O4H8 04 Apr 2026

How Not To Start A Startup

These are my notes from Michael Seibel's talk. It had a very positive impact on me, and I want to write down the key points clearly.

The reason why YC was created was actually really simple. We believed that smart, talented builders did not have proper access to funding. We believe that to get funding, you had to have the right relationships, the right networking, be able to build the perfect deck, and that shouldn't be the filter to decide who gets to build, the future. And so instead, we have an open application. Instead, instead of negotiating with us, we have standard terms that you can read and standard paperwork that you can read before you even apply. And then probably most importantly, but underappreciated, you're funded in a batch of companies. And so now there's a group of people that you become friends with that support you, you support them, and you're going through your startup journey together. And having done YC in two thousand and seven and two thousand and twelve, I can tell you that that's been the most valuable thing ever in my life. I wouldn't be here without YC. And, one of the jokes that Paul Graham, the founder of YC, of-often says is that people that you meet in YC will one day be in your wedding. And he was right. I had five groomsmen in my wedding, and four of them were YC founders.

One of the biggest things that I see founders screw up is the problem that they choose to solve. A lot of times founders don't really understand what kills startups and how that affects what problems they should be solving. The primary thing that actually kills startups is losing your motivation to work on your startup.

So it's not money, it's not competition, it's not anything else other than losing motivation to work on your startup. Now, that can come from one of two sources. Either your co-founder relationship, doesn't survive or, you chose an idea you don't really care about or users you don't really care about.

So you should think that the first challenge of picking the problem that you wanna solve in your startup is how do you hack your personal motivation? How do you pick a problem and a set of users that not only will you fight for today, but you'll fight for when you're really tired, you're really frustrated, you're low on cash, your friends are telling you that this is not a good business?

The tricky bit is that most people are trying to respond to things that are happening right now, whether it's what VCs are tweeting about or some trend that's peaking right now, like, you know, video conferencing. And what they don't realize is that they're aiming for this point ten years from now. That's when your startup will be at scale. And that's the point where you have to have maximum motivation, and your motivation has to be building over the next ten years. So if you're working on a problem just because it's cool today, and if the problem isn't cool tomorrow, you're not gonna work on it anymore, you've got a problem. You've really got to reconsider how to hack your personal motivation so that you're gonna survive the ten-year journey.

Generally, the closer you feel to your users, the more you believe you're having an impact in their lives, and the closer you feel to your co-founders and the more you don't wanna let them down, the better success you're going to find over time. So number one, how does the idea you choose or the problem that you choose to solve hack your motivation?

Number two, are you brave enough to walk alone in the dark? excellence in startups is actually very different from excellence in other parts of life. So for most of you, you put yourself amongst the smart kids in middle school and you took good classes in high school, you got into a good university, you try to get good internships.

And generally, when you put yourself amongst the smart kids, you try to be average or above average. That is an extremely good strategy in almost every walk of life. Put yourself amongst the smart people, be average or slightly above average. If you wanna be a lawyer, if you wanna be a doctor, if you wanna be a banker, great strategy. The problem is when you apply that strategy to startups. Unfortunately, the vast majority of startups fail, and the failure rate of startups is so high that a strategy that works in other careers probably won't work in startups.

So when you think about startups, ninety-nine point nine nine percent of startups fail. When you think about YC startups, sixteen thousand companies will apply to a batch. We'll accept one and a half to two percent, and of that pool, the ones we accept, we only expect two percent of them to build ultimately successful businesses that scale. So two percent of two percent.

So in this situation, it turns out that being average amongst YC founders or an average startup founder means you're gonna die. It turns out being above average means you're gonna die. Can you be extraordinary?

Now, the problem is if everyone else around you is reaching for average or above average and you do all the same things that they do, you'll die. You actually have to be orders of magnitude better than the people around you.

