ABOUT THIS EPISODE

Michael Seibel is a Partner and the CEO of YC.

He cofounded Justin.tv, which was in the Winter 2007 batch and Socialcam, which was in the Winter 2012 batch.

For this episode we took questions from the internet. If you have questions for a future office hours episode, just tweet them our way.

Read the transcript here.

The YC podcast is hosted by Craig Cannon.

We're accepting applications from startups for the Winter 2019 funding cycle. Apply here.

Questions

00:25 - Why is YC worth 7% of your company?

6:25 - Generating leverage when fundraising

12:07 - Youssef asks - How did you validate your product market fit?

15:00 - LC Carrier asks - How does YC feel about companies who don't want to raise VC after the program?

17:05 - Edmilson Rodrigues asks - Do companies need to be incorporated already to participate in YC?

18:50 - Alex Rodriguez asks - What do you look for in startups that haven't had good growth but continue to push through (e.g. AirBnB) that makes you accept them?

26:50 - Fedor Paretsky asks - Do you have techniques you encourage to make pitches sound more exciting?

35:05 - David Chen asks - How to find mentors and advisors?

39:25 - building EatNeat asks - What if anything are you specifically looking for in a startup that wants to be a part of the Startup School 2018?

40:00 - Ryan Carl Mercer asks - What's your preferred way organizing your time?

41:05 - John Rigler asks - Can intrapreneurship be effective? I recently returned to IBM, have a patent, and yet have only vague ideas about how to signal and organize other like-minded folks. Could this path sabotage my dreams?

41:55 - Horacio Chávez asks - How would you approach an investor who says "I won't invest unless you have a patent"?

42:35 - Yahya Elamrani asks - Why does it feel like entrepreneurs aren’t marriage material? Should an entrepreneur look for an entrepreneurial spouse?

44:15 - Yahya Elamrani asks - How intense do you really have to be to found a startup?

48:50 - Is there a particular stage of company that's best served by Startup School?

50:35 - How do you get the most out of Startup School?

