How YC Was Created With Jessica Livingston

1. 0:00 – 0:55

   Coming Up

   1. SPSpeaker0:00

      That first batch, which is kind of magical in terms of the group of people and the outcomes, what did it feel like?

   2. JLJessica Livingston0:07

      It was like one of the most fun times in my life, because everyone really wanted to be there and really wanted to start a startup. That's when it felt like, "Hey, we're onto something here." Y Combinator is on a whole new level now with, again, all of the knowledge and all of the connections and its brand and everything. But it is true that the core of it is the same, and I just think that's so cool.

   3. SPSpeaker0:31

      (laughs)

   4. JLJessica Livingston0:31

      Don't change it if it ain't broke, right?

   5. SPSpeaker0:39

      (laughs)

   6. GTGarry Tan0:40

      Welcome back to another episode of The Light Cone. I'm Gary. This is Jared, Harj, and Diana. And collectively, we funded hundreds of billions of dollars worth of startups right when they were just one or two people. And today, we have

2. 0:55 – 1:49

   Jessica Livingston: The social radar

   1. GTGarry Tan0:55

      a very special treat. We're sitting down with Jessica Livingston, one of the co-founders of Y Combinator, who actually funded all of us right at the beginning of our careers as founders. Jessica, welcome.

   2. JLJessica Livingston1:08

      Thanks. I'm so excited to be here.

   3. GTGarry Tan1:10

      So we're sitting down with, uh, none other than the Social Radar herself.

   4. SPSpeaker1:17

      (laughs)

   5. JLJessica Livingston1:18

      (laughs)

   6. GTGarry Tan1:18

      Why do we call you the Social Radar, actually?

   7. JLJessica Livingston1:20

      Gosh. I mean, it's a l- it's a little embarrassing, but I have embraced it. Obviously, it's the name of, uh, my podcast. But it all started years and years ago, because Paul used to call me the Social Radar. Because he was always interested in technical elements of founders, and I just dug right in to more personal sides of things, more of their personality, and then it just stuck, and it grew. So I finally have just leaned into it. (laughs)

   8. GTGarry Tan1:48

      So

3. 1:49 – 5:20

   YC was unique from the beginning

   1. GTGarry Tan1:49

      one of the things that really attracted me to YC very early was how different it felt than all the other people who could possibly fund you at the earliest possible stage. It didn't feel like working with a VC or even talking to a VC.

   2. JLJessica Livingston2:04

      Well, Gary, that's what it was meant to do. (laughs)

   3. SPSpeaker2:09

      (laughs)

   4. GTGarry Tan2:09

      Yeah. (laughs)

   5. JLJessica Livingston2:09

      I mean, I'm- I'm making a joke, but we really did start it because there was nothing else like that at the time. And at the time, there were really just... And we were in Boston, which was even more different than Silicon Valley. So there were venture capitalists who wanted to invest millions of dollars in yo- in you, and you needed to have a business plan and an even an idea that was a little bit tested and all of that, or there were random angels. And back then, in 2005, there weren't as many angels at all as there are now. There were no real small seed funds or anything, so we said, "There needs to be a very early stage company that's just gonna write a small check just so a founder can sort of quit their job, pay the rent, and test out if their idea even works before they then go on to raise venture capital money."

   6. GTGarry Tan2:59

      Kind of fitting that the reason why you started YC was because, uh, you had tr- You were talking with a VC in Boston, but then they did the classic VC thing, which is they totally ghosted. (laughs)

   7. SPSpeaker3:12

      (laughs)

   8. JLJessica Livingston3:12

      (laughs) I think it just took them a long time. It was, you know, three weeks ge- would go by. "Oh, can you come in and meet with this person?" And then y- two weeks would go by. "Can you come back in and meet..." So it was just taking a long time. And fortunately for Y Combinator, during this long period of time, I mean, I look back, and I- must have been over a month, maybe a month and a half or two, and every night, Paul would- and I would go out to dinner. And we'd be talking, and he'd say, "Oh, if you go and work at this VC, you know what you should do..."

   9. GTGarry Tan3:48

      (laughs)

   10. JLJessica Livingston3:48

       I mean, you've all been there when he wags his finger at you and say, "You know what you should do..." And we just, every night at dinner, would talk about all these cool ideas, and some of them were things like, "Make sure you don't get on the board of every company. Just fund a lot more, help them get started, have events." I mean, that was a big component, like have a lot events- of events to encourage more people to start startups. I mean, that- VCs were not in the business of encouraging more people to start startups, and we saw that. And so finally, um, Paul said, "You know what? Let's just start our own thing," because it was taking so long, and I said, "Great." And when we first were gonna get started, though, just I know you guys all know this, but we were going to fund companies asynch- asynchronously, just like investors, and we were gonna have a little office in Harvard Square, and so we were gonna sort of be that way in terms of a regular investor. We didn't have the batch idea yet. That came later.

   11. SPSpeaker4:50

       And it had a different name initially, right?

   12. JLJessica Livingston4:52

       Yes. It was called Cambridge Seed, because we were, of course, in Cambridge.

   13. GTGarry Tan4:57

       (laughs)

   14. JLJessica Livingston4:57

       Um, and that did not last long. I did buy the domain, but it didn't last long because, uh, we knew, even then, when, when it was just an idea, we knew, well, maybe we want- we don't want to be, you know, focused in Boston. Maybe we want to have people from Silicon Valley apply. We won't- don't want to limit ourself geographically. So that's when Paul came up with the idea of the name Y Combinator.

4. 5:20 – 13:39

   Why events are so important to YC

   1. HTHarj Taggar5:20

      You mentioned events, and like events have always been, like, the core part of YC.

   2. JLJessica Livingston5:25

      Mm-hmm.

   3. HTHarj Taggar5:26

      Sometimes internally we joke that we're basically an events company that figured out-

   4. JLJessica Livingston5:29

      Yeah.

