YouSaid · the spoken record

Michael Seibel

lines on the record: 54
first: 2020-09-08
most recent: 2020-09-08
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“In 2006, Justin Kahn and Emmett Sheers sent an email to our friend group saying that they were starting a new company and that they were taking a road trip from Cambridge, Massachusetts to San Francisco because they wanted to start their company in Silicon Valley. I was working on a U.S. Senate campaign where we had just lost our primary by three percentage points. And I hadn't taken a vacation in a very long time. They were 22, I was 23. And I emailed them and I asked them, can I join you on your road trip? And what they didn't tell me is they had packed up Emmett Civic with all their stuff. So to clear out a room in the car for me, they had to basically give away or throw away about a quarter of their stuff. And they said, yes. And I wouldn't be here right now without that yes.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“100% you can get better at it. I think that so much of execution is a mental game and an expectations game. The best analogy that I give is that if you take the fastest person on a high school running team and they train with a college team, they're going to get better. You take the fastest person on a college team and they train with the Olympic team, they're going to get better. They're going to run faster than they thought they could run a mere month before. So when you take a founder in isolation and put them in a batch with a bunch of really smart people who are pushing really hard, they're going to accomplish more than they ever thought. You want to know the secret sauce at YC? That's it. It's not the advice or the demo day or yet. It's the batch. And one of the things that I say in the very beginning of the batch is that the founders make YC not us. If you were to take all of the kids who are going to MIT right now, move them to the community college down the block. That's one of the number one engineering schools in the world.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Hiring if your product's punching you in the face, but you're hiring great people, you can squint, lie to yourself, and tell yourself your company's doing well until you're out of money.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“And the great founders limit the amount they lie to themselves. We're about to have the last dinner for YC dinner. And in my kind of final parting advice, one of my slides, just big text, it says, you do not have product market. Keep on drilling people's heads because what every founder kind of dreams of is company building. And if you lie to yourself and tell yourself you have product market fit, then you can start company building. It's whatever a founder kind of dreams of. They dream of being that Steve Jobs, that Bill Gates. When you have product market fit, you should do company building, but most people never get it. And most people should never be doing company building. And most people should never be investing their investor dollars in company building. They should just be investigated in product. That's hard. Product can punch you in the face every day.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Surters or not because we're growing such that in two weeks we're going to need them. And by lunchtime, it was clear that we were not going to hit the two week window so that we had to move over to AWS within the next two weeks. By dinner time, it was clear that we had to move over to AWS that night. We didn't go home and 6 a.m. The next day the entire product was moved roundabout the entire product moved over at AWS. Once again, there wasn't time to like, you know, philosophize, I had consumer examples. The reality is that the beautiful thing about a founder is their ability to lie to themselves. And the number one thing a founder lies to themselves about is whether they have product market fit.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Operating. That's what product market felt like. It was a sledgehammer to the freaking jaw. We had no time to sit down and is this product market fit? It's like everything's blowing up all at the same time. Because no one really builds products to scale. You can't pre-build a product to scale. So once you get an overwhelming amount of usage, everything starts breaking. My second company, SocialCim, we had that moment with more time I would go into far more detail on how this wasn't exactly product market fit, but it kind of replicated product market fit. We had this moment where we were growing. And when I was going to work in the morning, I said to myself, okay, we're still racking our own servers. This is 2012, and we were using EC2, but for this product, we're on the racking own servers. And I was looking at our growth rates, and I was like, okay, it takes two weeks to order servers and install them. We're going to need to make a decision today whether we're going to order.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“I hate this question because I have to answer it so much and I am not sufficiently good at answering it. I had two consumer companies. I'd like to describe What it felt like to have product market fit. So my first company, Justin TV, in the spring of 2008, we believe a man in Morocco pointed his webcam at his television and he was watching a local Moroccan soccer game, like a Moroccan league soccer game. And he wanted his friend somewhere else in the world to be able to watch it who wasn't in Morocco. So he pointed to his webcam at the soccer game. 3,000 Moroccans from around the world saw this link, watched this game horrible quality. You could only imagine how bad the quality was. It was the largest stream we had had at the time and it broke our site completely. That year our company grew 1,200% and the limiting factor was can we stay up? Can we keep the video system and the web system?”