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When you feel that anxiety of something in your career, not to just instinctively run away from it.
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The cultural constraints are actually way bigger than the actual constraints of changing jobs and learning new things.
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What is it >> to you that makes YC so powerful for its graduates now?
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>> If you as a founder don't get good funding on the other end of YC at a high market cap, nothing else matters.
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I think it's better [music] time than ever to be a founder.
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Number one, there's more capital available than ever.
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Health, family, work, and social life.
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I can tell you in my case, you know, if you're talking about me, I've never had a social life.
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>> Cassell, welcome back to John Ideas. >> Yeah.
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>> Welcome you this time.
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>> [laughter] >> Last week we talked a lot about Applied, amazing company, $15 billion business you've built.
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But in some ways, when I was researching this, the most interesting bits for me were A, your life journey, which is kind of amazing. B, your career advice.
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I think you've got the the most strategic career advice of any of the guests that I've interviewed.
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And then C, Y Combinator.
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So I want to talk about all those things.
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I think we'll start with career advice.
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Tell us about the lesson you learned from this Harvard professor on making good strategic decisions about which industry to be in.
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>> Top of the list is it's better to be in a high-growth business industry than it is to be in a mediocre industry.
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You could be a You could be You could be the best at a mediocre industry, and you can be mediocre in a high-growth industry, and the mediocre person in a high-growth industry does financially better and has a bigger impact and all those things.
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So today there's a lot of anxiety around AI, especially for new grads who are like, "Oh, well, what job should I take?"
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And they're kind of almost like this in instinct to run away from it and and kind of look back at the past, maybe.
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It's important when you feel that anxiety of something in your career, not to just instinctively run away from it.
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Like maybe look at it and try to find where the growth is, and try to run towards that growth.
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And um especially early in your career, I think you'll get rewarded a lot more than anything else.
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>> And so for you, that decision was you were in the in the auto industry. Yeah.
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You you you'd kind of grown up in Detroit after moving from Pakistan, which we'll talk about.
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You were in the auto industry doing a I imagine very well. Yeah. And so what happened?
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Did you someone told you you actually this is not the best industry to be in?
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>> That's really, you know, tough advice when that's all you know and you grow up with.
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And I made a very pragmatic and dispassionate move.
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Uh and I moved to the Bay Area.
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I moved to Silicon Valley um because Detroit is a great place for making cars.
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Um making software is is really done there.
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And I think there's probably another takeaway there for career advice, which is it is very important that you learn from and are around really competent people.
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And so if there's anything that you should uh optimize beyond just finding an industry that's growing is to be around people who are very good at that that their jobs.
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And I mean, again, a little controversial, almost at any cost.
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I I wouldn't care really about compensation.
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I say this as somebody who didn't have money growing up and had to pay my own way.
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I wouldn't care about compensation.
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I wouldn't care about title.
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I wouldn't um and again, it's all within you know, you have to be thoughtful here.
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I'm not saying I'm not saying take the worst job offer because that's sometimes not the right answer as well.
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But the person and the people you're going to learn from, that is really important.
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More mid mid mid-career and uh I would say later in your career depends again on where where you where you're at.
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Um as you're technical non-technical etc.
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Um I do think in your where you're optimizing changes, the moment you have kids, the moment you have your parents are getting older and you have other responsibilities.
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Um so you you have to be actually more thoughtful.
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You can't just say I'm going to start a company at 45.
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I I I I'm not in that camp uh that even starting a company is for everybody. >> Right.
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So yeah, I think I think you have to be a a bit more thoughtful.
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But, with that being said, I think the mistake that you can make in mid or late careers like, well, I spent 15 years at McKinsey, so I I got a It's like that's fine.
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You like the the constraints we have in our brain the cultural constraints are actually way bigger than the actual constraints of changing jobs and learning new things. >> Yeah.
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Where is the puck going today?
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So, for for for me and for you, it was like get to Silicon Valley, build technology companies, software companies originally.
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Um where where I mean, AI obviously, but what what should people be thinking about?
