CodePath EES2024 Y COMBINATOR-Answering EveryQuestionYouHave About Starting or Working for a Startup

Hello everybody. I am Anthony Davis and we are extremely excited for you all to be here. We have a very very special session.

We have Michael from YC. He’s a partner with YC and he’s going to be answering all of the questions you might have about working at a startup or starting your own startup company. So without further ado, let’s welcome Michael to the stage.

Okay, Michael, thanks for being here today. Just want to give students a little background on how this particular session will work. I know they’ve probably set in a few other sessions.

Okay. So guys, this is going to be a very very interactive session. So, as you all can see in the chat, you’re going to have a Q&A button.

We’re asking that if you have questions about anything regarding starting a starting a company or working at a startup, ask your question there. Michael is going to be reading those questions, but more importantly, he’s going to be asking students to come on stage and have conversation. We want this to be very very interactive, have conversations.

So, make sure your camera is ready. Make sure that you are you’re ready to be on on camera and go on screen. So, Michael, I will turn it over to you.

All right. Really excited to be here. I think that for quick background, I graduated from school in ’05.

I started a company called Justin TV with four of my three of my friends. It became a company called Twitch which sold to Amazon and then I’ve been working at Y Cominator for about 11 years. YC is a startup accelerator and I’ve funded a little less than a thousand companies during those 11 years.

The reason why I’m really excited today is that I started my journey when I was fairly close to y’all’s ages. So I was one year out of school. I was 23 years old.

And I think this is a very interesting time to start a company as a young person. But I think that there are a lot of misconceptions. I think there’s a lot of what I would call pop startup knowledge.

Stuff that’s just not true that students pick up. And so what I’d really like to do today is see a bunch of your questions and really get into conversations around how someone actually goes through the process of getting a company started and how you would go from being a student or being an intern or being in your first job post college. How would you go from that point to actually doing a startup and getting into YC if that’s something you’re interested in?

To be clear, to kind of kind of set some some ground rules here, the only startups I’m really talking about here are software companies, and software companies specifically that have a goal to be, to raise money and to try to be big. I think that, a lot of students are pretty confused around the VC world. Often because VCs tend to tell people, hey, like come, we will fund any kind of business.

And that’s a lie. VCs only want to fund founders who are excited to build very large businesses. So, if that’s something that you’re interested in, I’m here to answer a bunch of questions.

All right, with that, if you want to ask me questions, you should use the Q&A feature. I’m looking through this right now. You can also upvote questions that have already been asked.

Great. Ibrahim looks like he’s got a question here. Can we bring him up on stage to ask it?

Let’s see how this goes. Ibraim, I hope you got your camera rolling. All right, there he is.

Go ahead and ask. You can turn your microphone on and yeah I’m trying my question says how to move from grand project like sorry don’t I don’t think you’re talking into your microphone sir just to know for future folks have your squared away here so that you can do a good job on this thank No. All right. I’m going to read Ibraham’s question aloud.

How do you move from creating projects to starting your own startup andor making one of those projects your startup? First I would say that a lot of great startups started as projects. Specifically great startups can start as projects where you’re solving your own problem.

Maybe one of the most or two of the most famous ones are Google and Facebook which both started from founder solving personal problems. One was searching the internet, the other one was hanging out with friends in school. I think that what most founders screw up in this process is they believe that the project that they need to kind of turn into their startup has to already be working.

So they’re in this kind of weird state where they’re working at a bunch of side projects and they think, "Oh, the one that works I will turn into a startup." And I’ll tell you that like it is rare that small projects actually work. So the actual algorithm you should be looking on looking at when trying to figure out which of your small projects to start to turn into a startup is one like which solves your own problem. Like have you been able to solve a problem for yourself?

And if you have a small side project that you’re actually using and enjoy using, that’s a really great sign that you should be perhaps bringing a startup. Then I would say the second one is what do you have fun doing? I think that too many founders or potential founders think first how can I explain why this is a good business as opposed to thinking am I enjoying this?

Am I enjoy working with this in this problem area? Am I enjoying building in this area? Am I enjoying giving users my product?

If you’re having fun, that’s a really good sign you’re going to do a good job and stick with it for a long time. If you’re thinking like an MBA and trying to figure out like what’s going to work as opposed to like what you enjoy and what you’re going to personally use, you’re not really using your superpowers. All right, next question.

Nuria’s got a question. Can we bring her up? All right.

Nura, is she there? There she comes. Okay, I can’t hear you.

Can you turn your mic on? Oh. No audio.

Okay. Okay. Well, hello.

There she goes. Okay. Sorry about that.

It’s kind of like complicated and it’s my first time using this technology and this tooling but thanks Michael. So yeah I think that question that I was that I put in the chat was what sort of projects thrive at Y Combinator? And I think one of the issues with startups sometimes is that you think that your idea needs to be revolutionary or that needs to be something crazy.

