Should You Start A Startup? | Startup School — Transcript

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1. 0:01foreign [Music]
2. 0:06I'm Hodge tiger one of the group Partners at y  combinator today I'm going to talk about whether
3. 0:14you should start a startup because YC invests  in startups so early I've spent a lot of time
4. 0:19with people who aren't yet sure if they should  start a company or not I've helped many people
5. 0:23including my own friends and family think about  this decision at my intended audience for this
6. 0:27talk is anyone who doesn't feel ready to start  a startup today but thinks they may want to one
7. 0:32day in the future I'm going to break down the  topic of whether you should start a startup into
8. 0:36two parts first we'll talk about which types of  people seem best suited to being startup Founders
9. 0:41and help you figure out if you might be one of  them second we'll talk about how you might best
10. 0:45prepare yourself for becoming a startup founder  in the future let's start by helping you figure
11. 0:50out if you're the kind of person who should become  a startup founder or not I really wish there were
12. 0:54simple test you could take that would give you a  clear and correct answer to that question I've now
13. 0:58worked with almost a thousand startup Founders as  a group partner at YC and I still get surprised by
14. 1:03which people take to Startup life like a duck  to water and which ones struggle to adapt now
15. 1:07you might find this surprising if your image of  startups is based on the way famous Founders are
16. 1:12often depicted in books or movies these depictions  can make it seem that if you're not a ruthless
17. 1:16brilliant programmer like Mark Zuckerberg in The  Social Network movie or a charismatic product
18. 1:21genius like Steve Jobs in one of the many books or  movies about him you probably aren't cut out to be
19. 1:26a startup founder now I can't deny it that being  a brilliant programmer or a charismatic product
20. 1:32genius will certainly make it easier to be a  successful startup founder but I can say that
21. 1:37after working with many successful Founders  there are many more different types of people
22. 1:42who succeed as startups with different strengths  than just those stereotypes as an investor my job
23. 1:48is to pick which people will make great startup  Founders and yet even after 15 years of starting
24. 1:53and investing in startups I still get surprised  by who turns out to be a great startup founder
25. 1:58that means it's going to be hard for you to know  for sure if you're suited to being one you might
26. 2:02think you could just look at how well someone has  done in school or at work and assume success there
27. 2:07will lead to success of startups that's definitely  what I thought when I first started working at YC
28. 2:11in 2010 and began reading YC funding applications  for the first time after I started working with
29. 2:16more startups though I realized that these signals  mattered much less than I'd expected they would
30. 2:20when you're working on a startup you have to  put in Blood Sweat and Tears to convince even a
31. 2:25single user to care about trying your product let  alone convincing the first 10 or 100 you have to
32. 2:30push through a lot of rejection to get there and  because this is your startup all of that rejection
33. 2:35feels very personal in a way it doesn't when  you're working at a Fan Company building a product
34. 2:40for someone else it takes a lot of resilience  to make it through this initial struggle to get
35. 2:45your early users and that's the quality I think  is most important for startup Founders to have
36. 2:51resilient people are suited to startups and should  definitely become Founders but how do you know if
37. 2:56you have enough resilience to be a startup founder  when I first started working at yce I thought I
38. 3:01could use confidence as a proxy for resilience I'd  assume that if someone projected confidence like
39. 3:06speaking with conviction being high energy during  our funding interviews they were likely to be a
40. 3:11resilient founder the more Founders I worked with  though the more I realized this was also wrong
41. 3:18it turned out that someone could appear very  confident initially but not be resilient when
42. 3:23their startup hit roadblocks conversely some of  the quietest and least confident seeming Founders
43. 3:28at first turned out to be the most resilient  Founders I'd go on to work with many eventually
44. 3:33taking their companies public this is Saji the  founder of benchlink I met him when we funded
45. 3:39benjling in 2012. benjling is now worth over  six billion dollars and Sagi has grown into
46. 3:45a formidable founder and CEO but I remember when  we first interviewed him and his co-founder Corey
47. 3:51they were both softly spoken engineers and we  were all concerned they wouldn't be suited to
48. 3:56working on benchling because benchling's idea  was to sell software to biotech companies and
49. 4:02pharmaceutical companies to make money and we  weren't sure that they would be good at that