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Like, this is the future, go build [clears throat] your career in this industry.
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>> You know, what are you going to value at the end of your existence?
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And what are the constraints that you have today?
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And for me, the constraint when I was younger is I didn't have any money.
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And so, that that was a big deal.
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And that was the driving function.
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Only like as an adult, it came to my realization that actually everybody isn't like desperately poor.
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>> [laughter] >> So, it's like it's like all my decisions were made very easily.
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It's kind of like, you know, when I was at General Motors, they said, "The Corvette is the easiest you know, program to work on because everybody knows how the decisions are going to be made."
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You want to figure out what that true north is.
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And the way that you kind of figure out or at least it's the the the recommendation I would have is yeah, you're at the end of your life and you look back and what is it the stuff that you want around you?
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And then you work backwards from there.
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And I think it's completely okay if it's not AI and working at a you know, venture back company or being a founder of this company.
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There's a There's a million paths to success.
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It's success is just too too narrowly defined.
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Now, if you're talking about you've already gone through that exercise and you've concluded you want to be in the technology business, you know, how do you what what to work on?
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I think it's better time than ever to be a founder.
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It is easily the best time.
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There's a couple of reasons for that.
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Number one, uh there's more capital available than ever.
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Uh there are literally more professional institutional grade capital available in almost all parts of the planet never existed before.
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You can literally go to small countries now that have VCs.
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That [clears throat] wasn't even the case in London 25 years ago.
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You have other things as well.
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You have people who want to join startups.
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That was actually sometimes more difficult than raising capital, which is like you have to convince people that you know, it was the default when I was coming out of Harvard was go to McKinsey, go to Bain, go to BCG, go to Goldman, there's go to BlackRock, go to Blackstone.
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The handful advent there's not many company you know, being capital should say. And that was it.
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That was those are the the leasing.
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Now it's like the default is I want to find a young company, which is great.
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Because if you're a founder, that means all these people were very qualified actually look at the thing that you're doing is is something that you can enjoy.
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I think probably the third reason uh to to to to to to be a founder is I think it's a rare job if you can deal with the stress and all the kind of this the downstream impacts of it.
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It's a rare job that you kind of get almost everything.
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You get control over your destiny, you get to make impact, you get to work on places projects and products that you want to work on.
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And you have a good financial outcome and it's like it's an amazing positive thing.
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You you you know, I it's incredible that you can actually have a job which is like net net can be hugely positive for uh your community, you yourself and and you don't feel bad about it, you know, it's uh yeah, so.
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>> You so you grew up in Pakistan in a rural environment, right?
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Around farms and >> Yeah, I was in a farm yeah, grew up in a farm. >> Grew up in a farm?
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So tell us what what that was like.
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Tell us about the the early early years.
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>> My parents are farmers and we lived in a house without electricity or running water and we came to the US.
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My uncle I was in elementary school so I was I was young.
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Uh but we came to the US because my uncle got a job at General Motors.
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He had he he got a student visa to go to the US and then from student visa he got a job at General Motors and he helped me sponsor us and that's how I ended up moving to Warren, Michigan, which is kind of the home of General Motors. >> How old were you?
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>> Uh I I a seven seven years old.
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So I was like second grade, third grade.
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>> So, you very much remember life in Pakistan before >> Oh, yeah, yeah. Absolutely. Yeah, yeah, yeah.
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>> What are your memories?
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>> Uh I mean, that's that's a funny, very personal question.
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Uh I've never been asked that question.
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I mean, uh Yeah, I mean, not having stuff.
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I mean, you remember in the sense of like, you know, you you you drink well water and you you uh you know, all of your day is consumed by like these trivial things. >> Right.
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[laughter] >> And like, you know, remember like, you know, going to school.
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I mean, I actually moved to another village because my parents' village didn't have a you know, school.
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And um it's I lived with my grandparents and they're they're they're they actually had a had a school in their village.
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So, like just that experience of like it's suddenly being told to you, this is so important that you're going to actually move somewhere to to get educated.
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I think that had that had a long long-term impact.