And I guess I’m wondering is it better to just have like a good execution or a good idea on something that already sort of exists or would you just say try to go for something super unique? Okay, so I have two answers to that question. First, I think that if I were you trying to answer this question, what I would do is I would look at the YC website and I would research the successful companies.

I think one of the things that is really tricky is that a lot of times people ask a YC partner a question that can be said is like summarize everything that works for the winning companies and like in effect it’s almost like do all the research for me and produce like a nice one pager that I can like learn from and I would argue that in a lot of subjects that’s really possible like I think in physics like that can be done. I think we’re trying to teach someone math that can be done. I think the tricky thing about startups is that imagine if the rules of physics were changing every year.

How would someone kind of summarize it in a nice easy tolearn way? So what I find is that the founders who actually win are the ones who are willing to kind of do the primary research. And it’s really interesting when you find someone who does primary research because it turns out so much information is available about winning companies if you look.

But you’re not going to stumble on it. You have to actually look. So that’s the first thing I’ll say to you.

The second thing I will say is what always surprises me is how much a startup has to fight, maim and kill an existing player to win. I think there’s this misconception that there’s all this green space in the world and they’re new problems all the time and like a new startup can come and solve a new problem. And in my experience, that’s just not true.

In my experience, humans have been around for a really long time and the problem set is actually fairly limited. And right now, if you’re solving a problem, if your startup wants to solve a problem, usually that problem exists and humans are trying to solve it some other way. And if they’re going to switch to you, that thing that they’re switching from is not going to be happy.

And so I often tell founders like, hey, almost every company that wins had to maim or kill an existing company. There’s really no way to play this game nice. And that doesn’t mean you have to be an or be unethical.

Like I’m not saying anything like that. I’m just saying like your, you know, when Google releases you know, Google Workspace and competes with Microsoft, Microsoft loses customers. When Notion competes with Google, Google loses customers.

And so I think a lot of founders have to kind of think about it that way and think like, well, if that’s the case, I can look at the market right now and understand what important problems are because the biggest companies are solving the most important problems. And if I want to try to solve a really big problem, I can actually look around and see, oh man, maybe I have to knock off this person or that person to when I solve the problem better. So that’s my best attempt at a summary, but I really think it’s helpful to to kind of dig into the details.

And you go to the YC website, you can see a list of all the best companies, and simple Google searching will give you a bunch of research. All right, thank you. Great question.

Next question here. Let’s go Allison. Oh, looks like a Let’s check out.

There she comes. All right. Hi.

Can you see me? We can hear you. We cannot see you.

Okay. My question is, do you think AI products are becoming oversaturated? Like the advancements in AI is like you know marginal returns.

So what’s like the current best basis to use AI now? So I love this question. Before I answer it, explain to me why you believe AI products are becoming oversaturated.

Well, I’ve seen a lot of like startups that are just wrapping current technologies that are really expensive to build like themselves. So they just use like open AI like APIs to build their company off of. So let’s do an analogy here.

Would you say that companies that use AWS are just AWS rappers? Not technically not necessarily. Why why why would you why would you distinguish between the two so clearly?

That’s a good question. The reason why I’m pushing back is this is a this is the perfect example of pop startup information. Like this is the kind of thing you can read on Twitter and like it’s the kind of thing that a seed investor would say or like someone who’s like a snarky like older person would say and it is an extremely common opinion from those folks that comes from look at all these startups doing AI.

I think once again when we want to think about how market we want to think about how markets work a really good way for you to think about it is a new technology hits. So let’s say the previous big technology would have been mobile and then a whole bunch of startups and a whole bunch of large companies start building products to figure out what the opportunities that this new technology unlocks. And so when you say oversaturated, it’s this weird term because it assumes that like the opportunity has been consumed, whereas like I think the opportunity with AI has been not consumed at all.

Like almost none of the products work really well yet. Almost none of the things that you can build with AI have been built yet. Now certainly people have started companies, but they’re not actually working yet.

So, just like in the early days of mobile phones, right, a whole bunch of people with apps, but it wasn’t clear what was going to be the Door Dash, what was going to be the Instacart, what was going to be the Uber. That took years to flush out. Yeah.

And so, I think that we’re in that kind of phase right now. And I think a cynics view is like, oh, it’s too crowded. I should move on to the thing.

Whereas, like I think another view is this is the coolest new tool that we’ve had in over a decade. It’s not clear the best way to use it. And this is an amazing opportunity for me to try to use this new tool to solve the existing problems in the world.

And over the next five years, the winners and losers are going to be picked. So the people who are starting now will be declared winners and losers five years from now. Yeah.

