sgoel9/sam_altman_essays huggingface dataset:
Applying to YC
2014-09-15

One of the most common misconceptions startups have about applying to Y Combinator is thinking that they are too early or too late.

We have funded companies with only an idea; we’ve funded companies with millions of users, millions of dollars of revenue, and millions of dollars raised. In nearly every case, the founders tell us they got a lot of value out of Y Combinator, and that the equity we take more than pays for itself. We continue to add more features to YC to help later-stage companies--i.e., our alumni. And of course, the YC alumni network is helpful at any stage.

We think we can help companies at any stage up to Series B, probably, and perhaps even later (but it gets difficult to convince later stage investors at that point, even if the founders themselves want to do YC). We encourage prospective founders to reach out to alumni to get their opinion on if YC would be a good fit.

Even if you haven't gotten in previously, you should apply again. Many of our successful founders applied multiple times before we funded them (including Drew Houston of Dropbox).

You also don’t need to have a pre-existing relationship with us. A lot of founders seem to think they need to figure out a way to meet with us or talk to us outside of the application process because VCs traditionally don’t fund companies they meet without an introduction. This is part of our model; we’re willing to do the work to look at thousands of companies that come to us without an introduction. In fact, we love doing so—many (perhaps most) of the best companies get started by unknowns.
Stupid Apps and Changing the World
2014-08-07

An article came out today in Businessweek about arrogance and Silicon Valley. I thought it was good, but there was one more point I wanted to make.

People often accuse people in Silicon Valley of working on things that don’t matter. Often they’re right. But many very important things start out looking as if they don’t matter, and so it’s a very bad mistake to dismiss everything that looks trivial.

The problem comes when people building something claim it’s going to change the world when it still looks like a toy. That just pisses people off.

Facebook, Twitter, reddit, the Internet itself, the iPhone, and on and on and on—most people dismissed these things as incremental or trivial when they first came out.

I have a thought about why. There’s the famous observation that the value of a network grows as a function of the square of the number of nodes, and also many of these services/products double their userbase every N months, with N decreasing as the service gets more valuable. So the value/importance of the service grows hyperexponentially. I’ve never met anyone in my life that has a good intuition for hyperexponential growth—most of us even struggle to comprehend exponential growth.

There is all sorts of emergent behavior as something grows in importance a millionfold in a short period of time. If some users really love what you’re building, engage with the service or product as an important part of their daily lives, and interesting new behaviors keep emerging as you grow, keep working on it.

As an aside, pay no attention to market predictions—some of the worst predictions in the history of business (a market for 5 computers, a market for 900,000 cell phones) have been the most costly.

There are two time-tested strategies to change the world with technology. One is to build something that some people love but most people think is a toy; the other is to be hyperambitious and start an electric car company or a rocket company. Most of the “intermediate” companies, although it would take a separate long post to explain why, end up not having a big impact.

In closing, I have two pieces of advice for the “arrogant fucks” who make the world go round. One, don’t claim you’re changing the world until you’ve changed it. Two, ignore the haters and work on whatever you find interesting. The internet commenters and journalists that say you’re working on something that doesn’t matter are probably not building anything at all themselves.
Uber vs Car Ownership
2014-07-29

Taking uberX everywhere is now cheaper for me than owning a car (I have an expensive car, so it's not a super fair comparison, but I still think it's interesting).

I first played around with one of those web calculators and was so surprised by the result I sharpened my pencil and did it myself with more precise numbers. It was not quite as dramatic as the rough calculation but Uber still wins. I linked to the spreadsheet below for anyone curious; change the yellow fields to your own numbers if you'd like.

A few notes:

*I live in San Francisco and drive a Tesla Roadster. It costs about $10 to charge (on average, sometimes I pay peak rates and sometimes not) for about 200 miles of range.

If I can easily take the Caltrain to the south bay (about half the time), then I do, otherwise I drive or take Uber. My total annual spend on Caltrain is a few hundred dollars.

*My cost per mile is probably lower than most peoples', but is somewhat neutralized by the higher depreciation which is partly due to battery pack degradation.

*Uber may raise the rates on uberX, which could swing my particular calculation back in favor of ownership.

*I used an average cost per mile for uberX of $2, which is a good average for me including time and minimum fares (it's much more on short trips, but a little under $1.50 on long trips).

This of course leaves out the huge intangible of how much nicer it is not to drive and instead work/text/think/whatever.

