- Today, we're going to talk about
whether you should start a startup
and whether you should apply to Y Combinator.
Spoiler alert, the answer is yeah, you should,
because it changed my life and put me in touch
with some of my closest friends and collaborators,
today we're talking to one of them, my friend, John Coogan,
Cofounder of Soylent and one of the best
tech YouTubers today.
He went through YC himself twice, let's get started.
(gentle upbeat music)
One of the most common questions I get is, hey Garry
should I start a company?
If you're a recent grad, you're probably wondering
if it's safer to join a company like Microsoft
or take a risk at a startup?
You might have seen this in one of my older videos
but, one of my biggest mistakes in my life
was saying no to Peter Thiel
when he first invited me to join Palantir
as their first software engineer.
But you know what?
I get it, the thing I was always taught at a young age
was to go get the steady job for a big tech company.
It was impossible to think of an alternative
when you have a job offer for Microsoft.
Here's John's story of when he decided
to become the cofounder of Soylent.
- I grew up in Los Angeles, I went to school in Boston,
I studied economics at Northeastern University
and I actually, I like to think I went there
because Biz Stone, Cofounder of Twitter went there
and Shawn Fanning, Cofounder of Napster went there,
but really, I don't know, probably just a random school
that I applied to.
I don't know if you remember this, but,
my first company was a software company
and I actually pitched it to you at Imagine K12
and at the time, it was a much smaller,
it's like a smaller spinoff of Y Combinator,
Imagine K12 is now been absorbed into Y Combinator
but there were some similar partners
and they had a little bit of it,
wasn't a full demo day,
it was just kind of a show to some investors--
- Was a quiz on Facebook?
- Yes, it was a quiz app on your phone,
that you had to authenticate through Facebook
to meet a competitor.
So the idea was you could load up some trivia questions
and then you would be presented
with some some multiple choice questions based though
so we could kind of programmatically generate the questions
then we could compete and see who won
and hopefully we learned something in the process.
Didn't really go well, I was still learning to code
at the time, I remember you coming around
and me I'd read your blog, and I was like,
oh, that's Garry Tan, oh, we got to make a good impression
and you were very polite and you gave some really
good feedback and I mean, we asked you
a bunch of design questions
because that was kind of your specialty at the time course
and you were great blog so, it was just a very funny thing
and then, you know, a year later,
Soylent gets going and we got to work together again.
- For people who don't know Soylent is people.
No, it's actually food, it's actually this idea that
maybe you could make personalized food out of,
you know, the things that your body actually needs, right?
But that wasn't the first version of that startup,
it was actually originally Meow Global Networks, right?
So it was actually a networking hardware company
and they were your housemates.
- Yeah, exactly.
So I was living with Robin, Matt and a couple other guys
who were working on a wireless networking
technology company, it wasn't going anywhere,
we couldn't get venture capitalists to pony up millions
of dollars to go install cell phone towers essentially,
we've been a very, very capital intensive business,
but it was really fun to tinker with the technology,
so even though it wasn't going anywhere,
we liked what we were doing
and we started getting faced with this problem,
like we're running out of money,
but we don't want to go get real jobs,
we want to keep tinkering,
and what's the best way to do that?
Well, if we can make a product that will allow us to eat
you know, food more efficiently and save money on food
which is really the only thing that we're spending money on
other than rent, which we paid a year in advance
and our internet bill, we already owned our computers,
what else do you need when you're building the startup
other than just where you need live--
- Well, you need pizza, ramen, or something to eat,
I guess.
- Exactly, so that's where Rob starts coming up
with this idea for a more efficient food,
so we could stay healthy because,
ramen famously, not the healthiest,
if you at least buy it at Costco like we were doing,
it just became kind of a little bit
of a mini viral phenomenon in in Silicon Valley,
was kind of my first introduction to the content marketing
because Rob was such a powerful writer,
he would put out these blog posts
and they'd be incredibly controversial because--
- They'd go viral.
- They'd go viral because
everyone has an opinion about food.
Everyone wants to say, you know,--
- I eat food.
- I eat food, I have an opinion,
I know something about it
and so that's how we just got so much attention
and then of course we built the business and developed.
- I have to admit, you know, I was a partner at Y Combinator
at the time and Rob came by and said he was working on this
and I was like, this is super interesting.
Like, you know, this probably,
you know, if people are really resonating with it,
that's great, but you got to change the name,
which was terrible, terrible advice
and that was actually a really big lesson for me
to realize that, you know, eight or nine out of 10 people
might hate it but it actually didn't matter
because one out of 10 people found out about it
and they were like this is awesome, actually,
I mean, I was one of those people,
like, I lived on Soylent for at least a year,
I don't know, something like that.
