All right, this is Dalton plus Michael. Today we're going to talk about life changes. I don't know about you, Dalton. I've had a couple of life changes. How about you?

Yeah, there are a lot of new things. Different environment here — changes for the viewers.

Yes, there's a microphone right in our faces, which is awkward.

There are some differences.

Yes. So what are you up to nowadays?

Well, I'm now a partner emeritus at YC, and I've started a new VC firm called Standard Capital.

Big change.

Yeah, it's a big change.

Big, big change. For me as well: partner emeritus, still a ton of office hours, which is kind of crazy. But it's been amazing. I've been prodded to try to help make San Francisco better, and it's been an adventure.

That sounds really easy, fixing San Francisco, Michael.

Well, as a tech bro, let me tell you.

You have all the answers, right? It's just that easy. You're the guy.

It has been humbling, to say the least. It's been so much fun getting to meet public servants and learn something completely new. I think they're all a little surprised at the beginning of the conversation when I don't start with tech-bro answers. I don't come with my recipe for "Why aren't you... You suck."

"Have you thought about using AI?"

"Have you thought about just doing these things? Have you thought — oh, there's a public-safety problem — about deputizing all adult males and drafting them into a police force?" That's been really fun, because I think people get a little disarmed when I say, "I don't know anything. I like government. I believe in government, but I really don't know anything." Maybe one to six percent of the things I've learned in software and tech might be relevant. The rest is new.

That's very humble of you. You're probably blowing their minds. They're like, "Are you tricking us?"

What I've learned is tech bros often come in pretty hard, pretty fast, pretty hot. Within five minutes they're like, "This is a different conversation." A lot of the time I'm asking a version of: "Can I just see what's happening? Can I look over someone's shoulder?"

Do you have dashboards?

No, not even dashboards. I just want to see someone doing the work and start asking myself, "Would or could I do it differently?" Apparently that's a very different approach.

Anyway, moving forward: why did you decide this was the right time to do something new?

For me: I did 25 batches — that's a good round number. I also have a newborn. My daughter was born really recently, at the end of February. We've both been through this; you go through a lot of life reflection around that. Honestly, I can't say that didn't affect my overall psychology. It's certainly more top of mind.

I'm really excited about what I'm doing next. I love the work. I love working with founders, and I love doing office hours. I actually love the craft. I'm excited to be a founder again myself. It always felt a little weird to say "Founders are great" when I'm not a founder — I'm just an employee here.

It's really freeing to be able to start a new company from scratch. We've talked about it so much on our YouTube channel. I literally signed all the documents and set up payroll. I did all the stuff we've been talking about. And I'm really proud of that. It feels good to start something again.

That makes sense. To help everyone else, I think it would be interesting to talk about how people should make big life decisions. There were a couple of people I spoke to who put me in the right frame of mind.

The first was my co-founder, Justin. I was talking to him: "Yeah, it's been 11 years at YC. Maybe I could just do this job until I retire." I could hear the naked judgment.

What did it sound like?

I don't know. You know someone for so long. He said something that got to me: "You could literally write everything that will happen between now and retirement if you stay at YC. Is that the life you want? Do you want a life that's that predictable — especially because you're financially secure?" And I was like 😬.

You do love chaos, Michael. Let's be honest. Let's be real.

I do. Yes.

You love chaos. You thrive on it. So he knew how to push your buttons.

Yes. He knew how to push my buttons.

The second person was my wife, Sarah. I was talking to her casually about what post-retirement life might look like. I weirdly love chaos and planning. She said something that really got me: "You've spent your entire adult life in San Francisco." I moved here at 23. "You spent 10 years giving back to YC because YC changed the trajectory of your life." I agreed. Then she asked, "So are you going to do anything for San Francisco?" And I was like 😬.

She knows how to push your buttons. These people in your life — they know where to push you.

It's weird. I've always thought to myself: when you're in tech, it's easy to say "I live here, but my users are all over the globe." You can tell yourself you're post-local. But when you wake up and realize this is where you've spent your entire adult life, maybe there's an obligation there.

