Y Combinator Startup Podcast - The Student's Guide To Becoming A Successful Startup Founder

Episode Date: April 25, 2023

If you're a high school or college student with big dreams of starting your own company, this video is for you. Dalton Caldwell and Michael Seibel, two startup founders who started in the early 20s and are now top investors, sit down to share the hard-won advice they wish they had known back in high school. Whether you're already running your own startup or just have an idea you can't stop thinking about, Dalton and Michael cover the skills you need to learn now and how to set yourself up for success after graduating school. Apply to Y Combinator: https://yc.link/DandM-apply Work at a Startup: https://yc.link/DandM-jobs

Your job is to be an optimist. Your job is to believe amazing things about what can you do with your life and what can you do in the world when you're young. That's the point. That's the point. That's why the world needs young people. This is Michael Seibel with Dalton Caldwell. And today we're going to talk about our advice for high schoolers. Uh-oh. It's been a little while. It's been a little while. So maybe the place to start, because I think that oftentimes young people are in a rush, maybe we need to start by saying, the startup game isn't going away. That's true. You've got time. And look, I think to set this up,

we know a lot of young people watch these videos. We know they like startup content. We know they may even anonymously be involved in startups on Discord. Like, it's crazy for the folks that apply to IC. A lot of them are literally in high school. And so we understand who you are if you're watching this, or if you know someone like this, you can forward them the video.

Yes. But we want to speak directly to you high school students who are trying to figure out who are ambitious and want to be a part of what's happening in the tech world and the, you know, startup world and aren't really sure where to begin. Yes. Maybe the first analogy I give you, and this will immediately age me, so I apologize. I was a big Final Fantasy 7 player. You played a fun with FF7? A little bit, of course. All right.

The basic thing I learned in Final Fantasy 7 was that you can fight the boss at a certain level and get your ass. kicked. Or you can grind for like, you know, 10 more hours and fight the boss and actually, like, kick their ass. And I think that this analogy applies to a lot of things in the real world and specifically in the startup world where, like, investing and leveling yourself up can produce a lot of benefits later on, like deferring a little bit of that satisfaction of getting started right now so you can upskill makes you 10 times more powerful later. But let's be clear, you have to be upskilling during that time. Yeah, you got to be grinding.

You got to be grinding. Like the grind has to happen. Exactly. If I just stood there and didn't grind, my character got no better. And it was cool in a video game, you see grinding. It's a lot easier. You can see the character leveling up. Exactly.

Learning his spells or whatever. Exactly. But in the real world, let's talk a little bit about grinding. What's the kind of grinding? What's the kind of upskilling that you would advise high schoolers? to do. Well, the most obvious and straightforward one is learn how to code. Obviously. It's pretty tricky. Even if you think, hey, I'm not going to be a, a lot of people say to me the younger folks, oh, I don't want to be a coder my whole life. I want to be

a founder. I want to be a product person. Well, you should still learn how to code. Like, it's really hard to make an argument. Yes. If you're a young person, why you shouldn't have that skill in your skill tree. Can you make a case why you make a case? I was the business guy who didn't know how to code. And literally, I would say there are many moments in the early the stage of a company where I felt borderline useless. And certainly I didn't have the power to impact the product anywhere near as much as my other three co-founders who were software engineers.

So like this is such an obvious one. Yeah, and you've got time. Yes. This is a great thing, AP computer science. Yes. You can take REPLIT. Like there's all these YC companies that help people learn how to code. Code Academy, there's so many.

So even if you have some complicated relationship with maybe I don't want to be a programmer, that's fine, learn the skill. Yes. This is like, it's like learning how to cast spells or something. Well, I'll push even harder. Like, get this complicated view of I don't want to be a coder out of your head. Like, the coders are the most powerful people inside of software companies.

Like, that's the hint. The people who code are the most powerful people. They're the most highly compensated. They're the hardest to replace. They often have the best ideas. They often have the best, the easiest, the easiest path to implementing their ideas by far. They're the power center. The talkers, not as much.

