This Is What Young Founders Should Focus On

we sometimes talk to people that think we're at the end of History like they read so much of this stuff they're convinced we're basically the end of History this is the end of all startups this is the end of the world as we know it and my response is I think it's going to be okay I do too and that's what I would say to you viewer I think it's going to be [Music] okay welcome to D plus Michael today we're going to be talking about tips for Founders in their 20s I think to kick

this off we're seeing so many more young Founders start startups come through YC and I think that you know our entire goal is to almost give you a head start a running start into this adventure of doing a startup so to start with the Practical you've probably heard it on this channel a couple times AI is here what do you think what should people be doing with it okay so the first tactical thing we're going to talk about is um side projects side projects um are things where you you build them but you have not

yet quit your job yes and they are a great way to hone your skills um get used to building something actually shipping it yes getting customers just going through the entire life cycle of um starting something without making the full leap and getting experience with new technology yep um which you might not get at work yes so um why are people afraid or hold back from doing a side project yeah I think the biggest uh push back is there's no one there to motivate you to do it I think if you've been working somewhere a

very long time you're used to being told to do something or you're given um a deadline or or something like that from your manager this is where you have to be entirely self motivated that's fair so maybe we could do that right now we're saying hey if you're thinking about starting a side project today the day yes right you need external um people to pump you up and so maybe we can be that for you that's abouts you're not of not make money you can make art you can make cool websites that you find funny

you can make Twitter Bots um all this stuff is it's just honing your craft of getting used to ship things so what are some what what are some tactical tips you have on S brother well I think the the other thing I'm thinking about with side projects is people are always worried about what about my job and like oh like I don't want to do some weird IP blah blah blah blah blah thing um and to be honest one thing you should know is that so many Founders did side projects while working before starting their

company so if this was like a common cause of death we wouldn't tell you to do it right yep second you know don't be an idiot like use your own computer right don't use company resources from your employer don't do it when you're on the job and supposed to be working yes like you know the the most common um kind of basic Common Sense can really help here but otherwise don't be afraid of it I mean for a lot of Founders it's their first taste of Freedom yeah it's also easier if the side project in

no way resembles what your day job is or what your employer does and is instead just yeah something fun um you really then you really don't have to worry about these these issues yeah all right number two where you live a big hack for um an early stage founder is who you are surrounding yourself with uh what city you're in what's going on in that City and I think this is like the easiest thing to fix especially nowadays like if you want to be starting a company the advantage of being in the Bay Area is

just so incredible we have so many Founders YC Founders who are living overseas who have come back in the past year and have told us the energy here is just incredible so this is not just our us talking our own book like literally the number of YC Founders who've chosen to relocate back to the Bay Area in the past year has blown my mind easy win so even if you're not sure what the timing is to start a company if you're in a position to say uh transfer offices at your current job or otherwise yeah

apply to grad school around here summer else it makes all this other stuff much easier and so we would just recommend it and that's something within your control that's something you can you can put action to today even if you're not ready to start a company today now what's our third practical tip yeah um how do you want to set this one up so here's the deal if you are completely out of the loop on what's happening in the world say you know you don't have a computer that's a disadvantage the odds are the the

what's happening in the world is going to pass you by you know you're going to be out of the loop and that doesn't help yeah the argument I would make here is there's a point of dimin ing returns where if you are two online and you spend if we were to have a pie chart of what you spend time on and the pie is like a very large section of just reading news or consuming content about what's happening in the world yeah I think you can hit diminishing returns and a lot of the great Builders

I know they sort of you know the size of that slice of pie is smaller than like the time they spend actually building things yes and a side effect of consuming too much information all the time on this point is you can get kind of negative and you could be discouraged from trying things because you you feel like oh I've read about that that's not going to work oh this approach won't work like you kind of lose your um beginner's mind and yeah it doesn't seem to help folks in their 20s to have this sort

of crotchety old mentality cynical cynical mentality and it's and again when you debug it it's that they spend an important amount of time um reading about things and not doing things you're being polite I I'll be more direct I think that if you are over plugged into the Twitter hive mind you are even with the idea that it would help you be a Founder I think you're secretly hurting yourself and I think the reason why is because of the exact point you're making the most productive doers do not spend all of their time on Twitter