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You know, once I got in my head as a, you know, young person that um starting a business is the way to non-linear wealth accumulation.
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And that was a very explicit thought that I had. How do you make money?
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I remember I started working at McDonald's when I was 14 and and um and the one of the the the owner came in once.
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You know, he owns like whatever, a dozen McDonald's in the area.
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We were asking the store manager, "Oh, who's that?"
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He had I remember he had a Porsche 911, which is ironic because I work with Porsche now. I have a 911.
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It's like, you know, it's like how the world is full full circle.
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>> You grew up in in the shadows of the car industry, the whole launch where you're now transforming >> Exactly.
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Yeah, it's a crazy crazy full circle.
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>> So, what did the what did the manager tell you?
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>> Yeah, and he said and she said, "Oh, that's just the owner and he like every month will swing by and make sure operations is going well."
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And I remember thinking like, "What are we What are we just What are we [laughter] doing here? Yeah, we're the idiots.
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And like, I'm getting paid at $4.
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75 an hour and this guy has the nicest car and he's showing up once a month like and then like that triggered in a fairly young age that actually being an owner is the thing.
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So, my macro recommendation, if you could in on on just career and kind of what I what I was like if you can somehow dissect and remove your ego from the equation, you see and I'm I'm very much in the in the camp of emotions are not helpful.
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I think they they they deform the problem that you're looking at.
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Um and so that's the engineer in me, you know, you ideally want to be fairly objective and clinical about the thing that you want and how you're going to get there and why you're not.
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You know, why you're not doing those things.
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And so, let's take the being a founder.
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Let's say you kind of see you want to be a founder, but you've never actually started a company.
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You're mid-30s and you you still work at let's say whatever big big co, you know, and still like why isn't you that why is very important.
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And I think if you can't have that honest conversation, some people can't, um then you might always be in that cycle.
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There's a version of that honest conversation and it's like, "Hey, I to have a family and I or I have a lifestyle and I like going out on the weekends and I like having, you know, that one of the things that crossed over
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X uh recently that that I'm sure people have seen before, but it's like the you only get four burner like it's like a stove and you only get four four burners and only three of them can be on and it's like, you know, your health, family, work, and social life. >> Yeah. >> Yeah.
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>> And I can tell you in my case, you know, if you're talking about me, I've never had a social life.
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I can't tell you the last time I went out.
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I don't, you know, maintain a group of friends and that's important to a lot of people.
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They they they look at me like, "Well, that's the richness of life."
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And it's just not been important to me. >> That's fascinating.
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>> That's yeah, it's and it's I I I don't I I used to be very insecure about this, but you know, as I've become older, I'm just me now.
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Like I I can't be anybody other than >> How extreme are you on that?
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I mean, do you have kind of a small group of like two or three or four very close friends or you've been like family and work and that's it? >> It's more than that. >> Really? Wow. >> Yeah, yeah.
11:33
It's It's more than that.
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I I even avoid group text chats and stuff like that.
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I I I People ask me all the time like, "Oh, you know, how do you how do you have time for all this stuff?"
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And as a company, especially as it's grown, I haven't struggled that much with with time.
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I think if you try if I was trying to jam in two or three more things, even honestly one more thing, even doing a dinner a week, it just disrupts everything.
11:54
And I like you like just just just like a a very tactical example for the founders out there, especially the if your company is like under 5 years, you know, I I Again, I'm not saying you should do this, but I'm just giving you a template.
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I work 7 days a week, and I always have.
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And from when I was at, you know, McDonald's to I had a couple of jobs when I was in high school, and three jobs at one point or most of the time, I should say.
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And then, you know, all the way to now, I'm in you know, in my early mid-40s now.
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And um the the the 7 days a week thing has always been very productive.
12:29
And so, what is a Saturday and Sunday?
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Saturday and Sunday is I go to a coffee shop, and I'll work for 4 to 5 hours alone, and I just clean up all my Slack, I get through all my to-do's, I and let my brain think, and I think, "Oh, I saw this thing about, you know, about Fable, and let me research that."
