Think Different. Think Users.

This post is from my talk at Y Combinator's Aspiring Founders Forum.

There was a famous Apple ad campaign in the late 90s with the slogan "Think Different." This is something you’re going to have to do as a startup founder. It would be almost impossible to create a successful startup just by doing what everyone else has been doing.

It's hard to think differently, which is why it's so rarely done. There's a lot of social pressure not to. People will dismiss your idea or even ridicule it. At some point you'll probably have to fight this headwind. At some point you'll have to do something that seems stupid to most people.

So that's my first point — just that you should be prepared for this. It's something pretty much all successful startup founders have had to go through. It's hard for us to see now how much of a headwind they faced, because they've of course now proven that their ideas weren't stupid after all. But if you ask them, they can usually remember quite vividly the skepticism they faced in the early days.

I went through it myself. It's hard to imagine, now that Y Combinator has become such a well-known brand, but when we first started out, it seemed so lame. No one thought YC would matter. Our own lawyers tried to talk us out of it. 

Which leads me to my second point: when you have a crazy idea, how do you know whether or not to bet on it? Because most crazy ideas actually are bad. 

I think there's a second half that the Apple ad campaign left out. It's not enough just not to be guided by the conventional wisdom. You have to be guided by something else. And in a startup founder’s case that something else is users. For founders, that slogan should become "Think different. Think users."

I’m not saying that you should deliberately try to think of weird ideas, but rather that you should be willing to explore weird ideas in the process of making your users happy. If you have to choose between making users happy and the conventional wisdom, choose users. In fact if you have to choose between making users happy and almost anything, choose users.

That was how we knew we weren't wasting our time with YC. Everyone else thought it was a dumb idea, but founders loved it, and they were our users. We've always thought of founders as users, and that's one of the things that made YC different from other investors. 

Which leads me to my third point: making users happy isn't just a sign that you're on the right track. Making users happy will also give you the strength to fight the headwind of conventional opinion. And you're going to need help, because that headwind is strong. You can't be in denial about that.

What it should feel like in an early stage startup is that you're having a little party with your users, and it doesn't matter what the rest of the world thinks, because you're having such a great time. Except of course that that party has to be growing. It can be small, but it should be growing.

When you can find something that everyone else thinks is dumb but that a growing number of actual users love, this doesn’t just give you the strength to carry on, but is a sign that you could be onto something really big. That's my fourth point: the bigger the difference between conventional opinion of your idea and users' opinion of it, the more potential it probably has.

In finance, where I started my career, everyone knows that there's a strong relationship between risk and reward. And that applies to ideas too. The really great ones usually seem crazy at first. So crazy that no matter how independent-minded you were, you probably wouldn't think of them just by trying to think of ideas. You have to be led into them while chasing users.

So here are my four points about thinking differently. One, you'll need to be prepared to do it. Two, you shouldn't just do it gratuitously; you should do it in the course of serving users. Three, if you make those users happy, it will give you the strength to resist the force of convention. And four, the gap between users' view of you and the outside world's view of you is a sign of your potential.












Startups: The Very Beginning

This was the talk I gave at Y Combinator's Future Founders Conference for women. 

I've given a lot of advice to startups over the past 15 years, but today I'm going to focus on just the advice that matters in the earliest stages.

I'm going to start by talking about cofounders, because they are really the foundation of any startup. You need two things in the founding team that you’d need in any foundation of a building. The founders collectively need certain skills, just as the foundation of a building has to cover a certain space. But you also have to hold together the way the foundation of a building does.

You can always change the idea you are working on, but it's much harder to get rid of a cofounder. So you want to choose cofounders very carefully. They should probably be people you already have a pretty good relationship with: a friend, a classmate, a coworker, a spouse. Someone you've worked with on things and you know is effective and reliable. Also someone who shares roughly the same ambitions and moral outlook as you. Otherwise you'll probably be driven apart by the stress of the startup.

The younger you are, the easier it is to find cofounders. It's easy to meet talented people in a school setting. Also, as you get older, people become more constrained in their lives and careers, and have more financial obligations. So it's harder for them to start a startup with you.

The ideal cofounder relationships are organic. It shouldn't be the case where you say, “I have this great idea and want to start a startup,” and then have to hunt around for a cofounder you don't know very well. Ideally you're already friends and you have the idea together.

So if you think you might want to start a startup one day but aren't ready to do it right now, my advice is just to start collaborating on small projects with friends. Maybe one of these projects will become a startup, but it doesn't have to. The point is just to practice working together.

As well as holding together, the foundation of a building needs to cover a certain area. There are certain qualities founders need to have. But you don't all need to have all these qualities. You just need to have at least one person with each.

There’re a bunch of useful qualities in founders, but I’ve narrowed it down to the 3 most important. The most important quality is determination. There’s got to be at least one founder who's super determined. I've seen so many smart and talented people fail because they couldn't stick with it when things got tough. Startups are really hard and take a really long time. There has to be at least one founder who's just a tower of strength.

Part of being determined is being able to withstand rejection. People will think your idea is lame, customers won't be interested, investors will say no, reporters won't care. And they might not be polite about it either. But you can't let rejection discourage you. This is really hard for a lot of people.

The second thing you need in the founding team is domain expertise. At least one of the founders should be an expert in what you're working on. Which means if you're starting a software startup, at least one of the founders should be a programmer. You can get away with hiring programmers, but you're more likely to succeed if the founders themselves at least know how to program, even if they're not great at it.

I'm not saying that you can't be successful if you aren't a programmer. But if I had to suggest the best way to spend a year preparing to be a founder, it would be to learn the basics of coding. I've seen so many women who had great ideas for startups but couldn't implement them, and had to either outsource their initial version to a development shop, or worse, recruit a cofounder they didn't know just because that person could program. Time after time I've seen these companies blow up, when if the founder had only known enough programming to make a prototype, they probably would have gone on to succeed.

The third quality you need in the founders is the ability, or at least willingness, to sell. Someone has to be the face of the company—to sell the product to customers, and sell the company itself to investors, the press, and potential hires. At least one of you is going to have to sell. 

