<human>: I would say one that I see on the YC application that I love is when it's like some kind of weird incorporation. Yes. We incorporated it as a Wyoming LLC.  And I'm like, this was a voluntary red flag. This is like, why would you do that? And sometimes they'll even write, well, because, blah, blah, blah. And you're just like.
<bot>: Well, I think my theory is there's a lot of smart people. Again, they want to invent it in different ways. And they'll look at something like,  corporate law in the existence of the Delaware C Corp and be like I Someone that knows nothing about this could do better. Yes And everyone else is doing Delaware C Corp. Yes, that's not for me. I'm gonna do a and then crazy things happen. Yes, right and so Probably corporate governance is not the best place to innovate one thing that's been funny  Headline ripped from the news is yes people looking at the corporate structure of open AI. Yep, and being like oh This is an interesting. This is an instruction manual a Nonprofit that owns a for-profit would not recommend that strategy even the people that work working there I mean even Sam himself has suggested that that was perhaps not the wisest choice. And so again the point here is  is the miracle of making something you want is the hard part. But if you're just doing like a startup, you know, Delaware C-Corps are pretty good.
</s>


<human>: Let's say the punch happens, bam, and you need some treatment.  something really bad happens or you suspect something really bad happens. I think the first point that you brought up that I really love is this idea of like, do I have to do anything right now? Like, talk about that a little bit more.
<bot>: Yeah, I think I learned this as a founder the hard way, which is when something bad happens, you want to immediately like make a move. You want to like,  call a meeting or you wanna, you get an email with bad news in it, you wanna hit respond and like, in the moment of fight or flight when your adrenaline's pumping, you're like, how dare you, sir? You wanna start writing emails with that tone? Dear sir, in response to your query about, like if you're ever typing an email with that tone,  Don't do it. And what I've noticed is you can just like not respond or like let stuff sit a little bit and sleeping on it is the minimum thing I would do. This is what I always tell founders is when they have something to happen to at least sleep on it. Because I just noticed the next day  You have a whole new amount of clarity on the situation.
<human>: And I often find myself in my best moments. In my worst moments, I'm exactly like you said, I'm like, act now, go, send that email, like punch back. In my best moments, I'm always like, if there's ever a decision that feels like it's action one or action two,  There's always a third option, which is don't act. And it's almost never presented to you. I find a lot of times lawyers fuck companies with this. It's like, you gotta do this or that. And it's not like, how about we don't respond?
<bot>: Yeah, what if we do nothing?
<human>: What if no action is taken? And then what's really funny is that the best founders  no action becomes one of their like key plays. Like they use that play way more than you think. It's a great play. Such a good play. Um, and it's amazing that like for the best founders, no action is like, you know, 20, 30, 40% of the time what they do, maybe more. But for other founders, they don't even know the play exists. Like they don't even know the play exists.
<bot>: Yeah, maybe just archive the email.
<human>: Whatever the email says. Yeah, that's true. Just hit archive. You know what's a really big deal? They'll probably reply back. I've noticed that. It's a really big deal. And of course, don't do this in the case where someone's health is on the line or someone's going to go to jail or whatever. That's different.
<bot>: Yeah, it's more of the stuff where it's interpersonal or someone, I don't know.
</s>


<human>: I think the first thing I'd be thinking about is revenue.  I would say that at the end of the day, when a company goes public or when a company is acquired for a lot of money, the market is looking at how much revenue that company is making and is that revenue growing. And I would say that, for example, if I'm at a company right now that's making 50 to 100 million in revenue or more, that's a unicorn.  Like, that's pretty good. Yeah, it's reasonable that it's a unicorn.
<bot>: If they have $100 million plus in revenue, OK, that pencil's out, right?
<human>: Yeah, that's pretty good. I think that if I'm working a company that has like $50 million or less in revenue and is a unicorn, now I'm starting to ask myself the question, do users like the product? What's retention look like?  Are we charging as much as we could? Could we charge more? Do we actually have product market fit?
<bot>: Do we actually have product market fit? Again, not likely to be a popular question in management, if you ask management this, but worth considering.
<human>: And I think a lot of these questions can really be answered by looking at what are the customers doing?  Right? I think what's so funny is that if you're an employee inside of a company, most likely the information you need to tell whether the company's doing well or not is like literally available to you.
<bot>: Yeah. Well, and I can imagine there actually may be some folks out there that work at companies where the information is not available to them. Is that OK? Like, what do you think?
<human>: Is that normal to not be told these numbers? I would say that, like, what's interesting is that  Maybe there are certain financials or certain cash on hand or something that it's important for the company, or a founder might decide to keep private. But I would say in most companies, product analytics in some way or another is available, is widely available. And so you can tell whether the users who are paying for your product are actually engaging with it.  And man, I think that's like hilariously the simple leading indicator of whether you have a good product is you sold somebody the product, they've successfully onboarded, and they're actively using it.
<bot>: And then they renew. And they do it on the business model of the company.
</s>


<human>: This is Michael Seibel with Dalton Caldwell. And today we're going to talk about the problem with zero-sum games. So we were chatting, Dalton, and we've seen a lot of zero-sum games kind of in our lifetimes. It seems like it's something that comes and goes pretty, pretty often. Why don't we start with kind of the first time you've encountered a zero-sum game and almost like how you got trapped by it?
<bot>: Yeah, so just to start with definitions, a zero-sum game is a game that you play where the upside that you're getting comes directly from the other player. So if we're talking about money, a classic zero-sum game is we make a bet. And so say we bet, you know, 20 bucks, something will happen and you win.  The money that you win comes out of my pocket. There's no new money that's created in the system. It's zero sum. So whatever you gain, I lose. And it all equals out to zero, okay? That's zero sum.  A positive sum game is where something happens and as a consequence of it, value is created that lasts for a while. So say that we decided to do something for fun and we built a house. We're like, it would be fun to build a house. So we do the thing and then when it's all said and done, the house exists. Our labor produced something that will last – that wasn't there before.
<human>: We can charge rent for it and maybe generate some income.
<bot>: Yeah, exactly. And so we were entertained in both scenarios where we, you know, made a bet versus built something. And in one of those scenarios, it was a, we made something that lasts and the other one, it was just a zero sum form of entertainment.
</s>


<human>: It's fair.  And here's why you're wrong. OK. So I live on Market Street in downtown San Francisco. Fair? Just to be clear. OK. For me growing up, living in a city was aspirational. So I spent my high school and middle school years in a suburb of New York.  And when you do that, you know.
<bot>: That means New Jersey, right? Whenever someone says a suburb, I'm from New York. Well, where exactly?
<human>: They're like, well, you know, upstate. Middle school and high school in New Jersey. And when you're growing up in a suburb of New Jersey, you know where you are is not where the action is. It's true. You know, almost by definition.  And at least for me, I perceive getting to the city as part of growing up, becoming an adult. That was a big part of my mentality. Two, I like nice restaurants and nice bars. And those things don't exist in the suburbs. I know someone's going to be in the comments saying, well, in my suburb, there's like, no, no, it doesn't. Sorry. It's just good for where you live.  Another thing that I like, especially as a startup founder, I liked having a chip on the shoulder. I liked being in a place where there were things I couldn't afford, where there were places I couldn't go unless I was more successful, where I could kind of see what success could get me. And I always felt like the suburb tried to hide that away. Like everyone was in the same kind of house, in the development, and we all have our own space, we can't see each other.  seeing what if we were to make it, what I might be able to get. That was really amazing. Also, I spent my first kind of nine years living in a city in Brooklyn. So I was used to living in an apartment. That was never weird for me.  And there are a bunch of amazing newer companies, Uber, Airbnb, DoorDash.
<bot>: I don't know those companies. Well, DoorDash was Palo Alto Food Delivery. That was their original name. So they didn't move there. They didn't start there. And they moved. They moved. OK.
</s>


<human>: And honestly, that's gonna be kind of the theme of this whole setup, right? Super dirty, but it worked. You had a couple of these in iMeme, right?
<bot>: Yeah, there was a couple that we had in iMeme. So one of them, so at the time, again, like to set the stage, the innovation of showing  video in a browser without launching real player? No one here probably knows what that is. But it used to be to launch a video, it would launch another application in the browser that sucked and it would like crash your browser and you hated your life, okay? So one of the cool innovations that YouTube, the startup YouTube had before it was acquired by Google, was to play video in Flash in the browser that required no external dependencies. It would just play right in the browser. At the time, that was like awesome.  Like it was like, it was a major product innovation to do that. Um, and so we wanted to do that for music and I mean, and we were looking at the tools available to do it and we saw all this great tooling to do it for video. And so rather than rolling our own tools that was music specific, we just took all of the open source video stuff and hacked the other video code that we had.  so that every music file played on iMeem was actually a video file. It was a .FLV back in the day. And it was actually a Flash video player. And it was basically, we were playing video files  that had like a zero bit in the video field. And it was just audio. And we actually were transcoding uploads into video files. You know what I'm saying? Like the whole entire thing was, it was a video site with no video. I don't know how else to explain it. And it works. And I do think this is a recurring theme is a lot of the best product decisions are ones made kind of fast and kind of under duress. I don't know what that means. But it's like when it's like 8 p.m. in the office,  and the site's down, you tend to come up with good decisions on this stuff.
</s>