12:48
And like just having time to just do like the memory clean up and the like defragging that needs to happen.
12:56
Um if there's one thing that's made me successful, it's actually that.
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>> The evenings and the weekends are also the time when you're not being distracted by by endless requests of your time.
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And >> But if you're running to a dinner, if you're running to friends, and your you know, your friends depend on you, and they're having a serious issue with their health or their their family or their relationships or their career, you know, I found it very hard not to give time to that.
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And so that that's And again, I'm not saying this is the right thing.
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And And it It be one of these things that, you know, when I'm in my 60s, I look back and I say, "Hey, that was the big mistake."
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Like I should you know, that I should have lived a a different life.
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If you If you look at all of these posts of people who are passing away, they always consistently say, "I should have worked less.
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I should have spent more time with friends and family."
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So, you know, it's it's a very conflicted piece of advice.
13:42
>> It is It's very noticeable though that I I would say, I mean, it's just the hard reality that you know, lots of the people like you who've had extraordinary lives and really created very very big outcomes from giant ideas uh work basically all the time.
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And and I think it is the hard reality that a lot of people don't grasp that to achieve those kind of outcomes, basically you have to work harder a lot harder than the average and and sacrifice stuff.
14:04
We had very different world, but Nick Clegg, the former Deputy Prime Minister of the UK and the former number two at Meta, and he I asked him how did he how did he how did he done it?
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And he basically said, you know, he seems very gregarious and kind of sociable, and he you know, him and his wife who was very is a very successful lawyer and and potentially politician, she just said they they basically never went to dinner parties.
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And you know, they had they they worked extremely hard and they tried to be good parents, and and that was kind of it.
14:28
And you can't add the extra stove to the >> Yeah, it's kind of like the analogy of this at work is uh at a at a plant nutrition we we I wrote internal posts, and one of the first post we ever wrote is just about meetings and meeting culture.
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And um what happens especially in big companies is people start thinking the meetings are the work, and that's actually not the work.
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In this like larger life example, people start saying going to an event or going to a conference or going to a dinner that that's the work because you're learning about the ecosystem.
14:57
In venture, there's some truth in that cuz that's that's kind of part of the game is getting information, learning information, and understanding what your peers are thinking.
15:04
But in the making aspect, so not the funding, the making aspect, it's making.
15:10
>> Clearly, this is not for everyone, obviously.
15:12
obviously. But what I think is interesting is that I think there are founders in Europe and perhaps New York and and some other GOs who think that they are living the life that is going to get them to what you've got and others who've made it have got Um
15:24
and they're willing to make the sacrifice but they they actually don't realize that it is kind of a seven days a week highly highly full of sacrifice and because they just don't know they're not aware that they would like to go do that but they're not aware of this true sacrifice that's required. >> Yeah and there's a thing that we haven't
15:39
>> Yeah and there's a thing that we haven't talked about and sometimes analogies are helpful like imagine if we were just talking about this is a podcast about making a great band and everything we've talked about being a band so you take all the analogies you talk about you got to you got to put the reps in you got to be a master of your instrument.
15:59
There's also this kind of thing about taste and like understanding what the market wants. >> Yeah.
16:05
>> And I like you use Nirvana as a good example in the sense of Kurt Cobain simultaneously knew how to make catchy music but like dislike that fact and when it was like what like you as a as a founder you have to somehow
16:21
understand like where do you sit with your skill set and the thing that you're making and where the market is and it's something that's not actually talked about enough is like the founder has to know like how their company relates to everything around them. And then
16:37
And then that's really important.
16:39
that's really important. It's not only the simple version of that is is just competition but that's that's not that or the market that's growing but it's products it's their ability to recruit or their lack of ability to recruit their ability to be um charismatic to venture capitalists or or not to fundraise or not and so that's
16:58
what you have to once I think I think good founders kind of really understand like where all of that stuff is not only their own personal strengths and weaknesses personal strengths and weaknesses of a team so now you it's like it's it's much more complex then you can actually kind of kind of maybe put the company in the right position. I often see founders
17:15
I often see founders take somebody else's playbook and try to like, you know, it's kind of like they're you can't become Nirvana by copying Kurt Cobain. Right.
