Office Hours with Sam Altman

all right so this is going to be the first office hours we're doing on YouTube and people have submitted questions on H n so we're jam ready and so yeah that's the same Altman here we go so this is kind of a couple questions put together as a b2b company how do you get sales outside of your network what resources can you recommend to set up a process that will get you first 20 ish customers and then adding on to that among the successful YC b2b companies how do they acquire their first few customers it's a great question I think it's one of the a universal challenge that b2b companies face the answer tends to be very different for different sorts of companies there are some companies where all your customers go to one trade show and the answer is to go there and meet a bunch of them there are others well you may only have ten potential customers in the world and the answer is to just start figuring out any way to get in front of them called emails referrals whatever but I think there is an implied premise in there which is that you need to get to companies outside of your network mm-hmm that's one way of addressing the problem the other is to expand your network and get companies into it and I think that is the approach I have seen work better so I would think about expanding your network the particular example of YC most we have kind of built the YC community in such a way that most people that are b2b companies get their first 20 customers from other YC companies and this has been super valuable yeah for YC and for b2b companies doing YC and we now have enough companies and enough different verticals you can usually find them if you're not in YC I still think you want to think about things in a similar way which is how can I meet other entrepreneurs who are always founder to Thunder sales tend to work pretty well or how can I just get a bigger Network and get access to a broader group of people where I can find my first customers so in terms of doing that do you advise people to go to meetups and stuff like that I think there are some good meetups but most of them aren't um how do you filter I haven't been to one long I mean I think you want to talk to people that been to the meetup before surely respect but one thing that a lot of people including myself did when they were founders that worked pretty well was just start emailing other founders that you respect that are in your same city and suggest getting together and you know like have a dinner like reserve a table for ten people and like nine other founders the respect and I did this or other people did this to me when I was sort of 18 or 19 in Silicon Valley didn't know anyone and some of those people I have stayed in touch with and our close friends now you have years thirteen years later so I think this is like a strategy that works to expand the network it's harder if you are not in some sort of startup hub mm-hmm because it is easier to establish these relationships in person but if you are in one that's what I recommend okay so do have any other tips because I know that's like something you're actively quite good at like expanding your network Iran if you're new to a city say you like jump the barrier and make it to Silicon Valley or another hub again I so so one of the things that is magic about Silicon Valley is that there is this strong culture of helping other people and and and and startups are the dominant kind of economic driver here or one of them so I don't be afraid to just email people that you want to talk to yeah and that is how I think many people end up building their networks there are some conferences and meetups that are really good and although I'm like sort of shy and big groups and I don't like them myself I know some people really do yeah um but most of them are filled with people and I just I don't think are very good another thing that people forget is if you build something impressive your network will kind of come to you so if you email people and you're like hey I'm gonna start a company please network with me I'm trying to find customers you sound like a lot of other people and if you instead say hey I have built this awesome product you know here it is check it out then people take you seriously yeah then you are in a top 1% of well that's uncalled emails absolutely making cool stuff and on the conference note I found that speaking at conferences as a more introverted person is like the key yeah I'm - you yeah that's easier for sure I'm still possibly a waste of time okay but again whether it's YC or something else there are now a number of pre-built networks true to get access to and I think they really helped to get initial customers cool um and then that last question any successful YC b2b companies unlike their stories like their first customers almost all of them sell exclusively to YC companies for their first 20 are nearly exclusively okay but I would say this was a little bit less true when the network was smaller and it is still a little bit less true for companies that are in a very specific vertical that it does not exist motion YC community but but most of the time it's just start using Bookface or emails YC founders and selling to the YC okay cool in book faces the are internalizing yeah cool all right so the next question is a when founding a start-up is being a college student an advantage or a disadvantage doesn't matter at all hmm I think like most things in life it is there are pluses and minuses and you want to get the most out of the plusses and minimize the minuses uh I'll answer it generally for sort of a young person not college in particular so the advantages you