English
United States

TRANSCRIPT

00:00:00Hey how's it going this is Craig cannon and you're listening to why combinators podcast today's episode is with Michael Seidel Michael's a partner in the CEO of YC he can find a Justin TV which was in the winter two thousand seven batch and social camp which was in
00:00:14the winter twenty twelve batch for this episode we took questions from the internet if you have questions for future office hours episode just read my way alright here we go let's start with the first question is about doing what I see the program the core program that people
00:00:30now a common question is why is why see worth the seven percent what do you think so when I think about why see %HESITATION and I talk to founders about it oftentimes I tell founders it's in their best interest to start building up unfair advantages in the start
00:00:49up %HESITATION it used to be that an unfair advantage was capital but more and more now %HESITATION you see capital being very widely available and so I tell founder start thinking about what other unfair advantages can they get so with why see I think a lot of founders
00:01:10always wanna know about fundraising what's unfair advantage you get around fundraising first why the companies get higher valuations typically fifty percent to two X. higher than our companies who don't do I see we see valuations on demo day ranging anywhere from four million dollars in the low end
00:01:30to twenty five million dollar plus on the high end with most valuations between six and twelve million armed put another way when you raise money through ice you get less dilution second better investors we've taken the time energy over over a decade to collect all of the best
00:01:49angels and feces and put them in one room %HESITATION the YC batch is one of the most heavily scouted group of start ups in the world and so on we do the work for you to put the best people in the room and then the final one is
00:02:03a fundraising happens faster when you go through I see are some companies can completely finish their fundraiser in under two weeks and almost everyone is finished within two months as opposed to other policies that you might run alone which can drag out longer so first we give you
00:02:19a bunch of unfair fundraising benches I see the next thing and I would argue even more importantly is we give you an unfair advantage around a batch your batch with other companies that are in the similar state as you are even if you're an experienced founder and I've
00:02:35been YC twice the second time I was very experienced founder %HESITATION I don't have any given time a whole bunch of friends and colleagues who are all starting companies right now and so being able to literally be around a whole bunch of other people who are just getting
00:02:52started were grinding I you know within the first year two and still grinding %HESITATION is extremely valuable from kind of a friendly competition perspective but it's always also should be valued as from a support perspective to the talk people who are there with you arm and to have
00:03:08this whole variety of people so you can find the people that you're going to actually relate to the most the next one is software what kind of software does a typical investor give you access to non with why see we give you access to a whole variety of
00:03:26software that gives you an advantage is there's a form that allows you to ask questions and your questions from other founders came from for you there's work at a startup which allows you to basically recruit off of why sees brand there's posting our job posting how can usually
00:03:40YC companies can do there's an investor database with over five thousand entries including reviews and data from every company that's ever done YC there's deals which are literally millions of dollars worth of discounts given by top companies there's a company a YC company directory which allows you if
00:03:57your view that the company actually sell into otherwise he companies it's one of the secretive and is being YC I'm there's an alumni directory which also allows you to some of the companies and also allows you to find specific people give advice and find is a knowledge base
00:04:11that gives you actual clear tactical written advice on PR fundraising growth central and so %HESITATION most the time you're raising from angel's typically you get some phone calls you get some email changes are with why see I would argue that you get a platform and that's an unfair
00:04:27advantage the last thing is additional programming on a lot of people think of why I see is a three month program one and done in fact why see is built to support you from the beginning of a company to the end of the company and two of the
00:04:41news programs that we've built our specifically relevant to our founders one of the series a program where we actually re batch you with our companies that are now in the anywhere between hundred fifty to three hundred forty thousand dollars a month in revenue we're going on racing series
00:04:58that we teach you how to raise a series a would you try to build professional process we teach you how to do a great doc and then we send you out at the same time and connect you with investors I'm having an advantage in terms of raising a
00:05:11series a I would argue is one of the biggest competitive and you can have last we have what's called the YC growth program that's run by YC continuity which is our growth stage fund and if you were running a company from anywhere between fifty two hundred fifty employees
00:05:27suddenly as a CEO your job changes it's not about part marking fifty more so how do you manage an organization how you build organization and our growth program essentially is a series of dinners that teaches you all the tactics around how to actually be a sea of spending
00:05:41or is Asian as a YC founder all of this is encompassed in the seven percent arm there's no additional equity that you have to give to get any these programs in any the software in when your YC finder was fun for life Sir argue when you're thinking about
00:05:58fundraising in this environment where there's a lot of money %HESITATION stopping with the money is an unfair advantage and start thinking about what other unfair advantages the people who are giving you money can give to your company I think why she looks great on that perspective and %HESITATION
00:06:13it's pretty simple math why it's worth it yeah in in tagging on to that %HESITATION I wanted to cover I we don't have it in the notes but your most recent blog post about generating leverage in fundraising yeah I think this is something that we ought to write
00:06:26more about in Erin's trying to do it with the series a program %HESITATION but can you explain that problem and your proposed solution for the average company I'm I think the base of the problem that a lot of founders need to understand is that a lot of fundraising
00:06:42advice is written by the seas and the unfortunate problem when you're reading a fundraising advice from a series a V. sees perspective is that they're not necessarily on your side and so if you think about it %HESITATION the narrative round fundraising is typically something like you raise money
00:07:04when you're running low on money when you're at between twelve and six months of runaway %HESITATION when you raise money you need to be most sensitive about valuation which I think is completely not true bomb when you raise the money %HESITATION I think almost strangely people think about
