Michael Seibel (Y Combinator) at Startup Grind Silicon Valley

welcome to the startup grind so we'll welcome thank you and thank you for coming I love to just start by learning a tiny bit about your background tell us where you grew up tell us what your parents did for work how did you get to what ye alta just tell us what tell us a little bit about you I grew up in Brooklyn and New Jersey my dad was a software engineer my mom was assistant manager at a bank and then a stay-at-home mom I went to Yale because I didn't get into Harvard yeah tough safety yeah really really I don't know what else yeah I moved out here I guess in 2006 I've been out here since what you you studied political science did you plan to be a politician are you going to be a politician are you - where'd that come from I thought I was gonna be a was like a maybe actually maybe I thought I was gonna be a lawyer my freshman year I had the Constitution on my dorm room wall which scared away a lot of women and I promised my mom that I was gonna be a lawyer and every time I see her she still says like you know you have a fulfill via no I'm kind of lame apparently and so yeah and then I think that I knew I wanted to do some stuff in politics so I worked on a political campaign after I graduated and then basically I got kind of dragged into doing a startup it sounds like you didn't really as you just said you got dragged into it you didn't you're not one of these kids had a lemonade stand you didn't go door-to-door you know selling know I think my dad always thought I was gonna be a business person yeah but I never you know I never believed him I always liked being the leader of whatever club I was in but that didn't really translate into anything in my mind I think most of the friends that I had when we graduated college we had no idea what we wanted to do and usually that translates into banking or Teach for America or Burning Man we didn't hear gladden even know Burning Man existed back then so yeah so uh you know no plan so you knew Justin how did you guys meet at Yale John around ordering are we recording this yeah sure is this gonna be available for public public consumption yeah well just my private collection collection yeah which one of these two actually that's pretty important so I met Justin in college I would say I was not gonna be public okay good to know I would say that I I was not the best college student and he was the first person introduced me to a beer bong custom made and we became fast friends so you so you go into politics he moves out here right now or no new politics and he joined the first YC class ever yeah so this guy that no one ever heard of or certainly I never heard of who wrote these essays started to had this program where he invited a bunch of people to move up to Cambridge and to come to his house and eat dinner with him every Tuesday which sounded really scary and like Justin and Emmett were like oh we're totally gonna do this thing and go to this guy's house and stuff and he cooks for us and there are a bunch of other guys there don't worry his girlfriend comes she knows she the the girlfriend comes didn't happen to like she didn't later than later no she got involved but that wasn't part of like the first version of the story and so it sounded really weird simultaneously like they thought I was rude because I moved down to Baltimore and you know Baltimore is interesting city and so they were like what are you doing in Baltimore and I was working on a political campaign there and so we kind of kept eyes on each other and we would always meet in New York and that's where we would all go out and party and so and so forth so I would Amtrak up they would Amtrak down and we would hang out yeah and that was about for a year they were working on a calendar company called keiko calendar yeah they launched it I think one month before Google Calendar came out which turns out to be really bad timing a really good timing right because that led to the next thing I mean bad for that idea but yeah you know it I guess it's all right sighs 2020 right yeah so okay so as I've heard the story you kind of he calls you up you go on this road trip and you come out here to San Francisco this is before yeah because you're still working so this campaign the campaign so it's very interesting so in the fall maybe a couple weeks before the election I go out to dinner with Justin and his dad in DC and he tells me he's thinking of this idea of an online reality TV show and both my his dad and I say that is a horrible idea and then because it was it was really bad idea and so then we lose the campaign and so because I was a finance director I had to stay around and basically clean up stuff and and just in an Emmett sent an email out that said we're gonna go on this road trip and they didn't really invite me I'm more basically was like well I've been working this campaign and having gone on vacation let me go with you and what I didn't know was that they had packed all of their belongings in Emmett's Civic and so if I was taking a seat they had to throw away like a quarter of their belongings didn't know that so they threw it away and then I said so what's the plan because we had all these friends all across countries like what are we gonna do and Justin's like we're gonna get on a tee and drive straight for four and a half days and I was like that doesn't sound fun so I planned the whole road trip and I think that kind of started maybe the thought that we might work together well and so he so you do the road trip you come out here you kind of get a taste of like San Francisco and was so wide everything about this place is a lie so when I got here it was the day before the Blue Angels do their official thing over the shirt so they were practicing so it's a beautiful day it was October I'm thinking to myself this is an amazing place October it's warm I'm on Treasure Island looking over the city there for fighter jets flying around yeah I'm like this is paradise had never been like west of Kentucky and Here I am and like gold in California it's all a lie right all a lie and then I thought