, um, with the O-one release. Three is agents, um, ability to go off and do these longer-term tasks, uh, You know, maybe like multiple interactions with an environment, asking people for help when they need it, working together, all of that. And I, I think we're gonna get there faster than people expect. For as innovators, like that's like a scientist, and you know, that's ability to go explore like a not well understood phenomena, Over, like, a long period of time and understand what's just, kind of go just figure it out. And then, and then level five, this is the sort of slightly amorphous, like, do that but at the scale of the whole company or, you know, a whole organization or whatever. That's gonna be a pretty powerful thing.

AI assessment note: “Three is agents... For as innovators, like that's like a scientist... level five”

Q Yeah. It sounds like it would, um, it would take a similar shape to, uh, creating OpenAI in that, like, do you need to be ready for, uh, people to attack you or dismiss you?

A Definitely. I mean, if you do anything that matters in the world, uh, you will have a lot of people call you an idiot or just dismiss you. The more you do, the more, the better you do, the more they'll attack you. Um, the more you kind of, like, threaten the existing state of the world, it will just continue to escalate. Um, One thing that I've noticed about many of the best ideas is the vision is clear. Like we wanted to build AGI, but the, the first steps were super unclear. Like we didn't know that we were going to be a product company. We started this nonprofit research lab for many reasons, but one of which was it, it really didn't occur to us that we were going to make a product that people would be able to pay for. Like this was, you know, it was years till we came up with the idea of ChatGPT, the API. And so, I think if the, the kind of, like, highest level vision is clear, but the first few steps are very unclear, that's not a bad thing. That often happens with, like, very ambitious ideas, and I wouldn't let that cause you to lean out. Now, you do still have to take some steps forward, imperfect, though they may be, and ours were certainly very imperfect. So there's, like, another failure case where you have this, like, brilliant big idea, and you can kind of never make any forward progress. At some point, you've got to just, like, Got some new data points.

AI assessment note: “Definitely. I mean, if you do anything that matters in the world”

Q later you, uh, came on to become president of YC and, um, you, you sort of brought exactly the same energy to, uh, a great many YC founders over the years. Um, did you have anything like, did anything jump out at you from that time around, you know, taking this raw energy of someone really, really smart and maybe a little undirected and then driving them more towards agency?

A Yeah, I, so first of all, I love startups. I think not everyone, they're not like for everyone, but I think startups are the coolest thing in all of business. Um, I think startups are really like the main thing that keeps the economy from becoming stagnant. Um, I think companies do just like drift towards suckiness, and startups will continue to be important forever. In fact, if, if we are right that AI is going to be such a big change, startups will be much more important to making sure that The power of this technology gets widely distributed throughout the economy and society, and it's not just concentrated in a few companies or models. So I, I think startups are this, like, unbelievably cool, fun, extremely painful and difficult, but wonderful thing, and I think a big part of the job of running YC is you are kind of the, like, unofficial flag bearer for the startup movement. Um, you know, like, there, there's lots of startups. There's lots of ways to do a startup. You obviously don't need to do YC, but it has always been a huge help to companies and a very powerful force. And so, starting with PG, uh, and then all of us, like, you know, we have to, like, make YC successful, but I think we really have to, like, fight for why startups are important and why people should consider startups and help put, like, relatively more power in the hands of founders and encourage More peo…

AI assessment note: “I love startups. I think not everyone, they're not like for everyone”

Q What are some practical things here? I mean, hard tech, for instance, I was hearing, ah, you know, at one of the breaks, someone was asking, like, should I go get my PhD? How important are credentials? Um, you know, how would you answer that, especially people who want to do these harder tech things?

A Well, as a general observation first, I think startups tend to win when, um, The sort of like technology landscape is moving very quickly when costs are coming down, when cycle times are short, and all of those things are happening right now. So if you look at when there have been like the great clusters of startups in the past, You know, there was the internet boom in whatever that was, like, 99, 98, 99, when new things became possible. Um, there was another version of, a mini version of people building on top of, basically, like, Facebook apps. There was then another big version when the iPhone app store launched. Um, But the great startups tend to cluster when the ecosystem shifts, and incumbents lose a lot of their advantage, and then also when you have this, like, cost and cycle time change. This moment feels very big for those things. It also has this other thing that you were talking about, which is a lot of the traditional things that were hard to get. Expertise, you know, the ability to go, like, hire excellent people that were That could do specific things you needed. That's really shifted, and in the last few months, um, I have seen a lot of people who just kind of grew up using AI the last few years, who are like, I can kind of automate an entire startup of agents and four of us, four people, and, you know, all this compute, and I think we're going to see much more …

AI assessment note: “a lot of the traditional things that were hard to get. Expertise... That's really shifted”