have are you probably have normally have less life commitments than people who are more experienced on more boards or other things or families or just all the things in life that creep up and take time and attention so you have huge focus generally have like a lot of work stamina you can work super hard you generally are fairly ruthless and can pick up and move around the world for a good opportunity you generally are at least in my own case you're used to living a very frugal life and like I was thinking that I think it'd be hard for me to go back to the way I lived during my startup where I had like rats running through my kitchen and yeah you know also that there's nothing more until I was 25 and yeah and but at the time it didn't bother me no for sure because it was just like what I always been used to absolutely so the ability to live cheaply is a huge advantage over startups where the founders need a lot of money just a little but do you think the weight of being in the valley in terms of the network is worth the cost I still do that could tip someday yeah and you can still live cheaply kind of in the nooks and crannies of the valley I think you can still make it work here I think it's actually sort of a myth so those are all advantages the biggest advantage of all I think is that um younger people tend not to have the scars of experience they don't know what they don't know they are willing to take on these things again and again you hear someone say you know it's a good thing I started this company when I was 19 or 18 because if I knew how hard was going to be if I knew what this industry is gonna be like how long was going to take I wouldn't have done it yeah and so there there are these ways in which inexperience is an advantage and also ah not always but frequently young people tend to be on the forefront of new technological shifts mm-hmm and so you young people tend to have a pretty good sense of what's what the next big wave is going to be not perfect not always but is been better than chance the disadvantages are also obvious you know you're probably going to be not very good at managing people you're very inexperienced in business you'll probably not as good engineers you will be later in your life so you want to definitely want to supplement yourself with experience people in certain areas mm-hmm and do you think like going to college matters at all um I I went to two years of college and I really loved it and I'm really happy I did and I learned a lot of stuff that has been helpful to me so I'm very happy I did mm-hmm yeah it's kind of that first first step in the door because I guarantee most people oh I see don't know where I went to school or most other people oh I see went to school yeah I don't I couldn't tell you I there's like maybe the people that went to my school I happen to know where they because we talked about it yeah but I couldn't I couldn't tell you the schools of any YC partners that didn't go where I went yeah no and maybe like one or two I just maybe vaguely but in every house or at an MBA and I was like interested in that but it never it's never a topic of conversation yeah cool all right um let's see so how can a student with no technical background go start a start-up for example Evan Spiegel from snapchat didn't have a programming background neither did Brian Chesky at Airbnb so first of all I'd say they're both lightly technical both of those guys they both know a little bit Brian is a great designer and was able to design the first version you and I think they're both really great product so it is possible to be the products founder yeah and you only need to be lightly technical or lightly designed capable to do that however you you have to be able to convince really good technical people to follow you so if you're not going to be technical you have to be great a product and be a great leader and you have to have a very strong idea and then sweat all the details and so if you are that person how do you vet someone who's technical well if it's someone that you've known for a while which i think is the only way I would do this um then you hopefully seen other things they've built you've hopefully collaborated together on some projects and you have a pretty good feeling even if you can't read their code you can say wow they build this awesome thing we did it really quickly it kept getting better this is a good sign um I would not start a company with someone I didn't already know okay in so for a while how long does that mean does that mean like six months I mean five years I just think six months would be a minimum okay and I would and and I wouldn't start a company with someone I hadn't worked with on some project either okay and I think in the course of that you'd find out what you thought about how good they were fair and what about people who do want to like dip their toe in and become like technical enough to run one of these like like ebon or Brian you know there are so many resources available and if you're a college student if you just take a couple computer science classes you'll get basic familiarity and there's many freeways now online some of which are YC companies hmm how to learn the code cool that's exactly what I did I did Python the hard way sorry you go yeah we actually worked all right so why do you think crowdfunding for startups hasn't kicked off as well as hoped I guess as hoped by whoever was starting it what sort of pitfalls have startups in the space encountered that you know about yeah this is a disappointment to me it's I don't I wouldn't call it a failure but it's not been the runaway success I was hoping the thing that I still see going most