James Isilay

Sam Altman on how to identify founders who can build $10 billion companies “It’s difficult to hear an idea at the very early stage and say: ‘Yeah, this idea has what it takes to be a $10 billion company.’ However, I think you can, with practice, identify founders that have a chance at creating one of those companies.’” The first four traits Sam looks for comes from gmail creator Paul Buchhiet: obsession, focus, frugality, and love. Next, Sam looks for intelligence: “You can give a founder an idea, but the problem is they need to come up with new ideas for the company basically every week… We tried an experiment at Y Combinator where we funded 20 teams of strong founders that didn’t have ideas but otherwise were really good, and they all failed. What we learned is that good founders have ideas all the time.” #6 is communication skills: “So much of your job as a founder is about communication—every time you hire someone, go to raise money, try to sell the product, and set a direction for the company. A huge amount of a founder’s job is being an evangelist for the company. If you don’t have strong communication skills or you don’t develop them quickly, you’re at a big disadvantage.” #7 is execution speed. How quickly can you generate a hypothesis, test it, and implement it? Sam observes that most slow-moving founders who went through Y Combinator didn’t go on to be successful: “A relentless cadence of execution is incredibly correlated with success.” #8 is the rate of improvement of the founder: “If you look at a founder who comes to meet you for a seed round and compare that founder to Brian Chesky, you will be disappointed 100% of the time. That’s the wrong comparison… You should look at the at the growth rate of the founder… Humans always underestimate exponential growth.” #9 is the right motivations: “There a lot of people who start a startup because they think it’s a way to get rich quickly, and unfortunately it’s just not. So startups have become the new default career trajectory for ambitious people… This does not work given the amount of pain you have to suffer for a startup… In our portfolio at YC, every time we thought a company was going to go really well and didn’t, the founder did not have a deep sense of mission.” Video source: @ycombinator (2018)

Mark Zuckerberg on the best advice Peter Thiel ever gave him “Peter was the person who told me this really pithy quote that, ‘In a world that’s changing so quickly, the biggest risk you can take is not taking any risk.’ And I really think that that is true.” Mark continues: “Whenever you get yourself into a position where you have to make some big shift in direction or do something, there are always people who are going to point to the downside risks of that decision — and locally they may be right. For any given decision you make, there’s upside and downside. But in aggregate, if you are stagnant and you don’t make those changes, then I think you’re guaranteed to fail and not catch up. So to some degree, I think it’s really right that, over time, the biggest risk you can take is to not take any risks.” Video source: @ycombinator (2016)

LinkedIn founder Reid Hoffman: Founders have no work-life balance “I actually think founders have no balance… If I ever hear a founder talking about how ‘this is how I have a balanced life’ and so forth, they’re not committed to winning… The really great founders are like: ‘I am going to literally pour everything into doing this. Now it only may be for a couple of years… But while I’m doing this, I am unbalanced at this thing.’ It’s not to say that you don’t take breaks or you don’t go on dates or whatever else. But you’re super focused on this because it’s really hard and there’s lots of ways to die.” Elon Musk emphasizes this as well: “If other people are putting in 40-hour work weeks, and you’re putting in 80 hour work weeks, you will achieve in 6 months what takes them a year to achieve, which will greatly improve your odds of success” Why make such extreme sacrifices? Well, as Paul Graham puts it in his essay How To Make Wealth: “Economically, you can think of a startup as a way to compress your whole working life into a few years. Instead of working at a low intensity for forty years, you work as hard as you possibly can for four.” In the early years, you will have to make lots of sacrifices and shouldn’t really expect much work-life balance if you want your startup to be successful. But you can view it as an opportunity to compress your whole working life into a few years. And hopefully excitement about what you’re building and the extremely-talented team you’re building it with make those long hours way more fun and rewarding than a normal 9-to-5 job. Video source: @ycombinator (2014)

Jack Dorsey on why building something for yourself can be better than trying to solve a problem When a 29 year old Jack Dorsey joined the podcasting startup Odeo, he soon learned that no one there really cared about podcasting either: “That was one of Odeo’s biggest failures. We were not building tools for us. We were building tools for other people.” As Odeo struggled, the team began to look for new ideas, and Jack presented his idea for Twitter. Somewhat counterintuitively, the product would not solve a specific problem: “Twitter solves no one’s problem at all. It was something we wanted to use. It was something we wanted to see in the world. It was something we wanted to use on a daily basis, and that’s all that drove us. That’s what got us up every single morning, and that’s what made it meaningful.” It turns out there were more people like Jack and the Odeo team who wanted to use it to. “I think that is one of the biggest lessons I learned—Twitter did not start as a company. Twitter started as a product within another company that was failing. And to me, this really emphasized the fact that entrepreneurship is not necessarily starting a new company. It’s actually just taking significant risk to build what you want to see in the world.” Video source: @Cal_Engineer (2013)