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Y CombinatorSuccessful Founders Are OK With Rejection – Dalton Caldwell and Michael Seibel
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CHAPTERS
- 0:00 – 1:37
Rookie Mistake: Not Talking to Users Enough
Michael Seibel introduces the Rookie Mistakes series and reads a founder's note about doing daily user calls instead of brainstorming in a silo. Dalton Caldwell says founders' ideas about what people want are embarrassingly wrong once exposed to reality, and talking to users is an inoculation against wasted effort.
- •Founders' note: do at least one user call per day early on
- •Don't brainstorm ideas in a silo
- •Founders' assumptions often collapse when real people use the product
- •Watching users rip apart your product is humbling
- •Talking to users guards against building irrelevant things
- 1:37 – 2:55
Why Surveys Fall Short: Get Customers to Pay
Seibel asks whether surveys are the most efficient way to learn what customers want. Caldwell says surveys suit micro-optimizations like choosing between names, but for validation the harder bar is getting someone to pay, use the product daily, or install it.
- •Surveys are fine for choosing among four company names
- •Surveys are weak for finding fundamental truths or a first customer
- •Getting someone to pay is a much higher bar than filling out a survey
- •People say an idea sounds useful but would never pay a dollar for it
- 2:55 – 5:27
Airbnb: Learning from Real Hosts, Not Surveys
Seibel notes that surveys hide the few users with real expertise. He tells the early Airbnb story of offering free photos to hosts, where one host shared a decade of notes on what other platforms did well and badly. Caldwell argues that actually trying to make the business work taught far more than a survey would have.
- •Only a tiny subset of users have real expertise
- •Airbnb offered free photos to hosts listing on other platforms
- •A host with a decade-long notebook of platform pros and cons shared it with them
- •Surveys would have yielded little, or even negative, signal
- 5:27 – 9:28
Twitch: Interviewing Streamers Reveals Easy Wins
Seibel recounts how, during the pivot from Justin.tv to Twitch, the team interviewed video game streamers. Despite having built every feature of a live video social site, streamers first asked for higher stream quality and a way to make money, both easy to build.
- •The team hadn't talked to users for years at Justin.tv
- •Streamers' first request was higher quality streaming, a simple setting change
- •Streamers also wanted to run ads on their own streams to make money
- •Even five years in, experts were surprised by what users said
- •Users' requests were far easier than the months-long projects on the brainstorm list
- 9:28 – 10:52
Financial, Time and Social Capital as Real Validation
Seibel shares a YC founder's quote that a customer's opinion matters only if they pay, use the product regularly, or share it with friends. Caldwell says founders struggle because of a human desire to be loved and avoid rejection, and that ego protection is the core issue.
- •Three forms of capital: financial, time, and social
- •Opinions without commitment aren't valuable
- •Wanting to be loved makes rejection hard to seek out
- •Ego protection underlies many founders' avoidance
- •Overcoming it is inner, personal work
- 10:52 – 12:52
Be Scientific: Test the Key Hypothesis
Seibel asks founders to imagine themselves as scientists choosing experiments that truly test their hypothesis. He cites the Stripe founders, who tested whether startups would use an easier product by charging more than competitors.
- •Many founders avoid testing their key hypothesis to protect their ego
- •Fear of investors, co-founders or being wrong drives avoidance
- •Stripe founders built an easier product for developers and charged more than the competition
- •A scientist would see charging more as a logical test, though founders see it as crippling
- 12:52 – 14:15
Polite Rejections and Spotting a Real Customer
Seibel reads a founder's note about a customer who loves the tech but can't adopt it today, calling it a rejection. He asks how to tell a live customer from someone being polite, and Caldwell says a dispassionate scientist would accept the no and move on.
- •"We love it but can't pick it up today" is effectively a rejection
- •Polite customers may just want you out of the office
- •Seibel poses how to tell a real customer from a polite one
- •Caldwell: a scientist would accept the no and go on to the next thing
- 14:15 – 16:34
Sales as Learning and Filtering
Seibel argues founders misunderstand sales as convincing, like a lawyer persuading a jury. He says the best salespeople spend their time learning and filtering, so a fast no is a gift, and calls should open with questions that let customers disqualify themselves.
- •Founders often think sales means convincing
- •Best salespeople focus on learning and filtering
- •A quick no teaches you about other customers who will also say no
- •Every call should begin with questions that let the customer disqualify themselves
- •Many calls should end within five to ten minutes
- 16:34 – 17:48
Having a Strong Ego and Accepting Rejection
Seibel and Caldwell tie the themes together: accept no, test the core hypothesis, and don't feel bad when someone doesn't want your product. Seibel says people avoid talking to users because it feels bad, and compares it to a marathon runner who must stay logical despite cramped legs.
- •Common themes: accepting a no and testing the core hypothesis
- •Don't spiral into self-doubt when someone doesn't want to buy
- •There are lots of other people out there
- •People avoid user talks because it makes them feel bad
- •Staying productive, logical and scientific despite feeling bad is the job
- 17:48 – 20:18
Employee vs Founder: Living Without a Filter
Caldwell frames the issue as a trade-off between being an employee and a founder. Employees have layers of management shielding them from external feedback, whereas founders face unfiltered reality and must be the filter for others. Seibel adds that it's more fun to see the sky with your own eyes.
- •Employees at big companies are protected by layers of managers and feedback
- •Founders have no managers and no filter
- •Founders must tell their team it's all going to be okay
- •Many people aren't mentally prepared for unfiltered reality
- •Seibel argues unfiltered reality is more fun
