Y Combinator Startup Podcast - #113 - Caterina Fake and Kat Manalac

Episode Date: February 21, 2019

Caterina Fake hosts the podcast Should This Exist? which is about how technology is impacting our humanity. It launches today on iTunes. She also cofounded Flickr, Hunch, and Findery and is an investor at Yes VC.Kat Manalac is a partner at YC.You can find Caterina on Twitter at @Caterina and Kat at @KatManalac.The YC podcast is hosted by Craig Cannon.***Topics00:32 - Caterina's new podcast, Should This Exist?2:32 - Is there a process for considering if something should exist?4:02 - Who should be part of these conversations?5:17 - Wait But Why and the Human Colossus7:22 - Episode 1 of Should This Exist?10:17 - Having conversations before things exist11:42 - How might employees think about their role in whether or not something should exist?14:32 - Caterina reflecting on her creations and if they should exist19:02 - Considering whether things should exist as investors23:32 - Cofounder charter - What you will and won't do26:03 - Questioning the VC model27:22 - Working on Wall St, feeling herself change, and quitting31:22 - Caterina as a student34:02 - Peculiarity and entrepreneurship35:22 - "Don't fight to win prizes that aren't worth winning"38:32 - What was once fringe is now mainstream40:52 - Kat looking up to Lea Salonga42:42 - Evgeny asks - How did she get her first 100 paying users?49:27 - How does she advise founders to find investors?54:47 - What questions should founders ask themselves while making something?

Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinators podcast. Today's episode is with Katerina Fake and Katman YLic. Katarina hosts the podcast, should this exist, which is a show about how technology is impacting our humanity. It launches today on iTunes, and I've linked it up in the description. She also co-founded Flickr, hunch, and findery, and is an investor at YesVC. Kat, who you've heard on the podcast before, is a partner at YC. You can find Katarina on Twitter at Katarina and Kat at Katmanjallik. All right, here we go. So, Katarina, you are starting a podcast.

What's it called? Indeed, I am. It is called Should This Exist? It's been in development for several months now, and we've been working on it. It will be 10 episodes starting on the 21st, which I think was when this will go live. And basically, it's about so much of what we do as entrepreneurs and, you know, as why Combinator knows better than pretty much. anybody is basically making the business case for your product service startup.

And I think that we found in recent years, especially that the conversation has turned to not, can this exist or how can we enable this to exist, but should this exist, right? And I think that a lot of the things that we've seen kind of come out in the world in the past, you know, several decades, sometimes they may not have been not necessarily what the founders intended, right? It may not have been what, you know, society wanted or needed or even individuals wanted or needed. And if there were a slight course correction, or if the founders had just been kind of asking themselves that question, should this exist? It's a very important question to ask, right?

Just flat out. Should this exist? Should this feature exist? Should we, you know, plan this company a little bit differently to address underrepresented groups? You know, this has potential for kind of increasing bias or inequality or like a thousand things that we can look at that are kind of these outcomes of our paths. And if you, you know, as we all know, when you're doing a startup, you've already been in existence

for five years. it's much more difficult to change your course than it is at the very outset. So those are the questions that we are hoping to introduce into the conversation should this exist. So is there a process that you go through when you're trying to take apart an idea and figure out whether or not it should exist? Well, most of it comes out in conversation. And I think that a lot of it comes out in the conversational process that you engage in, not only with your team, right, as a founder and, you know, as a creator, inventor. Actually, a lot of the people that we have on the show are inventors and scientists and people

who are, you know, kind of just taking maybe some research or some new technology and bringing it out into the world and productizing it. And a lot of the time, I mean, there's a lot of questions out there. You know, there's a ton of, for example, like groups that are like, kind of asking ourselves, you know, what are AI ethics? What, like, what do we do with, how do we manage the, you know, the potential very great downsides of, say, CRISPR? I mean, there's a lot going on right now.

Crypto, I mean, it's like a very, we're kind of going into realms in which we just don't have a good ethical framework to discuss them even. And so just making the kind of question the part of the conversation, very important. I think about this a lot because I read thousands of YC applications and some of them are for really, you know, really incredible technology that I'm like, wow, this could have a huge impact. So who should be part of that conversation when you're trying to decide whether something should exist? Is it founders, investors or like how? I mean, I honestly think that it's a matrix, right? There's a lot of people that should be involved in that conversation.

And I do think that one of the benefits of this show and one of the things that we're hoping to do with this show is to bring people in that are not necessarily normally part of the conversation, right? You want to bring in sociologists. You want to bring in historians. You want to bring in psychologists, people who actually study a lot of the different processes. And not all of us, computer scientists, user experience designers. I mean, you know, like we're, I mean, I think. everybody starts off with the best of intentions, nobody thinks that they're going to do something destructive when they start off. And as, you know, you kind of read in the poetry of like Baudelaire,

the descent to hell is by small steps, right? You just don't, you just kind of see that happen and over and over again. And so you want to prevent the, you know, that kind of the Theranos outcome. You want to put like all of these, these things that, you know, you kind of get there. Yeah. Have you ever read the blog, Wait, But Why? Yes, I have. Tim Urban. So Tim talks about this idea in the context of what he calls the human colossus. And basically he says, like, we have this, like, divine destiny and that humans will just build.

But it seems like you probably disagree. Like, the market doesn't necessarily push a product to a certain place. Well, I mean, I think that they, you know, it's one of the great things about humankind, right? We're kind of, you know, homo favor, right? The maker, right? It's like, you know, we are the makers. And we honestly just can't help ourselves. Exactly.

