YouSaid · the spoken record

Michael Siebel

lines on the record: 78
first: 2021-06-08
most recent: 2021-06-08
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

“Different challenges, but in the startup world, I've always thought about it in kind of four chunks. One is information. For the longest time, the information about how to access this world was on the distributed vocally. You had to know someone. YC spends a ridiculous amount of time publishing information about the startup world. Everything that I've told you so far has been written and recorded in six different places online for free. And I'm doing it here again because we don't believe information should be a barrier to getting access to this world. And to further that, we created a program called Startup School, which is a free online MOOC.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“So let's be clear can you have experience of the problem you're solving? Yes. Can you have relationship with your co-founders before you start the company? Yes. Can you recruit a technical co-founder or learn how to code yourself? Yes, right? Can you make progress on your product? Yes, right? So none of these things I think are barriers. I think that what I've appreciated about this is people want to know what they have to reach for. Like they know they're trying to accomplish something that's almost impossible. Like it's just as hard to become an NBA basketball player as to become a successful startup founder. They know the challenge is hard. And what they want to be given is accurate information about how to accomplish the challenge. They don't want to be coddled. And so when I think about kind of my approach to how we increase the number of underrepresented founders in the startup world, I can't speak to the tech world. I've never really worked in a big tech company.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“So I don't like describing them as barriers because it implies that people can't accomplish them. It'd be a barrier if we only accepted people who were above six foot six tall. I don't know any way to make yourself taller.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“There you go. There you go. You know, someone described YC's model as anti-fragile. We don't try to be too right. And there's a very, very small downside if we're wrong, which allows us to give founders the benefit of the doubt. And what's funny is that so many people who are YC were alums. And I think that we would argue that YC definitely gave us the benefit of the doubt. I mean, Justin TV started as an online reality TV show where my co-finder Justin was wearing a camera on his head and broadcasting his life 24-7, right? Like,”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“Sometimes in the process of working on your startup, you learn something, you learn that your core assumptions were wrong, and that's okay. But let's be clear, if you can execute, then when you acquire that new information, you can incorporate and you could do something good with it. If you can't execute, you might not even learn that you're doing the wrong thing. And when you learn you're doing the wrong thing, it's very hard to switch. So we don't mind when people pivot. Now let's be clear, right? Most YC companies don't pivot. I think there's this perception, like, you know, 90% of companies are pivoting all the time. And I think pivot is being used in extremely aggressive ways nowadays, kind of the cool term.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“You know what's funny? We aren't great. So put another way, right? We aspire to hit all of those points that I mentioned. I wouldn't even give us an A at doing it. Maybe B, maybe B minus. And so what's cool about our model is that it accommodates that. What's also cool about our model is sometimes those pivots are good, right? I was co-founder of Justin TV. We pivot to Twitch. It worked out.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“Do you square that with how often why combinator companies pivot inside the boot camp? Because that's maybe the most common stories. You get accepted to YC. It was really hard. You got an idea. You're a weekend. Oh man, that idea collapsed. You pivot, and suddenly something else entirely exists. How do you square all that?”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“As opposed to teams where they're saying, hey, look, we're technical, we can build. Even if we have to do it nights and weekends because we're bootstrapping, we want to get the first version of the product out there. We want to drive, get the first 10 customers. We want to look at how long you're working on the startup and what you've accomplished. And we want to be impressed and a little afraid because we believe that if you can accomplish a lot with a little, then if given more resources, you can do even more. So that's what we look at. And to be honest, we default positive. Like if you're telling us this is a problem, we'll kind of assume it is. If you're telling us this is a big market, we'll kind of assume it is. Like our job isn't to kind of second guess your idea. It's really to figure out can you execute towards it?”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“Startup journey takes a long time. We're really trying to figure out are you in this kind of get rich quick category or is there something deeper tying you to this problem that you're solving that's going to keep you motivated over the long time? And I think the last thing that we think about a lot is how much have you accomplished in the period of time you've been working? I think there's a set of founders who basically believe that step one in their company is to raise money. And so you'll see some folks who, oh, we've been doing our startup for two years. We haven't built a product yet. We've just been pitching the whole time.