00:07:31raising money arm when it's the first moment that they think they can so I'm I see a lot of companies were like we're at we're gonna price company where the million dollars there are isn't time to research a that's all you see is that right argue that's like
00:07:45the earliest possible time to consider raising and so on this whole kind of narrative around fundraising especially series a fundraising I think is designed to bring you into the front door of the VC as soon as possible to allow them to get the best look possible as early
00:08:04as possible right so we should clarify that in financial terms right so your valuation is probably a little lower at that point they can probably get a higher percentage of the company at that point yeah in because you're scared that you won't be able to raise you sell
00:08:18early and even more so there are probably six or seven terms around a funder around a fundraiser series a fundraise how big your option poll as how many board members what the rights of the preferred stockholders are and if you're going into a fundraiser without leverage you have
00:08:33a hard time negotiating any of those terms and so you might think valuations the game but actually there six other terms are really important so I think that you know series a is what confuses a lot of sorts I really want to focus in on Thursday I'm I
00:08:45think some of these things are different when it comes to raising seed but series a is really confusing to a lot of startups I think a lot of the advice out there %HESITATION is tricky and a lot of the common wisdom is actually tricky armed the way that
00:08:58I like to tell this story is I talk to a farmer I say every startup has a leverage graph basically it has a a graph of how much leverage the startup has over time and I'd argue that that leverage grass and good company always goes up to the
00:09:13right but has peaks in as valleys the best founders I know will raise money when their leverage graph is at a local peak and the founders of struggle will try to raise money when they're in valleys and what's interesting is that when you're at a peak you might
00:09:30not feel like it's time to raise money you probably don't need money you might even be close to break even you got a lot of customers you're building products great things are going really really well and as a CEO it's oftentimes hard to think oh let me take
00:09:43my mind off of my company to raise money but in many ways that's the absolute best time to raise money %HESITATION that's how many of the most leverage it's time you can walk away that's a time when investors are going to be more ready to chase you verses
00:09:57you should chase them and so I really tell founders Hey think about where they are on their leverage graph and think about this way before you hit that twelve months before you run out of money yeah and how are you spotting those points like I say obviously I
00:10:11know that were in a better situation than we were eighteen months ago who knows where we're going to be in eighteen months but those local peaks and troughs how do you as a founder identify this I think the first he tends to happen when you hit product market
00:10:26set the record I think what happens when you hit part of market fit is that you have a lot of gross but you are relatively understaffed and so your growth to expenses ratio looks very good %HESITATION I also think at that point if your revenue generating business you
00:10:46have more money coming in the door than you've ever seen before arm and so it's so funny because every startup wants to hit product market I think most of us don't realize how much a punch in the face product market for this but I think that's where the
00:11:00first kind of peak is and I think that what happens when you hit product market fit if you start investing in scaling operation %HESITATION improving your product oftentimes takes a second priority to just making sure your customers can consume your product and %HESITATION that counter intuitively I think
00:11:20that's the most strategic time to raise a series at %HESITATION I think that you know your grass gonna look great %HESITATION hopefully got revenue coming and hopefully when he's going to look good and so to me like that's that nails and I think when companies try to raise
00:11:35their series day and when I see stories I mean you know five to ten million dollars around his arms and hold road BC I think a lot of times and try to find a try to re series a pre product market fit they have to be over a
00:11:47light on the story and second time founders experience foundress founder's with accents tended do disproportionately well with pres series a product market pre product market fits series is but I think that if you are not one of those funds for first time founder going with the numbers like
00:12:04it's it's just always easy when you're going with the numbers yeah and so a related question from the internet use of asked how did you validate your product market so it is in the context of social can I assume that's what they mean yeah I think that like
00:12:20we've been we've written about this I think that you know the the phrase product market was invented by mark injuries and and then somehow nobody bothered to look at his definition and now it's just been misappropriated and everywhere and like the now common use of the phrases like
00:12:34I've built the thing that my customers want but it's like even weirder than not because like oftentimes I'll ask companies come is asked me if I had part of market and I'm like how would I know it seems like if you had part of market fit you'd be
00:12:49growing uncontrollably everything in a company be breaking you be doing all you can just keep up with current customer demand like that's the definition of art market yeah it's unambiguous that's happening to you and Mike I think a lot of founders being %HESITATION our product marketed as I
00:13:04build the right product right and it's like it no product market is what happens after you build the right product and you distribute it well right is like it's like anything else culmination of some MVP kind of process exactly yes no an MVP in product markets it sometimes
00:13:20can be five years apart and so yeah I know I I tutors you like you know in MVP the hobos get any customers coming in the door yeah and then you kind of struggle struggle struggle and some companies find a product we're now customers are just beating the
00:13:35crap out of them to get it right he says it put the market pulls it out your hands right back yeah and so if you're don't feel like growth is beating the crap out of here you are not in product markets black unambiguously did you guys have it
00:13:49at social camp I would say yes and no I would say that we definitely got hit in the face with growth however I would say that we were particularly good at distribution and not as good a product and so I would say that our product didn't retain as
00:14:06well as we wanted to but we certainly got a ton of growth and I think that you know in social you see that happen and I'd argue that like you know do we have product market fit like I would probably say no I probably see that there's growth
