Key Moments
Work at a Startup Expo 2018
Y CombinatorKey Moments
Startups offer unparalleled learning and growth, but come with significant risks like poor management.
Key Insights
Working at a startup can provide access to roles you're unqualified for, accelerating learning and career growth.
Startups are a great way to gain experience and network for those who eventually want to start their own company.
The most significant benefit of a startup is the maximized speed of learning, regardless of company success or failure.
When evaluating startups, prioritize companies where a small number of users genuinely love the product over those with many indifferent users.
Consider the growth rate of the market, not just the current size, when assessing a startup's long-term potential.
Identify technological platform shifts as a key indicator of where big startups will emerge.
Founders and early employees' quality and vision are critical determinants of a startup's success.
New graduates' interests can be a leading indicator of future trends and successful startup ideas.
THE DOWNSIDES OF STARTUP LIFE
Joining an early-stage startup comes with inherent risks, primarily concerning management quality, which is often suboptimal. Early employees might not receive adequate mentorship or direction, requiring them to proactively seek it. Furthermore, the expectation of getting rich quickly by joining a startup is statistically improbable, and one should not join with this primary motivation. Silicon Valley has matured, and the allure of stability and clear career paths might be better met at larger, established companies rather than the volatile startup environment.
UNPARALLELED OPPORTUNITIES FOR GROWTH
A major draw of startups is the chance to take on roles that far exceed one's current qualifications. This can lead to an incredibly rapid learning curve, as exemplified by individuals who quickly scaled to leadership positions or co-founded successful companies. These opportunities would likely be inaccessible in larger, more structured organizations.
A LAUNCHPAD FOR ENTREPRENEURSHIP
Working at a startup can serve as an invaluable gateway for aspiring entrepreneurs. By immersing oneself in the startup ecosystem, one gains exposure to like-minded individuals and learns the intricacies of building a company. This environment fosters the development of an entrepreneurial mindset, providing the necessary network and experience to eventually launch one's own venture.
MAXIMIZING THE SPEED OF LEARNING
The most compelling reason to join a startup is to maximize one's personal rate of learning and growth. Whether the company is experiencing hyper-growth or is on the verge of failure, there are immense learning opportunities. This includes developing critical skills in scaling systems, negotiating complex deals, or navigating market challenges, all of which contribute to significant personal and professional development.
EVALUATING STARTUPS: KEY INVESTMENT PRINCIPLES
When considering joining a startup, it's beneficial to view it as an investment. Key evaluation points include looking beyond vanity metrics to find companies with a small but passionate user base. Exponential growth and strong momentum are crucial indicators. The future size and growth rate of the market are more important than its current size, and identifying technological platform shifts can reveal major opportunities.
THE IMPORTANCE OF MISSION AND TALENT
A startup's mission should be exciting enough to attract and retain critical talent. The quality of the founders and early employees is a significant determinant of success, especially when they possess unique insights or can execute exceptionally well. Additionally, ideas that sound bad but are good often represent market inefficiencies that startups can exploit, as opposed to ideas that sound good and are immediately pursued by larger companies.
THE VALUE OF INTUITIVE GUIDANCE
Pay attention to what excites recent graduates, as their interests often precede broader market trends. When seeking advice on which startup to join, choose advisors carefully, prioritizing those who are open-minded and intellectually rigorous. Their insights can provide a valuable counterpoint to conventional biases and help in making more informed career decisions. Ultimately, focus on maximizing your personal rate of growth.
Mentioned in This Episode
●Products
●Software & Apps
●Companies
●Organizations
●Books
●Concepts
●People Referenced
Median Time to Market for Medical Devices and Drugs
Data extracted from this episode
| Product Type | Average Time to Market (Years) |
|---|---|
| New Software Medical Device | 4 |
| Hardware Device (e.g., pacemaker) | 7 |
| New Drug | 10 |
Startup Market Potential Growth
Data extracted from this episode
| Industry | Current Market Size (2018) | Projected Market Size (in 10 years) |
|---|---|---|
| Legal Services | $400 Billion/year | Undefined |
| Cannabis Industry | $9.7 Billion/year | $47 Billion/year |
Common Questions
Justin Kahn highlights three main reasons why one shouldn't join a startup: generally poor management, low statistical probability of getting rich, and the lack of career stability often sought after in today's Silicon Valley.
Topics
Mentioned in this video
A recruiting company for YC companies and others, co-founded by Jim, who gained startup experience at Justin.tv and Socialcam.
A live video system that became the fourth largest bandwidth consumer in North America, sold to Amazon.
Acquired Twitch and is broadly a tech giant; later mentioned by Instacart and Volley as a platform for their services (Alexa).
Emburse initially launched credit cards using the MasterCard network.
The co-founder of Reddit is an investor in CoinTracker.
