Lenny's Podcast: Product | Career | Growth - The social radar: Y Combinator’s secret weapon | Jessica Livingston (co-founder of Y Combinator, author, podcast host)

Starting point is 00:00:00 I want to start with a quote by someone you may know, Paul Graham. Much of what's novel about YC is due to Jessica Livingston. If you don't know her, you don't understand YC. My three co-founders were deeply technical, but I would look at other things about founders. You know, all these little social cues. Your nickname was the social radar. Every interview, everyone always turned to you, and they're like, Jessica, what does their social radar say? I would look at do the co-founders get along?

Starting point is 00:00:27 Are these people committed? And if a founder would get defensive, that was always a bad sign. Is there anything else along the Airbnb story that would be interesting to share? He hated their idea and Paul tried to get Brian and Joe and Nate to change it. But I remember specifically, Joe brought out the cereal boxes, the Obama O's and Captain McCain. And I just thought, oh my God, they're going to work hard to do whatever they can to make this company succeed. You just talk a bit about this idea of just making shit happen, showing signs of being hustlers. You sort of need that desperation.

Starting point is 00:00:57 You have to burn the boat. Today, my guest is Jessica Livingston. Jessica is the co-founder of Y Combinator, the first and most famous startup accelerator, which since 2005 has funded over 5,000 companies, including over 200 unicorns now worth over a billion dollars, including companies like Airbnb, Stripe, DoorDash, Coinbase, Dropbox, Instacart, Reddit. The list goes on. Jessica is also the author of one of the best-selling books about startups, founders at work, and hosts The Social Radars podcast.

Starting point is 00:01:33 She lives in England with her husband, who you may know, and her two sons. In our conversation, we dive deep into Jessica's superpower of being the social radar. She got this nickname in the early days of YC because she can read people incredibly well. This becomes a huge unfair advantage when you're evaluating and investing in early stage startups and founders, but also becomes useful in every part of your life. There's actually a quiz that I'm going to link to in the show notes called, reading the mind in the eyes that I suggest you take to see how you do and it'll give you a sense of how well you are at reading people. Jessica got a perfect score just as an example of

Starting point is 00:02:11 her unique talents, reading people's emotions, along with her superpower and tips on how you can develop your own social radar. We also talk about her fabulous podcast called The Social Radars, some wild early YC stories, including how the interview with the Airbnb founders actually went down and so much more. If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes, and it helps the podcast tremendously. With that, I bring you Jessica Livingston. Jessica, thank you so much for being here and welcome to the podcast. Thanks, Lenny. I'm glad to be here. I want to start with a quote by someone you may know, Paul Graham. So he wrote,

Starting point is 00:02:59 A few months ago, an article by Y Combinator said that early on it had been a one-man show. It's sadly common to read that sort of thing. But the problem with that description is not just that it's unfair. It's also misleading. Much of what's novel about YC is due to Jessica Livingston. If you don't know her, you don't understand YC. I'm hoping with this conversation we help a lot more people understand you. Kind of an implication of this quote that I wanted to ask you about.

Starting point is 00:03:29 is that there's an implication that you've never gotten the credit that you deserve for starting YC for helping YC become become. I'm just curious what that's been like for you. It's sort of a hard question. It is true. Like, I was one of the co-founders of Y Combinator, and yet I'm often sort of left out of news articles. I mean, Wikipedia people want to take my entry off of Wikipedia. all the time. I'm not as notable. And I'm sort of like, gosh, I'm a founder of Y Combinator, author of a bestselling book on startups. You know, what does a girl have to do? But, you know, it is what it is. It's the external views. And it's not, it doesn't matter to me. Do you know what I mean? Like people within YC know what I've done. The Y Combinator alumni know what I've done. And my friends and family and people I respect in the Silicon Valley community know what I've done, or most of them do.

Starting point is 00:04:33 So that's fine. But it is true. I've often been sort of erased. And in some cases, it's annoying because it's a lot of people who have a certain narrative about Y Combinator that don't want me to exist. I mean, I'm maybe making that up a little bit. or the people that sort of don't want me to be part of the narrative or the ones that think that Y Combinator only invests. It's run by white men, only invests in white men.

Starting point is 00:05:05 And gosh, if there was a woman on the founding team making choices of who to fund, that would undermine their narrative. So I think sometimes that's what happens too. Fascinating. Just a convenient story to tell sometimes. This episode is brought to you by interpreters. Interpret. Interpret unifies all of your customer interactions, from gong calls to Zendesk tickets, to Twitter threads, to App Store reviews, and makes it available for your product team.

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Starting point is 00:07:32 Non-technical folks love Anvil's drag and drop builder, and developers love their flexible APIs and easy to understand documentation. Build documents software fast with Anvil. That's useanvill.com slash Lenny to learn more or start a free trial. That's use an vial.com slash Lenny. So I see your nickname was the social radar. Your podcast is called The Social Radars. I haven't seen you talk too much about the skill anywhere else.

Starting point is 00:08:05 And that's what I want to spend our time on together to better understand the skill that you've built of being this social radar. How does that sound? I will try, Lenny. I will try. I don't talk much about it because I don't. it's hard to talk about. I don't understand some, some, it's hard to put into words exactly what it is about me, but it's true that my nickname at Y Combinator was the social radar. And I think it was because

Starting point is 00:08:34 my three co-founders were deeply technical people. And I was not, but I would look at other things about founders when we'd have these 10-minute interviews. I would look at, are these, are, are the people, do the co-founders get along? Are these people committed? Do they really know about their product? Do they care? Are they going to quit their job? Or are they telling us that they are going to quit their job, but really aren't, you know, all these little social cues that I'd try to pick up on. And in a lot of cases, red flags about them that I'd add to the decision-making process. And so that's why they called me the social radar and it just sort of stuck and it's because I love people and the dynamics and understanding what's motivating people. I mean, that's, I just love it and I love founder psychology,

Starting point is 00:09:32 founders personalities. I mean, I just, I'm absolutely fascinated with it. I love it. Okay. So we're going to try to unpack as much as we can with the context that you're made, not exactly sure if you're able to articulate exactly how this power of yours works. Yes, yes, yes, yes, yeah. There's this line you wrote somewhere, and Paul's written this and other people that every interview that you all did early on at YC, everyone always turned to you and they're like, Jessica, what do you think? What does their social radar say? Can you just talk a bit about that role that you played in the early days, YC of kind of seeing that side of candidates? Well, in the early days, especially before I knew a lot as much as I know now about startups and founders. I mean, early on, I was learning a lot in the first few years. In the first few years, you know, it was just the four of us. So I would be in charge of going out, telling people wait here while we do the interview, come on in. I'd be in charge of like the stopwatch that would time us and I'd say, okay, our times up.

Starting point is 00:10:33 And it was very administrative. And I would observe. I wouldn't, you know, Paul, Robert and Trevor, my co-founders would be asking them all sorts of questions about their product and their technology and blah, blah, blah, blah, blah. I would occasionally ask questions, but I'd usually remain pretty silent. And so I don't think people even really noticed me. But I would be just watching them and sort of trying to observe as much as I could, not understanding sometimes even the technology that they were talking about. I let my co-founders do that. And then after, you know, we'd be talking, they'd look at me and they'd be like, should we fund them? You know, Jessica, should we fund them? And, you know, sometimes I could tell, I could tell, based on the conversation, whether they thought that the technology was good or how they felt. And sometimes I'd say, absolutely we should. Or sometimes I'd say, guys, you know, I'm a little nervous. Did you see how that founder interrupted the other founder and wouldn't let the other founder talk? And so, because my three co-founders sometimes wouldn't notice this. They'd be so caught up in the

Starting point is 00:11:41 conversation they were having about the technology, especially Paul. Paul would get, really into things. And sometimes I always tease Paul because one of his defining qualities is that sometimes someone would have an idea that he'd get so excited about that by the end of the interview, he'd be giving them ideas about how to grow their product and, you know, what they could become. And they'd sit there saying, yeah, yeah, that's a great idea. And then he'd say, fund them. And I'd say, whoa, whoa, whoa, Paul, you can't just fund this because you love the idea. Let's take a step back and let's look like these two. founders are working at Google and they don't say they're going to quit. That's not good.

