Billionaires Build

As I was deciding what to write about next, I was surprised to find that two separate essays I'd been planning to write were actually the same.

The first is about how to ace your Y Combinator interview. There has been so much nonsense written about this topic that I've been meaning for years to write something telling founders the truth.

The second is about something politicians sometimes say � that the only way to become a billionaire is by exploiting people � and why this is mistaken.

Keep reading, and you'll learn both simultaneously.

I know the politicians are mistaken because it was my job to predict which people will become billionaires. I think I can truthfully say that I know as much about how to do this as anyone. If the key to becoming a billionaire � the defining feature of billionaires � was to exploit people, then I, as a professional billionaire scout, would surely realize this and look for people who would be good at it, just as an NFL scout looks for speed in wide receivers.

But aptitude for exploiting people is not what Y Combinator looks for at all. In fact, it's the opposite of what they look for. I'll tell you what they do look for, by explaining how to convince Y Combinator to fund you, and you can see for yourself.

What YC looks for, above all, is founders who understand some group of users and can make what they want. This is so important that it's YC's motto: "Make something people want."

A big company can to some extent force unsuitable products on unwilling customers, but a startup doesn't have the power to do that. A startup must sing for its supper, by making things that genuinely delight its customers. Otherwise it will never get off the ground.

Here's where things get difficult, both for you as a founder and for the YC partners trying to decide whether to fund you. In a market economy, it's hard to make something people want that they don't already have. That's the great thing about market economies. If other people both knew about this need and were able to satisfy it, they already would be, and there would be no room for your startup.

Which means the conversation during your YC interview will have to be about something new: either a new need, or a new way to satisfy one. And not just new, but uncertain. If it were certain that the need existed and that you could satisfy it, that certainty would be reflected in large and rapidly growing revenues, and you wouldn't be seeking seed funding.

So the YC partners have to guess both whether you've discovered a real need, and whether you'll be able to satisfy it. That's what they are, at least in this part of their job: professional guessers. They have 1001 heuristics for doing this, and I'm not going to tell you all of them, but I'm happy to tell you the most important ones, because these can't be faked; the only way to "hack" them would be to do what you should be doing anyway as a founder.

The first thing the partners will try to figure out, usually, is whether what you're making will ever be something a lot of people want. It doesn't have to be something a lot of people want now. The product and the market will both evolve, and will influence each other's evolution. But in the end there has to be something with a huge market. That's what the partners will be trying to figure out: is there a path to a huge market? \[[1](#f1n)\]

Sometimes it's obvious there will be a huge market. If [Boom](https://boomsupersonic.com/) manages to ship an airliner at all, international airlines will have to buy it. But usually it's not obvious. Usually the path to a huge market is by growing a small market. This idea is important enough that it's worth coining a phrase for, so let's call one of these small but growable markets a "larval market."

The perfect example of a larval market might be Apple's market when they were founded in 1976. In 1976, not many people wanted their own computer. But more and more started to want one, till now every 10 year old on the planet wants a computer (but calls it a "phone").

The ideal combination is the group of founders who are ["living in the future"](startupideas.html) in the sense of being at the leading edge of some kind of change, and who are building something they themselves want. Most super-successful startups are of this type. Steve Wozniak wanted a computer. Mark Zuckerberg wanted to engage online with his college friends. Larry and Sergey wanted to find things on the web. All these founders were building things they and their peers wanted, and the fact that they were at the leading edge of change meant that more people would want these things in the future.

But although