wrong with crowdfunding for startups is it's easy if you're a startup that doesn't need it because you already have very well known investors but thus far when it comes to equity crowdfunding the crowd has been less willing to back things that don't have professional investor support and so it has become largely though not exclusively a way for companies to multiply the amount of money they raise from full-time professional investors I still believe that crowdfunding should be important but clearly we have not yet developed the perfect product for that um I think it's and I and I don't blame people for not doing it because certainly as an investor I want to get to know the company in person the founders well in person and I probably would not go investing in people I've never met ah you know via crowdfunding platform um so I think we still have some iteration to do in the model okay cool so what do you think is the best way to create impact slash maximize potential impact on the world for a high school student developer Elon Musk named a few things he thinks would be world-changing in 10 to 20 years what do you think high school students should be working on right now first of all I think it's a bad piece with a bad strategy to let someone else tell you what they think is important and then go do that yeah I think it's it's really important you develop your own convictions because those are you know that's what you understand that you care about and also I could be wrong um the area's uh so the two areas I focused on computer science when I was an undergrad or AI in computer security and I thought those are gonna be two of the most important areas I think I called that one pretty well in fact I still stand by in within comparisons yeah that those are two really good areas to pursue it's amazing to me how much AI has changed since I was an undergrad mostly in good ways if I had stayed at school longer I would have studied what was it the time called biotechnology and now is called sometimes that sometimes synthetic biology but that's sort of stuff well you're really kind of pushing the edge of what computers and biology can do together and how we can build new and modified life forms energy so I'm the chairman of the board of two nuclear energy companies and I really believe that quality of life and cost of energy are super correlated I also believe will destroy the planet if we can't get cheap clean energy I was in Beijing recently and I could not believe the pollution so I think if you could pick a major area that's not software to have an impact clean energy and really cheap clean energy would be transformational I mean education is really big and underexplored mm-hmm I think there's a lot we can do with technology to make education a lot better and then it's still early but VRA are clearly will be an important computer poplin agreed and so that like to specifically answer the question like for high school students specifically another question don't go let someone else give you a list of three things and pick one from there yeah I'm like go study the world yeah go study history go look at like the bleeding edge of technology go read what a bunch of smart people say and synthesize it all and then make your own list of the most important things like you get to make your own prediction that's what I wanted to talk to you about with your the recent notes for the New Year blog post like you're talking about like finding what you value in the world value yeah like how do you go about doing that well um how did you I think I needed to try a lot of things I need to study a lot of things I knew I loved computers from a very early age but I didn't know exactly what about them I loved I certainly didn't know that I would end up loving investing in tech companies and helping founders so I took an extremely broad look at the world Iced I tried to take like one class and everything I tried to read one book in every topic I tried to make smart friends that work on really different things and then I tried a bunch of things so you know to my great shame it was like an investment banker for one day but I didn't like that and I built a lot of software and I got really into AI and I got really to mobile um yep and I tried a lot of other things and there were other things I really loved but were just like like not quite smart enough for theoretical physics hmm but I did love it and I found out I sort of in the process of that and then pushing a little bit further in the areas where you know seemed to have an interest and an aptitude I kind of converged to what I do now um and I think that you know breadth first and then increasingly depth first search algorithm works right well um and I ended up getting super specific in a few areas uh the the what the word of what the world values question he's different um well that was that was split up - because it was values and needs right so value is a nice way of saying money right and the needs is kind of separate yeah so I think in terms of what the world needs I found that through my exploration like it's very clear that okay like if you study history and if you study science the importance of the cost of energy is super obvious yeah um if you study economics though it turns out that actually if you make cheaper energy over a 20 or 30 year period you can totally replace existing forms um but so I think what the world needs ah there's a lot of things and it doesn't take brilliance to see them although there are some things that the world needs that are very non obvious it doesn't go the other way if you identify something the world needs they probably need it if you don't notice me