Why Building Real Skills Beats Credential Maxing in AI

1. 0:00 – 4:18

   Intro

   1. GTGarry Tan0:00

      Think about the area under the curve of utility that you could contribute to society, and everything else is simulacrum. It is not real. When you think about SBF, when you think about Theranos, when you think about the things that truly disgrace us as people who create technology, when you peel back a little bit, you realize there's nothing. It was a fucking lie. I don't want that for us. People outside of this room, the world at large looks at tech, and they hate us sometimes because those are the people who represent us. And I say, "Not for me." They don't represent us. Welcome to another episode of The Light Cone. This time we're doing it live. We're not used to doing it in front of a studio audience. So, we thought we would, uh, start off with a controversial topic. This is something that, uh, a bunch of people who are at this conference, uh, have been, I don't know, just talking about, coming to us to talk about. Uh, is this the last window to get rich? Are you worried about this? Are you guys worried about this?

   2. DHDiana Hu1:08

      Um...

   3. GTGarry Tan1:08

      Is this the end of capitalism? What's- what's happening?

   4. HTHarj Taggar1:10

      (laughs) We're like, no, yeah. No.

   5. DHDiana Hu1:11

      Is money gonna stop to exist without AGI?

   6. GTGarry Tan1:14

      They- they won't, they won't, uh, admit to it, but in private conversations, this is one of the topics that certainly we've been debating.

   7. JFJared Friedman1:21

      Yeah.

   8. GTGarry Tan1:22

      What, you know, why is this coming up actually?

   9. HTHarj Taggar1:24

      Seems like at least when we speak to people who are applying to YC or kind of like members of the audience, there's a real sense of uncertainty created by AI right now, right? Like, the thing is like the sense of will the jobs that we thought would be there be available? And if we're not, um, if they're not, like, kind of what do we do? And if we're not sort of, if we don't o- have real ownership in something that's, like, valuable and growing, like, what will we be left with? But that seems to be the thing that comes up a lot.

   10. JFJared Friedman1:53

       I had dinner with some undergrads who were here last night, and they were saying that this is one of the things that people are talking about a lot on college campuses is just like, "Hey, the AI's gotten really good at programming now."

   11. GTGarry Tan2:04

       Mm-hmm.

   12. JFJared Friedman2:05

       "Um, (laughs) what's gonna happen to all the programming jobs?" Like, it used to be the case that if you were a CS major, there was a very clear path to, like, a very stable, like, upper middle class background where you get, like, a good stable job as a, as a programmer. Um, but, like, are those jobs still gonna be here in 10 years? Like, yeah. It's like-

   13. GTGarry Tan2:24

       Yeah, like my- my parents were really proud when I, uh, you know, graduating, I, you know, got my degree, and then I got my job at Microsoft, and I was a level 59 PM. Uh, you know, lowest of the low, but I had health insurance, and my parents were really, really proud of me. And, you know, one of the fears frankly, like, that we're hearing, uh, and it's sort of, you know, coming out in the numbers is that will there actually be jobs? It's, you know, I- I think it's a tricky thing right now. With the advent of intelligence, you know, some of the simplest things that people rely on entry-level people right out of college for, uh, they're not hiring as many of them anymore. And, you know, the craziest stat, I think this came out of, uh, uh, the New York Fed in February of this year. Um, computer science majors, uh, you know, obviously this is not the people in this room. This is just, like, o- out of, like, you know, a normal distribution of all computer science majors, 6.1% in unemployment in February of this year. Art history in contrast was only 3.0%.

   14. JFJared Friedman3:29

       Wait. You're saying that the unemployment rate of art history majors is lower than the unemployment rate of CS majors?

   15. GTGarry Tan3:35

       Unbelievably.

   16. JFJared Friedman3:36

       Wow.

   17. GTGarry Tan3:36

       But that's what the stat did-

   18. HTHarj Taggar3:37

       (laughs)

   19. GTGarry Tan3:38

       ... yeah, indicated. Don't worry, guys. No one in this room, no one watching online-

   20. HTHarj Taggar3:42

       (laughs) Just the average, just the average CS student.

   21. GTGarry Tan3:44

       We're talking about, you know, the- the median, which, you know, that you guys are so f- so many standard deviations above. Don't worry.

   22. DHDiana Hu3:51

       But that's concerning, right?

   23. GTGarry Tan3:52

       Yeah. Yeah.

   24. JFJared Friedman3:53

       Yeah.

   25. DHDiana Hu3:53

       And-

   26. JFJared Friedman3:53

       But, like, but, like, this- this role of, like l- like, level 59, you know, engineer at Microsoft used to be this, like, super stable job. If you do that job, all the adults in your life will be like, "Good job." Like, "You make the, you made the safe choice, the prudent choice." But, like, one of the things I've been, like, I've been noodling a lot is, like, is that actually the safe choice? Like, is it possible that the world has become inverted and, like, the career path that seemed

2. 4:18 – 5:16

   The Inverted Career Risk Paradigm

   1. JFJared Friedman4:18

      to be, like, the lowest risk most safe path might not be anymore?

   2. HTHarj Taggar4:23

      Yeah, I think, like, one thing that's gonna be interesting with this audience is that there's one theory. There's, um, Bryan Caplan has this theory on education. I think it's Bryan Caplan at least. It's, like, where, um, it's basically all about, it's credentialing, but it's actually a very specific thing that's being credentialed. It's, like, what colleges are credentialing to employers-

   3. JFJared Friedman4:41

      Yes.

   4. HTHarj Taggar4:41

      ... is that, um, these people graduate our program, which means that they can, like, show up to a place on time and, like, perform a series of instructions and-

   5. JFJared Friedman4:51

      (laughs) Yes.

