Paul Graham Shares Lessons Learned From 630+ YC Startups(techcrunch.com)
techcrunch.com
Paul Graham Shares Lessons Learned From 630+ YC Startups
http://techcrunch.com/2014/02/24/paul-graham-steps-back-at-yc-but-dont-expect-him-to-launch-a-startup/
11 comments
> Graham said that, after thousands of founder presentations and pitches, he and the YC partners are now able to tell “within minutes” whether a startup will pass muster or not.
This I find slightly worrying. It's amazing if it still works (and I've been wondering how YC was still able to scale), but is the minimum amount of information that needs to be exchanged between startup and YC in order to get a good assessment really that small? Or is the quality of selection (due to scaling issues / less time per applicant) nowdays compensated by the effect of YC's reputation?
This I find slightly worrying. It's amazing if it still works (and I've been wondering how YC was still able to scale), but is the minimum amount of information that needs to be exchanged between startup and YC in order to get a good assessment really that small? Or is the quality of selection (due to scaling issues / less time per applicant) nowdays compensated by the effect of YC's reputation?
I didn't say we can always tell within minutes, just that we sometimes can. Also, the interview is not the only information we get. We've also read the application.
Having interviewed many people over the years (not for an accelerator though), you can easily tell within ten minutes if someone can not pass muster. I have never had anyone who stumbled over the first three questions I asked them, recover on subsequent questions. Nowadays, the only reason I keep interviewing people who stumble over the first three questions is out of politeness.
As I am usually interviewing people for one position, which they need to perform well in, it would take more than ten minutes to get to a yes. But since YC gives sixty or more yeses a batch, and they still win if only a few of them pan out to be a Dropbox or Reddit, than they can probably afford to give a yes in the first ten minutes as well. Because who is a superstar is obvious in the first ten minutes as well. The only question for a superstar beyond the first ten minutes is if they are a fit or not (for example, would the obviously motivated and skilled author of Temple OS, who is marked dead here on HN, be a fit).
As I am usually interviewing people for one position, which they need to perform well in, it would take more than ten minutes to get to a yes. But since YC gives sixty or more yeses a batch, and they still win if only a few of them pan out to be a Dropbox or Reddit, than they can probably afford to give a yes in the first ten minutes as well. Because who is a superstar is obvious in the first ten minutes as well. The only question for a superstar beyond the first ten minutes is if they are a fit or not (for example, would the obviously motivated and skilled author of Temple OS, who is marked dead here on HN, be a fit).
I have to disagree with the "can easily tell within ten minutes if someone cannot pass muster" part. Interviewing is hard. We tend to make such snap judgments but those judgments reflect our own biases.
I have come to believe over the years that interviewing measures interviewing skills. Test scores measure test taking skills. Success on the job requires success-on-the-job (to coin a phrase) skills. All those things correlate, but the correlation coefficient is not super high. In fact, ignoring those correlations can be an effective strategy to find great people.
I have come to believe over the years that interviewing measures interviewing skills. Test scores measure test taking skills. Success on the job requires success-on-the-job (to coin a phrase) skills. All those things correlate, but the correlation coefficient is not super high. In fact, ignoring those correlations can be an effective strategy to find great people.
Aren't "interviewing skills" essential to founders? Isn't a YC interview basically a chance to pitch your company and answer probing questions about your plan? Seems like a pretty fair qualification to me...
Only if fundraising is your endgame, which admittedly it is for a lot of wantrepreneurs.
Fundraising is not a CEO's endgame, but it's very similar to the day-to-day of CEO work: promoting the company to others; being the public face; communicating clearly, concisely, and effectively; making sure that the company 'works' in all the ways that matter.
All of these are 'soft skill' competencies that hackers tend to downplay. But you need someone who can do this and do it well.
All of these are 'soft skill' competencies that hackers tend to downplay. But you need someone who can do this and do it well.
I don't downplay the importance of those skills, but are they essential to all CEOs? Does every company need a public face? Absolutely not, at least not for startups, depending on your core competencies and what makes you a good CEO, the public facing stuff to the extent that it is necessary in any given company can be delegated.
I don't think that's the case.
In deep tech, no.
This is absurdly reductionist.
Better than absurdly pompous...
Assume for a moment that I don't know what you mean by 'reductionist'; why is it wrong?
https://en.wikipedia.org/wiki/Reductionism[#]
In other words, you by failing to distinguish scaling phenomena (1->N) with a gating criteria (0,1), you are making an attribution error concerning the "essentialness" of your explanatory variable.
