seeing everything people apply to YC with.
People all kind of have the same idea.
One of these themes is simple pragmatic advice.
One of my mantras is just don't die.
Being coached and being reminded of the fundamentals and basics puts you in the right mindset.
You have this concept of tar pit ideas.
Seems like an unsolved problem.
You'll get all this positive feedback from the world and people have been starting that startup since the 90s.
Recently you put out a request for startups, 20 categories of ideas and the YC wants to fund.
We're trying to mix up some of the information diet about what kind of ideas people might be contemplating that they aren't currently.
A lot of people say you're the king of the pivot.
A good pivot is like going home.
It's closer to something that you're an expert at.
There are other patterns you find across startups that do well.
There's a lot of founders that come this close to it all being over and through sheer will kind of just keep it going.
Today my guest is Dalton Caldwell.
Dalton is managing director and group partner at Y Combinator, where he's worked for over 10 years across 21 different YC batches, including working closely in the earliest days of Instacart, Retool, Brex, Diehl, DoorDash, Webflow, Replet, Amplitude, whatnot, RazorPay, and 20 other unicorns.
Prior to White Combinator, Dalton was the co-founder and CEO of iMeme, which was acquired by Myspace, and co-founder and CEO of app.net, which was an early ads-free competitor to Twitter.
Dalton has seen and worked with more startups than nearly any human alive.
And in our conversation, we get incredibly tactical and deep on a startup journey.
Why it all comes down to simply not losing hope and not letting your startup die?
What to do when your startup is struggling and how to know when it is time to give up?
What makes a great pivot and signs it's time to pivot?
How to actually talk to customers?
Why every single startup goes through a point where they feel like all hope is lost?
Why investors say no to startups, what most often leads to startups failing, why you need to avoid overdelegating early on, plus startup ideas that you should avoid and also 20 ideas Dalton is looking to fund.
Also, so many great stories and lessons, this episode is action-packed.
With that, I bring you Dalton Caldwell after a short word from our sponsors.
And if you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube.
It's the best way to avoid missing future episodes and it helps the podcast tremendously.
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Dalton, thank you so much for being here and welcome to the podcast.
Yeah, thanks so much, Lenny.
I'm really excited to talk to you today.
So to prep for this podcast interview, I asked a bunch of founders that worked with you during YC, what advice you shared with them along the journey that was most transformative to the way they think about product, the way they think about building their startup, the way they operate?
And there's a bunch of themes that emerge, and I'm going to touch on a number of these themes.
One of these themes is just how often you get to like very simple pragmatic advice and how much of your message is just like sell shit, make money, don't run out of money.
Why do you think founders need to hear this advice, which is seemingly simple and obvious?
Have you ever seen NBA basketball or college basketball where they have the coach mic'd up and it shows what they're actually saying in the huddle?
Ever listen what they actually are saying?
They're like, okay, we need to really focus and get the ball and win this game.
Like if you actually listen to what the greatest, smartest, most successful athletes are talking about, like if you listen to what Tiger Woods is saying to his caddy, it all sounds like pretty mundane stuff.
It's not like what Tiger Woods is talking about with his caddy is some impossible to decipher jargon.
It's like, yeah, you really need to keep your head down on this one.
And I think the reason this is true is that even if you're the best in the world,
being coached and being reminded of the fundamentals and basics is what puts you in the right mindset.
And that you already know everything, right?
You're at the top of your game if you make it to the elite levels of being a startup founder, basically doing anything that's really hard psychologically.
And so, yeah, one of my mantras is just, just don't die.
Just keep your startup going.
And I say that over and over again.
And honestly, that is often what people tell me is the most impactful thing I say.
It's not that I said some ninja 5D chess move that they never would have thought of before.
It's just the constant affirmation that continuing to keep going and doing high quality reps is the game.
I know that you'd give a talk that's exactly called that, how not to die.
Just to pull in the story a little bit more, what is the general advice you share there for people that also don't want to die?
The way to summarize that is if you look at all the startup stories that we have at YC and all the companies we funded over all the years, the underlying theme is that rationally, the founders should have given up at some point.
And so again, let's talk about Airbnb, obviously something you know a lot about.
You know, when they probably should have shut down like three or four times before they got into YC.
It objectively wasn't working.
They were basically ruining their lives.
They were disappointing their parents.
And it was a purely irrational act for the founders of Airbnb to keep working on their goofy startup.
And so, and again, that's just one story.
across the portfolio of YC and non-YC companies, there has to be this irrational, you know, intention to keep going even when the world tells you it's not working and you feel completely defeated.
And you likely have to go through this many times and have these near-death experiences.
And then you get lucky and then you look like an overnight success.
And so that's that's that is the theme that is a summary and I provide lots of data and lots of stories there.
But this is one of those things that the longer I had this job, the more I really, really believe this is true.
What's your advice kind of on the flip side of that, where there's a lot of startups, especially these days that are just super struggling, have been added for a while, their mental health challenges.
They'd be very sad if they had to shut this thing down, but often it's probably the right move.
What's your advice to folks of deciding, okay, actually does make sense to give up in this case?
I think this is a nuanced question, and it's hard for me to say something on a podcast that will actually be useful to people.
But here's a couple of thoughts.
One, are you still having fun?
Do you still enjoy doing what you're doing?
Do you enjoy spending time with your co-founders?
Is this actually a fun thing you're doing?
And if the answer is yes, I would tend to lean on the keep going.
And then if it's more of, wow, this is actually profoundly affecting me in negative way in my relationships with people in my life and my team, you know, I don't really want to work with my co-founder anymore and things like that, then I would lean on the probably don't do it anymore.
Something that a lot of the folks that turn it around have in common is they actually do love their customers and they love their product.
And again, in the Airbnb story, and you know it really well, but they really liked Airbnb.
And they liked working with each other.
And they liked the first host that they met.
And they knew all their names.
You know what I'm saying?
They loved their startup, even though it was going bad.
And so that's kind of, to me, a signal to keep going is that you really, really love what you're doing and the people you're doing it with.
And you love your customers.
And you love the problem.
versus when you're just like, yeah, I could care less about any of those things.
I'm just having a bad time.
Harder to be encouraging in that situation.
And this is a fixable situation.
You can make it more like the thing you love, can't you?
Yeah, this is actually very practical and great advice.
Like this is something people can sense.
Okay, am I actually enjoying this?
Do I want to keep doing this versus like, man, such a drag that I have to keep running the startup.
Is there anything you could say to folks that are just like, I can't stop because it'll feel like I failed?
If it's really going poorly here, if you're having a really bad time, it's no big deal.
No one will remember that you shipped down your company probably in 10 years or 20 years like time.
As long as you have integrity, as long as you're an honest person, as long as you handle yourself well through good times and bad, people will remember you fondly.
We have such a short life.
There's only so many years we get to have our careers.
Doing something that makes you miserable, and the only reason you're doing it is to avoid losing face.
And you know when your heart is not going to work, I don't know.
That seems like a pretty big opportunity cost on literally your life.
That's exactly what I tell founders all the time.
There's no need to force yourself to work on this.
And I really like your point of just like, is it still enjoyable?
Do you like working with your founders?
Kind of following the thread of the struggle train a little bit more.
One of the founders that worked with you during YC, his name is Danny Alberson, shared a story how during one of the batches of YC, one of the founders raised his hand and asked you, what is wrong with our batch?
And you shared a story about Brex that made everyone feel a little better.
And if so, can you share that?