yeah and not even just Twitter or X Michael technically um excuse me but but even our own website news. comed.com has had a funny thing that's happened to it where again there's lots of awesome Builders here lots of positivity I don't want to sound about everything but yes it is interesting what a large percentage of the comments end up sort of discouraging yes whatever the Innovation whatever the thing is that the post is about a lot of the comments are like pretty negative about it and it's become like a running joke of course but you

know I do talk to Founders in the batch that are discouraged from even launching their product and I try to like unravel what's going on and like I think they're afraid of commenters on Hacker News and that causes them yeah to not do things 100% yes yeah I don't know that the commenters even realize they have that much power but uh congratulations all right so those are our practical suggestions let's get into some um conceptual ones uh one of the first ones I'd love to start with is the cool thing about being a Founder is

you get to make something for for yourself and you get to solve a problem that you care about sometimes I see young Founders more interested in what investors care about um or what they think will make money or you know some kind of actra concept of what makes a good business versus doing things that they care about and I just kind of feel like sometimes that's like leaving a superpower off the table it's like why not especially to go back to what we talked about a moment ago if you're building a side project it should

be fun obviously so like it for yourself you're doing it for your own self-satisfaction so of course you should be excited about the thing you're making indulge yeah but why do you think it's so tempting when founders are trying to come up with an idea to figure out what they think investors want to fund versus figure out what's a problem they'd be excited to solve yeah I think it's the goal function um I think if someone is building software because they like software building computers because they like computers don't tend to deal with this one

as much but if you believe the goal function is to raise money it would make sense that all decisions would flow from having that particular goal function and It's Tricky now because I wouldn't blame a young founder who believes the goal function is raising money because in today's day and age I feel like investors have put themselves in the center of the startup story and they want you to believe that raising money is the most important thing it's not surprising that young Founders are confused by by this yeah but how do they resist how do

they you know oh I want to solve my own problems but like everyone tells me if I don't raise money I can't do a startup yeah I think my direct take on this is that from like student groups or other yeah um organizations like that it seems to be sometimes oriented around pitch competitions and when you're or if you take a class about startups some of the folks I've talked to the class involves basically Less on the building side and more on like making an investor pitch the goal is the is the deck in the

presentation yeah and so so I guess I guess what we're trying to say or you know not to put words in your mouth but it's the goal should be make something that is useful to people including yourself yeah um and that's a good place to start yeah versus trying to reverse engineer what it seems like investors want and that includes us of course yeah obviously does it's so funny how like we give this advice and I think it's like so simple it's easy to ignore it's like start by creating value for anyone yeah as opposed

to like making that step three four or five what else what's another conceptual thing that you want young Founders to embrace I think some of the terminology and the acronyms get thrown around a lot and it's sometimes worth taking the time to really break down what the words mean and I'm about to specific so let's talk about the term MVP minimum viable yep product yes and I would argue most people skip over the V yes and every one of those words is important yes those are those all three words matter and so viable means that

someone finds it useful yes viable means you have users yes if you have no users if you can't get any customers by definition it is not viable it's it's not alive and not just users users getting value not accounts created you should imagine that there's more value created in the world positive sum post their launch than pre- your launch and the reason this matters or the reason we're we're spending time on this point is if you refer to something you're working on as an MVP yeah and it doesn't have anyone using it who is getting

value from it you are not telling yourself the truth exactly you don't actually have an MVP you have not yet built an MVP yes and so again which just it's something we notice yes so you should have that be the bar that viable that word is very important to me like you bring up this concept of car carg culting over the years and I think this is one of the clearest examples where it's like let me build the shell of something that's useful but no engine of usefulness and then try to get a bunch of

users Revenue like make the graph like work on growth yep and I think that like somehow too many people are in that mindset versus like let me make something useful and if it does help people they'll tell people and and even if you have to tell people you can promise usefulness like it it won't be an empty promise and I think that all too often especially when finders come into YC sometimes like we have to remind them like it's okay to start with making something useful like yeah the graph is a result of making something

useful it's not something to be gamed you know for example if it's a developer tool yeah are you using your own tool yeah well well but it's not that good yet and again I'm just this is a rubric for for everybody yeah if you're in the position to be your own user yeah you should enjoy using your product and get value from it every day that's it's entirely within your control and if you do that it's a it's a higher bar yeah well and and and the last one on this point I often tell Founders

don't be too opinionated about how your product works before you've created value for anyone be flexible like it might turn out the world is different the customer is different than you think the user the value to be created is different like be flexible in this time where you're trying to figure out how to create value all right so um next one of the ones that I really would love to imprint in young Founders is how do you set expectations that can help you win versus help you lose sometimes we encounter young Founders who come into

