YC Startup Talk for Students, 2022

1. 0:00 – 0:27

   Intro

   1. DHDiana Hu0:00

      [gentle music] [keyboard clacking] So, a little bit about me. Uh, I'm a former YC founder. Uh, I've worked at startups basically my entire career, both small ones and large ones. And me and my team run YC's Work at a Startup, which is a hiring platform, a great way to find a job, and we'll be touching upon that a little bit more in a bit.

2. 0:27 – 1:16

   What Y Combinator does

   1. DHDiana Hu0:27

      If you don't know about YC, we help startups get their early start. And just to name a few of the companies that have gone through YC, Dropbox. This is, uh, Ashton and, uh, one of the founders in the very, very early days. You know, kind of your garage moment. Stripe when it was a little further along where there's, like, a te- team of eight or 10. Um, Airbnb when they were working out of their own apartment, and Instacart. So we work with startups when they are two to three people, just the founders, and there are a number of ways in which we help. We talk about three things that are the hardest things about starting a startup. They are building a product and making something people want, raising money, and hiring a team. So I framed this a little bit from your input, but also what I wish I knew way, way, way back when along my career, even coming out of college.

3. 1:16 – 3:18

   What’s the best way to learn about startups?

   1. DHDiana Hu1:16

      You know, a lot of people ask, "What's the best way to learn about startups?" But one of the best ways to actually learn about startups is to just go work at one, right? You're not gonna be able to experience that unless you really go find one that is interesting to you. You find one where you get along with the founders, and you work at one. If you have multiple years to try different things, then going and working at a startup is one way to learn about startups with a very low risk. If there's, um, anybody who would be a poster child for this, for better or worse, it's me. Uh, I was an early engineer at Salesforce. I graduated from college, and I got the chance to join, you know, a seven-person team, work with the founders, work with Marc Benioff, and work with this gentleman right here, Parker Harris. He's one of the co-founders of Salesforce. He taught me a lot about just full stack engineering, about running teams, about managing people, and I really got to work with someone who was very, very experienced. So I got to be pretty darn technical and build apps top to bottom, and that's something that you get to do at a startup. From there, I then got to be an engineer at a company called Zuora, and within a year, I ran the engineering team. And you know, one thing we say about working at startups is working at a startup sometimes means you get more responsibility than you deserve. And so in this case, I got to run an engineering team in China. I got to manage this gentleman named Lei Jin, who was just one of the most talented engineers I'd ever met with, and sometimes I'm like, "You could be my boss, but I'm glad that we're doing this together." And I felt, in some ways, over my skis, but you know, I grew a ton through that experience, and that's what working at startups often gives you. This is a picture of me with the head of engineering at Lyft and that woman, Amy Farrow, who is amazing, and she was a CSO at one point of Lyft. And so I got to work with these two people to help take a company public. And the last thing is I started my own startup in YC. This is me and my co-founder, Kendall, at the YC office. Back in the day when we did our startup, you got, like, 125K or something like that, and now YC's getting half a million dollars. Half a million dollars to start your own startup if you've got a great idea and you're really passionate about it.

4. 3:18 – 5:54

   How are startups different than FAANG?