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“And you have no background or no experience, you have almost no leverage over an investor. You're basically praying the investor falls in love. Anyone who goes out and tries to find a significant other, you know that's a low percentage chance of winning. The folks who can basically get a product up and running in some way, shape, or form, and get a couple customers, the first 10 customers, to love the product and pay for the product, they have far more leverage when trying to convince an investor that this product might be a thing. They're demonstrating that they can build a product. They're demonstrating that they can sell customers. They're demonstrating they can collect money, they're demonstrating that this company will exist. This company is not dependent on the investor to exist.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“There is another pop culture misconception out there that the path to creating a company is you think really hard to come up with a clever idea. I'm going to emphasize clever because it's really helpful if people think it's a cool idea. Preferredly people who don't even know anything about the problem. Then you pitch investors and you raise money. Then you build the product and launch the product and then users use it and then you're successful. I think that's kind of wrong on almost every front. I think that's kind of what people absorb out of American society. I think that in the age of software for much less money, you're able to have much more confirmation from your customers as to whether or not you're solving a problem that they have so that when you go to an investment meeting, you actually have leverage in that meeting. When you're pitching an idea,”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“No, it's like you are going to start learning skills because there's a gun to your head. And if you don't have the skill, someone's going to pull a trigger. And then you learn. And then you do that enough times. You dodge enough bullets. Maybe you make a good company.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that we can debate on whether your kind of life earnings and what job you can acquire, we can debate on that. And I don't know that I have an extremely strong answer, but like learn more? People learn by doing. You don't do at school. It's that simple. You can learn on best practices are to fire someone, or you can have someone in your company who's not performing and who hasn't been performing for six months. And every time you look at them, your stomach hurts because you know you need to fire them, but your stomach hurts more because you're too scared to. That's when you learn. That's learning. School's not learning. I think that there are certainly certain technical skills that are very viable to acquire in school if you use school for that purpose. Otherwise, I think school is great for building relationships with smart people that you can then work with in the future. But one of the things that we have to tell founders all the time is that if you're going to succeed at this, you're going to learn the whole time. Things you are not good at now, you're going to have to become good at. So this is not a situation where you go to business school and acquire the skills and the company you go use them. That is a complete wrong way of looking at it.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Start a successful company. One of the things that I tell young people considering startups is that I actually think there's probably something a little different or off you might describe as wrong with people who are very motivated to start companies. I don't think they're normal. I'll bring it back to what I said before. Would you sign up to get punched in the face every day? Does that sound like a perfectly logical rational thing to do? Most people wouldn't. I think that it's just really important to be honest with people about how hard it's going to be. and that it's okay if you don't want to do it and it's okay if you want to give up and it's okay if you're not successful you're not a failure because you weren't successful at becoming an astronaut there's so few people who become astronauts and so try to set things in that context as opposed to normal career contexts”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“With facts, the real reality. This is how hard it's going to be. And then I think the second thing is you acknowledge that you need to develop tools to manage your emotions. We have a number of talks on this. Our former bachelor at YC, a woman Amy Bueller, she was a trained therapist and she's now a founder coach. And she's kind of created a philosophy for us that's been really helpful. And it's kind of had the primary part is like, how do you manage your relationship with your co-founder? And so we spend a lot of time kind of trying to explain that to founders because the co-founder is your primary support system. If that, it's a lot easier to manage your emotions when you have that rock next to you. And the other thing that we kind of emphasize is honestly health. And we talk about that a lot, but what I hear is when people talk about one and not the other. There's a lot of conversation about like how hard should you be working and how hard is it healthy to work? I don't think it's particularly healthy.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Kind of programs to think, put myself in a group of people, and then act like them startup YC Batch is extremely talented people. But if you are the average player, you lose. And so a lot of the times we try to really push people to think, how are you going to be different? How can you not set your internal expectations based on the people around you? Because if you win, you're going to be orders of magnitude different, your numbers, your progress, how much the problems that you're solving for your customers, the magnitude of your impact is going to be so much higher than the people around you that you have to kind of think that way. One of the great things about the Airbnb founders is that they thought that way. They thought very early on we're building a company that will be around for a very long time. Most founders don't think that way. That wasn't the average of their peers. It was exceptional. I think I made many of these mistakes. When I think about how do you deal with the founder psychology, the first thing is you prepare them.