Starting point is 00:12:21 You know, and I'd point out these things that I had observed. But I mean, we always agreed. It was very rare that we wouldn't agree on funding something we were usually on the same page. I see. It's interesting that you talk about these behaviors like co-founders interrupting each other or being kind of aggressive here and there. Some people believe that's okay for founders to be like this, you know, like a lot of successful founders, Elon, for example, Steve Jobs, are kind of assholes a lot of times. I imagine, and I've read part of the reason you thought about just like the type of person is you're trying to build a specific culture in the early days of YC

Starting point is 00:13:00 and you're going to be around these people. So maybe can you talk a bit about just like why that those elements were important to you and why did you look for those? I mean, I've definitely heard that Steve Jobs could be an asshole. I've heard stories, but I think I would have funded him because he's so incredible and he's so, he was so smart and so interested in the product and new, like, I'm very persuaded by people who know what they're talking about and, and love their product and our domain experts. But, but I did consciously, especially early on, less so later on,

Starting point is 00:13:36 early on, I did sometimes tend to say, I really think this person's an asshole. I do not want to fund them. and we often wouldn't. And very early on when we were just funding, you know, 10, 20, 30 startups a batch, I would sometimes, I have been known to say, like, I don't know if I can have dinner with them every week. Like, it was at that point. And I don't think we've ever regretted any of those. It didn't happen all the time.

Starting point is 00:14:05 That was rare. But I just, life's too short, you know? Life's too short. And I wanted, like, a nice, I wanted to be able to. to work with these founders. And as it turns out, it was sort of important early on in weeding out, like, explicit assholes because that was the basis of our Y Combinator community, which is now thousands of founders.

Starting point is 00:14:29 Now, of course, all the founders aren't all, you know, running their company anymore, but most, I would say, like, most all of the founders bring something useful and valuable to the table. So if you ask a question on bookface on our, you know, forum for founders, someone is going to be there to help you. And it's amazing. And that all started very early on there was this culture of, you know, older batchmates helping newer ones and this this pay it forward mentality where everyone helped one another and rooted for one another and made introductions for each other. And I think it's a big part of our Y Combinator community now. So I wrote down a few of the things that you mentioned you look for and you looked for in the early days. So let me just share a few of them. Let's spend

Starting point is 00:15:18 a little more time here. So you looked for did the founders get along? Are they committed to the idea? Are they ready to quit their job? Are there any red flags? So is there anything else that you remember you spent a lot of time thinking about or looking for then or even now? There's looking for in the application, and then there's looking for in the interview. And now we have software that looks for all of the red flags in the application that I used to do by hand. In the application, I'd look for just weird things. Like, was there, like, a huge gap in the equity allocation? Like, did one founder have 99% and one founder have 1%?

Starting point is 00:16:05 That's weird. I'd want to dig in on that. That doesn't feel right. You know, are they going to quit their job? Are they going to move to Silicon Valley? What are their current shareholders? It's like 90% of their company already owned by someone else. There are all these weird things that we like to just flag. And we wouldn't like necessarily not fund someone because of them, but it's just more data, right? So that was in the application and I'd look through all of those. But in the interview, I definitely was sort of one thing I remember I would always look for was when you'd have a conversation with us. A lot of times, Paul, especially, but Robert and Trevor, would really be getting right into the idea and questioning you and how do you know this and what about this. And if a founder would get defensive, that was always a bad sign. Always a bad sign. The best founders would say, you know, gosh, I have thought about it and here's what I figured out. Or they'd just have this almost a tennis match and a conversation rather than closing up and feeling like, oh, this person's interrogating me.

Starting point is 00:17:18 You could just sort of the open-mindedness, the flexible-mindedness of people was really important. I'd get really excited about domain expertise. I mean, like my co-founders, we all, like loved that. If someone was fixing their own problem in a broken industry, we loved that. Definitely, I'd look for co-founder relationships. And again, I'm not saying I was always right, but you could tell if, you know, one founder, I'll give it a story. One founder, once we asked a question and one person started to respond, and the other founder, like, put his arm in front of him and said, I'll answer that question. And it was just so weird that he wouldn't let his co-founder speak.

Starting point is 00:18:07 We'd have situations where we'd call people like hackers in a cage where it's kind of obvious. There'd be like a business founder, business person who had clearly like convinced a programmer to join the team. They were given, the programmer was given like very little equity. And just we called them like programmers in a cave, like hackers. in a cage. And sometimes that works out. I'm not saying it doesn't, but I'd always try to observe like, okay, does this hacker in a cage have any, like, say in the company, the direction of the product, that sort of thing, because the programmer needs to have opinions, right? It's so funny. I love this metaphor. And I totally go what you mean. I want to unpack a

Starting point is 00:18:56 couple of these, because this is exactly where I was hoping we'd go. So this idea of looking for defensiveness and being open to change and being flexible. Why do you think that was so important to successful founders? Why did you look for that? Why was that a predictor success? Several things. First of all, being defensive is really bad if you're a startup founder because you're always going to get people who question you. And it's your job to sort of educate them if it's a new area. If you're doing you're doing something presumably pretty new, you're always going to have people who question it or say, why, you know, that product's already out there. Why is your better? You have to educate them. You don't want to be defensive about it. Also, a lot of times the first idea isn't bang right on, you know, the right idea. And you have to be

Starting point is 00:19:47 open-minded and maybe adjust it in a certain direction. The famous like PayPal story, how it started off being, you know, the Palm Pilot, you know, or money transfer. And money transfer, and money transfer between the Palm pilots or whatever. And then all the customers were like using a janky version on the web. And they were begging for this to be on the web. And finally the founders said, oh, I see, you know what most people want this for. You have to be open-minded to see what direction really is what your users want. And so if you find someone is defensive, usually they're not open-minded. The other thing is that the best founders will want to learn from other people and listen to other people. I mean, you talk to the Collison brothers and say something, they ask you a question, they're listening to your answer.

Starting point is 00:20:42 Like, so many founders think, oh, I can't learn from anyone, but the best founders are always listening and having spirited debates about things. I mean, that's part of the process. And so I think when someone's defensive, it's just a bad sign. Yeah. So I would look for that. I loved when I'd find someone sort of showcase that they'd make something happen no matter what. Like they're scrappy, they're hustlers. I remember, can I tell the story about the Airbnb interview?

Starting point is 00:21:17 Please. Okay, because that was definitely one I'll never forget. That was one that was clear the founders were really. good. The market had just crashed, basically, with all the banks, going out of business and everything. And so we were only funding startups that we felt had like really scrappy founders and could be cockroaches, meaning could live off of very little amounts of money, or could charge customers and make money. And we didn't fund that many people in that winter 09 batch. So we're being very strict with ourselves, very disciplined about things. And the Airbnb guys

Starting point is 00:21:54 came in and I just remember they had a contagious amount of energy. They just had an energy about them, the way that they talked about their product, which was crazy at the time, staying in someone's bed or airbed. In fact, it's a famous part of the story. Like, we hated their idea and Paul tried to get Brian and Joe and Nate to change it. So we didn't even like the idea. But I remember specifically they brought at the end Joe brought out these like the cereal boxes the Obama owes and Captain Crunches or Captain McCain's or whatever

Starting point is 00:22:32 Captain McCain's yeah Captain McCain's and they were saying that they had to they went to some like Costco or something and bought off-brand Cheerios and off-brand Cap and Crunches took them out of the box put them in this new box

Starting point is 00:22:51 glue gunned it shut And I just thought, oh my God, these guys are really like going to great lengths for this. And for some reason, it was silly, but it really appealed to me. Like, they're going to work hard to do whatever they can to make this company succeed. And even though we were skeptical about the idea, I mean, I think we definitely made the right bet on the founders. And it was just very clear in that interview. I'm so happy to share that story. I was definitely going to ask about it.

