Key Moments
Should You Start A Startup? | Startup School
Y CombinatorKey Moments
Startup founders don't need to be geniuses, but they do need extreme resilience to overcome rejection. The biggest risk isn't failure, but rather the missed learning opportunity.
Key Insights
Resilience is the most crucial quality for startup founders, often more so than initial confidence or academic success.
Even founders who initially seem quiet or unconfident, like Sagi of Benchling, can develop into formidable leaders with sufficient resilience.
Initial motivations for starting a company, such as making money or curiosity, are less important than the enduring motivations that develop over time, like genuine interest in the problem and team.
The 'worst-case scenario' of a startup failing after a year without much salary is a crucial factor; if one can live with this, they are better suited to founding a company.
Past startup experience is highly valued by companies like Rippling and Airbnb, with former founders often being hired into leadership roles due to demonstrated self-starting abilities.
Finding a co-founder and developing ideas often go hand-in-hand; actively discussing ideas with potential co-founders and working on side projects is key to progress.
Resilience trumps genius and confidence in founders
Contrary to popular depictions of founders as ruthless geniuses or charismatic product gurus like Mark Zuckerberg or Steve Jobs, Y Combinator Partner Harj Taggar emphasizes that diverse personality types can succeed in startups. He notes that even after 15 years at YC, he is still surprised by which individuals thrive as founders. Early academic or professional success is not a reliable predictor of startup success. The core differentiator is resilience: the ability to withstand immense rejection and personal setbacks inherent in convincing early users to care about a nascent product. This resilience is more critical than outward confidence, as Taggar has seen seemingly confident individuals falter under pressure, while quiet, less confident founders have proven remarkably resilient, eventually leading their companies to public offerings.
The Benchling story: resilience in the face of sales struggles
The story of Sagi, founder of Benchling, exemplifies the importance of unforeseen resilience. Sagi, initially a softly spoken engineer, co-founded Benchling with a vision to sell software to biotech and pharmaceutical companies. Despite concerns from YC and early investors about their sales capabilities, Sagi persisted. Benchling struggled for over two years post-YC without generating significant revenue, relying on enthusiastic grad students as free users. However, Sagi's resilience allowed the company to eventually develop effective enterprise sales strategies. Today, Benchling is valued at over six billion dollars and serves top companies in the life sciences sector. Taggar highlights that he could not have predicted Sagi's tenacity to overcome such prolonged sales challenges and transform into a capable CEO, underscoring that resilience can emerge and develop unexpectedly.
Why motivations matter less than evolution
Taggar challenges the notion that certain motivations are 'flimsy' or 'superior' for starting a company. He argues that motivations like becoming rich or simply being curious about the startup experience are perfectly valid starting points. The key is not the initial reason for starting, but how these motivations evolve over time. Founders need enduring motivations to push through difficult periods. The best enduring motivations often stem from genuine interest in the problem being solved and a strong connection with the people the founder is working with. He shares anecdotes of founders who planned to exit their companies early but ended up running them for a decade, transforming them into public companies, demonstrating how initial intentions can shift dramatically with sustained effort and evolving passion.
Assessing risk: can you live with the worst-case scenario?
A practical approach to deciding whether to start a company involves honestly assessing the worst-case scenario. Taggar advises against rhetorical contemplation and encourages a concrete evaluation: What is the absolute worst that could happen if the startup fails? This typically involves dedicating at least a year to the venture without earning a significant salary. The ability to accept this outcome without crippling anxiety is a strong indicator of suitability. For recent college graduates, this lost year is less impactful than for established 'FAANG' employees facing career-defining promotions. Crucially, individuals must factor in the immense learning that occurs during a startup. Even in failure, the exposure to sales, product development, and customer support provides invaluable experience that can shape future career paths, whether in subsequent startups or specialized roles.