And then in terms of your second question, the best spaces to use AI in right now, well, I would come back and say, what were the best spaces to use mobile? I mean, it’s an it’s an interesting question. Or if we even go one step back, what was the best spaces to use web applications?

I would argue between mobile and web applications, almost every problem is being touched, right? Yes. And then if you kind of if you look on the other side of it and you look at AWS and cloud computing, what spaces can benefit from cloud computing?

Like almost every. Yeah. So I think that like you know if we were to take an even bigger step back we would say like what spaces benefit from the internet?

Everything. Yeah. So, I think you’re seeing why there’s so much excitement because it’s fairly rare.

Like in my entire like startup lifetime, there’s only been three of these moments. The first one was web apps when I was just getting started, right? Where it was like, oh man, we can actually build applications and serve them in a browser.

We don’t have to distribute them through Windows, right? The second one was mobile, which all of you lived through. And this is the third.

Each one of those produced companies that are literally changing the world right now. So, one would argue running towards this is probably the only smart thing to do if you’re doing a startup, right? Running towards using the new tool to figure out, can we solve any of the problems in the world better now that we have this new tool is like the only smart thing.

And if you’re not using AI, well, markets are efficient. The other tools are old. Most likely the best solutions have already been created.

Does that make sense? Yes. Thank you so much.

That was very insightful. No worries. Great question.

All right. Next question is from Daniel. This is a good one.

I like this question a lot. Let’s see him come up here. All right.

Sorry. One sec. I’m just going to plug my laptop in here.

It’ll be a race between Daniel and I. Daniel can’t join. Okay.

Well, Daniel, you’ve got a good question, so I’m going to read it out loud and answer it. How much of my startup idea should I share with others? What if I feel like my idea should be would be stolen?

So, this is an extremely common concern and I want to be the one that tells you you should not be worried about this at all. The fun thing about software companies is that software companies are literally 200% about execution. As a YC partner, we receive about 30,000 applications every batch and I have seen almost every startup idea that exists.

And what’s so interesting is I think that a lot of people have this misconception of the value of ideas in our software world. So I’ll give you an example. If you know the location of a gold mine, that information is incredibly valuable.

Like if you know where gold is in the ground and no one else knows, right? That information is incredibly valuable. That’s akin.

And in those types of businesses, ideas are very, very valuable. Software businesses are the exact opposite thing. If when Facebook was first being built, you thought, "Oh man, social networks, that’s a great idea." So did everyone else.

There were 50 social networks launched right around Facebook. Just not valuable at all. The reason why Facebook won is they out executed everyone else.

So on the flip side, if you think about a startup as generating a movement, right? You need your users to be excited about you. You need employees to be excited about you.

You need investors to be excited about you. How can you start a movement silently? It’s impossible.

So the counterintuitive thing here is that like you should be talking about your idea to everyone. No one is going to steal your idea. They want to work on their own ideas.

And if they do steal the their idea, your idea, how are they going to execute it better than you? But the more people you talk about with your you talk your idea, the more you learn, the more you can rally people to work with you or to try your product. So this is like a really big misconception, right?

Like you might be talking to lawyers or random other business people who are like, "Oh, no, no, like your ideas are valuable." No, your execution is valuable. You should be telling as many people as possible what you want to work on. All right, next question.

Let’s go through this where I did the rapper one. Pranjal, you got a good question about mentors here. Well, let’s see if you can come up on stage.

This is funny because this is a test of everyone’s internet and computer skills here. Can you get on stage? Close.

So close. And then why don’t I cue up a couple other people so that you can be waiting. So after Punjab, we’re gonna do Jaden.

We’ll do Kevin and we’ll do Lighten so we can cue those folks up. All right, so Punjal can’t get on stage. Issues with the internets maybe.

Let’s go to this question. How can I get someone to mentor me? Oh, maybe he’s here.

Looks like he’s close to being here. Okay, turn on turn on your mic and Here we go. Go ahead.

Okay, awesome. Sorry about that. I had some technical difficulty but my question is say I have like a really effective business idea right and I don’t necessarily need need a lot of money but I need guys come back looks like not good internet okay I got the gist of my idea of the question here and it’s up on on the screen right I think too many founders are looking for mentors.

I think mentors I I’ll be controversial. I think mentors are in the startup world and I’ll explain why. I think that the concept of mentors is usually introduced to founders when it comes to what I like to call east coast jobs.

So, East Coast jobs, and I’m speaking to America, about America here, are these jobs where like you have to join a large organization and work your way up for like a large number of years. And to work your way up in this organization, you actually have to learn how that organization works. How do people get rewarded?

How do they get promoted? How do you avoid getting fired? Like I think that each company is slightly different and those best practices to succeed inside of that organization, they have nothing to do with the real world, right?

They have nothing to do with whether you’re helping customers or not or whether the company’s making more money or not. They’re part of the culture of that company. And I think that a mentor is really great at guiding you through that kind of culture because t typically they’re further ahead of you in their careers and they’ve worked their way up.

