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At a glance
WHAT IT’S REALLY ABOUT
YC Partners Reveal Where Early-Stage Startups Most Commonly Waste Money
- The hosts say founders keep repeating the same spending mistakes, and almost every founder can look back at first-year expenses they could have trimmed.
- They warn against expensive big-company hires, armies of contractors, heavy ad spend, events and brand advertising, and PR agencies, citing personal stories of money wasted on each.
- On lawyers and advisors, they advise against customizing standard documents, getting quotes up front, using payment plans, pushing back on advisor equity, and asking would-be advisors to invest instead.
- They conclude that spending is justified mainly after product-market fit, and before that founders should earn the right to spend by testing cheaply and doing the work themselves.
IDEAS WORTH REMEMBERING
5 ideasBig-company hires often disappoint at startups
Harj describes the temptation of hiring an expensive FAANG engineer, and another speaker notes these hires lose the workflow, tools, and support of their old company while still carrying the same cost.
Contractors become a Band-Aid you never rip off
Harj says founders plan to bring work in-house later but keep paying expensive contractors, who lack skin in the game and have different incentives.
Ads can substitute for building and create dependence
Harj shares how Triplebyte crept toward almost a million dollars a month in Facebook ads for years, until the ads stopped being profitable, and says a new product that cut acquisition cost should have come in year two rather than year six.
Scrappy tactics beat paid sponsorships at events
Examples included WePay's block of ice with money frozen inside, flyers slipped under hotel doors, and a hotel phone-call space, all of which reached attendees for far less than official sponsorships.
PR agencies tend to disappoint, and founders can build press relationships themselves
Harj paid a roughly 50K retainer and ended up cold-calling journalists himself for better results, while another speaker says journalists want direct relationships with founders.
WORDS WORTH SAVING
5 quotesI don't know a single founder who looks back at their, you know, startup expenses for the first year and can't think of a good chunk of it they could have trimmed.
— Harj Taggar
Yeah, ads are too often used as a substitute for building.
— Unattributed
I'll say this, if you wanna get really good at firing vendors, hiring a PR agency is a great way to get your feet wet, right?
— Unattributed
you kinda need to, like, earn the right to spend the money.
— Harj Taggar
You're in no way an authority to hire someone if you haven't tried it yourself.
— Unattributed
High quality AI-generated summary created from speaker-labeled transcript.