17:27
You can't be like this, you know, depressed guy living No, that's that's not how it's it's going to work.
17:33
But you can learn that this is the way Nirvana actually became huge. Yeah.
17:38
And they used MTV because that was the thing.
17:40
And so you have to kind of So you as a founder have to like almost like learn how to play the game.
17:47
>> I think YC is the most influential organization company in startup history. Full stop.
17:52
I think that the culture that it's created, the lessons that it's imbued that are now so mainstream it is kind of extraordinary.
18:02
>> YC is like in in model speak, it's like a distillation of actually Silicon Valley. >> Right.
18:10
>> So there there's interestingly nothing about YC which didn't exist before. >> No.
18:16
>> But no one put it in that package >> Yeah.
18:19
>> to consume like YC did. >> Yeah.
18:21
>> Uh and when I mean consume, I mean like the scale to get to lots of people's brains and stuff things like that.
18:26
>> So and and the Silicon Valley culture in a way is a distillation of probably just Intel.
18:30
It is a bunch of companies in those early days, HP and some others.
18:33
But Intel really has a huge huge influence. Andy Grove specifically.
18:37
>> All of the the learnings from YC that they're freely available, right?
18:40
Paul Graham's essays are out there. Like it's all for free.
18:44
Anyone can can consume it.
18:46
And yet there is something about being part of YC, even though it's only 3 months. >> Yeah.
18:51
>> The community, the network you build, the halo effect of the brand.
18:56
What what is it to you that makes YC so powerful for its graduates now? >> Now is different.
19:02
I mean I left almost 10 years ago.
19:03
So it >> let's talk about both.
19:05
Let's talk about then and now. >> Yeah.
19:06
I say yeah, that yeah, that's probably better.
19:08
It 10 years ago I mean part of it is that's applied to both is like the four-minute mile. Yeah. Year-round founders.
19:14
Like this is one thing that's interesting about the Valley is uh and I think it's happening in more cities like, you know, you see Lovable and you see Lagora, suddenly you're like, you can build a big company in Stockholm. >> So important.
19:25
Role models so important.
19:27
>> So it's like the four-minute mile.
19:27
Once you see some and and like in the Bay Area, the the first buddy that makes a big year, like, uh you know, uh Kyle got got the successful aid not a particularly smart man, but he's he's he's like, so then like, you know, then Michael does it and you're like, um that's that's such interesting and then by the fourth you're like, okay, what am I doing on the sidelines? I can do this as well.
19:50
That's a really important thing.
19:51
That's and in YC, I think at the minimum it just shows you the playbook. >> Yeah.
19:55
>> That it's not a mystery. >> Yeah.
19:56
>> I think it's like the magi- if if, you know, it's the magician is a magician until you see all the tricks. >> Yeah.
20:03
>> And then you're like, oh, it's just a this there's some some mechanics and I can learn those mechanics and I can be a magician.
20:08
That that exists at both times.
20:09
I think in that era, the old era, let's say let's say YC from 2005 to 2010, >> Yeah.
20:15
>> like that era, the first first 10 years, um that is really a downstream funnel from Hacker News.
20:22
It was in a Paul's essays were were every I mean, I remember when I went to the interview, I remember majority of the reason I went to the interview was just to meet Paul Graham. >> Yeah.
20:33
>> Paul Graham, founder of YC. >> Yeah. Oh, yeah.
20:35
>> I shake his hands and I remember thinking distinctly thinking, oh, we have an interview.
20:39
>> [laughter] >> Like I was like Like I was so like uh lost in the fog, >> Yeah.
20:42
>> you know, cuz I think Paul, you know, is is is you know, has some of the best ideas, you know, I like really really really great ideas.
20:51
Like uh um and I'm like a connoisseur of ideas in that way.
20:56
And so so that So it was it was a different it was it was frankly like I felt like a I was like a like a devotee and that was the era of YC where it was actually the Paul Graham show. >> Yeah.
