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Y CombinatorY Combinator

The Hard Conversations Founders Don't Want to Have

In this video, Y Combinator partners Michael Seibel and Dalton Caldwell discuss the importance of having honest and difficult conversations with startup founders. While having hard conversations can be uncomfortable, Seibel and Caldwell argue that this transparency is essential for founders to grow and ultimately, these experiences help founders have their own hard conversations that they've been avoiding with the people around them. Apply to Y Combinator: https://yc.link/DandM-apply Work at a Startup: https://yc.link/DandM-jobs Chapters (Powered by https://bit.ly/chapterme-yc) - 00:00 - Intro 00:39 - Definition 02:35 - Being likable 03:52 - Validating decisions 06:54 - Fundraising 08:31 - Deep dives 11:37 - Co-founders 15:42 - Employees 18:37 - Nobody's perfect 19:50 - Outro

Michael SeibelhostDalton Caldwellhost
Feb 23, 202321mWatch on YouTube ↗

Summaries, chapters, transcripts, and FAQs on this page are made by uListen, not YouTube.

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  1. 0:00 – 0:39

    Intro

    1. MS

      I think so much about being a YC partner is like, is, is exactly that. Like, I've made all these mistakes before [laughs]

    2. DC

      And I'll probably make them again.

    3. MS

      And I'll probably make them again. And the only thing that I could say is I know the way out. [laughs] This is Michael Seibel with Dalton Caldwell. At YC, we often have to have challenging conversations with founders when giving them advice. Today, we would like to talk through some of the hard conversations that founders don't want to have. Dalton, why don't you, uh, set this up for us?

  2. 0:39 – 2:35

    Definition

    1. DC

      Well, look, let's start by trying to define a hard conversation. By definition, if it's a conversation you're looking forward to having, it is not a hard conversation.

    2. MS

      [laughs]

    3. DC

      A hard conversation sucks.

    4. MS

      Yeah.

    5. DC

      That's why it's called a hard conversation. You don't wanna have them. They're bad, right? Um-

    6. MS

      Or they don't feel good

    7. DC

      ... and so-

    8. MS

      They don't feel good

    9. DC

      ... they don't feel good.

    10. MS

      They don't feel good.

    11. DC

      You dread, you dread the hard conversations. And so, you know, a hard conversation is when the stakes are high. Like, it could go bad. It could go off the rails. It could be you're saying something risky or you're making a point. Um, maybe you're doing something that's impolite or saying something that's impolite. 'Cause again, think about an easy conversation. Easy conversation is superficial. You just agree with someone. You're just like, "Hey, you're great. Way to go." That's an easy conversation, right?

    12. MS

      Yes.

    13. DC

      Hard conversation is not that. Um, a hard conversation is when you're vulnerable. You're putting yourself out there. You're saying something that someone in the conversation is in a, is uncomfortable.

    14. MS

      You know, it's funny was as you set that up, what's tricky being a startup advisor is that you know it's gonna help someone to have hard conversations with them, but you also know that they're not going to enjoy it. And I think as an, as a, as a YC partner in the early days, I think I measured my effectiveness based on how much fun founders had talking to me. And, and, and only after a couple batches did I realize that doesn't really do anything. Um, and then when I started having honest conversations and talking about, like, my actual opinions about their product or about how hard they were working, oof, like the job changed. [laughs] Did you experience

  3. 2:35 – 3:52

    Being likable

    1. MS

      that?

    2. DC

      Yeah. I mean, if you just agree with someone, it's easy to, you know... And you, like, mirror their body language. Like, there's all these techniques you can do to be likable, where you're like, "Oh, wow," like, "You're so smart. Everything you say is correct. Ha ha ha, your jokes are funny." You know, you can do this stuff.

    3. MS

      Yes.

    4. DC

      And the problem is it's not that helpful, um, if y- [laughs] it's just not that helpful. Like, and again, if you think about us as founders or think about friends, think about our friendships with people, the people that you would consider your two true friends in life are the people that can say the things to you that no one else will.

    5. MS

      Yes. Yes.