Sometimes people on this coding thing, they're like, well, I didn't grow up coding or I wasn't like a 13-year-old whiz kid like people I know in high school. It doesn't matter. I'm just trying to argue you don't need to be that. If you have the right ambition and grind mentality to be willing to learn, of course you can do it. Yes. Even if you're 19 or 20, it's never too late to learn that stuff. Never to it. Number two, we talked about this a little bit.

Design. Learning how to use basic design software. Yeah. This is one that kind of blows my mind because when I think back to my startups, I had to power up, you know, Photoshop. We use this thing called ramp back in the day. Like basically, if a button need to be made and we didn't have a designer. It's on you. Yeah, make the button, you know.

Like, it didn't even have to look that good. And so this is a skill that anyone can grasp for. And like, there's examples of good design and bad design all over the internet, right? So you can easily copy. I think the third one is launching products. Like, man, if you could get a product out, it doesn't have to be used by any people. It doesn't have to just like actually going through the full emotion of coming up with an idea for a little side project and releasing it and handing it to someone. Because you're doing reps.

Like one of the things I noticed at YC is a lot of the folks that later on become great founders. They worked on projects in high school that may not be commercially like venture funded companies, but they were like pretty cool. Yeah. And so one of the examples I always think of was back in the 90s, there was a computer program called Winamp. Yeah. And that's how you would listen to the MP3s you downloaded from Napster. Yep. And some high school kids, Mark Zuckerberg and Adam D'Angelo, I believe, built a music recommendation plugin for Winamp.

Yep. And it was quite popular. I think it was called like The Brain or something like that. Something like that, yeah. And so it was just like a free plug-in, and it was quite popular. And they made it when they were in high school. And I don't think it had anything to do with what they did later on in life. But they knew how to write code.

They knew how to make something they themselves wanted, which was music recommendation for Winamp. And they released it. And I think it got like millions of downloads. It was pretty popular. They went through all the motions a startup founder has to, but in this kind of like no stakes. Yeah, they weren't trying to, it wasn't a business,

at least to my understanding. Maybe they thought I was, but it was more of making something cool. Yes. And this sort of story comes up a lot in some of the founders that we fund is that they do stuff like this. Yeah. And you'll ask them, well, why were you doing that?

And they almost don't understand the question. It's their nature to build things and release them. So again, the advice part is, find low-stakes things you can work on, give them to the world. And again, I think there's a lot of the advice if you want to be in the music industry, if you want to be a writer, a lot of the advice, if you listen to the greats, to young people is do it. Do the reps.

And even if you write the poem and don't show it to anyone. Yeah. Or even if you are in a bunch of bands that don't make it and break up, you got the reps in when you were young. The next one that comes up a lot, if you're going to be a startup founder one day, you've got to learn how to talk to people, got to learn how to make fun. friends. Yep. And needless to say, I think that this is a skill that people kind of assume you can't learn, like assume like, oh, some people are just really social and other people are just shy and

like, I can't change that. But I know you and I have seen this with YC founders, like massively change. Absolutely. This is 100% a learnable skill. And anyone who says otherwise is really doing you a disservice. I think what's so interesting about this one is just like the previous, examples, the way you get better at it is you suck at it first. Yeah. And you have to be willing to be uncomfortable. Again, I think my high school mentality, I know if you felt the same way, is you believe too much that your identity then, like that's a nerd, that's a jock, that's a, it was like you would put people and sort people into buckets like they were like permanent. Yes. And that's fake. Yes. That shit is not permanent. Everyone could be anything

if they choose to. Yes. And so you can make a choice if you're like, well, I'm not really, you know, a people person or like, I'm not the kind of person that would go and talk to everyone at a party or whatever. Like, yeah, you could do that. Totally do that. Well, and it's so weird to me because looking back to high school, it was such a, like, it was such a sandbox. Like, it was such an environment where my interactions with people didn't matter really, right? Like, I'm not, how many high school people are you still really close with, right? Not a ton, right? So, like, was, that reputation is not going to follow you in the real world. And two, you can experiment. Like, you can be wherever you want to be. Yeah. If you make a fool of yourself, you go to