This calculation is why I think Uber is still undervalued. The people who say Uber is only worth $4 billion or whatever don't think enough about people like me who will go from spending ~$500 a year on taxis and car service to ~$12,000 now that the experience and cost have reached a tipping point.
Net neutrality
2014-07-14

When there is a structural reason consumers don’t have freedom of choice, and the free market can’t work, consumers need minimal protection from the government so that they don’t get abused.

We need protection from the cable companies to keep the Internet fair and open.

I think that most people misunderstand the net neutrality issue; the Internet backbone isn’t neutral anyway. But that’s ok; there are multiple paths to traverse it.

This is not the case for the “last mile”. Consumers often can only buy Internet access from a single provider; there is no choice. These providers would like to be able to make some traffic more equal than others and accept payment for it. [1] This isn’t allowed for voice, and it shouldn’t be allowed for data.

Municipalities, often for good reason, gave these edge providers a monopoly (the bad kind of monopoly where consumers can’t choose to leave) and often used tax dollars to fund the development. At this point, the Internet is a public service and fair access should be a basic right.

I would love to see a world where the companies that own last-mile infrastructure are required to lease the lines to any ISP the end consumer wants; this would create a competitive market and mostly eliminate the problem. [2]

The Internet has been the great bright spot in US innovation in the last decade. It’s mostly been a free and open platform, where anyone can get something started. When the great companies start, they often look like very fragile projects. Any additional barriers, however small, could easily have stopped Google or Facebook from getting going.

I have met with the Chairman of the FCC, Tom Wheeler, and I believe he is a good actor who wants to do the right thing. But he is fighting against very powerful lobbyists and large companies that want to disrupt the freedom of the Internet. We should help him defend it.

As long as consumers don’t have freedom of choice, last-mile traffic discrimination should be per se illegal. Please go to fcc.gov and file in support of this by tomorrow. Alexis Ohanian will be filing on behalf of Y Combinator shortly.

[1] Unpaid prioritization is sometimes necessary; if everyone in a neighborhood is trying to stream 4k video, something is going to get prioritized.

[2] One reason wireless Internet is good that is that it doesn’t face the last-mile challenge; consumers can choose among Verizon, ATT, Sprint, etc.
Founder Depression
2014-06-13

If you ask a founder how her startup is going, the answer is almost always some version of “Great!”

There is a huge amount of pressure as a founder to never show weakness and to be the cheerleader in all internal and external situations. The world can be falling down around you—and most of the time when you’re running a company, it is—and you have to be the strong, confident, and optimistic. Failing is terrifying, and so is looking stupid.

Founders end up with a lot of weight on their shoulders—their employees and their families, their customers, their investors, etc. Founders usually feel a responsibility to make everyone happy, even though interests are often opposed. And it’s lonely in a way that’s difficult to explain, even with a cofounder (one of the things that works about organizations like Y Combinator is that you have a peer group you can lean on for support).

So a lot of founders end up pretty depressed at one point or another, and they generally don’t talk to anyone about it. Often companies don’t survive these dark times.

Failing sucks—there is no way to sugarcoat that. But startups are not life-and-death matters—it’s just work.

Most of the founders I know have had seriously dark times, and usually felt like there was no one they could turn to. For whatever it’s worth, you’re not alone, and you shouldn’t be ashamed.

You’ll be surprised how much better you feel just by talking to people about the struggles you’re facing instead of saying “we’re crushing it”. You’ll also be surprised how much you find other founders are willing to listen.
Bitcoin Price Pressure
2014-04-30

The price of bitcoin keeps trending down. [1] This causes a lot of people to declare the end of bitcoin.

It’s important to understand that the default price pressure of the bitcoin ecosystem is down. There are a lot of reasons for this, so I’ll just give a few examples.

When most merchants take bitcoin for a purchase, they immediately sell for dollars (they can’t usually pay their vendors in bitcoin, they can’t pay tax in bitcoin, they don’t want to be exposed to the volatility, etc.)

When miners mine bitcoin, they have to sell some of them to pay for the electricity in dollars (or, more likely, RMB). As the difficulty goes up and the price of bitcoin goes down, they have to sell a larger and larger percentage of what they mine. In fact, as far as I can tell, mining is currently unprofitable with any reasonable cost of electricity. It still makes sense to mine if you’re living in a dorm and don’t pay for electricity, or if you can’t pass a KYC check and are willing to pay a big premium to get bitcoin.

The recent US and international tax changes and tax filings also caused sell pressure. This will continue to be the case until the US government takes bitcoin for taxes. If I ran the government, I would never do this—the US needs the dollar to remain the world reserve currency.