Those are the three essential qualities: determination, domain expertise, and ability to sell. There should be at least one founder with each. If you have all three, you could theoretically go it alone. But even then you'll find it easier with a good cofounder. It can be done as a single founder, but it’s so rare. 

So once you have the foundation of the building, the founding team, the next layer up is the idea you work on.

Y Combinator's motto is "Make something people want." That sounds really obvious, but it's because founders so often overlook this obvious point that we made it our motto. It's not enough to make something you believe other people want, or that they want, but not that much. They have to want your product enough to actually sign up, to keep coming back, and to tell their friends.  All when you're just a tiny startup.

A good way to ensure that you make something people want is to make something you yourself want. This isn’t the only route to success, but it's the safest one, and the one that the biggest startups usually take.  At YC, we love teams who are domain experts and have built something to solve a problem that they themselves had. Airbnb did this, Stripe did it, Dropbox did it. But the pattern doesn't end with YC.  Microsoft, Apple, Amazon, Google, and Facebook did it too. They all made something the founders themselves wanted to use.

So my advice to anyone trying to come up with a startup idea is to solve a problem that you yourself have. When you're part of the target market, you'll have insights about it that you wouldn't otherwise.

But remember that making something for yourself is just a heuristic to guide you in finding an idea. In the actual execution, you need to focus on users. You need to understand what they want, and be fanatically dedicated to making them happy. One very important piece of advice we give startups is to "do things that don't scale." That means to do so much for your early users that you couldn't possibly keep doing that much if you were bigger. That sounds like strange advice, but it works. Startups have momentum, so it makes sense that you have to make an extraordinary effort to get them rolling.

I don't know of a single case of a startup that felt they spent too much time talking to users. The way you stay on the right path in the early stages of a startup is to build stuff and talk to users. And nothing else.

A critical part of making users happy is to measure whether you actually are or not. Otherwise you can deceive yourself about how much users really like you. Especially if your first users are friends who don't want to hurt your feelings.  There's a famous sentence we often quote at Y Combinator: You make what you measure. Pick a number you want to grow, and focus on that.  The best number to measure is revenue, if you can. That's a really good test of whether users genuinely like what you've made.

During Y Combinator, the Airbnb founders had their revenue target taped to their bathroom mirror. And they hit it. Their target was to become what we call "ramen profitable," which means that you have enough money to pay your expenses if you live really cheaply. You’re eating ramen noodles, but at least you don’t have to quit and get jobs. Once you cross this line, you become a lot more confident. No one can stop you now.

Obviously the less money you spend, the easier it is to become ramen profitable. So it's very important to live cheaply at the beginning. Low expenses buy you time. And you’ll need more time than you think. Even if you have a great idea, you usually need at least a few months to work out the kinks.

The standard metaphor for this time that your initial capital buys you is "runway." You have a certain amount of space to take off, and if you don't, the company is dead. And this metaphor is not over-dramatic. It happens constantly. A startup will be working on a genuinely good idea, but spend too much in doing it, and run out of money and have to shut down.

The other thing that can kill otherwise promising startups is lack of focus. The most successful founders are fanatically focused on their product and their users. The reason focus is so much more important in startups than in most other kinds of work is that there are so many different things you could be working on, and so few people to do them. It's the opposite of a big company. So you have to choose only a few things to work on, and work on them very intensively.

When we do office hours with startups at Y Combinator, this kind of focus is usually the goal. What is the most important problem right now and how are you going to solve it? A lot of the advice we give in office hours is what not to work on. And these are often valid problems, just not the most important problem right now. 

Focus, as Steve Jobs famously said, is about saying no. So what you choose not to do is as important as what you choose to do. One very specific thing you should not do is to become a scenester. Startups are considered cool at the moment. If you wanted to, you could occupy all your time playing at being a startup founder without ever actually doing the difficult and unglamorous work of building things and talking to users. Needless to say this is the road to disaster. So if you ever find yourself doing anything that seems at all scenester-ish, tell yourself "No," and get back to real work.

All the advice I've given so far applies equally to all founders, but there's one more piece of advice I have for women specifically: Don't worry about being a woman. Yes, it may be a little harder for you as a female founder. But it's not going to be so much harder that it will make the difference between success and failure. Startups at least have this advantage over the corporate world: they are already so hard that the additional difficulty imposed by being a woman is rounding error in comparison.

Sure, there are some real obstacles women face as startup founders. But don't let yourself be intimidated or distracted by all the noise out there online about how it's harder for you as a woman. Unfortunately, the conversation around this topic is too often driven by people who have not actually built anything themselves. And they're often incentivized to make the problem of sexism seem bigger than it is. Activists, like all activists, tend to magnify the problem they're addressing. And reporters know that outrage is the best way to get clicks.  But the people making the real difference are the builders not the talkers. They’re the women out there who are quietly and successfully building their companies. Like the women speaking here today.

I want to end by emphasizing a point about startups that I think is especially important for women: there's not just one model of a startup founder. The press presents this image of a stock character of a founder. It’s always a young white guy. Whether they're glorifying it or attacking it, it's usually the same stock character. But when you look at the thousands of actual founders out there, as I have, there's a great deal of variety. I'm an example myself. So don't let yourself be deterred from starting a startup because you don't match the image presented in the press.  

If you can make something people want, if you can focus on delighting users, and you measure how much you delight them in revenue, then you can start a startup. That's the standard to hold yourself to, not the stock character founder you see in the press.

Why I Started the Summer Hackers Program

Last month I got an email from a friend’s daughter asking me for advice about breaking into the startup world. My advice to her was to learn to program. I'm not sure that's what she wanted to hear, but that would be my advice to any young person interested in startups—unless they were planning to do biotech or something else that can be built without programming.

Through my work at Y Combinator, I’ve observed a lot of patterns among early stage startups. With female founders, I’ve seen a lot of cases where the woman is an ass-kicking domain expert in some field and has a clever idea but she’s completely hamstrung because she can’t program.

Specifically, she can’t build the first version of her product and is forced to find a cofounder who can.  Because she can't judge technical ability, she'll often choose the wrong person for the job.  And in a startup, if you choose the wrong programmer or cofounder and have to replace them, the delay alone can be enough to kill the company.