Starting point is 00:23:19 It's so funny because I've heard that story at least a hundred, hundred times working at Airbnb. It's like they tell the store the beginning of Airbnb every chance they get at every all hands. It's like a recurring theme. And it's great to hear that's basically went exactly the way they describe. Oftentimes there's like a myth around what happened, but that's, that's exactly how they describe it. No, it was definitely a whole crazy story and how Paul called them to accept them. And they were on the 280 or something or the 101 and the reception went down. And so he didn't hear if they were accepted or not. Wow.

Starting point is 00:23:56 Did you tell that part? No, I haven't heard that part. Oh, yeah. That's part of the story. And they had to keep driving to like get, uh, to talk to Paul again and find out that they were accepted. Oh, yeah. It was just a crazy interview.

Starting point is 00:24:09 The, the element of the story I'm also curious about is the way Joe tells it is he had the box in his backpack. And as they were walking out, Paul are you like, hey, what's that? What's that cereal box doing there? Uh, is that how wind or is it more like, hey, We have the cereal thing. I don't think Paul and I, like, looked in his backpack and us. I think he, I think there was definitely some pressure on Joe not to show us the cereal boxes.

Starting point is 00:24:34 I think Nate was really down on that, especially. And I think on there, they were walking out the door and they're like, hey, we just brought you a little something. I think, I think Joe did pull it out. And, and we had an extra, like, minute or so around the cereal boxes. That's how I heard about the glue gun story. and everything. But I think Joe had been reluctant, but he did it at the end. And I think it was a good call. That's so funny. And after that meeting, what was that conversation like between you and Paul? Was it just like, everyone's like, we definitely got to do this? Or was it like you being like, hey, these guys are really interesting?

Starting point is 00:25:10 No, I think we all liked him. We all liked him. But I remember saying, we have got to fund. I just remember being like, we've got to fund these guys. I don't know about the idea. Maybe they'll change their idea. Who knows? but they seem really great. They just, again, the energy level and the passion with which they spoke about their experience, you know, hosting. Because they'd been around struggling, but had been a company with an idea for, you know, a little while before they applied to why. See, we were there basically their Hail Mary, their last resort for them. And so they could tell us about their story about how they hosted the people at a company. and there was definitely some magic to it, which was convincing. Is there anything else along the Airbnb story that would be interesting to share while we're on that topic?

Starting point is 00:26:01 I mean, the only interesting thing as it relates to being the social radar is that there were just some interviews that I remember because I just thought, this is great. Like, these founders are so good. I'm totally convinced what they're working on might not work, but I feel like it's so worth the bet based on these founders. And that happened. There were definitely a couple other of our most successful companies that I clearly felt that way about. You just feel like they know what they're talking about. They've thought about the problem. They're not solving this problem because it's sort of the problem de jour or fun and exciting. Like some are very unsexy problems like, you know, when Parker Conrad applied with Zenefits, you know, unsexy HR. stuff, benefit stuff, but he knew how broken it was and was trying to fix it. And I love stories like that. You know, there was one story in terms of the one time I did sort of persuade the rest of the group to fund someone was, do you know the company goat, the sneaker? Absolutely. Okay. When Eddie and Darshan applied, they were not doing the sneaker company.

Starting point is 00:27:19 They were doing this group, sort of book a group dinner at a restaurant with people you don't know as a way to meet new people. And for some reason, I loved the idea because I thought maybe it could be like a secret dating, like a Trojan horse for dating sort of site. But I really loved the two founders. And one of the reasons, again, they had this passion about their idea. But they had worked, they had had like this cream puff company. before that they had run and they just told these stories about how hard it was and they all this stuff and I for some reason just thought these are hustlers these guys are scrappy they're going to make this succeed and they didn't make that that company succeed but they pivoted

Starting point is 00:28:06 and made goat succeed and it's doing really really well and I remember that one I definitely had to convince I mean not that Paul Robert and Trevor didn't like them but I think they really I didn't think the idea was that great or just sort of where I was like, we have to fund them. I love sharing these stories. If you have more to share, please keep their own room out there. So a few things I've noted so far, things that you look for. And I think it's important to note this is very early stage evaluation where the founder and the team is, it's incredibly important because the idea often shifts. Oh, yeah.

Starting point is 00:28:41 This is as early as it gets, Lenny. Yeah. Oftentimes just an idea, I imagine. Yes. So a few things. So far, things that you found to be really valuable to look for. One is this idea of just making shit happen, showing signs of being hustlers, just like getting shit done, ObamaOs, things like that.

Starting point is 00:29:03 And then I think along the same lines, just like passion for this idea and just like almost charisma. Is that how you think about it or is it just like? I hate using the word charisma because I wouldn't, there are a lot of charismatic. people who are full of baloney and are just doing a startup because it's a cool thing to do now. And I wouldn't want anyone to get fooled by charisma. There has to be some substance behind that charisma. Of course, we all love talking to more charismatic people than less.

Starting point is 00:29:36 And I've certainly talked to my fair share of totally uncharismatic people. But sometimes they're really good founders too. you know, if they know what they're doing and care about the user and are fixing a problem that they, you know, have a deep connection to. So I don't want to say someone who's charismatic, but it definitely helps because, as you know, as a founder, you have to do a lot of sales and you have to recruit people and you have to convince investors to fund you and you have to convince users to use your product and all this stuff. So it does help. It does help being charismatic, definitely. So, okay, so there's being like super hustler, making shit happen. Domain expertise, something you've mentioned a few times, just like having deep domain

Starting point is 00:30:25 expertise in area. And I think that's probably where they probably don't pivot oftentimes where they've actually have experience in that specific problem. They might pivot a little bit. They might pivot a little in terms of the actual solution. They might be trying to solve a problem and the first attempt doesn't really work. I haven't mentioned earnestness, though. Oh, do tell.

Starting point is 00:30:47 Earnedness is like one of the most important because earnest sort of to me is bucketed with authenticity. And to be a successful startup founder, you have to care so much about the problem you're trying to solve, the users you're serving, and being earnest about it is so key to success. I mean, there are so many wannabe founders, so many people doing it because it's cool, or they think, you know, this idea is cool, but they don't really deep down have what it takes. And I think we always try to fund earnest people. What does earnest look like in practice? How does that come across? I think it means being, like, sort of humble about, you know, and if you get asked a question in the interview and you don't know

Starting point is 00:31:41 the answer, they say, you know, I don't know the answer to that. I'd have to think about it. Or I don't know the answer. I've given it some thought and here's what I have come up with. And they're just honest about things. And they're not trying to sort of do whole smoke and mirrors thing, which we've definitely gotten people like that that like avoid the question or or doing it for the wrong reasons. I mean, yeah, I remember there were just, there was one group. that were like 45-year-old men, and they were building an app for, like, teenagers in fashion. And I remember just thinking, at where we were asking,

Starting point is 00:32:23 why have you chosen teenagers in fashion? And it was so clear that they thought they could make easy money. And it wasn't because they cared about fashion. It wasn't because, oh, I have, you know, a daughter who's really into fashion and I've seen this need. It was just like they made up the idea. you know, and I, that is not earnest, that is not authentic to me. You talked about it.