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Sports. The Duke coach can probably say only one or two of you are going to ever have a real starting rotation job in the NBA. And damn, you got to do. You're already like pretty good. I think it's just really important to emphasize that point. And then the point that comes right after it, which is that to win, you have to reach for extraordinary. And one of the things I really try to motivate folks to do, and it's something that Dalton Caldwell, one of our partners, says a lot, is that you have to be a couple standard deviations away from average in order to have an extraordinary outcome. One of the things I think about a lot is that if you're a smart kid and you put yourself in a community of smart kids and you're operating average, you tend to do well. If you're one of those smart kids and you're average, you'll get into a good college. If you're an average smart kid, you'll get into a good professional school. You'll get a good job. You don't have to worry about paying your bills. So I think a lot of people are.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that my style is to be, some founders would describe it as a little brutal. I kind of describe it as like very real and I don't want to lie. When we kick off the founders, one of the traditions that Paul Graham, the founder of YC, started was this phrase there only be, and back then the batches were much smaller. There'll only be one or two of you who actually solve the problem you want to solve, really serve your customers, and build a successful business. We can't tell who it is, but it'll only be one of two of you. And I always love that because it was honest. This startup game is very different from most career games. Imagine if the first day you went to Yale Law School, the professor told you only one or two of you are going to become lawyers. You'd be like, wait, why am I paying all this? Like, this is not what I signed up for. Our startup game is a lot more like...”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Every founder has to fundamentally lie to themselves, convince themselves to do a startup. And it's really interesting to explore, are you more able to lie to yourself about people wanting something they might not want? Or are you more able to lie to yourself about you being able to build something that you have no qualifications or no clear logical argument why you should be the one who can build it? It's funny, right? Airbnb is a product risk company. Stripe is an execution risk company.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Do think that's correct. I've observed something in no way conflicts with that, but is slightly different. I think that older and more experienced founders tend to be more comfortable with execution risk, meaning I know there's a need in the market, but I don't know whether I can fill it. Younger and less experienced founders tend to be a little bit more interested in product risk. I'm confident I can build it, but I'm not sure people want it. I find that very interesting because successful companies have been built in both areas. But I kind of, to me, it's a bit of a, and I'm making over broad generalizations when I say that younger, more experienced, and that's an over-generalization. But I kind of feel like it's a peek into the founder's psyche. It's kind of like”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“There was this massive trend of no one was the strong yes. Everyone was like, oh, maybe no one could kind of imagineer this thing working. So we implemented this rule that someone's got to care enough to be the big yes. And I think it was good for the culture of YC because it prevents arguments and kind of stupid fights. But I think it was also good for the investing in YC because if someone can't dream this thing to be something, it probably won't be.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Somewhat unique about a partnership. I think Benchmark does this as well, and they did it before us is that we have an equal partnership. And then the last thing is that any YC investing partner can get a company into YC. We call it a strong yes. Anyone can strong yes a company who's an investing partner at YC. There is no consensus required. And what's funny is that I think a lot of people think that that rule, it's actually a rule that was named after a former YC partner, a guy named Gary Tan. A lot of people think that rule exists because, oh, the best ideas are controversial and there's going to be debate, which I love. The reason why that rule existed was because in our kind of YC lingo, we have votes when we're voting in a company interviews as strong yes, weak yes, weak no, strong no. It used to be the case that a company with three weak yeses would get into YC. And when we started to analyze the”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“like apologize they explain when they would make the next one everyone was acting in a way that i think oftentimes institutions don't treat them they were acting like responsible adults so they went and they talked to some city and they talked to the treasure department because the treasury department is what handles this kind of money collection not the kind of criminal justice part of the the government and the treasury department's like you've got better collection rates than we do And the only thing we care about is how much money we get if doing it your way gets more money We're down. Like we don't perceive our role here as punishing people by making it hard for them to pay. We just don't have any good software and so if you can get us more money we're happy to try to do it and so they're in the process now of what I like to kind of call stripe for government every time a citizen has to interact with government to pay something how can that process be citizen friendly? They're going to build a very successful company, but it's also going to be”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Class person, you go to jail, you lose your job, you can't pay your rent, right? You really fucked that person's life and their family's life. They ask