Y Combinator Startup Podcast - The Hard Conversations Founders Don't Want to Have

Episode Date: March 1, 2023

Y Combinator group partners Michael Seibel and Dalton Caldwell discuss the importance of having honest and difficult conversations with startup founders. While having hard conversations can be uncomfortable, Michael and Dalton argue that this transparency is essential for founders to grow and ultimately, these experiences help founders have their own hard conversations that they've been avoiding with the people around them.Apply to Y Combinator: https://yc.link/DandM-apply Work at a Startup: https://yc.link/DandM-jobs

I think so much about being a YC partner is like, is exactly that. Like, I've made all these mistakes before. And I'll probably make them again. And I'll probably make him again. And the only thing that I could say is I know the way out. This is Michael Seibel with Dalton Caldwell. At YC, we often have to have challenging conversations with founders when giving them advice. Today, we would like to have.

like to talk through some of the hard conversations that founders don't want to have. Dalton, why don't you set this up for us? Well, look, let's start by trying to define a hard conversation. By definition, if it's a conversation you're looking forward to having, it is not a hard conversation. A hard conversation sucks. That's why it's called a hard conversation. You don't want to have them.

They're bad, right? Or they don't feel good. They don't feel good. You dread the hard conversations. And so, you know, a hard conversation is when the stakes are high. Like it could go bad. It could go off the rails. It could be you're saying something risky or you're making a point.

Maybe you're doing something that's impolite or saying something that's impolite. Because, again, think about an easy conversation. Easy conversation is superficial. You just agree with someone. It's like, hey, you're great. Way to go. That's an easy conversation, right? Yes.

Hard conversation is not that. A hard conversation is when you're vulnerable. You're putting yourself out there. You're saying something that someone in the conversation is uncomfortable. You know, it's funny was as you set that up, what's tricky being a startup advisor is that you know it's going to help someone to have hard conversations with them. but you also know that they're not going to enjoy it. And I think as a YC partner in the early days, I think I measured my effectiveness based on how much fun founders had talking to me.

And only after a couple batches that I realized that doesn't really do anything. And then when I started having honest conversations and talking about my actual opinions about their product or about how hard they were working. Oof. The job changed. Did you experience that? Yeah.

I mean, if you just agree with someone, it's easy to, you know, and you, like, mirror their body language. Like, there's all these techniques you can do to be likable where you're like, oh, wow, like, you're so smart. Everything you say is correct. Ha, ha, ha, ha. Your jokes are funny. You know, you can do this stuff.

And the problem is, it's not. that helpful. It's just not that helpful. And again, think about us as founders or think about friends. Think about friendship with people. The people that you would consider your true friends in life are the people that can say the things to you that no one else will. Yes.

And if you're surrounded by crowds of people that for whatever reason or unable or unwilling to tell you the truth about anything. you're having a bad time. Well, and how are you going to learn, right? How are you going to learn when you're giving people inputs and their output back to you is dishonest? Because they would just want to make sure that you feel good. So let's talk about some of the hard conversations that we have with founders. Let's take an easy one.

I'll give an easy first example. The founder comes to office hours. with us, they have already made a decision. It is obvious they've already made a decision. And they want us to spend an hour validating that they've made the right decision. That's kind of a hard conversation. Because like, Dalton, what do we, like, if we were being 1,000% honest, what would we actually just say like bluntly? Well, here's, I think there's two ways to handle us. There's the dishonest way. The easy conversation is to take them at face value and be like, oh, wow. Seems like you've thought about this really well.

Hmm. I see no errors in your logic. You're a genius. With no. You did it again. Exactly. Yeah. With like without the information to even verify that, right?

Like with no actual facts to verify. Wow. Like what amazing strategy. I just, I, this is just A plus work. And then then there's the hard thing. And what I think the hard thing is is not even disagree with it. It's to say it's. it's the question behind the question, which is, hey, it seems like you've already made a decision.

Cool. Why are we talking about this? Yes. Why are we here right now? Like, what's the question behind the question? Is it that someone else, is it that your co-founder disagrees with you? And what you're trying to do is bring my opinion into it to prove that you're right? Yes.

Is it that someone else disagrees with it? Like, like, there's always a real question hiding behind the scenes. And man, people, people, it's always there. When I, when I, when I bring this up, they're like, they're like, yeah, there is. There's a question behind the question. Yes. By the way, isn't this such a common theme? Like, I think if you really want to understand office hours in a nutshell,

So 60 to 80% of the time a founder will go into office hours with one question. And we won't even end up talking about that thing. Like that's not the actual question. That's not the actual. This comes up a lot with like people talking about applying to YC. Like people always like think it's really important. Michael, I have some really important questions. I want to ask you about applying to YC.

And he talks to them and it's just like, should I apply to like there? Like there's no there. There's no there. It's a no op. There's nothing. There is no much time. So I report my revenue monthly or quarterly? It's like what?