That definitely happened.
And I think the story is the story of the winner 17 batch.
And in the winter 17 batch, I funded something like, I don't know, 35, 40 companies in my group.
So we subset the mini groups.
So it wasn't like a lot of companies and I knew, I knew all of them really well.
And founders can't help but compare themselves with other founders all the time about who's doing well and who's not doing well.
And there was this one company in my group, this batch, it was called Vyond.
That was their name at the time.
And it was like a VR headset thing from these Stanford dropouts.
And they basically showed up to group office hours and were just ashamed.
And they're like, our idea is horrible.
We might want to shut our company down.
This is really embarrassing.
I had to beg them to not give up, basically.
And if you would have asked people in the batch,
what the worst company was.
I think they would have said this one.
Again, not because like they were like bad people, but it was just like the founders themselves seem to like despondent about how it was going.
And then finally enough, this is in the story too.
There was another startup also in my group called Cashew, which was this P2P for the UK P2P Venmo, excuse me.
in the UK, and it was going really poorly also and not growing.
And so if you just took this snapshot in time in the middle of the batch of like, who is definitely not doing well, it would clearly have been this Vyond company and this Cashew company.
And so to catch the chase, Vyond changed their idea and got really excited about it and renamed to Brex.
And this was Brex, which is like a deca corn.
And Cashew changed their idea and renamed to something called Retool.
And so out of my 35 companies, the ones that objectively seemed the worst in terms of like, everything is going bad or by far in retrospect, the most successful companies in that group.
Wait, so you're saying Brex was a VR company?
They thought was really high tech.
They want to do a really high tech startup.
And so they're like, we're going to build a new VR headset.
And, you know, they were good programmers, but they just didn't know anything about optics or the things you might want to be an expert in to build a headset.
It's a great segue to another theme that emerged from talking to founders about advice that you've shared.
A lot of people say, tell me, you were kind of the king of the pivot of helping people figure out how to pivot.
I'm curious just what you've seen makes a good pivot.
Usually, a successful pivot gets warmer instead of colder from what you're an expert at and somehow builds on what you learned on the prior idea.
And so in the case of Brex, it was, let's, they had worked on a fintech company in Brazil when they were younger.
And so I'm like, you need to work more on the thing you know all about and not the thing you know nothing about.
And that was what worked for them.
In the case of Retool, it was the same thing.
They built similar internal tools, both at their internships, as well as for Cashew, they had all these dashboards they built to operate their Venmo competitor.
And so they knew a lot about what to build.
In the case of Posthog Pivotian, they knew a lot about analytics and had strong opinions about it.
And so it was much closer than what the original idea is.
Rachel knows a lot about a lot of things and
She knew a lot about like the crazy picture process at Airbnb because he worked there.
And so it was kind of like, a good pivot is like going home, you know?
It's warmer, it's closer to something that you, and it never occurred to you that this thing you know all about would be a good idea.
Or maybe you consciously are like, I don't want to work on this because I'm burnt out on it.
Like sometimes you have to, someone, someone has to get over this barrier they have on why they don't want to work on a certain idea.
I like how modest you are.
I'm like, oh, here's a big idea.
And then you just give very tactical items to look for.
So essentially, a good pivot in your experience is you're getting closer, warmer towards something you have an actual experience in, and to builds on something you've done.
Essentially, the core idea of a pivot, right, where you're like.
In the example of Segment, which is obviously a really big successful company,
They started with something to tell your professor you were confused in class.
It was like software that they sold to universities.
And then they ended up pivoting to something kind of like a mixed panel competitor after like two years.
And it's because they didn't, they learned about how analytics works, running their first idea.
And then no one wanted to adopt their mixed panel competitor.
And so they were like, we should make this JavaScript thing that you embed on your website that can send events to multiple endpoints at the same time.
So that way people would be willing to try our mixed panel competitor side by side with mixed panel to show that it's better.
And then they were like, oh yeah, no one actually wants that.
They just want this JavaScript to send events to different locations.
And so there's no way those founders could have started with the final idea.
There was no universe where they would have made up the idea for segment, because they didn't know anything about how analytics worked.
But because they were grinding for multiple years and became experts on these things as a side effect of their earlier ideas, they ended up with really good unique insights.
I think that's a really important point there is you don't need to necessarily have that experience before you start the company could come from trying to build a company.
A big question people are always wondering is like, should I pivot?
Like, is this the time to pivot?
Is this should I keep trying this idea?
What's your advice there?
Just like, okay, now you should really be thinking about something else.
Again, this is one of those where I like to give very bespoke, nuanced advice on a case by case basis to the folks in YCE.
But again, just to give you a preview of how I would think about it, I would look at
how many more ideas the founder has on how to make it grow.
Like if it's not going well, and you're out of ideas, that is usually a good time to pivot.
But when there's a, you know, you have like half a dozen or a dozen really good growth ideas that you haven't tried yet.
Like, hey, give it a shot.
Again, in the here me and me story, right, they, they tried all sorts of stuff, including cereal and
Conventions like they had a bunch of zany ideas on growth and they didn't run out of them And so I think when you I think when they're still gas in the tank On an idea that might be reason to stay at the course and when when we're literally the founders like yeah, I don't know I guess
Maybe we should pay influencers or something.
When that's the kind of ideas they're coming up with, that might be a better sign to pivot.
That is incredibly helpful.
Coming back to Zip real quick, they went through, I think, six different pivots before they landed on this idea that is now a billion-dollar business.
Is there anything from that specific journey that you found really interesting?
Because they went in so many different directions, like accounting, marketplaces, and... Yeah.
I think in the example of the Zip founders, they were both such great experts.
And, you know, I knew Rijul really well.
He actually worked with me at YC as a visiting partner.
And so I was really close to Rijul.
And he had done this marketplace called Flightcar when he was younger, which was, you know, raise a series B. It didn't work out, but it was a really cool company.
And I had a lot of confidence in
his competence on running a business and executing fast and just having great instincts.
He really knows the fundamentals.
And the problem was they weren't as clear on what market to go into is still with me.
And so I actually suggested to do something in their case.
Again, this is very bespoke.
But my suggestion was to start by looking at what companies are publicly traded
and or owned by private equity that are large and that also are hated by their customers.
And to try to intentionally find where there's a knowable big market with an incumbent combined with the software is horrible.
And they kind of did that.
Like they basically found out about all this procurement software and what the state of the art was.
Again, maybe he told you this.
That was basically the process.
He did tell me that I love that example and piece of advice so much.
I don't know why more people don't do this, basically find a large incumbent with very low NPS and try to disrupt them.
I mean, I can't promise that works for everyone, but again, in the very bespoke situation with Rijul, it worked really well because he actually knew exactly, once he locked in on that prompt, oh man, he ran a master class.
You know, like they did, they did, they did an A plus job.
Also Lou, his co-founder, credit to him too.
Yeah, we got to give Lou the shout out.
I just didn't know Lou as well before he did YC, but you're right.
We got to give Lou the credit.
I was watching your chat with Michael Seibel talking about Pivots, and either you or he used this phrase of you want to move towards the mountains and the desert to find the gold of a new startup idea versus the middle of the city.
You're unlikely to find gold in the middle of San Francisco.
Is there anything along those lines that you can share?
Yeah, I think maybe this pertains into what we see from applications and interviews, which is from where I sit, seeing everything people apply to YC with and what they interview with and whatnot.
People don't, people all kind of have the same idea.