So if you want to get a job at Google and you’re thinking, hey, in 15 years I want to manage a team of a thousand people at Google, it would make sense to get a mentor who is a manager and seek their advice. I think in the startup world, people want something similar. I want a mentor to help me figure out how to get my startup to work.

Now, this is the tricky thing. Whereas the person who’s now managing a thousand people at Google can tell you how to do it, tell you how others did it, and probably give you some pretty good advice how to do it yourself. I would argue there’s almost no one who can tell you how to win in startups.

There’s almost no one who can tell you what your users want other than your users. There’s almost no one who can tell you how to build it because it hasn’t been built yet. So when you think about this mentor character, this kind of all knowing, allseeing kind of Obi-Wan Kenobi, they don’t exist.

Now, can every startup founder who’s successful point out some people who helped them along the way? Of course. But this idea that there was this one person who kind of was this sage and they could kind of like become a master by studying under their tutelage.

Complete I will tell you that the people that you’re most likely going to learn the most from when building your startup are your users, your peers, other startup founders, and your employees. That’s where the knowledge comes from. And I’ll tell you the biggest group of users who can give you knowledge are the people who really love your product and the people who really hate your product.

And so the last note I will give you is that most of the startup advice that I deliver during YC is written and is already online. So if you are interested in actually doing some searching right there’s a product called the YC library. There’s the YC videos on YouTube.

You can get all of the basic startup advice for free right now. You don’t need a mentor to have that. So great question.

Next up, Jaden, you’ve got like 16 questions in here, so we’ll see which one we pick. How do I let’s see. How do I find a business idea?

That’s a great one to start. All right, sir. Yes.

Yes. Hey. Okay.

Yeah. Hey, it’s really great to meet you. So for some context about myself, I’m a second year at Georgia Tech and I’m really interested in building like specifically like B2B startups right now.

But one thing is as like a college student I don’t have a lot of experience or like domain expertise especially with other businesses or like other more niche areas. So one question was like how exactly would I go about finding those business ideas and then kind of as an extension like since I would also probably be doing like interviews or like trying to talk to other like business owners, what is the best way to like reach out and contact them because like without getting ghosted? So I love this question.

Why do you believe you should be working on a B2B idea? So I’ve tried so in the past like I’ve tried to like one second that that question I want you to take 10 seconds and really think and then I want you to answer it in one sentence. Okay.

Why should you be working on a B2B startup idea? So I guess like should I just I’ll just Okay, I’ll just go. So I think I have identified a a problem in like at a So okay I’m I’m so nervous.

I’m sorry. You only have one sentence to answer this question. Okay.

Okay. So, I think I’ve identified I think I’ve identified a problem with like in it’s specifically it’s like a moving trucking like company like they handle like I guess not for the truckers. I guess they oh now you’re going way long.

Okay. Okay. I’m so so sorry.

I I would say this. I think a lot of people This is another piece of kind of pop startup advice. I think a lot of people have been told that consumer is dead and B2B is the only thing that wins.

And I think that you should be really careful because like by the time business knowledge makes it to students, it’s probably pretty old. And I would say that if you if we go back to cycles, one of the things that I’ve noticed is that consumer products tend to monopoly faster than B2B products and the consumer world just moves faster. So if you think about in mobile right mobile iPhone comes out by 10 apps are really hitting hard but like probably by 2015 all the consumer winners exist right Instagram’s out there Snapchat’s out there Uber’s out there lift’s out there so on so forth right and then over that period of time how many new consumer winners have happened since 2015 I think by that time even bite dance was out there.

So if we try to kind of take a step back, it seems to me that when you’re early in a technology cycle, there are a lot of consumer opportunities and a lot of B2B opportunities. And it seems like the consumer opportunities tend to get soaked up faster and the B2B opportunities tend to take longer to to be exploited. And I think that’s just because for consumers, switching to a different product is actually pretty fast.

Like you don’t have to ask anyone. You don’t have to do anything. You have to get any approvals, right?

Whereas for and oftentimes you don’t really sign up for products that and sign a contract for 10 years. Whereas in the business world, right, there’s approvals, there’s process, there’s long-term contracts. So, it can take longer for technology change to effectively produce solutions in the business world.

So that was a long way of saying you should probably work on ideas where you experience the problem personally and if those are consumer problems because hey you’re a young person and you’re experiencing more consumer problems than B2B problems work on something in consumer right this is one of the reasons why I think a lot of people are flocking to startups right now is because we’re in this new tech cycle and like there are consumer opportunities. I think one of the reasons why a lot of young people were kind of shying away from startups 5 years ago was that like there weren’t a lot of consumer opportunities and a lot of them didn’t have experience. They hadn’t personally experienced business problems.