- Yeah, that's a success story for us.
Yeah, I mean, it's kind of the idea of like
nicheing down to blow up.
So, you create this very thin niche
and then you kind of build out from there,
so, the people that didn't get the joke
and didn't understand it was a reference to a sci-fi novel,
they spread it, or they were upset about it,
or they thought it was a bad name,
they would spread it and then people that got the joke,
they became the in-group.
- I mean, how many tens of millions,
if not hundreds of millions of dollars of earned media
do you think the name alone was worth
or maybe billions?
I'm not sure.
- I mean, Rob went on the Colbert Report,
that's the late night TV National,
you can't buy that, the only other startup
that I'd ever seen on the Colbert Report
was Brian Chesky, Airbnb,
and we were not at that level.
We were like five people on a shoestring budget
and he was on, when I think he was probably
past unicorn status.
- I mean, that's such a crazy moment actually
to just realize that you can reach that many people.
What John and Soylent taught us is how important it is
to validate your idea with potential customers,
talk to your users and really make sure
that people want what you're building.
And once you figure out what problem you're trying to solve
with your product, the next most important lesson
is how do you get it in front of other people?
You can't sell a product if nobody knows about you.
Another question I get asked all the time is,
hey, should I apply to YC?
Getting into YC can feel like winning the golden ticket
to Willy Wonka's chocolate factory,
at least that's how it felt for me,
it is the Silicon Valley golden ticket.
But, maybe let's back up for a bit.
What is the experience actually like
for a founder going through YC?
- You know, the first time I applied to YC,
I actually got rejected
and it's kind of an interesting lesson
that I think a lot of people should kind of have in mind.
When I applied, we had myself and one cofounder
and then a third cofounder who had a great pedigree,
he was a computer scientist from Columbia,
even stronger programmer than I was,
I was still kind of learning at the time,
but he had actually taken the whole coursework
but he was kind of one foot in one foot out,
in his mind, he was like, I will join you guys
if you get into YC, if you don't get into YC--
- Oh, we had one of those guys too, actually.
- Yeah, and I mean, I completely respect it.
Like you're trying to de-risk, I understand,
but it's just like, it's not what YC looks for, you know,
and I think you put it well where you said like
if I were, you know, a YC interviewer
and I said like, Garry, what are you going to do
if you don't get into YC?
What's the correct answer?
- We're going to prove you're wrong,
that's the answer actually.
That's so funny, you had one of those guys,
we had one of those guys too
and you know what he left to do?
- What do you do?
- To go be an internet McKinsey,
instead of start a company with us.
- Wow, yeah, and you probably learned so much more.
- He would've made a lot more money, honestly
but he, like more importantly
I think he would've learned all the things we learned
that we use now.
It's like, how do you actually get these things
off the ground?
Like, McKinsey happens like anytime, honestly,
it's like, come on dude, like this can only happen now.
- Exactly, yeah.
- Which is actually like the, you know,
when people are trying to get people
to come and work on a startup,
that I think is one of the most powerful things you can say
to anyone you're trying to recruit whether it's a cofounder
or an engineer or executive or whatever,
it's like, that other thing, it's safe, it's going to be there.
Right, like that thing already has product market fit,
it's like finance or whatever else,
it's like, finance is not going away,
like, that job, you know, opportunity,
like, that's going to be there, it'll might not be that team
but it'll be a thousand other places
but this is only happening now, so you got to quit.
Okay, let's say you watched this far
and you've decided to quit your cushy job.
Maybe it's a tech, maybe it's finance,
maybe it's like me a decent day job as a PM at Microsoft
and you've decided to apply.
The next big question that matters a lot is how do I get in?
And what's the application process like?
John actually went through this process
three times as a founder.
- What I've found about the YC application
'cause I filled it out, I think three times now
for different companies is that it helps clarify
your thinking around your business in some ways
in the same way that building a slide deck can
but it's a little bit lighter touch than building
a full slide deck and it just gets you writing
and it gets you thinking about
how can I express these concepts in a simple way
that is still powerful enough to let someone understand
how this can get really, really big.
And I think that a lot of people are taught
when they learn to write that maybe they should, like,
leave the best for the end or something like that.
- No, inverted triangle for sure is the right way.
- Yeah, inverted triangle, just like
when you're writing a newspaper article
you know, you want to lead with the most important facts--
- Yeah, don't bury the lead.