   1. DHDiana Hu3:18

      All right. So a lot of people don't know how startups are different from FAANG, um, or don't know enough about startups in general. So I wanna share some of the things and, like, both the good and the bad. Um, at FAANG companies, a lot of times you have specialists, right? And, and that's by design because if you literally have 5,000, 8,000, 10,000, 100,000 people at a company, you don't get the bigger picture. You don't get to see how the business is doing. You don't get to understand 360, all the things that are going on. Um, startups, they tend to hire generalists, people who are willing to wear many hats. The one caveat I've seen to that is that, uh, in order to compete as a startup, oftentimes they start in a very specific niche. And so we have motion detection, motion image creation, API or API startups, uh, that need specialists, that need people in deep machine learning and so forth. And when we say generalists, it's like, "Well, can you also put together a website? Because we might need you to have a landing page so people can sign up." FAANG companies have lots of customers, billions of customers, high impact, um, but that high impact is, like, a potentially small impact across those billions of customers. Whereas at startups you have fewer companies, but you get to know the com- customers, and you have a very deep impact, right? At, at startups you get to talk to the customers. You get to understand what they want and build what they want. FAANG definitely has lower visibility, slower decision-making. There's a whole organizational structure, org chart, convincing, politics. I saw that at Twitter and I saw that at Lyft, and it's not a bad thing. That's what it takes to, um, run an organization at that scale. But versus startups, higher visibility, faster decision-making process, and you get to see the creation that you make, like, the next day 'cause you can ship it. Mentorship is kind of a toss-up. I think mentorship is not a function of, like, large company or small company. It's a matter of who you'll be working with. So it's up to you to learn who you'll be working with and to, in some ways, interview the people, interview your manager to know, "What projects will I be working on? What things do you think are interesting? What are you an expert at that by the end of my summer internship or by working with you for two years am I going to learn?" FAANG is low risk. Uh, you know, there's no doubt about that, especially in this economy. Uh, that said, some of them are having layoffs, and that's hard to track. And startup sites here are low to medium risk. People say that startups are high risk, and I will say that if you're a founder, yes, it's high risk. Could you pick the right one? Low, medium. If you pick one that's, like, later stage and growing, and we'll share some of those, not really risky at all. And another consideration, because it's not just you in a vacuum, uh, FAANG companies, you know, your family will be very, very happy, and at startups your family might not be so happy unless it takes off. Hard to determine, and then they're gonna be stoked.

5. 5:54 – 8:34

   How do I choose a startup?

   1. DHDiana Hu5:54

      So how do you choose a startup? But one of the things is trying to find the right stage startup for you, right? Not all startups are the same. They get lumped into a bucket. People think that the startup that you saw on, um, Silicon Valley is what a startup is, and I think we're here to debunk a bit of that myth and help you find one that might be good for you.Um, we talk about startups in these four categories. One is a seed stage startup, and this is the one that's most close to the TV show Silicon Valley. It's pre-product. They might not have customers, pre-revenue. You know, our startups raise one, five million dollars. So if you're trying to work at a startup, um, they can pay your salary. Uh, the only challenge is that, like, you know, is a five-person, a two-person startup a good fit for you? Maybe, maybe not. Um, in the case of, I think it was Kyle at Cruise, he used to work at Twitch, and I think he [chuckles] was, like, fresh out of college, and he was one of the first early employees. Um, he thought it was a good fit, but not everyone is a good fit for these early, early-stage companies. Also, early-stage companies, they're looking for engineers, a bit more of a jack of all trade, and sometimes ops. So if you're looking for ops roles or something that is more, like, operational, um, imagine Instacart in the early days. They need people running around. DoorDash, they need people running around, doing deliveries, talking to restaurants, right? Um, it's a matter of you selling what you can do for them, but, like, there are those opportunities where operations people are a good fit. You know, you have fewer sales, you have fewer product roles, and that's because we tell the founders to do it themselves. Series stage is where it gets a little bigger. Um, it's where they've raised maybe five to 20 million dollars. We've even seen some that are, like, 30 or 40 at this, uh, these days. Um, you know, the companies are a little larger. There is a hint of something possibly working, and that's, like, a hint called product market fit. Like, does the product actually have customers, and is there enough demand that instead of you trying to get it out there, pushing people your product, selling people on your product, the industry's actually pulling you along with it. Uh, you're getting inbound calls and asks to, like, "Hey, can I use your product? Hey, can I... You know, where do I pay for this thing?" And then we have two other categories, which are growth and scale. Um, growth is definitely where there's product market fit. So it's like, how do we get all the customers that we know that are out there using our product? Maybe it's 50 to 500 people, and this is where they're hiring for, like, so many roles, ops, customer support, more specialization. And scale is market expansion. We usually think, like, going international or using partnerships to, like, find new ways to get new customers. 500 people, you're getting, like, half a billion dollars of investment, and they're hiring for everything.