And I honestly think it's one of the best things about us is that we're just endlessly curious. We like to develop new tools. We're kind of full of possibility and vision and we see something that, you know, can be changed and we want to change it, right? I think it's one of the best parts of our nature. But when we do that, without a sense of some of the possible outcomes or even being aware of them.

And nobody knows. I mean, that's why they're called unintended consequences, right? Because they're not intended. And yet, you know, but sometimes if you sit down and you really look at it, you can see them. You can see, like, if you had just kind of like taken the time, made this part of your conversation, that you could put things on a completely different trajectory if you stopped to think. And, you know, it's actually amazing how hard that is to do. I mean, without exception, the entrepreneurs that we've interviewed so far for the show have been, they've all said, we are so grateful for the opportunity to ask these questions and to have these conversations because in our daily work, we never have. We aren't asked these questions by our investors.

We aren't asked these questions. And it puts them on much firmer ground themselves and sometimes even exposes or kind of shows them possibilities, you know, for their products that they hadn't previously seen. And that's super exciting when that happens. Well, so maybe we should be more concrete. So what's the first episode about? The first episode is about it's coming out today. Yeah. If today is February 21st.

And it's about a neuropriming headset that makes you learn faster. So it's like the matrix. Yeah. Yeah. Yeah. And it's actually, it was invented by Daniel Chow, who is a neuroscientist, and he had actually done devices that were implanted in your brain that required literally opening up your hat. I mean, he's like, I mean, he's a real jail.

Yeah. Right. And he realized that this was an extremely frightening procedure. for obvious reasons. His, it was, his, his,

his, his, his, his, his, had been called Neropace and it was, um,

addressing, uh, epileptics, um, the kind of the, um, medical treatment of epileptics, using the electricity in your brain,

right? And, which makes sense. But, um, had, had been, it was been very difficult to get people over that hump of,

you know, putting, literally like cutting your skull, and implanting a device in your brain. And so he decided, he decided, to go with a new product that, you know, you can still affect the brain, right? But you don't have to be as invasive. So super interesting. A lot of ethical implications. It's specifically designed

around sports. And if it works, so much learning could happen. It's almost science fiction. Yeah. Right? It's like almost science fiction. You put up, like there's this movie from the 70s called Fantastic Planet. It's a French movie. And literally, the people in it in the science fiction movie put on a headset and boom, learn everything. Right? Yeah, I know, you go. Right?

And so it's kind of, it's kind of sci-fi in that way, right? I was always a big science fiction fan. And so part of the reason that I love, frankly, these conversations is because they're all about that kind of possibility. what if, what if? Have you, whatever. Science fiction also has a very strong utopian. Of course. And dystopian, you know, kind of, you know, interest.

Like, it focuses on those two potential outcomes frequently. That's one of the things that I've learned recently that it has been so interesting is that big companies are starting to hire science fiction writers to map out these possibilities. Exactly. Because that is what they have been doing. Yeah. And that's kind of what their job is. Right.

As science fiction writers, they're just kind of future scenario planners. Right. Exactly. Yeah. No, it's amazing. Yeah. So, okay, so this is kind of reframing the show to me. I previously thought it was more about criticizing things that currently exist.

So is that happening or is it more about future ideas? No, no. It's more about kind of taking something that. That's leading edge kind of. Right. That's actually leading edge. Okay. And is something that is coming soon.

Gotcha. And is even in market. Right? And sometimes they're in market, sometimes they're still on the kind of early development stage, but having those conversations at the very early side of those. Because, I mean, there's a lot of criticism online of things that already exist. And I think that if you read your op-ed of, you know, kind of your daily paper, you will find a lot of that. But what we're trying to do is really kind of, you know, start at where we are with new products. And in some ways, it's kind of, it's kind of. the most fun. It's also way more optimistic. And it's more optimistic. Yeah, the dystopian stuff. It can be kind of...

I mean, you could just sit around and criticize the existing technology like all day long. Yeah. I mean, you know, and it's actually very gratifying to do that in some ways. And like a mean like putting down celebrities kind of way. Yeah. Yeah. But, you know, I think that the the goal of this show is actually much more about possibility, right,

than shutting stuff down. Hmm. Okay. So this is a little bit of a side note, but I did have a question about current existing technologies. So if you say we're an employee at a company where you're like, I don't know if this should exist, what how do you think about that idea now? Because it's no longer like if you're working at a hardware store 50 years ago and you're like, I don't know, I just sell like screws and hammers and nails and whatever. You're like, you know, kind of like doing no harm. Yeah, it's neutral. They're not harming anybody. Right. Necessarily. I mean, you know, obviously you can harm somebody with a hammer. Yeah. Yeah. Okay.

Yeah. Maybe you're like, oh, I sold screws to a serial killer. Sure. But now you're like, okay, I think maybe five years ago people might say like, I don't know. You know, I'm just like an employee at this company and I'm just whatever. Right. This is a fine salary. Right.

Not so easy to say today. Right. Yeah. I mean, I think that one of the great things about millennials and whatever. we calling the people that come after the rule in general? Gen Z. And then there's a one that like there's like you know after so like kids

today. Yeah, yeah. You know youth, whatever you call them these days are super engaged and want to know that the things that they're working on have merit are putting things on a good trajectory have positive impact and not negative impact. And you see this happening over

and over again. You saw recently the Google walkout. You see organizations rising up to help people inside of organizations communicate with each other and figure out how to communicate this to, you know, senior management, et cetera. So I think it's a huge movement. And I think that people have started to realize as employees of large companies, that they also have the power to say, no, no, like, you know, it should not exist this way. Maybe it should exist this way and actually be part of that influence and conversation and, you know, kind of actually set the trajectory of their work.

