Tetro.
I love technology and engineering and science because I would just spend every weekend as a kid reading things that were way, way above my pay grade. Like I didn't understand half of it, but I felt like I could.
And then it sort of brings us to today where the machines can help you learn. Were you a good student in school?
Yeah. I mean, I didn't realize this at the time, like my childhood was so rough that I guess I viewed getting good grades and going to college and your way out. That was my, yeah, that was the light at the end of the tunnel. That was always what I thought when I was a teenager. Like I was suicidal. I hated everything about it, but when I was in my computer I could go in my code cave and I had control and everything in my life outside of that was tumultuous and I just didn't know when I would catch a beating for no reason or whatever. But when I was in front of my computer or even when I was in school studying algebra or calculus it's like, oh, the world is so beautiful and well-arranged and I can understand it.
Yeah. Order. When you would be on your dad's computer, would you play games or would you build things?
I guess games were my first love.
What were the games then?
Oh my gosh, like Spy Hunter on the Atari, I guess. But I really loved adventure games like the Monkey Island games or the Indiana Jones games. The old Sierra adventure games were really fun because I loved, I didn't want just like the arcade. I wanted a story. Like I loved sort of this idea that you could inhabit another person's life. Today what people play that I love is like, you know, Red Dead Redemption 2 for instance, one of the best games that...
Yeah, I love games. I love those types of games because like the narrative story and you can inhabit someone else's world and reality. Back then I viewed it as like a nice reprieve.
Y Combinator is at this point an institution where you apply on the internet and you don't have to know anyone or anything and you fill out 12 questions, record a one-minute video and we have 16 partners who read those and watch the video and try to figure out who are the people who are going to build all of the technology for the next 20 years.
How many people try to sign up?
Yeah, it's 80,000 applications a year for about 800 spots per year. We invite you to come to San Francisco. We'll meet you for 10 minutes. It's usually two partners in there and 10 minutes goes really fast. It's really, we just want to know what are you doing and why is it going to be you who does it?
What are the backgrounds of the two partners in the room?
Usually, I mean, every partner at YC actually went through the program themselves and created a startup and in a lot of ways they made something people want. So, we went and did it and then we're back trying to help the next generation go do that.
Tell me about your experience of doing it. What do you remember from your 10 minutes?
Oh, man. I remember sitting down with the founder of YC, Paul Graham, and his other co-founders. They basically wanted to see the demo. And so my startup, you just took a photo on an iPhone and you emailed it and then you got a blog. And so that is very easy to demo and then I think they got it immediately. So once someone understands what something is and why people would use it, that sort of answers the big question. On the first day I see you get a t-shirt that says make something people want. And if you look at the 10 minutes, that's all we really care about. It's like is this person going to make something? And the craziest thing is like that's easier than ever now. Like everyone can make something. And then the second part has become much harder, much more important, much more difficult to get right, but much more important to get right. It's make something people want.
Was Paul Graham the founder of YC?
Yeah, he was the founder.
Oh, he was sort of this really brilliant polymath. I think you would really dig him. He wrote a book called Hackers and Painters, which is the perfect polymath book. You know, he's a hacker, but at the same time, I saw him recently, he was saying that he built one of the best classical art collections in all of England. He lives in England now. So, it's how cool is that? Like, he literally wrote the book on Lisp. Lisp is one of the most respected sort of hardcore programming languages from the '70s. I would say that Lisp is sort of for programming languages what CVGBs was back in the day. Cool. I mean it's just anyone who's legit ground zero. It's ground zero. It's legit. It's if you know how to program and care about the code, you know, Lisp and he wrote many books on Lisp, literally called On Lisp. And so we went from there to a business where he said how do I solve the money problem? You know, he was a PhD at Harvard in computer science and then afterwards he said, well, I need to make my way in this world and I'm not going to get there by painting, but I do know how to program. So how do I turn programming which is its own craft and art into commerce?
I guess this was like early to mid 1990s. So he actually was one of the people who created the first web application.
So the web was new. But then he realized well I don't have to just make a static HTML page. I could just hook it up to a program. Today you think about the web or the internet or a computer program and it's synonymous with I open my browser and I'm going to go to this thing. But he was the first person to actually hook that up. Yeah, that's amazing. And it was to make what ended up becoming Yahoo Stores. So it was, you know, helping other people build businesses and online businesses. I didn't have the words of I need to solve the money problem until I read it in his essays and I found his essays on the internet. Now all my friends are sort of in that world. People sort of talk about YC as a little bit of a cult, I guess. But I think about it a lot because is it a cult? Is it like an ideology? It could be a religion.
Yeah. Well, that's what we're trying to make it.
How is it different than other VC offerings?