21:09
And today it's very different.
21:11
It's not even who runs YC now, Garry Tan.
21:14
Garry was actually one of partners when I when I went through as a founder in 2010, 2011.
21:22
It's it is Garry is important to the but it's YC I am supersedes actually, you know, any individual.
21:27
And so today it's much more an institution.
21:30
>> You run it with with Sam Altman, right?
21:32
>> was a president, I was a CEO.
21:32
And uh And that was you could say the middle ground.
21:36
So there was that early years, that was the middle ground.
21:37
Yeah, that was like the new the new era. >> Yeah.
21:40
>> Um and all three those eras are different.
21:41
The first Paul Graham era I talked about let me talk about a little bit of the the the Sam and I.
21:44
That era was the institutionalization of YC, which is taking it from a family business, you know, the Hacker News server on in Paul's kitchen to making it actually like modern uh web application, etc.
21:55
All those little things um just getting the brand out a lot more.
21:58
I mean, I remember doing London uh uh Startup School.
22:01
You know, I first time we ever did it was was out here.
22:03
And uh that was over 10 years ago. So that was that era.
22:07
The current era is the And this is actually about Silicon Valley as much as about YC.
22:13
It's the industrialization era.
22:14
It's it's everything at that job, you know, much bigger scale.
22:19
The influences, the the the reach that Garry has actually is is No, Paul is kind of a celebrity, so it's it's slightly different.
22:28
But let's say other partners that were with Paul in the early days compared to Garry's influence is like you know, that's a huge difference.
22:35
I mean, it Garry just has a huge influence now.
22:37
Garry Garry can meet heads of state. >> Right.
22:42
>> YC was a little college cottage thing with like you know, four people who started in you know, in Cambridge.
22:45
So uh in in in the US Cambridge.
22:47
And uh and so I think today the the the just size, scale, and scope is huge.
22:56
The the the downside is it's just bigger, right?
22:58
So as as an individual person who's who's a founder who's going through I I did all my office hours with Paul Graham.
23:05
Yeah, and I think back when that's like extraordinary. >> Amazing, yeah. >> Um amazing, right?
23:08
And uh so I think that you know, you don't get that now, but you know, in YC's defense, um the partners today might actually have more reps on helping companies than even the early partners did.
23:23
Yeah, cuz the early partners, you know, a batch when it's 10 or 20. >> Yeah.
23:27
>> The whole batch is 10 or 20.
23:27
Now it's like a partner might work with 50 companies in the first first time around and they do three or four batches and suddenly they have a huge corpus of knowledge. >> Yeah.
23:35
>> So it's it's I think people always want to I think the inclination always is try to compare better or worse. >> Yeah. >> It's just different.
23:41
And the but the key thing is everything around it's different, too.
23:44
I think the old YC wouldn't work today. >> Okay.
23:47
>> And uh they it would be very difficult. Yeah.
23:51
>> But maybe not sort of which which era is better or worse, but just sort of why were why were each era very successful.
23:58
There isn't really a second or third place accelerator that's anywhere close to it.
24:02
It's so far away at the back.
24:05
>> Do you think that is because of the quality of people doing it?
24:06
Is it now the brand halo effect?
24:08
Is there an element of like well, they because they've got the brand, they can simply attract the best people and you know, it sort of does it does it itself?
24:17
>> I only wrote one Met post when I was at YC and it was called We Make Mistakes and it was actually written after we'd given all these people admission.
24:24
It was whatever batch I wrote it in 2014 or 2015 whatever it was.
24:28
And I said you know, for everyone who just got rejected, we make mistakes, but actually for everyone who also got in, we also make mistakes.
24:37
Just cuz you got in means nothing. >> Yes.
24:41
>> It's like a like they're like so so I think there there there's a a lot more the tolerances are a lot looser than than than one thinks.
24:49
There's a lot more of the those calls.
24:52
So understanding that, then I also realized that that stuff compounds.