   5. HTHarj Taggar5:29

      ... a way to, like, monetize events really well. (laughs)

   6. SPSpeaker5:32

      (laughs)

   7. JLJessica Livingston5:32

      (laughs)

   8. HTHarj Taggar5:32

      (laughs)

   9. JLJessica Livingston5:33

      It's true.

   10. HTHarj Taggar5:34

       Um, w- why is that? I'm just curious. Like w- how did you and Paul know early on that events were such an important piece of this? 'Cause it- it's not intuitive. Like most investors don't think, "Oh, we need to have really good events." Like that usually just an afterthought.

   11. JLJessica Livingston5:48

       Yeah. Well, let's see. So, uh, you're right. Events have always been a really important part of YC. And events, I mean, I would call the weekly dinners an event.

   12. HTHarj Taggar5:58

       Yeah, yeah. That's exactly what I mean.

   13. JLJessica Livingston5:58

       Um, just everything. The interviews were an event, and someone had to pl- I- I- someone. I had to-

   14. HTHarj Taggar6:04

       (laughs)

   15. JLJessica Livingston6:04

       ... plan them and get food and make sure everything was running the way-

   16. HTHarj Taggar6:09

       (laughs)

   17. JLJessica Livingston6:09

       ... it should, and everything was an event. So I had an event planning background, so I- it was very easy for me to do this. And as fun- funny as it seems, like Paul, Robert, and Trevor could never have-... planned a dinner.

   18. HTHarj Taggar6:21

       (laughs)

   19. SPSpeaker6:21

       (laughs)

   20. JLJessica Livingston6:22

       You know? But I, I, I am joking about Paul because he actually did have some experience in events. He hosted, um, this an- uh, spa- Anti-Spam Conference, um, that was kind of a model for Y Combinator's early events in that, um, they were very scrappy and cheap. Um, we had stick-on name tags.

   21. HTHarj Taggar6:46

       (laughs)

   22. JLJessica Livingston6:46

       And we just got really good speakers on, on subjects to come and he invited a lot of people who are interested in spam. (laughs)

   23. HTHarj Taggar6:54

       (laughs)

   24. JLJessica Livingston6:54

       You know? There's always an audience for whatever you want to do. And so we sort of saw the value of people coming together, meeting who might not have otherwise met, sharing ideas, and as we funded more and more batches and got more and more alumni, we then realized, whoa, this is a comm- starting to be a community. This isn't just eight startups in the Septem- you know, in the summer 2005 batch. It's starting to become a community and community is obviously an i- really important part of YC's DNA, and events are the best way to optimize the relationships within that community. Um, and so any kind of event that you do, whether it's a ten-person dinner on a specific topic, whether it's, you know, inter-batch random events, alumni, demo days, demo days, like any, anytime you can bring people together with an event, good things always happen.

   25. HTHarj Taggar7:52

       Why do you think... I'm cur- I think I have my answer to it, but why do you think other VCs or just traditional investors just didn't understand how important this piece of investing is and that you and Paul kind of had it baked in from the start?

   26. JLJessica Livingston8:05

       I'd honestly have... I'd be curious to, to find out your, your thoughts. But I think, you know, VCs were very traditional in what they did and they had, you know, assistance planning. They were sort of very separate from the events.

   27. HTHarj Taggar8:21

       Yeah.

   28. JLJessica Livingston8:21

       They had assistants all planning them and thinking, "Oh, this is just a nice-to-have dinner." And I think that because, you know, I was a founder and planning the events and it was so easy for me, we just baked it into what we did, and we had weekly dinners. Like VCs don't have weekly dinners with their investments and we did. So, we were sort of non-traditional in that way always. VCs didn't have demo days. You know, they had their annual holiday party or maybe their summer, you know, event for their portfolio companies. They'd just do one or two events a year and then they'd go to their board meetings.

   29. HTHarj Taggar9:00

       Yeah.

   30. JLJessica Livingston9:01

       Um, and so I don't, I don't know. I think it was just the way YC funded companies. We funded so many that we were always trying to get them together. Our, our weekly dinners and the batches were all around events. The interviews were all ev- round events. I just think it was just baked into the way we did things.
5. 13:39 – 18:02

   The DNA of YC

   1. SPSpeaker13:39

      you wanted to talk about the DNA of YC.

   2. DHDiana Hu13:41

      Mm-hmm.

   3. SPSpeaker13:42

      What was the DNA of YC? How did, how did it get started?

   4. JLJessica Livingston13:46

      The DNA of YC pretty much started with Paul. Um, and, uh, you know, I was there talking to him all about it, but he had a very clear idea that what we were doing at YC was applying, like, mass production techniques to startups. We wanted to make it easy for young technical people to start a startup. Because if you're building something, if you're a programmer or you're technical and you're building something, that's not very far away from being a founder, is it? You just need someone to say, "Here's how you incorporate, here's how you do this." Uh, I mean, tho- that's sort of the easy stuff. The hard stuff is building something people want. So, at the time, and this was sort of... this was all percolating in, you know, early 2005, probably late 2004, um, we saw, you know, it was getting a lot cheaper to s- to start a startup, cheaper to host things. You just needed a laptop. Um, programming languages were more robust. It was just getting easier too, so people really didn't need tons of money. Um, and Paul just thought, "You know, it should be easier for people to start a startup, so let's help them." And he looked back to his experience at Viaweb and remembered the most daunting part of what he did was the legal paperwork.