Like who just? Yeah. And so again, I get where they're coming from. And what they're really, the question behind the question I think is I feel insecure. And I want to talk to you, Dalton and Michael, about this so that you give me validation that I should apply. Great. But. And so that's the actual question behind the question, not, hey, I have this really complex.

complicated question about the application that's, I don't know. All right, let's stick with hard ones. We're talking to an early stage company, and it's becoming obvious that they're not going to be able to raise the amount of money that they want to raise, and they're not going to be able to execute this magical explosion of spending that they want to execute, that they convince themselves is what's required to get product marketable. What do you do in those situations? You know, that's a really tough one.

because you want people to be optimistic, as we've spoken about before. And it's hard to, you never want to be short on someone's startup. And so what I would usually say on this one is think about what a great life of philosophy it is to set your expectations low and prepare for the worst. And then if you get surprised, you get surprised on the upside, not the downside. And so the key in this hard conversation is not to debate someone. that their plan is bad. Keep the optimism, you know.

But isn't it better to sort of have a plan for the worst and not be surprised on the downside? And if you're surprised on the upside, fantastic. Right, man? And again, people don't want to hear this. This is a hard conversation to have. It's like going up in the airplane, do you want to bring the parachute with you or not? Like, I'm not trying to be grim by saying bring a parachute, but wouldn't you want to bring the parachute? Yeah, if you had the choice.

What's the downside of bringing the parachute? You don't use it? It's fine. All right, so here's another one that comes up a lot. Dalton, I'd like to spend two hours really going deep on this problem. But our office hours don't go that long. How do you deal with me? I want to do a deep dive.

Yes, this is another one of those questions. behind the questions. And again, it can be different things depending on the people. I think sometimes what's going on is you're an idiot and I don't have confidence. You can give me advice unless I spend two hours showing you a slide deck so I can explain everything to you. Sometimes it's not really about the meeting. I just want a lot of FaceTime so we can build a relationship or whatever. And so this is, yes.

Yeah. Okay. that's fine. But you see what I'm saying? There's usually, when someone asks that, there's something else going on. And again, it's usually the first one for me

where they think we don't understand. Again, maybe we don't. I don't know. But instead of them directly saying, I am concerned that you do not sufficiently understand our business. And so I want to make sure you do X, Y, and Z. Okay, that's a hard conversation. But then I'm like, okay, I know where you're coming from.

All right, I hear you. Yes. But some weird, like, can we meet for three hours? Yeah. I'm always like, why? I want to know the question behind the question, you know? Yes. Well, and what's so funny is if they just said, I don't think you're smart about this particular thing,

we would get to the, we would get to the media. Yeah, okay. Right? We would get to the media. Now, I think there's a couple others that I see. One is this assumption that we are like godlike advisors with complete understandings of every user base and every problem in the world. and like they can kind of like shortcut talking to users if they just spend enough time talking to us. And so that one is just like folks, like so often in this one, I'm just like, you're having the

conversation with me that you should have with your customers. Like talk to them. Like I don't use your product. Talk to the people who do. I think the other one, which I really trying to push back on is I'm lazy and I didn't come up with the agenda. I want to like roam my random thoughts. And over the course of two hours, we will have 20 minutes of productivity. But I don't want to organize my thoughts.

And I want you to accommodate that. And for that one, I'm always just like, that's like you're not training yourself for success here. Like you expect more from yourself. Like if your competitors can get 20 minutes of input, 20 minutes of output, they will do way better than two hours of input. 20 minutes about. And just, you know, that seems to kick people into gear. What's the other one that you're excited by? I think we can shift gears to a couple of their contexts for hard conversations.

Let's talk about hard conversations, not with us, but with co-founders. And so the thing I want to set up here is that classic thing is people become co-founders. Yes. They've never once had a disagreement or hard conversation. It's all been superficial. We're best friends. We work to, you know, it's all wonderful. And then the first time they have a hard conversation, that's it.

Explosion. You've seen this, man. Like what's going on here? Well, first things first, right? This is why we like teams who known each other for at least a little bit and have some kind of work or a personal relationship. Because I always say that like when you have some kind of non, you know, if you have some kind of base relationship that you might want to maintain, even if this startup doesn't work,

you won't say that thing. Or you'll think really hard before saying that thing that will, like, shatter the relationship. But when you're like, oh, the only reason why I'm even talking to you is because of this startup. And now I'm convinced that our startup's fucked, which, by the way, you will be convinced your startup's fuck to just continuously. That's like a normal feeling. And then you're like, well, fuck it.

Man, you can't, you know, there are things you can't unsay. And, wow, sometimes the original sin was like you shouldn't have started the company with this person. But like, let's say you are doing a company with your co-founder and it's just really frustrating. What's the advice to give the founders on how to kind of process them? I think it's like you have to learn how to fight and maybe fights the wrong word, how to disagree. It's like you have to learn how to pull your punches and have a disagreement that's a real disagreement and actually release the pressure of the disagreement in a way that doesn't cross the line so that the relationship is irreparably harmed. And it's a skill you have to learn. And if you never been through a major disagreement with someone or had the skills for both of you to have a fundamental disagreement.

and talk it through yet not blow the relationship up. Yeah. And again, this is a skill like any other skill, man. It's a skill. You know, it's funny because the analogy that I'm thinking in my head is that, like, you know, it's a pressure release valve and you don't want to just rip it open. Yeah. But if you don't release any pressure, you also have a...

