Founders at Work - Blog

Thanks 1000Memories!

Wed, 13 Apr 2011 12:20:41 -0800

This weekend, I received this beautiful bound book from the 1000Memories founders. It was a gift from them—a collection of all the photos from the memorial page I created for my beloved grandmother, Isabella Livingston.

It’s been almost 20 years since Isabella passed away. Rather than be sad, I remember all the happy moments we shared and try keep her spirit alive. Most importantly, I want my son to understand what a special person she was. She really would have liked him.

So when Y Combinator funded 1000memories last winter, I created a memorial page for my grandmother. I had fun going through the old photos of Isabella and choosing to add ones from my childhood that elicit special memories. My plan was to write about Isabella so that my son could learn more about her through photos and stories.

Then got sidetracked—probably with YC stuff. But my aunt Ann somehow managed to discover the link and added Isabella’s biography. She shared it with a few family members and my aunt Susan added some wonderful photos.

Now I have this lovely book that I can read to my 2-year-old at bedtime and share my memories. I'll treasure it.

Grubwithus Female Founders Dinners in the Bay Area

Wed, 26 Jan 2011 11:56:29 -0800

I’d like to encourage more women to start startups, particularly those who, like me at 25, are not sure it’s even an option.

My friends at Grubwithus (YC W11) are going to help me by organizing a series of dinners in the Bay Area next month for women interested in learning more about startups. YC alumni (and I in a few cases) will be at the dinners to meet you and answer your questions. Learn more about the Grubwithus dinners here.

What Stops Female Founders?

Wed, 26 Jan 2011 11:53:18 -0800

The lack of women in tech startups seems a perennially hot topic. I’m keenly aware of this problem because I see so many founders, and so few of them are women. I’m delighted to have 6 women at YC this winter (including an all-female founding team!) but the overall percentage of female founders we fund has remained constant over the years at about 4%.

We’ve found that the number of females we’ve funded is a reflection of our applicant pool. Anyone with access to the Internet can apply to Y Combinator, but few females do. (1)

Several months ago Mike Arrington wrote an article called “Too Few Women In Tech? Stop Blaming The Men.” He suggested that the lack of women is not due to discrimination but “that not enough women want to become entrepreneurs.” Since our applicant pool seems to bear this out, it seems a likely explanation.

So why don’t women want to start startups? I wonder if it’s not that not enough women want to start startups, but that not enough women even consider it as an option. I was one of them. I wish now that I’d started a startup in my twenties instead of wasting those years in a series of boring corporate jobs. But the idea never occurred to me.

So I decided to conduct a thought experiment: now that I know more about startups, what advice would I give to myself as a 25-year-old, and how likely would I have been to start a startup even with the benefit of that advice? (2) Some of my thoughts seemed so surprising that I wanted to share them.

(Remember, this is advice I’d give to myself at age 25. My background: I had a B.A. in English, lived in NYC, had a pretty active social life, and had an unrewarding job at a financial communications agency.)

Save money

As strange as it seems, the first bit of advice that sprang to mind was: never be in a position where you’re dependent on a paycheck to survive in the short term. Don’t get into debt, and try to have a nest egg—no matter how small. Though I had a decent salary, I managed to spend more money than I made and got into debt. If my weekly paycheck had suddenly disappeared, I’d have been screwed.

Having savings makes you less dependent on your employer and gives you some flexibility to think about pursuing other things. When you first begin working on a startup, it’s hard to convince investors to give you money. So the longer you can live on your savings, the more time you’ll have to figure out your idea and get users.

Duh. Of course no one should live beyond their means. But I’d never thought about the implications of that when I was 25. I was very shortsighted. Living cheaply enough to save money would have meant giving up all sorts of creature comforts like my one-bedroom apartment on the Upper West Side or festive dinners out with friends. As embarrassed as I am to admit it, downgrading my quality of life would have been a significant barrier to starting a startup. (I have no idea if women generally care more about quality of life than men, but it was certainly true for me.)

Learn more about startups

My next piece of advice would be to understand what being a founder is really like. The media often glamorizes successful founders and makes their paths seem easier than they actually were.

At Y Combinator, we recommend reading all of Paul Graham’s essays about startups and I give each team a copy of Founders at Work at the first dinner. There is so much information about startups online these days.