   6. HTHarj Taggar4:51

      ... you know, not do too many drugs and, like-

   7. JFJared Friedman4:53

      (laughs)

   8. HTHarj Taggar4:53

      ... kind of like make it through, which is, like, the kind of people you wanna hire. Like, they'll turn up, they'll do the job, and-

   9. JFJared Friedman4:59

      If- if you're at Microsoft.

   10. HTHarj Taggar5:00

       Yeah, yeah.

   11. JFJared Friedman5:01

       Yeah.

   12. HTHarj Taggar5:01

       Like, and Fang.

   13. JFJared Friedman5:02

       Yes.

   14. HTHarj Taggar5:02

       Like, I think, like-

   15. JFJared Friedman5:03

       Yes.

   16. HTHarj Taggar5:03

       ... any company at scale starts, like, that's actually what they are hiring.

   17. JFJared Friedman5:06

       Yes.

   18. HTHarj Taggar5:06

       Is like you went to a good college, which means that you can, like, do things reliably and follow instructions well. It's pretty clear now in the AI world that, like, the AI is very good at following (laughs) instructions.

3. 5:16 – 7:08

   AI's Impact on Education and Skills

   1. JFJared Friedman5:16

      (laughs)

   2. HTHarj Taggar5:16

      And it's probably gonna be hard for humans to compete with the AI on just, like, following instructions reliably, in which case people here need to think about what are they gonna get out of their college experience that goes beyond just kind of showing up, passing the tests, following the instructions really, really well. Like, it's gonna require how do you know to do things yourself, and how do you have, like, agency and independence? Um, 'cause that's actually the stuff that's gonna matter in, like, I think a post-AI world.

   3. DHDiana Hu5:45

      And I think the thing that happened is, uh, Jared and I went on this college tour as well, and what's happening is that a lot of the CS curriculum is actually quite outdated. Like, how many of you in the audience if you're still in, in college, do your courses even allow use of a cursor?

   4. JFJared Friedman6:05

      Yeah. How- how many, like, forbid you to use Cursor and, like, vibe coding tools in your CS classes?

   5. DHDiana Hu6:10

      Oh, yeah. Way more hands.

   6. JFJared Friedman6:11

      Yeah. Yeah.

   7. DHDiana Hu6:13

      And this is the future, and those are the kinds of skills that are now becoming relevant.

   8. JFJared Friedman6:17

      They're- they're quite literally prohibiting the students from learning the tools that they are going to need (laughs) in the future. It's crazy. It's like- it's like the world upside down.

   9. GTGarry Tan6:25

      Well, when Google first came- when the internet first came out-

   10. JFJared Friedman6:27

       Yeah.

   11. GTGarry Tan6:27

       ... um, a lot of, uh, teachers would say, "You're not allowed to use Google."

   12. JFJared Friedman6:30

       Totally. Yeah.

   13. GTGarry Tan6:31

       Which is un- unfathomable today.

   14. JFJared Friedman6:33

       Yeah.

   15. DHDiana Hu6:34

       And I think to Harsh's point, I th- a lot of the most cracked students as we were meeting them and all these... We had- we had some- some events that we all- that we hosted. They had this, um, this sense of helping on the side and working on a lot of side projects, to your point, Harsh, about having a lot of agency. You learn a lot more in the process of building a lot of projects on the side, rather than at school. How many of you have learned way more on independent projects than at school? Yeah.

   16. JFJared Friedman7:01

       Great.

   17. GTGarry Tan7:01

       All hands.

   18. DHDiana Hu7:01

       All of you saw.

   19. HTHarj Taggar7:01

       All right, we picked the right people.

   20. JFJared Friedman7:03

       Nice.

   21. HTHarj Taggar7:03

       Sweet (laughs) .

   22. JFJared Friedman7:05

       (laughs) What do you guys think is the answer to Gary's question? Is this the last window to

4. 7:08 – 8:28

   Agency vs. Credential Maxing

   1. JFJared Friedman7:08

      get rich?

   2. HTHarj Taggar7:08

      Being intellectually honest, actually, one of our, sort of colleagues, Paul Buheidhe, pointed this out, where it's, there's sort of a flaw in the logic potentially, like if this is actually the last window to make money and get rich, then you're basically implying that, you know, like the- we're gonna get some definition of AGI or ASI or whatever you want to call it, um, that's like a necessary condition for that to be true. I- like, in which case, we're probably gonna have, like, bigger pro- like even there's going to be a lot more going on than just figuring out, like, how to make this, like, human money. I think that's a concept that Paul talks a lot about, is that in a world where the machines can do everything that's better than humans, like what value will they even be in human money? In which case, why does it matter that you're going to race to accumulate, like, the human money now?

   3. GTGarry Tan7:50

      The game itself might change. The, you know, you sort of... You grow up, you go to college, you graduate, you go work, you get a job, you buy a house, you have a mortgage, all this stuff, and then, um... You know, one of the weirder things that, uh, I see people critique San Francisco about is somehow this belief that San Francisco itself is about, like, credential maxing? Which, um, I don't... I mean, I h- the pa- the part of San Francisco I want to spend time with is, like, not really about that.

   4. HTHarj Taggar8:19

      Yeah.

   5. GTGarry Tan8:20

      But I can see the critique.

   6. HTHarj Taggar8:22

      In general, I don't think people do their best work out of fear, but you do it out of, like, more positive motivation so

5. 8:28 – 9:43

   Motivation: Fear or Excitement

   1. HTHarj Taggar8:28

      you're excited about stuff, and so I don't think my advice to anyone here would be, "You should drop out of college and work on an AI startup because it's gonna be your last chance to make money before m- you know, like-

   2. JFJared Friedman8:41

      (laughs)

   3. HTHarj Taggar8:41

      ... the event horizon hits us."

