Jessica Livingston (Y Combinator) at Startup Grind Silicon Valley

welcome to the startup grind let's give a big round of applause for Jessica Livingston here we [Applause] go gosh that's a nice tradition wellow it work thing guys uh Jessica thank you so much for being here thanks for having me I just had an amazing thing just happen actually two minutes ago tell us about it um so no one knows this about me but my book that I spent several years working on I was always disappointed in the cover I found the graphic design just they made me do use this cover I'm so it's disappointed and someone here who raise your hand who has the Chinese Edition show it to us let's I love it like show what it looks like it's so cool that cool I just love it I was so happy so that just made my day and and the did you know it was in Chinese I didn't I I know but I I'd never see in the cover or anything so that just made me yeah um well we love to we love to start start off these interviews by just getting to know you a little bit better tell us about where you grew up uh tell us about your family what your dad did for work gosh this going to be very boring I'll try to make it quick so I grew up outside of Boston Massachusetts my family has lived there for Generations uh no one's ever come as far as to California for my family so it's a little bit Gracy that I did that um my dad did the exact opposite of working at a startup he his first job was his last job his first job out of uh college or grad school he worked for the Gillette company for decades and retired you know with a pension and all of that and uh that's what I knew knew growing up I didn't know anything had no exposure to startups or anything yeah tell us what were you so it sounds like you were not the child that was selling door to door or did you have any exposure at all or or or none at all no and it's kind of depressing because uh we have weekly dinners at y combinator when we're in the middle of our three month sessions and we have a lot of famous people come speak you know like Mark Zuckerberg and people like that and they all say you know when I was 14 I was working on this and I was selling this there's always some story I have no story like that um I just sort of felt into I'll just B people if I I'm not even going to talk about my career prior to Y combinator honestly it will bore people the only lesson in my career is to if you feel like you're not happy in your job don't be complacent don't say well it's a good job and I'm getting paid and I'm pretty happy if you have sort of a nagging feeling that you want to do something different or more even if it you think you're family won't get it do it um because believe it or not the hardest thing for me about starting y combinator honestly I was like 33 years old as old at the time you know her founder the hardest part was telling my father I had quit my job at the investment bank and I was not going to have medical insurance I was petrified I was like sweating all day and uh I was worried what he think and what did he say he was surprisingly calm actually oh and I was starting it with my boyfriend yeah yeah that was layer to it he was surprisingly calm and you know everyone I told about it was pretty skeptical um but I I was doing it there's no stopping me so I guess I'm a little bit stubborn that's only sort of startup founder quality that I seem to have when you went to college you went you went to Bucknell what were you planning to do what did you think you would become what what did you envision for your career you majored in English I majored in English I like to write I thought I'd do something that involved writing I I did I really did not have a vision I I it honestly let's move on to the next subject is my professional life I did not have a vision and I I did things like um I worked at Fidelity Investments because that's what people in Boston did when they graduated on the night shift answering questions about why you know my mellin stock my mellin fund isn't worth money right now you know stuff like that it was awful miss those days not at all actually they they make me appreciate what I have now cuz I absolutely love my job now describe uh describe what you were thinking so so you go into the financial services industry uh it when did when did you did you start working on the book first did you meet Paul first tell us kind of tell us when you met when did you officially meet Paul Graham and where did you meet him I have to remember what year it is I think it was 200 two or 2003 this is the guy you're the guy you're married to yeah I'm we're married now um we were both founders of linator and we met at a party in Cambridge Massachusetts randomly It's Kind of a Funny Story I actually uh went he was co-hosting the party with a friend of his and it was a guy I was taking a class at Harvard's extension school with and I wasn't going to go it was a Saturday night and my didn't have a friend to go with me so I wasn't going to go but I went anyway and I arrived on the doorstep and the got I said oh I'm Jessica Livingston I'm friends with morat Omer I'm here for the party and he said morat didn't you hear he moved to Arkansas last week to join the West Clark campaign it's not here tonight so I said oh my God I'm not going to know anyone and I did not know one person at this party and I went in and had a great time I met you know Paul and Trevor our other co-founder and just hit it