50. 4:08kind of Enterprise sales this concern was  shared by investors at demoday who worried
51. 4:13that they wouldn't be able to get those biotech or  pharmaceutical companies to pay for the benchling
52. 4:18software and benjling struggled to raise very  much seed funding at demoday sales did turn out
53. 4:24to be a real struggle for benchlink in fact over a  year after they'd graduated from YC benchling was
54. 4:31still not making any Revenue though they did  have some enthusiastic grad students as free
55. 4:35users and the product continued getting better  it took them almost another year that's now two
56. 4:41years after ycee to start doing sales and making  any Revenue now benchling is on calls to become
57. 4:48a public company someday and has many of the  world's top biotech and pharmaceutical companies
58. 4:52as customers looking back I always had confidence  that Sagi was a good engineer but I could not have
59. 4:59predicted back when we funded him in 2012 that he  would have the resilience to overcome that amount
60. 5:05of rejection and transform himself into the leader  of a company that took many years to become great
61. 5:10at Enterprise sales but what I haven't shared  with you are the stories of many other Founders
62. 5:15who seemed equally talented at first when we  first funded their companies but turned out
63. 5:20not to have the same amount of resilience as these  Founders did I've thought a lot about how to tell
64. 5:24the difference between people who have this kind  of startup resilience and those who don't I've
65. 5:29wondered if maybe having the right motivations or  reasons to start a company mean you're more likely
66. 5:34to have this special resilience over time though  I've decided that this also doesn't matter as much
67. 5:40as I had thought I think there are many perfectly  legitimate motivations to start a company for
68. 5:46example it's become popular to say that you  shouldn't start a company just to make money
69. 5:51that's considered a somewhat flimsy motivation but  I actually think it's fine to start a startup to
70. 5:55become rich startups are one of the few ways  to make life-changing amounts of money in a
71. 6:00relatively short period of time if the desire to  make money gets you started then great go for it
72. 6:05I also think that simply being curious about  what it's like to found a startup is a fine
73. 6:11initial motivation to start one actually doing  a startup is the only way to know for sure if
74. 6:17you'll enjoy it the reason I have conviction  that your initial motivations don't matter so
75. 6:21much is that I've seen motivation to change over  time I've seen Founders who started out a company
76. 6:26with a plan to sell it within a year change  their mind as they kept working the company
77. 6:32and they're still working on that same startup  a decade later and it's now a public company
78. 6:37this means that your initial motivations to  start a startup aren't as important as what
79. 6:43those motivations might change into over time in  order to keep working on a startup and keep going
80. 6:50through those dark periods that every startup  experience is you need enduring motivations
81. 6:55and I think the best ones are to be genuinely  interested in the problem you're working on and
82. 7:00love the people you're working with we'll talk  more about finding those later so instead of
83. 7:05introspecting too much on if you'll make a good  startup founder I'll offer some practical advice
84. 7:11if you are curious about what it'd be like to  start a company start by asking yourself what
85. 7:16do I have to lose now I mean this question not  as a rhetorical one but as a very practical one
86. 7:22figure out what the worst case scenario looks  like if you started a startup and decide if
87. 7:27you can live with that it's probably going to  take at least a year for you to have enough
88. 7:31data to tell if the startup you're working  on is promising enough to keep working on
89. 7:36in the worst case you'll shut down the company  without having earned much or any salary for
90. 7:42that year can you live without worst case  the calculus here is different for everyone
91. 7:48if you're about to graduate college taking a year  after graduating to work on a startup is not a big
92. 7:54deal those job offers will still be waiting for  you in a year but if you've been a Fang employee
93. 8:00for the past nine years and you're in line for a  big promotion this year then maybe you stand to
94. 8:05lose a lot by spending the next year working on a  startup instead asking yourself if you can handle
95. 8:10the worst case is the best way to know if you  should start a startup be honest with yourself if
96. 8:15you can't actually handle the worst case then your  own constant anxiety will probably self-sabotage
97. 8:21your startup efforts when you're thinking about  the worst case scenario of working on a startup
98. 8:25you should Factor something else into the equation  you will learn a lot from starting a company I
99. 8:31don't think enough people factor in how valuable  this learning is when they're doing their worst