   4. JFJared Friedman8:43

      Yeah.

   5. HTHarj Taggar8:43

      Um, I do think, something that's interesting to note, is just, like, the- how quickly, like, AI startups can grow is definitely something we've talked about. But if you think about, um... Something I've been thinking about recently, like I- all of us actually when we were in college, like, um, we would- you'd always have speakers come back, like startup founders who are like a- a year or two out of college, come back and speak, and you heard from them. And I kind of remember that the milestone to hit when you were like a year or two out of college having worked on your startup was, like, raising a Series A round of funding. And we'd have, like, the Dropbox founder come back and say like, "Yeah, I raised, like, a Series A and it's, like, really, really cool." And then it sort of became, okay, well actually, like maybe a couple of years out of college you could raise, like, a Series B or a Series C. If you fast-forward today, it's like you've got the Cursor founder-

   6. JFJared Friedman9:30

      (laughs)

   7. HTHarj Taggar9:30

      ... a couple of years out of college coming back with a $10 billion company.

   8. JFJared Friedman9:33

      (laughs)

   9. HTHarj Taggar9:33

      Like it's like the- the- the pace-

   10. DHDiana Hu9:35

       It's an order of magnitude difference.

   11. HTHarj Taggar9:36

       Yeah, it's like the orders of magnitude difference, right? So I actually think-

   12. JFJared Friedman9:39

       Yes.

   13. HTHarj Taggar9:39

       ... a far more exciting reason to think about,

6. 9:43 – 10:50

   The Accelerated Growth of AI Startups

   1. HTHarj Taggar9:43

      um, you know, "Should I start a company?" or "Should I join, like, one of these fast-growing companies?" Is just, like, the time, like how much you can get done a year or two, like, out of college is orders of magnitudes higher than it was even a few years ago. And I think that's, like for a certain type of person, a very, like, exciting motivating factor.

   2. DHDiana Hu10:02

      I think there's a-

   3. JFJared Friedman10:02

      I- I like that a lot, Harsh, that... I think that's why Sam said at the beginning of the- of the event yesterday, "This is the best fucking time in history to start a company."

   4. HTHarj Taggar10:09

      Yeah. (laughs)

   5. JFJared Friedman10:10

      Yeah. (laughs)

   6. GTGarry Tan10:10

      Well, the interesting thing about credential maxing and/or what's happening now is that raising a Series A is a credential that kind of gets bestowed by a fancy VC, uh, you know, driving a Ferrari down Sand Hill Road or something, right? Like that's something that's external to outcomes and often it's, you know, really like the shooting of a- a- a starting line gun as opposed to like something to celebrate in and of itself. The really big difference today is that the very best companies that we get to see day-to-day, they're like, I don't know, five people, 10 people, uh, I think al- you know, each of us on stage and all of the YC partners are sort of collecting, uh, um, incredible

7. 10:50 – 12:55

   Real Success over Fake Credentials

   1. GTGarry Tan10:50

      startups that we get to work with that went from zero to 10 million, 12 million a year revenue. Like that's net revenue, like it just goes in the bank. So you basically get the equivalent of an entire Series A, and instead of this fake credential thing where some fancy person on Twitter with lots of followers, you know, blesses you and suddenly, like all these people, you know, TechCrunch says like, "The new hottest founder." And you know what? Like those are all external things that are not actually connected to real business or having an impact on anyone. It's fake, right? It's the fake credential. And then the cool thing now is that that is actually very directly being replaced-

   2. HTHarj Taggar11:32

      Yup.

   3. GTGarry Tan11:32

      ... by people making things that, you know, people not only really need but they're willing to pay a lot of money for.

   4. DHDiana Hu11:39

      This is like a very good point. Sort of instead of, uh, taking the leap out of fear, that this is the only time, taking it from- from a place of approaching and really going after something, where this is really an exciting time to be a builder. We've seen crazy growth unlike anything.... only possible with, right now, with AI. Like, all these companies that we work with, zero to 12 million in 12 months. The Cursor story where they went zero to one in one year, the next one, one to a hundred.

   5. HTHarj Taggar12:10

      (laughs)

   6. JFJared Friedman12:11

      Yeah. Work well.

   7. DHDiana Hu12:11

      This is, like, unprecedented in tech history that way.

   8. JFJared Friedman12:14

      For B2B SaaS companies. It didn't used to be the case that B2B SaaS companies were the ones that had hypergrowth. Like-

   9. DHDiana Hu12:19

      Yeah.

   10. JFJared Friedman12:19

       ... there were some, like, consumer social companies that got hypergrowth. But, like, B2B SaaS used to be this, like, you know-

   11. DHDiana Hu12:25

       (laughs)

   12. JFJared Friedman12:25

       ... clotting, slow-growing, like (laughs) kind of thing. Now there's this weird inversion. It's the B2B SaaS companies that are (laughs) the, like, the hypergrowth ones.

   13. DHDiana Hu12:34

       I think what we're seeing is a lot of times is, uh, founders who are, uh, living in the future, at the cutting edge, who are winning here because you have to sort of build the taste to build something good. And you don't get taught some of those things in school.