One of the most, common things I say to the YC founder is that a YC batch is a bunch of dead companies walking because most of the companies in a YC batch, five, six years after the batch, are gonna be dead. If you act like everyone else around you, if you seek to be the average of everyone else around you, if you seek to have the approval of everyone else around you, if how you decide what you're going to do is by looking at the people around you, most likely you'll all fail together.

So are you brave enough to walk alone in the dark? Are you brave enough to make some decisions that look unpopular at the time, that are different from what your friends and startups are doing, but that ultimately will lead to your success?

This is tricky, but, honestly, the best YC founders really don't care what the people around them are doing.

The next one. I call this point garbage in, garbage out. How are you actually getting your insights and your advice for what you're going to do in your startup and how you'll do it? Unfortunately, nowadays, there are so many startup experts, or at least people who pretend to be startup experts. But unfortunately, almost everything that you're consuming, you have to question whether it's high quality or not. So, for example, if you consume TechCrunch and other tech news and think that that's how the tech world works, it's not true. What's interesting about TechCrunch is that you can read about companies getting funded every single day. Where are the articles about those companies dying? Very clearly, you know that the vast majority of those companies die, but where are those articles? It gives you a false impression of what's going on in the market.

Give you another example. You see a company raise a bunch of money. How do you know why? How do you know they made money because they were growing and making revenue and the idea is good? How do you know if they raised money because they had relationships with VCs? How do you know they raised money because they were a second-time founder? You have no idea. Most of the information given to the press is shaped in such a way to give an impression. The goal is not necessarily to share the truth.

So most of the news is not actually reflecting the real world. It's reflecting the world that either the reporter or the company wants you to believe. Even more so, there are so many, quote-unquote, "startup experts" out there who've never done a startup who wanna give you advice. Oftentimes, these people are your friends.

If you're constantly absorbing information and insights from press, which is inaccurate, or friends who don't know anything, or advisors who've never done startups, you're putting garbage in to your mental model on how startups work, and your startup is gonna be garbage out.

So be very careful about where you get advice. It turns out more advice isn't better. High quality advice is what you should be looking for. And your peers, once again, can be helpful in supporting you, but aren't advisors. They've never done startups, so please don't use them that way.

VC Twitter, please do not use that as a source of information about what's going on in the world.

Okay, my last major point. Investors don't invent the future. Something happened in the last fifteen years where investors became influencers, and founders stopped building companies for their users and started building companies for investors. They started seeing investors as a gatekeeper. They started seeing investors as better able to determine what product they should build than the users who actually have a problem.

So the way we see this at YC is some famous investor tweets about some problem, let's say remote work, and then, oh, lo and behold, the next batch we have a hundred applications, sometimes even five hundred applications for a bunch of founders who don't know anything about remote work, but who think it's a cool idea because some person said it on Twitter. They don't have any insights, but they don't care, and the second that that person or Twitter doesn't think remote work's cool anymore, they're on to the next one. These are not the types of people who start the companies that change the world.

I don't know what these types of people are, but these are not the types of people who are gonna work ridiculously hard and go through all the punches in the face in order to succeed. So I want you to neutralize all of this VC investor marketing that's going on there. Investors don't make the future. Investors will not hold your hand and show you how to build a billion-dollar company. Nobody really knows how to build a billion-dollar company. Everyone knows some information that can be helpful, but no one can guide you and walk you down the path just like they're giving you directions to the local library. That doesn't exist. Also, you should think of investors like service providers, and the service they provide is cash, right? You would never think that your lawyers are gonna tell you what to do or how to make a product that millions of people want, so you shouldn't think your investors will. In my experience, founders are the ones that change the world. Investors help a little bit. And so if you don't have a strong vision for what the future should be, get one. Don't adopt an investor's just because they think they're getting deal flow by marketing themselves online.