I mean, VC is a very interesting thing because to me, it feels like it stuck in the 1970s or the 80s. VC didn't exist really going back more than 50 years. And then the legends of the space, they're sort of, I felt like they're bankers, you know, they're all dressed up and buttoned up. You ever hear the story of like Fairchild Semiconductor? I think they literally wrote a bunch of letters to a bunch of bankers they knew in New York and then one of the people who replied was Arthur Rock, who was also the guy who ended up funding Apple later.
And so there's a long lineage of that, but I think it's like really evolved from that. I think today the best investors in the world are people who are actually former builders instead of bankers. And I think that vibe matters a lot. There's a lot more to the world than just the dollars and cents. Like the dollars and cents come after you make something people want.
So I think if I had to describe like, well, you know, is YC just another VC? VCs when it's just about the dollar. I guess the analogy would probably be like public company CEO of a media company. You know, those people kind of their job is to only make the dollars go up and that's it at any cost. Whereas when we're early, we don't have to be like that. And in fact, if you try to do that early when people don't have an idea yet, you'll kill it.
So, how does it work? People answer 12 questions, 1% get invited to a meeting. Is that...
Oh, yeah. About three or four percent.
Three or 4% get invited to meet you for 10 minutes.
Yeah. Yeah. Only 1% actually get an offer to be funded by us and we give them half a million dollars. It is an investment. So, we end up owning 7 to 10% of each company.
How much is it about the money versus what else YC does?
I mean, there are lots of places to get money at this point. What you can't get anywhere else is actually a community of people. And when you're early and you don't know what you're even going to build yet, the best thing you can do is surround yourself with other people who are actually builders who have been there. And that it needs to be sort of this safe space where you can talk about what you're doing. And we try to enforce that actually.
It's beyond the fact that money is more readily available now than it used to be. Is money less important now?
I think so. Actually, the wild thing now is like the act of being able to do the craft suddenly became 100 to a thousand times more important. The joke is Thanksgiving of 2025 was this totally insane shift in the way coding and codegen works. So, Anthropic released its Opus 4.5 model and the world shook, but no one noticed until they're only starting to notice now. I noticed in January where I started coding again after a hiatus from 2013 and right now I am about to do about 100x the amount of work coding, writing software that people can use, than the whole year of 2013.
So imagine like if there were 100 people in this room, this room would be packed to the gills. Like you probably couldn't fit 100 people in the room that we're sitting in. But that's how it feels when I'm sitting in front of a computer right now. I've released two different open-source projects in the last 60 days. One of it, which GStack, is actually used by 30,000 people every single day right now and it's free. I just gave it away. And then 11 days ago I released another thing called GBrain which is my knowledge memory system.
So there's this crazy thing happening where obviously codegen happens. You can use something like Claude Code to write a hundred times more software than you did before.
Does the fact that you were an expert coder in the past make a difference or no?
I think it helps a lot actually. Claude Code was sort of the first revolution from November and then now there's this new phenomenon that only happened since November I would say where there's this other thing called OpenClaw which OpenAI just bought and it's an open source package though. So, I think they basically just kind of brought the people in. Started by this guy named Peter Steinberger. I mean, it's a social movement at this point. It's actually very anti-corporate. It's like the definition of open source from the bottom up. And I'm a total believer in it now. The ridiculous thing is I dressed up in a lobster suit for our podcast, The Light Cone. And the internet didn't seem to like that very much, but I didn't care. But I actually at that moment wearing the lobster suit, it was more kind of a joke to me. I didn't really get that there was this new phenomenon called OpenClaw. And now I get it. I see the religion. So, do you know the movie Her?
Would you want to own a version of that AI from the movie Her where you have control of the AI or would you want to use it controlled by the corporations?
Oh, obviously it's always better to control things yourself.
So, that's why OpenClaw is so powerful. I use this example all the time. I mean, do you use an iPhone? I do. Do you use Siri? I don't. No one uses it. And the reason why is it turns out Apple isn't great at doing that stuff. But what if I told you that I'm going to release like an open-source version of it that actually works? And that's what I've basically been working on the last 11 days. Like if this thing, that's what GBrain is. It'll actually connect into your email, contacts, calendar. It read my Apple notes for like the last 18 years. It read my emails. It went and looked at my calendar for the last 18 years. And then it mapped everything. It looked up all the people I've met. It actually checked up on them and be like, 'Here, this, you know, you met this person a few years ago. This is what they're up to now.'
So imagine this AI, but instead of the AI that some corporation owns and uses it to surveil you, it's like you literally own it. You own the code. You own the data. Nobody else has access to it. And then you can actually tell it to do stuff and you can program it yourself. So yeah, we're in the middle...
And you don't need to know how to code to do it. Is that correct?