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“Three, can the founders clearly communicate what they're working on? Now, this is one that I never understood as a founder. I was like, judge me on my graphs. If my graphs are going up, give me money. And I think what I didn't realize was that the founder's journey goes from being kind of doer to inspirer when the product works. And so one of the things you're trying to figure out is can these folks inspire the 10 employees, the 100 employees, the thousand employees who will ultimately be the doers in the company. And it's really hard to inspire people if you don't communicate clearly. The next one that we try to figure out is what is your connection to the problem? Like what is going on? Why do you care about this customer, about this problem? And if we go a step deeper, are you going to care about this problem for the next one year or the next five years or the next 10 years?”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“First, does the team have the ability to build the product? Our original DNA of YC was funding technical founders. And the reason why was because we felt like they had an advantage in building a product in a software world. That's still core. So almost all of our teams have a technical co-founder and can build a product themselves. They're not relying on contractors or consultants or anything else. Number two, does the team have a pre-existing relationship? It's extremely stressful to do a startup, and YC is stressful as a program as well. If the team has some pre-existing personal or work relationship, the founders have some confidence that that relationship will survive the stress. The founders met two weeks ago.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“Think what is so weird about YC is that because we're funding batches of companies, we have a very different decision making process than a normal investor. You know, a normal Series A investor might only write two checks a year. The other thing that's different about YC is a lot of companies change, iterate, pivot after getting into YC. So you can't get too caught up in the idea. And then the third challenge we have is that we're often amongst the first investors. So we have founders who are aiming for some moment 10 years from now. We have the saying we don't want to be too smart. We don't want to be too thesis driven, right? We don't really know how the world's going to be 10 years from now. Founders invent that world. And so the more opinioned we are about their idea or their market, the more we're being too smart. So what do we look for? So that's a bunch of stuff we don't really care about. One of the things we care about.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“The current batch range anywhere between 300 to 400 companies, and you mentioned applications increasing. It's crazy. In the last 10 years, applications have increased 20x, and YC has around a 2% admissions rate. So it's still pretty hard to get in, but as more and more talented founders have applied, our strict goal has been how do we make sure YC can scale to support as many deserving founders as companies as possible? So as more apply, we figure out how to make YC bigger and better.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“Make the early program better? How do I make the series A to B program better? How do I make the growth program better? Basically, a lot of what we're trying to do is figure out how to give our companies more and more advantages as opposed to just kind of how to line our pockets.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“So we invest. So we're investment shop, right? So for YC, the standard deal that every early stage company agrees to is we invest $125K for 7% of the company and then continuity is a growth fund. They invest at whatever market terms founders are interested in. And so we make money as a fund. What's interesting about YC though is just how much of the operation of the fund is funneling back into how do we make our program better?”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“A common application that allows anyone to apply to all YC companies at the same time. So anyone who wants to work at a startup, they can apply on one website and then all of our companies can sort through the people who are applying, reach out to them. And the really cool part about that product is for the most part, founders of the ones using it, not recruiters. So if you applied with work at a startup and you look interesting, a founder will actually reach out to you and engage with you, which I think is a completely unique experience. So we got to nail the early stage and then we have to figure out at every stage of our companies how do we help them succeed.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“And so what's been great is in the last six years or so, we've really stacked more products post-batch for our alumni. And so we have a program called Series A to B, which is a program for companies after they raise their Series A to help them figure out how do you kind of encounter the next stages, the next challenges of a company post-Series A. We actually put them in a new batch of YC companies and a smaller batch so they kind of have new peers who are at their stage. We have a growth program for companies that are way post-product market fit. They're really focusing on hiring and company scaling, building out executive team. Once again, put them in new batch. And we have the continuity fund, which is a growth fund that can actually write 25, 50, 75 million dollar checks in the companies that are further along. We also have a little product that I love that I desperately wished existed when I was going through IC, which is called Work at a Startup. So we basically built...”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“After you've raised your seed around. And we came up with this tag phrase like, you know, YC is with you from cradle to IPO. But we had to kind of ask ourselves, well, what are we doing after the bath?”