|  
  
November 2015  
  
A few months ago an article about Y Combinator said that early on it had been
a "one-man show." It's sadly common to read that sort of thing. But the
problem with that description is not just that it's unfair. It's also
misleading. Much of what's most novel about YC is due to Jessica Livingston.
If you don't understand her, you don't understand YC. So let me tell you a
little about Jessica.  
  
YC had 4 founders. Jessica and I decided one night to start it, and the next
day we recruited my friends Robert Morris and Trevor Blackwell. Jessica and I
ran YC day to day, and Robert and Trevor read applications and did interviews
with us.  
  
Jessica and I were already dating when we started YC. At first we tried to act
"professional" about this, meaning we tried to conceal it. In retrospect that
seems ridiculous, and we soon dropped the pretense. And the fact that Jessica
and I were a couple is a big part of what made YC what it was. YC felt like a
family. The founders early on were mostly young. We all had dinner together
once a week, cooked for the first couple years by me. Our first building had
been a private home. The overall atmosphere was shockingly different from a
VC's office on Sand Hill Road, in a way that was entirely for the better.
There was an authenticity that everyone who walked in could sense. And that
didn't just mean that people trusted us. It was the perfect quality to instill
in startups. Authenticity is one of the most important things YC looks for in
founders, not just because fakers and opportunists are annoying, but because
authenticity is one of the main things that separates the most successful
startups from the rest.  
  
Early YC was a family, and Jessica was its mom. And the culture she defined
was one of YC's most important innovations. Culture is important in any
organization, but at YC culture wasn't just how we behaved when we built the
product. At YC, the culture was the product.  
  
Jessica was also the mom in another sense: she had the last word. Everything
we did as an organization went through her first — who to fund, what to say to
the public, how to deal with other companies, who to hire, everything.  
  
Before we had kids, YC was more or less our life. There was no real
distinction between working hours and not. We talked about YC all the time.
And while there might be some businesses that it would be tedious to let
infect your private life, we liked it. We'd started YC because it was
something we were interested in. And some of the problems we were trying to
solve were endlessly difficult. How do you recognize good founders? You could
talk about that for years, and we did; we still do.  
  
I'm better at some things than Jessica, and she's better at some things than
me. One of the things she's best at is judging people. She's one of those rare
individuals with x-ray vision for character. She can see through any kind of
faker almost immediately. Her nickname within YC was the Social Radar, and
this special power of hers was critical in making YC what it is. The earlier
you pick startups, the more you're picking the founders. Later stage investors
get to try products and look at growth numbers. At the stage where YC invests,
there is often neither a product nor any numbers.  
  
Others thought YC had some special insight about the future of technology.
Mostly we had the same sort of insight Socrates claimed: we at least knew we
knew nothing. What made YC successful was being able to pick good founders. We
thought Airbnb was a bad idea. We funded it because we liked the founders.  
  
During interviews, Robert and Trevor and I would pepper the applicants with
technical questions. Jessica would mostly watch. A lot of the applicants
probably read her as some kind of secretary, especially early on, because she
was the one who'd go out and get each new group and she didn't ask many
questions. She was ok with that. It was easier for her to watch people if they
didn't notice her. But after the interview, the three of us would turn to
Jessica and ask "What does the Social Radar say?"   
  
Having the Social Radar at interviews wasn't just how we picked founders who'd
be successful. It was also how we picked founders who were good people. At
first we did this because we couldn't help it. Imagine what it would feel like
to have x-ray vision for character. Being around bad people would be
intolerable. So we'd refuse to fund founders whose characters we had doubts
about even if we thought they'd be successful.  
  
Though we initially did this out of self-indulgence, it turned out to be very
valuable to YC. We didn't realize it in the beginning, but the people we were
picking would become the YC alumni network. And once we picked them, unless
they did something really egregious, they were going to be part of it for
life. Some now think YC's alumni network is its most valuable feature. I
personally think YC's advice is pretty good too, but the alumni network is
certainly among the most valuable features. The level of trust and helpfulness
is remarkable for a group of such size. And Jessica is the main reason why.  
  
(As we later learned, it probably cost us little to reject people whose
characters we had doubts about, because how good founders are and how well
they do are _not orthogonal_. If bad founders succeed at all, they tend to
sell early. The most successful founders are almost all good.)  
  
If Jessica was so important to YC, why don't more people realize it? Partly
because I'm a writer, and writers always get disproportionate attention. YC's
brand was initially my brand, and our applicants were people who'd read my
essays. But there is another reason: Jessica hates attention. Talking to
reporters makes her nervous. The thought of giving a talk paralyzes her. She
was even uncomfortable at our wedding, because the bride is always the center
of attention.   
  
It's not just because she's shy that she hates attention, but because it
throws off the Social Radar. She can't be herself. You can't watch people when
everyone is watching you.  
  
Another reason attention worries her is that she hates bragging. In anything
she does that's publicly visible, her biggest fear (after the obvious fear
that it will be bad) is that it will seem ostentatious. She says being too
modest is a common problem for women. But in her case it goes beyond that. She
has a horror of ostentation so visceral it's almost a phobia.  
  
She also hates fighting. She can't do it; she just shuts down. And
unfortunately there is a good deal of fighting in being the public face of an
organization.  
  
So although Jessica more than anyone made YC unique, the very qualities that
enabled her to do it mean she tends to get written out of YC's history.
Everyone buys this story that PG started YC and his wife just kind of helped.
Even YC's haters buy it. A couple years ago when people were attacking us for
not funding more female founders (than exist), they all treated YC as
identical with PG. It would have spoiled the narrative to acknowledge
Jessica's central role at YC.  
  
Jessica was boiling mad that people were accusing _her_ company of sexism.
I've never seen her angrier about anything. But she did not contradict them.
Not publicly. In private there was a great deal of profanity. And she wrote
three separate essays about the question of female founders. But she could
never bring herself to publish any of them. She'd seen the level of vitriol in
this debate, and she shrank from engaging.   
  
It wasn't just because she disliked fighting. She's so sensitive to character
that it repels her even to fight with dishonest people. The idea of mixing it
up with linkbait journalists or Twitter trolls would seem to her not merely
frightening, but disgusting.  
  
But Jessica knew her example as a successful female founder would encourage
more women to start companies, so last year she did something YC had never
done before and hired a PR firm to get her some interviews. At one of the
first she did, the reporter brushed aside her insights about startups and
turned it into a sensationalistic story about how some guy had tried to chat
her up as she was waiting outside the bar where they had arranged to meet.
Jessica was mortified, partly because the guy had done nothing wrong, but more
because the story treated her as a victim significant only for being a woman,
rather than one of the most knowledgeable investors in the Valley.  
  
After that she told the PR firm to stop.  
  
You're not going to be hearing in the press about what Jessica has achieved.
So let me tell you what Jessica has achieved. Y Combinator is fundamentally a
nexus of people, like a university. It doesn't make a product. What defines it
is the people. Jessica more than anyone curated and nurtured that collection
of people. In that sense she literally made YC.  
  
Jessica knows more about the qualities of startup founders than anyone else
ever has. Her immense data set and x-ray vision are the perfect storm in that
respect. The qualities of the founders are the best predictor of how a startup
will do. And startups are in turn the most important source of growth in
mature economies.  
  
The person who knows the most about the most important factor in the growth of
mature economies — that is who Jessica Livingston is. Doesn't that sound like
someone who should be better known?  
  
  
  
  
  
  
  
**