<human>: This is Michael Seibel with Dalton Caldwell, and today we're gonna talk about caring about your customers. Well, first, I guess. Yeah, let's be meta. Here we are. Does this look different? Yes.
<bot>: We're in person.
<human>: We're trying this. Where's your art?
<bot>: I know.
<human>: But we are really, literally in person. This is us.
<bot>: We're in person. We're not avatars. We're not in the metaverse.
<human>: We're not in the metaverse right now, people. Maybe next year. We're upgrading. This is an upgrade.  Great. We had so much fun last year, we decided to do this in person. So let's set this up. We're in the beginning of a YC batch, and there are a lot of companies who are trying to get sales, trying to get new customers. Always a good thing. And we might describe some of them as flailing.  So what is the sign of a startup that is flailing when trying to get new customers?
<bot>: You know, it's like the old aphorism when all you have is a hammer, everything's a nail. And so they'll have a product, they'll have an idea, and they want to like bully customers or beg, some strategy to like cram it down people's throat. And they're like, why won't they?  Take it. Why won't they take this thing that I'm trying to get them to buy?
<human>: I'm trying to help you. I have this thing and it's good.
<bot>: What's wrong with you? You're making a mistake to not want this thing. And so that's a lot of people's first experience with sales. That was my experience. These people are dumb. Don't they realize how brilliant my software is?
</s>


<human>: You know, the next topic is on, you know, acquiring companies. And I think that  This comes in a number of flavors. One is once again, we're finally grown up. We can make our first acquisition or like we want to get good at this acquisition thing. So we got to start doing it.
<bot>: There's a lot of talent out there, Michael, and some really talented, failing startups would love to be acquired by us. And this will help us grow faster.  So we're going to acquire them.
<human>: And by the way, that doesn't mean that acquiring companies is bad. It just often means the folks who are thinking about it in startup land tend to be thinking about it too early. This is another example of taking later stage advice too early.  when the advice you should be taking is make your core business work. Just make your core business work.
<bot>: Yeah, if you're a pre-PMF, if you don't have product market fit yourself, probably you're not gonna buy one. Probably not a great idea. You're laughing, but people are probably like, wait, really? Yeah, really.
</s>


<human>: Oh God, you brought up one on our list about sandbagging. Let's talk about sandbagging a little bit.
<bot>: Yeah, so sandbagging, I don't know how much people are used to that term. I think it's, I think it's a golf term. But sandbagging is basically where you set goals that are intentionally way easy to hit.  with the goal of blowing them out of the water, right? So say you know you can accomplish something in one week. The sandbag version of the goal is to give yourself a month. And then when you go around and you hit the goal, you like look like a genius. And what's funny is when you are working for the man,  When you are working at a company, like office space, you know, you're in a cube farm somewhere. It makes sense to sandbag goals. And that's actually great career advice, I suppose, is that you, you know, you set really, you convince people that something's really hard to do, and then you exceed their expectations. What a great way to get promoted or whatever.  However, there's a problem. If you're used to doing that, and that's how you think all things should work, when you start working for yourself, when you are your own boss, you are screwing yourself. And what may be a good strategy to rest and vest working at Google or Facebook and to just do as little work as possible by sandbagging goals and working three hours a week or whatever people do, when you're the boss, do you see how that's not great?
</s>


<human>: Then I think the last thing is they used their own product. Airbnb didn't realize the insight around facilitating payments, around accepting payment when they launched. They didn't have that insight when they launched. Brian came and spoke to YC recently and he shared the story that when he used his own product and he forgot to bring money for payment and the host thought he was a fraud, he realized, oh crap, like our site needs to allow people to pay. Like we have to solve this problem.  So it's funny, because these insights seems obvious now, but Dalton, back in the day, put your investor hat on. What were the shit takes? Why did everyone think, oh, this is dumb, you should do this?
<bot>: Well, look, there's two extremes. One was renting a house when someone is already home. Renting a room in a house with a host there was the ultimate, unappealing, scary, bad thing that no one wanted to do, especially  older folks, you know, like investor folks.
<human>: Like investor types. You know, who have a lot of money and can afford nice hotels.
<bot>: Why would I want to go stay in a stranger's apartment in Manhattan? No, thank you. Right. So it was extremely unappealing idea of people worried about those sorts of things. And then like the other the other insight I have for you on this one is it was seen as uncool and impure  when you're building a community at this time in history to charge money for it. Like the couch surfing ethos was a very like communal, community-based, pay it forward, social collective action, decentralized goodness thing. And to be commercial,  was extremely in poor taste. And remember, Michael, you and I both were the founders in this era. All of the messaging that was bombarded from us, from everyone, all of our peers, is that making money isn't cool and being commercial isn't cool. And what they should have done is get as big as they could and get 100 million people on Airbnb and then charge once they built the network. And so to charge,  That's a horrible idea, guys. Build a network first and then charge, right? Again, you went through this as a founder, man.
<human>: Isn't this what you would have been told? It's what we were told. I mean, Twitch became big when we started diversifying our business model and started accepting direct payments from users in addition to ads. But that was seen as dumb back then. So clearly, and of course this is gonna be a common theme, if they had listened to most of the investors,  or most of the founders at the time, Airbnb wouldn't exist.
<bot>: Yeah, it'd be like, well, couchsurfing is free, so your plan is to build something like couchsurfing, but with no users and you're just starting and you're going to charge money for it? Good luck. That sounds like a suicide mission.
</s>


<human>: Hey, this is Michael Seibel with Dalton Caldwell. Today, we're going to talk about where do great startup ideas come from? We've picked three successful YC companies to unpack this question, Airbnb, Coinbase, and Stripe. And there are three common themes that we've seen through all three of these companies. The first, timing was important.  For each of these companies, there was a pre-existing product, pre-existing competitor, dominant, you might say, but there was an opportunity to make something that was 10x better than what existed. Number two, most people, founders and investors, thought these ideas were horrible, either because they were too hard to execute or because they just were bad ideas.  And then number three, and I think the coolest one of them, is that each of these opportunities turned out to be bigger than the founders even knew when they started. They turned out to be way bigger. All right, so let's talk about Airbnb. One of the things that I think is really interesting to set this up is that existing products did exist, right? Airbnb did not come up with this idea. So what were you using before Airbnb to Airbnb, Dalton?
<bot>: Yeah, for context, I think if you've only seen Airbnb, you think they came up with the idea. That's probably if I talked to my mom, she'd say, oh, Airbnb is a great idea that those founders dreamed up.  But back in the day, I was already using VRBO before Airbnb was even funded by YC or existed. There was also a very popular startup called Couchsurfing, which was quite similar to Airbnb and it had a lot of mindshare, was a big network. And so it kind of felt like  the third-rate entrant to a crowded space at the time. I remember when they were in NYC, that was my perspective. Do you remember that, Michael? Had you used any of those? Because I had used VRBO personally, and I thought it was pretty good.
</s>


<human>: So another way that people screw up the accomplishing goals is not understanding how to take the L. OK, maybe you set the wrong goal. And instead of,  Realizing that and setting a new goal, you cheat or do one of these other tactics to try to accomplish it because you feel as though not accomplishing your goal is a failure in and of itself. Man, I find founders screw this up constantly. It's like, you don't have to assume you're gonna be good at setting goals. Like, you can give yourself some slack. Assume you're gonna be bad at it. And like, you can adjust over time. You can set better goals over time. You can not accomplish your goals and learn from it.  There isn't this, you know, sometimes in YC, I think people feel this like, oh, we're grading them on whether they accomplish their goals. And it's like, first of all, we're not grading, we're not your teacher, we're not your boss. And second of all, like, your job is to work on the hardest problem in your company. Like that, like, if you've made progress on the hardest problems in your company, you're doing well. That's the whole gist of this. It's not like, oh, did you like,  Release that feature when you said you were going to, you know, that no one's going to use. Oh man. And then you talk about excuses a lot. How do people screw that up when they don't accomplish their goal?
<bot>: I just noticed a lot that when folks set goals and are not able to hit them, that's okay. But when folks are in a position where they really think it's important to make a lot of excuses on why it's not their fault and everyone else's fault, and they just have this like inner desire  to tell me all the excuses. I think that's not helpful in that – again, I'm not the boss. I don't care. OK. You didn't hear a goal. Great. Let's move on. It's like they want redemption and so I just think that it's good if something doesn't work to accept it, to acknowledge it, to look at it, but realize you're the boss of yourself and you should just  not feel a need to make a million excuses or have like, like create this long narrative where you're the victim and everyone else, it's not your fault and your heart was in the right place and you did everything right but everyone else was wrong. This is usually stuff about sales cycle. Well, you know, the sales cycle is just long. Like this is just too hard. And it's just when people do this, my message to them is like, hey, that's fine. I'm not saying your excuse is wrong, but like why are you spending all this energy trying to plead a case like you're in court?  that the thing didn't work, as opposed to like, well, move on and make something that does work. How about that? Spend energy in a positive, proactive direction than weaving the narrative of yourself as the person who did great, but you're misunderstood by the universe.
</s>


<human>: Here's the other one. I love this one. Dalton, I need an executive team. It's time for my company to become a real serious company. And to do that, I need an executive team.  And so I'm gonna spend the next year recruiting the executive team, like it's time. I'm ready to grow up, Dalton. I'm ready to grow up. What do you think about this one? How many great executives have we encountered over the years?
<bot>: I mean, look, I think if all you do is consume like VC content, this is an idea that gets introduced into your brain. And I think maybe there is a time where this is a good answer.  But it's like so much of the VC content is aimed at late stage founders, which is pretty weird. It's like putting out content that's like, you know, how to care for your  your Ferrari or something. Like again, I don't really know who a lot of this stuff is aimed at. The majority of the people that consume it are like two or three person startups. And if you, if all of your advice is like hire an executive team and you have like a 3% pre-PMF startup, like, oh man, like you can get someone to leave. You can get someone with a title to leave Google or Facebook or somewhere really impressive. And you think you're like a big winner that you got someone from this cool company to join your company.  But then you wake up and you're like, wow, what did I do? Like what usually happens is they either are, either they joined your startup because they weren't doing well. I'm trying to think of a nice way to say it. Either there's a reason they joined your startup and left Google, or they had expectations that you were farther along or more successful than you actually are. And they get very upset with you when they realize that your startup sucks.
</s>