I would say that if you are super excited about doing a B2B company, the best place to experience business problems is going to work at a company, right? Like I do believe this whole like randomly doing research in random areas is like I think that like hey if you are really excited about trucking go work in a trucking startup and you’ll learn what all the problems are and you’ll figure out if that’s what you want to do. And then here’s the last note I want to leave you and this is like kind of like a it can be perceived negatively but it’s but it’s real world right so one of the things we talk about a lot at YC is founder market fit so basically like why are you uniquely able to exploit this opportunity now every founder in every team in YC has software developers and they all are Good.

So, being able to write code is not a unique ability. Now, there was this one company that sold to Amazon for I think $700 million called Pillpack. And this was a company that basically allows you to bundle all of your prescriptions into one nice little packet.

And you basically open the packet, take all the pills in it that day, and you’ve taken all your prescriptions. For young people, probably not very relevant. For older folks that might have four, five, six prescriptions said, "Open up all those bottles.

Oh, I forgot one. Oh, I ran out." Pill pack all good. Now, I talked to the founder of PillPack and I was like, "Tell me your history and let me explain to you what what what founder problem or founder market fit looks like." He said, "Well, I grew up and my dad was a pharmacist." And I was like, "Interesting." And during high school, to make money, I would drive around and deliver prescriptions to my dad’s patients.

Huh. Okay. And my dad realized that if he bundled the prescriptions, little packages, then it’d be a lot easier than giving people these what do you call it?

These these individual bottles. So, his dad when he was growing up invented this pill pack thing and was just distributing it like a normal pharmacist. Then he goes to college and what do you call it?

Is a CS major and learns to code. So here’s this guy who’s starting a like pill delivery company and his dad was a pharmacist. He delivered the pills.

He saw these packs worked and he knew how to code. Do you want to compete against that guy? So I think that like if you can find something where you would bring some of those advantages, then people don’t want to compete against you.

And I think that like too often founders are like, "Oh, let me explore some green field and like try to learn about a business from scratch or learn about a problem from scratch." And like remember like if you’re learning from scratch, you’re competing against the pullpack guy. It’s trickier as opposed to if you’re building something for yourself, you probably already understand the problem pretty well, at least as a consumer. You’ve now you’re starting to get the advantages of built back.

All right. Great question. Let’s bring up Kevin next and then after that, let’s do Lighten and Low Cash.

All right, Kevin. Hi, Michael. Can you hear me?

I can. Awesome. Great to meet you and thanks for the time.

If you have one or a few, I wanted to ask, what are some of the top traits you look for in founders? And something that maybe is not the most like basic that everyone says, you know, you just have to be hardworking and whatever the case. Is there anything specific you look for?

Yes. So, I think this is this is not said enough. I think founders overemphasize ideas and underemphasize technical skills.

And so I think that so often I’ll see a YC application where there isn’t a full-time software developer as a founder or they’re like outsourcing development or it’s just a a couple business guys who are like oh software is not that important. And when I read those applications I laugh. I’m like you are Like I will fund an engineer over a non-engineer every day of the week.

And so I think that’s like I think that’s well known but I don’t think it’s understood well enough. Second I meet a lot of students who studied software development in school but don’t want to write code in their startup. And I’m like well we’re in the software world.

If you don’t write like like writing code then maybe you should I don’t know get a job in a newspaper or something like why why are you in this world right? So that’s the second thing, right? I would say the third thing, and founders kind of mess this up so much, is I feel like they spend more time on their deck and their pitch and like the things that they think investors want to hear, and they spend less time just doing it.

Yeah. Right. Like a great trait for a founder that is lesser known is instead of saying, "Hey, fund me and I’ll build this thing." Build the thing.

Build the prototype. And like what’s interesting is that if the prototype is good, your resume matters less. Where you went to school, where you worked, all of those things are us trying to guess at can you build something.

You can cut through all that by just building something that looks good and like it doesn’t even have to have it doesn’t have to have a ton of users, but like every 10 years the cost of building things basically drops by 10x, right? Like how hard is it to build something nowadays? You can get free credits on AWS, you can get free credit like it’s basically free if you’re a software engineer.

So I would say like that is the thing that like cuts through everything else. If we can try your product and it does the thing that you say you want to do, we’re like great. How drisked is this, right?

Person can build stuff. They have some taste and design. It actually does the thing they say they want to do.

And then when we’re reading what you want to do, if we have the product next to us, it’s like boom. That’s amazing. So, I don’t think I’ve said anything that’s like mindblowing, but you’d be shocked at how much time people spend doing surveys, building decks.

Yeah. Getting advisors, incorporating, talking to lawyers. I met a founder yesterday who was like, "Well, I can’t launch because I don’t have a terms of service." I’m like, "Who who cares?" Like, who who cares?