Like basically, imagine this, imagine your information consumption where you're listening to the same podcast, wink, wink.
You're reading the same people on Twitter.
You're reading the same blog post.
Basically, you have the same information diet of all these other founders and your friends with all the same people.
Does it seem surprising then that you would all end up with similar startup ideas or similar philosophies on what makes a good startup idea?
So this is the metaphor on cities is that if you just are following the same principles and have the same information flow into your brain, you're going to come up with the same idea as everybody else.
And so the prompt here is to try to go more off the beaten path, either from your personal experience, like in the case of Brax and Retool or whatnot, you know, there was no one else trying to build marketplaces for Funko Pops, you know, go deeper in your own personal interest or experience to find something that just
your exact peer wouldn't come up with in exactly the same way.
And again, the zip example, I don't think other people were trying to build wonky procurement software.
That was not an idea that we saw much of.
And so again, the prompt to people is try to mix up what your information diet is or what areas of expertise you have and mine that well versus just having all the same thoughts as everybody else.
And so again, let me give you one more example.
startups around trucking were super new and fresh because no one was doing them and they worked really well.
And then it became completely conventional wisdom to do like trucking related startups.
Yeah, I'm not trying to diss anyone, but you'll see things that become fashionable really quickly because someone found success in this unfashionable space and then it becomes fashionable.
This is a good segue to something I definitely want to spend time on, which is you have this concept of tarpid ideas, which are essentially ideas people all gravitate towards and get stuck in and either pivot into and then can pivot out of or try to pivot out of.
And essentially, it's just consistently bad startup ideas that people continue to try to start.
Can you just talk about this?
And then what are some examples of just bad startup ideas that people should stop trying to start?
For people that are familiar with this terminology from us, sometimes they
get defensive and don't get what we were saying.
So let me by definition, it is only a tar pit.
If it seems like it's not.
Like, like if it's just a regular idea that is hard, that is not a tar pit.
The the weird aspect of what we call a tar pit idea is an idea that a lot of people come up with.
And then it seems like an unsolved problem.
And you get lots of positive feedback for, right?
you have a really good set of arguments that it's a really good startup idea.
And that's different than a bad startup idea.
You get what I'm trying to say?
A bad startup idea is like, I don't know, something that is obviously bad or something where you just can't get any positive feedback on.
But some of the most common tarpon would be something like building like an app to coordinate with your friends to decide where to go out at night or where to meet up with people, which is a really, it's coming from a good place.
If you ask your friends, hey, would you like an app for us to coordinate to hang out more so we can be friends?
And they're like, yeah, I would love that.
Like you'll get all this positive feedback from the world.
And man, people have been starting that startup since like the 90s.
And so you can validate it, like part of being a true tarpid is that you can get good initial validation.
And so anyway, and, and honestly, I worked on Tarquin ideas myself as a founder, which is a music discovery.
This is something I did in my first startup.
Music startups are hard and trying to be like, oh, we're going to fix music discovery.
This was classic things where you can get lots of positive feedback and even get users to work on those things.
But there are aspects of it that make it a very hard idea.
I had the startup called LocalMind that allowed you to talk to people checked in in various locations around the city on Foursquare and go all the back in the day and ask them, how's it going?
And everyone, when they used it, they're like, holy shit, this is the most incredible thing I've ever seen.
I could see what's happening at this bar that I'm about to go to.
And then they never use it again.
Do you remember when Foursquare Clones was all anyone worked on for two years?
Yeah, they told us Foursquare is going to own this.
There's no way this idea you're building is going to be its own thing.
And now, yeah, Foursquare is a B2B business.
And all the Foursquare Clones, if they didn't pivot out of doing what they're doing, wouldn't have worked.
So anyway, that's like Tarpet is just something that's super appealing and a lot of people do it.
And you can kind of get validation.
And that's why is it Tarpet?
Is it draws you in and you get stuck?
Because it seems like it's like a good idea and you get all this positive feedback.
Kind of along these lines, I was talking to a founder recently, and she's asking me, what causes an investor to say no to you when you're trying to raise money from them?
And I know every investor has a very different perspective on what turns them off to a startup.
But is there anything that you find is just like here?
If you do these things, investors will say no.
Maybe my best advice here is for founders to put themselves in the shoes of investors and just imagine what their life is like and how if you were in their shoes, you would make decisions.
And so given this framework, a lot of investors just don't make that many investments.
And as for what we talked about earlier, life is short.
And so there's lots of things that an investor that in their hearts thinks is like, pretty good.
And they're like, I like this person and I like their pitch.
But I only am going to do a few investments.
And so even though I really like a lot about this, I'm going to say no.
And I often think that founders think that there's some secret truth that's being held from them on why someone says no.
Or like they want more feedback.
And it's like, wow, the feedback is we didn't want to invest.
And it really is just that.
And so I think if you put yourself in the shoes of an investor of like, hey, I only could do a few of these a year.
They're really just trying to pick the things that they're either personally most excited about or things that they think can be truly phenomenally big in some way or, you know, again, I know you do investments too.
It's that you only get so many shots as an investor.
And so anything that doesn't seem like this is the one, this is the one I want to do is a no.
And that that's actually why they're saying no versus this, you did, you know, oh, you, you had a bad zoom setup or something.
Oh, we didn't, we, we didn't like what color your shirt was.
We said, no, I don't think that's, I don't think that's how this actually works, you know?
I think that's such a good piece of advice that it's not necessarily they don't believe in what you're doing.
It's they have better options and they're waiting for something that hits the higher bar just because they have a lot of options.
Cause again, and if you, if you ask someone, we'll put yourself in investor shoes, wouldn't you be making decisions the same way?
Usually founders are like, yeah.
But like they come, if you, if you do that exercise, a lot of this starts to make way more sense.
specifically when you're evaluating startups.
I wasn't going to go into this, but I think it might be interesting is market size.
How do you think about the importance of large town as an investor YC?
I think it really depends on what stage you're investing at.
And it's absolutely critical the later stage you get.
If you're going to invest in a very high valuation, it is really important.
The earlier you go, the less it matters.
And some of the most phenomenally good startups, if you were really a pedantic about it, the TAM would be tiny.
The TAM of Uber would be nothing.
The TAM of Airbnb would have been nothing.
I was a, I funded razor pay, which is, I think the largest payment processor in India.
And the TAM of that was tiny because no one was using credit cards in 2015 in India.
So you had to believe that the size of the credit card industry in India would like 100X.
Well, guess what happened?
You know what I'm saying?
And so, so I'm not saying that the,
Having a large market someday doesn't matter.
Of course it does eventually, but trying to be super pedantic about market size when it's like a pre-seed company or someone applying to YC is not, you know, it's just not something I put a lot of thought in.
Ooh, what's the tam of the collectible FunkoPop industry?
I don't think it's that big, man.
I don't know if you did that when you invested, but I, you know, things pretty small, but I wasn't worried about it.
That was like the last thing I was worried about.
It makes so much sense that at YC, you don't think about it that much because of, as you said, many startups pivot anyway.
But, and I'm not saying it's not important.
I just, it's not, and the things I'm worried about is like, hey, how do you get users?
Like, are you making something people want?
Those are the things I'm really worried about as opposed to, ooh, I ran an Excel model and I'm worried this might not be a big enough time.
That's, that's out of the top of my list.
I think it's important to acknowledge that a lot of investors are very, like YC I think is unique in a lot of ways where you invest very early and you help people through this journey.