off and then Paul and I started dating and I started meeting more people who were involved in startups um Paul Robert Morris and Trevor Blackwell had founded via web um an online store Building Company in the the 1990s and it was actually the first web-based application that was ever done so that always excited so seems so impressive to me and I'd hear these stories that they talk about or other people that they knew who had done startups that seem so crazy to me um stories about how they sort of lied to not lied to investors but pretended to look much more advanced and they were when really they they they had one computer and they stole people's um monitors and put them on desk so it looked like they had more employees there and this is crazy no one knows about this and I was working at this Tech in emerging growth Investment Bank and I thought I should kind of know about this stuff and no one knows this what goes on at early stage startups so that's when I had the idea for the book um and it was sort of based on the concept of the Paris reviews writers at work talked about you know how did you do it yeah um and I started like really cool by the way as well if no one's if you haven't read that those are really amazing yeah anything that gets to the heart of what an expert how an expert becomes really good at something is always probably interesting so I interviewed a couple people I interviewed Paul and I I put together this is what year oh sorry this is now fast forward to 2004 okay and what were those guys doing between they they sold via web in 1998 and are they just like throwing parties I mean what were they doing no no they're not like that they're not like that these people like Paul was the kind of person that in his first day at Yahoo who had acquired them he was like working like 8:00 a.m. till midnight thinking that's what people do and and everyone else is five they do um I don't know um he lasted one year to the date at Yahoo and then he left and he was living out here and then missed the East Coast so he he was he was doing a lot of writing when I met him not not so much on Startup stuff um but writing and then so I was wor so I'll just jump ahead though to 2005 he he was writing no can I ask you one thing for you that what struck you about him when you when you first met him or got to meet him what what what about him you know what about him was was interesting was special well he was incredibly smart yeah just as mindblowing when you first start talking to him you realize like oh wow this guy's like up here and I'm like down there um that was really fun and he's very observant you'll just be walking with him and he'll Point things out that you never would notice and he's just a really nice guy and uh you know I'd say this to his face he was a little bit more nerdy than guys I had dated in the past but I really liked he so he was just really fun and smart and charming and he actually really funny right he is funny he's very very funny tell us about moving outside of that so you start your right but you get this story and then what happens I I did a couple interviews and put uh a few chapters together and got a a book deal um so I had an advance to write this book and I thought okay I'm going to do the craziest thing I've ever done in my whole life because I'm very from a conservative upbringing and all of that I'm going to quit my job you know and I didn't have a lot of savings um and actually this is with the advance as you as you kind of prove out that the book's going to work you then decide you're going to quit it I had the so I knew I could like take 9 months off from the rat race and just like work on the book and do it and then i' try to find another job and um so I I no I didn't quit oh I'm sorry I'm got to get the facts right I did not quit I was going to but at the same time actually i' been interviewing for a at a venture capital firm and to do marketing there and just Paul and I just started talking a lot about startups and how could you help Founders early on what do they need what kind of support we just talked about it all the time and then Paul said you know I should really be an investor and help people because I was helped once he his initial investment was $10,000 in free incorporation work his first investor was a lawyer and uh that really got them into first gear wow um so we sort of like hatched up the plan for ycombinator it was very different than what it was now it was we were just going to be he was going to do Angel Investing and he said but I don't want to like read pitches to meet with people I just want to like fund someone and like work on their idea with them yeah I said well I could do I could run all the other stuff um I have the time now that I'm going to be quitting my job and he said okay and we both said okay remember we were coming back from dinner and he's like I'll put you know $100,000 into this and we'll just do it and I said great and then we sort of said okay great and we said well neither of us know how to do Angel Investing what are we going to do so this is all over you kind of have these uh kind of conversations over period of time but really did all materialize over this one dinner of hey we're going to actually do this or was it over a longer period of time it was pretty short everything we do is pretty short decisive people and this dinner was you and was it Paul and Trevor no no PA me once we decided we were going to