I mean, I'm trying to figure out how to make it so that anyone can do it. So that's what, that's some of the experiment that I'm in the middle of right now. So I released this 11 days ago. It's got 8,000 stars on GitHub. The analogy we've been using is when the Apple II came out by Apple, the thing that made Apple as a company was it was actually the first commercial usable version that a non-engineer could use of a personal computer. That moment hasn't happened yet for AI. Right now, it's still corporate. It's still very, very expensive. It requires a lot of customization. You have to hire all these engineers to run it for you. And then this maps to how computers were back in the '70s. Exactly. Like Steve Jobs literally grew up and lived in that moment in age when him and Steve Wozniak were sitting in a garage in Mountain View creating Apple computer. They were at this moment where they had to solder a breadboard to create the Apple I. And before that it was these giant room-sized computers and nobody could, no normal human being could have one for themselves. Only institutions and corporations. Yeah. So, we're exactly at that moment again and at a much more powerful sort of technology. I think personal computers did revolutionize the world. And then this is like the next revolution. It's happening right now. The homebrew computer club for AI is happening right now and anyone can actually come in and be a player and a part of this next revolution.
Tell me every tech revolution you've lived through.
Oh my god. I mean, well, I was born in 1981, so I guess I was born during the personal computer revolution. My first computer with my dad because my dad really loved, I mean, in retrospect, I really thank him for being really into that because, you know, it's super lucky. I remember hearing about Kanye early on like managed to get some early audio equipment and that was actually a part of becoming someone who could make music. So, I feel like me getting a PC XT when I was 5 years old, I didn't learn how to write with a pen until later. I learned how to type. And the first story I ever wrote was, I think, in WordStar 3.3 on a IBM PC XT, which is very funny. But yeah, the personal computer was a really big idea before only digital or IBM or just these giant organizations like your university or a giant corporation you worked at would let you time share and it was like very, very limited and it couldn't do a lot of stuff. It's kind of funny because we're sort of exactly in that age with AI.
And you see a time when that will be democratized.
Yeah, that's the OpenClaw moment. Like I think that that's happening, that revolution is happening right now. I think a lot of people, a billion people are using ChatGPT and the wild thing that I see that a lot of people in tech are seeing, just beginning to see, I mean there's probably a thousand of us in the world that really believe this but everyone is going to run their own AI agent that is totally under their control that they program.
Will it still be connected to either ChatGPT or Anthropic or not necessarily?
Not necessarily. For now, I think it will be, but the hope is you'll be able to choose. I think that that's actually going to be one of the big enduring questions in the next few years. There's sort of this nightmare scenario where one company or one entity or just one government has control of the biggest and best and only super intelligence. And I think in that unipolar world, really, really bad things will happen. But the good news right now is it doesn't look like we're on that trajectory yet.
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What are your thoughts on bias in AI?
This is where control matters a lot. So, and actually this is a very interesting debate, right? There will be people out there who say there should only be one AI and I want to control it.
There will always be people like that.
Yeah. There's sort of like the one world government people.
And then there's the sort of renegade people who are like, 'No, no, no. I want to be a pirate. I don't want to join the Navy. I want to be a pirate.' And personally, I'm team pirate.
So I, you know, I think that personal responsibility, personal liberty, and personal computing and personal value...
The idea that the thing that's right for one person is right for everybody else is a crazy idea.
I definitely don't want to live in that world.
It's a dehumanizing idea.
Totally. So, and I think we have choices right now. And that's why I think the personal AI movement is really, really important.
Now, there was an open-source AI that came from China maybe a year ago.
Oh, yeah. Yeah. Yeah. Those are model companies like DeepSeek or Qwen.
How did that change things when they appeared?
It scared the crap out of everyone and Nvidia stock went down by 10% and I bought on that day which was funny. So, I think there are two things happening. One is that it's good for the pirates. It's good for team Liberty. Yes. Because it showed that there can't be just one. There can be many, many model companies out there and that's going to be really important. But the second thing that is scary and maybe bad is that the reason why the Chinese companies are able to do that is they're actually stealing the intelligence right out of the giant American model companies. So two things can be true at once. It can be true that, and ironically, you know, Chinese companies that are operating outside of the American and northern American and European hegemony of copyright law can do this and then they can release it and then at the same time they're sort of doing a thing that is not totally clear that should be legal or good.
Aren't all the American companies built on stolen material as well though?
Yeah, that's a strong argument. Yeah, I mean you could say that's fair use and you know it's kind of odd for the big model companies to come and say actually this is just our copyright. They didn't write anything. They didn't create anything. They just bunched it up. That's right. Yeah. They brought it together, aggregated it. Yeah. So, and you know, on the one hand, we're all really, really, well, not everyone's glad that they did it, but you know, I think that it's clear that there is a lot of value to it. It's a really powerful tool. And then that's the debate as we're sitting here. It gives me pause that Sam Altman had not one but two different violent incidents at his home in San Francisco.
Tell me about that. I don't know anything about that.
Someone threw a Molotov cocktail at his house and then literally the next day after all of the news media published photos of his house and the address. There was a drive-by shooting.