okay this is cool and then they said to me we don't live in San Francisco we're staying in a cousin's basement in Mountain View so we drove past all that stuff it seems like at this point you should know that this shoe is dropping right oh no but I no idea I have this idea for this reality TV show they don't plan the trip course you're staying on the floor somewhere of course and so then I'm there for a week and I'm sitting here like what am i doing and I'm watching my friends tape webcams to the top of like baseball hats and looking at this like you guys are totally screwed and but I feel bad I'm like well I should at least help while I'm here they have to crumpled up checks in like their wallet from like PG and from YC and I was like at least I could do is open up a bank account because it seemed like they were gonna do that anytime SiC and find you a place to live so that we don't have to live in the basement and so that's what I did during that week I did those two things and at the end of that week it was my birthday and so we went out wine-tasting with some other friends who lived in the area and Justin bought me a birthday gift now I should have known cuz like dudes don't really like that's you know thoughtful like yes and this guy sounds sweet ly not thoughtful right and so it gives me like this iPod nano and I think I'd mentioned at some point that never owned an iPod and I should have seen it coming because that was a towel and then on the way back he's driving me to the airport and he's like oh maybe you should join Justin TV and I was like no like I thought it wasn't even two but there's like no and he's like well just think about it hey you know he just spent two weeks with the guy it gave you the iPod yeah yeah it so you can't just be like no thought about it no he sold all stuff to let you come to my house like alright I'll think about it and yet yeah that I shouldn't maybe I should have said that I guess it worked out but at the time I thought I was being a little crazy and in the interim they recruited our fourth co-founder as guys names Kyle was an MIT kid and he actually had a spec for a real camera not the webcam taped to a baseball hat and so I saw Kyle's speck I knew they had fifty thousand dollars which seemed like an infinite amount of money and I said to myself well you know presidential elections come every you know four years this might be a once in a lifetime didn't realize Obama was gonna run for president but you know and two weeks later I was sleeping in the living room of the apartment that I found for them yeah and so how did you how did you become CEO did you come out and you just became the CEO my own though didn't have titles like that back then Justin's card said star talent mine was like I was the producer odd I forgot would Emmet Emmet had some like weird Russian title yeah it was it wasn't well organized I mean really 20 to 23 years old we didn't know anything the way that I became CEO was after we launched the show we started running out of money and it's really hard for the guy who's broadcasting his life 24/7 to pitch VCS and so as luck well I guess I have to pitch the VCS and then it was like awkward that the producer was pitching these business cards producers like I had no idea so I was like it might we might look slightly you know we're pitching an online without a TV show but it looks slightly more professional if I'm a CEO pitching an online reality it makes sense it's logical yeah yeah so that's how you became that's how I became CEO and you did raise money because you yeah you got money from floodgate yeah yeah we've raised we raised back then they weren't a big deal wasn't floodgate right back then it was Mike maples and it was iDEN sank it it wasn't Phyllis all this stuff it was George Fariq and Paul Buchheit and I to this day I have no idea why they invested in us talk about like being an entrepreneur that nobody knows who's very young who is has the title of producer how do you get these people's attention how do you get them to take you seriously how do you without the network without what was why so you can I mean I never did startups without YC yeah okay like YC was part of the game from day one like but did it had a tee I mean wasn't nearly what it was today but was it with Paul I could say it was still sufficient because those guys came to demo day it wasn't like he magically had to find them yeah I think that like is that where you met them was yeah it was a demo day yeah and so today was different back then I mean demo day I think had like 35 investors yeah but yeah and I still remember our demo day because we had just got live video working that day and so all we did was show them a video of themselves live and they like all freaked out but then almost none of the murders checks so but ya know it was a it's so I feel so bad saying this but like my story of the valley is like how to do YC well because I never had to not be a YC founder so let's fast forward a little bit you're continuing to do justin.tv but you guys kind of reach this point where it becomes profitable yep and you start you you did you at some point you realized hey this is maybe not the rocket ship we thought it was going to be let's look at some other things we didn't realize it somebody told us so this guy named Gideon you who bless his heart CFO at YouTube CFO at face yeah now I think he broadens the 49er Diddy's left yeah okay so yeah he just basically does everything gets him and so he comes into our office right after so we went from two months of money in the bank to profitable making one and a half million dollars of profit for that year we did that from August to December Wow and at some point during November when we knew we were gonna be okay he comes to the office and he says you guys think you're this you've done nothing if you keep on doing what you're doing right now in three years no one will hear about you no one will remember you you will be forgotten and we were like we're pretty impressed with ourself no one was going to invest in her company at that point we'd already raised you know maybe five or seven