Grab coffee with anyone you know who is involved with startups and ask them what it’s like. Ask them to tell you war stories. What was the hardest part about doing a startup? What was it like day-to-day? You may discover that some aspects of founding a startup are not things you want to endure: rejection, the daily emotional roller coaster, a general sense of uncertainty, etc.

Find a co-founder. Someone technical if you aren’t.

Finding a technical cofounder would have been difficult for me. I was an English major and didn’t know any computer programmers.

The best advice here is to get out and network. If someone in your IT department is actually good, befriend them. Ask friends of friends if they know talented programmers. Read Hacker News. Go to meetups or other similar events. This may feel uncomfortable but it won’t be the first uncomfortable thing you have to do if you want to start a startup.

Finding a programmer to work with if you don’t already know one will be a challenge. Merely judging if a programmer is exceptional vs. competent will be very hard if you are not one yourself. When you do find someone, work together informally for a while to test your compatibility. Cofounders will endure so much together that their relationship is often compared to a marriage.

Learn to program

I wish I had learned to program when I had the luxury of spare time. Now I’d tell myself: take a class or get a friend to teach you. Even if you aren’t very good, it will make programming seem less foreign and terrifying. It will help you to understand the world in which your cofounder works and should ultimately give you a better vision for the product. Having even a basic grasp of programming will help you fathom what’s possible or not technically, too.

Build your own brand.

LinkedIn’s Reid Hoffman talks about how people are now their own brands. It’s really true. Anyone can blog, become a respected commenter in forums, produce videos, etc. One of the most frustrating professional problems I had in my 20s was not having enough “experience.” I wanted to do x, but no one would hire me even though I was capable because I didn’t have sufficient experience in x on my resume. (This is a problem that starting a startup can solve, by the way.)

So create your own experience! If you think you want to do a startup in a particular area, become an expert on your own. Create a blog on the subject filled with useful advice, tweet insightful comments—do anything that teaches you more about this subject and lends credibility to your own personal brand.

Do a test run

I never thought I’d say this because I believe it takes complete dedication for a startup founder to succeed but, the advice I’d give to myself as a 25-year-old would be to work on a startup on weekends at first. If you aren’t sure whether you should be a founder, test things out for a little while without actually burning your boat. (3)

Founders at Work began as a side project. My job was unchallenging and filled with a lot of bureaucratic crap, so I worked on Founders at Work as an interesting project to help keep my spirits up. Once I got a book contract though, I did decide to quit my job so I could work on the book full-time.

No life

Startups are a huge amount of work. If you have a successful startup, you will most likely need to give up many of the “softer” things in life. You won’t be able to date as much. You won’t take long vacations. In fact you might find yourself working almost every day of the year. Your family and friends will complain that they never see you.

Even if you don’t mean to blow everything off, you will become so consumed with your startup that it will occupy most of your waking thoughts. Andrew Mason of Groupon spoke at YC last summer and told us that he sometimes didn’t feel like he was part of the human race for the past few years. I understood what he meant. Paul Graham always said having a successful startup is like condensing 40 years of working into 4 extremely stressful ones. This deal just isn’t for everyone.

Thick Skin

Founders face all sorts of rejection in the early days. You are suddenly in a world where you get slapped around a lot, so if you take slaps personally it is going to be distracting. People will dismiss your idea, complain about the functionality of what you’ve built, or publicly criticize you.

At Y Combinator, we advise startups to launch early. Launch as soon as you’ve built something with a quantum of utility so that you can start getting feedback from your users. Though we and the founders know there is a much larger vision for the product, launching early often leaves you vulnerable to criticism from trolls and other naysayers. Constructive feedback from users is valuable, but uninformed and nasty remarks should not take up space in your brain.

Lots of founders find the fundraising process totally demoralizing, too. When you have a hard time raising money it’s hard not to start believing yourself that your company is lame. But even successful founders often have to meet with lots of investors before finding the one that agrees to invest.

Even if some types of rejection/criticism are warranted,you’ll find people are more direct about it in the startup world. In a big company, bad news is often couched in euphemisms. In the startup world, people just give it directly. So just be sure that you don’t take rejection personally.

Make something people want

Y Combinator’s motto is “Make something people want.” We believe it is the single most important thing in building a successful startup. As I’ve said before: by nature, startups are very non-discriminatory. As a founder, your success is directly tied to the success of your product. You must please the market. And if the product is actually good, the market will reward you.

We can help.