CoinTracker's co-founder previously worked as a product manager at Alphabet.
An investor in Promise, a startup helping people avoid jail.
A top-tier high-tech VC firm that funded Reach Labs' Series A round.
Justin Kahn's newest company, a tech-enabled law firm for startups that aims to make legal services fast and transparent using AI and real lawyers.
Mentioned as a large tech company with high salaries, also mentioned as a source of talent for Astranis and a competitor to OpenStreetMap where CrowdAI finds roads better.
Mentioned as a company where Astranis acquired its lead antenna engineer for their satellite constellation project.
Emburse recently launched its expense solution on the Visa payments network.
Venture capital firm that invested in Scale.
Jared's company, which competed with Justin.tv for a programmer recruit, Jim, by offering a higher salary.
A self-driving car company founded by Kyle Vogt and Daniel Kahn, sold to GM for a billion dollars, demonstrating massive learning and success.
The founder of Protocol Labs is an investor in CoinTracker.
A venture capital firm backing Universe.
GM acquired Cruise for a billion dollars, highlighting Daniel Kahn's successful application of prior learning.
Where Finbar, an early Exec employee and future founder, worked as an engineer before joining a startup.
A new startup founded by Finbar, which went through YC and is "doing super good" after previous startup failures.
Mentioned as an example of a company that made sense only after the platform shift of mobile phones and apps.
A past company co-founded by Peter, the CEO of Emburse, which was acquired by Box.
Coinbase's first seed investors also invested in CoinTracker.
An alum from Make School leads mobile development at Linebike.
Scale works with Pinterest for ground truth data in computer vision industries.
A well-known startup accelerator program. Referenced by Justin Kahn as a place he's been through multiple times and by Sam Altman as a source of metrics and a model for identifying trends.
A past company founded by Justin Kahn, which later spun out Twitch. It was an early live streaming site where he recruited early talent.
Checkr works with Uber for background checks; Level 5 uses Uber drivers for mapping data collection; Promise recruited a team member from Uber.
Sam Altman's company, presented as having an "exciting enough mission" related to building AGI, which helps concentrate talent.
DoorDash initiated a grocery pilot with Walmart, indicating their expansion beyond food delivery.
Checkr works with Lyft for background checks.
Mentioned as a large, stable company where one might seek a career with stability, in contrast to a startup.
Justin Kahn's company focused on home cleaning, which was ultimately a "horrible idea" and failed, but provided valuable lessons.
An East Coast company that acquired Justin Kahn's failing home cleaning business, Exec, providing Daniel Kahn valuable negotiation experience.
Emburse used Stripe's new issuance API to launch its credit card product; Promise also stole its engineering lead from Stripe.
Alumni from Make School have been placed at Google X, demonstrating the quality of their graduates.
Mentioned as a former employer of team members at Mystery.org, highlighting their engineering talent.
Scale works with Airbnb for ground truth data.
An unknown band recruited by Daniel Kahn to stream on Justin.tv in 2007, which caused the site to crash due to traffic.
Acquired Crocodoc, a company co-founded by Peter of Emburse.
A venture capital firm backing Nova Credit and Universe.
Kyle Vogt was an MIT student who was recruited by Justin.tv to work on hardware.
A venture capital firm that provided a large Series A funding round to Astranis.
Cited for describing Science Exchange as the "Uber for experiments."
Co-founder and President of OpenAI, mentioned as an investor in Scale.
Nobel Prize winner (2009) and a customer of Quartzy, demonstrating the high-caliber scientists using their platform.
Mentioned as a previous institution of one of CrowdAI's team members, highlighting the team's academic background in AI.
Then-President of Y Combinator, who followed Justin Kahn's keynote to speak about evaluating startups as an investment.
A Y Combinator partner whose quote about "slope" over "y-intercept" is used to emphasize maximizing personal growth and learning rate in a career.
Co-founder and CEO of Dropbox, mentioned as an investor in Scale.
CrowdAI claims to find roads better than what's on Google Maps and OpenStreetMap.
Volley builds their voice-controlled games on top of an AWS Lambda stack.
Cited as an example of a technological platform shift in 2008, creating massive new market opportunities despite a zero-dollar market initially.
Discussed as a technology that, at the time of the talk (2018), was not yet a "real trend" because users were not spending many hours a day using VR headsets.
A company spun out of Justin.tv, co-founded by Jim, which scaled rapidly to 128 million users in two months.
Implied as a tool to create "stock photos" of coders in suits, contrasted with Quartzy's remote work opportunities.
Volley develops voice-controlled games for Google Home devices.
Mentioned as a previous employer of one of CrowdAI's team members, highlighting the team's expertise in AI.
Volley develops voice-controlled games for Amazon Alexa, with Song Quiz being the number one game on the platform.
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