Starting point is 00:32:47 So there's this earnestness you look for also not being defensive. Kind of on, there's this also spectrum of confidence and people believing in what they're doing. Do you have any thoughts on just how to find that? Like, what does that look like when they're too defensive versus they're just confident and they know what they're talking about? Confidence is good. You definitely want confidence. I mean, it's hard to, I think you can see it when you experience. it. Like someone you can, someone who's confident in answering your questions but isn't defensive,

Starting point is 00:33:18 there's definitely a difference. And I don't know, this is why I'm saying it's sort of hard to articulate these things. But confidence means you can say, I've thought about that and I don't know the answer. Like that's confidence, you know, and they'll say, but here's what I do to try to figure it out. Here are my plans to address that. Yeah, confidence like is, I should have put that up front because that's very important, especially when it comes to fundraising. You got to have, you cannot go into an investor meeting lacking confidence. You can come into YCs interview lacking confidence, but we will then help you in the next three months to gain more confidence. And by the way, one of the things we do to help people gain more confidence is to make them believe that their

Starting point is 00:34:05 startup is a great investment to help them, like, create a startup that truly is. And, possibly going to make money or at least worth being a good bet. That's the thing. Early stage, the best you can offer is like, I might not succeed, but I'm definitely a good bet. And, you know, we help them with their product, we help them with their ideas, and we help them that by demo day, they can get up on stage and legitimately say, we're a good bet, and here's why. Let me tell you about our idea. And so we definitely help with confidence. Awesome. A couple other things you mentioned earlier just unpack a little bit. So being committed is something you look for and co-founder's getting along. In terms of committed, I imagine these are like very practical things, right? Like how are

Starting point is 00:34:56 they actually going to stick to this? Are they actually excited to work on this? Maybe talk about that a little bit. We all know how hard startups are. But I think you don't really know how hard it is until you actually do it. A lot of people would start a startup still having a job at Google or wherever, and they do it on the side. Because I do recommend if people are just getting started and don't want to raise money yet, you know, starting it on the side is a great way to get going. But at some point you have to commit. You have to burn the boat because we found that founders who were still getting a paycheck and health insurance, once the going got tough, they did not quit their job. And you need that, like, you sort of need that desperation.

Starting point is 00:35:41 Like I have to make the startup succeed because that it's my job. You know, not like, oh, I'll just stay at Google. You need that. And we found that founders who weren't leaving their jobs, it was just not working out. Or like that co-founder would always wind up leaving the company because they didn't want to actually leave their job. And, you know, that's fine. There are people that can't leave their jobs for financial. reasons, that's fine. You just shouldn't be starting a startup if you're not going to be prepared to

Starting point is 00:36:11 leave your job. So that's the leaving of the job thing. And the co-founder's getting along, I mean, oh my, I spent a lot of my time at Y Combinator when I was there all the time, full-time, you know, mediating co-founder disputes. And so many startups died or had near-death experiences because the co-founders didn't get along or broke up. It just happens all the time. And so that's why I think during interviews, I was desperately trying to search for any clues that the co-founders didn't get along. Or if they, like, blatantly contradicted each other. But you could also tell if they were answering, you know, finishing each other's sentences. You know, like, I love co-founders that have a history together. Either they went to school together, they went to college together, work together,

Starting point is 00:37:08 maybe they're siblings. Because when you have a long-term relationship, you trust each other and you know each other's weaknesses and you have the same, you're usually on the same page, you know, with your aspirations and everything. It's really scary when two founders get together just to start the startup and don't have any history. That's massive red flag. Sometimes it works out. Like in the case of Dropbox, Drew and Arash, you know, both went to MIT, but I think they didn't know each other before they started Dropbox. And it worked out. But most of the time, it doesn't.

Starting point is 00:37:46 So we've talked about co-founders getting along looking for defensiveness, domain expertise, the sign of making shit happen, fairnessness. Is there anything else that we miss that you look for in the founders that tell you maybe we should, maybe we shouldn't? relentlessly resourceful. I mean, that's sort of Paul wrote a whole essay on that. I mean, every founder's different. I never try to say, oh, this person doesn't have this. I'm not going to fund them. You always have to, everyone's different.

Starting point is 00:38:17 But I mean, you're an investor. I'm curious, do you, I mean, do any of these things surprise here? Do you care about these things too? Absolutely, absolutely. Okay. And I think, and I actually try to avoid pre-seed and early, early stage, because I mean, Not amazing at it. Maybe this is why I want to learn how to build my social way. Oh, gosh. Okay. Yeah, tough. It's so tough. It's like so few things actually work out.

Starting point is 00:38:42 Well, it's because you don't have a lot of data. If someone is just applying with an idea, you have very little data. You can look at where they went to college. What have they built in the past? That's always a great predictor of their ability. And so on the on YC's application, we asked them what project have you worked on before. whatever, but it's really hard to tell when you're the first investor. This episode is brought to you by Vanta. When it comes to ensuring your company has top-notch security practices, things get complicated fast. Now you can assess risk, secure the trust of your customers, and automate compliance for SOC2, ISO-271, HIPAA, and more with a single platform, Vanta. Vanta's market-leading trust management platform, helps you continuously monitor compliance alongside reporting and tracking risk.

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Starting point is 00:40:14 Like, I cannot help myself noticing weird things. Like, just dumb things. Like, if Paul, like, had on a yellow T-shirt and then an hour later came in with a blue T-shirt, I'd be like, why do you have a blue T-shirt? I can't, I have to, I have to understand what happened in that hour where that t-shirt is different. You know, I just, or people's like what their relationships, what drives them. I was always like this. And I think it goes back to my childhood. Like, I spent hours and hours on the phone with people, with my girlfriends, like dissecting situations and then all through high school

Starting point is 00:40:53 and college. I mean, the amount of time we wasted, like discussing, social matters with people and boys and things like that. It was just frightening how much time I wasted, but I just was genuinely interested in it and what drives people and why did this happen? And I don't know if I ever noticed I did this, but it was just, my point is, it's always been a part of me. And I definitely notice and have an aversion to, like, phony people. Like, I always have. I've never been one to fall for, like, someone who's super phony. and like tried to have them as a friend or anything. I just can tell and ugh, I hate it.

Starting point is 00:41:34 Do you feel like it was, it's like almost all genetic? Or do you think there's something in your childhood that pushed you to be good at this? I don't know. I really don't know. So this is why I think I'm going to be a bad guess because I can't give practical, I can't give a practical understanding. I mean, I don't really think it, you know, I can't say other people in my family are like that. and I can't say that it was part of my upbringing.

Starting point is 00:42:02 I just noticed these things. I don't know. I mean, I should be paying attention to other things, but I'm not. But I'm paying attention to this. Like, I'll give you an example with you. So I looked up your bio to read a little bit about you. And I loved the Dalton-Coldwell podcast. I listened to that.

Starting point is 00:42:23 Fourth most popular all-time. Dalton's was? Yes. Oh, go Dalton. That's awesome. Yeah, it was really good. I really, like, I learned a lot from it. I love listening to Dalton.

Starting point is 00:42:35 But, like, what I really want to know about you is on the release that you sent, or on the, like, instructions for this podcast, you said, there might be some edge cases where your podcast isn't good enough to go out. We just want to warn you. And, like, all I could think of is, like, what prompted that? Who? Who? Who?

Starting point is 00:42:56 Who? There has to be a story. of what prompted that. No one else would pay attention to that, but I'm just so curious. It's like, it's so weird. I'm just a weird person like this. Yes, I did add that.

Starting point is 00:43:09 There's a story basically is just an episode that wasn't amazing. And we didn't have that caveat in the, in the prep beforehand, and it felt bad to tell the person. See, I knew it. I knew that that had happened. That's exactly right. Is there kind of a way you've thought about honing this skill over time. Like once you kind of

Starting point is 00:43:29 got a sense, if people keep telling me I'm really good at this, is there something you've done to help strengthen it? No, but one of the things I do try to do is sort of reinforce, like sometimes I'll have a feeling about someone. Maybe we fund them,

Starting point is 00:43:47 maybe we don't. I'd sort of like to know what happens. A few years later, I like to follow up. Like, there definitely have been some situations where I haven't liked someone that we funded. And it's taken, you know, five to ten years before they failed. And in some cases, like, for a bad reason, you know, where I'll say, oh, thank God, I was right about that.