6. 8:34 – 11:47

   What should I focus on at my job/internship?

   1. DHDiana Hu8:34

      Okay. Um, if you're able to get a job, what should you focus on at your job/internship? The number one thing, number one thing I say is understand the business and measure your impact. Too many people go in and don't know anything about the business, don't wanna know anything about the business, and that's a missed opportunity, especially if you're at a startup. And the second thing is if they give you something meaty to work on, you wanna be able to measure that so you can put it back on your resume for your next job that you're trying to land, right? And why wouldn't you wanna know that you're actually having a positive contribution? So role by role. If you're in marketing, you know, your responsibility is you're supposed to build a pipeline for sales or growth. So the more that you can measure the number of companies that you reach out to, the number that actually connect, and the number that go into a sales funnel, or if you're going out and doing, you know, driver acquisition for DoorDash or Lyft, the number of people that you talk to, the number of flyers you hand out, the number that convert to an actual user, and the number that actually activate and drive. Marketing is about top of funnel, and that's what you should be measuring. Please do not make it about social and about Instagram and the number of posts and the number of likes unless it converts in a way that you can measure, right? Sales is about revenue. [chuckles] You are trying to get sales for the company. If you can get people to buy and pay, then that's where sales is... That's where your role at sales is gonna shine. Product, and I'm not gonna belabor this point, there are different types of product roles. There are different types of things that product people do. But ultimately, if you were a mini CEO, you care about the growth of the business. Maybe that's the conversion funnel of the number of people that turn into drivers and help you make money. Maybe it's retention because they're using the product over and over again, and you're an ads company, so that means that eyeballs equals ad revenue. Or maybe it's literally just about revenue. And so product is a bit mo- the most variant because it really is tied to, again, understanding the business and making sure that you are measuring and improving the business. Engineering, it's about impact. And this is a tricky one because I think engineers are the only ones who can work at a company, not have an impact, and still get promoted because they did what the product manager said even if the product manager was wrong. Sounds crazy, but it's true. Um, that said, even still focusing on the impact that you're having to the business, impact that you're having to the systems, making them more efficient, processing more tickets, whatever the case might be, will benefit you because then you can say that you have a demonstrable impact to the product. You understand that, and startups love that kind of stuff. Startups love people who can understand the product, understand the business, talk to customers, um, because it just helps things move faster versus, like, "Oh, you need to build a PRD, and then we're gonna split this up over, like, the next nine months. We're gonna build these things, and if we're wrong, well, it's not my fault." That's not where... If that's how you wanna work and that's how you're used to working at larger companies, definitely don't work at a startup. If you're working in support, and some people are like, "It's a great first job. You can be the first person to support and then end up running all of the support at a, uh, at a larger, later stage company." NPS, which is net promoter score, how many of your customers actually love what you're offering, number of responses or percent responses in 24 hours. Um, how can you make process or system improvements so you can actually process more requests with the same size team, or you can process them faster, which improves NPS or retention? You know, maybe there's a correlation between good support and actually reducing customer churn.

7. 11:47 – 12:59

   How do I start my own company?

   1. DHDiana Hu11:47

      Now let's go a bit more into starting your own company with... YC has these very three basic startup principles. Make something people want, right? Uh, it seems obvious, but when you start working on a startup, um, it's tempting toFollow side paths or side quests. Sort of think, "Hey, maybe if we keep- pull on this little thing, we'll unlock all these other users." Um, but then you lose your focus on making something that people want, and you find yourself three to six months later, you, that you don't even remember what you were starting a startup for in the first place. So number two, talk to your users. Talk to your users. If you're lucky to have users, even before you have users, talk to them. Understand what problem it solves. Understand the pain point. Understand how they feel. Iterate with them on a regular basis to get a sense of, like, whether or not you're getting closer and closer to what they want. Um, and never stop talking to them. And the last thing is do things that don't scale, right? Talking to users does not scale. Sending emails to all the students on here does not scale. But [laughs] I do it because I wanna get feedback. I wanna understand what you're looking for and how we can help, and be able to craft slides and talking points that are useful to you.

