Y Combinator Startup Podcast - The Cult of Conformity in Silicon Valley

Episode Date: February 10, 2023

What happens when the unconventional becomes conventional? Michael Seibel and Dalton Caldwell discuss how the startup world has changed from being dominated by outsiders and nonconformists to now attracting more mainstream conformists looking for status and money. They share stories of what the tech scene was like when they were in school - and how radically different it is today, while offering their advice around navigating a world that doesn't always reward nonconformists embarking on risky entrepreneurial journeys. Don't just think different, act different.Apply to Y Combinator: https://yc.link/DandM-apply Work at a Startup: https://yc.link/DandM-jobs

Who would want to be an early employee at IME and Justin TV, non-conformists? Like, they would never be, you know, a conformist would not be caught dead working at an early stage start. This is Michael Seibel with Dalton Caldwell. Today, we were talking about conformists versus non-conformists in the tech and startup world. So Dalton, set this topic up for us. Sure things. So something I think about a lot is the history of technology, the history of Silicon Valley, the history of startups. It's just a topic that I've always thought was cool. And something that I think a lot about in my job at YC is the change between startups being something entirely done by nonconformists and the domain of nonconformists and to kind of becoming like a mainstream thing that I would consider. conformist thinking is cool. Like your parents thinking is cool.

Your authority figures thinking is cool. The kind of people that would have gone into very blue chip kind of jobs or entering tech and startups that would not be caught dead doing in the past. So anyway, that's the setup. It's been weird to witness what was previously a very weird place to go, populated by weird people, become almost the opposite of that. So let's go back to the dark ages. You and I went to school in the early and mid-2000s. And when we were in school, what's so funny is that like, it's probably hard for us to explain to a current college kid how uncool tech was.

And then like, think of however uncool tech was. Startups were 10x less cool than even that. But maybe the way that I would explain it with a number, you know, I was a Yale O.4. graduate and in my graduating year, Yale graduated 10 CS majors in a class of 1,200 kids. So like, just to give you some perspective at that time, what was your experience like in Stanford during these times? There were startups around, but this was just after the dot-com boom had crashed. This was like an 0-2 and 03.

And so you'd have to be a real idiot to intentionally get into the wreckage of the dot-com crash. Like it was pretty much people that just liked computers would be my assessment had nothing to do with financial seeking financial gains. Again, if you do that, you do management consulting. There was a bunch of other options. And so it was kind of nerds is how I would describe it. Yeah. Yeah.

And, you know, at my school too, I think there was a whole set of kids. And I think this makes sense who were like, you know, I'm going to do really good in high school and get into a really good school. I came at that school, what's the next status seeking thing that a gunner should want to go after, right? And to your point, finance, consulting, law medicine, those were the like easy ones. And they had a lot of the characteristics of school. Like there was a clear application process. There was a clear steps. These steps were kind of imposed upon you.

Like it was a very comforting structure. Yeah. There was a lot of recruiters. There was stuff on campus. And also you could brag to people that you, what offers you got, right? Like a lot of these places, you would interview at all the management consulting places and then talk to, you'd brag to people about all the, you know, who you got offers from. What your signing bonus was.

Yeah. What's funny is all this stuff's going to sound very familiar to anyone who's been in college recently. Yeah. It wasn't that way back then for tech. But what was also interesting is the people who did get into startups. Because I might argue that back then. just the people who were interested in tech at all back then were much more likely to be nonconformists, right? You made the point. We just went through the bubble bursting. And so it was interesting. Like, I think a lot of our frameworks for who would be interested in tech just come from when we were in school, right? And it was, to your point, it was like weird nonconforming nerds. Like, it was people who absolutely hated the idea of having a bond.

ever. I think there was also a bit of like, the folks in this world weren't lazy. I actually think the other kind of aspect here that was interesting was that it was a lot of people who didn't want to wait in line. Like they didn't want to be told like, oh, no, no, no. Like, you still have 10, 15, 20 years to go to school or to work your way up through the system before you get to do stuff. You know, they were like, I want to do stuff now. And what was funny was that, you know, tech was the place back then where you could do stuff now. Like there would be no waiting and certainly tech startups back then. But now things have changed, you know, fast forward a little less than 20 years.

And tech is now attracting conformists. And I think that, you know, you and I have talked about this a lot, but I think at first that was a confusing concept to us, you know, just because of our different lived experience when we were in school. Also in hiring, I mean, we'll probably talk about this a minute, but like the people who we were able to hire at our startups, like, who would want to be an early employee at IME and Justin TV, non-conformists? Non-normal.