college. You're going to see those people ever again. I think it's totally fine. Totally fine. And I think that the other thing that I learned about this is that everyone else feels shy to. Even the people who you think don't feel shy. Even the people who you think, oh, they make a bunch of friends, da-da-da-da. Everyone has that thing inside of them being a little. bit. And I think when you're older, you get that. Yes, you get it over. But man, you don't get that. You don't get that the popular kids are like, have their own thing they're working on. Exactly. That they're struggling with. Exactly. The person that you're afraid to go talk to is the same person who would probably like someone to come talk to that. I think another one here is, like, how to help people. I think that what's tricky about being a startup founder is you have to be empathetic. Like, you actually have to care about your

customers, you have to care about your users. And I think this is something you can start practicing early. And I remember doing this, and it was this really weird story. I remember tutoring some kid in high school. And I'll tell you, I'll be honest, right? I was doing it to check the box on the national merit scholarship, whatever, the contest of the thing. And I remember, you know, I was maybe 11th grade and I was

shooting this ninth grader. And I remember the parents, on the second or third time I came, just looking at me and smiling and being like, and I realize, oh my God, like, they really, really, really want their kid to learn and they are so happy that I'm taking time. And they're paying it.

And they're still so happy that I'm taking time out of my schedule to help this kid. And I was like, oh, my God. Like, that's when, like, it kind of clicked a little bit where I was like, if you help someone, they'll really appreciate, like if you actually help them, right, if you care. And I actually took it more seriously. And it was funny because I remember there was one time where I screwed up and I couldn't make it.

And I was like, oh, my God, they're going to, they're going to fire me. Like, I was supposed to be there. And they were like, totally fine. Just come back next week. It's totally fine. And I think you might fight there with your customers. Like, even if you screw up, like, if you really care and you're really care and you're, really helping them, they're not going to fire you. It's, it is so rare to find products or

people who actually care. Yeah. That's a rare thing. Especially from young people. Again, like people are really impressed when young people care. Give a shit. Like teachers notice, like people notice. I don't know. It's, it's a way to stand out. Yeah, it's a very easy way to fit. Um, now here's another one that's a little controversial, right? Like, how? how to play the credential game. This one's tricky because I'd like to say we live in a world where credentials don't matter. Yeah.

But we don't live in that world. Right? So how would you tell a high schooler to think about this game? There's the people that like love the system and embrace the system, like the teacher's pets. Yes. And then there's the people that see the system for what it is and they want to rage against the machine and destroy the system. Yes.

And you know, I was a little bit more on that side. God, yes. The Stanford kid. Yeah, exactly. No, but the key thing is, I'm talking, I'm talking high school pre-star. I'm just trying to say, like, when you see this, you got into Stamber. When you see how the world works. Yes.

You're like, man, this is like not ideal. Yeah. I think it's one way to say it. Yes. A little fucked up. And to the extent you can learn to work, to understand the rules of the game and play the game with credentials and realize that leveling up on the credentialing up on the credential game will help you with your long-term goals. Yeah. I think that's much better than, like, rejection.

the system out of hand. It's basically like either extreme is bad. Rejecting that, like, fundamentally you understand the system is somewhat arbitrary, right? If you're smart enough, you understand that, right? So with that understanding, you can reject the system, and then, like, because you don't have the right credentials, it'll hold you back, you can somehow not understand the initial point,

think the system is the filter for merit completely, and then get very disappointed later in life when you realize that all these credentials don't mean you as far as person in the room, room, or you can try to get the system to work for you. Yeah, that's a great way to put it. It's a centrist philosophy, which is you acknowledge some of the shit. Yeah, but also if you opt out of it completely, you're kind of just hosing yourself. And I think that like this mentality is really important because I think that a lot of people

feel like the system's operating on them, but I think what they should feel is the system's a tool they can use. If you understand it, you can use it and you can use it to accomplish whatever goal you want to. And so this idea that it's operating on you, I think we're trying to break. Like, you can use it. Like, you can use the system. All right. Let's talk about fads.

Yeah. There have been a lot of fads. Thank you. Yeah. Well, I think it's easy, especially when you're young, to just get caught up and stuff, whatever the thing is. And some of the things are pretty cool. Again, I was really into the internet. Yep, yep, yep.

