Y Combinator Startup Podcast - When to Launch Your Startup and When to Wait

Episode Date: January 11, 2023

Step inside the group partners' lounge to hear Y Combinator Partners Harj Taggar, Michael Seibel and Brad Flora discuss how startups should approach launching and the exceptions to the rules.   Apply to Y Combinator: https://www.ycombinator.com/apply/

I think there's this image founders have of the launch, which is it's going to be like the launch, and it's going to be like the Oscar ceremony or something, where there's just going to be like hordes of people and like you're going to be treated like a celebrity. And so like you don't want to turn up for the Oscars in like your scruffy like top and bottoms, right? Like you want to like you want to spend some time getting in shape. You want to be looking good. Like it's just this whole thing. Hi, this is Michael with Harge and Brad and welcome to the partner lounge.

So as YC partners, we find ourselves repeating the same seemingly obvious advice to startup founders over and over again. Before COVID, we'd often gather together in the partner lounge at the YC office to try to figure out why this was the case and how we could help startups figure it out faster. Now that we're in the remote world, we're going to do this in front of all of you. So the first topic we're talking about today in the partner lounge is why don't startups like to launch early? and move quickly. Hardge, to be honest, this is painfully obvious advice, right? This is, you know, YC, Paul Graham 101, like, no one applies to YC not knowing. This is what we're going to tell them. Right. So what do you think is going on? Why do you think people are getting screwed up here? A bunch of reasons. The first one that springs to my mind is you have to know what fast is to move fast.

And I think one of the things we get to see as partners is across hundreds of companies and founders, the different speeds they can move at. And honestly, I remember when I first started working at YC, it surprised me, right? Like I thought my startup, we were moving as fast as we could. And then you see some of the top companies, you're like, wow. How do you get so much done in a week? And so I think there's that effect. I think maybe a specific version of that is if you've only ever worked at a big company, that you might think you're moving fast because you're moving big company fast.

But like startup fast as a whole other ballgame. Fast means you have to be a little bit uncomfortable what's going out there. You know, you were talking about Instacart before. What do you, what, how dirty did Instacart look back in the day when you saw them go through YC? I mean, pretty. There's the classic story with Instacart, which is we interviewed them and they did a demo of the product where they like, click to order beer and beer turned up pretty quickly. And I think it actually turned out it was like,

Apuva's friend or someone just drove to the store. There was no back end, right? And so that kind of continued during YC too, from what I remember. It wasn't like they had, they didn't spend a year building a sophisticated fulfillment center with complex algorithms to, you know,

optimize delivery times. Pretty sure they just had like the founders and maybe some people off-crumbs. breaks list driving to the grocery store to pick up groceries. Pretty dirty. I think it was a good UI, but the product was very much hacked together. Well, it's funny because Brex, it was almost the exact opposite. Like when they come in to tell their story at their batch, there was no UI.

Like, they could give you a virtual credit card and like it worked. But that was it. You couldn't see what you spent money on. You couldn't see how much money you spent. all they knew was that you had a card and it worked. One of the things, though, that I think is going on, and you brought this up a little bit hard, is that, like, founders will lie to themselves. They will think, I'm the exception.

I know the advice is good in general. I've heard all these great examples, but, like, we are different. Brad, you were talking a little bit about, like, the idea that maybe I could, maybe I can do a perfect launch. So how do you think founders think about their perfect launch and why they maybe can't move fast. Well, I think the minute anyone starts making something, they start thinking about the moment when they show it to people and what they want the reaction to look like and sound like and feel like. And yet they also know that there's a chance that it won't be like that.

And it will be crushing and devastating. And so I think every founder, no matter what they're working on, has this like parallel universe in the back of their moment. mind of what the reaction is going to be to their product. And when they let that parallel universe kind of win out over the reality that they need to get it in front of people faster and not worry about that, it can slow them down because they start optimizing for this thing that is just living in their head and it's not real at all. I think there's this image founders have of the launch, which is it's going to be like the launch and it's going to be like the Oscar ceremony or something where there's just going to be like hordes of people and like, and like, you're

you're going to be treated like a celebrity. And so like you don't want to turn up to the Oscars in like your scruffy like top and bottoms, right? Like you want to like you want to spend some time getting in shape. You want to be looking good. Like it's just this whole thing. Like the reality is like often no one cares. Like you launch. There's no one there.

Well, Hardjee, even though you talk about it has a fallacy baked into it. The launch. Yeah. Right. Right. That it's that it's a singular thing. There's the launch of the product. and that's just not the case.

You launch over and over and over again, and it's not a precious thing. The goal here is to get people excited about what you're working on and show it to the world, and you might have to show your thing to the world more than once before they get it. And like, that's okay.