   14. HTHarj Taggar12:47

       I know that, like, on that front, like, something very specifically we're seeing is that to build any products, you, you always need some combination of, like, domain

8. 12:55 – 15:05

   Domain Expertise and Technical Expertise

   1. HTHarj Taggar12:55

      expertise, which is really just, like, understanding your customer really well and understanding the space you're building in, and understanding the market really well, and then technical expertise to actually build the product. And it feels like pre-AI, things shifted where, um, sort of the technical expertise wasn't that important because it was real- most of the software was, like, web software and it became fairly straightforward to build web software. And actually, all of the value was in how much, like, domain expertise do you have. Like, do you have relationships with the customers you're going after? Um, do you have some edge on how to sell to them because everyone you're selling to has already got, like, ten roughly equivalent products being sold to them? Uh, and that actually made it quite hard, I think, for college students to be able to, like, go and compete for, like, you can't, like, compete on s- compete with Salesforce for, like, a CRM or go build, like, the best appointment booking software for healthcare practices. Like, all of these things were just very saturated. And now I think what we're seeing is with AI, there's this promise of, "Hey, like, this is more than software. Like, this can do, like, the work of people. It's like magic." But, like, it's actually quite hard to do that reliably. And so there's been this flip of where the technical expertise is now actually really, like, the missing piece for a lot of these things. Um, and we consistently see, at least in YC, that college students are actually at the forefront of this stuff. Like, actually understanding how to use the models and how to squeeze the performance consistently out of the models is something that even, like, you know, PhDs and people who are really experienced don't get. And I think maybe that's why Elon had that sort of look yesterday when he was talking about researchers versus engineers.

   2. JFJared Friedman14:28

      Yeah. (laughs)

   3. DHDiana Hu14:29

      (laughs)

   4. HTHarj Taggar14:29

      It's like, it's actually in the engineering and it's, like, working on the projects and, like, building real things is where you get the expertise.

   5. JFJared Friedman14:37

      Yeah, I had a lot of college students ask me over the last two days, like, "Hey, I don't have domain expertise in any particular area 'cause I haven't worked in industry that much. Like, what idea should I work on and, like, how do I basically, like, how do, how do I get enough domain expertise to, like, do something interesting?" Uh, w- what advice would you have for folks in that position, Harj, based on, on that insight?

   6. HTHarj Taggar14:59

      I think Garry's got, like, a great point on this. Um, it's basically, like, become like a forward deployed engineer,

9. 15:05 – 18:51

   Gaining Domain Expertise as a Student

   1. HTHarj Taggar15:05

      right?

   2. GTGarry Tan15:05

      Yeah, just, I mean, go undercover, I guess.

   3. HTHarj Taggar15:08

      (laughs)

   4. GTGarry Tan15:08

      Like, go, go and figure out what people actually need. And, um, yeah, if, there are just too many examples of billion dollar, uh, startups that we got to see. I mean, I always think about Flexport. You know, here's this guy who literally became one of the top importers of medical hot tubs. Like, I don't think anyone wakes up, you know, and graduates and decides, like, "Hey, I really need to become one of the foremost-"

   5. HTHarj Taggar15:32

      (laughs)

   6. GTGarry Tan15:32

      "... you know, import exporters of, uh, of medical hot tubs." But, you know, he did it. He, they, they did, they also, um, I think were one of the first e- the biggest e-bike importer. But then, you know, basically being in weird parts in the economy, um, caused them to understand just things that, that, uh, the, the other person, you know, the sort of thousand, 10,000 other people who want to start startups. Like, they didn't have that knowledge. And so sort of your ability, your, you know, if you're here, like, your inherent ability already is, like, one part of the Venn diagram. And then the other part is just something weird. (laughs) It's literally just, like, where does your interest come from? Like, I'm really taken by to what degree both OpenAI and SpaceX, for instance, were, uh, you know, the genesis came from, like, interest and a hunch and just, like, not really any commercial intent. And yet, you know, coming out the other side, uh, that was enough to attract the smartest people in the world-

   7. JFJared Friedman16:32

      Mm-hmm.

   8. GTGarry Tan16:32

      ... attract capital, and then really create, you know, the most enduring businesses in the world.

   9. JFJared Friedman16:39

      Yeah, the other thing that I've seen that's pretty cool is just I've just seen a lot of college students go from having, like, no domain expertise in an area to being, like, total experts in, like, a month or two at YC. And I think people maybe don't give themselves enough credit for how quickly you can become an expert in something if you're just smart and you learn fast and you just make, like, a concerted effort.

   10. HTHarj Taggar17:00

       I think the door is more open now than ever.

   11. JFJared Friedman17:02

       Totally.

   12. HTHarj Taggar17:02

       Like, you kind of go back to, yeah, i- in a world where, like, um, any domain. Let's make it, like, you know, if you're trying to build software for dentists, as a round example. Pre-AI, it was just, like, people were being pitched with so many different software products-

   13. JFJared Friedman17:15

       Yeah.

   14. HTHarj Taggar17:16

       ... that they weren't actually that receptive to, like, some college students promising some software and wanted to come, like, learn and, like, work in the office and understand, like, how it works. It's like, eh, I got, like, 20 software vendors all-

   15. JFJared Friedman17:26

       Right.

   16. HTHarj Taggar17:26

       ... like, um, telling me the same thing. But now because, like, AI has captured the imma- like, the imagination of everybody, everyone, like, wants to know what's possible and are consistently underwhelmed by what, like, the established software companies can offer them. But they're open to, like, college students just coming in and, like-

   17. JFJared Friedman17:44

       Well, because the college students are selling them pure magic.

   18. HTHarj Taggar17:47

       Yeah.

   19. JFJared Friedman17:47

       So I had three founders in the last batch actually that are building quite literally, like, AI agents for dentists.

   20. HTHarj Taggar17:51

       Yeah.

   21. JFJared Friedman17:52

       None of them, like, I think their only experience with dentists is they went to a dentist.

   22. HTHarj Taggar17:57

       (laughs)

   23. GTGarry Tan17:57

       (laughs)

   24. JFJared Friedman17:57

       Um, (laughs) um, and but it was exactly what you said, Harj. Like, they're literally selling these dentists, like, magic in a bottle. And so, like, of course the dentist will spend their time because if it works, it's, like, just incredible for their business.