do this then we roped in Trevor and Robert okay because we got to rope them in because they're awesome and um um they're also the three guys are very technical I am not technical but I'll tell you the company why combinator would never have been Incorporated if I had not been involved they're very they're not organized in that that way so it was like a symbiotic relationship and so we said well neither of us know how to invest we have to learn what Angel Investing is all about so let's do like a summer program we'll fund several people at once so we can learn all about it and we'll bring in people we know to come talk talk and we'll give them advice and you know Jessica you learn how to incorporate companies and you help them do that I said okay and so it's all just an experiment so talk about did did Paul and Trevor and Robert did they have specific roles like what what is Robert what is Robert really good at what is Trevor really good at well Trevor Trevor is like a hardware genius um even though V web wasn't Hardware Trevor that's really his expertise and Paul claims that Trevor is like just technically the smartest guy he's ever worked with Robert too is also you know Paul's best friend and he's just so knows so much from a technical standpoint like it's beyond my comprehension it's like St it's a joke that he's like our sis admin because he's so he's so smart he's a professor at MIT so both Trevor and Robert did not quit their jobs um Robert was a professor and Trevor was doing a company out in Mountain View called any Bots which factors into our future his history of white combinator um so it's really kind of just ping me but we roped in Robert and Trevor to like help out and read applications and so we said let's build a website and like put an applic we'll do of course we'll do we won't we don't want slide decks we want an application so I put the that up online where did the idea for batches come from well that's I explain how this how we just said let's just fund a few at once so that we can learn faster than we fed the M but but there was no was there any sort of research that went into this or was it just kind of like it felt right it felt like let's just try it if it doesn't work it doesn't work we said let's just try it if it doesn't work it doesn't work and and the batch thing um was just totally random we just wanted to learn very quickly and we found out it turned out to be one of those just great accidents uh cuz we learned we put put up the application and Paul was pretty well known for his essays so we did get some visitors to the y combinator site and we got I think a couple hundred applications at the first B yeah we were just delighted and we pitched y combinator more like come to this summer program if you're an undergrad or graduate student and if you want to go back to school if you're idea doesn't work out you can just go back to school it's very um you know loose exactly and we got a couple you know a bunch of applications we like wow this is great so I think we interviewed 25 of the applications over Saturday and Sunday in March or April and we funded eight of 2005 of 2005 we funded um eight one of which is sort of a famous story The Reddit guys we didn't fund because they were 21 years old and wanted to do ordering um food on your cell phone before before smartphones were even out they had no contacts with McDonald's or anything like that but they thought it was a great idea back then and we rejected them but I loved them and I kept saying like oh I loved those guys and so Paul called them and said they were on an an trct going back to UVA and Paul called them and he like we like you guys can you come back and we'll just brainstorm new ideas because we just didn't like your idea and they got off in New Haven Paul sent me an em know like those guys are back in I was at work I hadn't quit yet I was about to quit I was like yes um but we also funded in that batch Sam Alman Loop Lo and he was out here right he was at Stanford he was at Stanford and we actually tried to brush him off um we said you know you're just a freshman there'll be plenty of time because he was speaking in some Pitch competition we said there plenty of years for you to apply and he said I'm a sophomore and I'm coming and he came he took the red eye flew out for the interview and we also had the Justin TV guys in that batch doing a different idea doing an online calendar that launched like a month before Google launched the calendar crushed them but that's okay we had a good we had a good group that summer so so it worked out and we thought like all these guys became really good friends and they helped one another with their problems and we thought wow this is interesting he batch batch funding things you've talked about how every founder faces rejection what type of rejection did you all face well first of all one thing to remember with us is that Paul had the money to fund us yeah if we had to go out and find funding from an investor we would have been not not in a good place cuz investors just laughed at us um when they they heard they were like maybe but your model seems I don't understand your model um so investors thought we were Silly although we didn't know any investors so that we would have been in trouble in that respect we didn't know any investors but she knew the entrepreneurs through through Paul writing um but we didn't really have a big network of investors and of course