   5. DHDiana Hu15:10

      (laughs)

   6. JLJessica Livingston15:10

      Like, the incorporating of the company. And his first investor, in fact, was a lawyer, um, and the l- he got the best deal ever. He, you know, he invested $10,000 and did all of their legal paperwork. And by the way, Paul, Robert, and Trevor thought that was an equally great deal-

   7. SPSpeaker15:28

      (laughs)

   8. JLJessica Livingston15:28

      ... um, because they would never have been able to incorporate. They wouldn't have probably been able to find a lawyer. And then there's all the- the paperwork that you have to do to make the investment. So, we thought, "Let's just standardize this. Let's just make it simple and easy." Um, and at the time, that was unheard of. You couldn't just have, you know, fill in the blanks. So, we had our lawyers create all of the- the incorporation paperwork, and you just fill in the blanks. And you know, you, it was pretty simple. Um, and then you had to file it in Delaware, but we- we worked it out so, and saved them so much money. Um, and then we had our own paperwork, which was our investment paperwork, which we sent to all the people who applied, and we said, "Here's the paperwork. Have whoever you want review it so there's no questions." Like, the only thing that's gonna change is, like, the names.

   9. DHDiana Hu16:23

      (laughs)

   10. JLJessica Livingston16:23

       It's a standard deal. And we just thought a standard deal just takes so much complexity out of the equation, and you don't have to go back and forth and have lawyers representing you. It's just a standard deal. So, we wanted to standardize all of this.

   11. SPSpeaker16:36

       That was unprecedented at the time.

   12. JLJessica Livingston16:38

       Unprecedented, yes. Unprecedented. And then we thought the reason we did the batches was because we wanted to sort of learn how to be angel investors. So, we thought let's do... it's coming up on summer, let's do a summer program. We'll get a bunch of grad students, um, and we'll- we'll just learn about how to be angel investors, so we'll do this all at once. And so we posted this online. Paul stayed up all night one night writing, like, the Y Combinator website, so it looked legit. Um, but you have to remember, all that we had was, like, sort of their reputation as Viaweb founders, um, and then Paul's essays. And he, at that time, hadn't written that many.

   13. SPSpeaker17:18

       And your book.

   14. JLJessica Livingston17:19

       That wasn't out yet.

   15. SPSpeaker17:20

       Oh, it wasn't out yet?

   16. JLJessica Livingston17:20

       It was not out yet.

   17. DHDiana Hu17:22

       Ah.

   18. JLJessica Livingston17:22

       So, I was working-

   19. SPSpeaker17:24

       When did the book come out?

   20. JLJessica Livingston17:24

       The book didn't come out till winter 2007, and I actually started working on it in the winter of 2004.

   21. DHDiana Hu17:33

       Oh.

   22. SPSpeaker17:33

       Ah, wow. I didn't realize it was three years. Wow.

   23. JLJessica Livingston17:35

       Yes, three years from-

   24. SPSpeaker17:37

       Books take a while. Yeah, and you have to interview a lot of people.

   25. JLJessica Livingston17:39

       Especially... You d- I had to interview... I was doing this sort of simultaneously. And I have to say, I put the book on the back burner-

   26. SPSpeaker17:46

       Yeah.

   27. JLJessica Livingston17:46

       ... a lot while we were starting YC-

   28. SPSpeaker17:48

       Yeah.

   29. DHDiana Hu17:48

       (laughs)

   30. JLJessica Livingston17:48

       ... because as you can imagine, it was a lot, a lot of work getting it started.
6. 18:02 – 23:07

   The first batch

   1. JLJessica Livingston18:02

      we posted this online, the application, and we... much to our delight, we got a whole bunch of people who wanted to come interview. And so we said, "This is great." And they were all basically Paul Graham followers. Like, and they-

   2. DHDiana Hu18:19

      (laughs)

   3. JLJessica Livingston18:19

      ... um, they all read Slashdot, the Y Combinator's, like, application thing must have shown up on Slashdot. So, they're very technical people-

   4. DHDiana Hu18:26

      Mm-hmm.

   5. JLJessica Livingston18:26

      ... in this first round. But we were delighted. And in that batch were Sam Altman-

   6. DHDiana Hu18:33

      Hmm.

   7. JLJessica Livingston18:33

      ... uh, Steve Huffman and Alexis Ohanian of Reddit, uh, Justin Kan and Emmett Shear of Twitch, Aaron Swartz.

   8. SPSpeaker18:42

      Pretty dense group of...

   9. HTHarj Taggar18:44

      ... talent right there.

   10. GTGarry Tan18:45

       Three out of eight. Those are eight companies, right?

   11. JLJessica Livingston18:47

       Yeah, there were eight companies. (laughs)

   12. GTGarry Tan18:48

       Yeah, pretty good.

   13. JLJessica Livingston18:49

       Pretty good. We didn't realize this at the time because, of course, you know, they didn't seem nearly as impressive as they do now. Um, but they were impressive in their own way. I think even applying, seeking out this new funding, uh, was impressive. And doing this, you know, I remember in, in my, in our interview on my podcast with Steve Huffman, he said that his mom was so skeptical.

   14. HTHarj Taggar19:16

       (laughs)

   15. JLJessica Livingston19:16

       He was just graduating from UVA and instead of going to get a job somewhere at a legit company, he was taking $12,000 from this Y Combinator and that we were gonna trick him into doing this. (laughs)

   16. HTHarj Taggar19:29

       (laughs)

   17. JLJessica Livingston19:29

       So, they were pretty brave to do this. And by the way, you had asked about Y Combinator's DNA, I mean, I think one thing that we had in common and the founders had in common, is that we're unconventional. You know, independent-minded.

   18. GTGarry Tan19:44

       That first batch, which was kind of magical in terms of the group of people and the outcomes, what did it feel like?