Yeah. I mean, no one hurt. Obviously just property damage. Why does the mainstream media have such a hatred of technology?
I mean, on the one hand, it sort of makes sense. The mainstream media has really suffered from the death of ads. You can trace it to journalism being actually broken down by, I don't know why people don't give Craigslist a little bit more credit for this actually. I mean, you can directly trace the decline of ad revenue to newspapers to Craigslist. And on the other hand, I think people are pretty happy that they can go to Craigslist and sell their toaster. And Craigslist is free. So, I think there's a lot of paradoxes in how technology comes out into the world right now. And that's a good one. That's what are you supposed to do? Like, were we supposed to protect the newspapers? You know, were there supposed to be laws that prevented this from happening? On the other hand, Craigslist is free and it's giving a service that people are using that is way superior to having to call up the newspaper and pay $20 just to sell your car or something like that. So, what should the rules be? Things change. Is that okay? And then I always think about, are you familiar with this funny management book? It's Who Moved My Cheese?
No, I know the title, but I haven't read it.
Yeah, I mean, you don't need to read it because that's basically the whole thing. I think it's just people literally don't want their cheese to be moved and technology is the primary cheese mover in society and so it makes sense that people are very upset with tech people.
Is there a world in the future where all pieces of content can be on the blockchain and then when they're integrated into AI, you know where things are coming from?
Yeah. Basically, a lot of it is what are the laws around it? How do we get people paid? What do we do about it? For a while, there's this idea that artists should be paid via things like Patreon, which I actually invested in. I mean, I met Jack Conte and Sam Yam. I think they were actually right out of college. I mean, they were college roommates. And one is a great musician and one is a great computer scientist.
How'd they get the idea for Patreon? Do you know?
I think Jack had a band called Pomplamoose and he was on YouTube and he just basically, I think this was about when Kickstarter happened, but Kickstarter had a problem which is if you're running a band, you're not making products. You're not making one-off things. You don't want to sell a new t-shirt every week just to make money. So he says, 'Why don't we just do that? How about the straight-up patronage model?' Like, I really like this musician. I really like this artist. Let me just pay them $10 a month. So, I think Patreon just continues to grow and that's a great model for sort of squaring the circle.
Do they have competition? Does anyone else do what Patreon does?
I think they sort of have a good lock of what's going on right now, but Kickstarter still exists and I think GoFundMe still exists and there are lots of different things, but Patreon, I think, is just brought together all the people who are super creative who just want patronage. And my crazy idea for UBI is actually that shouldn't we just expand that? This sort of big, big, deep debate about what are all the people going to do when AI comes and takes the jobs. And I guess my answer is one, I think people are going to do a lot more cool stuff to serve each other. Not just make something people want, but make a whole lot of stuff that people want. Like that's sort of my first answer. And then my second answer is the something people want part doesn't have to be just more enterprise B2B software. It doesn't have to be that. It could be more music. It could be more art. It could be more fun parties. I was hearing about, was it Ari Emanuel? I heard that he was starting to buy all of these big like live event things. I'm like, that's so brilliant. Actually, that's going to where the puck's going to be because suddenly when everyone has all this free time, they're going to want to have fun. They're going to want to go to parties. They want to have interesting experiences. They're going to want to experience being a human more than being a drone worker. Wasn't it Aldous Huxley who talked about, you know, all of this technology will eventually result in a 20-hour work week and it hasn't happened yet but maybe now is the time.
So after the personal computer revolution what was the next one that you experienced?
I think the next one was clearly the internet. I mean, I remember like 1996 or so, like I was like a freshman in high school running around and running Cat 5 networking cable all around my high school on net day. Al Gore was running around talking about like the information superhighway is going to change everything and it did. Like he was right. Actually, I grew up in Fremont, which was the first place in the entire country to get cable modems. So, I could run a Linux box in my bedroom, and I did. And I learned how to make websites and program them. And that was super fun, honestly. I mean, basically Paul Graham did it the first time, and then by the time I did it, it was like maybe 1995, '96 and everyone was starting to do it.