the investors especially Angel Investors are just critical to startups after us because we only give them $20,000 and I think at the time it was more like $112,000 in 2005 and so they have to get more funding even if it's $200,000 and there just aren't that many angels at the there weren't at the time in Boston um so how are we rejected so most people we just we just move forward that's the thing like a lot lot of investors were skeptical about us but we just moved forward we called every rich person we knew in Boston and invited them to demo day there were like 15 people there just tried Stone Soup you know we just tried to like create a little excitement around this um you know I don't even know if any of those original attendees invested but well it's not like you were nobody's right I mean like like Paul Paul and these guys had sold via web for a lot of money and or no I mean it did did but it's not we weren't he wasn't like a superstar no one knew me and my book wasn't out like I was a definite nobody but the point is we just kept moving forward and we had eight found you know eight startups and we had 20 investors in the room and we just kept meeting people and then some people would get it no reporter would ever call us back I remember just pitching reporters being like there's this new trend um people rather than going to work for micros people are going to start building startups and get Microsoft to buy them and make all this money and like no reporters even thought that was interesting they wouldn't even call me you know back we just got no one cared no one cared but what happened was we just kept moving forward little by little not caring what people thought about us just doing a good job with the founders helping them build good products and the more our startups got out there investors said oh wait that Reddit company where did they come from why combinator and they just kept hear and the startups just kept getting more welln and more welln and then people started paying attention talk about when you moved from Boston to Sil Valley and why you guys did that yes that was early on um we had this great summer in 2005 and we said okay this seems like an interesting idea we want to keep going with this um we said but we don't want anyone to start a company and be the Y combinator of Silicon Valley like we want to be the Y combinator of Silicon Valley and so here here's where Paul comes in he's like let's go out this winter and do a three Monon cycle and Mountain View Trevor's out there we'll like use part of his office and I thought to myself I cannot move in two months out to Mountain View and like set up the company out there and do all this stuff but we did um and it turned out to be one of the best things we've ever done actually um because when we came out here in January we did another 3-month cycle and at this time we had nine startups in this bag and we got introduced to a lot of people in Silicon Valley and there were just so many great Angel Investors and so many VCS and it was so vibrant out here and you know we had 40 people at demo day out here um and then for three years we went back and forth because we've loved Cambridge we wanted to be there um so we do a summer batch in Cambridge winter batch out here but what happened was all our startups were getting funded by West Coast investors so we'd have a demo day um in Cambridge and they'd all move out here and get funded out here no one got funded by anyone in Boston and so finally we started flying all the startups out here to have a demo Day from the summer all the Boston startups would do one in Boston then fly out here wow um amazingly like Drew hon of Dropbox presented in Cambridge in 2000 Summer 2007 no one was no one cared um so yeah it's fascinating and then he came out here and like seoa funded him they thought this is great so in terms of that yeah that's how we sort of got started and then Paul and I in the meantime had gotten married we having a kid um we thought okay now that we're having a baby we have to choose and it just was sort of a clear choice for well for the company it was a clear choice but for us personally we thought it would be nice to have kids in sunny California yeah talk talk to us about how the 3-month program works I get accepted in the program and then what happens do I need to move my startup here to Mountain View uh just tell us tell us how it works okay well we have an open applications that we post that are up for several months anyone can apply um it's about 35 questions and you apply we review all the applications we invite a subset of those to come interview with us um at our M Mountain View office and we have 10 minute long interviews the whole thing we're always trying to scale that's one thing to know about us we're trying to make things very efficient and a lot of people like roll their eyes meaning you only meet these people for 10 minutes before you decide to invest but you know that's what we do and um we decided that day we call them that night and say Yes we'd like to fund you or no or we send them an email saying sorry we don't but we made the decision that day because one of our complaints about Investors was that they take takes so long to decide and they don't realize that that has a very bad impact on startups it can kill a startup if they take too long to decide whether to fund them um so we do it that day um then you know they they do have to move out here