    6. DC

      And if you're surrounded by, by crowds of people that, um, for whatever reason are unable or unwilling to tell you the truth about anything, you're, you're having a bad time.

    7. MS

      Well, and how are you gonna learn, right? How, how are you going to learn when you're giving people inputs and their output back to you is dishonest, because they just wanna make sure that you feel good? So let's talk about some of the hard conversations that we have, um, with founders.

  4. 3:52 – 6:54

    Validating decisions

    1. MS

      Let's take an easy one. I'll give a, an easy first example. The founder comes to office hours with us. They have already made a decision. It is obvious they've already made a decision, and they want us to spend an hour validating that they've made the right decision. That's kind of a hard conversation 'cause, like, Dalton, what do... Like, if we were being 1,000% honest, what would we actually just say-

    2. DC

      Yeah

    3. MS

      ... like bluntly?

    4. DC

      Well, here's a... I, I think there's two ways to handle this. There's the dishonest way. The easy conversation is to take them at face value and be like, "Oh, wow, seems like you've thought about this really well. Hmm, I, I see no errors in your logic."

    5. MS

      [laughs]

    6. DC

      "You're a genius."

    7. MS

      With, with no, like-

    8. DC

      "You did it again."

    9. MS

      Exactly, yeah. With like, without the information to even verify that, right? Like with, with no actual facts-

    10. DC

      Yeah

    11. MS

      ... to verify that.

    12. DC

      Wow, like, what amazing strategy. I just, I, this is just A+ work. Um-

    13. MS

      [laughs]

    14. DC

      ... and then, then there's the hard thing, and what I think the hard thing is, is not even disagreeing with it. It's to say, it's the question behind the question, which is, "Hey, it seems like you've already made a decision. Cool. Why are we talking about this?"

    15. MS

      [laughs] Yes. Why are we here right now?

    16. DC

      Like-

    17. MS

      Why are we here today?

    18. DC

      ... what's the question behind the question? Is it, is it that someone else, is it that your co-founder disagrees with you, and what you're trying to do is bring my opinion into it to prove-

    19. MS

      Yes

    20. DC

      ... that you're right?

    21. MS

      Yes.

    22. DC

      Is it that someone else disagrees with... Like, like, there's always a real question hiding behind the scenes. And man, people, it, it's always there. When I, when I, when I bring this up, they're like, "Ugh."

    23. MS

      [laughs]

    24. DC

      They're like, "Yeah, there is a, there is, you know, there's a question behind the question."

    25. MS

      Yes.

    26. DC

      Right? It's like-

    27. MS

      By the way, isn't this such a common theme? Like, I think if you really wanna understand office hours in a nutshell, 60 to 80% of the time a founder will go into office hours with one question, and we won't even end up talking about that thing. [laughs] Like, that's not the actual question.

    28. DC

      Yeah.

    29. MS

      [laughs] That's not the actual question.

    30. DC

      This comes up a lot with, like, people talking about applying to YC. Like, people are always, like, think it's really important, "Michael, I have some really important questions I wanna ask you about applying to YC." And he talks to them, and it's just like- Should I apply to... Like, like there's no-

  5. 6:54 – 8:31

    Fundraising

    1. MS

      All right. Let's stick with hard ones. Um, we're talking to an early-stage company, and it's becoming obvious that they're not gonna be able to raise the amount of money that they wanna raise, and they're not gonna be able to execute this magical explosion of spending that they want to execute, that they've convinced themselves is what's required to get product market fit. What do you do in those situations?

    2. DC

      You know, that's a, that's a really tough one because you want people to be optimistic, as we've spoken about before, and it's hard to... You never wanna be, um, short on someone's startup. And so what I would usually say on this one is think about what a great life of phil- philosophy it is to set your expectations low and prepare for the worst. And then if you get surprised, you get surprised on the upside, not the downside. And so the key in this hard, hard conversation is not to debate someone that their plan is bad. Keep the optimism, you know? But isn't it better to sort of have a plan for the worst and not be surprised on the downside? And if you're surprised on the upside, fantastic.

    3. MS

      [laughs]

    4. DC

      Right, man?

    5. MS

      You're winning. You're winning.