8. 12:59 – 13:53

   Case Study: Airbnb

   1. DHDiana Hu12:59

      We'll take a case study. Airbnb. I don't know if you guys have seen these slides or anything like it before. At this point, everyone knows what Airbnb is, but this was their first website. It was hyper, hyper niche. It was actually a website for sharing [laughs] a airbed and maybe breakfast for a design conference on, what is it? October something, 2007, right? In San Francisco. This is the website. It almost looks more like a marketing website than an actual app. The V2 was actually just a place where people could post almost on a Google spreadsheet, and this is what it looked like. You know, this is an actual, like, early airbed and breakfast experience. And, you know, a lot of people think that you have to have a ton of stuff built, you have to have the whole product. You just need to have the hustle and the grit to get the proof that this might be a real thing.

9. 13:53 – 16:46

   What does YC look for in a startup?

   1. DHDiana Hu13:53

      All right. What does YC look for in a startup? And I'll share some things, um, an, an oversimplified version. But number one is domain expe- experience and a passion for an industry. If you start a startup, you gotta be willing to duke it out for 10 years. You gotta be willing to work with the same team or the same founders for, like, five to 10 years. And so having that passion for the industry, passion of, like, wanting to work with your friends, and especially domain experience, 'cause maybe that gives you an advantage, are things that are super helpful for you to have and be an expert on when you start a startup. Otherwise, you're competing with people who probably already have this experience anyway. YC also likes technical members of the team, but there's a question mark there. Because in the past, it used to be really, really helpful to have a startup where it is all a technical team. One of the reasons is you can live longer. If you're burning money, you're burning less money if everyone is technical, especially if you have to pivot and start over again. But we have people who are founders and they're sales experts, and they know so much about the sales process, and they've already made $10 million in annual recurring revenue. And then hiring an engineering team once they've raised $20 million is a lot easier. So we have a lot of startups now that are non-technical, and if you are non-technical and looking for a founder, you should check out Startup School, which is run by YC, and we have this program called Co-Founder Matching that might help you find a technical founder. Do you need a prototype? It turns out that you don't need a prototype, but the question mark/caveat is, if it's, if you're passionate about the idea and you're technical, why haven't you built [laughs] a prototype to try it out, to go to customers, to get feedback, to iterate? I'll tell you another thing, that YC is not looking necessarily for the next billion-dollar business. We're looking for strong founders who can build things, who can talk to customers, who can iterate quickly, and eventually grow into a billion-dollar business, right? And it sounds weird, but this is a team that did it. It was a team called Segment, and their first product actually was targeted at professors at universities, and they found out that professors hated it. Professors said, "I couldn't tell if students were looking at Facebook or paying attention to me." So the team went back to YC. These four gentlemen said, "Oh, well, we learned that we needed to build a lot of analytics, a lot of instrumentation to understand whether or not our product was useful." And then they said, "Why don't you go build that as a product and ship it?" They launched it on Hacker News. It blew up. The GitHub repo got so many pull requests. They came back to YC. All of YC ended up using it. And they started building a real business, and a few years ago they sold it for $6 billion to Twilio. Those are the types of things that we're looking for in YC founders. A lot of grit, a lot of determination, talking to users, learning quickly, um, and being willing to pivot and iterate as necessary.

10. 16:46 – 18:22

    How do I learn more about startups? For aspiring founders: https://www.startupschool.org/. To find a job at a startup: http://workatastartup.com/.