   25. HTHarj Taggar18:10

       Which kind of just comes back to the agency thing 'cause it's like the thing, like...In order to build these products and in order to go out and, like, build, like, the future big companies, you kind of just have to have the agency-

   26. GTGarry Tan18:19

       Mm-hmm.

   27. HTHarj Taggar18:19

       ... to be like, "Oh, yeah," like, "I'm actually going to go do the, like, undercover agent or, um, fully deployed engineer, and I'm just gonna go, like, camp out in, like, someone's office and just see how they do their jobs and learn how to do it, and learn how to, like, build it with AI."

   28. GTGarry Tan18:34

       What about some, um, pitfalls? Like things that would prevent people from exercising their agency or exposing themselves to, you know, the real economy?

   29. DHDiana Hu18:45

       (laughs) I think one of the things that keeps coming back to my mind is having a lot of these conversations with, uh, recent

10. 18:51 – 20:39

    Breaking the Student Mindset

    1. DHDiana Hu18:51

       grads or college students. I think there's this arc of, um, a lot of you trying to figure out what to do with your life. And through most of your life, you've been conditioned to kind of just pass tests, study for the exam, do the homework, and it's sort of like all these, uh, very constrained boxes that you have to check. And then you treat startups or your next job sort of like another test or exam-

    2. GTGarry Tan19:16

       That's true.

    3. DHDiana Hu19:17

       ... that a lot of the rules are predetermined and you just have to-

    4. GTGarry Tan19:19

       (laughs)

    5. DHDiana Hu19:19

       ... go check the boxes. But that's a complete wrong mental model for it, because the problem is that when you go after building and tackling a big problem, it is an open, wide space. There's no rules. You get to create it. I mean, the good thing about startups is, pluses and minuses, you have agency to design what you're going to go after, set your goals, instead of, like, some authority figure to, like, "Oh, you need to do thises and that." And we get asked questions like, "Oh, what should I look like in order to raise money?" That is such a-

    6. GTGarry Tan19:53

       Yeah.

    7. DHDiana Hu19:53

       ... student question, sort of like there's some sort of bar, like by some higher power. Guess what? There's no adults in the room. It's you. You're in control, and you get to design those rules and you can go as fast as possible. You don't have to have like, "Oh, we have to do thises and this and check the marks and get there." It's really, you design it. You're in control.

    8. GTGarry Tan20:15

       I think there are two very dangerous, uh, forms of, like, credentialism that you create for yourself that we see that actually, like, we'd really like to warn you guys about. Uh, one is, I mean, I think we already talked about, like, making raising money from investors, like somehow the, the biggest goal. I mean, including us, by the way. It's like-

    9. HTHarj Taggar20:34

       Yeah.

    10. GTGarry Tan20:34

        ... you know, that we're just like people to help you and we think we can help you a lot.

11. 20:39 – 22:52

    The Dangers of Entrepreneurship Programs

    1. GTGarry Tan20:39

       But, like, once you turn that into, like, sort of, uh, the idol that you have to achieve, then that's just missing the whole point. And I, you know, I think that that's quite dangerous. Um, the other thing that we- we're kind of concerned about is there are, like, entrepreneurship programs at some of your campuses. Uh, some of them might take you to wild, exotic places for retreats.

    2. HTHarj Taggar21:01

       (laughs)

    3. GTGarry Tan21:01

       We're not going to name them, but like in full transparency, I'm very worried about them because what we're coming- we're coming to understand is they are teaching you to lie. And that is at a moment when literally all of software is changing and that software is the most empowering thing in the world. Why do you have to lie? I understand in a world of, like, contracting capability, in a world where there's less money, where there's, you know, fewer and fewer jobs, I kind of get it. It's very zero sum. We're at the most open, like, sort of abundance-oriented, like, mindset thing that is happening right now. Like, literally everyone here is hyper-, hyper-empowered. You don't have to play by those old r- rules anymore. You don't have to lie to investors. You don't have to, like, fake it till you make it. Like, you know, I worry that some of these programs are just literally trying to teach people to become more, uh, you know, SBFs and Theranoses.

    4. HTHarj Taggar21:56

       (laughs)

    5. GTGarry Tan21:57

       And that's like, you know, that's a waste of time, like, and you're going to go to jail.

    6. HTHarj Taggar22:02

       (laughs)

    7. DHDiana Hu22:02

       (laughs)

    8. GTGarry Tan22:02

       It's fine. Um-

    9. HTHarj Taggar22:04

       A- a- also a lot of these entrepreneurship programs, they do what Diana said, which is like entrepreneurship programs, especially ones that are not started- not run by founders, you know, all of us were, were, were startup founders, they, they basically teach entrepreneurship like it was a course, like, like it was just a series of tests to pass, a series of checkboxes to, to check. Um, anytime you try to bottle up entrepreneurship and like teach it as a college course, that's kind of what you end up with, is like basically like a s- a sort of like cheap facsimile of entrepreneurship where like they teach you to like, you know (clears throat) , follow a particular method or a particular practice, and that's just not what startups are actually like.

    10. GTGarry Tan22:41

        I just think about that Jay-Z line. It's like, "Everybody want to tell you how to do it. They never did it."

    11. HTHarj Taggar22:45

        (laughs)

    12. GTGarry Tan22:46

        True.

    13. HTHarj Taggar22:46

        A riff on that that I'm curious to get people's opinions on, uh, maybe especially Garry actually, um, something that is

12. 22:52 – 27:30

    Social Media Strategy for Startups

    1. HTHarj Taggar22:52

       clearly different I feel about the age we live in today versus, say, 10 years ago is just social media and using-

    2. GTGarry Tan22:58

       Mm-hmm.