obvious the world needs they probably need it we probably need it um in terms of values yeah there are some things that are great that you don't get paid for but in general if there is a true need for it oh I also want to be a writer really I did non-judgmental fiction but all whatever I didn't have much aptitude for that but I also realized that like the world does not need or value the 7 millionth novel yeah absolutely I was not I could make the best contribution right and in cases like that it also is generally harder to to sort of make a lot of money or even enough money doing them oh for sure yeah I mean you see the rates and it also works backwards to like if you find your you know if you find you're just very good at something it's just nice to be good at the game and you have a lot of satisfaction in that way yeah I mean that that is true for most people for sure yeah by and large ok so back to VR AR with VR a are on the rise in the last couple of years how do you think is going to impact the startup community and in your opinion what industry is going to get impacted the most in the next 10 to 20 years well I think you know everyone's kind of searching for the next platform companies tend to they're really transformational companies get formed in clusters on the rise finding platform so in you know 1996 to 2000 we had the birth of the Internet mm-hmm or say the rise of the Internet and as part of that we had the rise of all these companies yep and then it was kind of quiet for a while and then after the iPhone in 2007 maybe from 2007 2011 we had another rise of the mobile first companies and I would Facebook somewhat split the difference I'd mostly throw them into the mobile bucket um in terms of where they got really huge and so there's this question of what's going to be next what what is the next platform the next wave that will create a handful of 100 billion plus dollar companies um a lot of people think it'll be VR on a are it feels a little early um but but I can suggest a metric for how you should know when it's time to start really focusing and and that is you want to look at usage per individual user so there were smartphones before the iPhone but people didn't use them all day every day like they do with an iPhone they buy them they use them a couple of times I didn't even take them with them every day they certainly didn't do much besides calling on them in calendar maybe and then the iPhone came out and the iPhone didn't sell that many in its first year relative to like how many phones Nokia sold or whatever into oh sherry seven but the people that had one loved it and used it all the time and so I would ignore total shipments for VR and AR and I would wait until it gets to the point where someone builds a device or software that once people get it they use it a lot of every day mm-hmm and is that regardless of price because now we have like you know daydream whatever fairly cheap whereas like to get an oculus setup you're in several thousand dollars yeah I regard this a price because again like the iPhone the first iPhone was somewhat expensive but people don't get it you could still tell that people that had it really deeply loved it cool so regardless surprised the price will come down um similar to a question before this is just kind of funny anyway how do you know if your tech mill technical enough to build great products I mean it really depends on what you're building like if you're going to build a nuclear reactor you better be quite technical with nuclear engineering in for physics if you're going to build an iPhone app and it's not a particularly complex one to build the first version you don't have to be that technical later you better get world-class technical talent but you don't need it for the first proof of concept in many cases hmm yeah I mean I think that you see it across yc2 it's like people who can get you dumped yeah you build a product that people love and that's what matters it's not how beautiful the code is in the first version again later that will become really important yeah agreed all right so going into one of the more obscure questions uh Sam if you are an important but not founder employee at a start-up and you your company were to be acquired how would you approach the process of integrating and ensuring success between the companies and how would you evaluate the acquiring company and decide if it's worth staying um most our positions are not smooth sailing first of all so I would go into it expect no important thing that have seen is an agreement before the acquisition is finalized about autonomy of the target company and so I would push the founders to make sure that you got such an agreement that you would operate as independently as possible then you do want to build bridges you want you don't that you don't like two warring factions you want the existing company to support you and you want to support them and you want people to like each other so I think piece of advice number one negotiate the level of independence upfront mm-hmm piece of advice number two as a important leader in the company make it your personal business to develop strong relationships with as many people as you can at the acquiring company and then be a bridge as tensions inevitably rise mm-hmm in any opinion on how long a person like that should stay I would give it like a good six to nine months before making a decision that is not going to work okay cool you

Channel: Y Combinator

Views: 48,053

Rating: 4.9346213 out of 5

Keywords: YC, Y Combinator, Sam Altman, Craig Cannon, Office Hours, Advice

Id: 45BvnJgwYjk

Length: 24min 34sec (1474 seconds)

Published: Wed Jan 11 2017