00:14:20you can get that doesn't reflect product market fit because some part of parking part of market is not only of all these customers coming but they're doing what you want them to do like you're you're you're you're there you're the goal of your product is being served and
00:14:33the goal of social cameras to get everyone to be bitter creators when we are blowing up we're going up on video consumption but not of integration catch so I think that's probably an important part of people don't talk about markets like everything is going well but it's like
00:14:46also your business partners working right you're not selling a dollar for eighty cents exactly you're not in a negative margins you're not like getting this is to do something that's like not the thing you wanted them to do yeah let's go to some questions in general like YC
00:15:00application related %HESITATION so LC carrier asked how does YAC feel about companies who don't want to raise VC obviously money after the program and maybe canonical example as Appier who did a seed round and then went on to be profitable so I think what's interesting about this is
00:15:17like of course we don't care like these your company's well the first things we say %HESITATION at the White Sea kick off in the in the batches that you're the boss you get to decide which one do with your company %HESITATION we are not the boss and I
00:15:30think even more so what's interesting is that we have a large variety of companies that a large number of companies that never raise from the seas are only raise from the seas way after party mark if it was profitable so and so forth %HESITATION no we love this
00:15:44company's just the same I think that %HESITATION it's interesting like it in many ways I think that our house Y. C. is become more mainstream we have to be louder about what we like because we're lumped in with the seas and %HESITATION we're not the seas that's not
00:16:03the purpose of this %HESITATION were not sheer with the kind of sole reason of how do we make sure we make as most money as possible out of every single company invest them yeah that's that's that's not the way YC works yeah and to be clear if your
00:16:20company it raises money through I see and then goes on to be wildly profitable profitable that's a great outcome from his seat no dilution no pro rata my at no don't like that's it it's great for the founders late like this is %HESITATION you know like I think
00:16:37we provide an on board into the seas if he wanted but like by no means do you have to consume it right yeah I mean I think this is kind of related to it did you read Aaron's post this week about advice %HESITATION because we've entered in this
00:16:49position that's in between like VC traditional BC and universities were just thought of as like the advice giver and like you don't have permission to do this thing and we don't want certain people it's it's not really the case now %HESITATION related another super calm question email soon
00:17:06Rodriguez asked to companies need to be incorporated already to participate in YC this is another thing that I think is extremely important to understand a lot of people talk about the growth of YC and our YC certainly has grown now I'm pretty significantly %HESITATION dot sizes are a
00:17:23little bit more than double since I lasted twice in twenty twelve as it's responsible growth we've prepared ourselves armed and I think we still give a really good and high quality of service but what is also done is is allowed us to %HESITATION have such a variety of
00:17:39companies at a variety of stages so why see is always been about the super early stage and will always be about super early stage we can help you incorporate and we help a lot of the companies company incorporate when they come in %HESITATION there a lot of companies
00:17:53that literally start writing code when they join YC there a lot of companies that are pre launch when they join YC I think why sees expansion is allowed us to also work with companies arms were post launch and might have incorporated a response of money but I think
00:18:08sometimes people want to interpret that as a change of strategy as Moses an expansion %HESITATION you know this is not an either or it's not an origin and so %HESITATION and and also I think it's really motivational to being a batch where you have some companies that are
00:18:24pre launch and is still trying to kind of get that in the past the door any of other companies that are like starting to take off and I think that you know when you want that motivation to come to dinner you see it coming taking off and you
00:18:35think yourself we gotta go back to work %HESITATION I think the motivation is is key yeah I've in fact like cohort pressure you see people follow on after I see to just having dinners with their friends every couple weeks %HESITATION at yet another question about why see types
00:18:50of companies so Alex Rodriguez asks what do you look for in start ups that haven't had good growth but continue to push through for example Airbnb that makes you accept them into a batch I think what's interesting is like this concept of traction I think is very interesting
00:19:08I think that there are complicated it complicate or not well defined thoughts that people simplify so fine so start up %HESITATION I'm looking for tracks I think what they think of is that I'm looking for growth and dislike they think that %HESITATION if I have growth why would
00:19:24I need to I see rates come this kind of catch twenty two when I think about traction I seem a little differently I kind of think how much time have you been working and what have you done am I impressed with the amount of stuff you've done in
00:19:39a lot of time you've been working and so to me like Airbnb what they had done and that year before they apply to YC %HESITATION and by the way I think the story is like told in such a strange way it was a year was in like ten
00:19:52years everybody was struggling before they got in the White Sea it was is here but what they had done was impressive they launched multiple times they had been the housing host for the DNC convention the RNC convention they've been on CNN a bunch of times that would be
00:20:09done all have impressive things the product wasn't working but you could look at the last calendar year and say oh these guys are out there grinding it and so to me like that's far more important than when they've been whether the mean successful I think the second thing
00:20:25is that I'm the Airbnb guys felt like they were on to something like a lot of a lot of investors talk about like what's your secret sauce what's unique insight what's the thing that you know that other people don't right and %HESITATION it's such an over used phrase
00:20:45but it's it's kinda true the Airbnb guys really thought that people would stay in strangers houses and they thought that it could be a significant better experience and on top and they believe that through and through yes and even if you don't agree when you see three people
00:21:01who actually believe that your things yourself why not try it right well why not running when the experiment because you you were the one that went to bat for them to get into I see so what was it about them or about the price head you use a
00:21:16product before you told me about it before I told Pete Gee I'd not use the product now okay %HESITATION I've been on the bottom not used to know his back when I when I was working with them they were really focused on events %HESITATION and selling not renting