<human>: All right, we got two more types here, so two more types. Type, one is other founders. So this is becoming a lot more common nowadays, right? Like founders investing in each other's companies. It's, you know, some people have seen success doing this, others not. But what's the advice that most often you're going to get from another founder to help you when they're on your cap table?
<bot>: Usually when you get advice from other founders, it's heavily based on their personal experience. Duh. But the downside of that is if they really struggle with fundraising personally, all their advice is going to be them basically telling you, don't do what I did. Or if they struggle with distribution, all their advice is going to be around, you know, like they're almost like they have a lot of feelings about what happened to them. Again, this is, we were founders do, dude. Like a lot of my advice was heavily based on my personal experience and it only, it took years of me working at YC to sort of break out of that trap, which is to not be so autobiographical. And the things that I'm telling people.
</s>


<human>: When we were in this situation with the founder, you know, very recently this started clicking in my head where I'm like, oh shit, like,  Can we take a big step back? Do you like your users? Do you like them?
<bot>: Yeah. And people think that's weird. That's not what they expect you to say. No. Why are we talking about if I like my users? Is that relevant?
<human>: Where are you going with this? These people you're trying to build things for. Do you like them? Now, you brought this up. A lot of companies don't like their users, right?  Any examples?
<bot>: Well, look, to speak from personal experience, Comcast, who dislikes their users so much, I think they renamed to Xfinity.
<human>: That's part of the rebranding. Let's try again. I don't know. Maybe they won't remember.
<bot>: Every experience I've had with them, and again, maybe you have the same one, you can tell that the whole thing was designed with the implicit assumption that they don't like their customers, and their customers are bad. And everything that you try to do  they wanna make it bad. Yeah. And it seems to be baked into the whole thing, right? It's pretty weird. Well, they don't have a lot of competition. We can talk about why that is, that's probably a different topic.
<human>: It helps that they're running a wire to your house. Right. That's a big part of it.
<bot>: Yeah, I'm still a customer, let's be real.
<human>: I still pay for it.  Yes, they figured out that their customer was the government that gave them a monopoly. Yeah. So that's one example. Are there others you think about?
<bot>: I mean, look, there's other stuff like that, like phone companies. But let's talk about another one we've used more often. Social media companies. Let's talk about Facebook. Facebook is known to do some user-hostile stuff. What's the term for it? Dark patterns. There's a whole field of research.
<human>: Yes.
<bot>: And again, maybe someone would say watching this, oh, well, they kind of like their customers.
</s>


<human>: Yes.
<bot>: That is not evidence of original thinking.
<human>: No, No.
<bot>: Versus, you go read a bunch of places.
<human>: Yes.
<bot>: You digest the information, you synthesize it into your own original work. You maybe cite the sources of what you're learning from, but you actually took the time to digest and process these things. Same thing with the music industry where if you plagiarize a song, that's a problem.
<human>: Yeah.
<bot>: Like, if you just rip off someone's music, you will get sued. Right. But if you listen to a lot of music and you get influenced by some of the sounds you hear and you integrate these new sounds into the new music that you want to put out.
<human>: Yes.
<bot>: Totally cool.
<human>: That's literally, that's the game, that's music.
<bot>: That's the music business is that everyone's being influenced by everyone else. And so again, the really important thing to tease apart is copying completely without thought or anything original thinking or original work, versus being influenced and borrowing good ideas to integrate into your own thing. Right?
<human>: Doesn't the thing that suck about startups is that you do have to think about a lot of things. There isn't just, you can't just copy and paste. There's a checklist. You do have to think carefully, but I think that's why really smart people are attracted to it. Yeah. Because you have to think really carefully.
<bot>: Yeah.
<human>: It's an amazing test of your skills. All right, great chat.
<bot>: Great, thanks.
</s>


<human>: But, yeah, you know, it comes back to that. Like, the best founders are disciplined. What you talked about is that's discipline. Right. That's doing the right thing when no one's forcing to you or no situations forcing you to. And I think that too often, genius is mistaken for discipline. It's like, you know, a lot of people think, oh, this person out executed all their peers because they were smarter. And it's like, that assumes the peers were actually working on the thing they said they were working on, as opposed to, like, hiring and going to conferences and talking to reporters. Discipline to avoid the distractions. I mean, that should be comforting to a lot of people. It's like, yeah, for every ounce of discipline you have, you can probably lose 5, 10 ounces of intelligence and still outperform, you know?
<bot>: Yeah, that's a great point. It's funny how many people that we see, again, let me think how to phrase it with, like, you'd think they'd be really good at a lot of things, but they. I'm not sure what they do with their time. They have a great resume, but it appears they just don't really do work. And the people that sit down and do the focused work. And again, we all know what this is like. And think back to college. Lots of reasons to not work on something. If you could bottle up those moments where you're actually doing focused work, the people that succeed just seem better at that. That's actually the criteria that they seem better at. If you looked at their calendar, if you shadowed them or something, the folks that are really good at this are just better at doing focused work, and it's kind of nothing else. I mean, or at least.
<human>: Yeah. And by the way, you can't. You can't really change your raw intelligence, but you can get better at this. Like, this is a little bit like, working out like you can. You know, if doing focus work for someone who likes to procrastinate is a little bit painful, the more they do it, the less painful it gets, you know? And so, hey, you know, smart people certainly have an advantage, but, man, hard workers. Oof. Hard workers are dangerous. Hard workers are dangerous. Lazy people are, you know, as a startup founder, lazy people, lazy competitors are your friends.
<bot>: Yeah. It's good when your competitors are focused on the wrong things.
</s>


<human>: Tell a Google story because I think this one's like the like really like.
<bot>: So look, for the Facebook story, that was firsthand where I personally witnessed the servers with my own eyes. So I'm 100% confident that is what happened because it was me, right? This Google story is secondhand. And so I may get some of the details wrong. I apologize in advance, but I'll tell you this was relayed to me by someone that was there. All right. You ready? So look,  The original Google algorithm was based on a paper that they wrote, which you can go read PageRank. It worked really well. It was a different way to do search. They always didn't have enough hardware to scale it, because remember, there was no cloud back then. You had to run your own servers.  As the internet grew, it was harder and harder to scale Google. You still with me? Like there were just more webpages on the internet. So it worked great when the web was small, but then they kept having more webpages really fast. And so Google had to run as fast as they could to just stay in the same place. Just to run a crawl and re-index the web was like a lot of work. And so the way the work at the time is they weren't re-indexing the web in real time constantly. They had to do it in one big batch process.  back in the day, okay? And so, there was some critical point, this was probably in the 2001 era, again, this is secondhand, I don't know exactly when it was, but there was some critical point where this big batch process to index the web started failing. And it would take three weeks to run the batch process. It was like the, you know, reindex web.sh, you know, it was like one script that was like, do Google, you know, and it started failing.  And so they tried to fix the bug and they restarted it and then it failed again. And so the story that I heard is that there was some point where for maybe three months, maybe four months, I don't remember the exact details, there was no new index of Google. They had stale results. So anyone, any user of Google, they didn't know that, you know, the users didn't know this, but any user of Google was seeing stale results and no new websites were in the index for quite some time. Okay. And so obviously they were freaking out inside of Google.  And this was the genesis for them to create MapReduce, which they wrote a paper about, which was a way to parallelize and break into pieces all the little bits of crawling and re-indexing the web.  Hadoop was created off of MapReduce. There's a bunch of different software use. And I would argue every big internet company now uses the descendants of this particular piece of software. And then it was created under duress when Google secretly was completely broken for an extended period of time because the web grew too fast.
<human>: But I think this is the most fun part about this story. When the index started getting stale, did Google shut down the search engine?  Like that's the coolest part. Like people just didn't realize.
<bot>: They didn't know. And did they build this first? Again, in terms of do things that don't scale, did they build MapReduce before they had any users? No. Like they basically made it this far by just building a monolithic product and they only dealt with this issue when they had to.
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<human>: Like what are some other examples of quote-unquote gambling out there?
<bot>: Well, think about it. Okay, so poker is a game I played a lot. I'm sure you have too. And in poker, the rules are it's okay to bluff.  and you're rewarded. Like the game is to manipulate other people around you to do dumb things. It's not hard to take one extra step to do that kind of behavior outside of poker. And so there's a whole variety of both legal and non-legal confidence games where essentially the way you win is to manipulate people and get them to do what you want when you want them to do it through any means necessary. And  Yeah, I think that is rough. And a lot of people do some version of that. I guess maybe we all do to some small extent, but some people really take that to the extreme of making their entire living by fooling other people more or less, right?
<human>: Well, it's crazy because you're talking about legal versus illegal, but back in the day in the US, I was reading this biography of Morgan Stanley and like,  One of the things that happened in the early 1900s before a lot of the financial regulation is that banks would regularly kind of sell really bad paper, really bad debt to unassuming normal Americans, make a lot of money in the transactions,  I think the one example I read, it was some country. Some country was speculating, they sold a bunch of debt, they couldn't pay it back, and a bunch of Americans just lost the money. The bank for selling the transaction did fine. The country, well, they can always print more money. It's interesting because in that time, doing that was not illegal.  Like it wasn't illegal for the bank to resell something to normal people when they had knowledge that it was bad paper. But those people didn't. And it's funny how many of the financial regulations today come from people  in the finance world basically doing zero-sum games and like harming normal Americans. And harming them so much to the point where they're like, you know what we should do? We should like get a law passed because this is crazy. Like this doesn't scale. Like this can really screw a country if you let people play these zero-sum games to the extreme.
<bot>: Yeah. And there's some amount of like  lack of empathy or viewing of intentionally wanting to victimize other people. There's some dark stuff along that whole line of thinking. I think if you feel that you are smarter than other people, and this is something we encounter sometimes in our jobs, I think if you feel that you are more intelligent than others, perhaps you can end up on the slippery slope of moral arguments that it's okay for you to make a living off of other people's work because  You use your intelligence, your superior intelligence to get them to go along with this, right? You've seen this a lot. They kind of feel like that's freedom.
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<human>: The next area of prevention, you have to learn how to have hard conversations with your co-founders and for everyone to be okay afterwards.  Everyone has to go through this and it's going to suck. But if you have some of those in the bag, when you get punched in the face, you all know a little bit more how to interact with each other. And to me, the biggest challenge that I've seen on this front, and we've talked about this at YC quite a bit, is this anxious,  personality type versus avoidant personality type. You know, when people are challenged, people are frustrated, and this is way over simplification, but sometimes people are anxious, they wanna deal with the problem right now, they're leaning in, they wanna talk for, they've talked for two hours with you, and they wanna talk for another two hours with you. And sometimes people are avoidant, and, you know, after five minutes, they're done. They wanna think about it for a long time. They'd rather talk asynchronously. And I actually see that most problems between co-founders  The root cause isn't whatever went wrong or whatever they're debating. It's actually their style of dealing with their frustration. And if you can have a little empathy if the person who you're working with has a different style of dealing with frustration than you do.  and you can just take a beat, right? I'm the anxious type. You know this, Dalton. I wanna talk about it for six hours, then six more hours. I wanna plan, I wanna write it down right now. Go, go, go, go, go. And I always get into trouble when I'm interacting with someone who reacts negatively to that. And I always have to kind of be like, fuck, I gotta take a beat. In this situation, I gotta take a beat. And so, in my experience,  If you can figure out that dance with your co-founder, it's so much more helpful when you're dealing with these external challenges. And like, the startup's going to present many opportunities for frustration with your co-founder, right? Like infinite opportunities.
<bot>: It's like the whole topic today, which is eventually you're going to take punches. You're going to have setbacks with your startup. Eventually you're going to have conflict with the co-founder.  100%. And the thing that you're disagreeing about isn't even the thing. Who cares? It's noise. It's like roommates. Did you put the dishes away? It's not about the thing. It's not about who's right or who's wrong. It's funny because a lot of people want to ask us advice about co-founder stuff.  But what they want is us to agree that they were right and their co-founder's wrong.
<human>: You love that.
<bot>: They're like, Dalton, can I tell you about this situation? Basically, I'm smart. My co-founder's dumb. What do you think I should do about it? And it's like, no, no, no, no, no, no. I'm not going to take the bait on that. The actual thing that you need advice on, a thing to work on, is the meta conversation, which is like, how do you deal with conflict?  so that people feel good when it's over. Otherwise, whatever the, you know, not cleaning up your dishes or taking the trash out, whatever the equivalent of that is in your co-founder relationship, eventually it's not gonna work out, man, right? You gotta have tools, because there's gonna be more issues.
</s>