Yeah. Because it's their work, right? It's really, you know, it's the work that you do every day. And you have to feel good about that. I think that I think that we all recognize that where, you know, a lot of the time, those of us who are so lucky, right, to earn paychecks, working in technology, right, which is a privilege, right? Right? And most people do not have this privilege.

Instead, we should consider ourselves extremely lucky, are able to, with our work, and you can kind of see change the world, right? And kind of this has always been the promise of Silicon Valley. We're here. We're going to change the world, right? There's tons of that. Are you changing the world for the better? I mean, yes, you're changing the world.

Right? Everybody's changing the world with their work every day, a little bit by bit. Yeah. Right? And are you changing that world for the better or not? And, you know, you want to be always making sure that you bring your moral compass to work with you. Yeah. And absolutely.

And you have a choice because, I mean, I know many people at companies who feel like they got lucky. And they just ended up there. And they're like, oh, I don't know. I might be part of this machine, but I don't know if I can be part of another machine anymore. Like, this might have been one hit. Right. And so they get locked in. But I think as people start to think about stuff, they do end up moving on.

But I was curious about you as a founder. Did you ever look back, and maybe even on projects, where you're like, I don't know. I don't know if I should have made that. If that was a decision that should have been made. Well, sometimes you can't see the consequences of it. So, for example, if you go back to my Flickr photo stream to around 2004, you'll see the design. I posted it up there, I think in 2008 or something like that, of the first activity feed. I never call it a feed.

I called it recent activity. Because a feed always reminded me of like animals at a trough. Which might be more accurate. Which may be more accurate, right? Subsequently, right? And, you know, this was a significant thing. Yeah. Right.

It was not invented by me. It was just really invented. It was kind of averse cron that we had seen in blogs. And the difference was it included activity from other people in your social network. Right? It was the first time that this had actually kind of appeared. And so you would see people liking your photo. You would see when your friends had posted a photo and all of that kind of thing. And, you know, you could, you could just basically see

activity as it was happening on the system. And it's interesting because this was then adopted by Facebook subsequently, but the changes that were made there were very significant. And we could see it all the way along the way. We could see that, oh, suddenly they're reordering things based on people's attention, not on chronology, right? This is super significant. We saw that and we're like, whoa, that is not good, right? Because suddenly, if you have somebody, you know, it's kind of the same thing on, you know, kind of television. What gets your intention is not necessarily the thing that you should be paying attention to. It's a security hack of your biology as how,

as kind of how I think about it. Because you're just kind of as a human animal, you see like naked people, you are not going to not look at that. Yeah. You see a car accident. You're not going to not look at that. I mean, it goes back to the early days of newspapers. If it bleeds, it leads, that's what they used to say.

Right? And so once you start organizing things, not based on simply, I am interested in following this person. I'm interested in what they have to say, exciting or boring, right? Or I trust this news source, et cetera. And then kind of making it so that not only is it the most attention getting things are promoted, but you can buy your way there. Right?

So it's like I think that, you know, a recent activity, you know, reverse cron list is actually, I don't think there's that much wrong with it until you start adapting it in these somewhat nefarious ways. So you see kind of some of the inventions that you, but then you go back. I mean, you could look at, I forget what year it was, but then there was like the rise of things like Upworthy. So they gamed it in a different way. Sure.

So that was like the early days. Like, oh, we can sensationalize positive things and get in the feed before you had to buy your, because as soon as you switch to pay promotion of your Facebook page, it changed the game. Sure. Right. Like you didn't get any activity in the feed unless you bought your way to the feed. I know. And it was, it was kind of a tragic thing to see a network that was yours.

Yeah. Right? Like these are your people. Like this is your cousin and your sister and your coworker and your friend. And you don't even see it. And then suddenly like, yeah. And so, I mean, you know, yes, you can sense. sensationalize worthy things as well.

But I think that the problem is in the verb, sensationalize, right? Attentionify, you know, right? Yeah. It's an issue. Yeah. But now both of you guys are doing this as investors, right? So Kat, you sit in interviews, YC.

How do you think about, oh, I don't know, maybe this shouldn't exist or maybe, maybe, because. Do you put your money behind it? Because, like, honestly, it's super interesting. I was talking to a guy recently. Yeah. And he was introduced to Jewel, really early, which is the cigarettes, right? And the way he was pitched this was, it's a great product. It will reduce smoking.

Right? Like, fewer people will smoke as a result of using Joel. And he was kind of like, okay, well, that's it. Interesting claim. But then why would you start a smoking company to have there be less smoking, if you know what I'm saying? And then he kind of looked into it and he's like, in no way are they actually explaining the addictive properties of nicotine? It's now what? Like there's, you know, 5 million new smokers because of this single product, a single product, right?

And they recently got investment from Philip Morris. And so he could have at the very early stages of Joule, because he happened to, you know, meet them really early. have invested $250,000 in this company, which would now be worth $25 million, right? That $250,000. He said, and I thought that this was super interesting, I never had put a price on my ethics and integrity before, but I now know. It's $25 million. Exactly.

It's $25 million, at least. Right, right? Because that's just where it is now. And so I think sometimes, like, yes, you can totally get rich by burning down the rainforests and kind of creating sexist media and, you know, all kinds of things that you can invest in. Right. Right. Do you invest in them is the question, right? Yeah.