A lot of investors are very focused on TAM.
So you may find you're getting turned down because they don't think there's a big enough market for you to build a big business, right?
Or that you're asking them to believe a crazy leap of faith that, again, they could say, well, it's theoretically possible you'll be able to sell more than Funko Pops.
And I understand that that is your pitch.
But I have other opportunities that are less risky.
You know what I'm saying?
A lot of founders make the argument that the TAM is big.
And you can say, wow, that's a really interesting argument.
And I have no, I'm not going to argue with you about it, but no, I'm not going to.
And so again, it's hard to get someone to engage in a debate about TAM, even if you have some proof points.
Ultimately, a lot of investors just don't like that risk.
Going in a slightly different direction.
So someone else that worked with you, another Lenny, Lenny Bogdanov, who started a company called Milk and then he was head of growth at OpenAI for a bit.
He asked me to ask you about things product leaders and startups should watch out for.
I don't remember the specific office hours, but I understand the question, and I of course remember Lenny.
I think that the advice that he's referencing here is just how important it is to not over delegate and for the founders to stay close to things as well as watch out for the trap of hiring.
Super senior people with fancy resumes really early to start up.
I think that's what he's referencing there.
And again, this is definitely one of those very basic things that we find ourselves repeating a lot where they're like, yeah, yeah, I get it.
Like, don't overdelegate.
We get adults and then like two years later, they're like, wow, we overdelegated.
Uh, we need to, we need to go clean that up.
So that is probably the best product advice.
And the folks that are really great at product, the founders that are, are always deeply in the weeds on product and still care a lot and are still talking to customers no matter how late stage it gets.
Again, I'm sure you experienced this in Airbnb culture, but you know, you can't delegate caring about your users and you can't delegate caring that the product is great.
To make this even more real, what is it that you see them do?
It's they hire a PM too early, they hire senior sales person too early, what are the... Yeah, I think that you get pushed often by investors to hire executives or scale the team or we need, you know...
We need we raise all this money.
You got to show your serious about growth and building a world-class organization, whatever stuff like that.
And so you end up with super nice people with super shiny resumes from from big tech companies.
They they did this amazing thing at Google.
And then you hire them and then you wake up one day and you're like, oh, wow, everything went wrong.
Is that really anyone's fault?
It's just that you took your eye off the ball and this is what happens to first-time founders.
How do you as a founder then have time to do all these things?
Is there any guidance you give just like don't over delegate, don't over hire?
But also you have 24 hours in a day.
Is it just find the time prioritize well or is there more to it?
I think if you just care a lot about your customers and you care a lot about the product, your instincts are pretty good on what to spend time on.
And so for example, spending tons and tons of time like hanging out with investors and networking, probably not.
It's probably the thing that I would be cutting.
You know what I'm saying?
Like it's what we talked about earlier.
If you really love what you're doing, no one needs to tell you how to reprioritize your time.
Your intuition will be correct on what you should be spending all your time on, which is
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Okay, so when your former, when your colleagues, current colleagues, not former colleagues, Gustav was on the podcast previously.
His episode is, I think, the fourth most popular episode of all time currently, so no pressure.
I don't know if I can feed that.
So I asked him what is often the most common reason a startup fails?
And his answer was they don't talk to customers.
They don't find product market fit.
Nothing else matters if they can't do that.
And so his advice is talk to customers more often.
First of all, just is there anything else you would add to why do startups fail?
I know we talked about some of these already, but just what comes to mind there?
I completely agree with what Gustav said, but to look at this from a different frame, I think is that the founders lose hope.
And when you and your heart is like, yeah, we're failing.
Like once, I can see it when I'm meeting with the founder, when they've resigned themselves that they're failing.
Versus when like, we got one more move in us, we got one more try.
Like you can see in their eyes when they feel like there's more ideas or there's some last-ditch Hail Mary thing.
It doesn't always work, but it's almost like you have to not accept that you're going to fail.
And as long as you don't accept that that's going to happen, there's usually a lot more moves you can try to save the company.
What maybe it's to get profitable.
Maybe it's to like do some other zany thing.
Maybe it's, you know, to launch a new product.
I would argue that the cause of death is that they had lots of firepower and they were feeling really positive and they just ran out of money.
That's actually like more rare than founders think.
It's much more common that they still have some money left.
I'm not saying a lot but some money and they're just like yeah, I'm done I'm out of ideas.
I don't want to do this anymore and again fair enough, you know
But you know what I'm saying?
Like I think founders are afraid that they're going to run out of money and that's why they're going to shut down.
And it's way more common that they like their idea doesn't work and they have a big fight with their co-founder and then they can't agree on what to work on.
And then they just like, or like, I don't want to do this anymore.
That is the most common cause of death is something that sounds like that story.
And again, this comes back to your core advice.
We talked about this already of just like, sometimes it's actually okay to die.
And I guess just to refresh that lesson is if you're not having fun anymore, maybe.
Yeah, you're out of ideas.
Like if you know in your heart that you're done, you don't have to keep going through the motions.
And you've also seen enough cases now, you've shared a few of these where all hope was potentially lost, but they kept going, and then they turned into a huge success story.
And I think most people don't see those examples.
I guess is there anything you can share just like how often that happens, how often you see that turn around?
If we define it as the company had a near-death experience where it was going poorly and the founders seriously wondered if it was all going to be over a hundred percent of the time, people go through that.
You know, where the founders like, yeah, I guess we're done.
Guess we should pack it in.
And at least you feel that we had some point in your startup journey.
I mean, everyone goes through that.
And again, there's gradations, people that actually truly got down to very, very hard situations.
It's still a high percentage, like maybe 50%.
I mean, you can ask founders, there's a lot of founders that come this close to it, albeit over and through sheer will kind of just keep it going, you know.
That is really empowering, I imagine, for many founders hearing this of just knowing every single founder goes through, okay, I think it's actually over.
Following on this real quick, the advice that Gustav shared, which is about talking to customers.
I'm just going to keep trying to pull wisdom out of your head.
Do you have any advice for just how to effectively talk to customers?
We're always hearing talk to customers, build things they want, easier said than done.
You get one customer asking for a lot of stuff.
There's a big company that's like, build this thing.
We'll buy you, pay a million dollars.
Just give general guidance of just like what to pay attention to and what to build versus avoid.
Yeah, I think what I talked to aspiring founders about this lot, they're like, yeah, I talked to customers, we get a cool, and they're like, cool, whoa, how many customers do you talk to?
And they get really quiet.
And so I think this is one of those things like, hey, you should have a healthy diet and exercise every day or whatever, where people know it and that doesn't mean they do it.
And so I think to start with, you have to get out in the world and talk to people in person.
and you can't just hide behind your keyboard and call that talking to customers, right?
And I think a lot of folks, the inclinations are to like, you know, build a landing page and buy some Instagram ads and try to get people to sign up for something.
And again, maybe, maybe that's something, but I think a lot of the reason people do that is they, they're just shy and they don't want to put themselves out there because it's a little awkward to go talk to people.
And you kind of have to sack yourself up to go out in the physical world, get people to meet with you, get them to take you seriously, show them a product you're building.
And so again, to be very tactical here, you can do a self-assessment.
In the past month, how many in-person physical medians have I had with potential customers?
Listener, maybe you have, but you know, it's shocking how many companies I talked to.
We're focused on raising our precede round before we talk to customers, things like that.
And again, I think the core thing going on is just social anxiety and looking stupid.