00:21:32out whole house is either not a several houses renting out rooms %HESITATION and so doing they're bad thing and yeah and I didn't go to the RNC or DNC convention %HESITATION what I saw them was exactly what I said about traction yeah they just kept on working like
00:21:47one of the things that we say to YC founders estimate PGE always used to say which is that coming to do well in why I see you have office hours of them they tell you their major problem you brainstorm some potential solutions in the next time you talk
00:21:58to them they've moved on to solve the problem and with the Airbnb guys it was exactly like that %HESITATION and %HESITATION the other thing is that they were happy and gracious you know like it's easy to help people who are like nice they're nice the hard working yeah
00:22:17committed and I think that this part of the valley like doesn't get talked about a lot like if you're nice concise you know and hardworking like mom more often than not people will try to help you like they won't go out of their way they won't you know
00:22:30like stop their business to help your business only will they give you an hour like yeah yeah I think that like you sometimes have to warm up right sometimes you have to you know show that you're being serious but yeah I like this is not a situation where
00:22:43people feel that your success somehow takes away from them or somehow reduces the size of the pie %HESITATION so yeah I think people are always looking to meet motivated like it's not this weird like close friend network situation retire out and I'm done with motivated inspiring people that's
00:23:00why this is so weird about the valley is that like on the east coast all of the networks in my experience tended to be around like what you've done in the past like where you work we went to school what club you're in right and Mike sure it's
00:23:14not like strangers email me everyday I reply to them every day it like this is like the way of the vast strangely literal strange and so like the only thing we all have in common is were all crazy enough to try to start ups and if you like
00:23:29inside every founder this this feeling like if you're stupid enough to do a start up we should have each other's back because I'm stupid enough to do it too and there are a lot of people is to put aside yeah and you have enough good will to keep
00:23:41replying because in those emails you get a lot of crazy ones %HESITATION and I would just say that knowing what to ask from the right people in a clear concise simple way you can get through most of them is in a crazy half isn't it Cody mailing is
00:23:57a skill that everyone's work it works out so related to that %HESITATION Airbnb guys working on different types of things in the first year I think it it is worth explaining that like that doesn't necessarily mean pivoting five thousand times so yeah that's a good point %HESITATION I
00:24:14really I I've been trying to kind of nail down what's the difference between pivoting iterating arm because it a rating is clearly good and I think everything is oftentimes strictly inferior so one of the things I think about is that when you're reading usually there's lots of things
00:24:32that you can learn about from the previous version of your product because oftentimes you are keeping the same customer or very related customer you're solving the same problem or very related problems and so for me like I get smarter every time I enter it I feel like into
00:24:51reading is kind of long running the scientific process I'm and I'm learning every step of the way Jimmy Page hitting is when you basically take things outside of your room of the previous thing you worked on so in effect you're changing the customer drastically changing the problem drastically
00:25:09and usually even though you can kind of justified yourself often because there's similar technology like you not to completely write your code I would argue that like you are not learning very much from what you just did you're just working on something else and I think that rapid
00:25:25iterating is amazing I think rapid pivoting is is really bad and I think that you know Sam and I can I give two different pieces of advice on this I think reaches the same point you know someone asked Sam when do you should you have it and he
00:25:38said when you've exhausted every idea every single idea on your current %HESITATION that you're solving yeah and I love that construction but I feel like founders lie to themselves like I like myself is found all the time and so I like to tell people like time I just
00:25:56feel like you get so many here too like it's it it really can take that long it often does not long and like I don't like concerted hard work yeah just like I do it on nights and weekends sort of of concentration on I do think that like
00:26:18there are these there is this myth that if you build it they will come that's just like a myth like behind every one of those stories is a lot more hard work I think another having problem is that people have it and apply the same solution to multiple
00:26:33problems and like the solution is just never there and so you just get locked into this thing that won't work yeah %HESITATION another thing somewhat related to the Airbnb guys it's just how compelling they are fader Presti asked about basically pitching your company so they say what are
00:26:50your thoughts on the strategy of just like being very very aggressive in like enthusiastic about pitching your company in terms of pitching to investors and are there other techniques to encourage to make your pitches sound more compelling her exciting what I didn't understand as a founder why is
00:27:11that anytime I pitched an investor he was the you know basically round two over a thousand paths that they ever gotten so think about it this way any gimmick or trick that you think might be unique has in fact already been tried by one of those thousand people
00:27:33before you and so I think that oftentimes people kind of resort to a weird public speaking gimmicks or or I gotta make a memory or got a like creed impact really yeah sales type things and it's like honestly it's a lot harder to sell to like a sales
00:27:51person and if you see is kind of a sales person I'm it's kind of like it's a lot harder to do an email marketing campaign to a founder that does email marketing but I'm a little bit immune to drip camp right is like and you're smart that's awesome
00:28:04that your smart but by the way there are a thousand other people you smarter than you so when I think about doing the patch %HESITATION these the things that actually stand out to me the first thing is is arm clarity and conciseness I think that %HESITATION more words
00:28:23are actually are bad when you actually %HESITATION study really good sales people on the phone it turns out the customer talks way more than the sales person and so when you're in a really good investor meeting investor is fully engaging and is basically like giving ideas and brainstorming
00:28:42it doesn't feel like a pitch anymore right when you feel like you are pitching for a long period of time %HESITATION that's a that's a bad sign typically %HESITATION especially early fundraising leader fundraising is different but seat even Thursday arm so one thirty and being concise I really