Like, who cares, you know? Like, Brad, you were talking about, like, what's the worst case scenario? Like, how do you think about that? Like, what do you think founders are afraid of? Like, what do you think is, like, their worst vision of a launch. So I think they're afraid that people will think their product is ugly or that it doesn't

work well or that they will notice immediately the thing that the founders don't like about the product and confirm their worries. They're afraid that a competitor will hear about the product. They're afraid that investors will hear about the product. Before it's ready. They're afraid of all these things. But then when you actually think about them for more than two seconds, you realize that if you play out the worst possible thing that could happen after each of those occurrences, it's fine. One of the fun kind of mental gymnastics moves that we see people do is this like, oh, I did launch.

We have a wait list of 3,000 people who are ready to use the product. Or like, does it like, what do you talk? Brad, what are you talking about? We've already launched, right? Like, and then, and then when we say, oh, great, let's open up the wait list now, where's the button? Let's push the button. Whoa, whoa, whoa, whoa, whoa, whoa, whoa, no, no, no, no, no, no. Yeah, I think there's a whole, a whole set of contortions that certain types of founders have figured out how to tie themselves up in so that they can feel like they're launching.

They can talk like they're launching, but they're not actually putting a thing in front of people to used just yet. A wait list is just a form and you're not really getting product feedback from that experience. You know, it was funny because one of the best examples I'm remembering from back in the day at YC was a company named Magic. And when they came up with the idea of her magic, they launched two days later. And it was just a website with a phone number. And it just said, text us and we'll do whatever you like. And like, to me, like that's the right spirit. right like they understood that they didn't really know what was going on yet so like let's just get this thing out there and we'll start learning live versus versus waiting um i do want to play devil's

advocate though right like there are these examples of companies that founders will throw in our face right we'll give this advice they'll be like hard and brad y'all are idiots remember dropbox remember rippling remember stripe like they didn't all launch publicly in the first three days of coming about Which one of you wants to kind of tackle this one? Like what is our answer to the pushback here? Yeah, there are exceptions. You mentioned good ones. Take one at a time there.

Take Rippling, right? So I think that when Rippling was going through YC, they took close to like a year and a half or more. Maybe it was two years to sort of officially launch. And it turned out to be right, actually. The company is like doing tremendously well. And I think my analysis on that is you in that case, you had a founder who was building a product he'd already built for his last

startups and an unusual case, right? And he'd have tons of users. Like Xenafit was like a big startup growing really quickly. And then on top of that, like his Zenefit itself was a customer of Zenefit. Like, and so I think with Parker, you got this like incredibly unusual deep level of product insight and domain expertise. And so he was actually the example of where he could come up in his head with here's what the product needs to be. It needs to actually be like a lot of product. It's going to take us like some time to build this amount of product.

And we only make sense to launch. Like the MVP was robust. and he could trust his instincts, right, because he had this unusual depth of experience with what to build. But Brad, how rare is that? How often are we interacting with founders who have used and built a massive product doing the thing they're already doing

before they decide to do that again? It's pretty rare. It doesn't happen that often. And it's not always a fun office hour because you don't want to say, you're not Parker, right? You don't want to throw it in their face to that extent. The thing that I think is really great about the Rippling example is that the first time he built the product with Zenefits, he did not spend a year and a half.

In fact, he's one of the, I think the greatest examples of what we were talking about earlier. I remember when I was working on my company in San Francisco, he emailed me out of the blue while he was in the batch, said, I'm working on this new benefits thing. I'd love to come to your office and show it to you. And so my company is building this ad tool. We'd spent a year polishing the UI and making it all great. And he shows up with this with this HR software that was beautiful. It was feature rich. It had everything you could possibly need it.

It blew me away. And I thought, how the heck did this guy build this so quickly? This is incredible. And what I didn't know was that it was a bunch of forms. And there was not a back end at the time. And so that first time when he was not the expert in what the product needs to do, didn't have that knowledge, that's the strategy that he took. And then the second time, after he'd already built this,

he'd earned the right to do the big build and make it that way. I think this is like the common trap that founders have is that like they know 5% of the story and they don't know the other 95% of the story. So that's another kind of thing that I think people need to dig in a little bit to when they think of these exceptions. Like, how can they be rigorous about making sure they know what really happened? One of the things I love to encourage founders to do is to go back to something like GitHub and go to the blog and go to the beginning of the blog, you know, 10 years ago or whenever. And look at the screenshots from then. look at the feature announcements from them and just try to internalize that the stakes were lower,

the features were simpler, the feature set was simpler, and they were just getting on the board, and it wasn't this huge gargantuan product that you think of now. So if we're going to wrap up here, if you're an early stage founder listening to this, and you are a Parker Conrad, you've already built a billion dollar company doing this exact same thing before and now you know exactly how to do it right. You should ignore all the advice we gave in this talk. If you're not, then kind of what Harge and Brad were saying in the beginning, you already know launching fast and moving fast is the right thing to do. So just do it, right? Just do it. Right? In the end of the day, you choose every day you decide not to launch.

You choose every day you decide to go at 10 miles an hour versus 100 miles an hour. maybe today you should choose differently. All right. Thanks, Brad. Thanks, Harch. Thanks, guys. Thank you.