The last one was Steve Huffman from Reddit, who casually said at some point in the last year — this always stuck in my head — "I fully expect most of the capable people we know will end up doing something in public service before they fully retire." He said it with such inevitability. It sounded as inevitable as having a will. How could you look at yourself otherwise?

That's no more far-fetched than him being the CEO of a public company. In the scheme of plausible things.

Yes, exactly.

That's definitely plausible.

And it's funny because those things were rattling in my head. What I've noticed about making big life decisions: people say things to you all the time, but when something sticks, there's something deeper going on — when you can quote them a couple of weeks or months later.

How about you? Were there any conversations that helped shape your thinking?

I have to admit: pretty much every founder I ever worked with at YC would ask, "Dalton, when are you going to do your own company again?" I'm sure you got this too. It's in the top five questions I got as a YC partner. "Hey man, just between you and me, when are you going to start your own company again?" I'd say, "No, this is great" — I always had my answer — but it was always top of mind. When someone's a YC partner, we're all founders. It's hard to corral founders in any one place for an extended period of time.

It is tricky. It helps when they're having kids or are otherwise distracted by life.

That was certainly something that stuck in my mind — the constant questions about it. I had various answers that were true at the time.

Talking to my wife and my family about having complete agency over my calendar, over what I spend time on, over all that stuff — that was important. If you think about the advice we've been giving people on YouTube all these years, we always tell people: opt for the high-agency route. Opt for doing your own thing. Even if it's hard, you'll like yourself more than if you choose the comfortable thing.

Talking to my wife about our calendar and our home life — this all made a lot of sense. I'm also super excited about how well AI is working for our portfolio companies. This is my equivalent of starting my own startup using AI. I have founder–market fit to be an investor. It would be very hard for me to go start a true pure-play AI company.

You have to be careful about that "founder" term, because people on Twitter yell at VCs when they...

It's true. I think it's when they're not the founders of their VC firm and they just say they're operators. Paul Graham really is the founder of YC. He is a founder by starting YC.

"But I was the founding investor."

So I think that's completely fair, but the founders of the VC firms, I do think they deserve the title.

That's fair.

Ben and Marc from Andreessen Horowitz were the founders.

Well, there aren't that many. I've been surprised at how few people it seems like start funds to build institutions.

Yeah, it's hard.

Hard. I agree.

That weighed heavily on me. There's a big innovator's dilemma: if you're trying to graft AI onto an existing business, it's much harder than starting something from scratch. Across the YC portfolio in general, we like to fund from-scratch disruptors of existing industries that are using AI to run their thing, rather than trying to buy a company and then put AI on it.

This came up so aggressively in the mobile world. We're like, you and I both know so many people who are working on mobile startups before iPhone. And like, you would think they were in the best position. You know, it's like, oh, they're all squared away. Like they were in mobile, iPhone happens. None of the YC winners had that profile. All of the YC winners in mobile started after mobile came out. And so I do think there is something about if a new technology hits, having to start from scratch. Otherwise, are you really going to embrace and adopt the new technology or is there always going to be that?

It's the classic innovation. Again, we see this in our current SaaS portfolio. A lot of people have a ton of revenue in SaaS and they know they're going to get disrupted by AI, but that means they have to give up all that revenue. You've done these opposite. I've been doing a lot of these.

It's hard.

You know, it's hard to cut off the thing that's been working and got you this far. In lieu of doing something new. And so, you know, that weighed heavily on my mind. And honestly, like talking to founders has been inspiring to me too, because there's like You know, find your own way to do it, but keep doing the work, man. Like keep doing your wacky investing stuff. And I think it's been super cool, like all the notes that I got, I know you got them too announcing that I was doing this and leaving YC, just the sheer amount of good vibes.

Yeah, that was kind of crazy. I think that like as an aside, a maybe weirdly unfortunate part of doing YC for so long is that like you touch so many people's lives, but for you, that's just the day to day. And seeing all that response that both of us got when we announced we were leaving, I was like, oh crap, like it was just this like really big reminder, like, oh my God, like you're a main character in thousands of people's lives.

Yeah, it's pretty cool. Like it's like the, what's the thing, the Mark Twain story where he attended his own funeral? And like to hear what people say, it's pretty cool. And you would never get that amount of good vibes in any other circumstance except when there was a big life change. And so it's one way to kind of take stock of where you're at in life.