24:53
So you have to be careful in in and one of the reasons you have today the phenomena that you have in the valley is where it's basically once you become a consensus frankly is being applied to intuition is is is one of those.
25:07
Like everybody just wants to put money in.
25:09
And that's actually not always the case.
25:14
Like that doesn't necessarily mean the company is very good.
25:15
It just means like you kind of check boxed enough enough things.
25:19
And that actually reminds me more of like you and being an employee.
25:22
It's like a manager and you say now you just do all the right things and you just get the check marks and then you get the money.
25:27
And that's actually So, what should you be looking Should you be looking at the product?
25:30
Is the product is what the market wants?
25:31
That's all those that's the only interaction you should really care about.
25:34
So, that's that's a macro >> Especially early with with seed stage companies you really got to be careful about this is a consensus company season. >> Yeah.
25:41
I think I think when when it's so early that you can't do the product market assessment, you really have to be looking at are these people are they you know, formidable? Are they determined?
25:49
And are they intelligent?
25:52
And do they work well with each other?
25:54
Do they have the core, you know, components?
25:57
The elements make YC successful are actually quite different in those eras.
26:02
In that first era, I think nothing really existed like it.
26:08
That's the Hacker News community.
26:08
That's the the Stripe brothers.
26:10
That's you know, that that's that whole crew that that emerged and which I caught, you know, part of that. I fell into it.
26:17
It's funny because when I joined when I got into YC in in in I thought we were already late cuz it was like 5 years into the into the system.
26:26
And now it's like we're part of the OG crew which is like so weird to think.
26:30
But yeah, that's you know, that's when Garry Tan just starts working there and and and [snorts] so I think what made it successful at that point is there really wasn't anything like it and it was like it was like using the analogy from earlier, it was like the studio that it that somehow attracted the right type of person.
26:48
And my hypothesis having gone through the whole thing, you know, is I think Hacker News just filtered out people and it was like, if you're in Hacker News in 2006, 2007, you're a different person.
27:00
You're in 2026, it's different as well.
27:04
Uh but it was like so niche that you have to somehow find that thing.
27:06
It's like, you know, why are there like certain clubs in New York that the Ramones played at and then a bunch of other good bands played at?
27:12
Somehow they all kind of figured out to get there. So that was that YC era.
27:16
There are of Sam Altman, myself the being, you know, president CEOs uh uh respectively.
27:20
I think very much was, hey, let's just get It's like we're the we're like uh the evangelical area.
27:29
As we're the 12 apostles, right?
27:31
The Messiah's gone and I mean, I want to say it was pretty easy work, right?
27:35
In the sense of like you had this great source material and um we I mean, we had great investments there.
27:43
I mean, forget the opening I thing, but it's like DoorDash was there and Coinbase and Flexport and there's so many great companies that came out.
27:52
Interestingly and importantly to note, at that point, the criticisms that we would get at YC was intensely that Paul is gone, the Messiah's gone, and the best years of YC are are behind us. >> Right.
28:06
>> And it turns out actually that it wasn't the case.
28:08
And >> All the best ever companies came out of that era. >> Yeah.
28:11
But I can tell you that was the active conversation all the time.
28:14
That was the And the best evidence you're doing something right in Silicon Valley is like people really like talk, you know, garbage about >> Sorry to >> You know, whichever whichever venture fund is like really disliked, there's a decent chance it's because they're really good.
28:29
>> Yeah, yeah, yeah, yeah.
28:29
>> Cuz like everyone's competing, right?
28:31
And so then that era and then now you're in the the the curve.
28:33
So I think that was why it was successful.
28:35
It was like And I think we need to give Sam credit and give all the partners that were there at the time.
28:40
They were they were all the OG folks. They were early folks.
28:44
They they cared a lot about the firm.
28:46
Not to say the people, there don't now, but they cared a lot about the firm and you know, we're just such like it it really is the 12 apostles kind of idea.
28:55
It's like people were real converts. >> Yeah.
28:58
>> You know, the zealousness of a convert, right?
29:00
And uh and the the current era, you could say is is the industrialization era.