<human>: Welcome to Dalton and Michael. Today, we'd like to do a follow-up on a video that we recorded a year ago. That video was why you should leave your fang job.
<bot>: We all know these people that want to just tell you their darkest secret, which is they wake up every day and they like dream of quitting. Like they have fantasies of quitting every day.  Those are people that probably should quit.
<human>: This video is why maybe you should leave your failing unicorn startup. Oof.  Tricky topic.
<bot>: And let's say signals. We don't know. We don't have all the information. But there might be some hints. There might be some signs you want to be looking for that it might be time to reach greener pastures.
<human>: And if you're an employee of one of these companies, you probably have the best perspective, a better perspective than investors, maybe sometimes even better perspective than founders on what's really going on.  So maybe we should start this by saying there are 1,400 unicorns now. Is that right? Yeah. Wow. Well, I'll ask you. I don't know what you think. Do you think all 1,400 will go public successfully?
<bot>: I think the odds are pretty slim that they're all doing amazing. Yeah. I think that's a fair statement. I think that's a fair statement.
<human>: And so if you kind of divide this out, even if you're really optimistic, what do you think an optimistic count  What percentage of the 1,400 were being super optimistic, they do an IPO, and everyone's really happy? A third? I'm just making this up. A third? A third. Great. So in that case, two-thirds of that 1,400, it's not going to work out. And I think what's unfortunate is that when things don't work out, employees usually don't.
<bot>: They are. Yeah. And the who takes one for the team, they're usually in the category of the team. Right.
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<human>: Cruise, perfect example. I remember getting into a cruise car with Kyle, driving down 101. And he said to me, uh-oh, there's a shadow in the road. Let's see how we handle this. And I'm like, oh, fuck.  This is an MVP. Shadows, eh? Haven't thought about that. Yeah, haven't thought about shadows in ever when driving. And I remember when Cruise did their kind of first open launch, and I got into a Cruise car with my wife, and it just drove us to where we were going. And I remember for the first minute 30 being like,  I can't believe this is the same. I can't believe this is on a continuum that started with me being afraid of shadows and now it's like.
<bot>: I actually care about that stuff a lot. If I just think about growing up about just the number of people that I knew that died in car accidents and the number of people that every day get seriously injured or die in car accidents.  I think we're going to look back and be like, that was crazy barbaric. That was like having surgeons that didn't wash their hands. Literally. In that era. Yes. Is, I think, how we'll look at some of this transportation stuff. Yes. Right? And we're right on the precipice. It's happening now. It's not like everyone's even excited about self-driving cars. No. It's like, oh, I don't know about this whole self-driving car thing. Drunk drivers aren't that bad, are they? Yeah, yeah.
<human>: It's only tens of thousands of people who die a year in America.
<bot>: It's like, whatever. And so you should, I would expect people to be pretty excited about this. Yeah.  But it's seen as sort of this neutral or divisive issue instead of something that's kind of awesome.
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<human>: Taking a big hit to your growth rate in order to get to default alive. It sounds a lot like bankruptcy. It kind of sounds a little bit like personal bankruptcy, where it's like you take a hit on your credit score to kind of clear your debts. And the benefit though, is you clear your debt like you are now living sustainably as opposed to unsustainably. Now, here's why it's better than bankruptcy. I think in a traditional bankruptcy, it takes seven years for your credit to kind of get repaired. The startup world works a lot faster than that. So at any given time in your startup, you're being judged on the last six to 18 months. And so if you take this hit, you cut your revenue in half, but you get to default alive. And the result of that is you get to spend the next six to 18 months building a better product, getting closer to product market fit, or getting product market fit. You're going to be judged on just that last six to 18 months. You're not going to be judged on when you had a horrible business that was burning more money than it was making structurally, and you're going to have a huge advantage. And what's tricky was this was kind of our story at Justin tv and twitch almost exactly like.
<bot>: Yeah you had the choice, you looked into the precipice, you guys could have jumped in, you could have just let it go.
<human>: Like, right, you could have let it go. So, I mean, we had raised about seven or $8 million. We had grown to about, I don't know, let's say like 30 million monthly. People were watching content, we were making about $750,000 a month in revenue, but we were, we had a million dollars a month in expenses. We were burning $250,000 a month. And I swear to God, like, the come to Jesus moment was with half a million bucks in the bank. And I always love this, because as YC founders, we don't talk about these mistakes and want to give you the impression that we didn't make them. Like, we made this exact, we were right there.
<bot>: That's what you love about investors, is they're like, oh, I know everything. They taught me this at McKinsey and Harvard business. Like, like, that's what's nice about being former founders, is. Yeah, man, we got all this shit wrong.
<human>: Yes. Like, no one is actually playing right towards the mountain. Like, straight up, like, deep, deep mountain, not top mountain. And we, I remember we had this meeting with a lot of our employees, and we were like, look, we got three options. We can die in two months. We can try to get to break even, or we can try to get this thing profitable. And I remember, like, I had to call this meeting, and it was one of the most embarrassing things I've ever had to do upfront because I'm just, like, talking about admitting defeat. I'm like, here's the thing. We're gonna die.
<bot>: We messed up. We blew it. I'm bad at my job.
<human>: Exactly. I'm raising my hand. I suck at this.
<bot>: Hey, guys, I led us astray.
<human>: Yes. And I remember thinking, and I think this is the silver lining. I remember thinking, I have no idea whether everyone's just gonna quit or whether they're gonna rally. And everyone rallied, and it shocked me. But then, like, I thought about it more, and I was like, what kind of person joins a fucking startup, right? It's not the kind of person who's like, well, I don't see any risk here. Like, this seems like smooth sailing all the way, right?
<bot>: These are very mature veterans.
<human>: Absolutely not, right? And so, you know, we selected for the right people on the pirate ship, right? Like the pirate ship. They knew they were on a pirate ship. And I remember everyone was like, we are going to get this thing profitable. We had to do some bad stuff. We definitely had to let go of some people. Our version of raising prices. We had to put ads on everything. Like, we put pre roll video ads on anything that moved. I remember it was, we had this, we literally had this easel with a big piece of paper on it. And I was like, on this side, we're going to write down everything we can do to cut costs. On this side, we're going to write down everything we can do to make more money. And we're not going to leave this shitty little conference room until there's $100,000 of revenue somehow of profit here. And what's crazy is that we had that meeting in August. By October, we were breakeven. By the end of December, we had generated $1.2 million in profit, and we saved the company. And I remember the feeling of not needing VC's anymore. And let's be clear, that's not the last time we pitched VC's but just, it was the last time that I feel, well, it wasn't the last time. There was a nice little window where for a second, we didn't need VC's to like us in order for our business to be alive.
<bot>: And like, and what's funny, man, is that was the moment you were actually tested. And you guys, like, you, your co founder, like, that was it in retro, in hindsight, you guys had a choice and you did. You took the l, you took the hard, hard, but now here you are and that was like really smart. And we just see so many folks that don't do it. They have that, it's like sitting there in front of them, the hard move, and they don't do it for whatever reason.
<human>: Well, and what's crazy is the idea for twitch happened after that. And like, I, it makes sense in hindsight, why, like we were, if you're not just freaked out about dying all the time, maybe you can apply your brain to like, how to make this thing work. I think sometimes it's okay to do a startup bankruptcy. Like, sometimes it's okay to take that l get to sustainable and figure shit out. And especially if you've raised, like, you.
<bot>: See people that raise and again, like, let's keep picking on fast. Like, they could have just not spent the money. No one forced them to.
<human>: Seven months in, they could have stopped spending the money and they'd still have a ton of money.
<bot>: Yeah. And so there's some amount of like, playing along, like, there's some amount of like, founder choosing, making a proactive choice to not course correct, because they believe the fundraising to come in. And again, this is the point of PG's blog post, which is don't do that. Right. And sometimes, you know, this is what happened at my startup and this would happen. This is what happens to the delivery ones is you have contractual, like, lease obligations. Kill people. I had deals with the music industry and there's nothing, literally nothing I could do about that. And that sucked, you know, and so to the extent you have a startup that doesn't have contractual requirements to burn lots of money like WeWork or something, you know, I'd recommend not starting one of those, but if you're in one, you should be really careful of this stuff.
<human>: Yes. Well, by the way, venture dad is similar. Right. We're like, damn. Like, right when you're hurting, you gotta start paying more money out.
<bot>: And they can very, very similar.
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<human>: Let's take an easy one. I'll give you an easy first example. The founder comes to office hours with us. They have already made a decision.  It is obvious they've already made a decision. And they want us to spend an hour validating that they've made the right decision. That's kind of a hard conversation. Because, like, Dalton, if we were being 1,000% honest, what would we actually just say, like, bluntly?
<bot>: Well, I think there's two ways to handle this. There's the dishonest way. The easy conversation is to take them at face value and be like, oh, wow, seems like you've thought about this really well. I see no errors in your logic.  You're a genius.
<human>: You did it again. Exactly. Yeah. Without the information to even verify that, right? Like with no actual facts to verify.
<bot>: Wow. What an amazing strategy. This is just A plus work. And then there's the hard thing. And what I think the hard thing is, is not even disagreeing with it. It's to say, it's the question behind the question, which is,  Hey, it seems like you've already made a decision, cool. Why are we talking about this? Yes, why are we here right now? Like, what's the question behind the question? Is it that someone else, is it that your co-founder disagrees with you and what you're trying to do is bring my opinion into it to prove that you're right? Yes. Is it that someone else disagrees with, like, there's always a real question hiding behind the scenes  And man, people, it's always there. When I bring this up, they're like, ugh. They're like, yeah, there is a question behind a question.
<human>: By the way, isn't this such a common theme? I think if you really want to understand office hours in a nutshell, 60 to 80% of the time, a founder will go into office hours with one question,  And we won't even end up talking about that. That's not the actual question.
<bot>: This comes up a lot with people talking about applying to YC. People always think it's really important. Michael, I have some really important questions I want to ask you about applying to YC. And he talks to them and it's just like...  Should I apply to, like, there's no... There's no there there, yeah. It's a no op, there's nothing, there is no question.
<human>: Should I report my revenue monthly or quarterly?
<bot>: It's like, who, like, just... Yeah, and so again, I get where they're coming from and what they're really, the question behind the question I think is, I feel insecure and I want to talk to you, Dalton and Michael, about this so that you give me validation  that I should apply. Great. And so that's the actual question behind the question, not, hey, I have this really complicated question about the application that's, I don't know.
</s>