So to summarize, when picking a problem you wanna solve and a team you wanna work with, hack your motivation. Make sure that you're actually going to stay motivated personally over the course of years, even if the company's not doing well, even if the idea doesn't look like it's part of a fad anymore. Two, be brave enough to walk alone. You're gonna have to do things differently than the people around you to succeed because the vast majority of the people around you are going to fail. Three, garbage in, garbage out. Where you get your insights, how do you feed your startup brain? If you're feeding it with garbage, your model for how startups work will be garbage, and your startup won't work. Four, investors don't invent the future. They're not as important as founders. So if you're spending your time just trying to figure out how to make investors happy, stop. That's not the right strategy.

Next question. What's your advice for students who have a great team, product, and problem, but don't have domain experience to provide credibility when pitching to investors? well, I'll say this, the average startup believes that investors are a key component to get started. The extraordinary startup never lets investors get in the way of getting started. So my question is, why are we putting investors front and center in this question? Why aren't we saying we have 10 customers, 10 paying customers? Because that would prove your credibility, right? I think that putting the investor in the position to be the gatekeeper is the problem here. Why would you ever put someone in the position to judge you just based on your resume? When you're doing a startup, the most interesting thing is you could actually do something. You can actually build something, you can actually get customers, you can actually get paid. If you wanna show something to investors and you don't have a deep resume, or this isn't your third company, build something and get launched and get customers. And if your idea requires a bunch of money up front, if your solution requires a bunch of money up front, change your solution. Never put anyone in the position to judge you, and that judgment prevents you from making progress on your startup.

How do you think investors should best add value to founders? What have you seen the best investors do that are meaningful and helpful to startups? that's a good question. The first thing I'll say is that too much investor marketing is just lying. What I really want people to understand is that investors don't have all the right answers. Investors will not help you run your company. It's your company to run. This is hard for founders because both hearing that ninety-nine point nine nine percent of startups fail and investors really aren't gonna bail you out from those odds, can be frustrating.

I would say the number one thing investors can do is not do harm, right? Not give you impossibly low valuations and dilute the shit out of you from day one, not try to run your company for you, not try to annoy the crap out of you, not try to push you ideas because they saw this happen on Clubhouse the other day and other kinds of stupidity. Like, desperately not try to remove value from the company is probably the first thing that you should look for for an investor. I think the second thing that's helpful is they're a helpful conversation partner. They're a helpful conversation partner when you're dealing with a big strategic question. They're a helpful conversation partner when there's just information that you don't have that is well known within the investor community. And they're a helpful conversation partner sometimes, when things are looking down and you just wanna talk to someone who's seen this game many times before.

And then I think the third thing that investors often do is they often have good networks, and so they can often introduce you to operators who have direct experience that you can learn from. I would say that investors almost always only have indirect experience. Even investors who used to be operators, after a couple years, a lot of their granular knowledge about what products to use or what users are doing or what flows work nowadays, gets old. And so it's interesting that, like, actually your investor's ability to introduce you to other founders is one of the most powerful things they can do. It's one of the reasons why YC just funds you and puts you in a batch from the beginning so that you have a network of founders, and it's another reason why one of the YC perks is being access to this network of alumni who've done things before you. Actually getting access to the people who are doing things right now is far more valuable than getting access to the people who've invested in them, so something that you should consider deeply.

How long should you stick to an idea before ditching it? I think that's a really good question. I think it really depends on how much you give a shit about the problem you're solving. If the problem you're solving is your life's work, you should probably not give up for a very long time. If the problem you're solving, you're only solving because you thought that your startup would take off right away 'cause you had some special insight, and now you've learned more about the problem, and you understand you knew nothing about it, and you have no special insight on how to solve it, you should probably stop right away. Most founders today around you are working on problems they have no idea how to solve, they have no experience with, and therefore they're not qualified to build the solutions. That's most of the people around you.