themselves, what happens if we could make it easier to pay the government? They did this awesome trick. They basically were like, look, we're not going to start with a deal with the government that takes too long. We're going to set up a website where you can pay your ticket or you're fine. And if you want to pay with the credit card, you can. We'll accept credit cards unlike a lot of jurisdictions. If you want a payment plan, we will give you one on the spot online. You don't have to call anyone or go into some office or sign some forms. And let's be clear, we're not associated with the government. We can't even enforce these payment plans. We're just going to see what happens. They basically built the front end for this. And on the back end, they would just pay your ticket for you. And after a couple months, they had no defaults. They were getting no defaults or very few defaults. Everyone was paying. Everyone was on the payment plan was paying. When people missed a payment.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Good and evil right and wrong. If you're in our system, it must be because you did something bad. And the role of our system is to punish you so that you won't do something bad again. As they started speaking to these people more, they realized that the more efficient they made it for these systems to run, the more people they thought these systems might try to incarcerate or try to pick up on the street. And they were like, this is not part of our mission. Now, let's be clear, they were getting contracts. They were getting paid. But cousin wasn't part of the mission, they said we're going to take a step back. And we're going to look at this a different way. What they then did was really awesome. They then went back to the root causes and they said, a lot of people get mixed up in the criminal justice system based on some type of fine or fee or something that they didn't pay. So then there's a bench warrant. Then at some point they get pulled over and then bang. They're in jail. You're working.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“To make it easier for people to get to court without having to pay bail. So simple things like we'll put an app on their phone swing over they are, we'll send them text messages once their court date, make it one click so they can get a lifter and Uber. Just the basic things so that you can actually not put them in jail so that you don't have them lose their job or lose their car, basically have them slide into a much worse life situation for a crime that maybe they didn't even commit or certainly isn't that significant. So they started doing that and they were so powerful that they literally, everyone says, oh GovTech, it's impossible to sell the government. They sold the government. They got counties signed up. They started getting their software deployed. And they started realizing that the part of the government they were selling into this prison kind of police system was very much oriented around kind of”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Where solutions are not necessarily obvious. We have this company that went through YC a couple years ago named Promise, and two founders whose stated goal was to reduce mass incarceration in America. At first blush, an investor is going to think that's a nonprofit or that's a social impact. I don't give a shit about that. But this was very much a company. And they kind of went through two iterations and it was so much fun watching them do this because the founders are just forces of nature. Like whatever they're pointed at, they're going to get shit done. So their first thought was that people are getting thrown in jail before they're convicted because government is not good at getting people to come to court. So if you cannot afford bail, the easiest way to make sure you come to court is to put you in jail into your court date, which seems pretty fucking stupid, but hey, that's the game word. Their first thought was we're going to actually work with prison systems, with counties and their prison systems.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Are different kinds of bravery. I actually think that going after a vertical is very brave because investors will tell you Square is got it sewn up. You came over. But what I'll key in on more is the bit about solving problems that can be intimidating to solve.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“In the vacation rental business in New York who didn't like the existing tools, that was the actual kindling that got caught. Airbnb was a fire that was lit a number of times. And to be honest, as much as people argue that Airbnb was some unique idea, it wasn't VRBO existed. Couch surfing existed. It wasn't a unique idea. It was very clearly an iteration. Craigslist existed where this was happening. It was very clearly an iteration of what was already happening. And their first investor knew that a guy named Greg McAdoo. He understood the vacation rental market. He knew this was happening. So I feel like when the Airbnb story is told, it's told as like, oh, people would never stay in each other's houses. That's crazy. And it's like, no, that was happening. It's not crazy. That was happening before Airbnb started. Airbnb did not kick that thing off. They just built better tools than everyone else. They made it easier.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Typically, when we have a two sided marketplace, it really depends on what stage of investor you are. Like when you're super early stage and you're trying to get a company from zero to one, it's very different than when you're later stage. But the typical advice is that you should try to cheat supply. And that's a really fancy way of saying you should try to hand recruit viable supply. Because if you have viable supply, the hand recruit portion is important because viable supply shouldn't want to sign up. There's no demand. You have to actually one by one solicit and cajole viable to supply to sign up. But there's no way to collect demand without something to show them. Usually the stereotypical device is cheat supply. And in the kind of early days of Airbnb, that's exactly what they did. Their early viable supply were vacation rentals in New York City. And there were international travelers with kids who want to stay in an apartment instead of a hotel. There were people who were traditional.