How often does this happen? Often enough that I think it might be the worst bottleneck for otherwise promising female founders.

I'm not suggesting that all founders need to be good enough at programming to build the final version of their product, just that they need to be good enough to judge and collaborate with potential cofounders, and perhaps to build a prototype. And you can learn that much in a summer.

It won't be easy. Lambda School is a lot of work. So the Summer Hackers Program is something you should do only if you are seriously interested in learning to code.

As with the Summer Founders Program (the original name of Y Combinator's program) back in 2005, I’m testing a hypothesis. I'm hoping this will broaden the pipeline of female startup founders. I have no idea how much impact it will have, and it could take several years to know. But I know what a problem it is when founders can't program, and I know Lambda School can teach people to program, so this seems worth trying.

Women: Learn to Program this Summer

As an investor, I've found that one of the reasons there are fewer female startup founders than male ones is that there are fewer female programmers. So this summer I'm trying an experiment to see if I can help change that.

I'm going to give 40 women $9000 stipends to cover their living expenses while they take Lambda School's programming course. Lambda School has created a 15-week program designed to fit during the summer break and have generously agreed to cover these 40 students' $12,000 tuition. We’re calling it the “Summer Hackers Program.”

Lambda School is an extremely intense online programming class. It's a serious commitment, but if you make this commitment, you will know how to program by the end of the course, even if you start with zero previous experience.

And though my ultimate goal is to increase the number of female startup founders, this offer is not limited to women who plan to start startups. It's open to any woman in the US who wants to learn how to program.

To enable undergraduates to participate, the course is designed to fit within most colleges' summer breaks. It will run from May 28 to September 3.

The application deadline is April 1, and you can apply here.

Learn more about Lambda School here.


I'm in college and my fall semester starts before September 3. Is there any flexibility with this end date? 

Yes, a little. Go ahead and apply and mention it to Lambda School. 

Will women who take the course owe future income to Lambda School?

No. Lambda School's normal business model is to make their classes free and instead charge a percentage of the income its students make as programmers. Alternatively students can pay tuition. But for the Summer Hackers Program, Lambda School has generously agreed to charge neither tuition nor a percentage of future income.

Can I take the entire Lambda course? 

Yes. While you won't have the stipend, Lambda School will also cover the tuition of any of the participants interested in continuing with the CS and Labs portions of its curriculum—an additional 15 weeks full-time or 30 weeks part-time.

Why is this limited to women in the US?

Since neither I nor Lambda School have tried this before, I wanted to reduce the number of variables.  If it works this summer, we may expand it next summer.

Will students be able to use Lambda's career placements services?

In order for Lambda School to recommend you, participants will have to complete the CS and Labs portions of Lambda School. Tuition for those units will also be free for women who want to continue.

Do I need to move to the Bay Area? Does anyone help me find housing?

No to both. The Summer Hackers Program is an on-line, remote course.

We use inclusive definitions of “women” and “female” and welcome trans women, genderqueer women, and non-binary people who are female-identified.

Grow the Puzzle Around You

In 2005, I cofounded Y Combinator, the first "accelerator." Today there are hundreds of them all over the world, but in 2005 what we were doing was so unusual that most people in Silicon Valley regarded us as irrelevant.

Y Combinator began the same way as most other startups: with a hypothesis about something we thought people wanted. It turned out they did want it, and we grew and grew. Now we've funded 1867 startups with a total value of over $100 billion.

So having myself been through the type of startup journey that many of you are hoping to, I wanted to tell you my own story.

If you only know about me through the media, you might get the impression that my contribution to Y Combinator is that I’m Paul Graham’s wife. And while I love being his wife, there's a bit more to the story than that.

I was born in Minneapolis in 1971. Later that year, my mother left home, leaving my father alone with a small baby. So he took me back to Boston, where my grandmother lived.  I lived with her during the week while my dad worked, and with my dad on weekends.

My grandmother was the most important female role model in my life. She was a very independent person. The term anyone who knew her would use to describe her was "free-spirited." For example, in the wintertime, after putting me to bed, she'd go out and work till late at night on giant ice sculptures she built in the front yard.

She did what she wanted, and she didn't care if people thought she was unconventional.

Despite growing up without a mother, my childhood was pretty happy. My dad made a lot of sacrifices so I could get a great education, and he constantly encouraged me.

I played soccer when I was younger, and when I was in 9th grade we played an away game against a school called Phillips Academy, in Andover, MA.  The place seemed so unbelievably fabulous that I decided on the spot that I was going to go to school there.

Little did I know that this decision would have bittersweet consequences. In my old school I'd been a big fish in a small pond. I was a straight A student and good at sports.  But when I got to Andover in the fall of 1986, it seemed like everyone was a straight A student and good at sports. I got really discouraged and basically gave up.

I defaulted to being a mediocre student, and did nothing impressive or noteworthy for the next decade. They were like my own personal Dark Ages.

It’s a bit embarrassing to reflect on, but I think it’s important to mention, because when journalists and biographers write about successful founders, they often focus on early predictors of success in their formative years. In my case there certainly weren't a lot of the conventional kind. No one would have voted me "most likely to succeed."

But while I had no "achievements," I did have three defining characteristics when I was younger that were critical in making Y Combinator work.

The first was the quality that caused my YC cofounders to nickname me "The Social Radar." I was one of those kids that you just couldn’t get anything past. If something seemed off or out of character, I noticed and made inquiries. I was always trying to figure things out based on subtle social cues.

The second was that I never liked being at the mercy of anyone else. I hated anyone telling me what to do or not do: parents, teachers, bosses, people I was forced to collaborate with but disagreed with—anyone.

And the third distinctive thing about me is that I've always pretty much been a "straight shooter." My grandmother and my father were both like that.

But I’ll come back to these in a minute.

The day after I graduated from college, my beloved grandmother died of cancer. It was a really sad and lonely time in my life. And now I was supposed to find a job, with a degree in English and absolutely no clue what I wanted to do. 