00:29:02think most Arabs can explain in three sentences too don't start with your background like if you're telling a story and oftentimes the moat and oftentimes people default to telling a story quite a logically and argue that like actually like you should be thinking a little bit more like
00:29:20pulp fiction like tell the interesting parts of the story first get me hooked yeah and your background if you're back on isn't one of the top three most interesting things happening in the start up in a probably you shouldn't start with it never some sort of students right
00:29:35like for some sort of the person's background is but rare yeah I think the other thing that's important is that the investors to clearly understand the problem you're trying to solve clearly understand that I'm I think so often found is when it gets to rate to the solution
00:29:53arm and so what's weird is and that and that first couple sentences like what I want to get out of it is I want to know what you do right I have to be sold on it I just have to always want to know what it is right
00:30:07%HESITATION you know me knowing that Google is a search engine where you go to a website you type in something you want to know click the search button and then a bunch webpages that are relevant what you typed popped in right yeah I don't have to be convinced
00:30:19that I want that I deserve to be convinced that I know what that is right then I want to know anything about traction anything like have you launched eyes growing anything like that arm I wanna know that you have are tackling the founding team I mean I want
00:30:36to know why what's the problem they're trying to solve and and why you want to try to solve it I'm for me those the things that like if you can get out in the first thirty seconds I can engage in a conversation with you and I think the
00:30:49other thing that's how founders is that like if you do a bad job it's your fault like unfortunately like if the person you're talking to doesn't get it after the first sixty seconds it's not because they're an idiot like it's because you can explain to them well and
00:31:08like that's really hard to hear alike I just how fun is that straight and I'm like look I've been pitched like to infinite time so like I think I'm not dumb well I mean like it doesn't really matter if you're smarter I am does get unfortunately you're asking
00:31:25me personally you got a dumbing down from either way %HESITATION so yeah and I think that oftentimes what's weird is you have to throw away other instincts yeah %HESITATION first you always have to throw your customer patch the investors almost never customer and see what works in the
00:31:40customer's almost exact opposite of what to work on the investor second year after we jargon right what makes you sound smart amongst your peers makes you on understandable by someone who's not one of your industry peers %HESITATION and so I think they're all these like things that like
00:31:57people try to use to make them seem impressive yeah which driving people to do the exact wrong thing when they're pitching to the sea yes like I actually think you need somewhere between like six the ninth grade language like that said %HESITATION I that's a fundamental for me
00:32:13on your blog all of this is that why you complicating Noah and I think that's what's weird is that like you're speaking right and so like if you're not clear and concise the more brain power after use for out what you're saying yeah like the more %HESITATION the
00:32:27less I will conversations going to be so and I I think I related to this people can conflate salesmanship with confidence and many of these founders are very confident yeah but often times a day you know it's like that Steve Martin collector so good they can't be ignored
00:32:45for that reason like they don't really have to like take the money from a certain investors they can confidently walk into any room communicated clearly well you know what I think creates I've only seen two things reliably create real confidence not fake confidence one is you've done some
00:33:02impressive in the past that makes confident second as you have the numbers yeah right but you got one of those two things like you deserve to be calm and so you know perverse about is the numbers and I would underscore this for international founders I think it's really
00:33:19really hard to clearly communicate what living in another country and not specific problem in another country is like an investor here that's so important that's so important but what's funny is that when you got it right with Sean is like we mustn't bunch of companies out of Nigeria
00:33:36and you know when they explain to you that you can have five credit card processing machines at the hotel from five different companies and you can swipe your credit card each one of them and it won't work yeah scene I have to pay hotel bill in cash you're
00:33:52like oh if that happened I'd be super pac alright as opposed to saying or credit card processing doesn't work in Nigeria like I'm sure I know what I don't like you know rate like and you can do when you can tell a story and painted that picture and
00:34:08like it took me how long it took me ten seconds to paint that picture and I get out total you got it right as opposed to let me tell you about the history of credit cards in Niger right okay yeah I mean and by the way nature is
00:34:20two hundred plus million people another thing that like I don't know actually that's a really important thing to backs are really important one of things I think is interesting about a lot of investors is that they know like two inches on a lot of different subjects and like
00:34:36if you know like six inches they will think you're very smart and if you know one inch they'll think you're very stupid yeah and so like just doing some friggin research and like when you talk like all I often tell founders like write down everything you just said
00:34:53and count the number of facts and like if you didn't see any fax just sing some facts that's also advice I'm so do you add this is related to David chan asked how do you find mentors and advisers but when you're pitching your company are you pitching it
00:35:10to mentors and advisers to get warmed up for you just pitching it to random people at star on I think the like one piece of ice adjusting Khan gives that I really like is okay restive leave practice pitching arm friends colleagues existing investors before you go out yeah
00:35:30and that like there's something that you can learn from everyone of it and I think that one of the strange and unfortunate things is that fundraising is so hard and the process in general has been made so painful the founders and the shy away from it and they
00:35:41want to do it as fast as possible with his least practice is possible and unfortunately I think that that doesn't serve them well I am and so I think practice is really really important I'm on to this thing about mentors so I get asked five times a day
00:35:55can I be a mentor to %HESITATION company that I'd I would consider I've never met them for me I don't like the mentor ward I feel like it's an old fashioned word it kind of reminds me of the days of like master and apprentice where like you actually
00:36:13needed someone like you're not a blacksmith like someone has to teach you that **** or else you would not be able to do what we can drive can't go on the internet and Google search box just like you know it's like and and I feel as though for