Startup experience enhances future career prospects
Taggar points out that many successful companies actively seek individuals with prior startup experience. These companies, like Rippling (a $10 billion company) and Airbnb, view former founders as prime candidates because they demonstrate a proven ability to be self-starters, take initiative, and lead projects. Rippling, for instance, hires former founders to lead entire product divisions, finding them highly successful in building and managing these units. This is because startups force founders to wear multiple hats, developing a broad skillset and a driven mindset. Even if a startup doesn't achieve unicorn status, the skills honed and the demonstrated drive make former founders attractive hires, often leading to significant career growth opportunities.
The synergy of ideas and co-founders
Taggar stresses that finding a co-founder and generating startup ideas are interconnected processes, not separate tasks. Initial ideas are often vague hunches that need refinement through discussion and debate. The ideal person for this is a co-founder. He advises identifying individuals with whom you naturally enjoy discussing ideas, whether college collaborators on difficult projects or productive colleagues at work. Engaging in conversations about interesting technologies, admired products, or overlooked innovations, coupled with personal research, helps prime the mind for idea generation and fosters stronger relationships with potential co-founders. This collaborative environment is crucial for evolving raw impulses into tangible startup concepts.
From side projects to launch: the practical path forward
Once potential co-founders and ideas are being explored, the next step is to experiment with side projects. These projects serve as a testing ground for turning concepts into reality, even if rudimentary. Taggar encourages starting with a simple version that can be built over a weekend or pitching the idea to potential users to gauge interest. The goal is not to build a unicorn, but to gain experience in the creation process. For those without programming skills, learning to code is highly recommended, at least enough to build a minimum viable product. The traction and feedback on these side projects, while mixed, offer crucial insights. Taggar, quoting Paul Graham, suggests that a product a few people deeply love is more valuable than one that many people are indifferent towards, indicating a potentially promising startup idea.
Knowing when to quit your day job
The decision to transition from a side project to a full-time startup founder is often signaled by more than just explosive traction. Taggar advises focusing on the enjoyment of the process: are you energized by ideation and building, contrasting this with the draining nature of your day job? If working on side projects after hours feels less like a chore and more like a passion, it might be time to make the leap. The quality of collaboration with your side project partners is also a critical indicator. If you genuinely enjoy working with your collaborators and share the aspiration to build a company, this shared vision and rapport can be a powerful catalyst for quitting and commencing the entrepreneurial journey. This shared commitment is what sustains founders through the inevitable challenging periods.
Mentioned in This Episode
●Companies
●Organizations
●People Referenced
Startup Founder Decision & Preparation Checklist
Practical takeaways from this episode
Do This
Avoid This
Common Questions
The most important trait for a startup founder is resilience. This involves the ability to push through significant rejection, setbacks, and the initial struggle of acquiring users, which often feels very personal.
Topics
Mentioned in this video
A hospitality company, mentioned as a successful YC company where Nick Grandy worked as the first employee after his startup failed.
Nick Grandy's first startup, which was funded in 2008 and eventually shut down.
An organization that invests in early-stage startups and provides a startup accelerator program. The speaker is a group partner there and discusses their insights on founders.
A YC company co-founded by Nick Grandy, valued at over $3 billion, used as an example of successful career progression after an initial startup failure.
The speaker's second startup, which used software to help companies identify and hire great people.
A 10 billion dollar company founded by Parker Conrad. It hires former founders and currently employs about 50 of them.
Co-founder of Facebook, mentioned as an example of a brilliant programmer stereotype of a founder.
Co-founder of Apple, mentioned as an example of a charismatic product genius stereotype of a founder.
A founder who experienced a startup failure (Wonderbar) but went on to join Airbnb and later co-founded Outschool.
A co-founder of Y Combinator, whose advice about making a product a few people love is cited.
The founder of Rip Laine, mentioned for his company's strategy of hiring former founders.
More from Y Combinator
View all 562 summaries
14 minInside The Startup Reinventing The $6 Trillion Chemical Manufacturing Industry
1 minThis Is The Holy Grail Of AI
40 minIndia’s Fastest Growing AI Startup
1 minStartup School is coming to India! 🇮🇳
Found this useful? Build your knowledge library
Get AI-powered summaries of any YouTube video, podcast, or article in seconds. Save them to your personal pods and access them anytime.
Try Summify free