million dollars and no one was gonna give us a check it's the fact that we kind of made it profitable we were really proud but he was like you've done and I think that's what started the whole path of like okay now let's do something for real and that was like 2010 that was the fall late fall 2010 so we've been fussing around justin.tv for four years by that point yeah and so where where did what happened yeah what happened yeah so we sat down and we basically said we're gonna come up with a bunch of different ideas and figure out what we should work on and basically two ideas kind of won out in the end one was Instagram was going up and becoming a thing and maybe someone should make Instagram for video the second one was we had this small group of video gamers who to use justin.tv for years maybe we should like build something for them and see if that could be a thing and she basically split the company up into three groups is this one conversation is this over weeks this is over about a month okay I would say it was probably like three conversations one was like we're gonna come up with plans to was like presenting plans three was like we're gonna split up into teams did you just remember anything the conversation was between the founders and maybe two or three other people in the company probably 30 to 40 people at this time and yeah and so we spent the company up into three groups one group responsible for running justin.tv keeping the revenue coming in yeah that's gonna fund everything one group was responsible for building Socialcam monkey responsible for building twitch and we said we're gonna give this six months and probably both of these things are gonna fail if we're lucky one of them's gonna succeed and we never even considered the idea that two would succeed so yeah so how did you get social camp no no no so Social Care was my idea and resentments okay okay it was pretty simple and basically when both started to do well it was like it was it was in a pretty obvious choice we had to do because twitch was really a reskin nning of justin TV it was the same video system the same website just a reskin so she cam was a completely different stack mobile-first like completely different and so it basically made much more sense to spin off Socialcam in a minute spin off twitch we had all vested so it was one of those things where it's like two-for-one right let's give these both a try and like were everyone's going to win and so it was crazy because I went from you know being the CEO of a company at that point maybe 40 45 people to being back at the beginning likes is like three founders Wow which was great I loved it it was so much more fun and so you launch this thing in like early 2011 alright February by Southwest yeah don't do that why not it's just paying the asked launch something when you're in Austin Texas trying to avoid being drunk so yeah and so so wind it it grew very rapidly with it by that by the song yet not yet no okay so when did it when did it start to so it's started so I mean like I don't want to say like it didn't grow it's just it it grew slower than it did later so I think probably by the fall we had you know like a million downloads yeah and like I guess I have like maybe I sound like I dismissed that as being small but like justin.tv at this point probably had 30 million monthly uniques yeah so like a million dollar did impressing him like I mean it was cool it was good it was a good start but it didn't seem like holy and then we kind of spun it off and then we started thinking about how to grow it and it really wasn't until January of the following year January 2012 that it started to grow so we actually did YC again with Socialcam in 2012 January through March and the product grew five acts during YC Wow and then in the month after YC it started to you know that's when we started to invade all of your Facebook walls pretty aggressively so let's just talk about want to talk about that let's just talk about again your investor list for this product was just insane I mean it was its yuri milner it's ashton kutcher it's SV angel it like anybody who's anybody invest in this company did she even meet with all these people was this just something where you're getting emails like I'm in like but I did I did I didn't even those people I can tell some funny stories so I had to meet Ashton on the lot at two and a Half Men and I the only direction that I was given was that it's the biggest trailer on the lot so I'd never been on a lot I'd never seen like a trailer so I had no idea what a big trailer was I end up knocking on the door of a trailer and it's like his co-star and I'm like is Ashton Kutcher here and he looks at me like you're and then like a security guard sees me and he's like what are you doing here and I'm like I'm looking fresh and could share and like that's not good and then finally I found his like trailer which was like big it was two stories so I guess that was the hint like really my trailer and he was like sitting in a director's chair on like a patch of fake grass smoking a cigarette and I was like alright we got to start pitching so that was him Yuri Milner was was he an idiot or what did he agree on the spot you met with any salmon or did he oh I know we talked for a while we've probably talked for like two hours well and like I missed my flight home and all kinds of crazy stuff you start smoking that day yeah no I don't you know I can't remember when he agreed I I don't know for sure it was definitely before demo day but I don't remember okay so then with Yuri like so Yuri's got more of like a established reputation now back then like there was like a whole set of like rumors that yeah Russian mob all kinds of crazy stuff so so I for a while I never saw him it was just his guy here a guy named Felix so you talked to feel incredible yeah and it was like you know Utah and he's like we want to invest I'm like okay and then I said to Felix I was like dude like I love to have you guys I would just like to talk to yuri milner just to like have a conversation like just like to know speak with him one time and feel like