- Don't bury the lead, exactly, and that's absolutely true
in a Y Combinator application because
people are reading these things fast,
they need to understand what you do,
why it's important, how it will get big,
and most importantly, I feel like just where you are.
Oftentimes I'll hear from people who say,
hey, I'm building this really cool thing
and I have to ask five questions to learn
that it's two people or they have 50 people
or they've raised $500,000 or $10 million.
and just helping people understand
because all these different traction metrics
and kind of understanding the energy
that's going into a company, it's all highly dependent on
where you are.
If I come to you and say, I have a business that's doing
a million dollars in revenue, that means nothing to you.
You know, if you've raised a 100 million,
like, hey, maybe we got to pick it up.
- Yeah, the tricky thing about this is, I mean,
especially on YouTube, like we're talking to people
like out there who are from all over the world
and like have totally, you know, they might be
literally still in high school
all the way up to like later in their careers
and so they might be anywhere.
And so, you know, if we zoom out enough
the really interesting thing is actually,
how do you build a team of people
who are complimentary, who sort of span
the set of things that that particular startup idea
actually needs?
And then, you know, one thing that I do think YC
really wants, but then not out of like some arbitrary thing,
it is actually necessary for a startup to actually work,
it's like, does your initial team have the skills necessary
to get to that first milestone, right?
Like, and it might be software engineering skills,
might be design skills, might be PM skills,
might be sales, might be you know, direct marketing,
you know, like.
- Usually a startup needs five skills,
so you're hoping that those skills can be found
in just two or three cofounders.
So a lot of times you'll have the person that can do,
you know, some design and some engineering,
and then you'll have someone that can do
some product development and some sales
and really showing that you can kind of hit
all the different elements.
- You know, if you only have the startup and that's it,
when it gets hard, these things start flying apart
actually and that's the number one thing
that kills startups actually.
- I've been working with the same cofounder
for 10 years now and I don't think it's a surprise
that like we went to preschool together
because we kind of know where each other live,
our families are friends and we kind of know that,
hey, like, we have a shared value,
we understand that there's something like bigger here
that we're building, obviously the startup's
really important, but that relationship
is really, really key.
- Some of the people who are watching this right now
are sort of in a rush, they're like,
I want to do this, I want to do this now
and we're sitting here with the founder of Flexport,
Ryan Petersen, a few weeks ago
and he was saying, you know, he moved to China.
He became one of the top importers for
I think like electric motorcycles in the United States,
for instance, and so he had all of these like 10,000 hours
of all of these other experiences
before the moment that he started Flexport
and all of it sort of fed into it.
I mean, that recalls Steve Jobs's famous sort of story
of like, you know, auditing a calligraphy class
and that's why we have fonts in our software today, right?
So, you know, I think that's one of the weird things
to sort of temper this advice, right,
hey, like, you know, it's good to be in a rush,
it's good to have urgency for like starting a company,
but also like get good at some stuff.
Actually, I mean, some of that is like in your story
where you're like in there making an app from scratch,
right, and like over and over again.
- Yeah, there's definitely like a craft to all of this
and you have to have respect for the process
and develop some mastery, it's, yeah,
I've talked to a lot of like middle schoolers
and high schoolers who are like,
I want and I'm always like, do not drop out right now,
let's build some more skills,
let's enjoy the time you have because,
I keep coming back to like, obviously we focus
a ton on Zuckerberg because he dropped out of college
and it was this phenomenal success
but the founder of Workday was practically
a senior citizen when he took his company public.
- There's all kinds of different times for this.
- You can really be any type of person
and be a successful entrepreneur,
there's certainly not just one mold,
and I think that that's something
that needs to be said more often, I think for sure.
- That's it for this episode.
This was a special one for me, because as I said to John,
I felt, you know, kind of like he was a kindred spirit.
We both started our YouTube channels from just an idea,
we weren't sitting around waiting for someone to come
and teach us anything, we just gave it a shot
and made a bad first version
and then we kept doing bad versions
until it got mediocre then good and then, you know,
we're still out there trying to do our best.
To this day, I'm forever a student
and I still, you know, try to share YouTube tutorials
with everyone I meet, we do this to help each other
and to continuously improve our craft
so that each and every video is better than the last one.
If you watched all the way to the end and like this series,
be sure to head over to John Coogan's channel right now
and click subscribe and watch his video with me
on John's channel.
We talk about what you do after you get accepted into YC
and how to get the most out of your YC experience.
Thanks again for watching
and I'll see you next week.
(gentle upbeat music)