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that there's this weird thing in these two sided marketplaces. My canical example is always car buying sites. The average person owns a car for seven years. Yeah, they think they're the customer on a car buying site. When like once again almost always it's the person selling the car who needs to sell cars every day. And I'm not saying you're not the Airbnb customer. I'm just saying that if I were trying to figure out who I'm helping more, it's clear I'm helping the host more. Don't get me wrong. People have built businesses in areas that are infrequent. I never try to create rules around what kind of business you should start. Every business is a bit of a miracle is a little different and breaks some rule that existed before. I just try to kind of like do this exercise to give people this kind of, sometimes people will choose ideas and we go through this exercise and they come out of it being like, oh, no one cares. And it's like, oh, okay, well, if you can't identify anyone.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think in many marketplaces people have a misunderstanding of who the customer is. A massive misunderstanding of who the customer is. I think everyone assumes they're the customer. Are you an Airbnb host? I would ask you the question if you were an Airbnb host, how frequently would you want to make sure your home, apartment, vacation rental was booked? How intense is that need? And are you willing to pay 12% fees for people to book your place?”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“People who are kind of more interested in being the startup scene than actually identifying a problem, falling in love with the customer and trying to fix it. And what I'm really trying to do is kind of reform the seamsters and say like, hey, if you're going to be in this scene, can we at least get you to work on a problem you give a shit about in some way? And a problem that if you solve it, people are going to care. And I think that that's been my attempt to trying to get people to that final endpoint.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Tell someone, hey, take your ideas, take the problems that you have maybe in your life or that you witnessed your friends have or you have at work, and use these three heuristics, frequency, intensity, and willingness to pay to try to stack rank them. The stack rank isn't as important. What's actually more important is just being able to look at a problem and understand is it significant at all? And I think more often than not, founders just kind of when they use this tool, they start realizing, oh, like I guess this doesn't matter as much. Not as important to me. And I think it also kind of, it helps them unlock what are the problems that they're really passionate about. If you're really passionate about a problem, you're probably more likely to have some insight on how to solve it or some special way of looking at it because you've experienced it. Really, that's what I'm trying to get them to do. And I think what's tricky is that there's kind of a prevalence of what we would call scenes.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Frequency intensity and willingness to pay are three things that I tell founders to think about. Here's the thing. The base thing that I want a founder to have is some special or different insight about the problem that they're trying to solve. And I want to be clear, not necessarily a special or drift and insight about the solution. Solutions come and go, solutions change, they get iterated. Solutions are something that really get molded by the user. But some special or different insight about the problem I think is really important. What happens in my job a lot is that a lot of founders kind of come to me and they say, I don't know which company to start. I don't know what problem to attack. And part of my job is to help them kind of help guide them through a process analyzing the problem. Now, I think that there's kind of a surface approach and a deeper approach. The surface approach is kind of almost academic where I can.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of making software has just dropped incredibly. I think that it's really important to point out that distinction. Whereas I think that maybe there should be, and I'm going to get these ratios wrong, but maybe there should be like 10 to 100x more software companies now than there were in the 90s because of the costs have decreased. In my mind, on the hardware side, maybe that's only 2x more because of the availability of more private funding. But it's nowhere close to the same scale as software.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say Silicon Valley by and large is built to fund software companies. And the further away you get from that software core, the less reliable it is as a funding mechanism. And it's not a surprise that most of the kind of larger, more hardware, more infrastructure-focused companies, Tesla being a great example, SpaceX being a great example, were government funded. And I feel like people don't talk about that enough. So if you're trying to be a founder of one of those companies, I would argue that the world isn't as different as it would have been 20, 30, 40 years ago. It's different. Certainly you have a lot of better software to use to build your company, so it should be cheaper. But your funding sources are not as clear cut. Whereas if you're trying to build a software company, I think the world is massively different for you now versus 40 years ago, like in almost every way. And I think that there's a community here that's willing to fund you. And I think the”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's tricky. I do feel like I can split the world up into software and not. And it's a little when you start kind of zooming in, there's a gray zone. But I do think that the kind of frontier tech, the Tesla inspired startups are far more popular now than, of course, when I was starting. On one hand, I like that because I feel as though Tesla Greats makes great products. I feel like in some ways it's helping move society forward, those types of companies. On the other hand, I think that a lot of times there are investors who are extremely disingenuous about how much more challenging it is to build a not software company. And I think they're also disingenuous around what the fundraising environment is for non-software companies.