    6. DC

      And people don't wanna hear this. This is a hard conversation to have. It's like going up in the airplane, do you wanna bring the parachute with you or not? Like, I'm not trying to be grim by saying bring a parachute, but wouldn't you wanna bring the parachute?

    7. MS

      Yeah, if you had the choice.

    8. DC

      What's the downside of bringing the parachute?

    9. MS

      You don't use it. It's fine.

  6. 8:31 – 11:37

    Deep dives

    1. MS

      All right. So here's another one that comes up a lot. Um, "Dalton, I'd like to spend two hours really going deep on this problem, um, but our office hours, um, don't go that long." How do you, how do you deal with the, "I wanna do a deep dive"?

    2. DC

      Yes. This is another one of those question behind the questions. And again, it can be different things, uh, depending on the people. I think sometimes what's going on is, "You're an idiot, and I don't have confidence you can give me advice unless I spend two hours showing you a slide deck so I can explain everything to you." Sometimes it's, "It's not really about the meeting. I just want a lot of face time so we can build the relationship or whatever."

    3. MS

      Bond and stuff.

    4. DC

      And so this is-

    5. MS

      Yes.

    6. DC

      Yeah. Okay, that's fine. But you see what I'm saying, man? There's usually... When someone asks that, there's something else going on.

    7. MS

      Right.

    8. DC

      And again, my... It's usually the first one for me, where they think we don't understand. Again, maybe we don't. I don't know. But like-

    9. MS

      [laughs]

    10. DC

      ... they're, instead of them directly saying, "I am concerned that you do not sufficiently understand our business, and so I wanna make sure you do X, Y, and Z." Okay. That's a hard conversation, but then I'm like, "Okay. I know where you're coming from. All right. I hear you."

    11. MS

      Yes.

    12. DC

      But some weird, like, h- "Can we meet for three hours?"

    13. MS

      Yeah. [laughs]

    14. DC

      I'm always like, "Why?"

    15. MS

      [laughs] Yes.

    16. DC

      I wanna know the question behind the question, you know?

    17. MS

      Yes. Well, and what's so funny is if they just said, "I don't think you're smart about this particular thing," we would get to the, we would get to the meat of it-

    18. DC

      Yeah. Okay

    19. MS

      ... right? We would get to the meat of it.

    20. DC

      [laughs]

    21. MS

      Now, I think there's a couple others that I see. One is this assumption that we are, like, godlike advisors with complete understandings of every user base and every problem in the world, and, like, they can kind of, like, shortcut talking to users if they just spend enough time talking to us. And so that one is just like, "Folks," like so often in this one, I'm just like, "You're having the conversation with me that you should have with your customers. Like, talk to them. Like, I don't use your product. Talk to the people who do." I think the other one which, um, I really try to push back on is, "I'm lazy, and I didn't come up with the agenda. I wanna, like, roam my random thoughts, and over the course of two hours, we will have 20 minutes of productivity. But I don't wanna organize my thoughts, and I want you to accommodate that." And for that one, I'm always just like, "That's like, you're not training yourself for success here. Like, you expect more from yourself." Like, if your competitors can get 20 minutes of input, 20 minutes of output, they will do way better than two hours of input, 20 minutes of output. [laughs] Like, um, and just, you know, that seems to kick people into gear. Um, what's another one that, that, that you're excited by?

    22. DC

      Well, I, I think we can shift gears to a couple other contexts for hard

  7. 11:37 – 15:42

    Co-founders

    1. DC

      conversations.

    2. MS

      Yes.

    3. DC

      Let's talk about hard conversations, not with us, but with co-founders. And so the, the thing I wanna set up here is the classic thing is people become co-founders.

    4. MS

      Yes.

    5. DC

      They've never once had a disagreement or hard conversation. It's all been superficial. "We're best friends. We work t-" you know, it's all wonderful. And then the first time they have a hard conversation, [imitates explosion] that's it.

    6. MS

      Explosion.