   19. JLJessica Livingston19:51

       Going back, you don't really know, uh, you know, what it's gonna turn... Everything evolved very slowly over the years. But that first batch, it was such a, it was like one of the most fun times in my life, 'cause everyone really wanted to be there and really wanted to start a startup, and we wanted to help them. We did not know nearly what we all know now. And by the way, the collective wisdom of Y Combinator is like a million times better than we had back then. Um, but we helped them a little, and it just felt very magical. We'd come together every week. I mean, a lot was still the same as that happens now. We'd come together every, it was Tuesday nights, Paul would cook. I'd go to the grocery store, and he'd, he'd be frying up onions and cooking chili-

   20. HTHarj Taggar20:39

       (laughs)

   21. JLJessica Livingston20:39

       ... in our Crockpots. That was real. And we'd just talk and we'd have guest speakers, and I, I laugh because the guest speakers, it was like anyone we knew in Boston who had accomplished anything related-

   22. HTHarj Taggar20:51

       (laughs)

   23. JLJessica Livingston20:52

       ... to startups. We had like lawyers talking about patent law, which of course when you're early-stage startups, not the like most important thing. But we brought in these wonderful speakers who like, you know, loved coming and it was such a novel thing to come talk to a bunch of young startup founders in a group. I mean, I don't really think that happened much back then. Um, and it felt exciting, and, and by the way, these founders were making progress, and Reddit launched and that was legit very early on. That's when it felt like, "Hey, we're onto something here." And this batch thing is even more special because people became friends and people encouraged each other within it. And that's when Paul said, in like September, "Oh, we have to do this out in Silicon Valley."

   24. GTGarry Tan21:43

       Mm-hmm.

   25. JLJessica Livingston21:44

       (laughs)

   26. HTHarj Taggar21:44

       It's crazy. It's almost 20, almost 20 years ago now.

   27. JLJessica Livingston21:48

       Yeah.

   28. HTHarj Taggar21:48

       It's only funny if you don't remember this-

   29. JLJessica Livingston21:49

       Mm-hmm.

   30. HTHarj Taggar21:49

       ... but like just how... Do you remember what the night before the first dinner was like, or just like what were you expect...
7. 23:07 – 28:00

   YC dinners were strong motivators to work hard

   1. HTHarj Taggar23:07

      thing I remember from our first YC dinners in 2007-

   2. JLJessica Livingston23:10

      Mm-hmm.

   3. HTHarj Taggar23:11

      ... is that dinners were actually quite stressful as a founder because-

   4. JLJessica Livingston23:13

      Really?

   5. HTHarj Taggar23:14

      ... you would come in and people would just get their laptops out. They'd be showing each other what they'd built. I'd always feel quite insecure. I was nowhere near as good of a programmer as like pretty much everyone else in the batch. And so everyone else was just like able to get lots of stuff done, and you never wanted to come to the dinner and feel like you didn't have new stuff to show. Is that something that just like happened, or-

   6. JLJessica Livingston23:35

      That just happened. Yeah, that was just a natural thing, and I think it's a good thing.

   7. HTHarj Taggar23:40

      Yeah.

   8. JLJessica Livingston23:40

      Sorry if it was stressful.

   9. HTHarj Taggar23:41

      No, it's o-

   10. GTGarry Tan23:42

       (laughs)

   11. HTHarj Taggar23:42

       It was a good kind of stress.

   12. JLJessica Livingston23:43

       You know. It was good stress.

   13. HTHarj Taggar23:43

       It meant that like it just made me work really hard during the week-

   14. JLJessica Livingston23:46

       Yeah.

   15. HTHarj Taggar23:46

       ... 'cause you didn't want to turn up to a dinner and be like, "Oh yeah, like just chilled out this week."

   16. GTGarry Tan23:51

       Well, th- that, that was part of the magic of founding companies in batches is you could see what your peers-

   17. HTHarj Taggar23:56

       Yeah.

   18. GTGarry Tan23:57

       ... were doing, and there was a, there was... It was possible for the first time for you to compare yourself to what other early-stage founders were doing.

   19. HTHarj Taggar24:05

       It was huge for me 'cause I'd moved from London, and any startup event I'd been to in London was all just a bunch of people hanging around like talking about business plans or just like, the like, I-

   20. GTGarry Tan24:16

       That's the default world. (laughs)

   21. HTHarj Taggar24:17

       Yeah.

   22. JLJessica Livingston24:18

       Yeah. (laughs)

   23. HTHarj Taggar24:18

       It was totally the new default-

   24. GTGarry Tan24:19

       Business.

   25. GTGarry Tan24:19

       Out there. Business land.

   26. HTHarj Taggar24:21

       It was just lots of mentors around who had never actually like started a startup either, but just s- like-

   27. JLJessica Livingston24:26

       Right.

   28. HTHarj Taggar24:26

       ... liked to like talk to young people about them. And so-

   29. GTGarry Tan24:29

       And they had really nice degrees or worked at really fancy places.

   30. HTHarj Taggar24:33

       And so I had a feeling, a- and I didn't really know.... that much about Y Com- like, I had Googled, I had stumbled across a PGSA, then clicked through and read about this thing called Kiko, Justin and Emmett's thing-
8. 28:00 – 29:57

   Why YC alumni help new founders

   1. JLJessica Livingston28:00

      Well, that, this is the thing that goes back to the community and the essence of Y Combinator. I mean, again, very early, we realized, okay, we have to get the alumni to help the new people, 'cause by the way, we didn't have tons and tons of contacts at that point. Our best contacts were our alumni. So every single batch, they'd come back to talk and help, and they'd always be there to ad- help advise.

   2. HTHarj Taggar28:24

      Mm-hmm.

   3. JLJessica Livingston28:25

      And I think it was a really powerful part of Y Combinator, and continues to be a really powerful part.

   4. HTHarj Taggar28:30

      I also just remember the alumni would always, um, be mind-blown at how big the batch was.

   5. JLJessica Livingston28:35

      (laughs)

   6. JFJared Friedman28:37

      (laughs)

   7. HTHarj Taggar28:37

      (laughs) 'Cause our batch-

   8. JFJared Friedman28:38

      "15 companies, 20 companies, can you believe it?"