For example: co-founders are typically not "interviewed" for the job. But (a) their selection is essential; and (b) if you can find a co-founder, you can find any lesser employee.
It could be argued, that having the ability to "recruit" without formal interview is actually a more essential skill.
In other words, you by failing to distinguish scaling phenomena (1->N) with a gating criteria (0,1), you are making an attribution error concerning the "essentialness" of your explanatory variable.
For example: co-founders are typically not "interviewed" for the job. But (a) their selection is essential; and (b) if you can find a co-founder, you can find any lesser employee.
It could be argued, that having the ability to "recruit" without formal interview is actually a more essential skill.
except you completely disregard cultural backgrounds, but meh. to each their own. interviewing just like any other skill can be practiced.
edit: not saying i disagree per se. I can tell really quickly if someone knows their shit by working with them for a day... or so i'd like to think. the truth is i've been completely misjudged based on interviews before. i've seen people on top of their fields do the same mistakes with other people because they "seemed to know" based on talk. in the end talk is just that, talk.
edit: not saying i disagree per se. I can tell really quickly if someone knows their shit by working with them for a day... or so i'd like to think. the truth is i've been completely misjudged based on interviews before. i've seen people on top of their fields do the same mistakes with other people because they "seemed to know" based on talk. in the end talk is just that, talk.
You know, I know that PG has been beaten to death over the speaking English with an accent thing, which is unfortunate, because it got away from what he was trying to say. But this is an interesting point. Culture, language, and other similar factors that could lead to poor interview performance is something that I hope we can somehow figure a way around.
Now given that, let me say that I completely understand what PG was trying to say there, and I hope that I haven't hijacked the conversation.
Now given that, let me say that I completely understand what PG was trying to say there, and I hope that I haven't hijacked the conversation.
Let's not leave the "speaking with an accent thing" alone for a second.
PG's point was that if your accent is sufficiently strong that people have trouble understanding you, then you have a big problem. And that's something that is obvious in a sentence. So person opens their mouth, and you know it is a no.
If the person merely has an accent, that's OK.
And so we have confirmation of what he's saying now. There are times when it is obvious within the first 10 minutes, in fact in the first 2, that you need to say no.
PG's point was that if your accent is sufficiently strong that people have trouble understanding you, then you have a big problem. And that's something that is obvious in a sentence. So person opens their mouth, and you know it is a no.
If the person merely has an accent, that's OK.
And so we have confirmation of what he's saying now. There are times when it is obvious within the first 10 minutes, in fact in the first 2, that you need to say no.
you can easily tell within ten minutes if someone can not pass muster
Nope, you cannot. I think it's highly likely that there are some rather large biases in your process.
This goes for pg too.
Nope, you cannot. I think it's highly likely that there are some rather large biases in your process.
This goes for pg too.
> Nope, you cannot. This goes for pg too.
I dont know about PG but Warren Buffett says the same thing when it comes to buying new business that he make a decision within 5 minutes.
I dont know about PG but Warren Buffett says the same thing when it comes to buying new business that he make a decision within 5 minutes.
PG points out regularly that there is no way of predicting whether a startup will succeed. So, I'd guess that much of what they do is try to filter out companies that are likely to not succeed.
If YC has nailed down the process, then only formidable teams would make it to the interview, and then the interview would serve to simply make sure the dynamic and attitude of the team is not such that they'd be likely to not succeed (sorry for the double negative, but I think the inverse would have a different meaning). It seems reasonable that after hundreds of these interviews, YC partners would be able to spot those dynamics in minutes.
If YC has nailed down the process, then only formidable teams would make it to the interview, and then the interview would serve to simply make sure the dynamic and attitude of the team is not such that they'd be likely to not succeed (sorry for the double negative, but I think the inverse would have a different meaning). It seems reasonable that after hundreds of these interviews, YC partners would be able to spot those dynamics in minutes.
If you are the Richard Feynman of your field, don't you think you could pick up if someone is a good physicist or not in 10 minutes of talking about physics? Not just physics per say, but the mental models you have, the experiments you are going to perform, what kind of theories you have, what you've worked on before, etc. I certainly do, especially if you get to ask the questions.
I can sort of see this for physics but what if it's programming or software in general. I wouldn't be able to tell if someone is good if they were describing something to me in F#, as an example. They could be going about it the wrong way.
What if someone was really onto something and they were describing it to you. They might be trying to explain it as simply as they possibly can and you might think you understand, but a lot could be lost and your impression might be that, that person is not good at what they are doing or that it's a toy.