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“To build best in class software and to have a software advantage over their competition. When it comes to the cutting edge I think the cutting edge is a very interesting thing because I think that it is poorly defined in the present and well defined in the past. I think that every year, every six months there's a new, this is what the cutting edge of software is going to be. And it's really not my job to believe or not believe. Just as often as that kind of thesis is correct, it's not correct. And it's not really my job to care. It's my job to support founders who are going to have a vision of how software is going to be used 10 years from now. And I never want my vision to cloud theirs. If smart, talented people believe this is where software is going, I've got their back right or wrong. I never for a second believe that I'm shaping where software is going or I'm deciding or that I have some magical insight on where software is going.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“I almost want to attack it from a different direction. I think that as software is kind of pervaded a lot of forms of life, one of the things that I start hearing is that it's less valuable. There's a trend in the startup world for what people will say is this is just a software enabled startup. And that's kind of code for, oh, the software that we use is commoditized. I aggressively fight against that. I don't think that software can be commoditized. If I have two companies to fund and they're starting at the same position and they're going back to the same market and one believes software is commoditized and the other believes that they can build best in class software, I am always funding the second one. Always, always, always. To me, when I think about kind of founders, I'm excited about, I think of founders who are”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“It but you want to go back that exists there are programs to help you raise money raise your series A raise subsequent rounds there's a directory where you can basically sort and find companies that might be great customers companies in the YC network might be great customers it's a different world there's a forum where you can ask questions and pull the audience of alumni on important issues so there's a whole job site where we help you recruit engineers And we give companies more money now than we used to back in the day, the standard deal, we give companies around $20,000. Now it's $125. So yeah, it's crazy. I'm excited for all the stuff we're going to come up with in the next 15 years.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“More than a series A. There were barely any YC companies that are making more than a couple thousand dollars a month in revenue. There was barely any investors came to Demo Day early days. YC didn't get any respect from investors. It wasn't clear that it was a good filter. Today, there's an alumni network of 5,000 people, everyone from CEOs of public companies to major executives and major technology companies. There are a wealth of deals. I mean, companies give our founders special deals to get the needs of our software. So there's millions of dollars of discounts and perks and credits and so on and so forth. There's an entire database of everyone who writes checks in the valley with peer reviews from other YC founders. Immensely valuable. There is, and COVID accelerated this, almost all of the advice we give to founders is documented and written. So if you didn't catch something or you remember hearing”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know what's funny is that once we invest, we're in a lot of my sorting muscle kind of goes away. This comes back to I don't want to be too smart. There are many examples of companies that did not look very good during the batch that turned out to be very good. I mean, help. My company during the batch was an online reality TV show. 2014 had sold Amazon for a billion dollars. You got to be careful about being too smart, but how has the batch changed? I mean, the wealth of resources that are available to the founders today versus when I did YC, I think that's the big difference. It's stupid. What's funny about YC is that it's been imbued with former YC founders as people who are helping to run it. So we always get to ask ourselves the question, like, what do we wish we had? I did YC in 2007 and 2012. In 2007, there were barely any YC companies that had raised”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“The bottom 10% based on whatever criteria or the bottom 30 or whatever. And I think what's so interesting is that they don't spend enough time thinking that if our acceptance rates under 2%, the quote unquote worse person in their stack rank was better than 98% of the people or companies who applied to that batch. Can you really tell that they're not going to end up being the good one? Can you really perfectly distinguish the top 2% who's good, who's not? I would argue that's very, very hard. And that's why I like our model where we don't try to.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say nerves only matter if they get in the way of those two things. Otherwise, we don't particularly care. I will say that what's funny, and this is actually something that I feel like I don't remind demo day investors enough, is that these are pretty impressive people. Their companies might not work. You have to be pretty impressive to even want to start a technology company. And then you have to be pretty pressive to be stack ranked in the top 10% of an YC applicant pool. This is not just a straight cross-section of people on the street. And so generally, everyone who comes in the interview has something to be confident and proud of, something to draw, some way that they're special or better than most other people. And it's funny because I'm constantly reminded of this. I think that when investors look at a batch at the end of demo day, they want to immediately stack rank people and discount.