We’ve tried to make Y Combinator a great option for anyone who wants to start a startup. Twice a year we have open applications for our 3-month funding cycles. Here’s more about what we do in the 3 months, but essentially it’s like first gear for a startup.

We tend to fund technical founders, but we like to take risks on different types of people, because part of our model is to be able to take more risks by making the cost of failure low. The only thing we require is that you come to Silicon Valley for 3 months.

I’d encourage anyone who wants to start a startup to fill out our application. In fact, we designed the application to serve as a valuable exercise in itself. Even if you never hit the submit button, it will help you formulate your thoughts and think strategically about your idea.

Boxed in

So would I have started a startup at 25 if I’d known more about it? To be honest, I’m really not sure I would have. The biggest obstacle would have been the lack of potential co-founders. I might have started a startup if I’d had the right co-founder, but I just didn’t know the right people when I was 25.

I often regret not having at least worked at a startup, but then I remind myself that it truly never seemed like an option when I was younger. I was 34 when we started Y Combinator and even then the hardest part was telling people about it, because it did not seem like a “normal” thing to do! Lots of people were skeptical, but that’s always true when you do something that hasn’t been done before. Don’t ever let others put an upper bound on your professional aspirations. This can happen without you even realizing it. So you have to make a conscious effort not to get boxed in.

Level Playing Field

It’s been true in the past and probably is still true to some extent that investors discriminate against women. Not necessarily consciously, but their models of the ideal founder are current successful founders, who are mostly men.

But while your ability to reach customers may be limited by the difficulty of getting funding, the customers themselves don’t care. So if you work on something that doesn’t require lots of money to get started, you really do have a level playing field. And fortunately startups require less and less money to start.

There are so many ideas you can do for cheap that even if investors are skeptical, that’s not going to stop you. What’s more likely to stop you is what would have stopped me: not realizing that a startup founder could have been someone like me, and not knowing any technical cofounders. But unlike the skepticism of investors these are things that are completely under your control.

Learn to program (for anyone in NYC): http://girldevelopit.com/

(1) We don’t know the exact number of female applicants because we don’t ask people their gender on the application form. But we have a general sense judging from their names.

(2) That was 15 years ago.

(3) But make a decision fairly quickly whether you want to do it full time, since it’s really hard to have a successful startup “on the side.”

Mark Zuckerberg on What Hollywood Doesn't Get About Silicon Valley

Wed, 27 Oct 2010 12:08:02 -0800

Here's an interview I did with Facebook founder Mark Zuckerberg at Startup School the other weekend. One of the most interesting things to me was his analysis of what The Social Network got wrong. People in Hollywood couldn't imagine that someone would build something because they were interested in building things, so they had to create another, perhaps more "movie-compatible," motivation for him.

This is is one of the biggest things the rest of the world doesn't understand about hackers. They simply enjoy building things. A lot of successful startups began as things done just for fun or out of curiosity.

Check out the full interview (which includes some questions about Facebook's early days) and all the other talks from Startup School here: http://www.justin.tv/startupschool/videos

A Note About Sabeer Bhatia's Interview

Mon, 23 Feb 2009 10:24:14 -0800

I received evidence yesterday that some of the things Sabeer Bhatia said in his interview in Founders at Work were false. The evidence indicates that (a) Tim Draper rather than Jack Smith had the idea of putting a Hotmail ad at the bottom of emails sent by the service, and (b) that DFJ didn't disparage Hotmail to other VCs interested in investing.

Speaking at Startup2Startup

Wed, 19 Nov 2008 15:09:57 -0800

I'm really looking forward to tomorrow's Startup2Startup dinner.
Paul is going to do Q&A with Dave McClure and I'm going to talk
briefly about some of the parallels I noticed between the stories
in Founders at Work and my experience working with founders at Y Combinator.

Startup2Startup is an unusual event because the audience is almost all startup founders. I'm hoping it will feel a lot like Startup School. I love that type of audience because they're so engaged.

Dave McClure, who hosts the events, has been around the startup
world for a long time and knows what's what. The YC alumni who've attended in the past have said great things about Startup2Startup. This is the kind of event that makes Silicon Valley Silicon Valley.

Founders at Work paperback edition is out

Wed, 17 Sep 2008 04:30:50 -0800

I'm excited to report that the paperback edition of Founders at Work is now available.