   9. HTHarj Taggar28:41

      They were like, our batch was like 15 and their batch was like nine or something, they were like, "Oh my God." Like, "We can't believe this works when you go from nine to 15."

   10. JLJessica Livingston28:48

       (laughs)

   11. HTHarj Taggar28:48

       It's crazy. (laughs)

   12. JLJessica Livingston28:50

       It's true. It's true.

   13. DHDiana Hu28:50

       That comment is prescient. (laughs)

   14. HTHarj Taggar28:52

       Yeah. (laughs) basically just the perennial thing is, "Ah, the batches are, like, so big."

   15. JLJessica Livingston28:56

       Yeah.

   16. JFJared Friedman28:57

       So since I was in the third batch of Y Combinator, one of the most common questions I get when I talk to founders is like, "Well," like, "how is it different from when you did YC back in, you know, back in the third batch?" And the remarkable thing is how little it's changed, really from the first batch. I mean, around the edges, we've made incremental upgrades to some of the details, but like, the core structure of YC in summer '24 is exactly the same as the original summer 2005 batch. It's, like, pretty remarkable to ship a product whose V1 just, like, stays unchanged for such a long time.

   17. JLJessica Livingston29:34

       It is pretty remarkable. I think about that a lot actually, and obviously, Y Combinator is on a whole new level now with, again, all of the knowledge and all of the connections and its brand and everything, but it is true that, that the, the core of it is the same, and I just think that's so cool. Don't change it if-

   18. JFJared Friedman29:55

       (laughs)

   19. HTHarj Taggar29:55

       (laughs)

   20. JLJessica Livingston29:55

       ... it ain't broke, right?

   21. JFJared Friedman29:56

       Agreed. Well, Jessica,

9. 29:57 – 35:55

   YC going from underdog to serious + desired

   1. JFJared Friedman29:57

      one of the things that I'm really curious to ask you is, you know, we're talking about early days, '05, '06, '07. At some point, maybe '09, '10, '11, '12, YC went from, like, the underdog, where there was-

   2. JLJessica Livingston30:12

      Mm-hmm.

   3. JFJared Friedman30:12

      ... the Y Combinator effect. You'd bring in a speaker and they would be s- they would, they would come in, I think you said it was sort of like speaking to a, a Boy Scout troop-

   4. JLJessica Livingston30:21

      Yeah.

   5. JFJared Friedman30:21

      ... or expecting that, and then coming away, realizing, "Oh, these are actually really serious builders."

   6. JLJessica Livingston30:26

      Yeah, that happened all the time. People would w- come in thinking like, "Oh, I'll go in and talk to these little founders."

   7. JFJared Friedman30:33

      (laughs)

   8. JLJessica Livingston30:33

      And then they'd walk away being like, "Whoa. Well, actually, there might be some I'd like to invest in," or, "This is pretty serious." Yeah.

   9. JFJared Friedman30:39

      And then that changed at some point, maybe around 2011 when companies started getting $150,000 uncapped-

   10. JLJessica Livingston30:46

       (laughs)

   11. GTGarry Tan30:47

       It used to be, you know, $10,000 or $20,000. I think when I got into YC, my boss at the time said, "Oh, uh, you're quitting to go do this thing for how much? Like $15,000? Gary, do you have money problems?"

   12. JLJessica Livingston31:00

       (laughs)

   13. HTHarj Taggar31:01

       (laughs)

   14. GTGarry Tan31:01

       But then it changed, like, pretty dramatically. You know, it went from sort of the underdog that people didn't really believe in to suddenly something that people were sort of seeking out.

   15. JLJessica Livingston31:10

       Yeah.

   16. GTGarry Tan31:11

       Like, were there things that... Did you guys have lots of discussions, like, really in that moment, going from the underdog to now we're sort of the thing?

   17. JLJessica Livingston31:20

       No. B- I mean, we had lots of discussions, but it, it really did happen slowly, in hindsight. And there are all these little data points that changed and little contributors that I don't know which is the most important. I think probably the most important is that the companies (laughs) that we funded became well-known. You know, I remember when Dropbox started doing really well and everyone was using it. That added so much legitimacy to Y Combinator. Like, "Oh, Dropbox was funded by Y Combinator," and Reddit, of course, um, and then, you know, Airbnb. I'm th- I'm, I'm sure I'm forgetting other, other companies. Justin.tv. Um, s- people started taking us more seriously because of that. Then we'd get, you know, more press articles here and there. That sort of grew and added some legitimacy. I mean, at the beginning, it was like, I felt like it was a couple of years before anyone ever wrote about us. And then, of course, we'd always be inviting people to speak, and as the speakers became more eminent, they'd leave the dinner and think, "Wow, that was actually really impressive." So it was a lot of word of mouth. So I don't, I don't really know what the main change was. It was very organic.

   18. HTHarj Taggar32:32

       H- how about the challenges? How about the challenges of running YC? Like, how did they change once YC went from-

   19. JLJessica Livingston32:38

       Oh.

   20. HTHarj Taggar32:38

       ... underdog that no one took very seriously to, like, you know, the preeminent place to start a company?

   21. GTGarry Tan32:45

       Were there suddenly a lot of scenesters?

   22. JLJessica Livingston32:47

       Uh.

   23. GTGarry Tan32:47

       Like, there were probably always scenesters-

   24. JLJessica Livingston32:49

       Yeah.

   25. GTGarry Tan32:49

       ... and at Social Radar, you probably had to keep those out.

   26. JLJessica Livingston32:52

       I'm wondering if you're referring to applicants, investors, who? Like-

   27. GTGarry Tan32:56

       Maybe all of the above, right? I mean-

   28. JLJessica Livingston32:56

       ... 'cause there were scenesters. All of the above. Actually, one of the other bizarre data points was... Do you remember the movie The Social Network?