I wound up getting a job at Fidelity Investments in their customer service group, answering calls from 3:30 til midnight each day. Basically talking to retail investors about why their Magellan account went down that day. Ugh. I didn’t love the job but I did love having a job. Working hard and getting paid for it and not having homework hanging over my head. It was great. After Fidelity I worked in investor relations in NYC, then at Food & Wine magazine and at an automotive consulting firm. I even briefly worked for a wedding planner.

In 2003, I was working in the marketing department at an investment bank in Boston when I first met Paul Graham, at a party at his house one night.

We started dating and I felt like I’d finally met Mr. Right. Despite having quite different backgrounds, we were remarkably similar.  If I thought I never wanted to be at the mercy of someone else, Paul was that dialed up to 11.

He’d moved back to Cambridge after selling his startup, Viaweb, to Yahoo and was at the time writing essays, working on programming languages, publishing a book, and curing his debilitating fear of flying by learning to hang glide.

Paul is the best problem solver I've ever met. He’s also a genius at expanding ideas and making radical improvements to things. One of his defining characteristics is telling people "You know what you should do..."

Paul and his circle of friends exposed me to this new world of startups. It felt much more exciting than the later stage of publicly-traded tech companies that I was involved with at the investment bank. I read the book Startup by Jerry Kaplan, about his pen computing company called GO, and I was immediately hooked. It was like some light shining down from the heavens.

I wanted to hear more stories about the early days of startups, so I started working on a book of interviews with startup founders. The book was called Founders at Work, and was published in 2007.

At the same time I was becoming more interested in startups, I was becoming less interested in my job. The Bubble had burst a few years back and the investment bank was making drastic cutbacks. Working there had become boring and unpleasant.

So I applied for a job doing marketing at a venture capital firm, where I felt I might be one step closer to the more exciting world of startups. While I was interviewing with the VC firm, Paul would “you-know-what-you-should-do” me each night at dinner, telling me how I  should change the VC business once I got into it.  We’d talk for hours about how broken early-stage startup funding was, and most importantly, how more people would start startups if it could be made easier for them.

As the VC firm took longer and longer to decide to hire me, the ideas grew more and more compelling until one night Paul said, "Let's just start our own." The next day we convinced Paul's cofounders from Viaweb, Robert and Trevor, to join us part-time. The initial plan was that they would pick and advise the startups and I’d do everything else.

Instead of giving large amounts of money to small numbers of established startups, like traditional VCs did, we'd give small amounts of money to large numbers of earlier stage startups, and then give them a lot of help.

Our initial target audience was programmers, who we felt could handle the technical aspects of a startup but were clueless about everything else, just like Paul, Robert and Trevor had been.

We also had more faith in young founders than most investors did back then.  This was back in the days when Google’s VCs had insisted the founders hire an outside CEO as a condition of their series A round.

None of us had any experience at angel investing, and that's where the idea of funding startups in batches came from. We decided to fund a bunch of startups at once, during the summer, so that we could learn how to be investors.  In March 2005 we launched Y Combinator’s website, inviting people to apply for what we called "The Summer Founders Program."

We funded 8 startups that summer and recognized almost immediately the power of investing in batches. It was so much better for the founders. They had colleagues to help them during what had previously been a very lonely process. But it was also a much more efficient way for us to help the startups, because we could do things for them all at once. Every Tuesday Paul cooked dinner for all the founders, and at each dinner we brought in a speaker to teach them about startups.

Paul talked to all the startups about what they were building, and I helped them all get incorporated as C corporations.  This was a big deal in those days, because back then to become a C corp you had to pay a lawyer $15,000 to do it for you.

The first summer, we gave the startups $6k per founder, which was based on the stipend that MIT gave grad students during the summer. At the end of the summer, we hosted the first Demo Day, for an audience of about 15 investors.  Reddit was in that first batch, and the founders of Twitch, though they were working on another idea, and Sam Altman’s geolocation startup.

Though we'd only tried funding a batch of startups as a way to learn how to be investors, we realized within a couple weeks that we were onto something promising. So we decided to do all our investing in batches. And we also decided that we'd fund the next batch in Silicon Valley.  We knew that a lot of people would copy us, and we didn't want someone else to be "the Y Combinator of Silicon Valley." We wanted to be that ourselves.

Despite the fact that we’ve grown significantly and have expanded in many ways, YC’s core program is remarkably similar to what it was 13 years ago.

The question I always used to get from people over the years was, "So, what's your role at YC?" It used to really bug me because no one ever asked Paul, Robert, or Trevor that question.  But now I think it’s kind of an interesting question to think about.  What was my role as the only non-technical founder of Y Combinator?

At the beginning there were tons of errands, like with any startup, that just had to get done and there was no one else to do them. Paul and I divided up responsibilities perfectly, which I think is critical when you start a startup with your partner or spouse. He made our website and the application form, and I got other stuff set up for that first summer: I worked with the lawyers to set up Y Combinator the entity and to create all kinds of template legal paperwork for our standard investments and everything founders would need to set up their company and assign stock properly (which is a lot if you’ve ever done it!).  

I also had to learn quickly about how to advise them on filling everything out, so they wouldn’t have to pay any legal fees. I had to set up Paul’s small office building in Cambridge to be our weekly dinner gathering space for 25 people. I set up our bank account and contacted people to speak each week at our dinners. I bought the groceries that Paul cooked for the dinners. I even delivered air conditioners that I’d bought at Home Depot to the founders. I was the only one of us organized enough to make all that stuff happen.

When it came to investing, I had something that my cofounders didn’t have: I was the Social Radar. I couldn’t judge our applicants’ technical ability, or even most of the ideas. My cofounders were experts at those things.  I looked at qualities of the applicants my cofounders couldn't see.  Did they seem earnest? Were they determined? Were they flexible-minded?  And most importantly, what was the relationship between the cofounders like? While my partners discussed the idea with the applicants, I usually sat observing silently. Afterward, they would turn to me and ask, "Should we fund them?"