    7. DC

      T- tell, you've seen this, man. Like, what, what's going on here? Like-

    8. MS

      Well, first things first, right? This is why we like teams who've known each other for at least a little bit and have some kind of work or personal relationship, because I always say that, like, when you have some kind of non You know, if you have some kind of base relationship that you might wanna maintain even if this startup doesn't work, you won't say that thing, or you'll think really hard before saying that thing that will, like, shatter the relationship. But when you're like, "Oh, the only reason why I'm even talking to you is 'cause of this startup, and now I'm convinced that our startup's fucked," which by the way, you'll be convinced your startup's fucked just continuously. [laughs] That's like a, a normal feeling. And then you're like, "Well, fuck it." Man, like you can't... You know, there are things you can't unsay, and, um, wow, sometimes the original sin was like you shouldn't have started the company with this person. But like let's say you are doing a company with your co-founder, and it's just really frustrating. What's the advice you give to founders on how to kind of process that?

    9. DC

      I think it's like you have to learn how to fight, and maybe fight's the wrong word. How to disagree. It's like, um, you have to learn how to pull your punches and have a disagreement that's a real disagreement, and actually release the pressure of the disagreement in a way that doesn't cross the line so that the relationship is irreparably harmed. And it's a skill you have to learn, and if you don't-- And if you've never been through a major disagreement with someone or had the skills for both of you to have a fundamental disagreement and talk it through, yet not blow the relationship up-

    10. MS

      Yeah

    11. DC

      ... And, and again, this is a skill like any other skill, man.

    12. MS

      It's a skill. You know, it's funny 'cause the analogy that I'm thinking in my head is that like, you know, it's a pressure release valve, and you don't wanna just rip it open. [laughs]

    13. DC

      Yeah.

    14. MS

      Y- y- but if you don't release any pressure, you also have a problem.

    15. DC

      It builds up and blows up. Yeah.

    16. MS

      Yeah.

    17. DC

      Either way it blows up.

    18. MS

      Either way it blows up. [laughs]

    19. DC

      If you let the pressure blow, just build, build, build by only having superficial conversations for years-

    20. MS

      Yeah

    21. DC

      ... one day someone will snap.

    22. MS

      Boom.

    23. DC

      [explosion sound] And on the flip side, if you just like leave it open all the time and you fight constantly, that ain't gonna work either.

    24. MS

      No.

    25. DC

      It's sort of like the happy medium thing.

    26. MS

      No. I think the biggest thing that I had to learn, and, and, um, Amy, our former batch director, used to talk about this a lot, is this concept that like people will deal with conflict differently. I love to engage and like lean in and talk through conflict, but it's just as likely the person I'm working with, um, wants to avoid conflict, or wants to take time to process conflict, or doesn't process conflict through conversation. And like I have to look at those cues. I have to understand who I'm talking to and realize that when I have to kinda take a step back, even though I'm unsatisfied, because I'm creating more of a problem by like continuing to push forward. Um, and I think that this is one of those situations where you can't blame the other person for like not acting correctly. Like you have to take responsibility 'cause you can both blame each other into an explosion all day long, right? Like, that's easy.

  8. 15:42 – 18:37

    Employees

    1. MS

      So next, what about, what about employees? W- what do you think there?

    2. DC

      I think it's, I think it's the same sort of situation. Again, the, the dynamic might be a little bit different, but if you're only ever having easy, superficial conversations with people, it's cool until it's not. [laughs] And sometimes the best way to work with folks at your company or whether colleagues, employee, whatever we wanna call them, is to find the right way to have some of these hard conversations. And you know what they are. You know, you're probably-

    3. MS

      Yeah.

    4. DC

      I'm sure someone watching this is like, "Yeah, I, I can think of a few hard-"

    5. MS

      Mm.

    6. DC

      I can think of some things I would say if I weren't-

    7. MS

      Yeah. [laughs]

    8. DC

      ... afraid of the consequences. Um-

    9. MS

      Yes

    10. DC

      ... you know, like there's a right way and a wrong way to do it. We're not saying go blow people up, but if you're just avoiding hard conversations, no one wins.