And I think you just got to get past that, you know, you just got to start doing it until it doesn't feel bad anymore.
But you know, think about how stupid the Airbnb fatters must have felt they were like, Hey, you should rent out your house and I'm going to come and sleep in your house and here's an air bed.
Like, I guess the whole thing is a little awkward, right?
So you got to power through the awkwardness of talking to people.
And once you start doing it, it's actually kind of fun.
And so once you get used to overcoming this awkwardness, I think people do much better at talking to customers.
When someone does this self-evaluation, is there a heuristic that tells you this is enough?
Yeah, I don't know if I know a good number.
I think it's look at your calendar and there should be, you know, 20 or 30% of your time that the calendar says something like customer meeting, customer call, like meeting with food, meeting with this person.
And when the calendar is not that or it's all, you know, again, what you're actually doing is just buying ads to try to validate your idea that I don't, I don't think that's talking to customers, you know, I think that's something else.
That's an awesome heuristic.
So roughly a fifth of your time at least should be talking to customers.
And again, it depends on the idea space you're working on.
Some are more, some are less.
So yeah, it should be a fair amount of time and nothing substitutes for an actual conversation versus just staring at analytics.
Airbnb is a classic example of they went to New York and talked to their host and things like that.
Is there another startup that comes to mind that did this really well?
I've found just a really cool way and hustle to talk to customers.
Well, again, some of the companies we talked about, I mean,
For Brex, they were just talking to other people in their batch and that worked extremely well.
Same with Ritual as they just sold it inside of the YC network.
I think with Zip, they were just beasts at getting companies on calls with them to ask them about procurement.
And I think they had way more than 20% of their time.
Like when you looked at their calendars, oh man,
they were talking to customers a lot to build their first product and kind of pre-selling it before they built it.
Same with post-doc, I guess that's a different go-to-market.
They launched this open source thing to start with and it was
their calendars are filled with people that were trying to implement the first open source version of post-hog are so excited about it.
And people on Hacker News are excited about it.
And like, they had this like huge influx of people that were excited that post-hog existed and had lots of feedback and by reports.
Like it wasn't always positive, but they never lacked for people that wanted to talk to them once they launched that, which was very helpful.
On Zip, I actually have a lot of their story in one of my series on how to build a B2B startup.
And what they did actually, as you know, is they just cold DM'd people on LinkedIn and asked them for advice on, hey, we're trying to understand how you enjoy your current procurement products.
And then they ended up being early beta testers.
And I think they did a hundred, like hundreds of these.
No, there was a numbers game.
They were just grinding at this.
And so yeah, that was very good.
The other classic YC story is the Carlson collision.
I think it's called or the Carlson install.
Can you tell that story briefly?
The Carlson install is what often happens with customers is that they say, yes, I want to buy your product.
And then they do not implement it.
there's no implementation.
And this is very bad if you're selling software to someone, if they never implement it, they're going to churn and you're not, you know, you basically failed on the on the one yard line.
And so they kind of developed this tactic to be like, Oh, well, you know, I'm in the neighborhood, you know, I'll drop by your office to help you implement strike and kind of just like create again, it was a little awkward, like we talked about earlier, but you would be like, yeah, you know,
I'm in I'm in the neighborhood like how about I drive by and then they would show up and they'd be like cool cool.
Can you like pull up your text editor?
Hey can you can I can I drive can I have the keyboard and they would just sort of like install stripe into the customers website.
You know, smiling, being like charming, charming guys, and then be like, oh, that's cool.
Well, like, can we like roll out the website now?
And they basically would kind of not go away until you finish the implementation of Stripe.
And like, again, it was actually helpful because they were doing all this white glove service to get it implemented.
And I think the takeaway from that story is even when you get a yes, you're not actually done with sales.
You have to finish the last mile to get the thing implemented.
And they were very good at that.
That was an incredible story.
And now they're like, I don't know, $100 billion in business.
And that's how it all begins.
Yeah, I was an early strike customer at my startup.
And yeah, Patrick would like, we used Google talk at the time, Patrick would be sending me messages like on a weekly basis, just like checking in.
And so again, it's funny how successful these folks get.
But yeah, Patrick was very hands on with all of his customers.
It was extremely available.
Like I can say that because I was one of them.
And I'm sure he had social anxiety going through all that.
That wasn't a comfortable thing to do, just like keep pushing people to install your software and deploy.
It's just, you've got to do, like if you want your startup to work, this is just what you got to do, you know?
This is going to be just a way broad question.
And I don't know if you'll have an answer, but just, are there other just patterns you find across startups that do well?
This is like maybe the 64th million dollar question of just founders and what they do that ends up leading to success.
I don't think personality types matter as much.
I've seen very quiet people, very extroverted people, very, you know, you name it, I've seen all sorts of personality types.
So for me personally, I don't think that there's a right, or I don't think there's a personality type that people should copy and be like, I need to be like this person, you know, I need to be like Steve Jobs, I need to be like Elon, you know, I don't really believe in that because there's just so much variation.
Like Tony from DoorDash is so different.
Then a lot of folks and Rajole is so different and Grant from whatnot.
These are all very, very different people.
Patrick is a different kind of person.
Ryan from Flexport, like these are just very different personality types.
But the thing that I would argue folks that build really big companies have in common is they just really want it.
and they really believe in themselves, and they really believe they can make it work.
And that there's somehow deep in their internal psyche, there's something that's like, I'm the one, and I won't take, I won't accept this not working.
And even though objectively there's all this data coming in, this isn't working, this is bad, my employees want to quit, my executives want to quit, whatever it is,
Somewhere deep down in there, they're like, oh yeah, I'm gonna make this work.
This company is gonna be big.
And it's almost like that internal gravitational force inside of them is so large, it kind of warps the world to bend to that will.
And people start to believe it because they believe it so much.
And they convince their employees to believe it.
And they convince everyone around them that this is going to happen for them.
And so again, this is not a personality trait.
I'm arguing this is like a core belief.
And it connects so much to what we've been talking about.
Don't lose hope in what you're working on.
A founder hearing this might feel like, man, I don't know if I'm so convinced this is gonna work.
In your experience, how much of this is internally they're so certain and convinced versus externally they need to show this confidence?
Well, I think it's internally they're convinced.
I'm not sure it's external, but, and this is the big but, no one has this at the earliest stages when they don't have a good idea and they don't have customers and it's objectively not working.
And so, again, I know a lot of founders are like, well, I don't feel that way.
Oh, no, maybe I'm an imposter and I shouldn't do a startup.
Well, of course you don't feel that way if you haven't talked to any customers and haven't built a product.
But what usually happens is you pivot to a good idea where you start with a good idea that you care about, and customers you care about, and you launch it, and the better the product does, the more obsessed you get with your own company.
Like I think in the case of Stripe, I don't want to tell Patrick's story for him, but I recall him saying at some point, he wasn't as sure that Stripe was going to work until they were like a year or two in.
And then once it started working and then he, you know, they really believed in it, but if it wasn't like he woke up one day and like, strike is the thing, it's going to be, it's going to work.
Um, I think, I think you build conviction and you have this like, um, network effect, virtual cycle where you get more conviction.
The more customers reflect back to you and data reflects back to you that you're on the right track.
This is exactly what Scott Belsky shared in our episode when I asked him when to pivot is, do you have more conviction this is going to work or less conviction over time?
And so I like that connection we just made there.
Okay, so we've talked about all these way startups fail, bad ideas, tarpid ideas.