From the beginning I was careful about only funding earnest people. Back then, I never envisioned the people we funded growing into a community of thousands of YC alumni, but I always tried to create an asshole-free culture. If I could tell someone was a conceited asshole, we didn’t fund them. I’m sure we’ve since funded some conceited assholes, but early on I was pretty rigid about this. And I think it’s the basis of the culture of our alumni community.

So far this stuff might sound a bit different than you’d expect in a successful investor. But when you get to an extreme in something, things get qualitatively different. Y Combinator was a new extreme in the venture funding business, so what made someone a good investor was different. VCs relied on growth figures and estimates of market sizes, but those didn't exist at the stage we were investing. What YC needed was deeply technical people to understand the potential of an idea, and someone like me to understand the founders' characters and the relationship between them.  And to do that well you needed abilities no one had previously considered important in an investor.

It was doubly hard because some of the applicants were so young. We had to judge the founders not by what they were, but what they could turn into. Imagine Mark Zuckerberg back in his dorm room in 2004, with a website that let college students see what other students at their school were doing. Not super impressive-seeming to traditional investors.

Another secret weapon of mine that was strangely well-suited to Y Combinator was that I was a very experienced event planner.  Events are a critical part of what YC does. When you fund startups in batches, everything’s an event. Interviews are an event, each dinner is an event, Demo Day is an event.  As the alumni network grew we started doing events for alumni too, and from the very first year we did big events like Startup School.  I’d been doing events for years in my marketing jobs, so I could run all these practically with one hand behind my back.

Probably the thing that was most different about YC as an investment firm was that it felt like a family.  And I was its mom; I was soft and sensitive at a time when investors tended to be hardened and aggressive (and I’ll throw in ruthless too for a few of them). I cared about how the founders were feeling, if they were overwhelmed, if they were eating properly. I’d counsel them on relationships that were under strain due to the pressure of the startup. I’d listen at length and help them with their cofounder disputes and breakups.

Starting a startup is emotionally draining for founders, especially in the beginning.  Sometimes they just needed someone to listen. Luckily, my entire college career had trained me to be a good listener to people’s social problems.

And I tried to always be a straight shooter with my advice. In fact, we all were. Paul is the straightest shooter I know, which is why his advice is so valuable. He doesn’t bury it in euphemisms.  Or worse, withhold the truth in order to preserve people's feelings. And as tough as they might have found his advice at the time, founders always wind up thanking him for his candor.

One other thing Paul and I had in common was that we weren't driven by money. We were interested in startups and we wanted to help people start more of them. This was the basis for everything we did at YC. It was what allowed us to do something as weird as YC in the first place.

Because YC didn't have any LPs early on, we weren’t even constrained by a vague fiduciary responsibility to anyone. This allowed us to take more risks with which startups we chose to fund and also allowed us to be benevolent to failing startups.

That often brought us into conflict with other investors who had different priorities.  Early on, we funded a husband and wife team who had a baby. They worked hard on the startup but it was clearly failing. One of their investors tried to get them acquihired by a big company in the Valley, who ultimately passed.

Paul talked to the founders and learned they just wanted the security of jobs, so they could take a break from the constant stress of a startup. So he talked to the big company and got one of them hired there.  The founders were delighted. The investor, on the other hand, was livid. He ripped into Paul harder than almost anyone I’ve ever witnessed (well, before Twitter) saying that Paul had blown any chance of an acquihire. I still don't get why investors squeeze founders even over small outcomes like this. 

I also never cared much about fame. Or my personal "brand". I just wanted Y Combinator to succeed.

One thing we've learned from Y Combinator is that the most successful startups tend to grow organically out of the founders' lives. This was true in my case too. I was almost uncannily well suited for the kind of work it took to make YC successful. But the things that made me well-suited for it were so far from the qualities most people associate with startup founders. I'll list them so you can see for yourself. I was the social radar, a good event planner, maternal, empathetic, a straight shooter, and not driven by money or fame.  Think how far that is from the profile of the typical startup founder you read about in the press. Maternal? Since when was that an important quality in a startup founder? Let alone the founder of an investment firm. And yet it was critical to making YC what it is.

That's why I wanted to tell you my story. It's not true that every person can start every startup. But a lot more people have what it takes to start some startup than realize it. A lot of people, perhaps all people, have some distinctive combination of abilities and interests. And a lot of those combinations match some startup idea.

So if you want to start a startup, I recommend you try asking yourself what's distinctive about you. What unique combination of abilities and interests do you have?  And don't edit your answers, because as my example shows, the most unlikely ingredients could be the key to the recipe.

In fact, it may even be that the strangest combinations of qualities are the most valuable.  I had a weird combination of qualities, but they matched YC because it was such a weird company. And the most successful startups do tend to be weird. They're usually such outliers that the idea sounds preposterous at first. To everyone except the founders, because the company has grown out of their experiences.

So what can you learn from my story? Here are 9 things:

1) There is no one mold for a successful founder.  Just because you might only see a certain type in the news, that doesn’t mean you need to turn yourself into that.

2) Do what you’re genuinely interested in and try to play to your natural strengths. A startup is so much work that you'll give up if you're not genuinely interested in it.

3) Don’t pay attention to the mainstream’s opinion of what you're doing—whether it’s your skills, your idea or whatever.  Unless they’re your users, their opinion does not matter. (Pay a lot of attention to your users' opinions though!)

4) Find a cofounder with complementary skills, but the same moral compass as you. Paul and I had the perfect combination of skills to start something like YC. We agreed on all the big questions, and we each deferred to the other's expertise on the small ones.

5) Focus on making something people want. Everything follows from that. In 2005, people needed a way to get a small amount of funding easily.

6) Don’t let rejection distract you or hold you back. You’ll get rejected in so many different ways, but you must keep moving forward.

7) Start small so you can be nimble and open to change. We never could have pulled off moving our operations to Silicon Valley in a matter of months if we'd hired a bunch of people in Cambridge.  To this day, YC has a tradition of trying things on a small scale before expanding them.

8) It’s ok not to have gone to an elite college. I grew up thinking that that was the be-all and end-all. You’ve been trained to believe that you’ll be judged by your credentials. But in a startup it's the users who judge you, and they care about your product, not your credentials.