It builds up and blows up. Yeah, either way it blows up. Either way it blows up. If you let the pressure just build, build, build by only. having superficial conversations for years, one day, someone will snap. Boom. And on the flip side, if you just leave it open all the time and you fight constantly, that ain't got to work either. It's sort of like the happy medium thing. I think the biggest thing that I had to learn, and Amy, our former batch director used to talk about this a lot, is this concept that like

people will deal with conflict differently. I love to engage. and like lean in and talk through conflict. But it's just as likely the person that I'm working with wants to avoid conflict or wants to take time to process conflict or doesn't process conflict through conversation. And like I have to look at those cues. I have to understand who I'm talking to and realize that when I have to kind of take a step back, even though I'm unsatisfied because I'm creating more of a problem

by like continuing to push forward. And I think that this is one of those situations where you can't blame the other person for like not acting correctly. Like you have to take responsibility because you can both blame each other into an explosion all day long, right? Like that's easy. So next, what about what about employees? What do you think there? I think it's the same sort of situation. Again, the dynamic might be a little bit different.

But if you're only ever having easy superficial conversations with people, it's cool until it's not. And sometimes the best way to work with folks at your company or whether colleagues, employee, whatever we want to call them, is to find the right way to have some of these hard conversations. And you know what they are. You know, you're probably, I'm sure someone watching this is like, yeah, I can think of a few hard. I can think of some things I would say if I weren't. afraid of the consequences. You know, like, there's a right way and a wrong way to do it. We're not saying go blow people up, but if you're just avoiding hard conversations, no one wins.

And most importantly, the employee doesn't win. Because like, the employee probably knows something's wrong. And if you're the boss, they probably expect you to be the one kind of addressing it. You know, one thing that I say about employees a lot, and I want to limit this to like startups and startup employees. Like first, like, allow the idea in your head that you might have picked the wrong person and the person isn't the right fit. Like, like, it's like even if you did your best in interviewing and they're really good and da-da-da-da. Like, allow in your head the idea that might not be the right fit. And like this person might be able to do 10x better work somewhere else.

And that would make their life better just as much it was make your life better. Like allow for that because sometimes people feel like they have to solve unsolvable problems. And then the second thing I think about with like good startup employees is they want honesty. Like they good startup employees kind of understand this is a really hard task and that like the likelihood of being successful is really low. And they want to be in the know. They want transparency. They want to know how the company is doing, and they want to know how they can do 10x better to impact the outcome of the company. That's why you join a startup, because you want an early stage startup, because you want to impact the outcome of the company.

I've been often surprised at like sharing bad news, like, oh, we only have two months of runway, right? I would think would be demotivating, but for great startup employees, they're like, all right, how the fuck are we going to fix this? and then you can get juice from them. You're like, well, all right. I mean, if we're all in the trenches together, maybe we can make something happen. But like, it's really bad when like you know your startups in the trenches and your like employees are like clueless. Well, well, I thought it was going fine. We raised a bunch of money.

You never told me anything was wrong. And you're like, ugh. I think that to our credit, you and I say this a lot. If we were doing office hours with ourselves, what would, what would we? say. And yeah, man, I think sometimes we dodge hard conversations. Like, like, we're not saying, uh, to be vulnerable here. We're not saying we always get this right 100% of the time. In fact, I might argue many times the first conversations we have are wrong. I think the only thing that we do well is we continuously ask ourselves, are we lying to ourselves or is there,

like what did you say? What's the deeper question? What's the question about? What's the question about the question. What's the question behind the question? I think we are good at asking that. And sometimes we assume that the initial salvo of questions are complete bullshit ourselves. Like within YC itself. And I think that's life, man. I guess what I'm trying to say is no one's perfect. Don't put anyone on a pedestal. It doesn't matter who they are. They have their own shit. And that should be freeing and empowering and make you feel optimistic and not bad. Right? Isn't that the right takeaway here? That's the right takeaway.

You know, to close out, this reminds me of this like scene in the West Wing where one of the characters has a drug problem. That's pretty bad. Another character is going through PTSD and is really struggling but doesn't want anyone to know. And this character is like a drug addict that like cleaned up and so and so forth and is noticing the first character is struggling. You know, the way the kind of story goes is that other people who do. don't understand how much pain the person's in will, like, say, oh, you should go see a psychiatrist or you should go get a prescription. Like, they'll do these superficial things. But this character knows. And so, like, he actually, you know, the analogy is like he jumps down to the

bottom of the well with him. It's like, I'm at the bottom of the well, struggling. And then my friend jumps down with me. And, you know, the thing that they say at the end is that like, well, I'm jumping down with you because I've climbed out of this well before. and I know the way out. And I think so much about being a YC partner is like, is exactly that. Like, I've made all these mistakes before.

And I'll probably make them again. I'll probably make him again. And the only thing that I could say is I know the way out as opposed to like, oh, we play error-free ball, which is obviously. All right, man. Great chat. Thanks.