YC and they believe that they should go from first line of code to million dollars in AR in two and a half months and uh when that doesn't happen they're distraught yeah and we kind of watched this and was like what like this feels like a complete self-own here we didn't expect you to do that why did you expect to do that and and somehow in their minds they Define things like that as as what winning looks like what advice do you get people when you find them kind of slipping into that zone I hope

I'm getting this quote right I hope I'm not but it's we chose to do this because we not because it's easy but because we thought it would be so so there's a Nuance here yes where where thinking some will be much easier than it is helpful is very helpful to do anything hard um it's like the interview with the Nvidia Guy where where the where the interviewer was like would you would you do this again if you knew who hard it would be and he's like absolutely not no and so so there's cases where actually

having a an accurate representation of how hard it is to build something that is successful prevents it from happen prevents it from happening so hey you know you should maybe it's good to have bad expectations um but on the side positive side on the positive yeah maybe it's good to underestimate how hard it is to do things it actually I think that's a good I think it's very helpful POS Embrace that I think the flip side is being so freaked out when it is hard that you flip into like yeah hyper negative mode like winning

must be easy like winning the whole game must be easy or else I must be doing something wrong It's Tricky right so so this this is the tension is you want to engender a sense that oh this is going to be easy we'll just launch a product it's going to take off yeah and if it doesn't take off be like yeah okay it doesn't usually take off yeah exactly exactly just do that just hold two half truths in your mind at the same time and use whichever one makes you feel better it's good tactical advice

yeah everyone makes you feel better another one that comes up that we hear a lot is this idea of um who are you selling to who you trying to help like this concept of are you trying to make something for some employee inside of a company or are you trying to make something that helps further the goals of the company as a whole and the way I try to break into this as a Founder for for for Founders I work with is I just say imagine you switch roles with with your customer and you're now

the CEO of your customer company what would your top three goals be and like can your company help with any of what your top three goals would be and it's funny because often times I talk to Founders their first response is I have no idea yeah what the goals of the CEO is but that usually starts the Journey of being like well maybe I should go find out like maybe I should go think about or maybe I should try to talk to someone who would know how do you kind of deal with this disconnect between

I'm trying to help you know worker 3,500 versus I'm trying to help company with its goals I think this is where the T your users advice yet again becomes very useful yes um talk to your customers but it's subtle though it's and the reason is if you can't really empathize with the decision maker yeah you're completely fabricating what what their goals are yeah and so and often Founders are shocked when you talk to a decision maker that makes a buying decision at a large company what the founder thinks they should be worried about and what

the person is is worried about um are completely opposite yeah and so but maybe are we to blame here cuz like talk to your user you just said three things talk to your user talk to your customer talk to the decision maker did we oversimplify with the talk to your user concept Perhaps Perhaps we' we've done that in the past but yeah now I do think there's this weird world especially in Enterprise software where the user and the buyer are just Worlds Apart yep with worlds different expectations um I talked to a company yesterday who

was just like my user wants to do an hour's worth of work and a half hour the executive three levels above that makes all the buying decisions wants to save 10% on the on the budget for the year I think what they found puzzling too is that the user they were talking to didn't know the executives motivation either like it wasn't like they could talk to the user and learn about what the executive wanted it was like the company was so big they were separated too but if you're not building what the buyer wants harder

to get sales other useful concepts for young Founders who are just getting roll in here I guess a really really big idea that um sort of explains why investors and others are so excited or worked up or whatever word you want to use about AI is the following y um if you ask Claude or the LM of your of your choice to break down how much of the GDP goes to payroll expenses versus goes to purchasing software you will learn people cost a lot of money that that most of where money goes in the world