9) Be intrepid. There's room for lots of different kinds of people to be startup founders, but you do need a certain amount of boldness—to work on ideas that most people would consider stupid, and to keep going when you're ridiculed or ignored.

You are a jigsaw puzzle piece of a certain shape. You could change your shape to fit an existing hole in the world. That was the traditional plan. But there's another way that can often be better for you and for the world: to grow a new puzzle around you.  That's what I did, and I was a pretty weird-shaped piece. So if I can do it, there’s more hope for you than you probably realize.

Think about Equity

When I was younger I thought the way to get money was by working for a salary. If you wanted to get a lot of money, you did it by getting a high salary.

That’s still the way most people make money, and probably even the way most people make a lot of money.

But there’s another way to make money that I didn't know about when I was young, and that's becoming increasingly common. It's called equity. Equity is especially common as a way to make large amounts of money. A lot of people who get rich these days do it via equity, not salary.

I usually write for an audience of potential or actual startup founders. They understand what equity is, at least compared to the general public. But this post is not for startup founders. Here, I want to introduce the idea of equity to people like I was in my 20s—to the people who don't consciously realize there’s another way to make money besides salary.

Equity means stock. In addition to salary, some jobs also give you a slice of the company you work for.

If someone had told 25-year-old me about that, my reaction would have been, "Can you do that?" And the answer is, usually not. If you go to work for a big established company, they won't give you part of it. And if you go to work for Joe's Diner, Joe won't either.

On the other hand, if you start your own company, you can obviously have part of it. This is how the very richest people—the Zuckerbergs and the Bezoses—make money from equity. They own part of the company they started, and as the company grows in value, their fortune does too.

It used to be extremely rare for people to start companies that grew big. It has always been common for people to start companies that start small and stay small—hair salons, cafes, and so on. What’s changed in the last few decades is that it's increasingly possible for individuals to start companies that start small and grow big. And I don't mean just Facebooks and Amazons. There are thousands of companies smaller than Facebook and Amazon that have made their founders rich.

Starting a startup has gone from extremely rare to just rare. It will probably never be more than that. Starting a startup is very hard. It’s definitely not for everyone.

But you don't have to start a startup to get equity in it. Startups give their employees equity, too. How much equity you get in a company depends on how early you join it. The fifth employee will get much more than the hundredth.

On the other hand, the hundredth employee is taking less risk than the fifth. By the time a startup has a hundred employees, you have a better idea of its chances for success than when it has just five.

So making money from startup equity is not an all or nothing thing. You can go for a large amount of very risky stock (and a large amount of work) by starting the company, or a smaller amount of less risky stock by joining it later.

And now we're in territory that matters to a lot of people. Founding a startup is not for everyone, but anyone who’s reasonably smart and willing to work sufficiently hard can be an early employee of one.

I was one of those people. When I was 25, I worked as hard as people work at startups, and all I got for it was salary and a small bonus. If I'd known about equity, I would have seriously considered trying to work for a company where I'd get some.

Once you start looking at the world from the point of view of equity rather than just salary, everything changes. Deciding where to work becomes a lot harder. If you're only working for salary, you know exactly how much you'll be making. But startup equity is only valuable if the company succeeds. How can you tell if a startup is going to succeed? The truth is, it's not easy.  It's investors' full time job to try to predict that, and even they have a hard time doing it well.

But it's not impossible for potential employees to predict how well a startup will do. People in Silicon Valley, where startups are common, have several tricks for doing it. In some ways they have an advantage over investors. For example, one way to predict how well a startup will do is to be one of their users. There were thousands of undergrads who knew Facebook was a big deal before any investor did. And many of them made a lot of money from equity by going to work for it.

Another way to predict which startups will succeed is to look at where your peers are going.  Have several of the smartest people in your graduating class ended up at the same startup? That's probably a company worth investigating.

I'm not going to try to explain all the techniques you can use to predict how well a startup will do. My point is just that such techniques do exist. You're not just flipping a coin. If you work hard at figuring out where to work, you can do a lot better than random.

I don't want to give you the impression that going to work for a startup is guaranteed to make you rich. Far from it. Most startups fail. So you should never consider equity in a startup as more than a bet that might turn out well. On the other hand, it's a bet that you can make fairly cleverly, if you work at it, and when it turns out well, it can turn out very, very well.

So the world has now, I hope, gotten more complicated. You now know there's another way to make money besides salary. You can get it by starting a startup or by going to work for one. And deciding which startup to work for is not like deciding what big company to work for, where you go for the big names, because the equity with the most upside is that of startups so small that most people have never heard of them.

There are a lot of new things to think about here. Thinking about them will be worthwhile.

What's Different about "Unicorns"

This is the talk I gave at the Female Founders Conference 2017. 

Last year I spoke about all the problems that can arise in a startup and how to avoid them. And to be honest, I think last year's talk is the best general startup advice I could give you. So if you haven't read it before, please do.

And it would be worth re-reading even if you have, because a lot of these problems are the kind that get you even when you think you're already watching out for them.

Last year, I ended by saying that I wanted there to be more women founders of the big winners, of the so-called unicorns. These are the founders who make the most influential role models, and role models are what we need most if we want to encourage more women to start their own companies.

In recent years there’s been an increase in the number of women starting startups, and in the number who’ve raised significant seed and Series A rounds. This is good.

Now we’ve got to focus on the next target: more women-founded billion dollar companies. So that's what I'm going to talk about today: what it takes to start a startup that's not merely successful, but massively successful.

I'm not saying everyone has to do this. You don't have to start a startup. And if you do start one, you don't have to start a Google. But if you do want to start a Google, or think you might, what does it take? What's the difference between a successful startup, and a super-successful startup?

Fortunately I've seen enough of both types at close hand that I can see patterns of differences. I made a list of the things that I think are different about the unicorns, and there are 9 of them.

1. Be lucky

I want to get this one out of the way right from the start. In addition to everything else they need, the unicorns are lucky. One of the most important kinds of luck is timing. The most successful founders have the right idea at the right time. And you have less control over that than you might think, because the best ideas are not deliberate: they tend to grow organically out of the founders' lives.