yeah no problem and so we ended up talking of course he was in Russia so I was like in midnight I made this amazing conversation any of court he came and visited us a couple times during Socialcam it was a really awesome guy so it was like hilarious because it went from this like shady thing to like I was just a normal investor dude like really cool guy so yeah then another one was this one was was somewhat weird so on demo day Laurene Powell Jobs decided to invest she's another yeah and it was strange because I was talking to somebody and this woman runs up to me and says you've got to meet my boss and just says her name so fast that I just didn't hear it and so I was like okay I'll follow you and so I'm following her and then I get introduced to this woman and I get introduced to her son and her son's wearing like a read baseball cap and tying this woman's like trying to figure out like Laurene Powell Jobs like what it like you know when you feel like something significant but you're not quite catchy you kind of knew she was but you couldn't quite put your finger on yeah and so then she was like well how much is left in the round and I was like oh this much and she's like we'll take it and I was like oh and I think at that moment I realized who it was and I also knew that like there was a lot more people don't want to get into the round so I had to be like oh actually can you just do this much thinking back was like kind of ballsy and she's like yeah sure whatever and so yeah and then literally there was another investor standing right behind her and the second she said she was in this guy was like put me in and we tried to get him for a long time so Wow yeah demo day is an interesting day if you if you do it right if you do it right yeah sounds like it sounds like that's the way to do it so yeah the long they'll go long that was a long answer the short answer is I did get to meet all those people yeah there's a bunch of people in here that that she's walked up to and invested in as well I think so it's a common story yeah it's a common story okay so who remembers Socialcam who remembers using social cam come on oh my goodness yes it's old no it's not it's old I remember it very clearly well you remember what we did to your Facebook oh I remember it very okay so so you've got somewhere in the range if I've got to write a couple million users three to three million three million users at that point yeah and your main competitor just vide yeah it's a time it's rest our IP that all sudden they start they just start blowing up Facebook the graph kind of the same way that Zynga had kind of cycled LivingSocial its cycle through the graph then saying is social together now it's these these videos from this video in LA yep right and you see this and what are you thinking well not only do I see it on Facebook they are the number one app in the App Store yeah so we were like sitting together around 500 and then your number-one competitor becomes the number one app in the App Store and yeah you just start bricks it's like the worst day of your life so we kind of quickly figured out what they were doing and as in like that day or a couple days or that day but yeah a day we forget we were they were doing and then what was so funny was that we had already looked at using Facebook that way but I decided it was too spammy and because the way that they were using Facebook was when you watched a video video video it automatically shared it to your Facebook wall so we're like that's too spammy and then once we figured out what they were doing I remember talking to a friend Iowa I won't say who it was because then you'll blame him for all of the spam this sells his first name no one will probably guess who it is was a Paul or was it's pretty obvious to say the first thing might give it away Emma and so I was like what should we do and like the guy was just like well if they're doing it you should do it too and so you know I think that they were doing it so we had to do it better so we got permission to use the same thing after an aggressive kind of email campaign to Facebook and I think the difference between us and them was that they saw Facebook as an on/off switch and we saw it as a dial and the dial was maybe default set at 3 and we thought maybe we should just adjust it till 11 which I would omit was extremely short term thinking you know you might say we were responsible for making Open Graph useless but if we didn't do it other someone else you turned the Open Graph into the Facebook Graph yeah no open the back open closed yeah so that was crazy and we I'm are one of our investors a guy investing alongside Ashton's guy named guy Oh Siri and he is a Madonna's manager Israeli dude like really intense and he calls me on a Sunday this was bought by the way this was a month where we all slept no more than four hours a night and just just worked and he calls me into Sunday he's like Michael viddy is the number one app in the App Store you're the number two in the App Store we invested in you we didn't invest in them how do we kill them and he said it in a tone that was like you know everything that I have a good answer no no no it wasn't even like it wasn't even letting your team yeah yeah he was like how do we kill them like you have to physically do it or like are you guys gonna beat them like like you're like everything is on the table why do we beat them and I might just wait because we had just started getting into our groove was like just wait like a couple days and I promise you it's gonna work the switch was on and we were just getting it going it was like kind of not it was a get a nine who still had eleven to go and the cool thing about the switch was that the more traffic we got the less they got so the better we were growing the worst they were going so then we turned it up and I called him the next day and I was like see and then yeah and so um that'll happen really fast I mean we got into I see demo day Facebook growth and almost immediately Autodesk kicked up the conversation about acquisitions so that was a really crazy six months and you so you're talking