   29. GTGarry Tan33:03

       Oh, yeah.

   30. JLJessica Livingston33:04

       Yeah. That came out, and I swear, I have no proof, but I swear that sort of legitimized the idea of doing a startup in the eyes of- Oh, it did.
10. 35:55 – 41:33

    Harj’s legendary meeting with Yuri Milner

    1. HTHarj Taggar35:55

       Yeah. (laughs)

    2. JLJessica Livingston35:55

       'Cause it was very unexpected.

    3. HTHarj Taggar35:57

       Yuri Milner, uh, sort of the famous Russian billionaire investor, investor in Facebook, he... I think he was introduced to us through Ron, actually, through SV Angel.

    4. JLJessica Livingston36:07

       Okay.

    5. HTHarj Taggar36:07

       We're like, "Uh, hey, this person wants to meet Y Combinator to talk about ways to do things together."

    6. GTGarry Tan36:13

       Silicon Valley godfather, Ron Conway.

    7. HTHarj Taggar36:16

       (laughs)

    8. GTGarry Tan36:18

       (laughs)

    9. HTHarj Taggar36:18

       We should all take a moment.

    10. GTGarry Tan36:19

        (laughs)

    11. HTHarj Taggar36:20

        (laughs) Um, and PG forwarded me the email saying, "I don't wanna meet this person. Can you meet them?" And I was like, "Sure." And so then they met at the YC, we met at the YC office, and, uh, Yuri comes in with his, uh, associate or par- or partner, Felix. And he just... I'm like, "Hey, so what, what would you, you know, how could I help? What, what could we do?" He just immediately says, "I want to fund all the startups." (laughs)

    12. GTGarry Tan36:46

        With his, like, thick Russian accent, right?

    13. HTHarj Taggar36:46

        Yeah, thick Russian accent.

    14. GTGarry Tan36:48

        (laughs)

    15. HTHarj Taggar36:48

        I'm like, "What exactly do you mean?" He's like, "I want to fund all your startups."... now. (laughs)

    16. JLJessica Livingston36:57

        (laughs)

    17. GTGarry Tan36:57

        (laughs)

    18. HTHarj Taggar36:57

        (laughs) And I got a few more words out of him, and I realized he genuinely wanted to just invest in all of the companies in the batch on the spot. And so, PG, who'd been trying to avoid the sp- I could see PG doing office hours out in the, um-

    19. JLJessica Livingston37:09

        Oh, he was there?

    20. HTHarj Taggar37:10

        ... he was there doing office hours. And he was just, like, trying to avoid having to come into the room. I could see him sort of wandering around. And then I came out, I was like, "PG, you have to come in." He's like, "I'm not taking, I'm not, like, I'm not gonna meet," like, "I don't do meetings." (laughs) And I was like, "No, you really have to come in for this one." And PG comes in and realizes that Yuri is actually very serious about wanting to fund all of the startups. And so then I think that weekend, we basically just came up with all the paperwork. Carolyn Levy came in and just got it done to announce to the companies in that batch that they were all gonna get $150,000, like, uncapped, safer.

    21. GTGarry Tan37:46

        But you kept it a secret. So I remember I was a-

    22. JLJessica Livingston37:48

        Yes. Yes.

    23. GTGarry Tan37:48

        ... designer in residence at the time, and so I got the same email that the founders got. And the founders, they were all speculating, like, "What is this?" It was, I think, a Friday night, and-

    24. JLJessica Livingston37:58

        Oh, yes, we had a special one-off dinner.

    25. HTHarj Taggar38:00

        Yeah.

    26. GTGarry Tan38:00

        It was a special meeting that you had to be at.

    27. JLJessica Livingston38:01

        That's right.

    28. GTGarry Tan38:01

        And it was very mysterious, and it said you had to be there. And the batch thought, like, "What? Is Obama coming to speak? What's going on?"

    29. HTHarj Taggar38:08

        There were all sorts of rumors. There was Obama, Oprah, Steve Jobs. Like, everyone (laughs) was just like-

    30. JLJessica Livingston38:13

        I would have been psyched.
11. 41:33 – 46:12

    The first YC startup school

    1. GTGarry Tan41:33

       Do you wanna talk about the very first Startup School? How you guys came up with the idea of Startup School? We actually just hosted one-

    2. JLJessica Livingston41:39

       (gasps)

    3. GTGarry Tan41:39

       ... here, like, two months ago. But I always think about the Startup School event as, like, such a perfect example of how you wanted to just get more people to start startups-

    4. JLJessica Livingston41:48

       Yeah.

    5. GTGarry Tan41:48

       ... whether you funded them or not.

    6. JLJessica Livingston41:50

       Yes, yes. I would love to talk about. Startup School, if you've ever listened to my podcast, is a recurring theme because it, it was one of the highlights of my year, but it was also the most stressful.

    7. GTGarry Tan42:01

       (laughs)

    8. JLJessica Livingston42:01

       There was always something that went wrong. Um-

    9. GTGarry Tan42:03

       Sounds familiar to me.

    10. JLJessica Livingston42:05

        (laughs)

    11. GTGarry Tan42:06

        (laughs)

    12. JLJessica Livingston42:06

        And yeah, you were, we met you at Startup School because you were taking-

    13. GTGarry Tan42:09

        Yeah, 2008.

    14. JLJessica Livingston42:10

        2008. You were taking photos for us.

    15. GTGarry Tan42:11

        Yeah. That's right.

    16. JLJessica Livingston42:12

        And I was like, "Great. Some guy down there who I've never met is taking photos. I'm gonna get in touch with him, and hopefully he can give them to me for free."

    17. GTGarry Tan42:19

        Yep.

    18. JLJessica Livingston42:19

        Which you did.