Was it easy for you to get information? In those days,
We still had the yellow pages. You know, my funny story is my first job, we were living in apartments, and I looked around and I looked at my brother who was three or four at the time. And I was like, man, I don't want us to grow up in an apartment. The American dream is that we should live in a house. So, how do we do that? And then I look down at my feet and there's a stack of yellow pages. My parents are kind of hoarders, so I don't know. There's like a whole bunch of yellow pages. I picked up one, I flipped it to the internet section. I learned how to make web pages. The funny thing about the internet is on the internet, nobody knows you're a dog or a 12-year-old. So, I won all these like web design awards as a 12 or 13-year-old. And then by then I said, well, if I'm a, that's a pretty good tagline. I could just start cold calling people on the internet. And so, I found this company called Infolane. They, funny enough, made city websites. They made like the city of Fremont website. And I thought that was cool. And I just cold called them and I said, 'Hey, my name's Gary. I'm 14 years old. I'm an award-winning web designer. I'm looking for a job. Are you guys hiring web designers?' And so I got that first job. Rode my bike about 2 miles over to Infolane, this tiny little three-room office whose the main tech guy was this guy named Andy McCrae who's like bearded Unix programmer, like just grizzled, really knew his tech, classic CTO. And then the CEO was this guy named David Hilstrom. And he had the slick back hair. And he had like the finance shirt that had the white collar but then like the blue stripes underneath and then the pleated khakis and like the suspenders. And he was a fascinating guy honestly. Like he taught me the value of look someone in the eye and the strong handshake. And that was something that wasn't something my dad was going to teach me because he never learned that. He couldn't figure that part out, you know. So this is really interesting. Messy crew at home. Everything was a mess. And then I could ride my bike and go to work and hear like quirky, super smart people who weren't yelling at each other just getting things done and making city websites, you know, like serving the public good. And we were doing it by just typing in front of a computer. And there was a designer I got to work, my first designer I ever got to work with was named Jackie. I feel bad I don't remember her last name. I feel like I learned everything about design from her. She taught me this thing called the squint test.
How much older was she than you?
I think she must have been 55. Like she was...
So she was a grownup and you were 14.
Yeah, I was 14. Like I was just sitting right next to her.
So you consider her like a mentor?
Oh, absolutely. Yeah. I mean I had so many mentors. I mean the universe seems to just unfold and it's like here's someone you need to learn from. You just have to answer the call. I guess you just have to be like present.
And what was the next one after the internet?
Oh my god, the internet was so big. So the funny, funny thing about me is I learned how to make websites. I cold called to get my first engineering, like learned my first job where I learned to code was this design firm called Adjacency in San Francisco run by now my friend Andrew Sather. His story was crazy. He just cold, he didn't cold email because Fortune 500s didn't have email. He would cold send these beautiful graphic design briefs of what the internet could do for these giant brands and he signed them as an 18 or 20-year-old out of University of Wisconsin.
Great idea in 1998, like just had a vision for what it could be.
Yeah. So back then websites didn't look like the way they do now. They looked like dinky, ridiculous, like under construction signs and gray backgrounds. So Andrew Sather figured out how to make full-page bleed websites that look like magazines and that was the thing they figured out which I love. I mean I only say this because at every moment in technology like there is like a cult of the new that creates value in a way that is just astonishing.
Each of these things that you're describing changed everything and are all still living now.
Yeah. I mean I think about, I mean sitting here in Shangri-La, this is the place that so many songs were born right now, right? And so whether it's music or art or movies or frankly code, code is one of those things actually. So and I got to work with these legends who they came up with it. So Andrew Sather created the first Apple e-commerce store on the internet for Steve Jobs. And so I got to work.
Oh, they sold, you literally just went to apple.com. It was a brand new idea back then to be able to do e-commerce selling Apple devices online. Yeah. So you could buy an iMac and so was this beautiful iMac. I mean, I thought that was the coolest thing I'd ever seen. Like Apple was this thing up in the sky. Yeah. They made beautiful products, you know.
And before that, where would you have to go to get one?
Oh, you'd have to go to an Apple store. Oh, I guess Apple stores didn't exist yet. Oh, shoot.
It was probably hard to get. I don't. Yeah, you'd have to go to a retailer. And I imagine in many places in the country there wouldn't be a retailer.
Yeah, that's right. And you couldn't go online to buy it. So, it's like, yeah, it's unfathomable that all these things that we take for granted were created by people no different than you or me. I think that's like a straight-up Steve Jobs quote. That's what he said.
He said, 'Once you realize that, like you'll never be the same.'
Yeah. It's not special people doing these things. I mean they are special but everyone's a little bit special.
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Oh my god. So after the internet, it's sort of a toss-up between social. I would say Facebook was a big deal for sure. Social media and that happened because of the web. The funny story for me is I learned how to make all these web pages and then I thought that the web was dead. So it's like I was 2003, a computer engineering major at Stanford, graduated, no startups. Like I couldn't, all the startups were dead in 2003. Web 1.0 had already crashed. It's funny. One of the summers I spent at the man.com. I mean earlier we were talking about venture capital. In retrospect, that's the kind of venture capital that was bad. When you go in and sort of astroturf a business idea with someone who is a suit and not a builder, you get an idea like that. I think it was a men's magazine, some like 20-page PowerPoint about like all buzzwords. It's basically like mediated from a new sphere of people who are just disconnected. Like here's a bunch of abstractions and if it's hot, if it sounds hot, then I better get ahead of it. But that's like trying to navigate while you're blind. And what a builder can do is they know how this stuff is built. They got eyes. They can see. So you can just see like, hey, there's this thing over here. I'm going to go build that thing. And then they build it. And then it's awesome.