about a desk and then just one more thing on this and we'll keep going you got fifty six million monthly users well that's the number from the rest all right and I'm good and Autodesk comes in and vidi at the same time your competitor raises this huge round at like a 300 million dollar value a 150 they raise okay really fight more than at 450 450 yeah and then you you know that summer in July you sell for 60 yeah which I remember I remember like when I read it and I and I that you did this Bloomberg video which is worth watching because he's got this big smile on his face and I watched again today and it was like it was kind of like wait like what are these guys doing they're selling themselves so short like they're better than these guys the products better they're here in the valley and there's some 416 these guys are 450 but and then at the end of the story fast-forward and what happens with vidi basically collapses the traffic just graph the graph gets completely squashed yeah vide collapses they end up they raise thirty million dollars an up selling for way less than that just for parts and you guys had this incredible exit for you know for what you do with four people yeah Autodesk 60 million dollars well and we had to spun out six months before so how how did you how did you know that that was the time how did you no that was so we remembered Facebook you guys remember the first Open Graph what did they call it like the the first developer push that Facebook did all the quizzes and stuff yes that was when the quizzes happened that's when the like you could draw pictures on people's walls that's when Zynga happened right and basically we knew and then the crush happened and then Open Graph happened right so we knew what Facebook was was we knew phase knows not just kind of like oh they're open they're gonna stay open and I think our big calculation was could we change the video creation habits of people that was the bet right because everyone's gonna watch video but the whole promise of like Instagram for video is you get everyone to create video and what we were seeing was that we couldn't like you guys still don't like making videos even if we like 1/8 of everyone on Facebook watched at least one social cam video like we got 20 million downloads in two three months but we still couldn't Vince and we had all the filters and the borders and all the stupid crap and we couldn't convince people to create video because you know people don't like making video to be completely honest we didn't know that at the time that we had our hunch and so we were looking at this I mean we're looking at our numbers growing but we saw consumption blowing up but not creation blowing up we basically realized that like that was the bat and if we couldn't control creation then this wouldn't be not sustainable you wouldn't be sustainable and so the way we thought about it is that like this is going to be a longer-term project like we thought maybe we be able to flip the switch and make creation work we realized we couldn't we thought to ourselves okay we might be able to make it work in a year or two years but we're not gonna make it work right now and so let's take you know the bird in the hand go to Autodesk and then figure out the more deliberative way I'm trying to trying to figure how to make it work versus you know we had offers on the table for 200 and 300 million dollar valuations that we were just like well if we can't forgot to make this work then we kind of sense that we were setting ourselves up if we took them so and it was funny because I remember everyone said if Instagram for video if Instagram sells for a billion what is Instagram for video sorry yeah which I love because every freaking photo product out there is worth much more than the video products right but you know be in people's minds it's difference if you equate it to YouTube right it was like oh this is YouTube for mobile or something yeah but think about it Facebook's built on photos right face books worth a gajillion YouTube was bought for a billion dollars like it's a different right you video is a different game online so so yeah so we decide to sell and you know I guess it worked out and meanwhile twitches Emmett is your other co-founders building twitch that's trying to take off what what did you have what involvement did you have there and Weston is building exact exact yes who was that spun out as well yeah no exactly just a whole thing yeah it was like suddenly we went from like one company to three companies and so Emmett was was building twitch with our CEO a guy named Kevin Lynn who is a college friend of mine we brought on as a CEO maybe about a year in a justin.tv both of them were gamers both of them love gaming Kevin is like best BD guy like the guy you don't realize is selling you because he's the nicest guy in the world Emmett one of the top two developers have ever worked with in my life and so they just made the perfect team and went out there and just started crushing it and I think that the game was pretty simple for them it's kind of the classic stuff that they teach you talk to your users and build what they want and we had ignored that user base for four years when we started to build for them we started to see how many more people were part of that group that turns out that group you know has hundreds of millions of people in it and the more we learn the more we were surprised I mean at certain points video gaming is the number two category for unique Sandip it's a huge categories so they killed the most passionate fan base on the interwebs and hey not a bad group to sell video ads to right you know very clear demo who likes to buy things yep so yeah so you joined I see six months after or give or take they asked me to become a part-time partner in January in the fall why certain giantess they asked me in the fall of 2012 okay after the acquisition and I joined his part-time partner for the next batch which was January 2013 yeah okay what does that mean what it was a part-time partner versus full-time partner what is that different level of responsibility so I was working