Starting point is 00:44:12 I did have this feeling. Or, you know, I knew they'd be successful. And like the goat guys who I was saying before, there was definitely a period when grub with us, their first startup wasn't doing well. and they were starting, like, that maybe some people would have given up on them, you know? And now I can say, you know, I was right about them. That feeling was right. So I do try to sort of follow up with some of the really strong gut instincts that I had to see if I was right. I often, often when I have a gut instinct, it's like a negative thing.

Starting point is 00:44:47 So we wind up not funding someone. So I really need to know if that person went on to be super successful. And I will answer your question right now. There's no one that I had a strong dislike for that I sort of said we should not fund them that has gone on to be a super success. Thank God. Wow. Interesting. I mean, it doesn't happen all the time that I really put my foot down.

Starting point is 00:45:16 But sometimes I have. And is this feeling, is it like a visceral body thing for you? Or is it like intellectually you're like, notice, hey, this guy's interrupting her and this. person. More intellectual, but it does come from inside. Like, I can't, I don't know how to hone it. I can't, it has to become natural. You have to have a natural interest in sort of people. And so I'm sometimes not listening to all the words and I'm sort of just observing them. I don't know. Have you ever been tricked by someone where you didn't see something you should have seen? Is there anything there? Oh, yeah, for sure. I can't really.

Starting point is 00:45:55 talk about the times I have been tricked just because I don't want to say anything really negative about people but there was well there was one example that I do feel comfortable sharing um Ilya Lichtenstein

Starting point is 00:46:10 of mixed rank do you know the guy that like stole billions of dollars in Bitcoin from a crypto wallet do you not know this crazy crazy story like I think he's in the joint now he was definitely convicted of this and his wife and they stole like billions of dollars.

Starting point is 00:46:29 Yeah. And, you know, I definitely don't remember thinking anything, you know, bad about him, you know, or thinking he could be that kind of person. So that definitely, there have been some some duses like that where did not see that one coming. Oh, my God. I think what's extraordinary about the fact that that happens rarely is that your interviews are 10 minutes long and say it very little time to actually find all these things and plus their actual product and idea and growth strategy and all these things. Well, you find, you know, a lot can come in

Starting point is 00:47:07 reading the application. That's a lot of like work at the beginning. You read the application. But then the 10 minutes is kind of as long as you need in most cases. Because we found when they were longer like 20 minutes, you'd know in 10 minutes and be like twiddling your thumbs trying to get through the interview for the next 10 minutes. So we kept them short so we could interview more people. But there have definitely been cases where we've interviewed people, accepted them, and then very soon afterward, we're sort of like, like sort of crestfallen, like, oh, these people are very limp. What were we thinking? Definitely, we've been tricked in that respect all the time. Or, oh, gosh, they seem so impressive in the interview. And now,

Starting point is 00:47:54 they're just posers, you know, can't really do anything. Like, definitely I'm tricked all the time in little ways. Or, like, I didn't notice two founders didn't get along and then, you know, one co-founder goes missing, you know, a week into the program or something crazy. There's all sorts of crazy stuff like that that happened. I think in the game you're playing, I would expect some things to slip through. Yeah. You said that there's been kind of an obvious. operationalization of some of the things you used to look for in founders now that you're not actually in the process.

Starting point is 00:48:29 Is there like a Jessica as a service sort of thing? What kind of stuff have they built that looks for the sorts of things you used to look for in the interview process? No, it's all just stuff in the application that automatically like flags certain things. I actually don't remember all of them. But it's just all it is is a please pay attention to this reader of the application. It's not this disqualifies anyone. It's just please pay attention. And those are things like I mentioned,

Starting point is 00:49:01 like a really crazy equity structure, founders not quitting their job, things like that. That it's important that someone who's voting on them and then interviewing them knows, because I would often, some of the questions I'd ask at the end of the interview, I'd say, it looks like, you know,

Starting point is 00:49:22 you have 90% of the stock. and your co-founder only has one, can you tell us why that's the case? And maybe they could make a case for it. You know, who knows? I, you know, but at least I'd ask. So the flags just say, pay attention to it. Amazing.

Starting point is 00:49:38 So if we were to zoom out in early stage investing, the main thing you need to get right and evaluate as the founder. The social radar skill that you've had from childhood is such an incredible advantage in doing this well. And you could basically say YC is what it is because of this unfair advantage that you all had in the early days. I'm guessing many people listening to this are like, I want to, we need a Jessica on our team. We need to build this skill ourselves. We need to figure out how to integrate social radar and into our process. I know you're going to hate this question, but just give any advice for people that want to try to build the skill, get better at this, notice some of these things. I really think that our advantage was that my three co-founders were deeply technical people.

Starting point is 00:50:28 And I think a lot of investors back then, you know, weren't, a lot, you know, didn't have that background. And I think that that background really helped YC choose good founders. So I don't want it to make it sound like, you know, it was that big of a deal. but advice, advice for how to hone. I mean, I think just try to pay attention to subtle cues. If you really feel like, gosh, I am so clueless about these things, try to just tell yourself, okay, I'm going in to evaluate these founders, evaluate this investment opportunity. I know I'm bad at these kind of judgments.

Starting point is 00:51:13 I'm going to remember, like, do they seem like they get along? because there are no like trick questions. I don't have any trick questions that you could ask. Or it's just paying attention. Like have a conversation. Do they understand their product well? Are they defensive? Like maybe have your own little checklist that you think about.

Starting point is 00:51:33 You don't have to have it written down, but you think about. And then afterward, you spend some time thinking like, were they defensive? Like when I asked them why this is better than the competitor, how did that go? or ask them, maybe do have some questions like, if you don't know how long they've known each other, ask them that question. How did you two meet? How did, have you ever worked together before? How's it going? You just be a little bit more conscious about asking these types of questions to reveal like some key information for your investment decision. That was an awesome summary of a lot of the stuff we talked about. If anyone ever doubts that you are very good at this, Paul tweeted this quiz, reading the mind in the ice quiz that I took. It's incredibly hard. You basically see a bunch of eyes and you're supposed to judge their motion. And it's really hard.

Starting point is 00:52:28 And you got 36 out of 36, which blows my mind. I did nail it. I do have to tell a funny story about this. So Paul sort of like late at night and he emailed me because I had like gone to bed, but I had my thing. And he emailed me. He's like, check out this quiz. I got 25 out of 36. What can you get? So I got my computer out because I was like, I have to beat Paul.

Starting point is 00:52:53 And I did it. And it was really hard. Like they'd only show the eyes. And then it would say, what is this person thinking? Are they happy, sad? But some of them were really hard to distinguish. Are they irritated or are they angry? Like, it's kind of hard to tell the difference between irritated and angry. And I remember, like, looking into these people, I, people's eyes saying, what are they trying to communicate to me? Are they irritated with me? Or they mad me? Kind of thing. And as I went through, it would tell you if you got it correct. And as I almost got to the end, I was like, oh my God, this is going to be a near perfect score. I have to nail this. And when I got 36 out of 36, I was like, yes. And I told Paul, he tweeted it. We then, like a week later, had this YC event in London. And I swear, of God, about 10 people came up to me to talk about this I-Quiz and how they had not done well and what was my secret. It was very amusing. I never thought that anyone would think it would

Starting point is 00:53:56 that interesting. I love that there's this thing that totally shows this skill you have that is better than everyone else. I took it. All my friends have taken it after that tweet. And the highest we've gotten is 31 of all the people I know. Really? Yeah. And I think when people take it, we'll link to it, they're going to be like, how can you get 36 out of 36? You have to look into their eyes and say, what are they trying to tell me? I hope you're not trying to tell me like you're full of shit with your eyes. I'm feeling despondent. Just kidding, that's one of the options.