00:36:27some reason and and and by the way I think in corporate America mentors are probably extremely helpful I don't know I'm I'm not really been bunch my career but I think a lot of this advice comes out of corporate America arming comes out of like career prep centers
00:36:43and all that stuff I think for me personally I give advice to a lot of start ups and I'm happy to like this part of my job and I wouldn't do to stop it and like it to me when someone asked me to be a mentor it's asking
00:37:02weighing more of a commitment right it's like what I'm saying is that without being a mentor if you ask me a question in a clear and concise way I will ninety nine percent of the time reply within a week with what I think is the best answer you
00:37:18get that for free for you and so what I think about them in someone asking me to be a man from like %HESITATION gotta what else do they want heh heh Michael we've never met do you want to be in a single relationship together yes I don't know
00:37:30is this a little right and and that and I also I always feel like when those people if they just emailed me a question of yet like what what questions you ask me listed pretend I am a mentor right let's pretend I'm everyone's meant you already have that
00:37:42like what and you know if you're looking to like put my name on something that like that silly who cares right like no investors can be like oh will because Michael signed up as your mentor I'm in on bass like no no good investor will say that %HESITATION
00:37:55I think what a lot of founders have found both in my scene out is that if they ask me for help I'll try to help them yeah and like that's what you want to stop asking for a mentor like yeah it's funny because I actually had this conversation
00:38:08with someone else and I was like you know this company that helps a bunch of like I don't think they like I'm not their mentor and then it was funny because one of the guys was like I talk to them and they say you're one of your you
00:38:19never asked they just they just ask for help in and I was happy to help them so don't raise the stakes %HESITATION of any relationship just just ask for when you don't and you don't have to and they also don't know like maybe you just give them terrible
00:38:33advice maybe say yes to being a mentor and then you drive them off a cliff yeah I mean that like advice is one of those things right like take it with a grain of salt yeah I don't think there was nobody who I felt filled a traditional mentor
00:38:49role in my time at what at are in the valley like it if that kind of like took me under their wing and showed me what was what right like nobody did that right %HESITATION a lot of people helped a lot of people ask help but nobody I
00:39:03almost feel like a mentor in some ways is taking responsibility for your success and I'm like nobody does that especially if they have invested in you but even if they have they don't do that usually it's just like after enough years your friends yeah and then then maybe
00:39:19that's it exotic after enough years you would meet up just because yeah yeah with great yeah alright let's go to another question I'm so I just want to clarify this one on the first page building eat meat asks what if anything are you looking for in a start
00:39:36up that wants to be part of start of school anyone can do startups anyone do this sort of goal I think we designed it like to be extremely explicit we designed it to be step one yeah like in any state your and you can get value out of
00:39:49this thing and that's we decided yeah in that there will be these grants given out but that's gonna be decided after the fact yeah I guess at the end the Ryan Carl Mercer a frequent podcast into question Asker asks what's your preferred way of organizing your time I
00:40:06hate giving advice on this because I don't think I do it particularly well %HESITATION I I have like an email I I star in port emails and I use a to do list you know that's it I think that probably the biggest time hack I've had %HESITATION %HESITATION
00:40:29it's been since I've had a kid now I am the biggest time I have had is that I've been one looking after my parents close to that can help %HESITATION watch our my baby and then I think the second thing is I've been fortunate enough to be able
00:40:42to afford someone help at night I think those are probably the two things that are keeping me like functional right now but I do not think I am me model of the path of a yeah a model of organization let's go to the next one Sir John regular
00:41:02ask can interpreter should be effective and I had by that he means starting something within a company believe I recently returned to IBM I have a patent and yet only a vague ideas about how to signal organize other like minded folks within the company could this path sabotage
00:41:18my dreams so a copy of this answer by saying that I've only worked in a big company for I think fourteen months of my entire working life and I have exactly one experience with entrepreneurship and it did not work out very well so you know in my single
00:41:36experience didn't work I can't give you advice on how to make it work for you or if it does work I mean certainly there are big companies that invent new things all the time so somebody's figured out how to get that done but this is an area I
00:41:49have I would argue almost less than zero knowledge of okay Horatio Chavez asks how do you approach an investor who says I want invest in you unless you have a patent I probably would just talk to another investor yeah that's not a typical response %HESITATION especially in in
00:42:13in technology start ups I can't be to biotech and so on so forth when in technology start ups that is such an on typical response it's almost indicative that that investors not very good yeah or they're trying to say no nicely churn out I mean that that that
00:42:29that's a bad way of settling in nicely like no longer matter ways to say no yeah %HESITATION alright so yeah hi own runny **** why this it's it's just that we're gonna have relationship questions now why does it feel like entrepreneurs aren't marriage material shin on from there
00:42:47look for an entrepreneur hill spouse or marriage that's interesting question so I started dating my wife when I was doing a company %HESITATION I thought I was marriage material I don't know I think I am I think I think what they're trying to get at is that so
00:43:04like say yeah so you're really dedicated to social camel example of your time and all that I can assist in TV over a long time ago and %HESITATION that consumes all your time therefore you might not in someone's eyes be a great partner and I think that's what
00:43:21they're getting at but I mean I I think different people like different things and I think that %HESITATION you know some relationships are really motivated by working people find someone who is really into their job assuming instructive yet having some really should some people aren't away yeah you
00:43:37know but I I don't think I think that it is pretty easy to see how intense arch partner is working in a job pretty early in a relationship and you know if that's not something that someone likes them they should move on to something that like yeah yeah
00:43:55in that second question an entrepreneurial spouse I would just say a spouse that's okay doing their own thing whatever that might be just there okay doing their own hobby or whatever I hate to be like general on this but my wife certainly was that way my way certainly