There are plenty of other reasons, but the point is that bitcoin is different from many other financial markets, where the default pressure is up. [2]

This doesn’t mean bitcoin is doomed. It just means that for it to succeed, we’ll need significant external buy pressure. As I wrote awhile ago, I think the key thing we need for this is people actually using bitcoin for transactions instead of speculation (and merchants willing to hold bitcoin balances). [3] Unfortunately, transaction volume still appears to be trending down. [4] Anecdotally, I hear from merchants who start taking bitcoin that after an initial spike they see almost no volume.

The other way to get enough buy pressure would be if many people started deciding they want to hold bitcoin as a hedge or a speculation. This spurs occasional bubbles, but we haven’t yet seen it work long term.

A declining bitcoin price does not mean bitcoin is failing. And even if bitcoin itself fails, I think the blockchain will be one of key technical innovations of this time period. In fact, in the most recent set of YC interviews, we saw more great blockchain companies than bitcoin companies. Maybe Ripple or Dogecoin ends up winning. [5] Or maybe something that hasn’t been invented yet.

But it’s hard to imagine a future where the blockchain concept isn’t really important.

[1] http://blockchain.info/charts/market-cap

[2] Paul Buchheit first made this point: https://news.ycombinator.com/item?id=7570656

[3] http://blog.samaltman.com/thoughts-on-bitcoin

[4] http://blockchain.info/charts/estimated-transaction-volume

[5] Speaking of dogecoin, as of this writing, it is the number 3 crytocurrency measured by daily volume, and if the market cap went up $10MM (about 25%), it would be the number 3 by market cap also.
The Worst Part of YC
2014-04-16

We are going to send out YC summer 2014 interview decisions (both yes and no) before 10 pm PDT tonight.

The worst part of our job at YC is rejecting companies. It leaves me feeling down for many days after our application process. I experienced plenty of rejection from investors while running my own startup, and I remember well how bad it is. Starting a startup is such a hard thing that we wish we could help everyone doing so.

Some day, we hope to be able to fund almost all the good startups. In the meantime, we still have capacity constraints as we figure out how to scale, and that means we’re stuck saying no to potentially good companies.

The best startups often look bad at this stage, and we make mistakes. We could easily miss something great. If you’re working on something that users love, you like working on it, and you have a plan for how to build a business around it, then please don’t let us deter you. (It's sometimes useful to ask friends for an outside perspective on how you're doing.)

Although we had nearly 20% more applications than a year ago, it was really striking how much higher the average quality of applications was for this batch compared to any previous batch. Most of the partners independently mentioned this to me.

Anyway, to everyone we’re unable to fund: Best of luck, and don’t give up. We love to see founders and companies reapply—companies that look bad now can look great with 6 months of progress.
The Founder Visa (again)
2014-03-17

Nearly 5 years ago, Paul Graham first proposed the founder visa. There has been a lot of discussion since, but nothing has happened.

Maybe he was too ambitious in asking for 10,000 startup visas per year. So here is a proposal for the US government: please let Y Combinator help allocate up to 100 visas to founders per year. We’ll continue to take applications for funding from around the world, and work with whatever process you’d like—we just need to be able to get the founders visas quickly (None of the current paths works well enough for this, but a slight reworking of the O1 visa around criteria and timing could be sufficient.). If the test works with us, you could expand it to other investment firms. We’re happy to be the beta tester, and we’re confident we’ll prove that it’s a good idea.

100 visas a year is nothing. But 50 new startups a year could be a huge deal. Many will fail, of course, but one could be the next Google, Facebook, Airbnb, or Dropbox. Though this is almost an immeasurably small number of visas, it could have a measurably large effect on the number of jobs created in the United States.

Startups are what the US is the best in the world at. We figure out new businesses faster than anyone else. It would be disastrous if that stopped being the case.

If founders from elsewhere want to pay taxes and create jobs in the US, we should let them. Other countries are already encouraging this. If you believe that intelligence and determination are evenly distributed, less than 5% of the best founders are born in the US. But it’d be great if many of them started their companies here.

This is just a start. We are also in need of broad-based immigration reform, and I believe more immigrants will help our country. But I also understand that the founder visa got tangled up with full-scale immigration reform, which may take a long time. This is an easy way to have an immediate effect, and it’s good to move the ball down the field with small, incremental experiments.

Let us show you what we can do with 100 visas. This will be measurable, and in 5 years, we can tell you exactly how many jobs get created.
Anonymity
2014-02-10

I, like everyone else in Silicon Valley, downloaded Secret last week. It's incredibly well done, certainly the best yet of any of the gossip/anonymous apps.

Unlike most others, I deleted it, and have thus far resisted reinstalling it (which has been tough!). Unlike Facebook or Twitter, I felt worse--though entertained--after each use. At the point I deleted it, three of my friends had been on the receiving end of super nasty comments.