I'm enormously grateful to everyone who's recommended the book, whether through blog posts or informal conversations. It turned out to be Apress' bestseller of 2007, and this wouldn't have happened without all the positive and insightful feedback circulating on the Internet.

Apress wanted to include a new chapter in the paperback edition and suggested someone interview me about the early days of Y Combinator. I got Paul Graham to do it. It felt very strange at first to be on the "other side" of the tape recorder, but it turned out to be a lot of fun.

Here’s an excerpt:

When did you start Y Combinator?

We started Y Combinator in March 2005. Around that same time, I had gotten a book deal for Founders at Work, so I had planned to quit my job doing marketing at an investment bank and work full-time for a little while on the book. But we started Y Combinator simultaneously, so I didn't really get to spend much time on the book.

What was the process when Y Combinator got started?

That would assume that we had a process. There was no process. Remember, Y Combinator started off as an experiment. Paul had wanted to do angel investing. He wanted to help people start companies. But he didn't really want all the requirements that come with being an angel investor, so he thought he should start an organization that could handle all of this for him. I said, "That sounds interesting. I'd love to work with entrepreneurs." So we sort of hatched this idea for Y Combinator, and I was the one in charge of doing a lot of the business stuff.

We decided to do a batch of investments at once, so that we could learn how to be investors. We decided, "OK, we'll invest in a group of startups, and we'll do it over the summer since a lot of people are free over the summertime."

How did the summer turn out?

A lot better than we'd ever thought. Not that I went into things with a whole lot of expectations. The idea with Y Combinator was that we were going to invest small amounts of money in startups and help them get set up legally, just like Viaweb had been helped out by Paul's friend Julian. Get them set up, work closely with them on their products and then introduce them to investors to hopefully get more funding.

I remember when we first got started, we thought, "How do we even tell people about this?" So Paul built a website—I think he stayed up all night building it. We had a couple pages online that loosely described what we were planning to do—we didn't really fully know what we were planning to do—and we had an application, with about 20 questions on it, and then Paul launched it on paulgraham.com, which had a lot of traffic because of his essays. We started getting some applications in. I was still working at the time, and I remember Paul saying, "We have some good applications, you better quit your job."

What was the point when you quit?

If I remember correctly, it was the Monday after we conducted the interviews. We got a lot of applications, more than we thought we would. And then we chose about 20 groups to come to Cambridge to interview—over a Saturday and Sunday, all day long. On Sunday night we called everyone.

We chose 8 that we had wanted to fund, and all of them but one said yes. I give the founders a lot of credit, because this was a brand new concept and Y Combinator had no track record. The deal was: move to Cambridge for the summer and get $12,000 or $18,000, depending on whether you were two or three founders. We based the amount of money on the MIT graduate student stipend, which was a couple grand a month. We said, "Come to Cambridge and we'll work with you, and we'll get together for dinner and hear from guest speakers every week." (Unfortunately for Paul, we hijacked his personal office to use for Y Combinator.) So 7 of them said yes, and I went into work on Monday thinking "Y Combinator is real now"—even though we didn't even have Y Combinator legally set up at this point. I gave my notice that day, I think.

But that day something else very memorable happened. There had been one group, two guys from UVA, who were still seniors and were graduating that spring—Alexis Ohanian and Steve Huffman. They came to us with an idea that we just thought was wrong for two young guys with no connections in the fast food industry. Their idea was ordering fast food through your cell phone. And we didn't fund them. We told them, "Sorry, we really liked you guys, but we just think your idea would be a bit too challenging."

But that morning when I was at work, Paul called them and said, "We like you guys. Would you be willing to work on another idea?" They were on an Amtrak train heading back to Virginia. I remember Paul emailed me and the subject line was "muffins saved." I had nicknamed them "the muffins," because I just loved them. It was just sort of an affectionate name.

I remember thinking, "This is so exciting." They had gotten off the train in Hartford or something and headed back to Boston to go meet with Paul to brainstorm new ideas. I thought, "These are the kind of people I want to fund—people who would get off the train and go back and make it happen." So we wound up funding 8 companies that summer.

Do you remember anyone else in that first batch?

Looking back, it was amazing group that we had. Sam Altman of Loopt was in that batch. There's actually a funny story about him, too. He had submitted an application and at the time he'd been working with a few other people, but he was the only one who could come to Cambridge that summer. So Sam emailed us saying he was the only one who could come and Paul wrote back to him, saying, "You know, Sam, you're only a freshman. You have plenty of time to start a startup. Why don't you just apply later?"