    3. DHDiana Hu22:58

       Mm-hmm.

    4. HTHarj Taggar22:58

       ... social media as a way to, um, like, amplify your message and your brand. This is actually something that came up at a dinner last night, is how much in the early stages when you're building a product, like, should you focus in on kind of like building the product and going one by one to get users, all of the kind of like traditional startup advice, versus trying to cultivate sort of like a following or a brand, um, or attention, like, online? And like, you know, 10 years ago-

    5. DHDiana Hu23:26

       Or spend, uh, thousands of dollars on a video.

    6. HTHarj Taggar23:27

       Yeah, yeah, just like-

    7. DHDiana Hu23:28

       To launch.

    8. HTHarj Taggar23:28

       ... spend like high production launch videos and like lots of follow- like lots of follows on Twitter or X. And, um, I- I- certainly I think it's more confusing now because that wasn't even an option before.

    9. GTGarry Tan23:39

       Mm-hmm.

    10. HTHarj Taggar23:39

        And you definitely see people succeeding at the getting the online, like, attention and people talking about, like-

    11. GTGarry Tan23:46

        Yeah.

    12. HTHarj Taggar23:46

        ... the company.

    13. GTGarry Tan23:47

        What do they call it? Aura farming? Is that what they're calling it these days?

    14. HTHarj Taggar23:49

        Is that a thing? (laughs) Uh, all right, we've got a lot of say. Maybe that's the- the phrase. Yeah, it is like aura farming, I guess. Yeah. I'm curious what you think, Garry.

    15. GTGarry Tan23:57

        All I care about is, like, what's real and what you can, you know, s- touch and see and feel, and, you know, think about the area under the curve of utility that you could contribute to society, and you can always just look at that as ground truth, and everything else is simulacra. It is not real. It is like media, it is fake, it is a credential, it is a thing that represents something, and yet, like, if you look deeper into it, it's nothing.Like, there's nothing. When you think about SBF, when you think about Theranos, when you think about the things that truly disgrace us as people who create technology, when you, when you peel back a little bit, you realize there's nothing. This was just simulacrum. It was a fucking lie. I don't want that for us. Like, the, you know, people outside of this room, the world at large looks at tech and they hate us sometimes because those are the people who represent us.

    16. JFJared Friedman24:50

        Mm-hmm.

    17. GTGarry Tan24:50

        And I say, "Not for me." They don't represent us.

    18. SPSpeaker24:53

        (applause)

    19. HTHarj Taggar24:53

        Yeah, yeah. Yeah. That's pretty incredible.

    20. GTGarry Tan24:59

        100%.

    21. HTHarj Taggar24:59

        So I think that's a no on social media. (laughs)

    22. JFJared Friedman25:01

        (laughs)

    23. GTGarry Tan25:01

        I mean, I think social media is really great. I mean, I'm clearly extremely addicted to it, and-

    24. HTHarj Taggar25:06

        (laughs)

    25. GTGarry Tan25:06

        ... it's done some really great things for me, some terrible things too. But, um, I, you know, I think that, you know, you do have to tell your story. Like, I think one of the more important things that is the gift is that you can tell your own story. Like, in fact, that you have to. Like, the second you rely on someone else to tell your story, it's gonna be great, great, great, and then when you don't have that voice, like, someone's gonna take that. You know, there's... The world wants to, you know... Th- the only thing it loves more than, like, you know, a, uh, a story of, like, of becoming, is one of unbecoming. And, uh, if you don't have that voice and you can't go direct, um, you know, they're gonna do that to you. And so, better to start, right? Like, you know, I, I think working backwards, the thing that was most helpful for me, you know, obviously for my startup, but we try to encourage all of our startups to do this, is you can sort of work backwards from the outcome that you want. Like, uh, I actually think Apple does this really, really well, like, they don't commit to doing a feature until they have, you know, a product manager who says, "This is who it's for, and this is the, the problem it's going to solve." Right? And you can actually turn that into going direct. So, you know, let's say you have a one-week or two-week sprint. It's all too easy to just say, "Look, like, here's my bug list and here's my backlog, and I'm gonna fix these 10 bugs." But a much more powerful version of this is, "Let's work backwards from what I want to put on X." I'm going to make a very simple Loom video showing off a feat of strength, a thing that I really want to share that I know our team can do. And then working backwards from that, the next two weeks, that's all we're going to do. Like, you could storyboard it. It's like, "It's going to do this." Right? You can work... Like, basically at that point, media and PM and design can be all the same thing. You know, it's connected to users, it's connected to communication, it's connected to what your product will do for people, and then you build it, and you can just basically rinse and repeat like that. If you can do two-week sprints of working backwards from a really powerful, not flashy, uh, Loom video of what you did in the last two weeks, you can do this all for each other, and we can create a culture that is not about flash, but about substance.

    26. SPSpeaker27:18

        (applause)

    27. HTHarj Taggar27:20

        Yeah.

    28. GTGarry Tan27:20

        We got a question over here.

    29. SPSpeaker27:22

        I'm a big fan of Garry and Jared, so... Jared actually, uh, inspired me-

    30. JFJared Friedman27:26

        (laughs) Brutal. (laughs)
13. 27:30 – 32:33

    The College Dropout Question

    1. JFJared Friedman27:30

       here.