Get something out there. Cool. All right.

Can I ask one quick follow-up? Sure, go ahead. You said how it’s so easy to build stuff these days.

Do you think the moat for companies has kind of switched just to execution and not really on the tech itself or kind of like where do you see the landscape shift? Don’t take me out of context. I think building a prototype has never been easier, right?

Not not building a whole a whole product and a whole company, right? I think building a prototype has never been easier. I think that competitive advantages are tricky.

I’ll say this, you would be surprised how many startups say their product does X and then when you try the product, it doesn’t do X. Doesn’t do X. Yeah.

And it’s just like we can’t even tell if X is a good idea because you didn’t even get it to do X. So like maybe X would be amazing. Maybe X wouldn’t be amazing.

Like it was great. I was seeing a product the other day that helped people buy secondhand clothes and secondhand like like and I was like all right let’s see like I want to buy like year 2000 Jordans. We typed it in.

Nothing showed up that had anything to do with 2000. It’s like well I don’t know if this is a good idea or not but can you make Jordans at least appear or not appear? There are not right you actually make it work.

So often founders like realize how hard it is to make something work and then they kind of pivot to working on other things instead of just getting their product to work and like hey if it doesn’t work in the widest sense I would have been fine if the founder said hey it’s only going to work for furniture or it’s only going to work for watches or who cares narrow the problem but get it to work. Yeah, that’s all right. Awesome.

Thank you so much, Michael. Light, why don’t you come up and then in the queue? Let’s see who else we got here.

This is working better than I expected. Michael, thanks for your help in the background here making this all happen. And then let’s get Diego in the queue as well.

All right, Leon, go ahead. Yeah. So, my question is so just for I’m international student from Zimbabwe.

So when I came to the USA, I realized that families in the diaspora, they’re having a hard time teaching their kids like languages from back home. So I started like working on a little application to like teach. So so far I’m like only working on one application or one language.

Yes. And so I know that there’s some sort of like demand for that and it’s now like a small project of mine but then the question is how can I get like that small project to become bigger and and I know like Dualingo is moving fast but then they’re only like taking the larger languages from like Africa and stuff like that. So I’m trying to like move faster than Jolingo if I may say.

So I think this is a great question. I think that like if I were try to generalize it for everyone, I think that there’s a starting point that a lot of investors use when trying to figure out whether a company can or a startup can be big or not that I don’t think is exactly wrong. And I think that starting point is does a huge company exist in this space.

Now you might think Dolingo is huge. I don’t. I think Dualingo is small.

I think you probably know this too. I don’t think Dualingo is a language learning app. How many people who use Dualingo a year later can they speak the language?

I think Dolingo is like a game. Dualingo reminds me of like NPR. It’s like you can like you can listen to a really bad podcast where you’re not learning anything or you can like listen to NPR and kind of think you’re learning something but like are you really learning or are you just kind of like you know kind of a little bit learning and I feel like Dolingo is kind of like well I could play a game that would make me embarrassed that I’m just wasting my time.

Like I can just play League of Legends all day or I could play Dolingo and like at least I feel a little better about myself. I think that’s Duolingo. I think the real business in language learning unfortunately are language schools.

I think most people learn languages in two places. One at home and two in language school. I think no language schools have gotten huge.

So now we got this problem. You want to teach people niche languages, but like there’s no school that even teaches people English that makes billions of dollars a year. So, as a VC, I’m thinking I don’t know that this language thing is something that software can really help.

If it hasn’t produced a billion dollar company and software has been around for 50 years, why would it produce one now? And when I say billion dollar company, I mean billion dollars in revenue that actually teaches languages that’s actually software. So I think that’s the tricky bit.

If I go one step deeper, often times software wins when it makes something 10x easier. I think one of the reasons why edtech has never worked as a space is that no one’s figured out how to teach you anything in 10x less time. Or 10x less effort.

And it’s funny because like I remember when Khan Academy came out and people were like boom, this is it. Like if you put all curriculum online, game on, you’ve won and all curriculum’s online now, right? Yeah.

Has education changed? So, I think anyone who wants to create an edtech company, and I would put language in there, if they’re if they think they want to make it into a billion-dollar company, the big trick they need to figure out is how do you reduce the effort. And the scary truth is that the thing that’s reducing the effort for language learning isn’t even language learning.

It’s translation, right? Like you can literally translate any website into any language on your phone. You can do live translation right with your AirPods.

You can do translation in a world where translation is ubiquitous. Do people need to learn languages as much? They might want to.

You know, if I’m a parent and my kid doesn’t speak my language, I might want to. But does that kid really get an advantage? I don’t know.

So, anyways, great question. And that doesn’t mean you shouldn’t do it. That doesn’t mean you shouldn’t try.

It just means that’s the game we’re playing. Like, that’s the game you decide to play, right? Like, yes, you should know how hard it is.