    1. DHDiana Hu16:47

       Um, how do you learn more about startups? Mentioned this before, but there's Startup School. Startup School is almost like a pre-YC. You go onto Startup School and you can take your idea and run it through the program. There's software to help keep you accountable in terms of your metrics, your analytics. There's lectures, both live and recorded, to help you think about product, users, getting more users, whether or not you're onto something or whether or not you should start over. And now Startup School also has tools to help you find a co-founder. If you wanna learn more about startups but you maybe don't have an idea, or you're, like, on that cusp, definitely check out Startup School and all the content there. And then there's Work at a Startup, right? We talked about working at a startup to learn more about startups. YC runs a job platform with, I think, 800-plus companies, 6,000 jobs. And, you know, working at a startup might actually help you start your own startup one day, if that's your interest. Does anybody know, just in the chat, any of these people at all whatsoever? [laughs] Uh, Brian Armstrong is the founder of Coinbase. He used to work at Airbnb as a product manager. Or, uh, actually as an engineer. Kyle Vogt was an early employee at Twitch, and he started Cruise. Uh, Logan Head, who is the CTO and founder of Whatnot, which is now like a, you know, $3 billion company in two years, used to work at a YC company called Goat.Uh, Jaleh Rezaee, um, is at Mutiny, but she used to be at, uh, Gusto doing growth and, um, Rajul, who is the founder of Zip, uh, was a product manager at Airbnb.

11. 18:22 – 21:42

    Why apply to YC?

    1. DHDiana Hu18:23

       Lastly, and I said I'd come back to this, of like what does YC do to help and what are the things you will need as a founder of a startup? Number one, you will need help building your product. Part of that is personalized advice with one-on-one office hours from like founders, former founders and YC partners who have done it before and talked to tens of thousands of companies and have pretty good pattern matching of like what works and doesn't work. We have a secret startup handbook with 20 years of YC knowledge. No joke. It keeps getting better. It's so much better even than when I did YC eight years ago. There's a YC network of, sorry, 8,000 alum. Um, there's a secret Bookface [laughs] software, eh, secret, kinda secret, where it's like a social network. It's a fundraising tool. The whole batch is run on our software. Um, you know, startups are hard and so these are the types of things that YC offers that gives startups an advantage. Um, there's $500,000 in discounts and offers from Amazon and from Google, uh, from other YC companies to help you get your startup off the ground. And then YC isn't just the three months. Like, there's alumni events, there's workshops, there's conferences. We actually just ran an alumni event for all YC alumni. We rented out Spark Social in San Francisco. It was an awesome time. You'll see a lot of people who tweeted about it. Um, and then we have later stage programs if you're lucky enough or, you know, skilled enough to build a startup that goes through series A or growth. We have programs where we re-batch founders, um, to make it feel like a smaller YC, um, but with people who are CEOs of like half a billion, billion-dollar companies. We help you raise money. So we offer $500,000 right off the bat, which we used to do 125 but now $500,000. It's a pretty compelling option, an alternative [laughs] to working at another company, and some people are like, "Oh, that'll actually help a ton." Most of our companies raise two to four million plus, even in this economy. Um, and then we have the ability to write 100 thousand- $100 million checks on later stage companies. Demo Day is where we bring thousands of investors to your doorstep to invest. We give you pitch practice. We give you advice. We make intros. And then we have a pretty wide investor network to help you raise. We also do this other thing that when other founders in your batch finish their r- fundraising, we ask those founders to make intros to the other YC companies. Um, and that works really, really well. So the network effect is real in YC. And lastly, we help you build your team. Uh, we do team-building training. We have hiring conferences. We run Hacker News, so we help use Hacker News in terms of Hacker News launches and access to slash jobs to help you hire. Only YC companies can do that. We run Work at a Startup. We run these events, internship programs, tech talks, expos. Um, and these are the things that are the hardest. The three hardest things about starting a startup: building product, raising money, and hiring a team, and YC helps on all fronts. So if that's not gonna convince you to apply to YC, know that this slide right here are the things that you are going to need to do as a founder on your journey, and, uh, you know, YC certainly has a ton of resources to help you do so. That's my email right there. If you wanna shoot me a note, again, more than happy to help in, in whatever you're looking for. Uh [outro music] [keyboard typing]

Episode duration: 21:42