So would you say the best VCs today are the ones who are the builders?
I would say so. Yeah. I mean that's just sort of necessary, especially early stage. It just doesn't make sense that you could be that good an investor without being a builder first.
How different do the ideas change from an initial pitch until the thing that ends up being successful in the world?
There's some of a little bit of both. Someone like Tony Hsu from DoorDash, that's what they were and that's what they were always. And then there were like little adjustments along the way. They said, 'We're going to be the best food delivery.' And then the micro pivot there was like as everyone else was working on cities, they said, 'Oh, we're going to do suburbs.' And just that little shift allowed them to grow really, really fast and beat everyone else. Sometimes it's like Brian Armstrong at Coinbase. He came in and said, 'I believe that Bitcoin is going to be really, really big.' And then he just worked backwards from that. And so the first version of what he built, I think it was called BitBank. All he was trying to do actually initially was build a Bitcoin client for the phone. And then this is like the act of the founder. You know, you're out there, you're trying to make this thing. And then you realize, oh, it's not going to work. The whole Bitcoin client can't fit on an Android phone. And even if it did, you'd have to sit there, leave it plugged in for five hours a day just to make it usable. I mean, okay, that's not going to work. Let's turn around and make it work on a server. And then he did that and it again didn't work. And he said, 'Well, why? It's actually really hard to get Bitcoin. I built a thing that holds Bitcoin, but how do you actually get it in there?' And then he went and did that and it became Coinbase. So these things always evolve. They always change. And really great founders seem to be able to just ask the first principles questions and then go after that thing.
Walk me through the 13-week program.
Oh yeah, we're in week two right now of the spring batch. Honestly, most of the first 10 weeks is just building. So you come in and this is fresh in my head. We just went through the basics. And it's funny how much you have to do the basics, but we have a bunch of really experienced, successful former founders who are coming back and doing YC again, alums. And it's funny to watch them have to go back to beginner mind.
So these are people who are going through the program a second time.
Yeah, totally. So some of our best founders like Parker Conrad of Rippling came back through a second time and increasingly alums are coming back and doing YC again. Sort of.
Do you think they're doing it for a nostalgic reason or because they get something specifically by doing it?
I mean, I think the YC batch done right is a little bit more like a revival or an experience than an educational product or something like that. I think it's an experience. And then our reality is constructed entirely with other people. And so the number one value the first few weeks is actually disconnecting from your normal rhythm and saying, 'Okay, I displaced my entire life. I'm coming over here. I'm intentionally going to work on this company and I'm going to create a thing for other people to the exclusion of everything else and I'm going to focus on just that.' And that alone is so valuable because otherwise, you know, the first thing we say is like in every other context, your best friend calls you and needs to move and needs your help that weekend. Now you've got an excuse. Yeah. And the answer is sorry. Yeah. Is always tomorrow. Yeah, right now I'm doing a thing. And so it's kind of funny how much just making intentional space in your life is just that.
And then doing it in sort of like an encounter session style way. It's like you're with all these other people and every single week you see their struggles and what they're going through and the evolution in their thinking. And then about week three or four it starts becoming, oh, it's working for them. Am I behind?
Would you say it's competitive or more like everyone inspires everyone else?
Ideally, it's the latter. Sometimes it's competitive. What's funny is my YC batch, we had one of my fraternity brothers from Stanford actually was in my very YC batch. But our startup idea was post an email and get a blog. Theirs was post an email and get a photo on a photo frame. And so we were competitive with them. Like I knew that they were going to launch and we were going, we needed to launch first. You know, Parker Conrad talks about that during his batch for Zen, he was doing health insurance for business and there was another company called Simply Insured and boy did that light a fire under his ass to make that company 10 times faster and better than his competitor.
So, mostly I wanted to inspire, but on the other hand, a little competition never hurt anyone.
And it sounds like that's like real world direct competition in those cases.
Which you will have to encounter.
Yeah, that's super real. It's different than, well, he's building something really different than me, but I want to be as good as him.
Yeah, that's right. A lot of this is the 13 weeks is a lot about trying to get people to focus on the thing that really matters instead of how do I raise more money from VCs? How do I impress the finance bro? None of that matters.
Only thing that matters is did we make a thing that people want?
Going hard must be much more palatable knowing in 13 weeks this is over.