um because what we do can can we talk about that for just a second you so Paul Graham has said you are the best judge of character he's ever met he calls you the social radar okay so if you you know tell us what what is your take on Rob here not Rob was very nice I like yeah he's good H um so I can't believe he says this tell me tell us tell us what do you look for what do you I'll tell you this is why I got the reputation because it would be three super technical guys and me in this 10-minute interview and I'm not going to judge whether this they can pull this off technically or whether the guy the founders are good programmers so I con on other things I just let my partners figure that out and I try to pick up things that are more social like do the founders get along you wouldn't believe how many Founders break up and sometimes you can tell in a 10-minute interview like oh there's a lot of tension yeah you can cut the tension with a nice or um do you get people that come over the top of that CU they've heard that they come in like arm and arm or can you see through those things you don't see I don't know thatat I think about them still um I did have some someone once said if you want to bribe Jessica get her a nice bottle of red wine and then I got a lot of wine that's not how it works um but anyway so I'm looking at do the founders get along I'm very excited when the founders have really deep domain expertise and can tell that they've thought about um this space for a while it's very exciting if they're building something that they themselves use so I sort of pay attention to that or does it just seem like they want to start a startup and have made up an idea you can't just like decide I'm going to start a startup and have it usually work out yeah so I'm looking at things like that that's all the only reason he calls me the social radar is cuz none of those three guys can pick up on these things it's a great it's a great balance right yeah yeah I don't know we'll see what kind of impact if it's good or bad cuz sometimes I reject people who I just don't like like they seem mean or something I just like you know think Life's Too Short Danny here would you what was here say Danny I didn't mean him okay um so talk let's talk about this co-founder relationship for a minute does it does it does it matter if we're friends before does that have any impact on success like if we're very good friends or if we like Drew and uh and his co-founder he kind of he just went out and looked for a co-founder right and he came back with one they weren't friends before does that have any impact that you see yes and let me just preface this with there's tons of patterns that I I see now that we funded 500 I think it's 565 startups at this point so like I see a lot of stuff but there are always ex exceptions to the rules so when I say this you know they're Drew and Arash or they the aberration you know they well don't say that cuz then everybody who doesn't have the exception well start Founders always think they're the exceptions it's not going to change them but um it does help if people have been friends for a long time I get super excited if they you know childhood friends because there's so much pressure on the startup Founders that if you don't get along for some reason it'll somehow break you'll break um and there's so many decisions you have to make together and if there's that level of trust at basis it's good and we do get a lot of stups who are like yeah we've been working together for 2 weeks and it's really great I'm thinking oh God this is not going to end well um cuz that's another thing I sort of got to be an expert on it like founder breakups is there anything that you just say hey if this is happening right now in almost all cases I would just end it is there is there are there things like that you say just red flags it's like you mean a Rel a triple red flag like a flag on fire you know yeah within a Founder relationship yeah um a very big red flag is if like one founder has 90% equity and the other founder has like two and the 2% person is like oh this doesn't seem fair you know I'm not happy about this and then the 90% person is like well tough luck you I'm I'm sort of joking around exaggerating a bit but it does happen and that usually never ends well cuz you want the founders to be more of peers and um if there's a bad Equity distribution that usually doesn't bode well um there are often times where someone will come and do office hours and tell me like we're not getting along and I'll just think oh God this is here it comes yeah here it comes I just they'll even say do you have a second Jessica and I'll think oh God I know it's about to happen like I just could tell weird thing um other red flags um if two people are sort of arguing about or not agreeing on who's the CEO that's a really bad sign um if they both want that kind I don't want to say Glory because it's not really Glory but if they're just arguing over like who they want to make all the decisions yeah um that's a really bad sign and one of them's probably going to have to go or if or if for some reason their work ethics are different and you have one founder saying like this person's like going away every weekend and I'm working that's not good either so tell going back to kind of what the program entails uh tell us about some of the so I'm here for I move my startup I I come here is it just for the three months or do