Garry Tan on the Past, Present, and Future of YC

(upbeat music) - Gary, welcome to the show. - Thanks for having me. - I realized we are some of the only people in kind of tech that are from Winnipeg. - Oh, right on. - Usually. - Yeah, I was named after Fort Gary, - Yeah, I was gonna ask. - My son's name is Garrison, which is kind of funny, 'cause then it's-- - It's kind of the same thing. - Yeah, anyway. - Nice. - Then how did you end up in San Francisco from Winnipeg? - My dad moved to sort of work in the satellite boom back in the '80s. And so he moved to Southern California and moved around a lot. And, but yeah, I mean, basically California and tech drew our family and put food on the table and then it sort of brought me into tech. - And then you stayed obviously in San Francisco. What was kind of that journey like? - Yeah, we ended up moving to Fremont, which was it's in the East Bay. And I took Bart in to take my first computer science classes at UC Berkeley. I took Bart in the 16th emission down the street right here. And I got my first coding job that way. This is all web 1.0. I worked at a design firm that created the first Apple e-commerce store for Steve Jobs called adjacency. - Okay. - And so, I mean, tech gave me everything and I'm so lucky to just be able to participate in this. - Yeah, and then today, so you, everyone probably familiar with you, you're leading YC. Really quick, people who don't know what YC is. Or me, people who do, how do you describe it today when someone asks you like, what is YC? - I mean, it's an accelerator, incubator, people apply online, so you don't have to know anyone. And we accept about 1% of the people who apply. But when you get in, you get half a million dollars in exchange for, you know, about 7% of the company. But what's more important than the money is actually getting a YC partner like me. I'm one of 15 people who goes out there and selects companies, you know, we pick you out of the, you know, out of the database, we read your application, we watch your video, we pick specific teams to meet us for, we meet for 10 minutes. And we have to decide, you know, yes or no on half a million dollars within 10 minutes. It almost sounds like Shark Tank, but actually Shark Tank has, I think, zero billion dollar companies, whereas we were going on more than 100 at this point, 20 years in. - Really? - Yeah, that's crazy. - Yeah, so YC has sort of started as this experiment, a program in Jessica Livingston started it, really just as an experiment. Like, how do we give small amounts of money to people literally like almost summer internship style? Like, when I did YC, we only got 13,000 dollars or so. So, you know, it's, it's like 5% now from an internship. - Yeah, that's right, but that's all you needed. And, you know, that very first YC batch had Reddit with Steve Huffman and Alex Sohanian, that first batch had Sam Oldman who created Loopt, which got funded by Sequoia, another company sold to Amazon, I believe. So, you know, that very first batch turned out to be a success, and we just decided let's keep doing it. - Was Twitch in the first batch or early? - Yeah, the founders of Twitch started Kiko, which they sold that startup on eBay. Yeah, I think they listed it and bought it. - Yeah, they listed it on eBay and bought it. And then the funny thing is when they started working on Twitch, it started as Justin TV. And they got Kyle votes, you know, attention. He was an undergrad at MIT. And the other, you know, Justin and Emmett and Michael and the other sort of co-founders of Twitch, they were from Yale, but they had sold a company on eBay. And so my favorite store, it's not my store, it's Kyle's store, like he found out about Justin TV because in that very first YC batch, that team had sold a startup on eBay. And that was way, way more about startups than Kyle felt like he knew. And then of course, Kyle went on to create, you know, many multi-billion dollar companies now in Cruz, and he's, you know, on his journey in robotics now with botco, which is, I mean, I wish I could say anything about botco. Like, you know, you have to see it, it's insane. - Is it humanoid or in the home? - I'm under NDA, but it is truly one of the most remarkable things I've seen in startups in, like, maybe ever. - There is some information out there. People can look it up all through whatever I can find in the description. People can dig around. This episode is brought to you by Numeral. Numeral is the fastest, easiest way to stay compliant with U.S. sales tax and global VAT. 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Thank you, Flex, and now let's jump in. - And so this was all in Boston, that first batch, right? - Oh yeah, that's right. - And I was the last batch. I did YCM 2008, so we were the last batch in Cambridge, but so then why move to San Francisco? Like how did this happen? - This was before Paul and Jessica had kids, and so they really love to spend, you know, basically summers in Mountain View because of the California weather and winter in Massachusetts, it's pretty brutal. But they liked summers in Cambridge, and so we did the last summer batch in 2008. And then it's funny because it's coming full circle, we just added our first partner who's actually based in Cambridge on Cicupta. So he sold the startup, your great company, he sold it to Gingo Bioworks, and then he's basically right next to MIT. And so we're sort of thinking about opening an office in Cambridge, and you know, given all of what we're seeing out there, I'm like, you know, California being more and more sort of hostile to tech, we're realizing, you know, I'm all in on San Francisco, I'm all in on California, and we're gonna fight for it, but from an institutional standpoint, like, you know, they're gonna kill the golden goose here. And, you know, we gotta think about, you know, where founders