Starting point is 00:54:31 I'm like, what does that even mean? I know. Well, that's the other thing. I told Paul also the challenge is you really have to understand what each, like, feeling what that word means. He's like, oh, that didn't even occur to me because he's such a word person and knows, like, the exact definition of every single word. But I thought some people will struggle understanding the complexities

Starting point is 00:54:52 of the emotion. Yeah. With the words, I almost felt like I had to do what you did were just like, what does this word feel like when I'm reading it? Despondent. Let's see if these eyes are despondent. I love that trick you shared. So basically, you looked at the eyes, and you're like, what is this person trying to tell me?

Starting point is 00:55:09 Yeah. That's the best I could do. Amazing. So we're going to link to that quiz. I'm curious what people. If you take it, please leave your screen. in the comments. See if anyone can get anywhere near Jessica's score. Okay, so speaking of social radaring, you have a podcast called The Social Radars. Yes. Let's talk about it. Okay. Yes. First of all,

Starting point is 00:55:28 just why did you decide to start a podcast? There's a lot of podcasts in the world. What made you decide to start one? Well, I'm really excited that you're asking that question because no one has ever asked me about the Social Radars. Yes. I mean, it's pretty new, but we launched last year. I decided to start the social radars because I live off in the English countryside, not really as connected as I'd like to be with Silicon Valley, partly by choice, but I do miss it a lot. And I was finding that as I was catching up with YC alumni, you know, that would come visit or I'd see, I just loved the conversations we were having. And I missed that. I missed that connection with these people and sort of sharing their stories of triumph and failure. in some cases, but mostly triumph. At the same time,

Starting point is 00:56:15 I became obsessed with this podcast called SmartLists. Have you ever heard of it? I've heard of it. I haven't listened. Okay. So just for the listeners, it is a podcast hosted by three actors, Jason Bateman, Will, Arnett, and Sean Hayes. And they invite Hollywood people, actors, directors, musicians, sometimes athletes on the show.

Starting point is 00:56:39 and the thing is one person, one of the hosts invites the guests, the others two don't know. So there's no preparation and it's the most fascinating thing. I love movies and I love television and I can tell you like another weird, eccentric sort of gift of mine is I remember every name in Hollywood and know all like their children and all this stuff because I've been reading people magazine since I was 13. So I loved like you'd learn so much about the actors. of people because they weren't talking from a script or their, you know, media messages for promoting a movie. It was like just genuine conversations. Most of the time these actors knew the people and were friends. And I just found it fascinating. I could not stop. And I thought there should be like a really informal conversation like this with startup founders so people could

Starting point is 00:57:32 understand the people behind the startups. And it's not too scripted and not to, maybe, I don't want to say professional, because I hope it's professional sounding, but it's, it's very conversational and authentic. And I was trying to mimic that a little bit. So I, I convinced my colleague and friend Carolyn Levy, who of course has a full-time job being one of the amazing lawyers within YC, and she's super busy. I convinced her to do it with me, so I could have a partner in crime. And then we just started. And I said, We'll do a few episodes, see how it goes, and we'll keep going if it's fun. And I have had so much fun catching up with all the people I've interviewed.

Starting point is 00:58:20 I mean, at this point, I forget how many podcasts I've even done, but maybe... Think about 27-ish. 27 that have launched yet. And there's a few coming out, season three, we're still in the middle of that. I'm still editing some and doing some. But it's been so much fun, and I love it. And I hope that people enjoy listening. I hope I'm not just working this really small corner of the room.

Starting point is 00:58:42 I hope people enjoy sort of unstructured conversations. But people open up to me, though, because what I copied from SmartList that I liked, you know, they'd say, hey, remember when we were at that Oscars party and this happened? Like, because they had that relationship with the people that are interviewing in a lot of cases, I feel like I've had that with a lot of people I'm interviewing. And I could say, hey, Brian, remember when you interviewed and brought the cereal boxes, you know, and he could tell, he shared that story. I don't think I knew it before then that they were on the 101 and the phone went out, you know, the reception went out before Paul said that they were accepted. So I learn a lot. And it's really just fascinating to me.

Starting point is 00:59:26 Well, it's an awesome podcast. I've been listening. I'm going to just read some of the guests that you've had on just so people get a sense of who you're interviewing. So he actually just had Paul Graham on the podcast. He does a very few podcast episodes. So that's an unfair advantage you have there. Patrick and John Collison, Bright Ncheski. You mentioned Bright Armstrong, Emmett Shear, Tony Zhu, like epic people. Emmett Shear, by the way, the week after he was named Open AI CEO for like 72 hours, that one launched. I was like, I could not have planned that timing better.

Starting point is 00:59:57 Is there an episode you'd recommend people start with if they were to start to explore your podcast and get into it. Honestly, like, I truly believe this. I'm not BSing you. I think they're all really, really good. And there's so many interesting takeaways from every single one. If I were coming to it for the first time, I'd probably choose, I'd look at the guests and say, who am I interesting? Have I stayed at an Airbnb and I want to learn more about that? Or do I use Reddit? Just see who the guests are and start with someone you're kind of interested in. And I guarantee you'll, like, learn more about this person. So across the podcast episodes you've done,

Starting point is 01:00:36 I hate when people ask me this question, but I'm going to ask you this question. Is there anything you've, any big lessons you've learned, any stories that have stuck with you, any takeaways so far from interviewing all these incredibly successful founders and people? My God, I love that question.

Starting point is 01:00:49 I don't hate that question. Okay, I'm glad. I could talk for an hour just on, I want to like learn from you as an expert podcaster, because I'm still a noob here. Would I have learned the hard way? And you're probably, will nod your head when I say this is that I'm, I talk way too much. I'm a huge win bag and I

Starting point is 01:01:08 hate, I don't notice it now when I'm just talking to you and going off and talking, talking, talking, talking, but when I'm editing the podcast and I'm listening to myself, ask a question in 20 sentences when I could ask it in two. So I've really had to train myself to keep things short. Like you want, you want like regular. short dialogue. You know, you know this. But you also have to interrupt guests if they're going off too much.

Starting point is 01:01:39 So like the talking of the hosts should be frequent but short. That's the lesson that I've learned. In terms of content, I mean, every single episode is a gem in its own right. And there aren't like massive lessons because they're all sort of specific

Starting point is 01:02:00 to that person. And I never know exactly which direction we're going to go in when we get into things. But it was interesting. There were definitely some themes with like Adora Chung and Tony Zhu of Dordash, where they said they really made a mistake early on, scaling into different cities before they had nailed, you know, the original city. And that, you know, that's an important lesson. There's lessons for everyone, I think, in addition to really getting to know these founders, their personal size. of their personality, there's some great lessons that they all tell. I love these lessons.

Starting point is 01:02:37 Is there anything else you've learned about interviewing? That's something I'm always trying to get better at. I love this point you made. I say the same thing to every podcaster. You talk too much as a host. You should let the guest talk. Just ask the question, let them talk. Is there anything else that you've learned about just how to interview more effectively?

Starting point is 01:02:54 Remember, I've been interviewing people since YC started, because I was working on founders at work. when, when simultaneously when we started YC and so that was a collection of interviews. And back then I can't say I was that good at it. I've gotten much better. And then I've since gone. I used to do a lot of interviews at startup school on stage with people. And now the podcast. I think one thing that is that the guests trust me, they trust that I'm not going to try to like have a gotcha moment. I'm not trying to lure them into saying anything controversial. I mean, do I, I love it when they say something that hasn't been said before?

Starting point is 01:03:34 Yes. But I'm not trying to trick them. And just like you, I tell them, you will have a chance to review this before it goes public. And I think that disarms people. And they say, okay, I can open up because I know if I regret saying something, it's not like talking to a reporter who's going to publish it. Like, I care about them. I care about making them look good. And I'd never want to betray their trust.