I then go home oh sorry I never finished that thought I I interruped all over the place um so you do have to move here um or we we asked that at least one founder move here permanently or just for the three months and then they can you can move back wherever you are from or wherever you want to be I mean honestly if you're doing a startup you're probably going to do better if you're out here and a lot of your investors will take tend to be out here but we've had some startups move back to certainly back to New York there's some some people who have done that that might be in the fashion industry and totally make sense for them to be there um we had one startup that's you know moved back to Alabama um Wu moved back to Florida they seem to do do well I I honestly think it's probably if it were me doing a startup I'd want to stay here but you know people have families back in different places yeah and I get my own office space is that right it's not like everyone's kind of working out of the Y combinator office no one works out of Y combinator and that's very deliberate um it's very unique too I mean it's different well we we think that that corporate s of cultures early on um are very important and like if you start your you know look at the most famous companies they start in a garage in Meno Park or a garage in yeah that and it's very much a part of the company's history and culture and and it's sort of if people are in some Grim office space Al together it prevents them from creating their own sort of unique culture so most people will get Apartments some if they're a little further along will get an office if they have some employees or something but usually it's they work out their apartment for three months talk about talk about the events that you do once a week where everyone gets together on a Tuesday night I believe tell us a little bit about that that's another thing that we try to do we don't want to fill these people's time with meetings and meetings with millions of mentors and distractions so we really want them to be able to focus on their product before demo day so but we do have a weekly meeting um on Tuesdays it's I don't want to call it a meeting it's a dinner and then we have a guest speaker and oftentimes people will come early and do office hours with us on Tuesday we have office hours we post office hours all any day um but a lot happen on Tuesday like every partner does office hours where the start startups can talk to us about their burn the burning issue of the week um and then that night we have dinner um that originally Paul used to cook um but we've scaled up we have actually crockpot we call them gops they're usually like a chili or spew that goes over rice very easy and that scales pretty well um so then we have um successful startup Founders come talk and the talks are totally off the Record um so they're encouraged to come share really really good details like some of the most exciting things I've learned about the history of Silicon Valley happened in Y combinator at a dinner off the Record off the Record um but we have have had like most a lot of successful startup Founders come talk and I they never get boring people say after like eight years don't you get sick of hearing like you know this guy's talk I'm like no you know like Mark pinkis just came this week and he'd come before and I heard new stuff I love it never gets old it is interesting because you don't I don't know how many people knew about those dinners are people famili these are the from people I have talked to you do not talk about the content but this is the best event you could go to in Sil Valley other than you I've been to start school so I think it's pretty good but these dinners are kind of legendary in terms of who comes and what's said and and I think this like this kind of ties into the to the whole YC Community which I would love to to know how you guys look at at that Community what uh you know as I as I reached out to several people and asked you know hey tell me about Jessica tell me about some of the things she's done it was it was interesting to me to see some of the reaction first of all that it's clear the community is very tight it's it's almost airtight and like these dinners I I can speak to almost I'd say 99% of the time nothing from those ever leaks out and I just wonder how do you guys ay how do you look at community and then how have you how have you built that Community do you have a set of values what does that even mean to you well the Y Community is very special and I'm like we don't plan these things but I think it just came from sort of Paul and I our personalities and the way we treat the founders and we encourage the founders to help one another and we say you know if you've gone through this recent batch you know we'd like you to come back at the next batch and talk about share your fundraising experiences with new G the new gang and people feel really you know obligated to come help people because they themselves have been helped and the the alumni it's so big now there's like 2,000 alumni and they all help each other out and we have um their friends and they we have this list this mailing list that I think if anyone encounters a problem they can send technical problem or needing to get an introduction to someone they just send we don't want to get on that if that's oh yeah it's restricted um but it's it's wonderful because like for example we had a