Okay. Thank you. All right.

Let’s look at more Q&A here. And Diego’s coming up. Oh, I love this.

Okay. Saba, S A B Ah, can go after Diego. But next is Diego.

Okay. Nice. Go ahead.

Okay. Hey, Michael. So, my name is Diego.

I’m studying computer science at UNC Charlotte. Yes. And I was actually thinking kind of like iterating if I could ask you a question that you would really have like the most depth about and I I came down to thinking you’ve seen founders I’m sure just trying to connect with customers.

You keep iterating on like your customers know like your customers will be the best people to talk to. Yes. So I was gonna ask you like what do you think works well when founders are trying to connect with customers?

So here’s the fun thing. I’m going to tell you what doesn’t work well. So, I would say most founders aren’t really trying to connect with customers at all.

I would say most founders are trying to get customers to use their product because of the benefit to the founder, not because of the benefit to the customer. Most founders they meet, they’re thinking to themselves, if I get these users, I’ll be able to raise funding and be able to raise funding, I’ll be able to hire people. And if I can hire people and raise funding, and these users pay me, I can build more product.

And everything is me me. Here’s what I want to do. And these customers are just kind of, you know, h helping me.

When people think that way, they do things like, "Let me send a non-personalized LinkedIn message to a hundred people." Hey, like I’m doing something in the education space and I see you’re a teacher. Can you get on the phone with me for an hour and we could talk about like how I can do X, Y, and Z? Doesn’t that sound like a me message?

How am I helping the customer? So I would say that like that mindset is what really really founders. That’s so that’s number one.

Here’s a second mindset. If you can write code, the easiest way you can think about building a company is talk to customer, get a list of features they want, build those features and win. Now if that algorithm worked, YC would be producing so many billion-dollar companies, right?

We only fund people who can like teams that have software developers on them and like they’re all smart people and they can get customers on the phone. Why don’t all the products win? Here’s the screwed up thing.

Customers don’t know what they want. Customers don’t know what can be built. AI is new.

How does a customer know what you can do with AI and what you can’t? Now, here’s like a a crazy kind of blast from the past, right? Everyone’s used to influencers now and people making money by being influencers, but like 15 years ago, that didn’t exist.

When you put video or streamed live to some UGC site like us or YouTube, you didn’t make any money. And so when we were getting started with Twitch, we had no idea people wanted to make money streaming. Now, doesn’t that sound dumb?

Like saying that out loud now, I sound like an idiot, right? Like, oh, people wanted to stream for eight hours and not make money just for fun, but that was that was what everyone believed back then because how could you make money? There were no ads online.

No one would pay to watch someone stream. So, because the streamers themselves didn’t think that they could make money, they never asked. They asked for higher video quality or random other features.

And we had to kind of dig out of them the idea that they hated their jobs. They loved streaming. And if they could pay their rent, they would stream all day.

We didn’t know that. They barely knew it. But after figuring that out, we tried to we started realizing our unique insight of Twitch, which is like if we can get streamers paid, we got something.

If we can get the best streamers, the most popular streamers paid so they can do this full-time, they will produce content that will attract millions of viewers. And that was our insight. It took us five years.

So the two things not to do. One, don’t be selfish. Businesses are selfless.

They serve the customer and then get rewarded for it. So actually in all of your communication interactive with prospective customers, you should be selfless. You should be willing to give before you receive.

And then number two, trying to get a customer to give you a list of features to build and building them. It’s like an absolute zero op. Like not going to work.

The best founders when talking to customers try to figure out what the customer is trying to accomplish, what they want to do in their life, what they want to do with their time, and they want to try to understand the customer’s problem. After you solve after you understand the customer’s problem, it’s your job to figure out how to solve it. When you outsource the feature list to your customers, that’s Yeah, not their job to figure out the features.

All right, that’s a great question. How are we doing on time? Oh, wow.

Time flu. Okay, I think this will be the last one. Saba, you ready to go?

I feel like this is going to be my most disappointing answer, so I’m excited for it. Hi, nice meeting you. Great to meet you.

Go ahead. So, my question was I noticed that most startups or like the startup culture is on the west coast and I was wondering if there were any opportunities for us east coasters or people that might want to work remotely. Yeah, here we go.

Okay. So, there is oil in Texas and you love drilling for oil. You love it.

You’re an oil bar. You oil is your game, but you don’t want to live in Texas. You don’t like Texas.

Michael, can you help me find the oil in New Jersey? And then this is what Michael thinks. Well, do you like Texas or do you like New Jersey?

I mean, do you like oil or do you like New Jersey? And you’re like, "Well, but I like both, but I want to be comfortable. I I I prefer to I want to be in the oil business, but I prefer to Oh, you prefer." So, what about the person you’re competing against that just wants to be in the oil business?