Yeah, it is a process. I mean, most of the companies, the median company raises $2 to $3 million. On the high end, people raise 10 to 20 million after 13 weeks. So there are real stakes to the competition. And then just running people fast at a particular thing matters a lot. I've never seen anything speed founders up in such a profound way. I spent a couple years sort of in my wilderness years. I spent about, funny enough, it was seven years in the wilderness. It sounds ridiculous to call it the wilderness. I started my own VC fund that was very successful, Initialized. And during that time away from YC, I would try to do pre-seed. I'd meet teams that I really loved and I'd give them half a million dollars and I'd say, go, like, here's all the essays. And I'd meet them every week, but they're in the co-working space in the WeWork and they're, you know, sitting there in the coffee room like hanging out the way they used to when they worked at Microsoft or something. And it's like, you haven't changed anything yet. I imagine it's the same deal with just any creative profession. It's like, just get yourself out of your head. Change your location, change the people you're with, change the way you think about things. And that's my only explanation. Like, I would try to pre-seed people and get them to speed up to startup speed and it would never work. And then finally I'd get frustrated and say, 'Okay, it's time for you to do YC.' And if they were good enough to get into YC, then they would speed up. And suddenly, magically, they would turn around and a year or two later, they'd be making $20 million a year in revenue or something.
How did it work out for you to get invited back to run YC?
Oh man, that was an intense experience because I was good to go. I had billions of dollars under management and I had built the firm myself, but the founder of YC, Paul Graham, asked me to come back.
Do you know why he picked you?
Oh, here's a funny story. The story of Paul and Jessica is fascinating because PG, you would dig him so much. He's just connected to the source, man. Everything about YC that he designed has that quality about it. It's thoughtful and not ostentatious and concise and spare. And I guess that's what brought me back. And then I think YC itself way exceeded his expectation for it. I think he's a billionaire many times over from starting YC and it became sort of clear by what, 2013 or so, that that was true.
How many years had he done it?
Seven years at that point. So he himself went through a seven-year journey starting and running YC. He had young children and I didn't realize it at the time but I was working at YC. I was sort of one of proteges and then Sam Altman of OpenAI fame also came up through the first YC batch in 2005. Paul famously wrote an essay about him. He made a list of five top founders of our generation and he put Sam on that list when he had not created all the things that he's created since yet. So at the time it was very controversial in our community because Sam... clearly he could see it. PG's connected to the source, man. He called it. He called it. In 2013, PG brought me and Sam and my fellow managing partner Harj Taggar out to dinner at Fuki Sushi. At the time, he was looking for a successor. YC had become so big and so like an institution that it was too much work for him and he never really intended on that being like the only thing he ever did for the rest of his life. Yeah. Plus, he had young kids and so he went to each of us in turn and said, 'Who do you think could run YC?' Harj and I, I mean, Harj and I come from, I don't know, basically immigrant backgrounds. And for me, I've just been on, I'm a very late bloomer. I feel like I'm still in the process of blooming as it is right now. Like, I'm still discovering who the heck I am and how do I connect, that never ends because there's something beautiful about that.
Oh, yeah. That's a great state to be in.
That's true. I wish I did it earlier. That's the problem. Like, I would be more, things would be better if they could always be better. But the point is, you know, Harj and I looked at PG and said, 'Nobody, man. You got to do this forever.' And in that dinner, Sam Altman said, 'I could do it.' And he did it. He took it over, which was awesome. I remember Paul...
How long did he do that for?
2013 through 2019. And then he basically, that was when OpenAI took a life of its own and Sam had to choose. Yeah. And honestly, like as it happened, I have to give it to Sam. I have to say it. We were rivals. Honestly, sometimes he was kind of a jerk to me, but I realized that was just a part of the thing. That's part of the grand plan in the game. You know, he called it. I remember working for him in 2014 before I had decided to leave and I said every meeting he'd come back and he'd be talking about AGI, like he met Elon, he met Larry and Sergey and the world unfolded to him in a way like when he became president of YC. I didn't understand it at the time. I'm like, 'Hey Sam, we're just trying to like fund some startups over here. Like, that's cool, but can we talk about this B2B SaaS thing?' And then I hate to say it, but I look at the 2014 version of myself and it's like, shoot man, you were the Salieri and Sam was the Mozart. You know, he was there and he heard it and he saw it and he said that's the future and then we're going to go get it. I have to give it to him. He did it. And it was like one of the fundamental lessons for me in my life. I think I'm trying to embrace, there was something that blocked me, closed me off to what was clearly going to happen and I was there. So much of tech and so much of my life day-to-day is improv. It's like a yes and you're sitting with founders, very creative people. It's like, whoa. Instead of saying no, it's not going to happen. You know, I should be saying yes. And it's like, oh yeah, how does that, like, how does it happen? And if it happens, what happens, right? And it's just funny to think about that 2014 snapshot for me sitting in the YC partner room with Sam and like all the other partners who were working at YC at the time under Sam. The vibe was not yes and for Sam. The vibe was like, why is this guy doing this? And so that's actually one of the things that keeps me up. I run YC today and I want to run that room in a very different way. Yeah. And I realize sometimes I'm the one who's bringing that what the heck is going on energy and like people are thinking that about me.