    19. GTGarry Tan42:19

        I sure did.

    20. JLJessica Livingston42:20

        (laughs)

    21. GTGarry Tan42:20

        I just wanted you to fund my startup postures, which you did.

    22. HTHarj Taggar42:24

        (laughs)

    23. JLJessica Livingston42:24

        (laughs)

    24. GTGarry Tan42:24

        (laughs)

    25. JLJessica Livingston42:25

        So the first Startup School definitely was based on Paul's spam conference. Again, the stick-on labels, the, um, sort of very inexpensive venue, which was Harvard University. So you probably... Did you come to the first Startup School?

    26. HTHarj Taggar42:43

        I was there.

    27. JLJessica Livingston42:43

        Okay, you were there. And we partnered with the, you know, undergraduate group of programmers.

    28. GTGarry Tan42:49

        Yeah.

    29. JLJessica Livingston42:49

        And they got the venue. So we didn't have to pay for this 'cause the whole thing was we don't have a lot of money to pay for things. And then it was like, "Okay, we have a venue. We have some people who want to come." It will be open to not just Harvard students, but we'll just post it online and anyone who wants to come can apply, but with three questions. You know, it was like there was enough space for most people. And we just invited people. And...... we got Steve Wozniak.

    30. GTGarry Tan43:16

        (laughs)
12. 46:12 – 50:08

    Diana’s experience going through YC

    1. HTHarj Taggar46:12

       you, Diana? Come, do you remember where you heard about YC the first time and then just, like, your... 'Cause you traveled the furthest, I think (laughs) -

    2. JLJessica Livingston46:19

       Yeah.

    3. HTHarj Taggar46:19

       ... um, to get here?

    4. DHDiana Hu46:21

       Yeah, because I grew up in Chile. I came to study in the US, engineering, and I happy to get, happened to get lucky to get surrounded by a bunch of nerds in, uh, CMU in, in computer science. Used to hang out in the computer labs. And everyone was really into Paul Graham's essay, particularly started more from his thoughts and around functional programming and Lisp, because it's just very elegant for anyone that's into programming. And then you play the links clicking and you just read through the, his whole page. That's kinda what I did. And I was like, "Wow, this is so cool. I didn't know that you could start a company and then learn about Y Combinator and all of this." And that's kinda what got me into it. And I think what stood out to me as well, coming into some events for YC later on, was this aspect of, uh, as you describe it, very earnest. Because there were so many of these other events that I've been to that are very pretentious.

    5. JLJessica Livingston47:19

       Yeah.

    6. DHDiana Hu47:19

       That there's a, I don't know, people are saying a lot, but without content. Or these are the names.

    7. JLJessica Livingston47:24

       That sounds familiar. (laughs)

    8. GTGarry Tan47:26

       (laughs)

    9. DHDiana Hu47:26

       Yeah. (laughs) Or people just want to know, and if you don't have certain stature, they just skip and don't talk to you. But there's a genuine aspect of people are curious about what you have to say. And it was just cool. And I think to this day, we get a lot of attendees, even at Startup School, and hearing this, "Wow, this is, like, one of the best events." We hear a lot of things that are not said anywhere else. And it's just very humble.

    10. JLJessica Livingston47:52

        Yup, I mean, I'd say everyone there, all the partners there are just super, they're nerds, and they're super startup fans, and they're genuinely interested in you and your idea. And it doesn't matter what your background is or where you went to school. And I'm glad to hear that you felt like that, even in 2018.

    11. DHDiana Hu48:11

        Yeah, it still lived on. I think it's so special that that spirit's still there. And that was what felt special about YC, is like the first place that I felt that I kinda belonged, because I've been always the weird kid, kinda like sheltered, didn't get along with anyone because everyone was, I don't know, into sports or something. (laughs)

    12. GTGarry Tan48:29

        (laughs)

    13. JLJessica Livingston48:29

        You know, it's so great that you say that, Diana, because I feel like that's one of the sort of last things I wanted to mention about Y Combinator's DNA, that it is a special place that all these people who might've felt like they were different or outsiders or somehow unconventional come to YC and they think, "Wow, I've found my people. Like, I can do my thing here."

    14. GTGarry Tan48:53

        That was exactly how I felt. Yeah.

    15. GTGarry Tan48:55

        Yeah, me too.

    16. HTHarj Taggar48:55

        I, I think people don't appreciate just how difficult that was to make happen, because I, I remember actually when I was first thinking about joining, or actually joining YC sort of officially full-time as a partner, I, I spoke to a bunch of people like, "Should I do this or not?" Um, and a lot of the advice I, a lot of the conventional wisdom, this is like 2010, was that, "Oh, like, YC's great, but it's never gonna produce, like, the really outlying companies, because the really outlying founders don't want to be a part of a community. They just like, they're too oddball, they're too out there." Like, they have to be, like, um, outsiders, like, by nature. Um-... and so you just won't get, like, a Steve Jobs doing YC. And this is, like, a bunch of people told me this.

    17. JLJessica Livingston49:35

        I feel like Steve Jobs might have done YC.

    18. GTGarry Tan49:37

        Yeah. Like, I, I think that-

    19. JLJessica Livingston49:39

        I really do.

    20. GTGarry Tan49:39

        Yeah. I-

    21. JLJessica Livingston49:40

        If only for the money. (laughs) You know? I don't know.

    22. GTGarry Tan49:42

        (laughs)

    23. JLJessica Livingston49:42

        Like, easy money.

    24. HTHarj Taggar49:43

        Not if the events had sponsors or a whole bunch of other things.

    25. GTGarry Tan49:46

        Right, yeah.

    26. JLJessica Livingston49:46

        But, like, that, that to the point is, like, it's actually a really hard product to build, something that's, like, a community for people. Like, I do think there is a grain of truth to it.