They win. Now, let me say it another way. Isn’t it cool?

You live in a country where there’s oil and you can move there and you can you can get it. There are lots of countries where there’s no oil at all. Where to drill oil, you got to go and get a passport and then you got to get citizenship somewhere else and then you have to start a business there.

And then maybe that country doesn’t like foreigners starting businesses. So maybe you don’t speak the language. Oh, you live in a country with oil.

All you have to do is move to a different state. You see where I’m going with this? Fair point.

Fair point. And so this is I think the most important thing I think that people think about startups as a career versus a lifestyle. And when you think about a career in a in a job at Google, you can balance the various things you want.

I want a dog. I want to live in the suburbs. I want to work at this job.

And what a company does for you is basically derisks you and allows you to kind of express yourself in these multiple ways. But when you start a company, it’s your whole life. You sacrifice or have to be willing to sacrifice almost everything.

I think a much better ethn analogy here is sports. Imagine if you had a kid and they said,"I want to be the next Michael Jordan, but I really only want to practice an hour a day." You’d be like, "Well, it was already probably not going to happen before you said, "I won’t practice an hour a day." Now, it definitely gonna happen, like zero. And I think that like when people think about sports, there’s so many more public examples of how much you have to sacrifice.

It’s like, oh, you see that woman win the gold medal, but you know, when she goes home, she really like she like does hurdles every day for six hours a day. Like that’s her whole life is running hurdles. And it’s not surprising she’s the best at the world at it.

She’s willing to sacrifice the most for it. When you’re a startup founder and you win, you’re the best in the world at something. What are you willing to sacrifice to be the best in the world, right?

And I will say this, it’s a lot easier for young people to sacrifice stuff than older people. Y’all just have a lot less stuff going on. Most of you, I assume, don’t have mortgages.

Most of you, I assume, don’t have families. Most of you, I assume, you don’t have to take your are still relatively young. Most of them, most of you when looking, you know, if you were to kind of fast forward 20 years, this moment is the moment where you have the least external obligations.

So you have the biggest opportunity to go all in on something. And one of the reasons why younger people on average do more startups is because of that. The other thing is is that almost all of you have your entire 20s to get really good at something.

And you get really good at something when you’re doing a company in that space. We were not good at doing live video when we started the company. We knew nothing about live video, but man, we learned under fire.

And you learn so much more under fire. So, I would tell people, it’s funny because I always say, "Hey, I used oil in this example, but I usually use mining." And I’m like, the Bay Area is a mining town. If you want to be in the mining business, move to the mining town.

If you want to go on vacation, do not come to the mining town. If you want to have fun, do not come to the mining town. If you want arts and culture, don’t come to the mining town.

Or if you want those things, live in the mining town and travel to those things. Right? When I want to go see a Broadway play.

Well, I wanted to go see Hamilton from the original cast. You know what I did? I got on a freaking plane.

It was great. And then I came back and I kept working. You could do that.

It’s a little harder with family and so on so forth, but you can do that. And I think it’s a much better way of thinking about this than like, oh, I can have it all. Like, oh, I can have the balance.

Balances for employees. Balances for employees. All right, I think we’re at time.

These are great questions. And hey, I’m so happy everyone got their camera going. I know we tried a new little format here.

I think it worked out pretty well. My email address is Michael.com. You can email me.

There is no secretary. I read every one of my emails. Whether I reply is based on how good your email is, but you should know I read every email.

And if you’re smart, you will send emails with email with read receipts. And so, like, you will see if I read your email. The last thing I’ll say is that you do not need to email me to apply to YC.

You do not need to know anyone at YC to apply to YC. The only thing you have to do to apply to YC is fill out an application. And everyone who does YC fills out an application.

It’s super easy. It’s super simple. If you can’t find where the application is, trust Google.

It will help you out for sure. All right, Anthony. Thank you so much, Michael.

Thank you so much for this thoughtprovoking conversation. The students, if you can see the chat, I’m pretty sure you can. They have loved this session tre tremen.

So, thank you so much for that. For the students, thank you all so much. Please show Michael your appreciation in the chat.

We really, really appreciate this. Also, make sure that you fill out the survey here that we just dropped. Make sure you tell us what you liked about the session and X, Y, and Z.

Also, be sure to drop by the different lounges where some of our presenters will be hanging out and also the company booth time when it is open. So, again, Michael, we thank you so much, but we’re going to show a brief video from our host, Bobby D. See y’all later.

We will now be transitioning into the open network session. Let me give you some information here. It says that you can access the networking lounge to build connections.

Now remember network it will be your net worth going forward. Remember that Jim or you can visit the company’s booth to learn more about the organizations joining us here at the summit. And don’t forget to drop your resume when you go visit them too.

Thank you so much. We’ll see you in a little bit.