It all comes down to good communication but I think overall, we learn more over more time. I get that there is a time constraint with the current approach so maybe to scale things there should be some sort of engine that processes people/teams from a watch list over a period of time. For example, mine data from a private YC journal that applicants can start writing in a year or six months in advance. I don't think that should be a problem since a lot is submitted in the applications (my basic understanding of the process).
What if someone was really onto something and they were describing it to you. They might be trying to explain it as simply as they possibly can and you might think you understand, but a lot could be lost and your impression might be that, that person is not good at what they are doing or that it's a toy.
It all comes down to good communication but I think overall, we learn more over more time. I get that there is a time constraint with the current approach so maybe to scale things there should be some sort of engine that processes people/teams from a watch list over a period of time. For example, mine data from a private YC journal that applicants can start writing in a year or six months in advance. I don't think that should be a problem since a lot is submitted in the applications (my basic understanding of the process).
There are Richard Feynmans in math, biology, physics, computer science, etc.
I'm not sure there are Richard Feynmans in startups or similarly "soft" fields.
I'm not sure there are Richard Feynmans in startups or similarly "soft" fields.
That's true. What about people like da Vinci or Michelangelo?
I am not comparing pg to either of these three people, at least not directly. I'm just claiming that it's not unlikely there's some kind of taste, knowledge or whatever have you which he (and the other partners) possesses to a much higher degree than Random Joe Investor.
I am not comparing pg to either of these three people, at least not directly. I'm just claiming that it's not unlikely there's some kind of taste, knowledge or whatever have you which he (and the other partners) possesses to a much higher degree than Random Joe Investor.
I'm not sure there are Richard Feynmans in startups or similarly "soft" fields.
There are. Game recognize Game[1] is a thing for a reason.
[1] If you need this footnote then it doesn't apply to you.
There are. Game recognize Game[1] is a thing for a reason.
[1] If you need this footnote then it doesn't apply to you.
Game recognize game, and you looking might unfamiliar!
;)
Wasn't quite expecting the violent downvoting though. Humour never goes well on HN.
Wasn't quite expecting the violent downvoting though. Humour never goes well on HN.
This may well be an example of our ability to find patterns based only on "thin slices," or narrow windows, of experience. [0]
Called "thin-slicing", first read about it in "Blink" by Gladwell, which is based entirely on this concept, and has plenty of great examples of this phenomenon (The Wikipedia link below has some of them).
I think the human brain is the ultimate pattern-matching and learning machine, and when trained long enough develops an ability to discern patterns from the faintest and narrowest of signals.
[0] http://en.wikipedia.org/wiki/Thin-slicing
Called "thin-slicing", first read about it in "Blink" by Gladwell, which is based entirely on this concept, and has plenty of great examples of this phenomenon (The Wikipedia link below has some of them).
I think the human brain is the ultimate pattern-matching and learning machine, and when trained long enough develops an ability to discern patterns from the faintest and narrowest of signals.
[0] http://en.wikipedia.org/wiki/Thin-slicing
As a founder of a prospective startup, I know that so much can change in a matter of days or weeks — not just about the people/market/concept, but also with the founders themselves as we "grow up". I wonder how many founders came into their pitches throwing red flags, but who would have outgrown them during, or even before, the YC program began.
In my honest opinion, they should just re-apply afterwards. It's impossible for investors to see if those red flags will or will not disappear during development. They are quite explicit that the pitch is paramount and why it so.
Probably quite a few, especially those like Drew Houston who didn't get in on their first try. Presumably on that first application Drew had some of the same good credentials (MIT grad, perfect SAT score).
It's a shame YC doesn't provide feedback on applications…I'm sure they make notes as they go through the apps (at least for the ones they're not sure about) — would be great for them to have a system to include those notes with their decision notifications!
I would imagine that there is always the chance of 'false negatives' (people you call as failures that eventually succeed), but they are probably pretty bang on with identifying positives.
As an investment first that pretty much the only statistic that matters.
As an investment first that pretty much the only statistic that matters.
One could make the argument that amount of information to be exchanged in order to get a good assessment really is that small. If they mostly look at how you behave under pressure and whether or not you can still tell a consistent story (pitch your start-up), then you only need a couple of minutes. From what I've read, they judge team dynamic and character for the most part, only checking if you're able to think of a good idea because it would most likely change anyway.
[deleted]
It is very likely that they are not focusing on the information being told, but instead they are picking up non-verbal communication clues.
