I rolled up to YCombinator HQ about 2 hours before the event. I noticed a couple other stragglers that showed up early as well and we awkwardly stood around on opposite sides of the street. After about an hour of reading a book on my iPad I finally encroached on a group of hackers in a buffalo stance. Everyone touted their latest contributions of awesome apps, scaling adventures, and AWS horrors. After a while we were issued name tags and ushered into the barebones new home of YC. I grabbed a seat right behind the founder row in the front. A guy that I had met outside and I started chatted in more detail as we waited.
He flew out from the east coast for the event and the guy to my left flew out from Hawaii. Both had worked on mobile games in the past. The theme was common. Most had come from afar on an entrepreneurial pilgrimage to their main place of worship. As I scanned the room I realized that, apart from the women handing out badges and working the projector, everyone in attendance was male. The stereotypes were all present. The brogrammer, the hipster, the hardcore nerd, the vagabond, the business savvy techie guy…all accounted for. The crowd settled down and none other than the man himself, Paul Graham, took the stage to deliver some sage advice.
PG started off by apologizing about the space and its sparseness. They are in the process of remodeling but I didn’t really care too much about the aesthetics. His talk catered to hackers (coders, devs, whatever other moniker you want to give people who actually write code for a living). His first piece of advice really struck home.
- Don’t be the first tech hire. If a Harvard MBA or a Google Product Manager has a “great idea” that’s your first cue to GTFO. He talked about The Social Network movie and other startup movies. They go into detail about the idea of how it all began and the relationships of the founders, but then insert a montage of energy drinks, code writing, and sleepless nights. However, this is when all the work actually happens! Not having a tech partner means that you’re going to have to do all the work that you in that montage and can quickly lose motivation.
- *Equity is directly correlated to risk. **The formula he uses is the following. 1 over your EmployeeNumber to some power. *When there are only two employees then it makes sense for you to get ~40% equity. The idea is new and the business plan isn’t vetted yet. There are many chances to fail over time. As the company grows and the revenue model stabilizes, there is less risk and most likely more employees. If you work at a publicly traded company then forget any hopes of ever getting any real equity.
- **Young guys don’t take risks. **You’d think that guys fresh out of school would be the ones jumping to get into a startup. They are much better suited financially to absorb risk and rebound from it. The trends show that the opposite is true. They tend to go to large organizations fresh out of college. One theory is that they are comfortable navigating institutions (high school, college, etc.) and want to stay in that comfort zone while getting some “solid experience”. Most guys that end up going to startups have mortgages and families but are fed up with office politics, are burned out, and tired of not shipping code.
- Trust in the founders. **PG went on to talk about how hackers split hairs when percentage of equity is discussed. The percentages are meaningless if the business fails. For example, 1% in Google is vastly more valuable than 5% in Zynga. Much of the success is determined by the founders. Find good founders and your equity will be worth more regardless of the percentage you own. **
Paul Graham went on to discuss a few other topics that were a bit irrelevant to me like which VCs are the best. There was also a brief Q&A. A brave soul asked a question about when a startup isn’t a startup anymore. Paul mulled it over for a bit and finally said, “When politics win over merit, a startup is doomed.” I thought that statement was pretty profound. He offered more advice on constantly shipping code and staying far, far away from MBAs and Product Managers. After a round of applause he released the stage to various founders that came to present.
Although each startup had their own uniqueness, I noticed that common themes began to emerge from their presentations. I’ll summary those up briefly before moving on to specifics.
- The Work: They solve complex and interesting problems. The Stripe guys spoke of their initial problems of payment processing. Should they charter a bank? How do you charter a bank? Do we know anyone that’s chartered a bank? Do they want to meet for coffee? No? Ok, let’s try something else.
- The Team: The team composition seemed to vary from startup to startup but they were all talented in one way or another. It also seemed like many of the key players could spin a bunch of plates.
- **The Vision: **I’ll call this one, “We’re doing X so that we can prove Y and then disrupt Z.” Every team clearly stated their short and long term vision.
- The Space: It was amazing to see that almost every single founder had pictures of or spoke to their office space. From hidden rooms to chill out zones, they all wanted to give you a MTV Cribs style peek at their office space. They also identified that the office space should feel inviting. You want your teammates to stick around the space so that organic bonding and problem solving can emerge.
- The Glory: All had a passion for the industry they are working in. They want people who are also passionate about the work they’re doing. They want to be successful. They also have a scrappiness about them that was contagious.
- The Perks: There were some really fun and interesting perks. Unlimited time off, a company card, catered lunch and dinners, formal Fridays, spontaneous hackathons and parties were all nice. I was most impressed with AirBnB’s “$500 per quarter to use AirBnB” perk.
Every founder was well prepared and excited about their company. Many were very charismatic and inspiring. I’ll capture some of the highlights from some of the stand out presenters.
The Exec founder, Justin Kan, is a repeat founder. He had previously founded Twitch.tv and Justin.tv. He spoke to some lessons learned from his previous startups around managing employees. He now gives employees ownership over certain areas and gives them goals around those areas. He is using Exec to prove out an idea in a small vertical and scale it out once it’s been vetted. This is about as Lean as you can get. Employees also get dragon hoodies.
Weebly conveyed a pretty substantial trust in their employees. Every employee gets a company card and unlimited vacation. They have conversations around productivity, not time spent in the office.
Ahhhh AirBnB, so hot right now. I liked that part of their interview process includes hanging out with their team for a weekend. They really want to make sure that new employees fit culturally. In addition to the aforementioned $500/quarter to travel using their service, employees can also look forward to formal Fridays, Hack-Air-Thons, a super fun office layout, and shipping code to production on their first day of employment.
The Parse team is crazy smart and they work on incredibly difficult problems. The headcount is around a dozen employees and they still manage to ship features almost daily.
Steve Huffman, co-founder of Hipmunk, definitely gets the “Most Passionate About His Employees” award. He had some candid insight that would be good to take to heart for anyone looking to hire. He almost always likes everyone he meets so they do a lot of coding via shared documents and over the phone before meeting in person. This makes hiring decisions as objective as possible so that he doesn’t have to “fire his friends”. He spoke about his days at Reddit when someone told him that he’d never have to write another resume again. He wants to make sure that their employees get the same recognition for their work. He also wants to make sure that they love their jobs so much that they’ll never want to leave.
So that was my experience in less than 1,500 words. The night was filled with passion, charisma, knowledge, and camaraderie. It definitely felt nice to be among some hackers cut from the same cloth and I am definitely looking forward to instilling similar passion in my workplace and watching those startups grow into even more awesome startups.