I've often thought about the need for an anonymous social network to go along with the fully public and the friends-only ones. But I can't figure out a way to stop an anonymous network from decaying into a Mean Girls-style burn book. If I were running Secret, my number one focus would be to kill every comment about a specific person or company. If Secret becomes more of a confessional than a burn-book, it can probably thrive.

Anonymity breeds meanness--the Internet has proven this time and time again. People are willing to say nice or neutral things with their name attached--they need anonymity for mean things and things they are embarrassed about. In fact, the closer to real identity internet forums get, the less they seem to decay. Anonymous social networks have been (thus far, anyway) in the category of services that get worse as they get bigger--unlike services like Facebook or Twitter that get better as they get bigger.

People love gossip until it's about themselves. My prediction for Secret is that it gets very popular (like the previous gossip services) and then eventually the rancor gets untenably bad and people stop using it (like the previous gossip services). But until we reach that point, I assume we'll see some really nasty things that people can't stop reading.
The Only Way to Grow Huge
2013-12-03

All companies that grow really big do so in only one way: people recommend the product or service to other people.

What this means is that if you want to be a great company some day, you have to eventually build something so good that people will recommend it to their friends--in fact, so good that they want to be the first one to recommend it to their friends for the implied good taste. No growth hack, brilliant marketing idea, or sales team can save you long term if you don't have a sufficiently good product.

You can trick yourself for awhile, though: growth is measured on a percentage basis from last month. When you are still small, you can spend a lot of money marketing or advertising and have a big impact on usage growth. But eventually, you get so big you simply can't spend enough money to move the needle--you need your ever-increasing userbase to keep getting you more users. There are exceptions to this, of course, where monopolies are involved--Microsoft may turn out to be the interesting test case of the extreme outer limit of how long you can manufacture growth.

The only way to generate sustained exponential growth is to make whatever you're making sufficiently good. For example, refer-a-friend-to-earn-credits programs work if the product is good enough to recommend anyway (e.g. Dropbox, Uber). But they fail for most other startups that try them, because the product isn't good enough yet.

Having a growth team is still a good idea--you almost always need to jumpstart things. But don't forget about what you actually have to accomplish.

Thanks to Jack Altman for reading a draft of this.
Non-technical founder? Learn to hack
2013-10-31

I frequently get asked by non-technical solo founders if I know any potential hacker cofounders they should talk to. These people give a passionate pitch for the idea and a long list of all the hustling they've done, customers they've spoken to, models they've built, provisional patents they've filed, etc. Most of the time, they are thoughtful and hardworking. But they've often been searching for their technical cofounder for many months, and things have stalled during that process.

When people like this say "I'll do whatever it takes to make this business successful" (which they almost always say), I say something like "Why not learn to hack? Although it takes many, many years to become a great hacker, you can learn to be good enough to build your site or app in a few months. And even if you're not going to build the next version, if you're going to run a software company, it seems like a good idea to know a little bit about it."

Usually the response is something like "That wouldn't be the best use of my time", "I don't like it", or "I don't have that kind of brain". (Earlier today it was "You don't understand, I'm the idea guy. If I'm hacking, who will be talking to investors?", which is what prompted this post.) But every once in awhile people think about it and decide to learn to hack, and it usually works out.

They’re often surprised how easy it is. Many hackers love to help people who are just starting. There are tutorials for pretty much everything and great libraries and frameworks.

As an important aside, if you try to learn on your own, it can be really hard. You’ll hit some weird ruby error and give up. It’s important to have someone—a friend, a teacher at a coding bootcamp, etc.—that get you through these frustrating blocks.

When hackers have to for their startups, they are willing to learn business stuff. Business people should do the same. If you're not willing to do this, you should remember that there are far greater challenges coming in the course of a startup than learning how to code. You should also remember that you can probably learn to code in less time than it will take to find the right cofounder.

Speaking of cofounders, a word of warning: meeting a stranger for the express purpose of cofounders hardly ever works. You want someone you've known for awhile and already worked with. This is another good reason for learning to hack yourself instead of bringing on a cofounder.

You can build the first version of your product, and even if it's terrible (we had a non-technical founder in YC that learned to hack with Codecademy and was still able to learn enough to build a prototype), you'll actually be able to get real user feedback, iterate on something other than mockups, and perhaps impress a great hacker enough to join you. Although you may never win a Turing Award, if you're smart and determined, you can certainly get good enough to build a meaningful version 1.

If you're a solo founder and you can't hack, learn.