going to be. - Yeah, okay, so that, if you have an interesting question, if somebody's maybe out of the loop, they don't know what you're talking about, what's going on in San Francisco specifically, or in California. - Yeah, in California, broadly, C-I-U-H-W, which is a particular union for healthcare workers, just put on the ballot, or they're trying to get on the ballot, what they call the billionaire tax, I call it the asset seizure tax. Basically, you know, it's a one-time tax of 5%, if your net worth is above a billion dollars. So that sounds kind of reasonable, but if you read the fine print, it's tailored designed to seize the assets of startup founders. - So how can that be true? - I mean, Larry and Sergey both left the state because of it, you know, in the, you know, off chance, I mean, I think it's, you know, a real double digit mid, you know, 40, 50% chance that this actually gets passed in California. So I don't think it's something, I think it's something we have to take seriously, it's not this fringe thing. And the way it's written, it actually doesn't take your ownership, you know, Larry and Sergey have about 3% each of alphabet. They actually take your voting percentage as your ownership percentage. - And they still have control, don't they? Like voting, yeah. - Yeah, so, you know, they would get taxed 5% on 60% of the value of alphabet, which is literally their entire state, how it would be half of their net worth. - Yeah, so, I mean, it's very strange because it's turned into this war, like the drafters of it claim that it would not do this, and, you know, they have sort of all of these sophist arguments around how, and you know, this won't apply, but. - Why don't I just change it? Like, that seems obvious. Like, if you look at the rules, based on its written, they will apply this way, just change how you're writing it. - Well, that's one of the artifacts of the proposition system. This isn't going through legislation. It's not going through the assembly or the Senate. This is not something that Gavin Newsom can veto. It's actually going to a direct proposition on the ballot, you know, probably for November. So I guess vote it in pass. It just gets bolted onto the California Constitution. - Yep, that's how it works. I mean, this is how we got Prop 13. You know, a lot of things are broken about California, but this is one of those. You know, SCIU, UHW might change it, but I think in the background, I think people who care about basically the state and who want tech to thrive in the state, like we actually have to get organized, and that's what I'm going to keep working on that. - So I think what seems to be happening is instead of paying the tax, people just leave. - Yep. - Is that an actual thing that you think could happen? That's happening right now. You know, I think about a trillion dollars in personal net worth has left the state, which is about half of the billionaires in California. - So you're getting half the fact you thought you were getting, you put this bill into place. - Yeah, and you know, when you look at taxes, 76% of taxes are paid by the top 10%. I'm not saying that that's wrong, but what do you do when like sort of, more than a trillion dollars of net worth leaves the state? It means that middle class people, everyone else has to pay a lot more. And so, you know, this hilarious Wall Street Journal had a quote from like a wealth manager who's a mere millionaire, and which is crazy to me, and he says, well, I don't care, it doesn't affect me, but the reality is like, I'm also not a billionaire. The thing is like everyone will end up paying taxes or services that are really important will get cut. And so, you know, when you have bad policy, we just have to work against it. We've got to vote the right way. And so, I don't know, I mean, coming up in tech, I never paid attention to this stuff. And then now I'm starting to realize, no, we have to pay attention, you know, we're sitting here in San Francisco right now. I think we're in the middle of a really great resurgence, but the job is not done, you know, the same force is similar sets of people who put out this, you know, sort of asset seizure tax. They are also trying to ten acts, the gross receipts tax here in San Francisco. And that is where you don't necessarily pay money, pay taxes on revenue or income. It's based on like transaction volume of your service. That's right, yeah. And so, this is exactly the tax that actually drove both, you know, Stripe and, you know, Square, a number of fintechs out of San Francisco. And, you know, we have something like a 30 or 40% vacancy rate, you know, on the right over here looking out the window. It's like, you know, you will see a ton of empty space. And it's just, you know, it's been sitting empty for years. How are we actually going to fix that if nobody wants, you know, the second you get product market fit, or you're going to stay in San Francisco, you know, are you going to pay literally a thousand X, the tax that you would in Mountain View or Sunnyvale. I, you know, most smart people would probably find a way to say, you know what, like, I don't have to be here. And so, and these things matter, right? Like San Francisco matters a lot. You know, the reason why I'm fighting for it is that I want startups to continue to be in San Francisco and the Bay Area if they stay. That's the one thing that you can choose about your startup that can like, change your outcome. So drastically, it's two and a half times more likely if people choose to stay in the Bay Area that their company ends up being worth a billion dollars. You know, New York is about two X, and like everywhere else in the country is basically, you know, it's, you know, that's the baseline, right? So just moving to New York or San Francisco increases your chances all else equal by two and 2.5 X. And, you