100. 8:34case scenario analysis as a startup founder you're  responsible for making everything happen and that
101. 8:40means you get to do lots of different types  of work you'll have to do some amount of sales
102. 8:44product and customer support all at once this can  be very clarifying in helping you figure out what
103. 8:50type of work you enjoy and where you might want to  focus your career even if the startup doesn't work
104. 8:55out some people start a company that doesn't work  and then they jump straight back into starting
105. 8:59another one because they want to learn from their  mistakes others decide they actually really enjoy
106. 9:04specializing in doing one thing really well and  they join a company where they can do just that
107. 9:09the startup experience can really improve your  career opportunities even if the startup doesn't
108. 9:14succeed my second startup triple bite use software  to help companies identify and hire great people
109. 9:21I work with hundreds of employers as they search  for the best talent and I found that many of them
110. 9:26were explicitly looking to hire people who  had previous startup experience they believe
111. 9:30they showed evidence of being a self-starter and  being able to take initiative and Lead projects
112. 9:35some of the most successful YC companies have  actually built their hiring processes around this
113. 9:40knowledge Rippling a 10 billion dollar company  founded by Parker Conrad also a YC company hires
114. 9:46former Founders and puts them in charge of entire  product divisions usually we love hiring former
115. 9:51Founders to run specific product lines and and  build them and and really run them as general
116. 9:56managers we've been you know really successful at  recruiting I think we have Lao now probably around
117. 10:0250 former Founders that work at rip Lane at YC  we often see startup Founders leave this thought
118. 10:08up if it doesn't work out and go on to join a  more successful YC company this is Nick Grandy
119. 10:14YC funded his first startup wonderbar in 2008.  that startup shut down but he went on to join
120. 10:21another YC company you may have heard of Airbnb  as his first employee that of course worked out
121. 10:27great and after many years at Airbnb he left  to start another YC company out school which
122. 10:32is now valued at over 3 billion I share these  stories to show how career progressions are
123. 10:38not always perfectly linear introducing some  Serendipity and meeting smart ambitious people
124. 10:44can completely transform your career and being  a startup founder is a great way to do exactly
125. 10:49that okay so let's say you do decide you can  live with the worst case of doing a startup but
126. 10:55you're not ready to do one right now how can you  best prepare yourself to start one in the future
127. 11:00to actually start a company you'll want two things  an idea and a co-founder now sometimes an idea and
128. 11:06co-founder both come to you quickly and you're Off  to the Races there's lots of great startup content
129. 11:11out there about how to start a company once you're  ready but let's talk about what to do if it will
130. 11:16take you some time to get to that point I'd start  by encouraging you to not think of finding ideas
131. 11:22and co-founders as two separate tasks it's hard  to think up good ideas yourself also your ideas
132. 11:29will start out being vague and fuzzy more like  a hunch or an Impulse than a clearly formed idea
133. 11:34and you'll go through seven iterations of fleshing  it out into something more tangible and concrete
134. 11:40having someone to talk through that initial  idea or impulse with and debate and discuss
135. 11:45is important and the best person to do that with  is your co-founder I find my best ideas come to
136. 11:51me during conversations with smart people so I'd  start by thinking about who do you know that you
137. 11:56enjoy talking about ideas with in college these  are often the people you'll go to when you're
138. 12:01stuck on a hard problem or they are the people  you most enjoy working on group assignments with
139. 12:05at work these are the colleagues who you find  make you the most productive and help you do
140. 12:10your best work I'd see these people out and start  having conversations with them about ideas or
141. 12:15technologies that you find interesting talk about  products you use every day that you admire or are
142. 12:20frustrated by talk about Technologies  you think are underrated today and why
143. 12:24flesh your thoughts out and debate them spend  the time between these conversations doing your
144. 12:29own reading and research to learn more about the  topics you find interesting if you're a curious
145. 12:34person this will seem natural to you anyway all  of this primes your mind to more easily notice
146. 12:38and think of potential startup ideas and it helps  you get to know your friends or colleagues better
147. 12:43as potential co-founders if you're struggling to  think of people you enjoy talking about ideas with