The entire video of the interview is here: http://www.youtube.com/watch?v=0rVpAKziQJA
Err, Sam Altman is the only beta tester of a YC-company trying to develop a better email client?
Anyone got any more details on this? Is this just an inside joke that I don't get? (Yes I remember the build-better-email-client thing, but actually trying, and using one beta-tester?)
To be honest I no longer think an email client is the problem. Its the lack of contact book, integration with all my devices and just generally tying up my orgnaisation for me - frankly a better email client from now is an AI.
Anyone got any more details on this? Is this just an inside joke that I don't get? (Yes I remember the build-better-email-client thing, but actually trying, and using one beta-tester?)
To be honest I no longer think an email client is the problem. Its the lack of contact book, integration with all my devices and just generally tying up my orgnaisation for me - frankly a better email client from now is an AI.
What's so strange about that? Personally I think it's a brilliant strategy. It's the logical conclusion of having few users love you, and frankly I can't think of anyone better than Sam Altman to beta test a email app. Once they got him satisfied and hooked, they can easily go for the other big fish in the SF startup scene.
I'm sure they appreciate your two sentence dismissal of something you've never seen and haven't heard more than two sentences about.
I'm sure they appreciate your two sentence dismissal of something you've never seen and haven't heard more than two sentences about.
I am not dismissing their new email client - I am dismissing the idea that a new successful email client is about email. I have four mail clients and god knows how many messaging clients and VoIP in regular use and none of them manage to do the things I need that are related to messaging other human beings - synchronising address books, synchronising who I talked to about what and when, booking appointments between two people without several emails of a phone call, and generally reminding me what I have forgotten .
I struggle to imagine that there is a single email client that will solve this - this is an integration problem - multiple devices, multiple slices of my life.
Executives pay good money, very good money, for PAs to solve these problems. And I get more and more frustrated by the siloes of data (Skype, iPhones call log) that actively make it harder for me to get metadata about what I am doing each day.
so an email client, by my definition of what a single client is, no, does not seem a good idea. but maybe a cross platform synchronising and intelligent solution, that might be worth getting excited about
so that's why I asked if anyone knew anymore. Not a dismissal of their app, a request for more info. And then a strawman of the idea of building a better email client.
I think building a better mousetrap is an outdated when a jungle is waiting out there.
I struggle to imagine that there is a single email client that will solve this - this is an integration problem - multiple devices, multiple slices of my life.
Executives pay good money, very good money, for PAs to solve these problems. And I get more and more frustrated by the siloes of data (Skype, iPhones call log) that actively make it harder for me to get metadata about what I am doing each day.
so an email client, by my definition of what a single client is, no, does not seem a good idea. but maybe a cross platform synchronising and intelligent solution, that might be worth getting excited about
so that's why I asked if anyone knew anymore. Not a dismissal of their app, a request for more info. And then a strawman of the idea of building a better email client.
I think building a better mousetrap is an outdated when a jungle is waiting out there.
Was that ReMail? If it was, they were acquired by Google, so in some sense it seems to have worked.
>You can be surprisingly stupid if you’re sufficiently determined
I think one reason we're wrestling with this smart/stupid/success/fail subject is that these words paint with broad brushes. It's not just being smart or stupid, it's what you're smart or stupid about.
For example, I knew an uneducated couple who opened a small clothing store. At first, they naively sold merchandise for less than they paid for it. They calculated the markup on belts by adding $4, then adding $3. When I suggested just adding $7, they got angry and said no, you HAD to add $4 first, or it wouldn't work. I would have been fired for pressing the issue.
Pretty stupid, eh? Maybe. But they were smart, too, about other things. What other things? Some people get MBAs at Harvard and still can't figure it out.
I watched that couple expand into a small chain of clothing stores with an 8-figure annual cash flow, and retire as millionaires.
One can only wonder how long they would have lasted in a YC pitch session. My grandmother used to say, "we're all stupid, we're just stupid about different things." The same could be said of "smart," and I believe success reflects a correctness in this rather delicate dichotomy.
I think one reason we're wrestling with this smart/stupid/success/fail subject is that these words paint with broad brushes. It's not just being smart or stupid, it's what you're smart or stupid about.
For example, I knew an uneducated couple who opened a small clothing store. At first, they naively sold merchandise for less than they paid for it. They calculated the markup on belts by adding $4, then adding $3. When I suggested just adding $7, they got angry and said no, you HAD to add $4 first, or it wouldn't work. I would have been fired for pressing the issue.