<human>: So what can we talk about then?
<bot>: I think it's this. There's a lot of history to learn from about when major technological changes have come out. And to the extent this is a major technological change, as opposed to  we're all going to get uploaded to the matrix or whatever. There's a lot to learn from history. And so this is where when founders do ask us advice on what they should be thinking about with AI, or how will AI affect their startups, or is open AI going to kill all their startups? We have a lot to say about that, or we have a lot of suggestions to look from history.
</s>


<human>: I think it's interesting because you're seeing this in a lot of conversations with founders right now, right? Let's talk about who is choosing to start a company in this phase and what we can learn from them.
<bot>: Yeah, a couple of things. So one, there's a difference between cargo-culting AI and actually using AI to build better features. And so let's talk about the difference. Cargo-culting AI is to say, we have AI. And it's like tangential to what you're doing. You're just saying it to raise money. It doesn't help your customers. It doesn't improve your product, whatever. But we are seeing people adding AI features that dramatically increase retention, that dramatically increase the quality of the product, that make it much easier to charge for it.  And that stuff is real, and that is not hype. That's not bullshit. That's real. This is like when people first started launching apps, when the App Store came out. Apps were actually good. There was a hype cycle around apps, and a lot of people were cargo-holding apps. But building a high-quality mobile app that increased the retention of your users? Incredible. Facebook almost died because they didn't do it fast enough. Exactly. I think if you look at, I don't know,  we saw from our generation's founders, we saw open source and cloud computing come out. And think about cloud computing. If someone was like, oh, this cloud computing thing's hype, or like, we're not going to add cloud computing because it's just a thing VCs want to hear. You know what I'm saying? There was sometimes people, you remember these people, they were like, haters on cloud computing because it was overly hyped. But that's missing the plot. Just because it was overly hyped didn't mean you shouldn't  Put on your thinking cap. Well, it didn't mean you should be like, hey, should we be running some of this stuff from the cloud instead of running our own servers?
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<human>: And then the last one, and you brought this up in a previous conversation, it's raising prices. It's like, wow. Well, the thing that we're selling now, money. This thing we're selling a lot of right now, we lose money every time we sell it. Maybe we can increase prices so that we are break even or we make a dollar every time you sell it. Oh, no, that means we're going to sell it to fewer people. It's like, yes.
<bot>: So our plan is to sell a dollar for ninety nine cents and it's going well. And we're like, well, have you considered not losing money on every transaction? And like, absolutely not. Well, how dare you even suggest that.
<human>: You talk about this a lot. Like, I think it exercises a different muscle in your customers brain when they know they're getting a deal. Right? It's like, like in some weird way they're willing to use a product that's like they would never use in any other circumstance if they know they're getting a dollar worth of value for $0.75.
<bot>: Well, and you see this in New York recently with the ten minute delivery stuff. There was like eight of them and you could go get free. They all had coupons. So as a consumer, you could like get a lot of free stuff. And that was all VC subsidized.
<human>: Every time that company is losing money.
<bot>: It'S a wealth transfer from investors to consumers. You got, I actually appreciate that, you know, clear, some of these companies may make it. There may be one or two, yes, but my guess is the ones that make it are very, very, very smart about this stuff. I mean, yes, as per doordash, who I guess we always talk about. But, you know, they were good at numbers and they understood default alive, defaulted. And they understood burn. Like very sophisticated. And so even though they were playing, they were, they were flying the plane very close to the mountain. Yes, but they were also very aware of the mountain. They knew what they were doing. There were test pilots versus, hey, I don't know, like I read in Techcrunch that if the more I burn, the more I raise. So I guess, do you see the difference? Folks like doing high risk things when you're sophisticated and you know the risks is gonna work out better for you than wishful thinking, high risk takers. That never works.
</s>


<human>: I mean, another one's renewable energy. I had a friend who was working on a startup. And he said something to me that I thought was a lie. He was like, oh, yeah, based on where you live in America, you can choose to just buy your energy from a renewable source, like hydroelectric or solar. And I was just like,  It doesn't exist. He's like, yeah, it's here. And I'm like, oh, well, it must be like 10x more expensive. He's like, no, like right now, it's I think like 10% more expensive. And I was like, what? Like that's happening. Like we went from solar being the future in the 90s to just being the commonplace reality that no one thinks too much about.  And it feeling economical for a lot of people. It's like, oh, you live in a sunny area. You're going to save some money. It did not feel that way in the 90s. Well, we're in a solar-powered building right now.
<bot>: And this is solar power powering this lighting. And there's solar panels on the roof. OK, whatever. Do we care? No. No.
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<human>: Hey, this is Michael Seibel with Dalton Caldwell and welcome to Rookie Mistakes.  We asked YC founders for their rookie mistakes so we could share them with you and help you avoid them. Here's the next comment that was written by a YC founder. We built a product because we thought the world should be a certain way, not because we had a customer who actually wanted to buy the thing we were building.
<bot>: This is coming from a pure place. And we look at our heroes, right? We look at Elon Musk. We look at Steve Jobs. And we have this model of people that forced the universe to their will. And Elon, electric cars are the future. I am going to impart electric cars. I'm going to make it happen. And again, he kind of did. Good for him, right? But for most of us mere mortals,  It's pretty hard to force people to want the thing that you're selling or the thing that you think is good for them. It's really hard if someone doesn't want something to like debate them and convince them they do actually want it when they don't actually want it.
</s>