29:03
Now, you like I I mean, I used even when I worked at YC, I would say I work at Y Combinator, people were like, "Uh-huh."
29:11
Cuz I went, "What is that?"
29:11
It's like, "Oh, it's just like a Saturday, you know, and and uh now it's like that's not the case at all."
29:17
I mean, which is which is crazy.
29:18
Yeah, yeah, which is crazy.
29:18
And so, today, I think the what makes YC successful I think has to be um the when you boil it all down.
29:30
If you as a founder don't get good funding on the other end of YC at a high market cap, nothing else matters.
29:36
And I've certainly seen founders that can't raise any money and then go through YC and raise a lot of money, for sure. >> Same company. >> Yeah. So, it is the brand.
29:45
It is pe- People facetiously say, "Oh, it's just a brand or something like that."
29:50
I think it's more than that, uh but it is like it's the it's the filter mechanism.
29:54
It's It's the culling of of of And and that's a huge service, honestly, to the industry, because there's so many startups.
30:03
You know, when you talk about 2005, there are not that many startups.
30:05
So, you the culling is also actually less important and is more of a strategic one thing I missed is in the early early the 2005 to say 2010, that era was there there's really the '90s in the you know, to to that era is really dominated by two firms.
30:23
It's Kleiner Perkins and uh Sequoia.
30:25
And they basically split the valley.
30:28
There There's lots of other good firms around the time, you know, NEA, Benchmark, Accel, etc.
30:32
But the that that was, that was really the valley.
30:34
They they they took was it was John Doerr and Mike Moritz uh or Doug Leone or whoever.
30:39
And then um in Paul comes around and he's like, "You don't need to know me.
30:44
You can just go online and apply."
30:44
And that's that is a huge innovation.
30:46
I mean, it's uh it's so simple.
30:48
And he even does and he's talked about it where he, you know, he's did it frankly out of laziness.
30:55
He doesn't want to just And and, you know, laziness {slash} pragmatism is instead of just sitting in a coffee shop and hearing an angel pitch doesn't it's not structured.
31:02
But when you put in an application, it's structured and you can batch it together and all the advantage you get from that.
31:08
Um, you fast forward to today, it's it's none of that stuff, right?
31:12
You like it's there's a tons of accelerators, tons of incubators.
31:16
And what does it So what does it reduce all the way down?
31:17
Even the advice is all online.
31:20
>> Venture investors love to complain about how expensive companies are coming out of YC.
31:23
The hard the hard reality is if if you was a venture investor back a YC company coming out of YC, it is exponentially more likely statistically to be a $1 billion $10 million company than anything else. >> Yeah.
31:35
And I think like for all the people who complain about that, it's like, you know, it's not like YC's a monopoly.
31:40
Isn't that like a state-owned enterprise? >> Right.
31:43
>> [laughter] >> You try to front run YC. >> Free market.
31:45
>> Yeah, you go ahead try to front run YC.
31:46
It's It's I think I think and then you realize like, "Oh, their dynamics are difficult."
31:50
The one other thing that that that is that is worth mentioning is there is a dynamic about venture which is very important, which is um the best companies get to choose the investors and they'll just choose the investors that have the best companies. >> Yes.
32:05
>> So, um, you know, why do we take in recent orders?
32:07
Why do we take General Catalyst?
32:08
Why do we take uh Lux Capital, whoever?
32:11
Elad Gil, it's because they were all already good investors.
32:14
Now, also we're friends and they're I knew all those firms uh before, but um, so I think YC really gets a huge advantage from that.
32:23
>> Most people would be pretty satisfied with the impact you had just on YC.
32:25
And I think they'll have a very lasting impact, but it's one small part of the of the Cassa story.
32:32
>> We haven't talked about YC in a long time. It's funny.
32:34
>> it's always nice to talk about it.
32:34
We sadly have to let you go on a plane.
32:36
We could keep going for hours, but thank you so much for sharing multiple John ideas and this incredible life journey.
32:42
It's been really, really awesome.
32:44
>> Yeah, thanks for having me.