Okay, next question. Let's see. How do you apply the mentality that investors are service writers in a pitch deck? Trying to court investors is part of the game sometimes. You know what's weird is that, trying to court investors is way less part of the game than you probably understand it. One thing that's become painfully obvious during COVID is that the investment community is global, and if you're pitching investors in your local community and you're not pitching the global community of investors, you're probably doing it wrong. If you are thinking that the local pool of investors is the only pool of investors you have access to, you're probably doing it wrong. More importantly, most of the investors in the global community have a ton of money and nowhere to put it. So what I see time and time again is if you actually go out and do something, investors will come to you. If you actually go out and launch something on Product Hunt and start getting customers or launch something on Hacker News and start getting customers or get your thing out there and start to get customers, investors find you. But that's not the popular path. Everyone wants to be able to brag about the money they made, the money that they raised to their friends. And so they're out there all slinging decks with no products built and no customers. Slinging a deck with no product built and no customers is average. You have to be extraordinary to win.

So one of our philosophies at YC is we wanna understand your vision for the future. And to be completely honest, we don't wanna have anything that conflicts with it. We actually wanna believe your vision of the future and hear how you're gonna make it. We don't wanna spend time debating what the future is going to be. So, that's how we think about the future.

Does management consulting experience help founders work better? No. Here's the fun thing. Once again, you're reaching for strategies that work in careers. Careers and startups are different. If you think about startups, literally the number one thing that you can compare them to, to be accurate, would probably be sports, like professional sports, because professional sports has the same ridiculously high level of failure, or the, like, music business, trying to be a famous entertainer. So, it turns out that in those types of jobs with such a high, failure rate, the number one way that you actually learn to do something is by doing it. The number one way you learn how to do startups is by doing them. There aren't great prerequisites. What's funny about this is that you actually learn ten times faster when you're doing a startup, you have a gun to your head, your customer's yelling at you, there's very little money in the bank. You learn ten times faster in those circumstances than you'd learn at any job that you're trying to get prerequisite skills and abilities. So don't fool yourself. Like, all of this, like, "Oh, you can train yourself to do this," or like, "Oh, if you work at Google, it's gonna make you a better startup founder." No, that's all complete bullshit. Like, if you wanna work on your startup, do it. If you don't, don't. Don't lie to yourself and tell yourself that, like, you're getting the resume items needed to do your startup. That's just bullshit.

How many YC applicants can clearly state their revenue streams, and how much do you value that when deciding? well, we ask every single YC founder-- I'm sorry, we ask every single YC applicant what their revenue is, and all of them answer, so I think all of them can state how much money they're making or not making. I would say how much do we value how much revenue they're making? It completely depends. Here's the thing you should understand about applying to YC. We don't care very much about absolute position. We care about speed and acceleration. So what does that mean? That sounds like general investor bullshit talk. Okay, let's be really specific. How long are you working on your startup and what have you fucking gotten done? How long have you been working? What have you gotten done? I see startups all the time that are one year in, and what they've gotten done is a pitch deck and a team that'll join if an investor funds it. That's not exciting. I really don't give a shit.

I've seen teams that are three weeks in, and they have a beta that they're gonna launch in about a week or two. Great. Both of those companies have no revenue. Both of those companies have no growth. What's the difference? One company spent a year faffing around pitching investors. The other company got to work right away. Speed and acceleration versus absolute position. If you've been working on your startup for four years and nothing's happened, your progress over time looks really bad. This is not exciting.

And so you really have to think less about, "Oh, I need to meet this bar and I can put any amount of time into it as long as I meet this bar." That's not the way you should think about it. The way you should think about it is like, how do I demonstrate that we are moving quickly? How do I demonstrate that we're being productive? That's the most important thing. It's hard for founders to understand because in most of their life they're graded with absolute position, right? Oh, I got a ninety-two on a test. That's an A. Like, imagine a test that the longer it took you to take it, the lower your max possible grade would be. That's kind of what being an early stage startup is like, right? If it takes you a year to do the test, the best grade you can get is a fifty percent. If it's taking you a month to do the test, okay, you actually can access the hundred percent grade. That's a better way of thinking about what we look for, progress over time.

