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My First MillionY Combinator CEO Shares How They Turn Wild Ideas Into Real Companies
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At a glance
WHAT IT’S REALLY ABOUT
Garry Tan on YC's Simple Model, Startup Lessons, and AI
- Garry Tan says YC works through simple, earnest practices: a short application, a 10-minute interview, a standard 7% stake, and a batch of top founders, with 5 to 10 percent of companies reaching $1 billion or more.
- He recounts his rise from a food-insecure Fremont childhood, where he cold-called Yellow Pages businesses at 14 to get web design work and helped his parents buy a house.
- Tan explains lessons from turning down Peter Thiel's Palantir offer and from Posterous: build your worldview from primary sources, don't accept the frame the press or competitors give you, and play your own game.
- He argues large language models let two-pizza teams of around 20 people build businesses worth hundreds of millions, and that founders should target rote knowledge work, using strong evals and workflows.
- He credits Paul Graham with an anti-corporate, unconventional culture at YC and closes with a spoon-bending story about bias to action: ideas matter, but you also have to use your hands.
IDEAS WORTH REMEMBERING
5 ideasSimple processes can beat elaborate ones
Shaan Puri contrasts bankers' differentiated processes with YC's one-page form, 10-minute interview, and uniform 7% deal; Tan agrees that simple things actually work.
YC's returns look unusually strong across the distribution
Tan says an analysis of investors who backed at least three YC companies per batch in 2018 to 2020 showed a top decile of 16X, a median of 5X, and a bottom quartile of 3.3X, versus roughly 3X for a typical top-quartile VC year.
Build your worldview from primary sources, not narratives
Tan says he passed on Palantir partly because the press wasn't covering enterprise software, whereas Thiel and his friends talked directly to people and found that even intelligence agencies lacked good technology.
Don't let others frame the game you play
Tan says Posterous took the press framing of being easier than Tumblr, when it was really competing with how people got photos off phones, and he contrasts it with Weebly's profitable, self-directed path.
Distribution is the main constraint for businesses
Tan says big tech's ad auctions extract incremental gross margin, so founders, especially in consumer, effectively need to be creators and say valuable things, while B2B founders must get good at sales and rejection.
WORDS WORTH SAVING
5 quotesIt's a more, uh, succinct version of make something people want.
— Garry Tan
Like, the world doesn't, like, happen to you. If you are actually a, like, prime mover in the world, like Peter Thiel or my friends, um, you go out and you go into the world, and you discover something about the world.
— Garry Tan
When you're not careful, you sort of allow Media or other people to sort of frame your reality, and then you just play the wrong game.
— Garry Tan
I think there is an insidious nature to, like, formality and, um, corporateness and just, like, having to wear a suit or the convention, right?
— Garry Tan
Like you have to, you know, first know that you can bend the spoon with your mind, but then you bend it with your hands, guys.
— Garry Tan
High quality AI-generated summary created from speaker-labeled transcript.