Starting point is 01:04:01 And they know that. So that's part of it too. For me, with the podcast, I just take, I have some questions that I do ahead of time just so I have something down. But I also just let the conversation go where it's going. And we get in, we get into some random tangents that I find are really fascinating. Is there a story that stand out to you just like that sticks with you from the interviews that just like, wow, that was such an incredible story someone shared with me or less in her. The podcast that really sticks with me is the Parker Conrad episode of Rippling. But we spent a lot of time on Zenefits because if you didn't follow that story years ago, the press annihilated him. And in talking to him, I learned why. There was a smear campaign, you know, paid for. by someone still at Xennafits. There were legal threats made to force him to sign a, you know, sign this document that would allow them to have a non-compete in California

Starting point is 01:05:15 so that he couldn't start another company, basically making his life miserable, disparaging him, stories planted in the press. And I had him come on and I had him tell what really happened. You know, and I, even I, who have seen so much shit behind the scenes with startups in Silicon Valley over the years, like stuff you just couldn't believe, this was unbelievable. And the thing that really sticks with me is that, like, no reporter ever, like, maybe no reporters listened to it. But no one said, like, hey, I got that wrong years ago. I shouldn't have written that. That wasn't true. Let me set the records. straight. So he doesn't care. And Parker's moved on. He's successful with Rippling. He doesn't

Starting point is 01:06:05 think about this stuff. But I do. I care about justice, you know, and it was a horrible thing that was done to him. And like it affected his health. It affected his life, you know. And I just, I'm glad to have sort of been a conduit to set the record straight. That's an awesome episode maybe for people to start with it. If they want to check out the podcast. And then generally, I just love this rise of ways for tech people to share their story without this drive to, like, create clicks and create gotcha moments and things like that. Just this, I think people call it techno-optimism, this idea of just like, tech is great. Technology is doing great things for us. Let's just tell these stories in a really positive way versus all the harm they're causing technology.

Starting point is 01:06:48 Stop. Slow it down. I just want to have conversations that I personally find interesting. I'm very selfish about it, Lenny. As long as I have an interesting conversation, I tell Carolyn. this all the time. Like, as long as we have like 20 listeners, that's all I need. 20, like, really interested listeners. Um, we'll keep doing it. I love that attitude. I wish I had that same feeling. I, what I look for is, is it growing? That's the thing I'm like, is it growing at least? If it's

Starting point is 01:07:16 growing, no matter what it is, I'm feeling good. I need to be a little more like that. I don't know any of my statistics. What should I, what statistic, you tell me as a experienced podcaster, what statistics should I be like have taped up to my mirror every day and track? There's like the correct one and there's like there's a simple one that I look at which is just downloads of the episode. Like it's like the most basic one you see everywhere. But and it downloads is a weird one because they might download it not listen to it. But that's just the one that podcast platforms tell you how many people have downloaded it.

Starting point is 01:07:48 And that's the one that just tells you kind of generally are people listening or people continuing to listen. Do they cut? Did they remove it from their phone? Like, in theory, you should be looking at retention. Like, how many people are finishing the podcast episode? Can you tell that, though? I thought these platforms don't share that with you.

Starting point is 01:08:06 Some do, some do. Spotify gives you some of that Apple gives you. There's, the worst part about podcasting is the analytics are extremely bad and inconsistent, but there's some of those stats. The other one, okay, here's one to pay attention to is number of subscribers on the different platforms. People that follow you. That actually is a really important metric to watch. number of subscribers. Okay, one thing I also, this is just my personality, I can't bring myself to do what I want to, is ask people, if you like the social radars, like, please subscribe and leave a rating and a review. Like, I would do anything to have people leave rating and reviews.

Starting point is 01:08:46 Okay, if you're listening and you either check out the podcast or you're already listener, please leave a rating and a review and subscribe and follow. Thank you. Can I ask you a question about podcasting really quickly? Let's do it. When you do a podcast, after you hang up with a person, can you tell, do you have a gut instinct like, oh, that was a really great one? It's interesting is the ones that I sometimes think, holy moly, that was incredible, don't do as well as I would think. And sometimes ones I don't, I think didn't go amazing, actually do a lot better than I think. And I think there's like a difference between the energy and the fun of it versus like the content and the interesting.

Starting point is 01:09:25 and value of the actual conversation. And so sometimes you feel like that was so fun, so good. I loved it. But people are like, man, I don't learn anything. So those are interesting. That's something I've learned. Okay, yeah, because people come to yours expecting to learn things. That's right.

Starting point is 01:09:41 Now I'm getting, now I'm a little nervous. I'm going to get ax because I'm not teaching them anything. Valuable. You're so modest. This was incredible. I think we've taught people a lot of really important and really actionable things. And I know you don't think you'd do. But you did. And with that, we've covered a ton of ground. We've talked to every single thing that I was hoping we talked through. Is there anything else you wanted to share or maybe leave listeners with before we get to our very exciting lightning round?

Starting point is 01:10:07 No, I mean, honestly, I can't think of, I think I win bagged enough. This was incredible. You talked exactly the right amount of time. With that, we reached our very exciting lightning round. I've got six questions for you. Are you ready? Ready as I'll ever be. Okay. First question, what are two or three books that you recommended most to other people? Well, I definitely would recommend, like, my first second and third books would all be PG Woodhouse books. Do you know him as an author, Ask Jeeves? Okay. So he was an, you know, old school author and he wrote the Asked Jeeves books about the, you know, Butler and Bertie Wester. And they're so funny. They're just fabulously written.

Starting point is 01:10:58 Like, his use of words makes me laugh so hard. And so I would specifically recommend, like, the starter books that I'd write. He wrote tons of books, and he lived till he was, like, 100. He start with, like, very good Jeeves or write ho Jeeves, carry-on Jeeves. Those three are really good. Good books. And then I tend to read, so Paul's the big reader in the family. He reads, you know, riveting books like on Roman grains and anything that has to do with medieval history. I tend to read biographies of people. And so I, I just, especially musicians, especially English musicians,

Starting point is 01:11:45 strangely. And so I've recommended to a lot of people, if you really want a good autobiography, because I sometimes hate autobiographies because I feel like people hold back and don't really share everything. Keith Richards, his autobiography called Life, is really good if you're a fan of the Rolling Stones at all. That was really good.

Starting point is 01:12:04 And then I recently read Barbara Streisand's biography called, I think it's called My Name is Barbara, something. And I kept thinking as I was reading this, like every female founder should read this book. And you're looking at me like, that's so random. But it's because she was such a success within this totally male-dominated like world of Hollywood and just treated like garbage and dismissed and, you know, called a diva when she was very particular about something, whereas a man would be called, you know,

Starting point is 01:12:42 a great director. And she was called a diva. And I felt like every woman should just read this to inspire them. It was such a great book. Long, but very good. Incredible recommendations. Next question. Do you have a favorite recent movie or TV show? I don't tend to watch recent movies. I watch old school movies like from the 50s through the 90s and stuff. My favorite new TV show, just up to the top of my head right now, is Clarkson's Farm. Have you heard of that on Amazon? No. Jeremy Clarkson, he's in a show called Top Gear. I don't watch it. that, but he lives out in the English countryside. He has a farm and he decided that he'd farm it. And the whole show is about him getting into this business that he knows nothing about.

Starting point is 01:13:31 Everything goes wrong. But it is hysterical and heartbreaking at the same time. I've learned so much about England and about where I live and the crops that are grown and how hard it is for farmers. He's really shown a light on the difficulty of being a farmer these days. And it's fabulous, Clarkson's farm. And it's a good, it has some like bad language in it, but I do recommend the kids watch it. Because it's, it's just a good, it's a good show to watch as a family. If you can deal with a little, you know, foul language, foul language, the Brits say, drop a lot of f-bombs. Do you have a favorite life motto that you often come back to, share with people, find useful in worker in life.