Okay, this is a common question, which is always just like your startup is about making progress over time, and I explained that, like, your startup is where you learn faster, what most founders screw up is the idea that, like, the people who they're bringing on need some specific skill set from day one. What you should learn is that your startup's going to be the best place for people to learn how to do something they don't know how to do. So what should you focus on for the right teammate? you should never trade off somebody who's not gonna motivate the team because they bring some skill, ever. If you destroy the motivation of the team, you lose. The motivation of the team is the number one thing that causes death, so protect it.

So time and time again, I've experienced amazing engineers learn how to do something because they're rising to a challenge. That's a much better model for how and who you should be trying to get into your company in that first initial group, pre-product market fit group, as opposed to specialists. Where founders get this wrong is because they mess up the kind of order of operations here. I would say that, like, the initial team that you're building is a lot more like Navy SEALs. Very small, very motivated, very interchangeable, do not need a lot of management. That is your pre-product market fit team. You know, somewhere between four to eight, maybe ten people don't need a lot of creature comforts, let's say. They don't need the fancy snacks and all this other bullshit. That's what you have. That's the group of people who are gonna help you find product market fit.

Once you've found product market fit, now you're starting to build an army. An army is full of people with specialized roles. Very different from that Navy SEALs team. The army, there's someone who types, there's someone who holds a gun, there's someone who trains that person, there's someone who flies a plane. All very specialized, very different. They don't interchange very much. If you start building an army too early, it'll fail. One of the other common patterns of failure, raise a bunch of money, build your army. Turns out the product that your army made doesn't solve any problems. But turns out managing an army, getting an army to go from one direction to another is so painful and is so slow that you never get to build a second or a third or a fourth solution to figure out how to solve the problem.

So that was a long way of saying, if there's an asshole on your team, get rid of them. And if you're considering hiring an asshole, don't. It'll make your life better.

Why do I like being an investor right now? Why did I decide to move into an investor role? that's an interesting question. So it's tricky talking about a YC partner as an investor. Most founders don't understand the life of an investor, and let's be clear, if you assume that investors are kind of the kings of the castle here, you have a really big misunderstanding of what the life of a typical investor is.

The number one thing a typical investor does is try to get into good deals. That's what they have to spend most of their time doing, chasing deals. Second most important is picking which deals to chase. Third most important is once they get access to you, convincing you that they're the right person, that they're the person you should take money from. Helping you is way down on the list.

So if you look at how an investor's year will work, that's how their time is typically allocated. Working at YC, our time is typically allocated very differently. We don't chase deals. Companies apply. So the number one thing that sucks up most of the time of a normal investor, YC partners don't do. On the flip side, we do a lot of office hours. We do a lot of helping. We do a lot of what I would call founder therapy, to be completely honest. So I don't think I would ever make it as a traditional investor. I think interestingly, the YC partner job is the only investor job I would really ever enjoy in my life. I'm not a shark. I don't like chasing deals. I don't like arm twisting founders. That's just not what I like to do.

So instead of kind of adopting the whole impact framework, I like adopting the idea that, like, startups can have a mission that makes the world a better place, and they can be somewhat ruthless about pursuing that vision.

The message to really close here is that so many people out there are just chasing the idea of startups or chasing the cool factor, are in it for the hype, or wanna get rich. Hopefully some of you out there actually wanna make the world a better place. You are the people who are responsible when the world becomes better. So let's be clear. This whole thing that we're doing here isn't some game. It's not some get rich quick scheme. It's not a fad or a sport. This is a method by which you can make the world a better place. As a founder, you should try to take that responsibility seriously, and if you're the kind of person who's on the fence about doing a startup, understand it's one of the most powerful ways to make the world a better place if you embrace that fully.

Don't be turned off by what we call the scene-sters, the people who are in the startup game just because it's cool. They'll die off. Don't be turned off about them.