I want to go to the flip side and talk about good startup ideas.
So recently you put out a request for startups, which is essentially 20 categories of ideas that you want to fund, that YC wants to fund.
Can you share some of these ideas that you're excited about?
And basically you're looking to fund and looking for founders to work on.
And so we put out the request for startups just to inspire people to maybe apply with ideas that aren't the ones that we always see.
It's not like prescriptive.
Like we will only fund ideas on those.
It's just sort of, remember what I talked about earlier with information diet?
We're trying to mix up some of the information diet about what kind of ideas people might be contemplating that they aren't currently.
And so a couple of the ones that we put out there, one of them I made one about ERPs, which is enterprise resource planning software.
And I did that because I get so few applications on that and they're usually pretty good.
And I just would love to see more people look at that and learn about what ERPs are just because it's so rare that people apply with that.
And now I have a feeling we're going to see a lot more applications working on that.
And so it kind of worked as intended, which is to introduce this idea space to founders that didn't even know what an ERP was.
Now they'll go learn about it.
Another one is, you know, we like to fund open source companies.
And so that's one of the RFSs where, you know,
If more people apply to YC with open source ideas, I think we'd be pretty excited about that.
And that might, maybe founders didn't realize that would be something we want to fund.
Same with space companies.
Yeah, we've had a lot of success with space companies.
You know, several of the folks that are actually going to space right now that are SpaceX or YC companies.
And so I think sometimes founders feel like those ideas are too bold and ambitious.
But no, I love more people who apply with space companies.
And so think about it that way where we're just trying to plant seeds of idea spaces that perhaps someone subconsciously filtered out is what might be a good startup idea.
And hopefully that creates a new set of startup ideation for the person.
And we're going to link to this page in the show notes for folks that want to explore.
I'll give a couple more real quick.
Spatial computing, new defense technology, bringing manufacturing back to America.
So a lot of hard science, deep tech stuff, which is maybe a new, I don't know.
I imagine you guys have invested in this in the past, but it feels like a trend.
So these aren't like, oh, we've never invested in these before.
It's more of like, hey, it'd be cool if we saw more applications along these lines.
It would be nice because it currently feels a little bit under,
You know, yeah, there could be more startups working on this stuff.
Instead of the carpet ideas, uh, a couple more real quick, better enterprise glue.
What does that look like?
The software to connect all these business systems is usually pretty brittle and janky.
And there's been lots of good startups founded to solve this problem.
I think there's still a lot more room for improvement and likely LLMs will improve, like we'll probably be able to create better and better blue.
So all sorts of software systems can talk to each other.
So again, very broad idea.
But yeah, I think we'll see a lot of very successful companies where that's the kernel of the idea they start with.
One last one, small fine tune models as an alternative to gigantic generic ones.
And so we'll include this link in the show notes and folks can click on each of these and you basically, there's a lot more explanation of what it is you're thinking about there.
Just a couple more questions.
One is just your background.
In the early 2000s, you were basically hanging out with some of the biggest success stories of today.
Folks like Zuck and Reid Hoffman, Sam Altman, Elon, Sean Parker, this is before they really became anyone.
And they all became very successful.
I'm curious just what, looking back at that, what you've noticed is consistent across these folks that ended up being really successful over time.
Back in 2003, being in Silicon Valley and being near-ship in startups, they're just, it was a really small space.
There just weren't that many people that were into this stuff.
And so I remember, I cold emailed Reid Hoffman when LinkedIn was like 12 employees and he just responded.
And he's like, oh, let's have lunch.
It wasn't he he was just like a guy and everyone else that was doing, I guess you could call it social networking with that was sort of the people that I knew.
There was a few conferences you would go to and there'd be like 30 people there.
It reminds me of stories about the homebrew computer club.
I'm not saying this is as cool.
But when I read stories about what it was like when when the homebrew computer club existed, it was a very small number of people that all knew each other.
There were real like weirdo outsiders that were into this stuff.
And so that's what in the post.com boom Bay Area startup scene.
That's legitimately what it felt like.
I didn't think a lot about the personality traits of these people.
Again, they were all pretty different people, but what they had in common is the folks that are now the really big names just had a lot of staying power, right?
So when I met Sam, he had dropped out of Stanford to work on Luke's, which is hilariously a way to find people around you to hang out with.
Interesting theme here, huh?
He was this really young guy, and he just kind of did that.
And then he got into other stuff and ended up working at YC, ended up getting involved in hard tech and is now kind of like reinventing himself as the big mind behind AI, which is, which again, awesome.
But if I think about who he was back in the day, he was, yeah, he was like a 23 year old working on a thing for feature phones to find friends in your neighborhood.
Their customer was Boost Mobile.
I bet you can go find the commercials for Loops that Boost Mobile put out on YouTube.
Those are actually pretty funny.
Have you seen those commercials?
No, but I'm going to go check them out.
Anyway, it's pretty funny.
So, yeah, like that's the real story.
And then, yeah, I remember I was in downtown Palo Alto at the time and you
Some of the folks I was friends with were friends with Sean Parker.
And this was actually before Sean Parker went to Facebook.
And so one of my friends was like, oh, we need to get my friend arrived at the airport.
And so I ended up giving Sean Parker a ride to the Oakland airport.
And again, what was he like?
He just basically sat in the backseat on the phone the whole time.
But again, my point is I wasn't like, wow, these are going to be really big, successful people that one day will be important in the world.
a bunch of nerds that really like the internet and computers kind of doing things that they were interested in and were just obsessed with this.
Like there was no, they weren't like, gee, should I move to New York?
Or, gee, should I, maybe I should go to law school.
Like it was people that were very bought in to staying, working on internet companies.
And so you'll see these folks just reinvent themselves multiple heros, right?
Okay, like Reid Hoffman, right?
He was a work to PayPal, right?
And then he did LinkedIn and then he was like a VC and like, like he's kind of had like all these different eras where it's the same person, but it's almost like a different figure, right?
There's a lot of interesting lessons there.
One is that your career is long and you will have the opportunity to do many things and you can continue to shift.
Like in my example, this is my fourth career.
I realized I was an engineer, then a founder, then a product manager and now whatever this job is.
And I think that's really common.
I think the other again is the personality types point, which I didn't comment on.
But I think it's so important that you can be super introverted and be super successful.
You can be super extroverted and be very successful.
And I think the key there is use your skills and strengths to achieve the same things.
You don't have to be the amazing presenter on Steve Jobs type stage.
You can do the same thing in a different way.
And then the other point there is, again, coming back to, you just need to be really excited and enjoy the work you're doing, because that'll drive you forward and make you be successful.
So I love that the story is kind of a summary of so many of the things you've shared so far.
There's other two other fun stories.
Maybe pick one or the other one is you sold your startup to MySpace and your job was basically to save MySpace.
And then the other is you're the reason Andreessen Horowitz missed out on Instagram and couldn't invest.
So which of those would you want to share?
Well, it's kind of the same story.
And the way that it's the same story is,
My, my second company, um, basically I sold my first company in my space.
It was the music company that I worked on and the, they recruited a new CEO, um, who was formerly the COO of Facebook called Owen Vannata.
So again, hilariously part of the same circle of people.
And Owen was like, okay, we need to fix my space.
You know, Rupert Murdoch's,
So come up with some ideas.
kind of the best idea that I could come up with at the time was doing something around mobile photo sharing, something kind of like Twitter, but for photos.
And I figured with MySpace's user base, that would work pretty well.