However, while all the most successful founders are lucky, none are merely lucky. It is never a matter of having a great idea and then boom, a few years later you're a billionaire. Far, far from it.

2. Have the right motives

One of the most noticeable differences between the founders of super successful and moderately successful startups is their motives. And in particular, the founders of super-successful startups are never in it mainly to get rich or to seem cool. They're always fanatically interested in what the company is doing.

Incidentally, it’s perfectly fine to start a startup mainly for the money. But unless your motives change in the course of it, it probably won't wind up being a really big one.

There are multiple reasons why startups do better when the founders are truly interested in the idea. They work harder, since they love the work, and their enthusiasm is infectious. They think longer term. And they are much harder for another company to capture with an acquisition offer, because they don't actually want to quit.

3. Hit a big need

This one may sound obvious, but huge startups need huge markets. You have to make something a lot of people will pay for, or people will pay a lot for.

And this is one place luck has a big effect, because market sizes are impossible to predict.

For example, the Airbnbs didn't know how many people would want to stay in other people's homes. All they knew was that enough people would to make the idea worth working on. The founders of the most successful startups never realize, in the beginning, how big they're going to get.

So our advice at Y Combinator is not even to try to hit a big market early on. Since you can't predict these things, it's better just to work on something you yourself want, and then hope there will be lots more people like you.

4. Do something basic

When you describe the biggest startups, most all of them are doing something very basic. Google is how you find information. Facebook is where your friends are. Uber drives you places. Airbnb gives you somewhere to sleep. These are all things you could explain in a few words to a five year old.

However don't use this as a test for what to work on, because ideas often start out less general.  At first Facebook wasn't where everyone's friends were; it was just where a couple thousand Harvard students were.

5. Be willing to work on a dubious idea

A site for a couple thousand students at one college doesn't sound like a very promising idea, does it? It may seem like a promising idea now, because we know how the story turned out, but it didn't at the time. Almost all the really big startups seem like dubious ideas at first. I know exactly how Airbnb's idea seemed at first, because I was one of the people whose job was to judge it, and I didn't think much of it at the time.

It's not just that these ideas don't seem as big at first as they later turn out to be. They seem to most people like bad ideas.

You need to be a certain kind of person to work on one of these bad ideas that turn out to be good. You need to be independent-minded. You can't care what other people think. It's now part of the conventional picture of a successful founder to be a maverick, and that part of the conventional picture is very accurate. I can't think of one that I'd describe as a conformist.

6. Not be afraid of a big idea

You also have to be ambitious. Because what happens with these initially unpromising ideas is that they blossom into terrifyingly big ones. You start a site for college students, and pretty soon you realize you could expand to sign up the whole world if you wanted to.

At this point most people's reaction is fear. Signing up the whole world sounds like a lot of work. It also sounds like a valuable prize, and you have to fight to win those.

The fear of big ideas prevents most people from even realizing they could expand a site for college students into a site for the whole world. But a few people are more excited than afraid when this happens.

7. Be driven and resilient

Another thing I notice about the founders of the really huge startups is that I would not want to stand between them and something they wanted. All of them, 100%, have exceptional drive.

But, it’s not always straightforward to tell how driven someone is. Drive can be suppressed when someone else has authority over you, like in most schools and jobs. In these situations, people who are really driven may even read as less promising than people who are merely obedient. So not only is it often hard for me to tell how driven someone is, people often can't even tell themselves.

You can tell after they start a startup though. No one has authority over you in a startup. Most people find that authority vacuum uncomfortable. But a few expand into it. A few think, "Ah, this is how life was meant to be."

8. Focus: Life’s Work

Drive by itself isn’t enough though. You have to be driven to work on this particular company. In all the really huge startups, the company is at least one founder's life's work. So they'd never willingly be acquired, for example. If you sell your life's work, then what are you supposed to do?

9. Be able to evolve into a manager

Early on, starting a startup is all about the product. But that changes when a startup gets really big. A founder who wants to keep running the company has to become a manager. You don't need to have management ability initially. There's plenty of empirical evidence to show that you can learn this on the job. But you do have to be able to learn it. You probably even have to like it.

Designing cool products and managing people are very different things. Most people who like building things dislike the idea of being a manager. It's a rare person who can be great at both. But you have to be to create one of the really big startups.

Those 9 things, as far as I can tell, are the differences between startups that are merely successful and the ones that become really big.

But they're not just a list. When you put them all together, they make a story of how a "unicorn" happens. The founders work on something their own experience shows them the world needs.  It wouldn't seem like a promising idea to most people, but they work on it anyway, partly because they understand the promise of the idea better, and partly just because they think it's cool. As they work on the idea, they realize it could become even bigger than they thought. Instead of shrinking from that realization, they embrace it eagerly. This, they realize, is what they want to do with their lives. And they are so committed to the company that they're willing to morph themselves into whatever it needs.

There’s a lot of variety in startups, but this is the most common path for the really big ones.

Remember, you don't have to start a startup, and if you do, it doesn't have to be a "unicorn." But if you do, this is probably what it will look like: an unpromising idea that blossoms into a frighteningly big one, and driven founders who see that opportunity and run with it.

I'm hoping that there are some of you in this audience who hear this description and think, "Oh my God, it's like she's describing me!" The people on the path to being huge don't usually realize it, early on. But I'm hoping that if I can encourage just a few of you to keep going, then when you succeed, your example will encourage a wave of new women founders.

Yes, this is a very long-term plan. But, after all, this is my life's work.

Y Combinator When No One Cared

Recently I came across one of the first pitch letters I sent to journalists about Y Combinator. It was from the first few months of YC’s existence and it’s a snapshot of what our thinking was way back in the early days in 2005. It also reminded me that no reporters ever responded to my email.