When that was a new thing. I was really, really, really into it. And obviously, that stuck around. Certainly, there's a lot of young people that got super into crypto. There's young people that got really into stock trading recently with Wall Street bets and Reddit. You'll see people get really into stuff. And so it's actually great fun. In the Zuckerberg case, building Winamp plugins, that was part of the Napster thing.

So they were really into that. Yeah. But how, you know, where could it go too far, Michael? Yeah, I think that like the tricky bit about fads is this kind of like, what we said before about understanding the credential system. The fads are just like another system, right? And I think you kind of have to understand that some things stick because they create a lot of value and other things are just kind of passing with the time. And I think what's really important for young people to start to understand is like how to distinguish between the two, right? Like fads stick

when they really add value and fads pass when they don't. And if you can have a nose for when something is adding value, when it's actually helping people. If you can train yourself on that, then that's a really important skill. On the flip side, we see the opposite of this in the startup world all the time. We're like, COVID happens. Everyone wants to have a Zoom startup. And it's like, the Zoom guys thought people in the video conference would say way before COVID, right? And, you know, you mentioned Robin Hood.

Oh, now, you know, Wall Street bets, bam, I need to make a Robin Hood better. It's like even the robin guys were before Wall Street bets. It's like the fad is often hiding what's really going on. And like if you can kind of pierce through that, you can figure out real value, fake value, temporary value, long-term value. And I think that that helps a lot. And you can probably as a young person look at what's going on in your life right now and try to figure out what's a fad and what's going to stick, you know? Next one, how to be excited about technology. We came up in this weird era, I guess.

I didn't think it was weird, but looking back, I guess it was weird, where everyone thought technology was cool and making the world a better place. Yeah. A lot of the way we understand the world is framed via journalism. Yes. And one thing, again, for young people, they don't have context on this. But it used to be journalists were all emphatically excited with no downsides. No reservations.

No reservations. The internet is great. Yes. And they would debate how great it was. The debate was like, yeah, yeah, we know it's great, but just how great. Yeah, and who's making it the better, the fastest? And so it was this, it was hard to like see any problems with it. Yes.

And in this current universe we live in, it's the opposite. Yeah, it's, this is bad. A lot of these people are bad. Every new technology, how is it going to try to? screw us, exploit us. Yeah. You know, yada, yeah, yeah. And let's be clear, both extremes are incorrect.

That's correct. Yeah, there's fair points. Yeah. It's 100% there are fair points. But sometimes when I talk to young folks, they internalize too much of the current thing. Yes. And I think I don't see how that helps you when you're young.

Like your job is to be an optimist. Your job is to believe amazing things about what can you do with your life and what can you do in the world when you're young. Yes. That's the point. That's the point. That's why the world needs. It needs young people.

They need that optimism. Yeah. So I think on this one, the real trick is like, even when you're absorbing this bad news, like remember, like look around, see how technology is making the world a better place. Look at your phone and see the things you could do that you couldn't do before. Go online, see the things you can learn that you couldn't learn before. See the ways you can work that you couldn't work before. Like, keep the core message in your head, the technology.

is progress, even if the news isn't covering it that way. Let's talk about honesty. Yep. This is a big one. This is a big one that I think people, in fact, you know, we talk about a lot of people who maybe didn't learn this lesson that honesty is important and for a while they do okay with it. But inevitably they get caught. So how do you think about learning to be honest if you're high schooler?

The best skill is to learn to be honest to yourself. honest to yourself. Like if you if your own relationship with yourself is you can't be honest about things. What do you really feel? What do you really think? Who are you really? Yeah. It's going to be rough. Yeah. And then at your core, if you're not honest with yourself, your, your relationship with your parents, your relationship with your friends, with institutions. Yes. It's going to be tricky. We run across folks that seem like they've deferred a lot of this honesty. Yeah. I think that the thing you should understand about the startup world is that a lot of it works because of honesty.