Pretty stupid, eh? Maybe. But they were smart, too, about other things. What other things? Some people get MBAs at Harvard and still can't figure it out.
I watched that couple expand into a small chain of clothing stores with an 8-figure annual cash flow, and retire as millionaires.
One can only wonder how long they would have lasted in a YC pitch session. My grandmother used to say, "we're all stupid, we're just stupid about different things." The same could be said of "smart," and I believe success reflects a correctness in this rather delicate dichotomy.
I don't quite understand your markup anecdote. Did time pass between the $4 and $3 markups?
No, sir. That was all at once. I was expected to stand there with a calculator, add $4 to the wholesale price, then add another $3.
Commutativity of addition is not at all an obvious fact and I applaud your erstwhile employers for holding you to a higher standard of rigor.
Was there a reason why they did it that way? And did you have a reason to find it lacking?
Yes, there was a reason they did it that way. They were unable to comprehend that +4+3 = +7.
I found it "lacking" because it was tedious and exasperating to stand there with a little pocket calculator adding 4, then adding 3, to make price tags for hundreds of items, one at a time.
I found it "lacking" because it was tedious and exasperating to stand there with a little pocket calculator adding 4, then adding 3, to make price tags for hundreds of items, one at a time.
Family story: Supposedly, some uncle or some such of mine owned land and at some point some large company wanted to buy the mineral rights. They offered him like $9/acre or whatever and he said "Make it $10 and you have a deal." His reason for wanting $10 was to simplify the math: X acres times 10 = just add a zero to the number of acres.
He wasn't comfortable with math, but supposedly he made quite good money.
He wasn't comfortable with math, but supposedly he made quite good money.
This is the way to do it: “Start with a small, intense fire.” Those first customers will make or break you.
> Principally, he said, just because someone is intelligent, doesn’t mean they can actually run a business and go out and execute.
> “You can be surprisingly stupid if you’re sufficiently determined,” he concluded.
Oh that's nice.
Reminds me of the Simpsons episode when some kid accepts homecoming king with "Thank you for not choosing the popular jock and electing me, your intellectual superior, as homecoming king".
> “You can be surprisingly stupid if you’re sufficiently determined,” he concluded.
Oh that's nice.
Reminds me of the Simpsons episode when some kid accepts homecoming king with "Thank you for not choosing the popular jock and electing me, your intellectual superior, as homecoming king".
Smart engineer/entrepreneurs #1 mistake is thinking that because they are competent in their field(or got good grates at an elite school) that somehow magically translates to competence in business and entrepreneurship. I know and have met quite a few people that are grinding away at or have made products which have serious business challenges that they underestimate or are blind to and predictably fail to overcome. It's kind of sad when you see a product that has taken a high degree of workmanship/skill/and effort to make, but which has no market. Or the flip side, which is an insufficiently differentiated(aka not better enough than what people are already using) product in highly competitive market.
You can say the same about artisans who have spent their lives perfecting their craft but don't know how to get the word out about their creations. So many labor in obscurity and their pieces are stunning.
Do you believe the opposite (that you must be very smart to be successful), or are you saying it's not nice to point out the (true) fact that it's not all that important to be very smart?
I think "surprisingly" is the key word here. Someone could be quite smart and still surprisingly stupid if you were expecting them to be a genius.
I think "surprisingly" is the key word here. Someone could be quite smart and still surprisingly stupid if you were expecting them to be a genius.
The article mentions that he was a lightning rod and whatnot as the face of YC. I can't help but wonder whether he took a step back to really evaluate what he was doing with his time after all those blogs ran with the "Paul Graham is a sexist piece of shit blah blah blah" backlash stories a couple months ago.
No, Sam and I had already agreed by then that he'd take over. We just hadn't announced it yet. I do remember thinking though that this was going to be one of the things I missed least.
Ha! One wonders what Sam's thoughts were...
It's interesting that PG will no longer be reviewing applications. I wonder who the 10 people he referenced who do review applications are.
Is Andrew Mason still involved? He's not on the list.
The page only lists full time partners. There are many more part timers.
"PAWWWWWL, I gotta startup that corrects misspelled 'Role Tide' Tattoos. WATCHU THINK??"
His essays from the last few years are almost exclusively about startups and I think they're a must-read resource. IMO, they contain pretty much all the ideas that make up YC and going through the program will mostly reinforce these ideas in a very effective way, rather than teach some new secret.
There's much to be said about technology and its impact on society, so I hope we'll see some great new material.