goes um towards versus software and that on a relative basis software spend is like a pretty small again do your own research on this one um it's interesting it seems like AI is going to enable some of that spend to go towards buying software versus payroll and that therefore the size of the software industry is about to get much much much bigger yes it's going to be software is going to get more useful yes I'd argue that historically maybe the software industry is has not been as big as the payroll industry cuz historically humans have

actually yeah been more useful and it makes sense in the concept of so much of the software we've seen over the last I don't know 15 20 30 years has been workflow software it's been built for humans to operate Y and with the new AI products that we're seeing now it's no the the software operates the software makes the phone call the software replies to the email like the software is doing the work a human doesn't need to crank every piece of work being done the humans more supervising versus doing I don't think this thing

we're discussing is a secret I don't know if it's widely understood and I would compare it to if you knew about Moore's Law early yeah and you internalized it y you could predict the future pretty well yes versus someone that had never heard of Mo's law so this is an example where just having this in the back of your head as something is likely to happen I think another example that I brought up in another context to do with this is the cost to get stuff into Bas mhm is on a ramp kind of like

Mor's law where it's getting cheaper at an exponential rate and the side effect of understanding that again I hey viewer I don't know maybe that's useful to you but it seems like it's going to get cheaper and cheaper and cheaper and cheaper to put stuff into space yes and that some folks that are aware of that and S you know go to where the puck is going yeah are going to be in a good position well and I think that I love both of these examples because they both point to the point that like 10

15 25 years from now things will be very different yeah in my mind this point is so cool because just from like a money-making perspective you don't have to fight some other piece of software anymore it's not like either the customer pays for you or pays for the other thing it can be like oh you can just give them capability also it's not necessarily that you're trying to replace the humans there it might be that like this business can only have n humans and you give them the power of 10n and like that's also extremely

useful so I think maybe the kind of the hack here as well is like the B2B companies of the past seemed really resigned to being workflow tools operated by humans you don't necessarily have to copy that going forward and then let's wrap it up what's the last the last big boy here there's some um irony that we're the people saying it but it's not it's not lost on us sure just watch out for being a conventional thinker yeah and what's tricky is when you're a part of a subculture you can feel like the subculture is

like really futuristic and really out there but you end up having all the same ideas as the other people in your subculture and so the example we're giving is if you're really into startups and you're really into startup news y um you can end up kind of diverging with all the same opinions with all the other people in the same subculture yeah which is a a form of conventional mindedness and I think like you know there are two that I see making the rounds pretty consistently um which is funny because they're flavors of of historical

kind of misconceptions like one is like oh everything is just an AI rapper like anything using AI That's not a foundational model is just a rapper like yeah um which I love because it's like it's a perfect example what you said it got so mainstream in such the startup World well people would just say that like it was true yeah and it didn't need it wasn't like a theory that needed to be proven or argued Theory it wasn't even yeah it never it it skipped hypothesis Theory it just went straight to obvious you're an idiot

if you don't believe this which is clearly not true but I think the other one is that like oh well the foundation model companies are going to win the entire game like there's nothing else to do the foundation model is the only thing it's all the applications it's everything playing this game is silly that's another one where I think sometimes the cynicism slash like wanting to be in The In Crowd can kind of prevent you from actually making value in the world like lean back all the value that's going to be created is already being

created by the foundation Foundation model companies that's yeah I think we we sometimes talk to people that think we're at the end of History like they read so much of this stuff they're convinced where basically the end of the history this is the end of all startups this is the end of the world as we know it and are sort of like sad about it and uh it's funny I had someone responded to one of my posts on X the other day basically asking me about this and my response is I think it's going to

be okay I do too and that's what I would say to you viewer I think it's going to be okay I also would say this it's a weird thing about humans that we have predicted end of times many times like I don't know if there's something about us any hey positive and negative it wouldn't be the first time a lot of people thought we're nearing end of days and and so it's okay to have unconventional ideas about this again maybe we're we don't we're not saying we have the answers either but watch out for just

having the same mentality and not questioning it the cool kids on Twitter believe this therefore must be true that's that's that doesn't fly all right I think that's all we got thanks dolin thanks [Music]