know, I mean, I think there are infinity types of effects here. You're around people who, you have access to capital. That's number one. You're around people who are very, very ambitious. And so, you know, your ambition rises when all your friends ambition is really, really high. You get access to way smarter people who have actually done the things that you need to do. So, you know, I think the thing that scares me is that if the state, if the city, if like the policies don't support tech, you know, it's not merely going to move. It's actually going to hurt America. It's gonna hurt our ability to actually stay on the forefront of things. And, you know, people sort of scoff at that. But, you know, San Francisco is where we made the self-driving car, right? This is where Uber came up. This is where Airbnb started. This is where GPT-1 was formulated by Alec Radford, right? Like, this is the dawn of the AI revolution. Like, anthropic and open AI started in the mission district. And, you know, the third crazy thing that's happening that I've, you know, blew my mind. Like, it was going to pass until, you know, we harness people on the internet in December. The sitting supervisor in San Francisco for the mission district, where they came up with self-driving cars and large language models, wanted to ban AI labs, ban laboratories and research and development entirely in her district. She would have made it so that you had to go to a special council probably headed by her and her cronies to even be allowed to open an R&D lab, even for cancer research. So, you know, to me, that's a ban on R&D in the place where some of the best work in the world happened right here in our city. Like, you know, how do we get here? - Yeah, well, even if you go back, like, semi-conductors think of like Intel being basically birthed and grown in the Bay Area, the internet, all these different companies, different software companies, Instacar, how they probably get their groceries delivered, DoorDash, I'm sure they're stated at R&D, they've used Google products, the iPhone Apple, was birthed and born here in the Bay Area. And if none of those exist, you don't have, you don't have a way to reach your constituents as a politician, you don't have a way to go on vacation, you don't have a way to access the internet. Like, all that goes away. - Yeah, a lot of the internet was built right here. I mean, you know, a lot of it right here in California. So, you know, I think people don't understand, like, this is, it's the, you know, the golden goose, but, you know, we should enjoy the eggs, we shouldn't eat the goose. - Okay, so, if I want to get involved in local politics, whether it's San Francisco or anywhere, what'd you recommend doing? - Oh, follow me on X and, you know, I guess, what I'm trying to do is do a lot more research media. I mean, this idea, this, you know, understanding of the actual proposition, you know, I didn't necessarily want to break it on my X. You know, I sent it to a number of reporters and it just astonished me, like, people wouldn't, so they wouldn't publish it. They didn't think it was noteworthy. - I mean, based on what you just described, I'm like, holy shit, that's a pretty big deal. - I mean, this is where I sort of wonder, like, it doesn't feel like the media environment is designed to support this idea that tech should exist at all. Like, I think that it's so unpopular with certain sets of people in society that tech could be a positive force, that anything that might even resemble an argument to, like, not do an asset seizure, for instance. You know, the most mainstream business publications are starting to refuse to publish that, which is just surprising. Like, you know, how do we get here, you know? But on the other hand, on the bright side, you know, you do this all day and I'm trying to do this all day, like, we get to go direct, right? Like, what we're doing right now is not some sort of, - I'm not gay keeping this. Like, whatever you're saying, we're putting it out there. - This is like what I've learned and this, you know, I mean, I think that's the counterbalance, I guess. I mean, you know, we used to have to go through a media and there was like a mediation of, like, how reality works. Whereas, now we can just go direct. And, you know, I'm not gonna get everything right all the time and I own up to that. I try to, you know, be as truthful as I possibly can be because, you know, I have to wake up and look at myself in the mirror and say, like, am I doing the right thing? - Yeah. - And so maybe that's our covenant as creators on the internet now. - Yeah. - It's like, well, I'm not gonna get it right all the time, but at least like my guarantee to the people who follow me is like, I'm trying to do it, man. Like, you know, I have a particular worldview. I'm not without bias, but, you know, it's a bias that's informed by, I meet with founders all day. I mean, with tech people all day. And I'm meeting legislators, I'm meeting policy people, and this is what I'm seeing. - Yeah, plus if you just suddenly start saying things that aren't true or aren't well researched and formed, and people are just like, oh, Gary doesn't know what he's talking about. I'm not gonna be attention to him anymore. - Yeah. - You kind of lose your credibility if you're not continuing to fulfill that promise kind of to your audience or to the people that trust you. - Yeah. - So, on the other side, there could be audience capture. - Yeah. - Like, you might be totally biased of like only communicating things that are favorable to tech. in a way so that I guess there's that argument too. Which, I mean, then it's good to have the counterbalance, I guess, of all the different people with different opinions and not the only person that people should follow. And I would never tell people, like, use me as the only source of