company a couple years ago um who were like featured by Apple cuz they they happened to be the one one billionth like app download or something and they got featured on TV or something crazy and their servers like melted they could not handle this traffic and they sent something out at like 11:00 p.m. like oh my God our servers are on fire we do not know what to do can anyone help us and 5 minutes later like the cloud kick guys who are experts in managing all this stuff are like we'll be there tonight you know come over and like stayed up all night like helping them and it was just like the greatest thing they all help one another so it's it's really it's very special um so so you have these you have these uh weekly meetings are there any other kind of major things that you guys look at as you as you lead up to demo day is there any other are there any other things that you you put together or you try to organize or or you just tell them what what do you tell them just get to work and what what else do you have well we're having office hours with everyone um individual office hours and then we do group office hours where there's like 10 eight startups with a couple partners and we all go around they go around the room saying for five minutes or something saying like this is our most important problem that we're trying to tackle and we give sort of triage advice and so we sort of know what's going on um we're very touch that way we have an email that people Founders can send to us being like how should we handle this so we're always like in touch with them even though we're not in the office together but we do other events we have um prototype day where they come and present what they've done so far um it's you know it's not too many events because we don't like to do that but we have some social some happy hours where they can drink beers together whatever you know so I don't have those though so you uh do you do the red wine ones no that would horrible um do do you uh talk to us about what what do you do to prepare these companies as they get closer to demo day what what are the metrics or what are the thoughts that you give these guys to get them in the right place well we kind of put the fear of God into them about demo Day from the onet because it seems very surreal when theyve just moved to sunny California they starting YC like they don't realize how I hate this but like the shit's going to hit the fan on demo day and like if you're not ready you're going to regret having frittered away a couple months like it's a pretty intense three months period 3mon period so we're always sort of in encouraging them to get users and build their product certainly to try to launch you know obviously there are exceptions if there's some deeply Technical startup idea that's going to take longer to build they can't launch by demo day but we're encouraging in them to do that we say Do not fund raise before demo day like just wait till demo day to do that because it's terribly distracting to start talking to investors um then we have rehearsal day a week before demo day um and that's when we say okay the night before put together a presentation they have two and a half minutes by the way to present to um a room full of investors at the Computer History Museum we usually get around like 400 people 450 people in the audience so it's a pretty concentrated group of very important people that are going to see your product and they have seen and some of them have seen pieces of them before right and maybe some of them hav seen anything y yep depending on if they've launched or sometimes people will meet with investors ahead of time so they come present on rehearsal day and they all stink they're like horrible presenters um we focus them on believe it or not one of the things we want to get across in this 2 and a half minutes is what does your company actually do and you think well of course I'll be able to communicate what my company does but you would be surprised at how badly people are do and explaining what their company does so we really work with them to like simplify the message and sometimes we really have to dumb it down like we the eBay for this just so that investors can they're seeing you know 50 presentations in two minutes each in two minutes so just so they can say Okay eBay for this okay I get that the Airbnb for travel okay I understand that now I can pay attention so we work with them on like clearly communicating what they do um we want them to be able to demonstrate progress and that can come in many different forms ideally it's Revenue growth you know investors love you know charts that are going up um but not everyone has that but you know if you can come and say we've been launched for a month and this is our week over week you know Revenue growth and it looks good like that's very exciting so we help them choose what metrics sometimes there's no growth but theyve maybe lined up a big brand name partnership with someone and you're like oh wow you're working with Starbucks that's very impressive that's progress so we try to work with them on what progress they've made um and then finally what is the vision because right now they're only a few months old and a lot of people um claim that you know the Y combinator funds companies that are features but what they don't understand is that that's what they're starting with something small and there's a much grander Vision there's a take