    2. SPSpeaker27:30

       ... for my, uh, startup, but I just wanted some advice, because I'm kind of going through a dilemma right now. So, I've been working on a startup for the past month, and I'm, I'm going to my third year of uni, um, for context. But, um... So, yesterday at one of the after-parties, which I'm not gonna disclose the name, 'cause you guys are probably gonna apply to it, but, um, uh, I was, pretty much pitched my idea to one of the founders, and he basically said, like, you know, "Drop out of school and come work for me. Uh, move to San Francisco." So, um, I'm really stuck between, like, what do I want to do? Like, what's the right choice? Like, do I continue university and then go to s- uh, San Francisco and then, you know, grind the startup life? Or do I drop out now? 'Cause I'm already halfway done. Like, you know, I'm not, like, almost finished with college or anything, I'm already halfway there. So, do I drop out and just work and then just move on from there? Yeah.

    3. GTGarry Tan28:20

       I mean, I think the most important thing is, do you trust them, and is it actually a good startup? So, which is, uh, kind of a hard question to answer, like, like this. But, like, what, you know, what would you think?

    4. JFJared Friedman28:31

       Well, if it's one of ours, it must be a good startup.

    5. SPSpeaker28:33

       (laughs)

    6. SPSpeaker28:34

       Right.

    7. GTGarry Tan28:34

       Is it a YC startup?

    8. SPSpeaker28:35

       Yeah.

    9. GTGarry Tan28:36

       Oh, you should probably do it. (laughs)

    10. SPSpeaker28:37

        (laughs)

    11. SPSpeaker28:38

        No, I mean, more seriously, I mean, I don't know. How would you... Like, when you think about, like, where someone should go-

    12. JFJared Friedman28:44

        Yeah.

    13. GTGarry Tan28:44

        ... like, what would you say?

    14. DHDiana Hu28:46

        I think Garry could answer. Garry?

    15. JFJared Friedman28:46

        I- I'd add one- one third criteria, Garry. Uh, I, I dropped out of college to do Y Combinator and do a startup. I think, in addition to the two ones that Garry said, the third one for you to consider is, like, do you really like being in college? Which is, like, obvious, but, like, actually-

    16. GTGarry Tan29:01

        No. Uh, he does not. (laughs)

    17. JFJared Friedman29:02

        Yeah. Okay. Like, like, I- I think, I think, like, like Harj was saying earlier, when college students are thinking about dropping out, and they're making it in a fear, they're making a fear-based decision, they have FOMO about startups happening in San Francisco, maybe their friend dropped out and they're, like, worried that they're gonna miss out, I don't know that those are the best decisions. Like, some of those people actually do end up regretting it. Versus, like, when I dropped out of college, I dropped out of college because I was bored of college. Like, I'd done three years of college. I felt like I'd gotten out of it what I wanted from the experience, and I was just a lot more excited to, like, build real technology for real people. And I felt that regardless of whether the startup that I was working on succeeded or not, I wouldn't regret leaving college, because I was just kind of ready to move on to the next stage of my life. So, I think if you can, if you, if you can honestly feel that way, then may- maybe it does make sense for you to drop out.

    18. DHDiana Hu29:53

        I think if you feel you're done exploring living alternative life paths...

    19. JFJared Friedman29:59

        Yeah.

    20. DHDiana Hu29:59

        What I mean by that, is like, you tried an internship working at a big tech company, you tried an internship at a startup, you tried another internship to start a company, or you tried another one doing research. If you feel you've fulfilled the chessboard and the land of what your life could be and you explored everything, I think it's fine. But if you still have a bit of a inkling, it's like, "Oh, maybe I want to try what doing resear- research is like."I think maybe not yet, but if you're super sure you want to have a career in tech or startups, then maybe it's fine, to, to Jared's point because like you already did that life, alternate life path.

    21. GTGarry Tan30:37

        I feel like I got lucky and then... Because I ended up at Palantir and these things that ended up being super successful. But in the moment, like, you know, I could have just g-... You know, Palantir could have been a bad startup actually, and, uh, I didn't even think about it. So like thinking back on what I should have been thinking of when I was, you know, 22, 23, it's actually really important to try to be at the most dominant places, actually.

    22. JFJared Friedman31:01

        Mm-hmm.

    23. GTGarry Tan31:01

        I mean, the power law for startups is so intense that if you're gonna go work at a startup, I do actually think that you should try to go work at-

    24. JFJared Friedman31:08

        At a really good startup.

    25. GTGarry Tan31:09

        ... a really good one, like-

    26. JFJared Friedman31:09

        A really good startup. Totally, yeah.

    27. GTGarry Tan31:10

        Like, objectively, you should make literally a spreadsheet.

    28. JFJared Friedman31:13

        Yeah.

    29. GTGarry Tan31:13

        You should, you know, go down and, like, evaluate it the way, uh, a f-

    30. JFJared Friedman31:18

        Venture capital.
14. 32:33 – 38:55

    When to Quit Your Job

    1. SPSpeaker32:33

       "Okay, I'm, I'm done with this. I want to go start a company." And like, you work at something, uh, maybe at night, you know, after work. You can't really, like, go out on LinkedIn and advertise it because, like, your boss would see it. But at what point do you say, "I have enough here. I can really go quit my job, you know, start spending down my savings and go, go do something"?

    2. GTGarry Tan32:49

       You're much more responsible than I am. Like, I had, you know, $50,000 in credit card debt, and I had the nicest apartment in Queen Anne, and I bought a brand new Honda, and it was very stupid. And so I had to go get a job, and like, you know, I, I couldn't start a startup. I, like, you know, waited... I had... I needed my friends to pull me out of that situation. So, I mean, I think you want, I don't know, at least six, maybe nine months minimum of like just, you know, being able to live on ramen in the cheapest possible way. Uh, and then at that point, like, the money in your bank is like just capital that you think of. And so that's probably what I would want. And then the other thing is, uh, I would try to bring on... I would want to work with the smartest possible people. Like, I know this is a big internet debate. It's like, do you need a co-founder? Honestly, like, if it's your first startup, y- uh, I, I wouldn't... I would never start... Like, my second or third startup, sure, I could do it, like, alone. I, you know, have connections. I know who to hire, like all this stuff. If it were my first, I would not try to do it alone because there's just too much going on. There's like... The, the gradient of things that you need to learn is too wide, and you need to go, you need to go together.