Like, they would never be, you know, a conformist would not be caught dead working at an early stage startup. Well, you know, and to extend that point, what was so cool about San Francisco was it was the first place I went that just felt like I could be in a room full of weirdos. I could meet weirdos on the street. Like, you know, weirdos were all around. You know, it was the first place. Oh, wow. There are all these people who think they can make companies and they're just kind of all around doing it. That's different. Like, that's the opposite of where I came from. But, you know, today, I might argue that big tech has become put itself solidly in that list, right? It is amongst the finance and

consulting and legal and medicine. You know, college kids today obsessed with getting jobs at Facebook and Google. They study how they interview just as much as people study how to interview how to get into Goldman Sachs, right? Yeah. And they, you know, you brag to everyone. I got this offer. I get this bonus.

I got this level. Like it's a whole like, I've seen some of these Reddit threads, man. This does wild. And they want the structure. They want the leveling. They want the status. They want the money that used to be associated with these finance or professional jobs. bam, they're all now associated with big tech.

And so what's interesting is that at first you see the explosion of CS majors in school. And I think you would think to yourself, oh, man, that means that there are a lot more people who are interest in building. But that's not actually the case. Like it's deceiving. The numbers are deceiving. I remember going to a class and talking to a bunch of kids who are kind of interested in tech and startups and so forth. and I remember saying to them, hey, like, how many of y'all are studying CS and write code? And 90% of the people raised their hands.

And then I remember asking, oh, that's amazing. Like, what percentage of you would want to be writing code as part of your job in a startup or a company? And like 90% of those hands went down. And it was so clear that like that CS job was like a, a label or a status thing to get the career they wanted. It wasn't, writing code wasn't something they enjoyed doing at all. I remember going to the MIT Career Fair. This was like years ago.

And most of the people that talked to me wanted to ask me how to get a job in VC and what tips I had, then how to start a startup. Like that's what, like that's actually, again, I know it's, well, that's why they were talking to me. But it was just, it was fascinating that they're like, yeah, yeah, you know, why commenter? Yeah, cool, whatever. But like, how do I become an investor? And these were, this is MIT, man. Well, I think that you're setting up the next topic, right? Which is that, like, these conformists are also now invading the startup world. And I agree with you, right? The highest

status job in the early stage startup world is investor, right? It's the one everyone wants to meet, everyone's talk to, everyone seeks approval to. And so for sure, it makes sense, right? That, that, you know, the logic follows. But we also see a lot of these folks who are conformists who want to do startups. But they start almost it feels like their motivation or starting point is very different than what we would expect. You know, one of the things that we say sometimes at YC is that don't make the investor of your customer.

But a lot of these conformists who are getting into startups, that's what they do. Like they want an idea an investor is going to like. They want to act the way an investor is going to like. They want to have their resume investors going to like. They want to have their resume investors going to like. And their questions are usually something along the lines of they want us to tell them the secret to get investors to like them. Like that's actually, that's what they hope that we will tell them is the secret,

the secret words to whisper to an investor to get approval. I think that the challenge nowadays is where will nonconformists go to find their home? You know, it used to be as easy as. going to tech and now it's not as easy to go to tech. And you know, you brought this up when we were discussing this before, but, you know, PG originally started YC to be a home for this type of people, right, to be a home for people who wanted to build, who didn't want to wait in line, who really didn't care about status in and of itself. They just wanted to go out there and like challenge themselves. And it's interesting because when we're talking to founders now,

who are in YC. There are all these things that we hear or conversations that we have that do motivate us, that do make us feel like, oh, my God, like you actually want to be a builder. And I think it would be helpful to kind of talk about some of those things because they might be different than people would think. The first one that immediately comes to mind for me is, you know, now that YC gives $500,000, I'll have conversations with founders all the time where they come to me and they're like quiet.

They think I'm going to disapprove, right? they're like, Michael, like, I know I'm not supposed to say this, but I think 500,000 might be all the money we need to like, I don't know, like hit 50K and MRR to like get profitable or like hit this mega milestone. Like, is it okay if we don't raise a bunch of money? You know? I think the other hint, and you brought this up, you better describe it more detail, is they have no idea who the like tech Twitter solabob of the moment is or the tech. Twitter debate of the moment is, right? Like, this is not, they don't live in that world. How have you seen that?