And I think that at yes VCC, I'm an investor in my firm is called yes VC. I think we have generally, you know, certain categories that we won't invest in. in, you know. Which is true for a lot of funds, right? The LPs have rules. You can't invest in guns. Right. But like, we don't invest in gaming, right?

We don't invest in a lot of games. And the reason that we don't is because it's like a lot of the time it's like, you know, it's like it has all the same mechanisms as addictive gambling and things like then. Like a lot of time it's just like Las Vegas for children. And you realize that the same mechanisms that are, you know, the same security exploits, frankly, that social media has taken advantage. of are, which that's a whole other conversation that we can have about my opinions of social media.

You know, we just don't want to be in in that kind of atmosphere. If it has those kinds of properties. Yeah. Right? Those compulsive, addictive properties. It's just a category that I'm not against games, you know. I'm like a, you know, give me some settlers of contine. Yeah, right.

But I'm, but I'm not. I'm not in. the in the business of creating these, you know, addictive-like behaviors. So, and the gaming category is full of that. Right. And, I mean, that's why I like the concept of this show that you're doing a lot, because I think more of those conversations about should we fund this, should we be part of this? You know, oftentimes, you know, since we're so early, you know, we're the first, you know,

check, we're the first money in. And so that is pretty powerful. It's so powerful. Yeah. Because you're basically putting the Y Combinator seal of approval on every company that you invest in. We too. We're like putting the SVC seal of approval on every company that we endorse. I mean, it's an endorsement.

I mean, of course. Yeah, of course. Tricky things have happened at YC? Absolutely. Where a company pivots and you're like, oh, boy. That was not the intended consequence of the 120 grand at the time. Exactly. Right.

And you can kind of, you know, disavow them, try to go in and coach them and whatnot. But I think that part of the Y Combinator conversation should be in the, should this exist, direction. I think it's important. And I think it's also important. Another thing, too, is that we have a, we wrote this thing called the founder, the co-founder charter, which is a conversation that co-founders have. And I'm sure that YCOMO has some version of this as well. where you kind of set out your expectations, your hopes and dreams for the company, and where you

would want to go. But I think it's really important also to put down in that document, you know, what you will and won't do. Like where are the limits? If you're, if you're in AI, you know, or you're in one of these kind of emerging categories, it's like an ethical mind field, you know, really know where you will and won't go. Do you make all of the founders that you invest in fill out this charter? No, no, we don't. I mean, it's kind of offered and we kind of have the conversation. We encourage that conversation.

It's not required. But I think that our founders tend to be of a certain kind. And if you look at all of my prior companies, my prior investments, they do have a certain flavor. There's a certain ethos that they have in common. So, you know, Flickr was an online community. It was a very human community, very creative, very communicative. And other companies that I've been part of include Etsy, where I was the fourth or fifth person there on the founding team and then became the chairman up through its, I mean, you know, and then, you know, other companies that I have funded like Kickstarter, they have a very, I think, human ethos. Absolutely.

And the kind of technology that I've always hoped to build, and part of the reason I'm doing this podcast is that I've always seen a big part of my job as me catering a fake is actually to humanize technology. Because it can dehumanize us. And it has a tendency to do that if it goes in certain directions and to constantly bring it back, you know, to the human, to the relational, to the interpersonal, to the communitarian, to the creativity, all of those things about us. And there are also all of these structures that you're working within. Because I think people could say, like, well, you know, VC is inherently prone to being susceptible to all of these vices, right? Because you have the money. You're like, here, I'm going to give you X amount of money for Y percent. Sure.

And it assumes a certain amount of, like, hopefully infinite growth, right? And people will just like beg, borrow and steal to get that number so they can keep increasing the valuation so they can keep raising so they can, you know, exit. Right. Yeah. But you exist saying, you know, and I think YC is in a similar boat. That doesn't necessarily have to be true. Right. But it's painted that way often. There's so many conversations that are going on right now about the VC model that I think are great.

And everybody questioning the unicorn blitzscaling, you know, 99 must die for one to succeed model, which I think that for, you know, decades has been taken as the single path to a successful valley. venture-funded company, which is why you end up with the, you know, the venture-back sociopaths and the, you know, these, like, truly,

like, it kind of, it actually kind of puts you in the position where you have to become a worst person, right? You have to change your goals and your desires and who it is that you become. And I worked on Wall Street for six months.

Okay. So it's as long as I could actually hack it. Was that when you were the, The door assistant, you mentioned this on another podcast I listened to. You were like writing a novel or something. I was a receptionist. You were a reception. Yeah.

This is a long story. Yeah, yeah. I was a painter. Like literally a painter making like nothing. Literally nothing. I was I was living on like there's a place like in New York there. It was called Grace Papaya where famously you could get a 99 cent hot dog near my house. 99-cent hot dog and a soda.

This is like the lowest nutrition period of my life. Yeah. I'm sure how I survived it. I was like thin as a rail. But I was a painter and I took all these temp jobs. And I had a temp job at a investment bank. And the managing director of this department came to me and he said, ooh, you know, kid. I was only like in my 20s, super young, early 20s.

And you're really smart. You could be an analyst here. And I'm like, well, you know, I'm a painter and, you know, it's kind of not my, not my desire. And he's like, yeah, but I'm going to pay you a six-figure salary. Right. And I'm like, literally like, I'm living on like 99 and hot dogs at this point. So I'm like, okay, I think I can take you up on that. So I went out and I bought myself like literally I bought myself a suit, like a power suit and like some shoes, right?