I think YC is very interesting. It sounds like you might not want to use him as the example of how to do it.
Maybe not. Yeah. I mean, I think he's learned a lot. I think he's become a different leader. I think that he's taking a lot of shit right now and I really feel for him and his family. On the other hand, he doesn't deserve what he's getting right now.
Was it hard to go from a founder to doing something like running YC? Do you miss the day-to-day of your thing?
Oh, yeah. I get to have my cake and eat it too at this point. Yeah. Because I'm open sourcing things and open sourcing it and then honestly it's turning into the next thing that will bring people in. Like, I found Paul Graham and YC because of Paul Graham's essays and Paul Graham's essays are still about a third of all of the applications that come in.
Um, when were the essays written?
I mean, throughout his life starting I think in the late 80s or early 90s.
Tell me about 'do things that don't scale'.
Oh yeah. I think a lot of the things, the advice that you hear, that we, I mean, some of it is like we give away all the advice for free. That's been a long debated thing inside of YC. VCs don't do this. VCs like to say that this is a, you know, this is an institution, closed ecosystem. Yeah. You got to get our money and the only way we're going to teach you how to do anything is you got to come through us and they're gatekeepers. And then I really want us to not be like that. And I think YC has never really been like that. You go to any other incubator or even any other VC that does this job and helps founders and you look at their curriculum, it's all our stuff because we give it away on the YouTube channel. It's 2 million subscribers on there. And I think we want to just keep doing that. Honestly, we want to just like arm people with the knowledge to go and create this stuff. How cool is that right now that the tools are way more powerful now than ever actually.
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How similar are the pictures that you get each semester? Are there a lot of the same idea?
Oh, it's tons. And then the first thing we have to do is try to get them on something that's more unique to them.
And do you give feedback?
Oh, yeah. Yeah. No, I mean, one of the top things that we started doing the last two or three years once I came back is we have to meet people one-on-one. You know, a quarter of my team right now is in India and they're in New Delhi. These people are cracked, man. They are so smart. They're like 22-year-olds, PhD candidates. And then the most interesting thing my partner Ankit Gupta just put in Slack that I just, like, that's fascinating. It's like they're just working on 2008 Web 2.0 ideas right now. They're like social networks and tutoring marketplaces, which is very funny because in the history of YC I feel like that's one of the most common ideas. I think the founder of Dropbox famously in what year was it? 2006. He was at MIT and he was working on a tutoring business and he met Paul and Jessica and Paul and Jessica said you're the right person to do a startup but like you should not work on tutoring, man. And then he ended up coming up with Dropbox. So it's very funny how same as it ever was, like people are still doing social networks and photo sharing apps and tutoring businesses but they shouldn't, they need to work on things that are truly unique to them.
Do you get any really fringe ideas that are unlike everything else?
Oh, yeah. All the time. The craziest one I really, that's doing well and might actually pull it off, there's a space fusion company.
Literally, there are these nuclear scientists at the National Laboratories and they're in their late 30s, early 40s, but they'd been working on fusion at the national labs for years. And they came back with these simulations from their research. Fusion on the planet is very, very expensive due to gravity. But they have a simulation and a design that shows if you're in space you can do real fusion at a scale that is actually viable. And they're basically, they have to see about it. It's kind of like falling in love. You're like, 'Oh man, should I change my flight?' or it's like, this is off my plan, man. Like, this is not what I was trying to do, but like I got to see about a girl, right? That's what it feels like for some of these founders.
Yeah. So, they're off. They raised, you know, I think $4 or $5 million and these are not normal beaten path, worked at Google, went to Stanford kind of people. They are actually the smartest possible scientists to do it. And in most cases in the world, like 99 out of 100 universes, those guys don't get to raise $5 million. But because YC exists, those guys are up and running. And if they succeed, we will have fusion in space, which is wild. And I don't know if it'll happen, right? They don't even know if the simulations can actually happen in real life, but we have to see about it.
We got to find out. Are the people who get picked more likely to be the ones who come up with the idea that you've not heard before?
The idea is a function of the people in those 10 minutes. If we don't learn anything, then it's probably a no. Really, really smart people. The people you really want, they're really high agency and then they're also just so perceptive. I guess they're connected to the source. That's probably the hardest thing. It's like you know it when you see it, like you meet someone, it's like that person is connected to something beyond.
Yeah. They can feel it. It's even beyond thought. It's some other thing.
Yeah. So when you meet people like that, I mean, when I met Brian Armstrong I was like, oh my god, there's something going on with that guy.
Typically would you say is it more about the person than the idea?
I think it's more about the person. Yeah. What are they about? You have to be about something. You have to have a thing in you. And I realized like actually I can spot that in other people. You just spend time with people and it's like, man, you got some sort of nuclear reactor in there. Just don't lose containment.