    3. JFJared Friedman33:58

       Yeah. And in my experience, for people who are your age, who've like already graduated college or working at some company, that's the biggest limiting factor in practice for them actually doing a company is like they and their co-founder both need to be willing to quit their jobs and go in on a startup at the same time. It's, it's just like a timing problem. And like co-founders are hard to find, and it's hard to make that timing line up. So my advice would be like if you ha-... If you and your co-fi-... If that does line up for you and you and your co-founder are both in a point in your life where you're, like, able to quit your jobs and go all in, you should probably just do it because it literally might not ever happen again. It's actually that hard to do.

    4. SPSpeaker34:34

       Hey, guys. Well, thank... Um, first of all, thank you for, for the event. My voice is a bit cracked because of talking too much over the, over the past few days. Um, we were actually talking to the CEO of Strava, uh, yesterday at one of the after-parties, and he mentioned, uh, that they started being a very niche startup. Um, and I've taken a look at all the Y Combinator startups over the years, and it looks like, uh, they're getting increasingly niche. Uh, so I was just wondering, like, what do you think, like, what's your take on, on, on being super niche at the beginning and then expanding, and how do you know, like, how niche you have to be, um, in the beginning?

    5. HTHarj Taggar35:07

       Being niche at the start has actually always been, like, the recipe to succeed. Like even in the YC world, like... The current biggest company by market cap is Airbnb. Um, and Airbnb was like the definition of niche when it started. Like, it was literally air beds in people's living rooms, right?

    6. DHDiana Hu35:26

       During conferences.

    7. HTHarj Taggar35:27

       Yeah, during conferences. So like-

    8. JFJared Friedman35:29

       (laughs)

    9. HTHarj Taggar35:29

       ... yeah, I'm not sure you can get more niche than that.

    10. DHDiana Hu35:31

        Democra- democratic conferences.

    11. HTHarj Taggar35:32

        Yeah, democratic conferences. Yeah. So like... (laughs)

    12. DHDiana Hu35:34

        (laughs)

    13. HTHarj Taggar35:34

        Um, and it obviously, it turns out that that expanded into just being this, like, monster company that's taking over all of travel. Um, but there's even less obvious examples of this where people don't realize that things that seem huge now were niche at the beginning. Stripe actually, in a sense, obviously it's payments, of course, it's a big market, but actually when they first started, it was like, um, an API for developers, and the only thing that differentiated it from Braintree was that you could take payments instantly. Um, and people actually didn't think that that was much of a wedge. It was like, "Oh, okay, sure, if I'm working on a weekend project, I'll care a lot about that." But like big businesses aren't going to care about that. They're fine to wait two weeks to get like their merchant account. And so it's always been the case that niches have been the right way to start actually, and to dominate a niche and find ways to like expand into like adjacent markets and grow into a big company, I think is like the recipe.

    14. DHDiana Hu36:28

        And-Brian Chesky quotes a lot of some of the best advice he got from PG during the batch, was to really hone in to find 10 people that love your product much better than, I don't know, 100 randos. And a lot of companies start like that. You want to find th- those maximalist users that really obsess with you, and you iterate on those. And Coinbase was also very niche too.

    15. HTHarj Taggar36:55

        Yeah, Coinbase was classic niche, because, um, crypto itself was small and fringe, and even within that, they were building for what people thought was a non-existent market, essentially.

    16. GTGarry Tan37:04

        (laughs)

    17. HTHarj Taggar37:04

        It was just, like, regular people who wanted a nice user interface to, like, buy and hold Bitcoin, and it was like-

    18. DHDiana Hu37:10

        It was a bit of a oxymoron, regular people in crypto back in 2010.

    19. HTHarj Taggar37:12

        Yeah, exactly. It was like base... Yeah, the, the conventional wisdom was it was just people who want to use it to, like, launder money and buy drugs. And it was like, okay, no, there's, like, other, um, use cases for it. Um, but with AI more than ever, by the way, like, I think that niche is the way to go, because no one really knows how big the markets are, and it does seem like things that seem like they were niche before AI, you can get people to pay you a lot, lot more money for, because they're not just buying software, they're buying, like, work from you. And so find the niche you're really interested in, optimize for your, like, passion and interest in it, and just pull on that thread.

    20. GTGarry Tan37:46

        This is, like, actually a really powerful moment, because literally, you have 130... Uh, you know, I think of, uh, O3 as basically about 130 IQ, maybe O3 Pro can be even smarter than that.

    21. HTHarj Taggar37:57

        Mm-hmm.

    22. GTGarry Tan37:57

        Um, when I really think about that, it's like, oh yeah, like, a lot of the people who I've ever hired in my lifetime-

    23. HTHarj Taggar38:03

        (laughs)

    24. GTGarry Tan38:03

        ... are like, yeah, O3 is smarter than that person now, so. And then you can basically take that and, um, you know, connect it to the proprietary data systems of almost any niche, and the more weird and unlikely for someone, like, someone in this room to know about it, the more likely that will be a durable enough moat that you can get a f- you know, you can basically get, you can wedge y- yourself in there, and then basically all you need is a wedge, and then you just basically expand that wedge until you have the pie. Thank you guys so much for coming out.

    25. HTHarj Taggar38:36

        Go out and build awesome stuff.

    26. DHDiana Hu38:41

        Thank you. (clapping) (upbeat music)

Episode duration: 38:55