It's a fee black loop you only get access to if you take a big leap. No, I totally agree.

I think the other thing for me, and I think, you know, different people are built differently. I remember having a lot of passions outside of tech. And I remember when I was trying to make this decision, I felt like for 20 years, I had to be so just heads down in tech. I almost had to convince myself that those passions didn't exist. Cause it's like, this is a hard game. And like when you're not focused, it's an impossible game. But one of the weird things that kind of, one of the weird techniques that helped me, I got kicked out of college. And in order to kind of get the motivation to go back and graduate from Yale, I was like, I need to make a life plan. I think what I was really responding to was that these institutions in the moment like Yale weren't motivating me. Like I thought I'd be as motivated to graduate from Yale as I was to get into it. And like completely not. And so I was kind of like, all right, I got to put some other things out there where like, Graduating is gonna be prerequisite, but this thing isn't the actual end game. And so for me, it was a simple plan. It was 20s, money, 30s, family, 40s, government, retire and teach. That was a plan that I made when I was 21 years old.

When you're 21.

When I was 21 years old, Dalton. And it was funny, I said this to somebody and they were like, you're crazy. They were like, it is crazy that you would consider planning your whole life. And I feel like people who know me really well, they're like, that's pretty on-brand.

Michael, it's a little crazy to play in your whole life. I'm not with you on this, man. I'm not with you.

Not for everyone, right? You're mileage might vary. But it's been 20 years. And things have awkwardly followed that plan. And so, you know, I just turned 42 and I was kind of, I think, subconsciously in the back of my head, it was kind of like the plan. Like, what about the plan? The plan's been working. What about the plan? And I would have been more than happy to change the plan if I felt like it needed to be changed, right? Like, who cares, right? It's not like every thing was really perfectly laid out. And by the way, that's not that detailed of a plan, right? One word per decade. But like having that reminded me about the other things that I really liked. You know, rolling back into what Justin said, like I now have the opportunity of the privilege to be able to explore these other things that I like. And perhaps my biggest regret is if one day I look back and I was like, oh, I didn't get to explore all those things. And so for me, like that really kind of cinched it because it was like, oh, okay, like, this is just the next phase of the plan, right? And what's really funny is going into each of those phases, I had no idea. You start a company with your co-founder, whereas a camera on his head broadcasting 24-7.

Sounds like a $9 company.

You're not drawing a straight line of money, right? And family, I was 30, I was dating my wife, but we weren't married, we didn't have kids. And so for me, it was kind of like this plan never works where you take a leap and it's like a safe leap. This plan always works where it's kind of like you got to take a leap and then you got to feel your way down. And so that's what's been so fun over the past three to four months is like taking that leap and then realizing like, oh, shit, I really do like this other stuff. I still love tech, but does it have to be 97%? Like it doesn't, there are enough people who can carry the ball on the tech side. And so that's been incredible.

I think I've always lived by the philosophy that if I just pushed myself really hard and I tried to do really good work with interesting people, interesting things would happen. And that's kind of how I got from just some guy in Texas onto like this crazy life trajectory I've been on.

That sounds like a good life plan.

I get, but did you see what I'm saying? Or let me just do, yeah, it's totally life philosophy. Which is I should always be almost like uncomfortable. Like I should always be right at the limits of my skill set. I should always be pushing myself right to where I'm like redlining. And again, we've done some crazy stuff together. You understand what I'm talking about. Like reinventing YC to run on Zoom.

Yes. COVID was fun.

It was right at the limits of our skill set.

While having children.

While having children. I've always been my own worst critic. I've always been hard on myself. And I just wanted to feel like I was pushing myself to the very limit. And if I just kept doing this, that would compound on enough time to just have a really interesting life. And yeah, I've been kind of subscribing to that theory and continue to do so.

I think for you, maybe a question that I would ask is, what was something kind of counterintuitive that people don't know, that founders don't know about setting up a fund? Something weird, something different, not like about like the Shazifon, but just more just kind of like inside baseball.