Because I'm working on Wall Street. I have to like, I can't look like a receptionist anymore. I'm like an animal. I'm like the real deal. So I step in. And within six months, I found myself becoming a different person. This was the thing that I noted in myself. I was surrounded by, and it was all guys, right?

It was like me and a bunch of guys, right? And I was as tough as any of them, right? I was just tough as any of them. They were so impressed by me. They started calling me brass balls. I mean, it was Wall Street, right? You know, this is a very wolf of Wall Street kind of environment. Totally wolf of Wall Street environment.

And yet, I could be just as obnoxious as them. And that's what they liked about me. And I didn't like that that was what they liked about me. They didn't like my kindler, gentler, more thoughtful, poetic, painterly qualities. They liked the fact that I could just rise up or down, like lowered myself down to their level. Right? I could kind of meet them where they were and just be like, I can give as good as I get here. And then I realized what was happening to me as I was. So literally that was like six months of that

experience where I was just becoming, you know, the Wolverine of Wall Street. And I didn't want to become that. And so I was, what happened was I got off the subway at, on Fifth Avenue in New York where I was living and was on my way to work. And I remember I was, I had just become so angry all the time. And that I was walking down the street and I was refusing to move aside for other people, right? Because I was just like in this world of, I don't know, like I was some kind of like elite entitled person. Yeah, yeah. It was awful. Like it was truly, I was transforming into just the most terrific person. And it was actually when I was standing there on the sidewalk, unwilling to move aside for other people that I realized that I had to quit. And I walked in and I quit that day because I was just like, it's not worth it.

like you're this is the end of this is the end of you that you've become a monster it's very self-aware I think a lot of people do 20 years before they feel about I was gonna say you realize that pretty quickly you know and I was like I was like I was like I was back to 99 set hot dogs yeah yeah I'm saying I was good at saving so that's not entirely true but I you know yeah like and so that was it that was it kind of a a big moment I think it's dangerous right you get part of a certain culture and then you want to be good at the game. Yeah. And we see this in the valley, right?

Yes, exactly. This is the game I'm in and I'm going to mold myself to make it work. Right. Right. And that was the game and I'm good at the game. I can always figure out the game. Exactly. I can always figure out the game.

Right. Right. Like that's one of my, like my special sauce is that I would get in a system. So for example, school. Yeah. Yeah. We should talk about this. We should talk about this because I, I was a horrible student.

Right? I was a great student and I was a horrible student. I liked to learn, but I didn't like to be taught. And so I had this, you know, I would go to class. I would, you know, for example, like eighth grade geology. I was like, oh, this is great. I've been collecting rocks my whole life. I'm so wind of this.

So I sat down and read the geology textbook. Yeah. And I was like, oh, I love this subject. It's so great. So I showed up for class, the second class. And I realized that the teacher was just going to read out of the textbook, which I just read. And so I'm like, this is horrible. I'm not getting bothered doing this.

So I left. And they, you know, I kept on getting, you know, marked absent. I was a truant. My parents had to come in and talk to the principal and all these guys. They made me back, go back into class again. So in order to get around this, I would read, I would check out of the library. I get the inner library loan. I would get all of the books of the bibliography of each of the chapters in my geology textbook, and I would read them.

And then I would sit in the front row. And the teacher was like, hey, you know, blah, blah, blah, blah, blah, blah, plate tectonics, this. And I was like, you know, if you had read, I would raise my hand. If you had read the seminal paper in plate tectonics, you would realize that, blah, blah, and that was like the most of them. That one over really well. Right? So that went over incredibly poorly, which is kind of the design. Yeah.

And then I was excused from class. And she kind of took me aside and said, if you just show up for the exam, you know, I will not report you absent anymore. So I did all of these, like, weird workarounds. And then I kind of just would, and it wasn't like I was off, like, smoking dope, like, behind the bushes. Like, I was actually in the library reading. So it wasn't like I was a bad student. But I was truly, like, institutions and I have never gotten along well. And so I was, you know, I was always like that.

And I discovered that if you did really well on standardized tests, you were good. Right? Yeah. So I was like, I was one of those students where I had, like, you know, straight C's. And then occasionally I would get like A pluses in a class where I had a really stellar teacher. And I just loved them and I would do everything like that I could.

And then I had all these Cs and like I was always on the verge of getting kicked out. And and yet I was like a national merit scholar. Yeah. Right. So I had this, I had this like peculiar relationship to, to school and to education. I was, there were a lot of people there who had like so much better grades than I did. I did not get good grades in school. But it worked out okay for you.

So now, do you, yeah, right. Do you feel that school is doing a disservice to many people? Or are you just a small percentage of the world where you're like, I don't know, I was never going to fit in here. And so I can succeed as an entrepreneur. I mean, I do think that that nature, right, that peculiar, but peculiarity is actually very common among entrepreneurs. I think so too. Yeah. that tendency to look at existing frameworks in which you're being forced to fit and

to say, like, I don't fit into this framework. Like, this framework is not serving people. How can we? Well, you can also. Or change it or somehow adapt in a different way and forge your own path. And you have to kind of be, like I said, have a lot of initiative, right? Like, you cannot go to class because you don't want to do it. the work or you cannot go to class because you read all of the books in the bibliography

on plate tectonic. You'm saying? Like you can, you can, there's different approaches, right? There's different reasons to not go to class. Yeah, yeah, yeah. And if you're not going to class with the right reasons, in the end, I think it will serve you. Yeah.