148. 12:48then you probably need to change your environment  and meet some new people if you really want to
149. 12:53start a company one day it's best to choose an  environment where you will be around many people
150. 12:58who might someday be your co-founder I think the  best environment for this is working at a startup
151. 13:03you both get to see how a startup works from  the inside and your colleagues will be less
152. 13:08risk-averse than the average Fang employee so  if you're in college I'd recommend finding a
153. 13:13startup to work at after graduation or if you had  a fan company now think about leaving to join a
154. 13:18startup as an intermediate step to starting your  own someday once you're around smart people who
155. 13:23you enjoy talking about ideas with I'd recommend  you start experimenting with turning these ideas
156. 13:28into side projects at some point during these  conversations you'll eventually say something
157. 13:33like huh like it'd be cool if someone built X and  that's the moment to stop and think about how you
158. 13:39could be the one to build X is there a simple  first version you could build over a weekend or
159. 13:44can you find other people who might be users and  Pitch them on the idea to see how they react keep
160. 13:49pulling on this thread until you've come up with a  plan to turn this idea into something real however
161. 13:54small it is right now you're not trying to launch  the next unicorn you're just getting used to the
162. 13:59experience of turning ideas into reality and  experiencing the thrill of launching something
163. 14:05turn your idea into something real you'll  need the skills to actually build them
164. 14:09if you're not a programmer then either you need  to learn how to program or find a co-founder who
165. 14:15is a programmer my advice speaking from experience  is someone who started his first startup without
166. 14:21being able to code you start learning to code you  only need to learn enough to build a version one
167. 14:27of your ideas once you're around smart people  and you're working on some side projects
168. 14:31how do you know when it's time to take the leap  and quit your job to start a company while it'd
169. 14:35be great if one of your side projects started  getting explosive traction and made the decision
170. 14:39easy for you you can't rely on that happening if  you're serious about starting a company someday
171. 14:45even if you launch your side projects and get some  early users the feedback you get will be mixed
172. 14:50it's not uncommon for the early use of any product  to span the spectrum of being delighted appalled
173. 14:56and indifferent towards a product to judge how  promising your side project is as a startup idea
174. 15:01I'd use some advice from my y combinator partner  Paul bukhai he says that it is better to make a
175. 15:08product that a few people really love than one a  lot of people are indifferent Awards if your side
176. 15:13project elicits a deep reaction from someone the  kind where they can legitimately say that doing
177. 15:19something very differently as a result of your  product existing then you may be onto something a
178. 15:24single passionate user of a crude prototype that  was hacked together in a weekend means so much
179. 15:30more than a million sign-ups on a waitlist for  something that doesn't exist yet my main advice to
180. 15:34you would be to think less about how well your  side projects are going and think more about
181. 15:39how much you enjoying the process of thinking up  ideas and turning them into something real are you
182. 15:44learning new things and finding yourself energized  contrast this feeling with your day job if you
183. 15:50find your job is draining but you have energy  to work on your side projects on evenings and
184. 15:53weekends that's a sign it may be time to quit and  work on your own ideas pay particular attention to
185. 15:59how much you enjoy working with your side project  collaborators if you enjoy working with them and
186. 16:04you both want to be startup Founders recognize how  rare that is having a great co-founder who wants
187. 16:10to do a startup is a fantastic reason to quit and  start one to finish my advice is one don't worry
188. 16:18too much about your initial motivations or reasons  to start a company those can change over time
189. 16:25simply being curious about the experience  of starting a startup is enough to get going
190. 16:31think about the worst case scenario if you did  start a company and be sure you can live with that
191. 16:36if you don't yet have an idea or co-founder start  looking around for smart people to talk about
192. 16:41ideas with and launch some side projects  with actually launch those side projects
193. 16:47however small to get the experience of turning  ideas into reality and if you find someone you
194. 16:53really enjoy working with side projects with and  you both want to start a company make the jump
195. 16:59I really hope you do and I hope we get to work  together at YC Community someday thanks so much
196. 17:03[Music]