<human>: And I think the last one, and this is one that is maybe hard for people to understand is that,  You know, when you're watching videos or reading our content, this is, we can't personalize it for you, right? Like you're, we're making this for a business concept.
<bot>: Yeah, we're just talking to the void. We don't know who's actually watching this. But when we do office hours with companies, everything is personalized. We read their application, we interviewed them, we accepted them to YC. Yes. And so the advice we give is super personalized. Yes. And it's often the case that we will know something about someone's background. Yes. That we can integrate into the advice that we give them.
<human>: And I'll say that like more explicitly, we often contradict or it looks like we're contradicting kind of standard YC advice given someone's specific situation. I'd say like on average, we're probably telling them 80% of the same stuff.
<bot>: And so an example, if someone was a multi-time founder, like say Sam, and someone was known to be a good investor and we had the opinion that they were a good investor,  maybe following the playbook that he's following at OpenAI is exactly right.
<human>: And I completely think it's smart. He should do that. And let's be clear, we've had those people do YC. And we've given them different advice. And we have said, hey, maybe it makes sense to raise more money.
<bot>: And yeah, if you can put millions of your own money into your own company, you should totally do that. That doesn't apply to most people. Yes.
<human>: And so I think this is what's important. I think one of the ways that we try to control ourselves is  Figure out what the personal advantages are of every founder we work with and try to figure out how to help them exploit their advantages. I think it's really, really hard to do that in general. Yeah. So, shout out to, of course, Sam and Elon and Peter. They've made a huge impact and, you know, and are better fundraisers than us by a thousand. They're really good at fundraising. But if you want to be the next one of them, take some time to learn about them and their histories. And I think it'd be really helpful. All right. Great bunch.
<bot>: Thank you.
</s>


<human>: The next area I like to talk about is salary. Oftentimes, and this is more, of course, for companies that have raised funding,  just a small incremental five or 10% salary bump can make a huge lifestyle difference, and it's almost always worth it. I think people screw up, and this is where I say to founders, I'd love to hear your advice. If your startup salary is allowing you to save money, it's probably not good, right? You shouldn't be sitting here with Google employee level savings running your startup.  However, if your startup salary is giving you the lifestyle that allows you to be all in on your startup because the real world isn't distracting you negatively,  then it is good. And what's interesting is that often for different founders, this is a different salary level. For example, when I was starting, I had student loans in college. My co-founders didn't. I made a little bit more money so that I wasn't going into debt with my student loans. And that was perfectly reasonable. And no one was like, oh, well, you need to take X percent less because you need to pay a $200 student loan every month. It's like, no.  So sometimes small changes in salary now, you know, if you have a co-founder where it's like, I need to make a half a million dollars a year and I'm 23. Yeah, that's probably different. But like sometimes people are sacrificing penny wise pound foolish, right? Like sometimes people are being penny wise pound foolish.
<bot>: I think this is one of those topics, also like equity where what founders want to hear  is here's the right answer. One size fits all for everyone. Or here's the formula. Oh, here's a spreadsheet. Here we go, Michael. Here's how much to pay yourselves. Just fill out the spreadsheet and we're done. And sadly, like many things in life, anyone that tells you they're simple answers is probably trying to sell you something. Right? They're like, yeah, it's probably snake oil. And so the subtlety that I agree with you on is,  You want to pay yourself enough that you don't get into debt. You want to pay yourself enough so that you're properly motivated. You also want to keep the money in the company. These are all variables that you have to turn. And if you're going to be a successful founder, you have to have good judgment and you have to have opinions. And so when founders have no opinion about this stuff, it's not a great sign. So it's kind of like you need a philosophy of what you're solving for around compensation. You want to set everyone up for success  Yes. Align incentives well, and also realize that this, this looks different for every company, man. Like a lot of folks ask me, well, how much should I pay employee number one? I'm like.  That's a nonsensical question. Who are they? Do you see what I'm saying? Like, what they want is some answer. Oh, you should pay employee number one X. But like, no man, that's like, that's not how this works.
</s>


<human>: All right, welcome to Dalton post Michael today we're going to talk about How do you avoid innovating on the wrong? things so to set this up right we're in the  Innovation economy.
<bot>: Oh, definitely. We're a major innovation. It's right here.
<human>: Innovation economy. That's what's happening. We encounter a lot of founders who believe that  they need to take what I call innovation juice and spread it across.
<bot>: That's what you call it? Innovation juice? Innovation juice.
<human>: When I'm trying to insult it. And they have to spread it across every fricking problem they encounter. And I think that there's only a limited amount of innovation energy that any company can have. There's only so much juice, is what you're saying. It's like I set that up. And we have maybe encountered some places where  You should maybe just use the best practices. Yeah, here's what I think about this.
<bot>: Making a startup work is a miracle. And the fact that you got product market fit and made something people want, you literally performed a miracle to do that. It is amazing. People would die to get what you got.  Now the odds that you are going to be able to perform five miracles at once is much, much, much lower. Much lower. And so you want to focus the miracle juice on the single miracle, which is making something people want and making a product, right? Yes. You guys see what I'm saying? Yes. Solving a real customer problem. And then all this other stuff. Yes. Yeah, just do best practices. Please don't innovate. Yes.  need to have a low likelihood of success miracle, like you don't wanna have to be right on these long shot bets in five different ways.
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<human>: Unless you're the house, which that's the actual good business.
<bot>: And it's wild. Like gambling is fun.  Maybe not for everyone, but do you think, what's your experience with this stuff?
</s>


<human>: So we had two more at Twitch that were really funny. The first one, talking about duress, was our free peering hack. So streaming live video is really expensive. Back then, it was really expensive. And we were very bad fundraisers. That was mostly my fault. And so we were always in the situation, we didn't have enough money.  to stream as much video and we had this global audience of people who wanted to watch content. And so we actually hired one of the network ops guys from YouTube who had figured out how to kind of scale a lot of YouTube's early  usage and he taught us that you could have free peering relationships with different ISPs around the world and so that you wouldn't have to pay a middleman to say serve video to folks in Sweden. You can connect to yourself, your servers. I forgot what they were called.
<bot>: Yeah, it saves you money and it saves them money. That's what they wanted.
</s>


<human>: This is Michael Seibel with Dalton Caldwell. And today we're going to talk about, does your startup need to be in San Francisco? Oh, man. We're just we're wading into the debate of the moment. So
<bot>: Why don't you kick it off? You've got a controversial review. How about this? Usually in these videos, you and I just agree on everything. I do. It's boring. We disagree. Strongly. We have a different opinion here.
<human>: I'm confident you're wrong.
<bot>: Okay, good start. So let me start by saying I don't think everyone's startup needs to be in San Francisco to be successful, and that you could build a successful startup and not live in San Francisco. Please, please share. So a lot of the reasons  That folks read the discourse about san francisco and man, there's a lot of discourse Yes, is they're very fixated on the lifestyle of living in downtown san francisco Yes, they see all the photos on twitter. They hear the stories. Yes. It's all over national media Yeah, like my parents know all about yes My dad's like so how's it going in san francisco, right? Like, okay, so  For me personally, I actually prefer to not live in a dense city. I like living in a place that is warm and bright and sunny and I can walk around and like the birds are singing and like there's trees everywhere. I kind of like  living in a boring place, personally I'm speaking for myself, where there's not a lot of distraction and I can just kind of focus on the work I'm doing. Then, you know, really intense stuff going on around me all the time. Also, as you know, you know, I got small children and just for my lifestyle and the happiness of my family, like I prefer to live just in a different environment. You like having a yard? I do. Okay. So I, so I enjoy those things. And then also I think sometimes what people forget, especially that aren't in the Bay Area is,  how the actual big employers for most folks in tech are not in San Francisco. They're down south, yeah. Google and Facebook and Apple, the Apple HQ is in Cupertino, nowhere near the San Francisco.
<human>: All those old, boring companies, yes.
<bot>: And so clearly, in the history of this stuff, all these great companies were built outside of San Francisco. If we actually look how many of the most epic companies in the world in tech were actually built in San Francisco, it's actually not that many. And so to argue that every company has to be in San Francisco is factually wrong.
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<human>: What is comforting to me, though, is that when the Runway gets down to about twelve months, the magical thinking starts fading. You know, suddenly.
<bot>: It's funny, don't you wish you could bottle up? Like, if you see someone's performance, say there's, you know, you have 18 months of cash. The first, like, you know, 15 months when someone's back is against the wall, the quality of their decisions get much better. If there was a way to, like, gamify, like, if you bottle up the quality of execution and thinking and, like, I don't know, we see people do great work. It's just, you wish they would do this great work when their back is not against the wall again. It reminds me of being in college or something.
<human>: Yes.
<bot>: Where the papers due.
<human>: Yeah.
<bot>: And, you know, you didn't go to the class. You didn't show up to anything. And then, like, in the final 24 hours, you, like, you do great work, but you could have done that the whole time and not had a whole fire drill. Right. Isn't that a shame?
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<human>: So let's think about it. Because we talked about cargo culting on three levels, right? We're like, okay, garden variety cargo culting, that's still really bad as you cargo code Google. Then we're like, okay, the modern thing is the cargo cult, the modern unicorn that has very little revenue. And now the super, super modern is just a cargo cult the other struggling startup.
<bot>: I love when someone references a startup that we know and we're like, no. We're like, no.
<human>: Yes. And I think that, like, maybe the base conclusion here is that you have to do some copying. You cannot innovate everything. But I think that, like, I like when founders start with what does the user want? Starts with who are the companies the user's paying for, paying today to provide this service? And what can we learn from those companies? And then what can we learn from those companies writing the service who are successful? Okay, now let's think through it. And I think once you think through it, through user's eyes, you can tell which things are essential. Do people care about the Google logo or do they care that they get search results that are good?
<bot>: Hey, how about that fast, right?
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<human>: And so that also translates into a lot of actions, right?  Mass emailing, right? Mega spam spamming, the like templated email with one word of customization. Yeah, just quick on that.
<bot>: Like, you should always say to yourself, if I received this email that I am sending, would I respond? Because hilariously, a lot of people send a lot of email that they themselves think is horrible.
<human>: Like they are positive. Like, when I asked this question to the founder, would you respond to this email? They don't even think about it. They're like, absolutely not.  I've regularly archived emails that look exactly like this and we're like...
<bot>: What? I don't even know how to, what's the next? Well, I think this is going to tie into the theme where I think it's, you don't think your customers are smart or something. Like, you're like, hey, it's not for me, but maybe they want it.
<human>: I don't know. Maybe these. And if we were going to unpack the psychology of why people do this, like why they're making these silly motions, I think a lot of it is based on a lot of VC marketing. I think a lot of it is customers are not an end. Serving customers is not the end of my business. Serving customers is a means to getting VC dollars.  And we all know that VC dollars, that's the goal.
<bot>: That's what we're here to do, right?
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<human>: The last one is the extremely young investor just out of college writing a check. Sometimes this person's in college writing a check and kind of trying to build a career in our world. Different from the, this person often is different from the, like, junior investor because this person's usually not working at a VC fund or they're a big fund like that. They're usually kind of a scout or some kind of, in that kind of role. What's the, what's the advice they're often giving?
<bot>: Yeah, I mean, look, these people are super sweet and they're super exciting, you know, to talk to. I just think that, like, the same way that the founder realizes their job is to play the part of a founder, and so they, like, watch movies about how founders are supposed to act and, like, read books about it, and they sort of are being like, am I doing it right? Am I a founder now? Like, I think you kind of see this from these investors where they just, they read what other investors say and do, and they sort of, like, say and do whatever it is they read. And so, like, whatever the hot new trend is, whatever people are tweeting about, whatever, like, latest essay they read, they just sort of, like, repeat that and see if. And hopefully no one notices that that's what's going on.
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<human>: All right, the next one, the next gift  that you receive when you play a stupid game, we've touched on this a little bit, is I'm now burning tons of money because I just scaled negative margins. I had something that wasn't working in this city, and I expanded that thing to 30 other cities. And now it's not working at a massive scale. And I did it because my investors told me to.  And now those investors aren't taking my phone call. And this is like so hard because I think people don't realize that either some stage of investors or at some point in your company, someone's gonna pull out your finances and do basic arithmetic and ask themselves, is this real? And like eventually you will be judged based on like, is this real and sustainable?  And if it's not like, you know, hey, sometimes you even get post IPO at some point.
<bot>: Those people are having a bad time. We're not gonna name any names. It's not being post IPO and then having your stock lose 95% of its value. I don't think those people are having a good, they played a game and here's like the prize they have is having a rough time.
</s>