    27. GTGarry Tan49:54

        I do think it's true that most of... those people don't want to be part of most communities.

    28. HTHarj Taggar49:57

        Yeah.

    29. JLJessica Livingston49:58

        Yeah.

    30. GTGarry Tan49:58

        You have to create a very unique-
13. 50:08 – 58:05

    Lessons from interviewing so many founders

    1. GTGarry Tan50:08

       it possible that you have interviewed, in the course of your career, more founders than anyone else? Between interviewing all the founders for your book, interviewing founders at startup school, doing the batch talks, and now running your podcast, where you interview successful founders, you've interviewed so many of the most successful founders, and you've also met so many of the most successful founders back when they were teenagers, before anybody knew them.

    2. JLJessica Livingston50:33

       Yeah.

    3. GTGarry Tan50:34

       And so, I think it'd be super interesting for everyone to hear what you've learnt from getting to know all of these founders.

    4. JLJessica Livingston50:41

       Gosh.

    5. GTGarry Tan50:42

       What are your takeaways?

    6. JLJessica Livingston50:43

       Oh, that's such a heavy question. (laughs)

    7. GTGarry Tan50:44

       (laughs)

    8. HTHarj Taggar50:45

       I, I'd say as a, a narrow thing I'm interested in is just, if you think of some of the now really successful founders that you met when they were teenagers, essentially, what changed about them as they became really successful? And what stayed the same?

    9. JLJessica Livingston50:58

       I'll do narrow first, and then I'll go, I'll work up to going broad. So obviously, I've met a lot of, uh, founders, YC founders and non-YC founders-

    10. HTHarj Taggar51:09

        Yeah.

    11. JLJessica Livingston51:09

        ... who we'd invite as speakers, or that I interviewed at Founders at Work, like, for example, Evan Williams was in Founders at Work, talking about blogger.com.

    12. HTHarj Taggar51:19

        (laughs)

    13. JLJessica Livingston51:19

        I mean, this was even-

    14. HTHarj Taggar51:20

        Yeah.

    15. JLJessica Livingston51:20

        ... before Twitter was a twinkle in his eye. So I, I did know a lot of founders back in the day. They were all very smart, very curious, very independent minded. I mean, I just can't reiterate that enough, how you, you cannot be conventional minded to s- start a startup with a brand new idea, um, 'cause you're going against the norm and you're going against people saying, "Well, I don't think that that's a really good idea." Um, they're all very determined. Um, they're all, like, willing to, um, hustle if they need to get something, even if other people say, "No, that's not gonna work." Um, so that was always the same. But as they get more successful, I think they become more confident, and I'm not saying, like, (laughs) these founders were, like, basket case, insecure basket cases before, but they weren't confident. They're, you know, teenagers in some cases. Um, but they had a certain level of confidence in what they were doing. Do you know what I mean? And that's different from being confident in the world.

    16. GTGarry Tan52:26

        Yeah.

    17. JLJessica Livingston52:26

        But they felt like, "I'm building this thing that is good, and here's why I think it needs to exist." You know? They had that kind of level of confidence. But then, as they get much more successful, I don't think they change that much. I mean, maybe their lifestyle changes, certainly, but I think that they're true to themselves, I think, 'cause it's all about the idea. Um, and I, I think you get, like, let's just say movie stars in Hollywood, I bet they change a lot-

    18. GTGarry Tan52:56

        (laughs)

    19. JLJessica Livingston52:56

        ... as they get more successful, but I feel like startup founders, some of 'em are celebrity levels, um, and some do change, you know, in their, their outlook. But I think a lot don't change that fundamentally, um, just that they have more confidence. They have a lot more people who are saying yes to them-

    20. HTHarj Taggar53:16

        (laughs)

    21. JLJessica Livingston53:16

        ... uh, for sure. It's harder to get what you need and get, you know, meet people and things when no one knows who you are. And as you were saying, you sort of get written off 'cause you don't have the, um, the pedigree. Um, but they don't change, I don't think, that much.

    22. DHDiana Hu53:32

        Could you tell, uh, early on, uh, some stories of these very successful founders now? What, what do you see in them when they were in early 20s, teens?

    23. GTGarry Tan53:42

        Yeah. You know, you, you, you knew Sam Altman, the founders of Reddit, the founders of Stripe when they were teenagers.

    24. JLJessica Livingston53:49

        Yeah. Yeah.

    25. GTGarry Tan53:49

        What were they like as teenagers-

    26. JLJessica Livingston53:51

        Sam was a teenager.

    27. GTGarry Tan53:51

        ... at the very beginning of their career?

    28. JLJessica Livingston53:53

        I gotta say this without offending anyone-

    29. GTGarry Tan53:55

        (laughs)

    30. DHDiana Hu53:56

        (laughs)
14. 58:05 – 58:59

    Outro

    1. GTGarry Tan58:05

       thank you so much for coming and telling us all the old war stories of building YC and weaving the DNA that has turned into this sort of tree of prosperity. It's really crazy to have you back here, and thank you. Thank you for building this.

    2. JLJessica Livingston58:21

       You're so welcome. It was, like, the pleasure of a lifetime. And I love being here this morning and chatting with you all, like, I love to chat about old stories. So-

    3. GTGarry Tan58:32

       (laughs)

    4. JLJessica Livingston58:33

       ... thank you for giving me the opportunity to do that.

    5. GTGarry Tan58:35

       Thanks so much for coming.

    6. DHDiana Hu58:36

       Yeah, thanks.

    7. JLJessica Livingston58:36

       Thanks, you guys.

    8. GTGarry Tan58:37

       So if you like this, go check out her podcast with Caroline Levy called The Social Radars, and we'll see you next time.

    9. DHDiana Hu58:44

       It's really good.

    10. GTGarry Tan58:46

        Check it out. (instrumental music)

Episode duration: 58:59