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't want to give up too many secrets. I actually think that might be a lesson that applies in other parts of business. It is strikingly obvious if you're looking for it. And in a typical interview panel, there are three or four of us interviewing two to four founders. And it's only 10 minutes long. A lot of the time you're not the one talking, so you can be watching and looking and be the extra set eyes, which is really fun.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“The second one that he always taught me is that founders should know in almost all cases they should know more about their customers and their problem than you do. So you should learn something. You should learn something. You should leave an interview knowing something you didn't know before. I think those are the two ways that founders can kind of distinguish themselves positively. I think negatively you get a sense for how a team works together or doesn't work together in an interview. You actually get a sense of whether the founders like each other, believe it or not, when two people have to be in the same space, either physical or virtual for 10 minutes communicating, it's hard for them to hide how they feel about each other. I think we're learning what the virtual tells are, but I can tell you having many more reps on physical interviews, the physical tells are like hilarious and obvious. If you can avoid it, you'd rather not have fun to team that hates each other.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“One of our partners, Paul Buhight, he was one of the people who up trained me to do interviews. There were kind of two things that always stuck out from his lessons. One was that a founder who truly understands what they're working on is able to explain it to a layman. So the ability of the founder to clearly communicate their ideas in verbal form is extremely important.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“Founders in the early stages of the company are ridiculously stressful and companies literally can break from the pressure. What holds together a company, I think too often when you analyze a company, I think people start thinking about complementary skill sets. And that's a very mechanical way of thinking about it. Whereas when I describe a startup, I basically say like, you've signed up to get punched in the face every day forever. In the early days, who's going to be the partner that you're going to cry on their shoulder and they're going to cry on your shoulder when you're both getting punched in the face every day? And that emotional component is very hard, is very important to survive. So I'd say like those are the three things. The first one kind of translates into some sort of technical ability. The second one is like, what kind of progress are you making given the amount of time you've been working? And the third is what's the relationship you have with the co-founder?”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“The number one thing that I look for above all else is that the team who's applying has the ability, ability to build and launch the first version of the product. And the second and very closely tied to item is I want evidence of forward motion. Given the amount of time the founders have been working on the company, I want to be impressive of what they've done. And I don't care if that amount of time is two weeks. I don't care if it's two years. I just want the sum of what they've accomplished during that period of time to be impressive. And I think this is a hard concept for people to understand. I think that everyone is trained on school, whether these absolutes, what was your SAT score, what was your GPA? School doesn't really measure trajectory at all. Whereas like with us, it's really the only thing we care about is trajectory, is how much forward motion and momentum are you creating, as opposed to starting position. And so I really want to see evidence that a team is intimidating me with their progress. And then the last thing that I want to see is some evidence of a strong relationship between the”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think the first motto of a YC application reader is don't be too smart. I think there's all of this false conventional wisdom around being able to see the future, being able to look at an idea and tell if it's a good idea, just as the concept of a quote-unquote good idea. And I think that we're all kind of imbued with this somehow through popular culture. You basically have to unlearn that. These founders are shooting for a point 10 years from now, and many, many things that look like a bad idea now look like a good idea 10 years from now. Almost the first thing you have to do is kind of let go of your prejudices and opinions about ideas. The other thing, which makes that even more important, is that a huge percentage of the companies change the problem that they're working on or how the product works. And so if you key in on their idea too much, you might be missing out on the pivot.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll start with some numbers. Let's take the last two batches. We have this crazy nomenclature, so we call it winter 20 and summer 20, which is January through March of 2020 and then June through August 2020. So combined a little under 30,000 applications to YC between those two batches, we interviewed about 10%. I say in person, half of those are in person and half of them during COVID. So over video conference. And we accepted about, let's say, 475-ish. So 475 accepted companies out of about 30,000 applicants. So that's kind of the high level.”
2020-09-08 · Invest Like the Best · Michael Seibel – Lessons from Thousands of Startups - [Invest Like the Best, EP.190] · IDENTIFIED FROM THE TRANSCRIPT · source