<human>: All right, let's talk about accomplishing goals. So okay, let's say I set a good goal, right? I'm a post-launch B2B SaaS company with a couple users and I am setting a goal of getting my first 10 paying users, right? Great, like we're in the right ballpark. Let's hear about how people screw  up accomplishing goals and somehow kind of still play the stupid game.
<bot>: Right out of the gate, it's the way that you accomplished it is something that you know in your heart is not like... What's the word I want to use? Kosher? I don't know. What word would you use there, Michael?
<human>: I like using the word cheating. Like, you know, it's like you're taking a calculus test.  Did you learn calculus and then get the A, or did you cheat and get the A? Like, it's like, you know the answer to that question. The A isn't the goal. It's the representation of your knowledge and your mastery. If you didn't learn something when accomplishing the goal,  maybe you didn't accomplish the goal.
<bot>: You know, you can fool investors, you can fool co-founders, you can fool a lot of people.
<human>: Employees, yeah.
<bot>: Yeah, people are very trusting. And so I think the way, the mistake people make is they think that because they fooled people in the short term,  They won something. They know they didn't hit the goal. They're like, yeah, what I actually did was I got my friends and family to do blah, blah, blah. There's something where you're like, yeah, we cheated. But no one else seems to be aware of it. So you're like, well, I guess this worked.
</s>


<human>: So I think that, like, the framework here is really twofold. One, don't overthink when you don't have to. And then two, remember that, like, most of the work, most of the work is not in these overthinking games, like most of the work, are not in these over optimizing games.
<bot>: Yeah. It's action.
<human>: Yeah.
<bot>: Taking action and not thinking. Right.
<human>: Yes, yes. It's launching, it's getting the first customer, it's selling. It's like, it's doing these things yourself. And that's counterintuitive because I think that founders understand that startups are really hard, so they assume you need complex strategies to succeed, and it's like, ah, that's a hard thing. It makes sense when I say it, right. This is hard. We would need a complex strategy. Right. How do you respond to that? What actual kind of strategy do you need?
<bot>: I think if you haven't seen really successful startup companies either personally, like, where you were the founder of one, or, you know, people, and you saw them go through it.
<human>: Yeah.
<bot>: It's hard to believe how silly these things are when they start. Like, I think unless you've literally witnessed it personally and you've seen the silly shit that goes on and, like, how. What it really takes to get big, your brain rejects the idea.
<human>: Yeah.
<bot>: That that's actually how these companies got built. You're like, no, not true. It had to be like, lots of strategy meetings and whiteboarding, you know, flowcharts and, you know, Gartner magic quadrants of like, like, I think you really. Your brain won't allow you to see that.
</s>


<human>: But what is the investor really doing when they give you an offer like that? What's really going on?
<bot>: This surprises a lot of people in YC. But this whole, hey, this is great. We love to invest when you find a lead. Just come back when you find a lead. If I translate that out of VC speak, actually means no. And founders are like, what?  That means no. Here's why. To the extent that you are in a position where you did have a lead investor, it is very common that the lead investor would want to put in the entire amount of money to hit their ownership target. And so they would not want you to give more of the round to someone else. Right. Not to mention if you had the lead investor already lined up,  there'd be a lot of other people that would love to invest alongside the lead investor. And so when someone says, Oh, this is great. Come back to us when you find a lead, you know, give us an allocation in there. What they're actually getting is a free option to invest in the future. If you find an investor that they are impressed by, it costs them nothing to say that. Right. And if you don't find a lead, they just managed to pass on your company while being very nice to you, to your face.  Yep. Right? It's like, no, we don't want to invest, but if you somehow find a great lead investor and you come back to us, let's talk about it then. And the founder walks away from that conversation being like, wow, they're really interested. They want to invest. We have offers. When in fact, they just did this ninja move where they said no, but that's how you interpreted it. Isn't that wild?
<human>: It's almost as if they have to do this because this is their job. It's almost as if they get to run this game every day with multiple companies and all you're trying to do is raise money and get back to work. Of course they're going to be better at it. Of course they're going to have the cool lines. Of course they're going to tie you into knots.
<bot>: It's like you apply to a job at Facebook and they're like, this is great.  come back to us with your job offer from Google and Apple, and we'll go from there. So just let us know how it goes, right?
<human>: That's not a job offer.  Consider this a provisional job offer, assuming that you can get an offer from Google and Apple. And even better, sign something. Yeah, we'll sign something, or we'll give you something that looks official.
<bot>: And again, to be clear, maybe someone will see this and be like, oh, but that's, what about this? What about that? Sometimes there are cases of investors that can't write big checks, and they want to invest alongside other people.  This happens sometimes, that is possible. So we're not, we're not suggesting this is all things in all universes. We're just saying a lot of YC companies hear this line. And what it usually means, you know, what it means in our experience is no.
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<human>: And probably the last trend, and maybe one of the most heartwarming trends, is how many alumni reach out to us and say they're watching these videos?  Like how much has that come up for you in the last six months since we got this thing rolling? A lot.
<bot>: I think when we first started recording these, my perception, I wasn't really sure who the audience was and maybe I'm still not sure, but it certainly would appear that a lot of YC alums are watching these, which is awesome that we have this direct line for people, you know, to hear from you and I personally about what's going on with YC. I mean,  seems better than other forms of communication, right?
<human>: You know, it was interesting because, you know, we put out a video, as interesting as we put out a public video about  making sure that you are prepared for down economic times before we even sent a letter. And one of the reasons we were inspired to kind of send a letter was the number of alums who had watched that video and reached out and said, thank you for doing this. Like we're rethinking our plan. And so I just think it's exciting to see that the YC alumni are watching these videos alongside prospective founders. It's awesome to see.  All right, well, I think that's it. So in closing, we are really looking forward to meeting the next batch, which is going to happen very soon, mid-August. I'm sorry, mid-June. And then we're also ridiculously excited to meet all the founders that we've funded over the past years. We're going to do a massive alumni event in San Francisco in the fall. And so for all the people we haven't seen in person yet, we'll see you soon. Dalton, great to see you.
<bot>: Sounds good. Bye.
</s>