  From: Jessica Livingston

  ...We’ve recently kicked off the Summer Founders Program, a new
  program that lets people start startups as a summer job. [Background:
  We’re testing a theory that technology is enabling a new model
  to evolve where founders of startups can be a lot younger than
  they used to be. As the age of startup founders creeps downward,
  we foresee an alternative path for the smartest and most ambitious:
  instead of going to work for Microsoft, they start a startup and
  make Microsoft buy it to get them.
  We got 237 applications (in less than two weeks!), from which we
  chose 8 to fund. They're doing very varied things: click fraud,
  software for cell phones, a dating site, a news aggregator, desktop
  search, etc. Each group has recently moved to Boston, received
  funding from us, and incorporated etc.
  One thing that’s different about Y Combinator is that the three
  other founders have deep technical backgrounds (founders of Viaweb,
  a startup that developed the first web-based application, which
  was sold in 1998 to Yahoo) and we believe this gives us an edge
  in terms of picking good ideas even before a business plan exists
  and providing important technological advice early on...

The "news aggregator," incidentally, was Reddit.

We hadn’t even realized then that one of the most innovative aspects of Y Combinator would be funding companies in batches and thus applying mass production to startups. Instead, I played up the idea that it was now easier for younger people to start startups.

I admit that I was never very good at PR. This pitch isn’t very gripping, except maybe in hindsight. But if anyone had clicked on the link to the Summer Founders Program (SFP) background description, they could have discovered some new ideas that would redefine the way early stage tech funding happened.

When I reread the SFP description, I find the diffs between then and now fascinating. For example, we thought it would be ok to work on your idea each summer and go back to school in the fall. We gave founders $6,000 per person.  There’s a vague offer to help with getting follow-on funding, which during the summer evolved into Demo Day.

But most of what’s in there is spot on. 12 years later, YC hasn't strayed too far from its origins.

It’s fun for me to think about our origins. They are happy memories. We were working on something that we were really excited about and that was totally new, and we got to watch as it started to work almost immediately. And since no one cared about us at all, we were free to focus entirely on helping the startups.  And of course no one cared about the startups either. YC was a little group of people everyone ignored, working together to do new things with no distractions.

It’s also a lovely reminder to me how new ideas start small. Small but onto something. Keep working on something that a few people love. The press may ignore you, but users won't, and that's what matters. Laboring away in obscurity, as frightening as it feels at the time, is the way a lot of good things happen. Maybe the way most good things happen.

The Sound of Silence

I recently heard one of the more interesting insights about Silicon Valley I'd heard in a while. It explained something I’d wondered about for years.

But I can't tell you what it was.

There's too much downside in sharing any opinion that could easily be misinterpreted online. Even facts are dangerous to share if they don’t align with what people want to believe. 

There's a lot of concern about "fake news" lately. That is a real problem, but there's also the opposite problem: true things that aren't being said.

Some of the most useful things I've learned about startups over the years are also things I'd never share publicly. Not because the ideas are necessarily controversial in their own right, but because anyone could twist them to seem controversial if they were sufficiently motivated to. And when that happens I immediately regret having said anything. It's a massive distraction. I have two young kids, and I have hundreds of startups to keep track of. I don't have time to fight with people who are trying to misunderstand me.

Not surprisingly, the juiciest targets for this sort of willful misinterpretation are organizations and people who are successful. They have power, and power makes them both interesting and envied; I teach founders they all have to be prepared for this as their startups grow. 

In my blog post, "Subtle Mid-Stage Startup Pitfalls" I said:

       You can't prevent yourself from being a target. It's an automatic
       consequence of being successful. So the best you can do is react
       in the right way when people attack you. To some extent you have
       to resign yourself to letting people lie about you.

The problem with this is, the most successful people in an industry tend to have some of the most valuable insights about it. So you lose a lot when they are silenced.  And also, if they keep those insights to themselves, it makes the powerful more powerful. It means useful information remains amongst insiders, like me, for example.

Another downside of friction in sharing ideas publicly is that we lose the conversation they would have generated. Before Twitter et al, and before the media were so reliant on page views, Paul wrote an essay called “What You Can’t Say.” In it he said:

       The trouble with keeping your thoughts secret, though, is that
       you lose the advantages of discussion. Talking about an idea leads
       to more ideas. So the optimal plan, if you can manage it, is to
       have a few trusted friends you can speak openly to.

Thirteen years later, that's my default plan. There’s just too much downside for me to get distracted with others’ opinions of my opinions. [1] It's not that I'm afraid of expressing my opinions. I just think, "Why bother?"

It's great that technology has given more people a voice on the internet. But that doesn't necessarily mean less friction in sharing ideas, because some of those voices are shouting down the others.

How do we solve this problem? I don't know, but I hope there is a solution. I hope we’re just in the social media 1.0 phase, and that technology will eventually bring us a social media 2.0 where one can speak more openly. [2] 

I’m horrified at the prospect of the most insightful people in their fields thinking, "That's something I should comment on. Nah, what's the point? Too much downside." 

That's what happens now, and we don't even know how much, because how do you measure the sound of silence? 


[1] One of my favorite parts of “What You Can’t Say”:

       Darwin himself was careful to tiptoe around the implications of
       his theory. He wanted to spend his time thinking about biology,
       not arguing with people who accused him of being an atheist.

[2] One reason I have hope for a solution is that I do find I can speak more openly on Facebook than elsewhere, so maybe that’s a clue about what direction social media 2.0 might take.

Don't be Too Busy to Vote

I’m embarrassed to admit that I didn’t vote in the last presidential election.

I was so busy with 2 small children and a fast-growing company that I could barely keep up with everyday life.

I rationalized my decision to blow off voting by telling myself California would surely choose Obama anyway (it did). Why did my vote really matter?

Looking back, I realize how wrong I was. California would not have chosen Obama if all of his other supporters had been as lazy and disorganized as I was. Everyone's vote matters. And in this election, especially, your vote really matters, because the stakes are so high. Donald Trump is the most dangerous candidate I've seen in my lifetime.

This election I've already voted. I hope Hillary wins, but if Trump wins I'll at least be able to tell myself I voted against him.

(If you live in California like me, there is another very important reason to vote: to end the death penalty.)

Please don’t let the day-to-day business of life make you feel too busy to vote on November 8. Make a plan now about when and where you'll vote. Research shows people are more likely to vote if they make a specific plan to. 

VotePlz can help you find your polling place.

This may be the most important vote you cast in your life.