Right? It's hard to have that confidence when you're younger, right? To step back and be like, dude, this is all like, all these rules are made up. I know, but like I think that you have to look into yourself really deeply and ask yourself, you know, do I really, like, is this something that's actually truly worthwhile? And to not fight to win prizes, not worth winning. Right. So much of life is that.

Yeah. And switch it up. So what, I'm actually curious about both of you. Like, who did you look up to when you were younger? Was there someone, you know, oh, man, I could, you know, I could be like them. Oh, that's a good question. I don't, do you have an answer? I'll think about it.

Two of people who. Because when I think about it personally, and I'm like, you know, I don't school, I always did fine. Like it was no problem. It was not particularly difficult to get a B or an A minus or whatever. But I was like, I don't think I want to win this game. Right. Yeah. This is not where I fit in.

And so I would just look around and see like, oh, you know, like Spike Jones is like, he's making videos. He's making skateboard videos. But he's also starting a company. He's doing all this creative work. That's so awesome. Right. So there is a model, right? Sure.

So I'm wondering, like, it's you guys. Right. And it's interesting, too, because there, like you say, Spike Lee is kind of a great example of that. Spike Jones. It's okay. Spike Lee, too.

Spike Lee also. Why not? Actually, sorry. But like Spike Jones. And, you know, it's so funny because when I was living in New York, around that same time, Spick Jones was living down in an alleged gallery, down on the Lower East Side, on Ludlow Street.

And I used to go hand. out with those guys. And they were publishing a magazine called Dirt. Yeah. Do you remember this? I'm aware. Were you like aware of this? Yeah.

And so we thought that this was the coolest thing ever because it was, and I remember one of the things that I learned from that was how to deface. It's illegal. How to deface a Canadian five to turn the, you know, the old white dude on the $5 Canadian Bill into Leonard Nimoy's like Mr. Spock. Yeah, yeah. Right, which was so like, I remember that. I was like actually from like an early issue.

And they had so many like things like that that were like quasi illegal and dirt. I don't ever, I don't ever saw an issue of this thing. Like how to drill a hole in a quarter so that you could use it repeatedly at the laundromat. I definitely know about that one. Like things like like like a thousand things like this. And I'm like, you know, can you publish things like that? Yeah. Yeah.

And for me, it's like, oh, there are these like fringe examples of how it works. Right. You know, what's interesting, though, and here's the thing that's kind of interesting. Yeah. Is that what was on the, and this always happens, right? What was on the edge became the center. Totally. Right.

10 years ago, all the things we're doing with startups and having individual founders being able to build enormous companies that just didn't happen. Right. And also, you know, kind of, you know, culturally rebellion was actually rebellion against a system. And now you're kind of in, it's on the, you're on the inside. Oh, yeah. You know, you're kind of being asked to disrupt.

Yeah. Right. And that's a complete change, I think, in culture. I mean, you know, obviously it's been happening since, I don't know, since Levi's, you know, became like, you know, like $600 jeans, right? Like, you know what I'm saying? Like it's like, like it used to be just totally rebellious, actually rebellious to wear Levi's.

I mean, now, it's kind of hard to say, right, but. I think I've heard the comparison multiple times that like, you know, Facebook jobs are the same as a Goldman job 10 years ago. I think it's kind of true. It's kind of true. I mean, how much is an entry level Facebook employee make? Six figures, I assume. Yeah, six figures.

Yeah. Right? I mean, like, you get a painter. Yeah. You know, sitting behind a reception task at an investment bank. Yeah. Yeah. In the late 90s.

It's so funny. It's not that different. So do you have answers? We move on. Do we have answers? Oh, about who we looked up to as kids. I think I'll get back to you on that. I mean, I know there's so many.

It's super interesting to you because I think that there's, There's kind of cultural, you know, Spike Jones being a great example. Like there's kind of cultural icons that are not necessarily people you're going to, like, you didn't become a scape order filmmaker. No. Kind of media person, right? But you recognized in certain people a spirit that you felt was something that you related to and wanted to follow, you know, or emulate or, you know, you kind of just took his inspiration. And so as you are homeschooling, is that something that you try and set up for your kids?

You kind of have to find those yourself. You know what I'm saying? Like you can't just, I mean, did you, did you, it wasn't like your parents were just kind of like, Here are your available options. You would have been like, no, thank you. No, I mean, I do think that you have to, you know, provide a rich environment in which those possibilities are there present. Yeah. What I'm really thankful for today is that I was thinking through like all the people that I looked up to and only one woman comes to mind from being a kid, right?

I really liked Laosolonga, who was this, I'm Filipino. Right. And who was his Filipino artist and performer. What's her name? Laosalonga. She was the voice of Princess Jasmine. Okay. She was in, you know.

We should note, for the record, I'm half Filipino. Oh, who are? Oh, my gosh. My mother is. Filipino. Ah, that's just, oh my gosh. This is huge. Huge news.

No, no, it's true, actually. Really? Yeah. And so now I think that there's, and I think what it was is just seeing a Filipino woman who was successful out in the world. Oh, yeah. And put on a pedestal and people really appreciated a work. I didn't know any other Filipino women that were featured anywhere.

And so I think, I think it's so great now that there's way more women in all industries that are highlighted in future. Yes, some of who are. And so I'm not. That's something that means a lot to me is that is seeing someone who looks like you or represents sort of the background that you came from. Right. Owning it. I mean, I think this is really important, honestly, if you're an underrepresented group. Yeah.