at Autodesk full-time and kind of I you know probably put in on the order of two to five hours a week helping YC company okay that's kind of the level of a part-time partner whereas like as a full-time partner you put in about 60 hours a week so it's very part-time and here there's a small equity stake and but you mostly do it because you just enjoy helping startups yeah and so that's why I didn't and it was fun yeah and it's kind of like a trial run right I mean they there's a lot of I mean that's what it feels like and he was like a lot of part-time partners get announced and then then they kind of fade away and the I think Andrew Mason was announced the same time to I don't know what I don't know if he's still around or not I don't think he is but like but then you at some point you leave Autodesk and you kind of join YC full-time or was so I think like partner and partners come to YC for a bunch of different reasons like one is that they have a particular expertise that can be super valuable so a part-time partner named Elizabeth who's doing biotech company and it's so so helpful we've another one named Rick is really good at like b2b sales and he's running a company that's also YC company the other part-time partners that are kind of older and more experienced and you know like Peter Thiel's at a part-time partner right yeah and then I think they're part-time partners that you know are being tried out for full time and so apparently I was in that group because I was not running company and it was not as impressive as Peter Thiel so you know it seemed like a Peter Thiel trial would be a little bit different from probably anybody even Andrew Mason yeah so you know then basically about a year later you know it was announced that PG was going to be stepping back and kind of focusing a lot less on runnin YC and at that point YC basically decided to expand and Sam came to Autodesk and said you gotta join as a partner yeah cool tell us what what does that mean like what does your day look like what does your week look like and then I think a lot of people here want to know some of the specifics and things they can do is it relates to IC but just tell us like what what does your life look like yeah so it was cool so one thing about why I see that most people don't realize is it's a flat partnership it's like benchmark like yeah you come in and you're in everyone's an equal it's pretty cool also all of the people there for the most part have either been around YC for a very long time or a YC founders so it's like this group of people who you kind of have all of this shared experience with which is awesome the typical day of YC is a very weird one so YC companies really only hang out at YC on Tuesdays so everyone kind of wants to come to YC and like take a tour and see all the companies and it's like first of all it's like it's empty and second of all it's just a big room so it's like this empty I'm not much of a nor make orange room it's orange room yeah and there's some lights and some tables so it's not that sexy I think it's better to describe what I do in the context of a week so I probably spend half of my time doing office hours with companies in either the current batch or previous batch those are typically be in half hour sessions and I can list time and the alumni and the current companies can come in fill slots I spent about half my time talking to companies that have not yet applied to YC part of what I really enjoy doing is recruiting and advising companies before they get into I see it's not unique to you or do it does everyone so much of their time it's for you I see company each partner can kind of define what they want to do I kind of say that like 50 percent of our time we're doing normal partner stuff the other 50% of our time we get to do what we want helps YC so some partners write code there's a ton of software the helps run YC some partners recruits the partners to events you know you kind of do what you enjoy which i think is what helps the kind of you know too many chefs in the kitchen kind of thing so yeah so spent a lot of time doing the recruiting piece I typically spend Tuesdays at YC because we have group office hours we have dinners and I write a lot of email I think I probably write at least 200 emails a day which bothers me to those same people so you why she even wanted to advance people want to bring people to IC and you're part of what I'd like to do when terms accrue ting and something that I did with you which I love is that like I like to find people who have access to tons of startups and then basically give them my time it's basically say if you see someone you'd like you can tell them that they can spend a half hour with me and that's been one of the most effective ways because I don't like recruiting in aggregate like I like to talk to founders one-on-one over the phone hear their problems like that's wherever like in doing so that's why I spend most of my time doing do you prefer I mean you've been doing this for a year and a half kind of part time and then full time but do you prefer coaching to actually run a company do you feel like you're are you in this are you in the sunset of your career now yeah I hate when I think about that so I had a plan to start a company yeah I was supposed to be starting a company right now I don't know I think you know when I joined YC I definitely agreed to commit you know to at least five years which I feel comfortable with I'm about to get married probably gonna have kids congratulations thank you you could clap for that I mean that's right yeah so I thought it I thought it was a good opportunity to get good work/life balance yeah and we'll see you know maybe the itch will come back I don't know it was eight years so I definitely put in my time yeah okay tells I give some really give some really interesting thoughts around moving quickly and I think they're unique and I think they're super helpful one of those thoughts is that if it takes more than a month if it takes more than a month to build it's not an MVP can you talk to us a little bit about what that means because every one