At the end of the day, a lot of the people at big companies or successful franchises, they know in their heart if they're self-aware that people are nice to them and respect them because they work somewhere that is important and powerful. And there's two ways you can deal with that. Either one, you believe that you're special. And so you're like, oh, I'm a PM at Facebook. I'm a really big dog. I'm so important.

We love Facebook PMs. Some of the best people on earth. I'm really good friends with the Facebook.

I'm sure you are. You basically can use the power of the place you work with yourself. And so you get entangled where your identity and your work identity are the same thing. And you just get really, I don't know, like you get confused about what's what. The non-self-aware people are just unaware of this and they're, you know, they leave an important job and they're just like, shocked. And then I think the self-aware people are aware of this yeah, and this is why they stay on those jobs forever It's gonna like hey if I leave no one's gonna be nice to me more I'm gonna lose all the juice that I had and so I think this is what keeps people that they want to admit this in public But I think a lot of people are kept in various jobs with the self correct self-awareness that the moment they leave No one will return their calls anymore. People may be like, wow, these guys have it all figured out. Like these guys have it all locked in. Every day must be stress-free. No, this is hard. Just like I'm imagining trying to fix city government's hard. This is the hardest thing I've ever done, man. Like I've done a lot of hard stuff, but to start something from scratch, especially at the scale of what we're trying to do, this is objectively the hardest thing I've ever done.

If you're in that mindset and I agree with you that like if you only know how good you are when you're kind of in that hard charging in that most stressful moment, it's almost like another reason to consider making a big life change because it's like you only really know your top speed and your top capability in those moments. And like ditto when people don't kind of have to say yes to you. You're kind of getting a real grade.

It's like people in the government. All these people retire from government jobs and imagine they treat you differently once you retire from a government job.

I would say for myself, so one, I don't want to take on the mantle of fixing government. That's at least more than a three month task. I think the only thing I'm excited about is trying to help. But I think that what I can do, it might be interesting, is just kind of go over a little bit of what I've learned. And this is kind of like a TLDR after, I don't know, 90 to 120 hours of conversations with people in city government, conversations with citizens and thinking. So I would say the first inning of knowledge.

First one, I think what is most obvious to me and what scares me might not be obvious to other people. It's like most people who work in government are trying to do the right thing. most people are working in government are capable people who are actively choosing to take a lower salary to give back. So that's like a big deal.

So the second thing that I've learned that's been very surprising me is like I expected more smoky rooms Like I expected more like the people want this, but we're gonna like do this other thing.

That's what people think about tech too.

Yeah, yeah.

They actually think that there's a lot more coordination. There's not as much coordination as people think.

There are many problems where when I kind of got to the root of them, It was our politicians and doing and our government doing the things that we said we wanted. And then it turns out we didn't know is it bad or right thing. Like, like it so reminds me of like listening to your users and your users being like,

they want to meet that.

Yeah. Like I want all the texts on the website to be black and the background to be black. And it's hard. You can't run AB tests in the same way. This is a hard environment. But I was shocked how often it was like, yeah, we did what the voters told us to do. And I was like, oh, shit. OK.

I think the other thing I didn't realize is in the same tone, We as citizens drive the bureaucracy. Like I think this story is not told the right way. Like it's always told like we're victims of government bureaucracy. It's like we are actually driving the government to create rules to make the government less efficient. Like every time there's like one bad apple yeah, we are like put in all the new rules like why how could this happen and then like there's 50 new rules and if a company were run this way it would never work

Big companies are run this way where when something bad happens. The scar tissue is to create rules to prevent that bad thing from ever happening.

But big companies can't do it as well as government. Government can create rules that you can go to jail if you...

No, this was crazy. They're enforced by the police. Fair point.

But once again, it's triggered by us. It's triggered by somebody made a mistake, honest or not, and us being like, How could you let that happen? Like how could the government not play air free ball like for a hundred years with all of it? And so that's like a big one where I'm just like, if you think you're a victim of bureaucracy, like a city worker is the largest victim of the bureaucracy.