    11. MS

      No. And the employ- most importantly, the employee doesn't win 'cause like the employee probably knows something's wrong, and if you're the boss, they probably expect you to be the one kind of addressing it. You know, one thing that I say about employees a lot, and I, I wanna limit this to like startups and startup employees. Like first like allow the idea in your head that you might have picked the wrong person, and the person isn't the right fit. Like, like it's like even if you did your best in interviewing and they were really good and da, da, da, like allow in your head the idea that like that might not be the right fit, and like this person might be able to do 10X better work somewhere else. Um, and like that would make their life better just as much it would make your life better. Like allow for that 'cause sometimes people feel like they have to solve unsolvable problems. Um, and then the second thing I think about with like good startup employees is they want honesty. Like they-- Good startup employees kind of understand this is a really hard task and that like the likelihood of being successful is really low, and they want to be in the know. They want transparency. They wanna know how the company's doing, and they wanna know how they can do 10X better to impact the outcome of the company. That's why you join-

    12. DC

      Yeah

    13. MS

      ... a startup, 'cause you wanna... an early-stage startup, 'cause you wanna impact the outcome of the company. I've been often surprised at like sharing bad news. Like, "Oh, we only have two months of runway." Right? I would think would be demotivating, but for great startup employees, they're like, "All right. How the fuck are we gonna fix this?" And then you can get juice from them. You're like, "Well, all right. I mean, if we're all in the trenches together, maybe we can make something happen Um, but like it's really bad when like you know your startup's in the trenches and your like employees are like clueless. "Well, well, I thought everything was going fine. We raised a bunch of money. You never told me anything was wrong." And you're like, "Ugh."

  9. 18:37 – 19:50

    Nobody's perfect

    1. DC

      I think that to our credit, you and I say this a lot, if we were doing office hours with ourselves, what would, what would we say? And yeah, man, I think sometimes we dodge hard conversations too. [laughs] Like-

    2. MS

      Oh, sure

    3. DC

      ... like we're not saying, uh, to be vulnerable here, we're not saying we always get this right 100% of the time.

    4. MS

      In fact, I might argue in many times the first conversations we have are wrong. I think the only thing that we do well is we continuously ask ourselves, are we lying to ourselves or is there, uh, like what, what did you say? What's the deeper question? [laughs]

    5. DC

      What's the question behind the question?

    6. MS

      What's the question behind the question? [laughs] I think we are good at asking that, and sometimes we assume that the initial salvo of questions are complete bullshit [laughs] ourselves. Like-

    7. DC

      Yeah

    8. MS

      ... are like within, within YC itself.

    9. DC

      And I think that's life, man. I guess what I'm trying to say is no one's perfect. Don't put anyone on a pedestal. It doesn't matter who they are. They have their own shit, and that should be freeing and empowering and make you feel optimistic and not bad. [laughs] Right? Isn't that the right takeaway here?

    10. MS

      That's the right takeaway. You know,

  10. 19:50 – 21:23

    Outro

    1. MS

      to close out, this reminds me of this like, um, scene in The West Wing where one of the characters has a drug problem that's, that's pretty bad. Another character is going through PTSD and is really struggling but doesn't want anyone to know. And this character is like a drug addict that like cleaned up and so on and so forth and is noticing the first character struggling. You know, the way the kind of story goes is that other people who don't understand how much pain the person's in will like say, "Oh, you should go see a psychiatrist," or, "You should go get a prescription." Like, they'll do these superficial things, but this character knows and so like he actually, you know, the analogy is like he jumps down to the bottom of the well with him. It's like I'm at the bottom of the well struggling, and then my friend jumps down with me. And the, you know, the thing that they say at the end is that like, "Well, I'm jumping down with you 'cause I've climbed out of this well before and I know the way out." And I think so much about being a YC partner is like, is, is exactly that. Like, I've made all these mistakes before. [laughs] And, and like-

    2. DC

      And I'll probably make 'em again.

    3. MS

      And I'll probably make 'em again. [laughs] And the only thing that I could say is I know the way out. [laughs] As opposed to like, "Oh, we play error-free ball," which is obviously a lie. All right, man. Great chat.

    4. DC

      Thanks. [outro music]

Episode duration: 21:23

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