00:44:09someone he didn't need me to be around twenty four seven yeah exactly and I think that's good all right yeah ask another question how intense do you really have to be to found a startup I think that this is such an interesting question because like intense is such
00:44:24an interesting idea right so like okay I'll see you in two different versions right yeah so Justin TV there were %HESITATION probably at the Max point five or six of us living in a two bedroom apartment one so we're shared bunk beds one person in a room to
00:44:47their own one person was sleeping in the living room and I was sitting on the balcony %HESITATION we work to dig the office was the apartment usually works you know when we're at home from and our roommates were people in the company so there you know that was
00:45:06the that was not part and then more over the building was full of other start us so friends were sort of founders and we're going to I see and you know so it's a forthright on one hand that sounds like really intense right I don't know though like
00:45:23college is kind of similar right you're living with people you're going to school with like oftentimes you know they have similar interests like you're kind of in close in this space all kind of doing something similar like and I didn't see it is that different %HESITATION not what
00:45:38I will say is that like so so I think when describing the steady state I didn't think of it is like this like massive intensive like thing what I will say is that the lows are low yeah like when people talking about emotional rollercoaster like hate that phrase
00:45:56is so cliche well like there have been times in my start ups history where I like going home and cried like there's been times where I thought pack it up last five years of your life down the drain there been times that I thought you know I've lost
00:46:15my best friend there been times when I've thought like all kinds of stuff right is bad bad stuff so I think that like you need to be resilient you need to be able to do that kind of stuff I'm not saying that you like shove it away beagle
00:46:32get past those lows yeah you need to be able to wake up the next morning a couple days later and get back into the game arm so I would almost argue that the resilience thing is maybe more important in the intensity thing I kind of feel like it
00:46:45doesn't feel like intensity when you're doing the thing you like to do and you're sort of should be the thing you like to do overly I think that I think intensity can be used as a synonym for like **** guy and that that's definitely not I would just
00:47:01want to dispel that like that is absolutely not true we likes **** note to still be an **** now anybody but like I say going back to Airbnb thing I think intensity can also be a signal of working efficiently and many other really great founders do that like
00:47:17I said I don't like the word intensity because I feel like it's like morally ambiguous like I would say like passionate yet like you know passionate yes **** no like I feel like intensity could be passing or could be asked like I just have this horrible image of
00:47:31like Hey I'm like the intense hustler like I just get **** done people don't like sales people as well it's weird to like talk about this world but it's like like one night when I was at a distance viewers are starting rose three engineers and mia relic it's
00:47:46sometimes I think people find hard to understand how much of an engineering backbone there is this whole thing and a lot of the like norms are kind of I would almost argue invented by engineers or former engineers and so like you know people not wanting long meetings people
00:48:03not what people want and concise medication but a lot of these are kind of treats you find in the engineering community here and like sales people engineers are like water and oil lakes so what works is stereotypical salesperson the the kind of cartoonish kind television a sales person
00:48:21and %HESITATION engineer and so like I had to learn a lot like I tell a lot about just the engineering culture and I feel like I've been braced it as my own now but like it's different its deeds to its not business is not New York by it's
00:48:35not business guy first year it's kinda engineer first yeah it's definitely not Polish to us no no no no no no no don't wear suits so just a couple more questions about start of school do you think there's a particular stage of companies that this would be most
00:48:54beneficial for or doesn't matter you know it's funny I always get this question the context of applying to I see yeah and I always tell founders it's like sometimes people freeze applying the sort of core pipeline YC as if we were charging fifty thousand dollars and it was
00:49:11a ten year life commitment it's free yes I think it's free to apply to why seats for you to apply it is free to do start of school look if you're curious about it founders they don't tend to talk themselves out of things right try it yeah apply
00:49:28YC like if you give interview you give are more like like to try a sort of school if you like a great if you don't like don't like talking yourself out of three things is like kind of weird right like yeah I remember a K. Kevin hill used
00:49:46to say he would scream at people we're giving away free lottery tickets what are you doing so it's so true so it's it's just like it you know don't don't talk yourself out of stuff like yeah part of being a founder is just kind of like some amount
00:50:04of just do you know at some amount of just do and if you find yourself talking yourself out of things like maybe you talk yourself out of the the thing you should be doing right now yeah %HESITATION and so yeah there's no contracts there's no who like we're
00:50:18not gonna come hunt you down if you want to play later to YC it won't count against you there's really no cost yeah like in in any in financial moral is there any reason all all of the Pacific cost is no cost yeah okay so then assume we
00:50:36get over the fear of applying of doing started school how do you get the most out of it I think that the way to get the most out of it is you devote a significant amount of time to making progress in our company goals every week I do
00:50:52not think of this as an educational program you don't think this is a program where you sit there and you know learn about how to be a founder like learn by doing this is a learned by doing type business and so you should think where do I want
00:51:06to be from a metrics perspectives are from a milestone perspective at the end of start up school and map out that path to start school and like where you wanna be week over week to get to where you want to go %HESITATION I think that's to get the
00:51:19most violent if if you can move two times faster to get your MVP to get to launch its first customs agents are school you got a great service for free arm and it's way more it's way better than you know whatever lectures we could do yeah I am
00:51:35in thank you thanks much all right thanks for listening so as always you can find the transcript and video app logged out why commentator dot com and if you have a second it would be awesome to give us a rating interview wherever you find a podcast see you
00:51:50next time

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