of us has had that experience where you say well yeah he's right but not not this not Mize to do it not in my situation so I love saying that and I say something else too whenever I ask a founder when do they're gonna launch whatever would they say I say how about two weeks and so I would say that in 75% of the situations and in software it's more like 90% of the situation's you can build something in under a month and the companies that I see so many companies don't succeed because they kill themselves and the number one way you can kill yourself is not launching basically you don't know anything until your product is exposed to customers so I still tell companies is that like okay if you don't know anything into your products suppose the customers if whatever is in your head is 90 percent wrong in 10 percent right how much time do you want to spend working on something that's 90 percent wrong and some people like to spend two years and it's like okay that's great but as soon as you launch you're gonna learn about that 90 percent and you're gonna look back and say okay well you know a large portion of those two years I wasted so if it's a month then you know you're not gonna be too pissed if you wasted you know 90% of the past month and the second you start having users what I love is then you just start building things that they like like the switch happens before you launch you're building things that you like or things that you think users will like after you launch people things that they like and that's probably a better path to building successful companies so we always push that and what's so funny it's like we push that for our software companies for our hardware companies for a biotech companies the message is the same like there isn't like any company that comes in or we're like oh you guys should definitely do slow and steady it's always like fast break a lot and like ignore all rules what about the nuclear fusion startup is that one of those ones where advise them to move quick and feel faster I that one I don't know but I do know there was a company doing drug discovery in the last batch who we were like look like you need a deal for investors to think this is real and they were like well we can't get a deal in this period of time we were just like get a deal yeah it takes years oh no not FDA it was like a deal with the pharmaceutical minions like and and they got a deal with the farmer school company that all of us have heard of in two months that would take a normal company a year and a half Wow and it was just because like the stakes were there so part of what I tell mewhat YC is that like it's the it's the proper application of force if a start-up is pointing one gun at your head we just point another gun at your head and it turns out you just move faster it's not a comfortable situation it's not just any gun it's like an Uzi it's an Uzi yeah oh yeah and then demo day is like a bazooka point yet so what I love about it is that people think that there's a knowledge transfer but like we don't know how to make your company into Pinterest right if we did we would kill you take your company and make an adventurist right we just know that through the proper application Madonna's manager involved through the proper application of like a supportive environment but a high-pressure environment you will figure it out faster it there says now this thing where you know you you're it feels like one of your best options to getting into YC is to go through the network there's so many founders there's hundreds of founders maybe even thousands at this point or mm okay 2000 founders so but it feels like not all YC founders were created equal in terms of the application process is that is it true or is it is it is it that there's a rumor that you need to be recommended right why is he founder to get an interview and that's like false like I would say that probably I mean I don't know this for certain but at least more than half the companies that get an interview are not recommended by anyone and I bet that number is more like 80% so and the other thing I would say is that a recommendation is a double-edged sword you know when I was in high school my teacher said when you ask for college recommendations you don't ask your teacher if you can write a college recommendation you ask them can they write a good college application replicating and like the difference between a recommendation a good recommendation is huge I think a lot of people miss that it's like if you meet this person once you have no relationship in know nothing about you and then like you pressure them and giving you a recommendation that probably is not going to be the best recommendation in the world you probably were better off with that one talk about you see you see thousands all right do you guys talk how many people apply each batch the last batch it was somewhere between sixty five hundred and seven thousand okay so you're getting you're getting you know seven six or seven thousand applications are you seeing a surprising amount of the same types of companies to submit it over and over again and then how does that relate to these kind of audacious companies that you're looking for whether it be you know a pharmaceutical company or you know it's like not these tip the typical startups so we try like I'd like so I read about eight hundred and change applications and for this batch and I desperately try not to look at the idea at all and I think that's kind of a most important thing as most founders think the most viable thing they have is an idea I tend to think that's lower on the list so yeah like do I swear I mean really yeah oh yeah I am low on the list so what in what is it so I would say what I'm looking at is team market traction idea really comes touches hardest on the market you know is this something that millions is this something that could be a billion-dollar company is really what I'm trying to extract out of the idea of versus do I think it's a good idea what I use it myself any of those things I think that the second that you start judging an idea you put your user hat