A lot of the reasons why early adopting customers will use you is because they think you're gonna be honest. A lot of reasons why investors might give you money, why your co-founders might work with you, employee might work with you. A lot of reasons why people make things happen in the startup world is because we're in a high trust environment. Yeah, and this is one of those negative things

that people say about nerds is, oh, this person has no manners, they just say whatever they think. Like, again, in polite society, yeah. Is you supposed to lie all the time? Something a nerd would do. It'd be like, hey, my, that product sucks. Yeah.

Like, why are we shipping this product that no one wants? Yeah. It's like, hey, shut up, man. Like, that's like what a nerd would do. Yes. You know, you're bad for telling the truth about something because it's impolite and you're hurting people's feelings. Yeah.

And so there is part of the nerd culture in this that I think is good, which is essential. The person who would stand up and raise our hand and point out that the emperor is wearing no clothes. Yeah, our thing is broken. Yeah, no, I totally agree. And so I love that because it's both the, be honest to the stakeholders around you,

but it's also that honesty to yourself, right? Like if you know your product sucks, if you know you don't care about your user, you gotta acknowledge that. And then I think the last one is learn to love long games. And this is kind of the theme brought out in the beginning. These games are long. And I remember when I started my startup, I was 23 years old, and I had never done anything that took very long. When you really think

about it, like, what do you do in school? What's the longest project you have in school? Like, maybe a senior thesis in college? Maybe. And so I remember talking to our lawyer at the time, and he said, oh, and he was 30, which in my mind was like impassably old. I was like, well, obviously nothing you know is relevant to modern times. And he said, you know, the average startup takes seven to 10 years to exit or IPO or sell. And I just thought that couldn't be the case. And what's funny is like he worked at a law firm, like he worked at a law firm that represented like maybe a quarter of all tech companies. He had the data.

Like this wasn't like a off the top of his head thing. And I just remember thinking this guy doesn't know what he's talking about. And I remember when our company sold, took him out to dinner. It was seven years later. I was his age when he told me that. I was 30. He was 37, impossibly old. And I remember thinking, fuck, the guy was right.

Like, this is a long game. And I think having ambition in your life involves playing the long game. Because to actually do something great, it doesn't happen overnight. And I don't know what your experience is. But we know a lot of people when they were very young. Yes. And it's okay to have ambition. It's good to have ambition.

Yes. And true ambition means being patient over many, many, many years. Yes. And so to give you a completely non-start up example, my high school girlfriend, her thing was poetry. Yeah. She really liked poetry. Again, this is like high school.

Yeah, yeah, yeah. And so she would write all this poetry. You know, that was like her thing. And, you know, I kind of fell out of touch with her. but she is the New York Times poetry critic now. Holy shit. And that was my high school girlfriend who love poetry. So she played the long game.

And this is my point. It's that like, you know, probably not everyone that likes poetry when they're like a 16 year old is probably not going to go there. But if you actually put in your whole life towards something and you have a dream and you're not ashamed of the dream and you keep the dream going into your third. Like a lot of people have dreams when they're young and they lose their dreams and their 20s. They let the dreams go. Yes. But if you keep your dream and put in the years of work, those are the people sitting at the top of the system. Yes. Like the people that make it are people

just like you and me. Yes. That had a dream and they put in 17, 10 years, 20 years of real hard work. Yeah. Well, and then they get to reap the rewards. And I think that it's funny because as this goes, as you're describing this, like two things went through my head. One, I remember being in my 20s and being this like poor startup founder and seeing my friend in san francisco which isn't the most fun city but that's another topic um and seeing my friends in new york who were in banking and finance and stuff going out and having fun and i remember thinking like why do they get to live this fun life and i have to live this hardworking life and then i realized like this grind is going to benefit me and like the fun that a 25 year old has in new york to be honest

It's pretty shitty. Compared to a, you know, a wealthy 30-year-old life, way more fun. So to wrap up, if you're a high schooler and you're thinking about this startup game, one, that's awesome, right? Like, we love that you're thinking about it. Don't let it. Never let anyone put you down. Like, have a dream.

It's cool. Be cool. Be yourself. Like, if that's your dream, we love it. Yes. Live your dream. Live your dream. The game will be here when you're ready to play.

And, you know, we'll be here to play. All right, man. Great chat. Thanks.