Right. To see your kind of Latinx hero to see your, you know, Filipino hero. You know, I think it's important. Yeah. Yeah, absolutely. Now I have another Filipino here. Here we are. It's the most ever on one of my podcasts.

Yeah, the most ever the Filipinos. Filipino town. Where's Diane Eisner? Like, you need to go get Jollybee together. It'll be great. The Jollybee used to be a couple blocks away from here, but it's no longer. No longer. Yeah.

I know. Did they have banana ketchup at the Jollybee? I don't think so. I could never get into the sweet pasta situation. Yeah. It's a thing. You have to grow up with it. It might be an acquired taste.

So we have some questions from Twitter. Okay. That I thought would be kind of fun to cover. Okay, good. Okay. So let's see. We have many questions. So I think this could be kind of interesting. So how did you get your first 100 users? But now you started three separate companies. So there's Flickr, hunch, findery. Did you apply the same strategies for all of them? They're very different. It gets easier as you go along. I started on maybe I didn't like kind of start from second base, but I, you know, I started from first base at least. I was already on base.

Like in that, I had a, I had a blog that had a lot of followers. And I had started this very early, early on. And so it was literally drawing from my existing community and the people that I already knew who then were invited to and participated in. You have to, you know, you start small. You start where you are with what you've got. And I had the advantage of having been very gregarious online for several years before starting Flickr, which is where our initial user base came from specifically. So you were just blogging? I was blogging.

I started a blog in 1998. Nice. And it was. What platform did you use? It was on. The first one was actually just written in HTML. Oh. Okay.

Yeah. So you just put up a page every time you had a new post. It was literally in HTML. And then sometime around that time, there was blogging software appeared. Yeah. Which was kind of a revelation. There are always things like geo-cities and this starting to sound like kind of grandpa in the creaking, rocking chair talking about like when I was a kid.

But it was like GeoCities and Diaryland and all these kinds of things. were like back in the olden days. And then blogger came out and then movable type, which eventually became WordPress. And so I started using both of those, actually. I just found my blogger archives online, which was kind of amazing to find. And so I've had this blog,

I've had the blog, which I maintain to this day, at catterina.net, which I had started in circaque, 1998, roughly around then when I got my handwritten, reverse cron, you know, blogs, literally. And there wasn't any blogging software at the time. And so not only that, but the blogging community was actually very small. And so we all knew each other. I knew Mina Trot from Movable Type. I knew Ev Williams from Blogger.

I knew all of these people. And it was just a very, very small and very rich community, actually, very close. We all read each other's stuff. And so it was a really great core community to start with. Not only that, but they had the ability to talk about new things, including your photo sharing product too. But it's interesting because one thing that I should note is that the way that Flickr really took off was that it was at the time thought to be. be extremely expensive to serve photos, right? And it was. But we knew that the cost of storage was declining and the cost of serving photos was declining and more people had broadband at their

house. You know, we're talking about like circa 2003. And it seemed counterintuitive to allow people to hotlink, quote unquote, your photos to your blog. Yeah. And so, but we realized that actually it wasn't going to be that expensive because the costs were just declining, you know, month over a month. And so the way that Flickr really got going was when we allowed people to embed their photos on their blog, because blogger and movable type, neither of them had the ability to serve photos.

And one crucial thing happened is the next. number one question that was asked on the blogger FAQ was where do I host my photos? And the guy who wrote the FAQ wrote Flickr. Wow. Flickr is the place that you can put your photos. And so then people started using it. Did you guys have some like watermark type thing going on? Yeah, yeah. We said like, we're happy to host your photos. Yeah. So long as you link back to Flickr. Yeah. Right. It's what happened with Imager and Reddit. Yeah. Same thing. And so. And I think that that was tremendous because suddenly we were on blogs all over the place. And be like, oh, well, you know, obviously if you're going to have a photo,

eventually they did enable people to upload photos to blogger. But it was a long time coming. And in that intervening, you know, several months, you know, we just grew like crazy. Interesting. Yeah, I mean, I heard the same thing about Twitch writing their own encoder. Like they realized like there was like this massive cost savings at the certain point in time. And that's what allowed them to become profitable. Sure.

To become this gigantic company. Right, right, right. Because you could kind of see like the, you know, the cost of like, you know, storage and bandwidth declining like this. You could just see it happen. And you kind of knew what that trajectory was going to end up at. And, you know, yeah, you're losing money now, but you won't be losing money later. Interesting. Yeah.

So, yeah. So, okay. So basically you created your own like little personal brand like back in the day. You know, I would never call it a personal. I know, I'm kidding. Right? Let's not go there. Yes.

But you know what I'm saying. People ask this stuff all the time. Sure. Sure. I guess designer historically like training. Historically I was so that's kind of how I got into the internet. Because like I was this painter who failed at Wall Street for various reasons. Yeah.

And then moved to California because my sister was out here. And the web was happening. And I thought to myself, oh, well, I can parlay my aesthetic skills. into a design job. Yeah. And I already knew how to code. Like I was always, I was always very nerdy kid. And I had my own computers, and I knew how to kind of really do basic, very basic programming.

But, you know, I always had an interest in it. So that's how I got started. I, you know, I kind of was self-taught. Okay. And then what about when you're, when you're an investor, what are the things you're looking for in founders? So, like, these are kind of ways as a founder you can might, you might be able to attract more users. But how as a founder, or as an investor now, do you attract investors? Is it just as simple as like make something people want, make something great?