over the world vision and so in most cases we're trying to um have them communicate what the Grand Vision down the road is cuz that is very important to investors and how big is this Market what's the Tam total addressable Market size we want to be able to say this is like $10 million Market I just wanted to talk to you about this kind of um this trend that's happened in the last few years of startups becoming this kind of it's like this cool thing to be a founder you know it's this trendy thing um and I I wondered if you could talk to us a little bit about you know if if you see these Trends if you know if you see them in your applications kind of what your thoughts are and tell us a little bit do you see this happening is this is this something that you guys are concerned with yeah this is actually something I think about a lot um because when we got started in 2005 um you know the bubble the original Bubble had burst and like still wasn't super mainstream and cool to be a startup founder we had people do YC that then their parents sort of got on their backs about going to grad school at Stanford and um it wasn't super cool um which you know and and if you think about how many uh successful startups got founded a lot of them got founded kind of by accident they were people working on some technology on a side whether they were in grad school or working in a big company and just sort of backed into an accident entally um so like we believe there are founders potentially great Founders out there who don't know that they want to be Founders um we certainly did back then in 2005 and now that it's more mainstream and like the movie The Social Network came out and like all of a sudden people's parents like understood oh Facebook we we use that we know about that oh you're doing a startup that's great and so more people we certainly saw a huge jump in applications to Y combinator um that's great in a way because it sort of um you know lubricates that particular full CR of you know people's starting a startup which is always good but not all people the end is always so good yeah not all people are good startup Founders um and you should really like dig down deep within yourself before you do this and know that it's not very glamorous most of the time and it's really hard and it's very stressful and very emotional like one day day you'll think you're just dying and the next you'll be euphoric and it's just very very hard on people especially if they have are in relationships or have families and it's not for every they have lives you mean yeah you're not going to have a life you know I hate to say it in the early years um so it's sort of good and bad like I'm very excited that more people are feeling like it's a good thing to start a startup um and they should everyone should do it if they think that they can but I guess I just caution people to be careful and tell us about you've seen these guys that have started out very small with nothing and then work their way up to very successful companies is it when you get to that point cuz I think a lot of Founders say hey well if I can just get to you know you know if I can get to that point where I'm just staring at that screen all day with that huge curve and just gets bigger and bigger biger I can just get to that point then everything will get good do you see that what do you what happens when your company becomes very successful does it get better does it now you have new problems you think like I used to sort of think like oh gosh these success uccessful like startup Founders talking at YC every week they're just coasting now um they're totally not they are new problems you have like the world you're under a microscope and the Press hates you and picks apart every move you make um you know it's you have millions of employees to manage I mean the hardest thing for our startups that are really on a upward trajectory is hiring right now yeah and like not only is hiring very hard but then managing all those people if you get a lot of employees and you have get HR departments and it becomes more complex and now you're not programming anymore which led you to do the startup in the first place and just just new problems come so um and the final question on this is I mean of course I'm sure you expected this uh when the Y combinator movie comes out who will play you that would be on either like Sandra Bullock May or Christen Bell maybe Sandra Bullock with the wig and then I got for Paul you have any takes on Paul he's kind of a complex guy so could go Daniel de Lewis but he's also Asher he's a little too thin and Li yeah um I Adam Sandler maybe see well I'll just be serious that'll never happen no movie about it and then we'll reenact this event and we'll get joh peard to come play me let's Jessica a big round of [Applause] applause

Channel: Startup Grind

Views: 6,736

Keywords: Y Combinator (Organization), Jessica Livingston, Startup Company (Product Line), Startup, Silicon Valley (Region), Entrepreneur (Profession), Startup Grind, Venture Capital, Startup Education, Marketing, Design, Product, TechCrunch, Startup company, Entrepreneur, Entrepreneurship, Interview, Chat, Fireside, Startup grind, startups, grinds, startupgrind, founder, founders, investor, investors, venture, new venture, venture capital, innovate, innovators, Start-Ups: Silicon Valley, Silicon Valley

Id: cl7JO36hJDU

Length: 44min 48sec (2688 seconds)

Published: Fri Jul 12 2013