So it was right as the app store was getting big.
And I had a lot, I had a lot of success in the app store with iNem.
It was one of the top music, top downloaded music apps.
And so I was like, wow, the app store was really good.
And at this time, Facebook was a little early on.
They were trying to do cross-platform mobile apps, if you recall.
And their apps were not great.
This was, again, ancient history.
And so that was sort of like my plan.
And then immediately, Juan Van Nato was fired.
And so I didn't even really get onboarded.
I think I worked in my space for like a month because the person that acquired my company got fired and there was like, I think the whole word chart got fired.
So I didn't even know, I didn't even know who to talk to.
It was a great experience.
You know what I'm saying?
I wasn't really sure who my point of contact was at that point.
I don't think they knew either.
Just Tom, just message Tom.
No, no, he was long gone.
But no, like literally, I don't know who was left at that point.
So I was like, well, I should just do a new startup and I should work on something like what I was thinking about.
And I ended up, yeah, starting the company and quickly was able to raise an angel around because people remembered my company from the first one.
And the major investor we had was Andrews and Orwitz.
This is one of their first board seat investments, like Mark Andrews was on my board.
You know, and I have my own set of stories about that, but it was it was interesting experience and we launched it and I think we've got half a million or a million users like you can go.
Find tech French articles about it and it was we launched an Android and iOS and it was mobile photo sharing and actually was growing pretty well.
And then what happened is there was another portfolio company called Bourbon, which was originally a Foursquare clone that was built by these two guys.
And they decided to pivot out of that and into what was pretty similar to my thing.
You know, again, fair enough, I should tell this works.
And they did something smart.
Again, this is me talking.
I don't know what their version of the story is, but what I think they did that was smart is if you looked on the paid app store charts, the number one app was hypstamatic.
And it, hipstomatic cost money.
And what do we know about what people want?
They want things that are free that cost money, right?
And so they basically built a pretty legitimate knockoff of the hipstomatic filters, combining it with the social graph, and they launched it and it pretty quickly took off.
So of course this is Instagram, right?
And so it took off really quickly and like, you know, that was like a wild experience for me to be like, oh, this seems familiar.
And basically because Andrewsson Horowitz had invested in my company, was on the board, even though they were investors in Instagram, that was like a conflict that they didn't do the deal.
And then for whatever reason, this became like a big source of Silicon Valley gossip, which was like, wow, I can't believe this happened.
And so it was just a really weird experience for me as a founder to be right in the middle of something that became culturally so important.
I imagine there's a bullseye in your back from A16Z for a little bit.
Oh, I don't actually think they care.
I don't think they held it against me, because what did I do wrong?
You know what I'm saying?
Obviously, there was some frustration, but I was a guy who had a company.
I didn't feel much higher from them.
I think this is just how life works.
I wonder if they changed their conflict policies after that at all.
I think this happened multiple other times.
But those aren't my stories at all.
And by the way, I don't know if you mentioned the name of your startup.
Yeah, it's called Pick Please.
Okay, so for the final phase, before we get to our very exciting late in the round, I have these two segments, recurring segments, a failure corner and contrarian corner.
We can do both or we can pick one or the other.
Failure corner, share a story of something, a time in your career where you failed and when you learned from that experience.
Contrarian corner, what's something you believe that most other people don't believe?
Yeah, I think for contrarian corner, I know where I would start, and I think it's relevant for your listener.
Like, I think this is relevant to this.
And so, again, maybe, and you could argue this isn't contrarian, but here is, here's what I think.
I think growth and growth packing and doing all this analytics, AB testing stuff is a total waste of time for very early startups.
One of the weird things about having lots of startup advice on the internet, again, this is one of the reasons we started making videos at YC.
A lot of the advice was catered towards later stage companies.
Like, oh, here's how you set up your board and here's how you motivate your sales team.
Like it was all aimed at series A, series B founders and not for seed stage founders.
The problem was seed stage founders would consume all the later stage advice and get really confused.
And so the anti-pattern I see is there are lots of founders that are very familiar with your awesome work, which again, I really recommend.
But when you have no customers and you're reading, you know, Lenny's guides on how to set up.
Split testing and how you did growth at Airbnb.
And so you see this inclination away from getting a first customer, getting one customer and talking to that person.
Instead, they have like all this really complex growth hacking theory.
I think this also happens if you worked in big tech where your product already has scale.
And so, you know, if you work at Facebook, your job is to launch new little features.
Yeah, of course you should make heavy use of analytics and AV testing and split testing and future flags.
Yeah, yeah, yeah, yeah, it makes sense.
But when you have no users, what are you doing?
So do you think that's contrarian?
I'm just trying to argue this advice applied to a startup that's too early is actively not helpful.
I think it's contrarian for many people, 100%.
I also 100% agree with it.
It makes me feel like I need to, at the top of my post share, here's who this is for if you're earlier than this ignored, if you're later than this ignored.
I mean, again, I'm not saying you're doing anything wrong, but imagine if
OG Airbnb founders took all of your current advice and applied it when they had like four users and they knew their names.
And they were like trying to run complicated growth hacking split test things.
Yeah, maybe just to clarify it when you talk about growth, growth hacking.
So obviously when you're starting something, say a consumer app, there's a, you need to get a bunch of users somehow.
What's your sense of just like when you say don't do this sort of thing, but this is okay.
What kind of falls in those buckets?
I think it depends on the idea.
I think in the case of whatnot, they obviously, it was a consumer app and they needed to get users, but they were very intellectually honest on the metrics for how you get a marketplace off the ground.
And they didn't just go dump all their money into Instagram ads.
And like they effectively knew they needed to focus on buyers and on the buy side and build momentum on the buy side.
They really understood marketplaces.
I think it's having a sophisticated view of how you get the consumer company off the ground.
I think if you look at the Facebook story, them getting 100% penetration on the Harvard campus first instead of launching overall.
Again, good strategy, would recommend that strategy.
So again, the way I would extrapolate that is know what your comps are of what companies your archetype is and then look at what they did on the zero to one and ignore what they do today.
Don't pay attention to what Facebook does today if you're a brand new startup founder.
Pay attention to Facebook when they were getting their first thousand users.
I feel like this should be its own episode where we just go into how to get your first thousand users.
I know there's a video actually we'll link to that Gustav made with YC's advice on how to get your users.
Did you want to visit Failure Corner or not?
I failed at tons of stuff.
I make lots of bad investments as well as good ones.
I think in my startups, I pivoted a lot and a lot of things I did didn't work out.
And so again, I just gave you a specific story with Picklead, right?
You just heard a specific story there.
I guess what I learned is that you just can't let it get to you too much and you got to keep going.
And that if you keep going, no one really remembers those as much.
And it doesn't really define you.
And fear of failure shouldn't dominate all of your thoughts.
And instead, you should use your energy and positivity to keep trying to do good work.
Because back in the day, if I would be like, well, I guess starting time for me, I guess tech isn't for me.
I wouldn't have had a career doing any of this stuff.
I wouldn't be working in YC.
I wouldn't be advising companies, right?
So I always had to have, in my life, a lot of optimism and energy, and use that energy and motor to keep me going.
And it served me really well, right?
Even if lots of stuff I tried didn't work and continue to not work.
Again, obvious stuff I know, but yeah.
That doesn't mean it's not true, even though it's obvious.
I feel like that's a recurring theme here.
And I love that it's another version of just how not to die.
There's like the startup itself that shouldn't die.