Yeah, I mean, yes and no, because you can actually make something that people want desperately. And it won't work out. So I think a really instructive study was done by Bill Gross. Yeah. Right? Of Ideal Lab, who I don't know how many like 500 companies have gone through there. And at some point, you know, they had a fairly large pool of companies. companies that they had incubated there.

It kind of was like, you know, Y Combinator before Y Combinator. And it was like 90s, not Y Combinator. And he looked at the companies that had succeeded and those that had failed. And they looked at a bunch of different aspects that you could measure the companies in. Was it in a large market? Did it have, you know, did it have a very strong founding team? Were they execution oriented? Was their timing right?

Were they first to market? of these different things that investors had historically looked at as leading to the success or not of this company. He found that without a doubt, the single biggest factor of the success of the companies was not the individual contributors, their business plan, their, you know, market, but their timing. Yeah. Mm-hmm.

And I know this because Flickr came out at a point when Friendster had already gotten people used to the idea of putting their pictures online and having an online profile, number one. Number two, more than half of U.S. households had broadband, could download a photo, like literally. And three, more than half of the cell phones were shipping with a camera. Like, it was unstoppable. It was a juggernaut. It grew so fast. And, you know, its timing was perfect.

It was perfect timing. And I know this too because, you know, other companies that I have built, hunch, I think hunch was about five years too early, right? And I think that findry was about two years too late. And it's super interesting how these things work out. And so when we're investors at ESVC, when we look at investments, we try to find what we're calling movement. We looked at those companies that I mentioned earlier.

Etsy, Kickstarter, Cloudera was an investor, was an investment. And what was happening around them? What was the time, like what was timed right? Etsy came to emblem, like kind of like represent the DIY handmade, anti-big box retail, movement. It was a movement, right? And it's funny because I took it all around the valley and I took it to, you know, it's like kind of like big name investors, all of whom you've like know well and I've heard of.

And like they're all kind of like, wait, so let me get this straight. It's a bunch of women sitting around knitting sweaters and selling it to each other. And I'm like, exactly. It's going to be huge. Great? Yeah. They could not see it. But you got to understand there's this like ground swell.

And it literally the next decade was about handmade this and artisan all that. Right. As an investor in blue bottle coffee, it was the same thing. It was like artisanal food was just like the decade was about that. You know, Cloudera was like open source. Kickstarter like basically came to represent, you know, crowdfunding. Yeah. Right?

Yeah. So when you actually look at the cultural changes that are happening around your product, if you have the ability to spot a movement like that, a big cultural movement like that, everybody's traveling in the same direction. The reporters and the journalists want to report on that. People are suddenly becoming conscious of the fact that they can have artisanal pickles. Really? We don't need artisanal pickles, but suddenly everybody's like desiring them.

You see what I'm saying? And so there's this sort of groundswell of movement. And like, you're just like, you're a surfer. And you see the big wave. And you're like, I am on that wave. And, you know, being able to kind of see that hone your, um, kind of eye, you know, in your heart, you know, and like all of your kind of senses towards that, you know, is tremendous.

So if you can like, because everything, everything around you wants you to succeed. Yeah. Yeah. Right? And so if you can find that, like, as an investor, that's like, you know, that's an amazing thing. And as a founder as well. And as a founder as well, like, honestly, you know, figure out the thing.

the thing, not just make something that people want, because a lot of the time you can make something that people want it, but, you know, not enough people want it or they're not aware that they wanted or like the culture's like kind of gone beyond it or... Especially if you're taking VC. Yeah. Especially if you're taking venture. Yeah. So, okay.

So wrapping up, people can find should this exist on iTunes. Yes. And we'll link it up. Yes. Excellent. Cool. I'm sure it's going to be great. But if I'm a founder,

What questions, like, should I ask if I should, like, maybe should this exist? Like, should I make this thing? Right. What would you suggest as like an exercise? There's so many, there's a really good, um, kind of framework for asking these questions. And I honestly think it's not just a single question. And it's not at a single time, right? I think it's something that you just have to build into your process as founders and, um, as

employees actually because, you know, there's more people joining startups than founding startups. So I think it's the responsibility of a lot of people on the team, like you mentioned earlier, to be just asking that question, should this exist? And it can be the same question. I mean, at different points in the game, right? If I make this decision about the design of the recent activity, so-called feed, is this, should this exist? Like, is this a feature that people want or need? is this going to end up like let's let's do a thought experiment let's just like sit down and kind of imagine if this thing becomes the thing yeah that millions of people use just like think it through yeah right and then put on your your kind of doomsday scenario hat right like your

science fiction your science fiction dystopian novelist hat yeah and say to yourself is this is So let's say I'm just, you know, the most pessimistic person on the planet. Find the pessimists around you. We've all got them in our lives, right? And they especially stand out to entrepreneurs because they're really, they're looking at things this way and we're looking at things that way. So bring them in and say, like, look. And those people who are just kind of like, no, no, that's, you know, that's bad.

It's going to be bad. Like, listen to them and kind of figure out. Okay. Are they right? Right? Are they right? could this end up there? And, you know, kind of just like, sometimes just seeing it for the first time isn't to be like,

ooh, we're going to change that feature or we're going to build an admin function that prevents that from happening. Or we're going to take a totally different data set and feed it into our AI so that we don't have that outcome. So that's it. I think that's great. Well, thank you for going on. Thank you. Thank you so much. This has been fun.

Yeah. All right, thanks for listening. So as always, you can find the transcript and the video at blog. combinator.com. And if you have a second, it would be awesome to give us a rating and review wherever you find your podcast. See you next time.