I think the other one that kind of, and this applies outside of government, but this really got me. We were talking about this earlier. I took for granted that software companies build their own tools. That's just like a muscle that they have that we've always had. And I think that what I'm realizing is how many organizations don't have that muscle. It's basically, if we're using software, it means some vendor is building it for us. It's sad because thinking about how many tiny tools that we built at YC, we're like, God forbid. I mean, most people know about Bookface now, right? God forbid we had to find a vendor who would sell us like YC alumni stuff.

Or like a vendor for the application.

Oh, God.

We wanted to change some text on the application. We'd have to...

Call someone, call our account manager. It never would have worked. And I think I just took for granted how many times we were making our own tools. And now I'm like looking at organization that like it's very, very, very hard to make their own tools. And it's like, oh, that's bad. And I understand why, right? But it's like, it's harder.

I think the other one that keeps on coming up, you think that government has these powers and these responsibilities, and you kind of don't want to make it a human operation. You want to make it a machine. It's like, well, The permitting process is bad. This supervisor can write legislation to improve it. These people need to vote for it, and then it's done. And when you start talking to people, it's like, obviously everything is humans. Everything is humans. And so it's really nice to kind of be the Twitter tech bro and like try to like solve all the city's problems in like a tweet, you know? And, but just like the more I've learned, the more it's just like, you know, I had this thought that it was a, you know, it's easier trying to advise a founder to build a successful company. Like that's easier, you know, with the amount of research I've done, it's not like I'm, there are no conclusions.

Oh that's great. I was waiting for the conclusion.

There's no conclusion.

I thought you were going to fix everything.

There's no solution. Like, this is hard. And by the way, like that's different for me. Usually with this amount of engagement in anyone's company, I would be able to offer like advice. I am nowhere close to like.

So iPads isn't the solution. I'm just kidding.

To bring it back, like I respect people in public service even more. It's like they're taking on the hardest problems. They're not getting paid crazy amounts of money. we are making their lives harder as citizens, and then we shit on them. And then like, they're subject to the wind, just like every other business, but we pretend like we're in this hermetically sealed environment that government controls. I used to think startups was one of the most stressful, hardest jobs imaginable. And I'm like...

it sounds rough.

It's like, yes. Like I almost, sometimes in my conversations, I feel like I'm just like, I have to express compassion. I'm like, this is. I respect you for doing this. So anyways, I think that's what's been kind of humbling and fun. And like, this is where I live. So it's like, if I want to contribute to where I live, You gotta learn this stuff. Most people can have a mentor mentality, but some people have to have a bit more of an owner mentality at some point. And I feel like maybe I've been renting too long, you know.

That's very, that's very noble. I think a lot of people just renters for life, man.

Renters for life. I'm gonna make some t-shirts.

Anyways, final advice for people listening to this video contemplating a big life decision. Maybe it's starting a company, maybe it's starting a family, maybe it's moving to the Bay Area. What do you think?

You know, here's the trick that I do that I would actually recommend. I think people are used to now writing prompts for LLMs. And that you realize after you've written prompts for a while that the better the prompt, the more likely you get a good answer. Still with me, right? Like you have to spend time.

Very much so.

And I think there's a superpower we can all develop of crafting the prompts for ourselves and thinking about it that way when we're making decisions. Which is like, you know, given these constraints or given this and given that and kind of like try to formulate your thoughts into a very cohesive linear way. And then I think you tend to get pretty good answers. And the prompt that I keep giving myself is if I were doing office hours with myself, What would I say because when I do that somehow a whole different part of my brain is activated Because we're you know, we're so used to giving advice about things I'm always like what advice would I give myself and I've had a lot of you know I'm not sure that would work for everybody but I've had a lot of luck with that type of prompt and in general I think thinking of your own thoughts as prompts and trying to curate them is a pretty Good hack man.

I like that. I think if I try to extract out the prompt perhaps I'm I'm subconsciously giving myself it would probably be some version of You've been Incredibly lucky When all said and done what's the story that can be told about how you gave back in thanks for being that lucky. I don't think you can deserve to be lucky, but I think that if you are lucky, you can kind of give the world thanks. And so how do you maximize that, I think is interesting. And I think, YC gave me a great opportunity to do that, but I think maybe government is one of the single places that gives you more of an opportunity to do that.