And then there's your just drive and motivation to keep going and try new things when things don't work out.
I love all the recurring themes and messages for people here.
Dalton, is there anything else you want to leave listeners with before we get to a very exciting lightning round?
Yeah, I guess the final thought is, you know, if someone wants to do a startup and doesn't know where to start, just to give you permission to
Talk to potential customers and try to pre-sell something before you write code and have those conversations.
I think so many folks don't know where to begin on starting to startup and my tactical advice is start doing customer validation.
First, versus building a PowerPoint deck versus trying to raise money versus like all these other things, I think a lot of people don't use that strategy.
And basically, if you find people that are really excited and you do line up customers, that is a great green light that it is time to do a startup, right?
That can get you down the path.
So yeah, I think that's my final advice.
And then with that, when does the building come in?
Is it buildable while you're talking, build it before you?
Build it once you have some conviction that you're like, oh, I think I would have a customer.
I think at least one person would use this thing I want to build.
I love the simplicity and pragmatism of all of your advice.
Dalton, welcome to the very exciting Lightning Round.
I've got six questions for you.
What are two or three books that you recommend most to other people?
I think a lot of founders are afraid of doing sales and they don't know how to do sales.
And they think they need these really experienced sales coaches and they need all this training.
And I'll be like, well, go on to Amazon and find the most popular sales books like Getting to Yes that everyone reads and just read those.
And that'll get you 80% of the way there.
You know, I'm saying that they want to hire someone for millions of dollars to give them sales coaching.
I'm like, well, have you read these really basic sales books?
And so I think as a low cost way to go on Amazon, getting to yes.
And a few other are the top sellers.
I forget the names and just read those.
And that is your crash course on how to be great sales.
There's also this book called Founding Sales that I imagine you're familiar with.
Pete Kazanju is on the podcast talking about that and that's something I always recommend because it's just like how founders can do sales.
Do you have a favorite recent movie or TV show that you really enjoyed?
This may be warping what you're asking for, but I like to watch old shows a lot.
And so I keep rewatching like the Sopranos and the Wire, and it always is different to me every time.
And I, you know, things like that.
I think here's a silly answer.
I've been really enjoying watching old episodes of Colombo, which was a television show from the 70s and 80s.
I don't even know if this is instructive.
But it is, for some reason, I'm really into that right now.
It's very old episodes of Colombo.
You're an old soul, Delta.
It just feels like a time machine to a different time when I watch these things.
Maybe one of the most unique answers yet.
Well, again, I guess I'm not trying to give you an answer where I sound super clever.
I'm actually telling you the answer.
That's actually what I'm watching.
It does actually sound very sophisticated and clever.
Do you have a favorite interview question that you like to ask, I guess, founders in this context?
I don't really believe in trick questions.
And I think I just start with, hey, so tell me about what you're working on or what have you learned since you started?
Yeah, none of these are trick questions, but I think you can get the most honest and interesting answers by asking the most straightforward, basic things and having that be like a blank slate for their answers to draw on.
You know what I'm saying?
So I like the most simple prompts and let them take the conversation where they want to go.
I know this probably is a very big question, but just what do you look for in their answer that gives you a sense of this is a good or a bad answer?
And I know this is like its own podcast episode.
I think evidence that they actually have thought about it
Like, as for what I said earlier, that they've done research, that they have opinions, that they care about it, right?
Sometimes when people answer questions, they're like, you can just tell that it's really superficial and they haven't put much care or soul into their answers, you know?
Do you have a favorite product that you've recently discovered that you really like?
Like my Warring and my Apple Watch and all that good stuff.
There's a YC company called CyFox, S-I-P-H-O-X I just signed up for and they do at home blood testing.
And basically I'm trying to sync that at home blood testing thing into all my other devices.
I think, I don't know, I really enjoy all the stuff that Apple and other startups are working on and YC companies are working on around personal health.
And so yeah, those are products I'm into.
And wait, then you do like needle and stuff and you take your own blood.
It's this little tiny needle.
And it just, it takes a few drops of blood and you do it at home, you mail it in and then it has all these blood tests.
It's actually really cool.
And that's, I just discovered that it was one of those cases where I saw it.
I saw it and then I later was like, oh wait, that's a YC company.
Like basically I became a customer and it was pleasantly surprised that it's a YC company.
And I think I found it, so it's S-I-P-H-O-X-Health.com.
Yeah, it really rolls off the tongue, right?
Yeah, that's the name of it.
Okay, I see the little needle.
Okay, two more questions.
Do you have a favorite life motto that you often come back to find useful in work or in life, share with friends?
Just check in with yourself that you're having fun.
and that you enjoy what you're doing.
And if you don't, you should probably make a change, whatever that is.
And again, if you're a founder, you're in control, right?
You can change your own company.
But I think a lot of people go through life and they don't ask themselves this question, like, am I having fun?
Do I value what I'm spending my time on?
And I think that you just can go back to this over and over and over again as a good prompt on how to decide what to do with your life.
Easier said than done to change that in many cases, but it always starts with realizing, okay, this isn't actually.
Yeah, admitted to yourself.
Yeah, I'm not really enjoying this.
And then trying to be like, well, how can I fix it?
Having that conversation with you.
It reminds me of a Steve Jobs quote where you wake up day after day, like it's okay to wake up some days being like, I don't want to be doing this.
But if it's every day and continues to happen, then that's a sign you should change it.
You and Michael Seibel have been doing this incredible podcast together.
If somebody wanted to check out the podcast and dive in, is there an episode that you love most that you think they could start with?
Some of the episodes are more for folks that already have a startup and they're dealing with like problems.
Some of the episodes about
investors or things like that.
It's very clear that the audience for those is current startup founders.
And there's a lot that are just more life advice, how to make decisions and think about.
And those have strangely become very popular and got a lot of views with non-startup founders, which is a pleasant surprise.
And so I recommend those for folks in the audience that are not currently startup founders.
Life tips from top founders, I think is from billionaires.
I think that was pretty popular.
So what I'd be looking for is diagnosed.
Am I a current founder and I have founder problems?
Or am I just looking for general?
philosophy type questions, and I really like those philosophy ones.
We have one for high school students and it's aimed, the audience is, here's advice for high school students that are interested in startups.
Here's some tips that you should be thinking about.
Again, pretty narrow target audience, but I love that episode because we're really trying to speak directly to that audience.
And, you know, I think it's pretty good advice.
Dalton, you are wonderful.
Thank you for sharing so much wisdom.
I'm really excited for founders to listen to this.
I think it's going to make a big dent in a lot of people's lives.
Working folks finding online if they want to reach out and follow up on some of this.
And how can listeners be useful to you?
I'm on twitter.x.com and Dalton C is my username.
And also my LinkedIn is pretty good.
Just search for my name on LinkedIn.
And yeah, I love to see you all there.
And then how can folks be helpful?
I mean, honestly, it's just great when folks want to apply to YC and do a startup.
And so feel free to dive into other videos and apply to YC.
And something that's really special about my job is I get the privilege of getting to fund companies that they already know me from videos and they're shocked.
that I'm exactly the same.
Like, like effectively, um, they're like, wow, you're, you're just that guy from the videos I've been watching.
And, and it's so cool that you're just exactly like you seem in the videos.
And so basically, yeah, if, if people like what I have to say and they like the videos and apply to YC, it'd be, I would love to, to fund their company.
Dalton, thank you so much for being here.
Thank you so much for listening.
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