It's just a sign of what you're focused on. And so when folks are really involved in the scene, in the drama, in the characters, and are obsessed with the startup scene as opposed to their own thing and solving customer problems, yeah, that's usually a sign of, like, conformity. Yeah, the next one that I see that I love is, um, everyone has eyes. expectations what they're going to accomplish when they get into YC. And then inevitably, and initially, they don't meet those expectations. And it's so fun to work with the founders who are excited by that, who are like, I'm excited that this is harder than I thought it would be.

Like, I knew it was going to be hard. It's proven to be harder than I thought. This is going to make me better. Like, this is forcing me to raise my bar. I wanted to test how good I was. Yeah. And like, this is bringing the best out of me. And you're, it's different because you don't get to level up and get a gold star. And, oh, good job. You're now founder. We're getting a promotion. You are now founder level three.

You know, congratulations. You know, like when people are cool with it, it's not that way. Because I think sometimes people really want it to be that way and they're really freaked out that it's not. Some people love it. They're like, yeah, this is great. Like, there's no structure. Like, the only way that you can keep score is like revenue for my startup.

And if it gets big. There's no other way to keep score than that. Some people love that. And then you should set up this last one because I always love it this one. I think a good way to say it is folks that have a very high opinion of themselves. And when they see peers, they're like, yeah, I'm like going to try way harder and be way smarter and learn way faster than them. Like basically, the nonconformists are willing to kind of like they want to be above the peer group, not in the peer group versus if you're a conformist, you don't want to, you kind of want to be in the

pack with everybody. A lot of the folks, the really hardcore nonconformists I funded that have done great, they'll be like, yeah, you know, I don't get what all these other people are doing, but like, this is what I'm doing and like, it's going great. You know what I'm trying to say? So it's like a combination of optimism and confidence. Yeah, I, the way that I like to say this is it's people who are excited to bet on themselves. like they believe in their own growth curve.

Like they believe they are on an exponential curve and like they are all in on what they're going to be able to accomplish. You know, like what's funny is that like once again, that's typically not based on the skill that they come in with day one. It's always based on their assumption that they can accomplish whatever needs to be accomplished or learn whatever needs to be learned or meet any challenge of the future. you know. It's funny because like one of my co-founders, Kyle Vote, like, it's this in, in speeds. Like there was never a technical challenge where Kyle's first thought was not, well, I'm sure I can figure this out.

Like, full stop. Like, I'm sure I could build this up. And I remember when he told me that he was going to do cruise and self-driving cars. And my first thought was like, you're crazy. And then I just kept on thinking every time there was something super hard to Justin TV. Kyle's first feeling, yeah, I got it. No worries. I got. And we knew he had no experience. It's like, yeah, I got it.

And then I was converted immediately. I was like, you know, self-driving cars is going to test you and like you respond to being tested. Like the bigger the test, the bigger you come through. Like, that is a nonconformist. Like that is the person who like, you know,

that's the person who can bend the world a little bit, you know, like, so what's the grand takeaway here, Dalton? I think the grand takeaway is the following, which is just to remind people that it's okay slash good to be a nonconformist. If you're not currently a founder, one tip is to join a early stage startup instead of a big company because it's more likely you'll find like-minded people. you know, being the first 10 employees somewhere is going to be weird. And the people that tend to like working at the first 10 employees tend to be nonconformist.

Right? Because there's no structure. It's like chaos. So that's like a really good move versus going into like the big tech treadmill. And I think other big takeaways just to remind people like, you know, don't play status games. Or maybe you can, but maybe some, you know, do it inside of a big tech company. of trying to play status games and startups. Yeah, my final thought is, I come back to what I say to every founder when they come in,

which is, you know, congratulations for being in YC. The average YC company dies. Like you literally have accomplished in the scale of making any impact on the world, getting into YC means you've accomplished nothing. I think there's a lot of people who think that they're nonconformist, but they are actually secretly following some thesis of tech Twitter or yada, yada, yada, you know, and like they tell their sums like they're non-formists,

but they really are just trying to fit in with a pack. And I would just say like for the real non-conformists out there, just find your people. Like you're going to be so much happier when you're surrounding yourself other people like you. And, you know, we think YC can be a place like that. But like even if you don't think YC be a place like that, you'll be more productive when you surround yourself

with a group of people like that. And I can say personally going through YC, that's why we got better was because we were surrounding ourselves with these nonconformists who all thought that they were amazing. And we all were like, well, I guess we got a level up. We think we're better than them. So what are we going to do? So for nonconformists, good luck. Great talking to you, Dalton.

Sounds good. Talk you later, man. Bye.