Sam wrote back something to the effect of, "I'm a sophomore, and I'm coming to the interview."

Summer '05: (l to r) Sam Altman, Alexis Ohanian, Steve Huffman, Justin Kan, Emmett Shear, Paul Graham

Weekly dinner gathering: it's so roomy!

Trevor, Paul and me at a photoshoot (taken in front of YC) for a magazine article that never ran. Photo: Asia Kepka

Robert Morris and Sam Altman

YC's summer update

Mon, 04 Aug 2008 06:20:32 -0800

We’re less than 2 weeks away from Demo Day and I feel like this funding cycle has whizzed by faster than any other. We have 22 startups this summer, bringing the total number we’ve funded to 102. There’s a lot going on!

The founders will find the next few weeks to be the most hectic of the summer. As well as preparing for Demo Day, many are also planning to launch. Some have already: Startuply, a site (and widget) for startup job listings; Anyvite, an easy-to-use invitation service that (unlike Evite) also works well on mobiles; Posterous, which lets anyone post anything online just by emailing it; Slinkset, which lets users make their own Reddit-like link site for whatever topic they want; and Awesome Highlighter, which is like a highlighter, but for web pages.

I’d like to publicly thank the amazing speakers we’ve had come talk to everyone so far: Mark Macenka, a partner at Goodwin Procter, explained corporate law 101 in layman’s terms and warned of common legal pitfalls for early stage startups; Hutch Fishman, CFO of many successful startups, covered all the financial stuff founders need to understand; Jonathan Seelig, one of the founders of Akamai, shared insights from both the entrepreneur’s and investor’s perspective; Steve O’Leary, who’d retired a few days before as head of M&A at Jefferies Broadview, talked all about the nuances of the acquisition process; Bill Warner, founder of Avid and Wildfire, gave an extremely candid talk about his early experiences; and last week, Google’s Rich Miner, founder of Android, came to tell everyone about both the Android platform and his experiences as an entrepreneur. Special thanks to Joel Lehrer from Goodwin Procter, who came and spent the day advising the startups individually about patent and IP issues.

Coming up we have three stars in one week: Joel Spolsky, Mitch Kapor, and Greg McAdoo.

We’ve also been lucky to have a steady stream of YC alumni travel to Boston to visit us and advise the new founders. As peers they offer a uniquely valuable sort of advice.

Rehearsal Day, the “dress rehearsal” for Demo Day, is now only a few days away. So now the founders will gradually switch from working 100% of their time on their products to working on presenting as well. These presentations will be seen by literally hundreds of investors, so it’s worth putting in the effort to make them good. Fortunately the founders will get several chances to nail the delivery, because we’ve scheduled 3 Demo Days this year to accommodate investor interest. The first is in Boston, then everyone flies to the Bay Area for two more days of presentations at our Silicon Valley office. After which we all relax and have a beer.

*Thanks to Posterous' Gary Tan for the fabulous photos!

Rich Miner talks to the group.

Congratulations to Ryan, Julian and Simon!

Wed, 30 Jul 2008 13:48:44 -0800

PG, Ryan Junee and me.

It was announced today that Google has acquired Omnisio.

Y Combinator funded Omnisio last winter. Like most founders who participate in Y Combinator's 3-month funding cycles, Ryan Junee, Julian Frumar and Simon Ratner built a remarkable product in a very short amount of time. Omnisio addressed a real need: it gives everyone an easy way to annotate online videos.

We put them to the test last April when we used Omnisio to capture and display all the talks from Startup School. They did an amazing job.

I am so delighted for Ryan, Jules and Simon and wish them all the best now that they are part of YouTube's team.

Speaking at Business of Software Conference in Boston

Fri, 18 Jul 2008 13:53:37 -0800

I’m looking forward to speaking at the Business of Software Conference this September in Boston. I plan to talk about trends in early stage software startups and what I’ve learned from the 102 startups Y Combinator has funded.

I’m honored to be part of such a great line-up of speakers: Joel Spolsky, Seth Godin, Eric Sink, Steve Johnson, Richard Stallman, Dharmesh Shah, Jason Fried, Paul Kenny, Tom Jennings and Mike Milinkovich.

Hope to see you there!