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“That we didn't do in 2005. But I would say that, man, if the disrupting task was done, if all founders didn't have to encounter those five problems, I mentioned the beginning, I'd retire. I'd be like, hey, change startup community for the better. But I mean, to speak to the new challenges. What's interesting about the group of people who run YC now is that so many of us were YC alum. So I did YC in 2007, and then again in 2012. And during that period of time, YC was really just focused on the batch. And one of the things that alum always talked about was what are the other services YC could provide you after the batch?”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“I don't know that we're not in that disruptor phase. Most successful companies still don't do accelerators. And so I would argue that most founders today are still starting their process by negotiating with normal investors and confronting those same problems. I would say that there are more investors now and certainly more investors are tech friendly and founder friendly than they used to be 16 years ago. But what's interesting is that half of YC's investments now are international. And in those communities, they look like the Valley in 2005 or even worse in terms of founder friendliness. So I don't think the disrupting task isn't done yet. Now, of course, there's new things that we're doing too.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“So, it's interesting to me about that Y Combinator started to solve this problem in some ways you have helped to solve a lot of them. Those problems will continue to exist. You will continue try to solve them. But after 16 years, why combinators kind of the center of the universe for startup accelerators? Like it has gravity. It is very influential the way that it works influences how other people do things, how other accelerators are started. You're not kind of in that disruptor lane anymore.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“So, before you even ask us for money, you know the exact terms we'll invest at. Four, we put you in a cohort of other companies so that you're not only getting help from us, but you're getting a community, a people who can help you. And that's YC. That's what makes it great. And so it turns out that those problems still exist, even though YC is 16 years old. And that's why 16,000 companies apply to YC every six months.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“They don't know if the company before them or after them raised more or less or got better or worse terms. So the fourth problem is for the longest time technical people were not being funded. Only business people, only people with MBAs. And the fifth problem was that after funding the relationship was only with the investor. The founder wasn't given a community of founders to learn from, to get support from, to grow with. So YCO is essentially created to solve all five of those problems. And so if we go through one, you don't have to know us. All you have to do is go to the website and apply. Two, you don't have to do a deck. Literally, all you have to do is fill out an application that's kind of like a college application or a job application, which most people have done. Three, you don't have to negotiate with us. All of our terms are right on the website, both the general terms and the legal document.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. It's actually scrutinized, and I think almost silly. It reminds me of like a TPS report in office space and stupidity. The third problem is they're negotiating against an investor first. So the first relationship with the investor is a negotiation and one that's not transparent.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“I'm happy to. So I think we want to start with what were the problems that YC was created to solve. The first problem for any founder raising funding traditionally is that they needed warm introductions. They needed pre-existing relationships. The second problem is they have to know all the best practices around creating a deck.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“I want to talk to you about Twitch and the creator economy. I want to do that a little bit later, but let's start with why Combinator. Here's my understanding of what YC does. Y Combinator takes small investments in very small, scrappy startup teams. You put them through a boot camp, which has gained somewhat mythical and legendary status for how rigorous it is. And then you have like a pitch session called Demo Day, which also has somewhat mythical status. And that demo day helps people get larger rounds of funding. That seems very simple, but like I said, there's a lot of myth around it. And I know there's a lot of actual process inside of Y Combinator. Walk people through that entire cycle and kind of demystify a little bit.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“Okay, Michael Seibel, Managing Director of Y Combinator. Here we go. Michael Seibel, you're the managing director at Y Combinator, which is one of the most famous startup incubators in the world. You are also the co-founder of both SocialCam and Justin TV, which is the company that became Twitch. Welcome to Decoder.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT
“Now, I don't really know what to make of that statement, especially because one of the things Michael talked about the most passionately in our conversation was demystifying Lycominator by widely and openly sharing information. And the criticisms of YC here are not that new. So I thought it would be appropriate for Michael to come and explain all of this. We followed up, we asked again, we tried to make the case, and this is the reply we got. Here it is. It's one sentence. Michael isn't available for a Zoom call this week given interviews. Sure. Anyhow, look, there's a lot in this conversation worth thinking about, and I did enjoy speaking with Michael. But I talk to a lot of leaders about making decisions on the show. And I have to say, I don't understand this decision at all.”
2021-06-08 · Decoder with Nilay Patel · The next generation of startups is remote, with Y Combinator's Michael Siebel · IDENTIFIED FROM THE TRANSCRIPT