on and like I'm not going to be a user for you know that many startups so I hate putting a user hat on and I always want to give advice I'm like if I'm giving you user advice now let me take the hat off now I'm just giving you investor advice so so yeah so no as a results like when we're looking at that application it's very much the other things and do we see like themes yeah I mean a lot of people want to figure out the age-old problem of after work where do I go to dinner I see that constantly but like we also invest in those things I mean Luca in the last batch where do I go to dinner right so themes aren't necessarily a bad thing doing something unique is not necessarily a path to getting in versus doing something that's an iteration on something else I think it's just more being serious about it there are a couple kind of overarching questions we ask ourselves and one is with this company exists if we didn't fund it and like if it wouldn't then we don't want to fund it we don't want to be the difference between you doing your startup and not we want your startup to feel inevitable and that has nothing to do with your idea at all I know uh I interviewed Sam in February and he said that he said that why she hadn't missed any billion-dollar companies yet and all the applications it's true that it missed some hundred million dollar startups here and there but what we you you you have talked about this about the founder of zenefits Parker when he came through and that you guys have I mean his application video is one of the ones you guys touted as like this is one of our examples single founder he hadn't quit his job couldn't quit his job yet didn't have a team yep non-technical broke all the rules he broke every single rule that that is like you know total you know told breaker if they don't mean and in that evaluation process when he sits in the room and you guys are evaluating him what like how do you make that choice what does it come down to when you're sitting in the room with with that person so one of the things that's awesome about YC is we accept so many companies so everything I told you all of the rules probably apply to 75% of the companies in the other 25% you might describe as like horribly broken and very interesting in unique ways and by having such a big batch it allows us to be flexible and so you know with Parker there were two things that seemed extremely clear one he knew far more there actually there were three things one he knew far more about healthcare than any of us to the company was going to happen and three each and every one of us had the problem that zenefits was solving when we were starting our companies it was painful to get our folks with the paperwork signed and on insurance and so if you're a VC it's extremely hard because you get to make two bets a year and maybe you don't bet on the things that seem like maybes but like with YC and you get to make 100 bets every six months like the beauty of it is that you can bet on maybes that kind of like hit you so hard on the positive points you can ignore some of the negatives and so that's why I like to tell companies it's not like you have to have absolutely everything lined up perfectly no like no one looks perfect but you know if you're for every red flag you have the positive things have to be even more shining and with Parker those positive things were just through the roof shining so if you did a great job we're gonna take some questions from the audience that we have any questions I'm guessing we do so be ready for those I wanted to ask you one more thing and we'll do that and that is you know you're really low-key like okay I'm telling you you know when you think of justin.tv you know like hey go Justin you know and when you think of twitch Oh Emmett and when you think of social cam you know like I've told you I immediately think of you you know but like you were CEO of justin.tv yeah you know and and you know you're this you're this partner in YC and I just like I think you this is something this is something I really like about this I'm sure I'm not doing a good job thank you a compliment but but I just want to like we see so many entrepreneurs that are so outrageous and so over-the-top and so in-your-face and and then there's this there is this other group of entre NORs that just like just get stuff done and just kind of makes it happen and so I wonder like like where is that line like what do you see in the in the entre NORs you see oh I see you see so many and these guys that you really grew up with you've seen all across the gamut sure yeah like where is that balance of like being out there and in your face and being humble and marketing yourself or just getting stuff like how do you look at that whole thing I think that there I guess there are two things right I think that there are all different types of personalities and so I wouldn't say that like one personality makes it better founder than another I just think you know you your most authentic when you're being yourself some people are crazy some people are not if you're not being yourself it's pretty obvious I think the humble thing though is pretty Universal for most of the good founders that I meet sometimes they don't admit it publicly but like it's pretty universal like everyone remembers when they thought the whole thing was going to go to and that they were gonna be a failure and like for most people that was not very long ago so you know in YC when we get to kind of see people on a more personal kind of protected space you know that kind of stuff comes out all the time because even the founders of Airbnb right like they almost failed so many times so the humble thing I think is actually pretty consistent but crazy versus calm like I am whatever you like like whatever you're good at do that let's give it up for Michael thank you very much for coming

Channel: Startup Grind

Views: 11,612

Keywords: Michael Seibel, Y Combinator (Venture Investor), Startup Grind, Entrepreneurship (Field Of Study), Silicon Valley (Region)

Id: ra4_aIht73M

Length: 52min 33sec (3153 seconds)

Published: Mon Jul 06 2015