<human>: You know, this is why it's a little dangerous. This is a dangerous thing. I'll say. You know, we've been accused of being a mafia and we're not a mafia, right? We don't break anyone's legs or anything like that. But it's not completely false, right? Like if you're like made in the mafia, you do get privileges that normal people don't, right? And like when you get to go through YC, you get access, like you said, to resources that other people don't, right? And so there, and there's a little slightly different way. It's a little bit like the mafia. People don't shit on you as hard, you know, like when you're the mafia, like someone's not gonna rob you, right? Like when you're YC VC's don't rip you off. Like, and so I'm not saying it's a mafia, right? I'm saying it's not a mafia. We just have these very clear similarities to what I've seen on Mafia tv. Oh God. Anyways, so this kind of, this part of the feedback that we got from founders, it had two elements. One was we didn't really understand the benefits that YC had when we were applying. It also had this aspect of, there were some really serious misconceptions that we had about YC that didn't get cleared up until we got in. You know, one was this misconception around like, are we actually going to get to work with you personally? Like is there actual structure of this thing where we feel like we're getting really personalized support? But what are some of the other misconceptions that you saw that were obviously, I mean, I would argue, obviously designed to try to convince people to not do YC. These were designed attacks on YC. What else are you seeing out there?
<bot>: Trying to encourage founders to think that investors are what makes your company great and that you could get product ideas and product market fit based on who you let on your cap table. So you're like, if I get this investor, they'll do this for me and this investor does this for me. And so, well, YC will do this for me. And it's like, guys, like the way you build a company is not, you're not baking a cake where you, where you sprinkle in three different investors and then a cake pops out. Like, the stupidest thing I've ever heard. This is a really common misconception out there, which is like, I, I hate to break it to you. You're doing all the work.
<human>: All the work.
<bot>: We're not. The reason, the reason to do YC is not that we're going to do the work for you. It's that it's a great environment to do this with other peers and founders and get access to these resources while you're the one baking the cake. And the amount of resources you get in this network way trumps the resources you get from some random small check. Like, yeah, similar side check, right? Like, so I think that's one.
</s>


<human>: What else are you, what else are you seeing in terms of like, this often happens in product where like someone has a magical version of their product in their head. Like, what do you see in that context?
<bot>: Yeah, I think in practice, if you can't build a product and you don't have a tech co-founder or whatever, or you have never once built a product and given it to anyone, and you think it's going well,  you are too optimistic. Like, it's not going well. Like, sorry. And again, think about how many people over the years that have pitched us like, it's a new social network and it doesn't exist, but it's like Facebook and TikTok and it's with your friends and you can discover, you know, they'll just kind of like rattle all this stuff off, but they will have no code. None of it will exist. And they'll get really frustrated that we aren't pumped about that.  Like they don't like they're being too optimistic that the idea that their articulation of this is somehow valuable or interesting.
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<human>: So I remember getting our first  angry letter. And like during my startup career, I went from angry letter from law firm, getting sued by the company owned by the Prime Minister of Italy, getting sued by the UFC, getting  very aggressively invited to testify in front of Congress about sports piracy issues. It was like, that first letter I thought was a disaster, and if only it described all the other shit that was gonna happen. I might have just quit. I might just shut this down. And I remember having this conversation with YC founders now, because it'll always be like, oh God, we got sued. And I'm just like,  And, like, welcome to running a business. Like, you got sued. Like, check that box off.
<bot>: It just comes with the territory. Like, there's no way to avoid it. Like, there's not a universe where you could do big things and not have these setbacks where folks will tell you you're over. Folks will tell you, you know, you're bad and you should feel bad.
</s>


<human>: Maybe the first analogy I'll give you, and this will immediately age me, so I apologize. I was a big Final Fantasy VII player. Do you play Final Fantasy VII? A little bit. Of course. Alright. The basic thing I learned in Final Fantasy VII was that you can fight the boss at a certain level and get your ass kicked.  or you can grind for like, you know, 10 more hours and fight the boss and actually like kick their ass. And I think that this analogy applies to a lot of things in the real world and specifically in the startup world, where like investing and leveling yourself up can produce a lot of benefits later on, like deferring a little bit of that satisfaction of getting started right now, so you can upskill, makes you 10 times more powerful.  later. But, let's be clear, you have to be upskilling during that time. Yeah, you gotta be grinding. You gotta be grinding.
<bot>: The grind has to happen.
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<human>: But in the real world, let's talk a little bit about grinding. What's the kind of grinding? What's the kind of upskilling?  that you would advise high schoolers to do?
<bot>: Well, the most obvious and straightforward one is learn how to code obvious. Like it's pretty tricky, even if you think, hey, I'm not going to be a lot of people say to me, the younger folks, oh, I don't want to be a coder my whole life. I want to be a founder. I want to be a product person.  well, you should still learn how to code. Like there's, it's really hard to make an argument. Yes. If you're a young person, why you shouldn't have that skill in your skill tree. Can you make a case? Why do you make no case?
<human>: I was the business guy who didn't know how to code. And literally I would say there were many moments in the early stage of a company where I felt borderline useless. And certainly I didn't have the power to impact the product anywhere near as much as my other three co-founders who were, who were software engineers. So like,  This is such an obvious one.
<bot>: Yes, this is a great thing. AP Computer Science. Yes, you can take replit like there's all these YC companies that help people learn how to code code Academy. There's so many so even if you have some complicated relationship with maybe I don't want to be a programmer.  That's fine. Learn the skill. It's like learning how to cast spells or something. Well, I'll push even harder.
<human>: Get this complicated view of I don't want to be a coder out of your head. The coders are the most powerful people inside of software companies. That's the hint. The people who code are the most powerful. They're the most highly compensated. They're the hardest to replace. They often have the best ideas. They often have the easiest path to implementing their ideas by far. They're the power center.  The talkers, not as much.
<bot>: Sometimes people on this coding thing, they're like, well, I didn't grow up coding or I wasn't like a 13-year-old whiz kid like people I know in high school. I'm just trying to argue, you don't need to be that. If you have the right ambition and grind mentality to be willing to learn, of course you can do it. Even if you're 19 or 20, it's never too late to learn that stuff.
</s>


<human>: I think that the two silver linings, like one, everyone you respect out there who's doing great things is dealing with all this stuff.  And so that should make you feel good. Like every single person you respect who's done something hard has dealt with all this crap and 10x more. So you're not getting some bad hand. Like everyone gets this hand.
<bot>: What is that about you? This is just the thing. This is just the game. This is the thing is that you're gonna every day have to deal with things that feel like setbacks.
<human>: Well, and you can get, I think that's the second silver lining here is you can get good at this. Right? Like you can get good at dealing with these setbacks. You can actually get better over time. You can learn how to take a punch.
<bot>: You can't control whether or not you're going to have setbacks. You can't. You have to like let it wash over you. But you can completely control your reaction.  Yeah, that's 100% like what happens in your brain after a setback happens is within your control. And so you want to have acceptance. Yeah, some bad stuff's going to happen and I can't fix it. But man, you have a lot of choices in how you deal with setbacks.  And it could be anger, it could be fear, it could be bartering, it could be denial, like we've seen it all. But this is something that you can practice and get good at. And the folks that are great at whatever their thing is, again, like, whether it's athletes or whether it's people putting out music or making movies, like how do they?  Like you can get better at dealing with like criticism or people not caring. And like, you can just do that, that's your choice. Like no, there's no structural reason you can't have a better or more productive reaction to the setback, right?
</s>


<human>: So let's talk about this in the context of startups. You know, how does this come up when we're talking to founders? How does magical thinking pop its rear, its head up?
<bot>: I mean, I think to start with, it's to always have excuses. Like when you ask people direct questions, everything involves a very complicated answer and excuse about why they can't grow, why they can't get customers, why it's hard for them to get customers.  why somehow there's a complicated story, it's other people's fault that they can't do something, and all these other people are plotting against them, and like basically they're telling a story where they're the main character, they're the hero of the story, and their startup is great, and if it weren't for all these dang external parties doing bad things, it would be working, right? Again, like put this into practice of like why people can't get a customer, for instance.
</s>


<human>: What I will say, though, is that, like, Don't let yourself be held back by these fake limitations. These are fake.
<bot>: I think that's such a great way to close off this thinking. I think the reason we got a lot of requests to do this video, I think it was from technical founders that had been told by investors, you need a business founder, and are kind of looking for our advice about that, or they're not really sure. And I think a lot of times when investors give a founder that feedback, which is you need a business co-founder, they're actually giving you direct feedback on what they see is a deficiency in your appetite to do the work
<human>: Yes, yes
<bot>: In a polite way
<human>: Or or or the quality that you did the work, the quality of your pitch or the quality of how you set up your company. But it doesn't mean you don't have the skills to do it.
<bot>: Yeah. Like if you meet with someone like, I don't want to do sales. I hate doing sales. Sales is bad. A lot of advice would be, yeah, maybe you should get a non-tech founder, right?
<human>: Well, by the way, that's why I hate that advice, because that advice is suggesting the solution versus telling you the problem, which is like, hey, you might have to talk to your customer. You don't seem like you like that. That's going to screw you. There are many ways of solving that. That's correct. You could learn to like it. You could hire someone who does. You could hire an engineer who does. You can hire. But I do think that don't believe this idea that there's some magic with one business person plus one tech person equals startup win. No, no.
<bot>: And I think along these lines, sometimes people have a lot of pushback of our advice on why you need a co-founder full stop. But our argument is not you need a business co-founder to teach you business because they went to business school.
<human>: No.
<bot>: It's just that this is so hard. You need another person to go through this experience with. It's not that there's any one particular bit of experience that is necessary. Right?
<human>: Like 100% you need someone to offer emotional support because this thing is going to be hard.
<bot>: Yeah.
<human>: Yes. Yes. All right, good chat.
<bot>: Sounds good. Thanks, man.
</s>