Starting point is 01:14:17 So boring, but I always try to treat people the way I'd like to be treated myself, really, is a fundamental life lesson. It's like boring, but so powerful and important. So I, and I try to live that same way. And I think it's a good reminder of people. Sometimes the most, I think as Michael Pollan that said, that cliches are cliches because they're so true. They're like so true, we're tired of hearing it.

Starting point is 01:14:41 Sometimes it's important to be reminded of them. Who's most influenced you in your career? Who do you think of when you're like, this person's really had the most influence on me? In my career, I definitely have to say my husband, Paul Graham. I've just learned so much from him over the years. And he's such a good person. And I don't, I think people who know him all know that he is.

Starting point is 01:15:07 It's just he has such a big online personality either through Twitter. or through his essays. And so he has a lot of people that don't like him. Because he also speaks what he believes. And he is not afraid to say anything if he believes it's true and needs to be said. Whereas I'm the exact opposite. I'm like, oh, I'm not going near that. I'm not touching that with a 10-foot pole.

Starting point is 01:15:34 I don't even want to get in someone's crosshairs or fight with someone. And I admire that so much. Like there's so much that he's done with Wycombinator and just in our personal life that is just so admirable. And I just, I've really learned, learned a lot from him. It's such a boring thing to like learn from your husband. But at the same time, I'm going to extend this. I'm going to win bag a little bit longer. I have learned so much from the founders that we funded.

Starting point is 01:16:05 I mean, some of them are just incredible people and have been. through so much and survive so much and built these amazing companies that I couldn't have even imagined when we funded them that these companies would be as successful as they are and they're all, you know, so many of them are just great people and they now teach me things. Honestly, like Brian Chesky teaches me things. The student has become the master. He knows so much more about me and running a business and I often like, we'll go to him for advice. And so I'm really lucky to be surrounded by so many smart people in the startup world because as a startup nerd, I mean, I could talk about startups, you know, and think about them all the time.

Starting point is 01:16:52 And it's so great to have all these people around sort of lifting, lifting me up. Would you believe that serial experience led to a $92 billion business today? I just looked at up how big they've gotten. Honestly, I wouldn't. And it's, I wish I could say, oh, I knew they'd be this big. Yeah. But the truth is, with all of the super successful startups, yeah, you can remember feeling very positively about them. And certainly feeling like as they went along in the first few years, like they're doing really well, they're really determined.

Starting point is 01:17:32 They're doing a great job. But you just never really think they don't, they themselves probably didn't. realize that they'd ever be that big. Let's face it. That's just the way startups are. Okay, here's the actual final question. Is there a fun story of early days YC, whether it's with Airbnb founders or Paul or anything that comes to mind as just like, wow, what a different time that was or what a surprising thing that happened. It's funny you ask, because actually one of my ideas I've had lately is that I want to start thinking about writing sort of a YC biography kind of book. I don't know when the time is, but the point is I have to remember things.

Starting point is 01:18:13 Because it's hard when it's been 20 years to go way back. You have to remember specific things that happened. I mean, why see, I just remember the early days being so magical and so pure. When we started like no one knew about us, no one was bothering us. We just did what we were doing with no distractions. We were helping, I'll be a little bit of, a very small group of founders, you know, eight in that first summer, we were just doing what we love doing and growing organically. And no one was scrutinizing us or blaming us for things or, you know, writing negative news stories about us. I mean, the negative stories in the press, because I'm a people person and I'm very sensitive, like Paul's not as sensitive as me.

Starting point is 01:19:04 And so he doesn't care if there's a negative story in the press that's not true. Like, I do. It really, like, affected me. And I hated when we got big enough that, you know, people would lie about us and say a bad thing. So I look back fondly when we first started. It was the most fun time of my life, the most productive time of my life. Didn't have kids then. And I could just help the founders and, like, learn about all these exciting things that

Starting point is 01:19:34 happened in the startup world because it was new to me then. The startup world was new when we started Y Combinator. So I had a lot of learning to do. And I met all these cool people. And it was just very authentic. Like no one was doing it to be cool. Okay. Well, let me, let me ask maybe one other question. Was there a moment when you felt like YC was working when it felt like, wow, maybe this is going to make it? There were sort of two moments that I remember I felt like YC was working. Because remember, we started Y Combinator as 100% like an experiment. Could we fund younger founders with small amounts of money? That was it.

Starting point is 01:20:13 Then that summer we created this batch investment idea, and then that became the idea of funding them in batches. And that was the first aha moment was after that first summer, when we invited people to participate in the summer founders program, which is what it was called. And remember that first summer, had Sam Altman, Emmett Shear and Justin Kahn, Alexis and Steve of Reddit. You know, those were, they were in the first batch. And the batch thing worked really well because they all

Starting point is 01:20:45 became friends. We could have dinner every week and bring in guest speakers and then introduce them to investors at Demo Day. And that whole batch investing thing was an aha moment. And we said, oh my gosh, let's keep doing this. this really works. And so we said that was a moment where we knew we were on to something. And that's when we then did it in California in the winter. But the second big moment was probably it was, I remember it was like a year later. And no reporter would write about us. Investors really didn't, you know, think that much of us. But I remember when Reddit got bought by Condane asked in 2006. It was that.

Starting point is 01:21:34 And then at the same time, I think it was like Charles River Ventures or one of these Boston, maybe it wasn't even Boston, but it was a VC firm, did like the seed program where they invested maybe 100K in startups. And the press like loved that. They like wrote all about this $100,000 investment. And they'd sort of mention Y Combinator as doing small investments. And then that coupled with the Reddit press. sort of made us feel like, oh my gosh, we are sort of legitimate in the eyes of outsiders became sort of aware of who we were. And I sort of felt like, we've arrived. We've been in the news, you know, we've been in the press. Like people are finally paying attention.

Starting point is 01:22:17 That's amazing. And it's funny that read it just won't public. It's kind of the other side of that coin. I know. Pretty impressive. I mean, definitely didn't, didn't necessarily think that was going to be happening. I know you have to run, but I can't help but ask around what you just talked about, where you decided to invest in batches. You wrote this really interesting point that none of us had any experience angel investing, and that's where the idea of funding startups and batches came from. We decided to fund a bunch of startups at once during the summer

Starting point is 01:22:43 so that we could learn how to invest. And I love that your inexperience in doing it created this structure, like that unique weakness slash strength is like what led to the way YC operates. And I think that's really interesting. Yeah. Yeah, we definitely wanted to learn. more about how to be investors. So that's when we decided to do this, you know, summer founders program where we could invest in a whole bunch at once. And then the plan was to

Starting point is 01:23:10 go to asynchronous investing like normal investors. But we realized that there was something magical about this batch thing. So sometimes, I always say we love domain experts, but sometimes maybe ignorance is sort of bliss and you just discover new things. Jessica, this was everything I hoped it would be we covered so much ground. I think people are going to love it no matter what you think. Oh, good. Good, good, good. Two final questions. Where can folks check out the social radars and anything else you want people to know about it? And how can listeners be useful to you? Well, you check out the social radars on all the, you know, podcast platforms, Apple, Spotify, Amazon, all of those. And then there's a website, but social radars.com.

Starting point is 01:23:54 and they can be helpful by just listening to it and spreading the word because I don't do any marketing for it besides like posting on Twitter. Just because I'm, you know, you know, it's expensive doing a podcast and stuff. So I don't do any marketing. So if it resonates with you, if you find an episode interesting, please spread the word and write a review and rating. I was just going to add that. I'm glad you threw that in there. Jessica, thank you so much for being here. Thank you so much, Lenny.

Starting point is 01:24:26 It was a lot of fun. Same for me. Bye, everyone. Bye. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at Lenny'spodcast.com.

Starting point is 01:24:52 See you in the next episode. Thank you.

Lenny's Podcast: Product | Career | Growth - The social radar: Y Combinator’s secret weapon | Jessica Livingston (co-founder of Y Combinator, author, podcast host)

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