information that would be bad. So I just think of that meme, you know, hey, where are the media now? You mentioned something kind of interesting with sort of these, like, eras of YC, who you might have actually said is before we started recording, but you said there's kind of in these different eras of YC. And so maybe the first era was, maybe it was Boston, maybe it was still the first era when Jessica and Paul moved to San Francisco, what was kind of like the second act or second era of YC? I mean, basically it was Paul and Jessica and Trevor Blackwell and Robert Morris in Cambridge initially. And then they started coming to the Bay Area and then actually a hard tagger, who's the managing partner with me at YC now, was one of the first outside partners. He was a YC alum. He actually co-founded a company with Patrick Carlson that went through YC the first time called "Octomatic." And, you know, I got to work with him, Paul Buckeye, who created Gmail, Jeff Ralston, who created Yahoo Mail, we were sort of like a set of people starting in 2011, who became partners. So, this was kind of like the second era. Yeah. So, PG and Jessica were, you know, still directly involved and it was like way more than a full-time job, I would say, and they had very young children as well. Was it like a work in a scale YC, we're going to try to help more founders, we're going to pull more capital to work, we're going to try to make a bigger impact on the world? Oh, yeah, definitely. I mean, I think that first era was fascinating to see because I saw, here was this place where I was, you know, a software engineer, I was working at Palantir, I designed a logo at Palantir, actually, employee number 10, and then we were trying to hire away some YC alums who had just gone through the program. So, that's how you first came across, that's how I found out about YC. Oh, interesting. So, you know, Palantir, we were only 10 people and we were just really into hiring the smartest engineers, and so it's kind of funny because, you know, in 2006, 2007, that was right when YC started. And so, it was probably, it wasn't until maybe 2011 or so, that was when Dropbox had become a billion dollar startup, but a lot of people said, "Oh, one you're lucky." And then, you know, in 2011, 2010-2011, that was when Airbnb became a billion dollar company, and then when you're lucky, too, you're good, I suddenly, everyone in the valley realized YC was actually really a place to pay attention to. So, Airbnb put YC on the map, just in the sense of, "Holy shit, they've done this twice. There must be something there." Yeah. And then, that's when YC sort of went from giving people, you know, $12,000 to, you know, $100, $120, $175,000, and yeah, it was just interesting to see the difference, right? Like, I knew back in 2007, 2008, like, this was where really smart engineers wanted to go start their company. Like, I wanted to be like Steve Huffman, I wanted to be like Drew Hausten, I wanted to be like James Lindenbaum, who created Heroku, which we used, you know, really one of the best cloud software startups of that era. And so, it was already in the minds of, like, the creators and the founders themselves that, like, here's this super technical guild of all the smartest people making the things that we want to make. And then-- And then other people started paying attention. It looked like three or four years for the investors to catch up, but they caught up by 2011. That's kind of classic, though, like, the investors always catch up later when they're through points there. Which makes sense. Yeah. And then you-- I think there's, like, a famous-- I actually might have tweeted this as a joke, but you were, like, were officially a photographer at YC at one point. That was, like, your first kind of role. You were just, like, volunteering, taking pictures. Yeah, totally. I mean, we were applying to YC. I was actually trying to become an editorial hip-hop photographer at the time. Really? Yeah, that's right. This is, like, a portfolio where it's, like, building a little bit. It was, like, a quarter-life crisis of mine, where, you know, I had rage quit my job at Palantir. Oh, really? And, I mean, I was just younger, and, you know, I spent a lot of time on my YouTube channel, sort of, talking about my psychological and, like, sort of business journey, you know. And, you know, honestly, I managed to, sort of, reprogram myself in a way, and in ways that, like, helped me get to where I'm at, where I'm at today. But I put a lot of credit to Cameron Yarbrough, he actually started a exact coaching startup called Torch. And Torch.io, and, you know, he was one of the people who taught me, like, oh, yeah, you know, you know, everyone sort of goes through whatever's going on for them, right? Like you have your 10,000 hours of human training from your childhood and your teachers and, like, all the things that you saw. But, you know, on the one hand, some people treat that as destiny. Well, that's what I got, and that's it. And what I learned from Cameron was that these are things that you can actually control. Like you can change, you can, you know, you're a Westworld fan. I was the HBO show. Yeah, yeah, yeah, with the robots. And you could, you know, freeze all motor function. And then you should go into, like, a debug mode, you know, that's what therapy and coaching can do. And that's something that helped me a lot. Like, I, you know, basically stopped rage quitting after being able to spot, like, oh, well, this is a pattern like I rage quit my job working for Joe Lonstayl at Palantir. I rage quit actually my startup in 2010. And after that, I realized, oh, no, no, I have this cycle where I will, you know, sort of self abandon a little bit too much. You know, there's, for me, like the, the central core thing that I had to learn about myself was that I had this sort of mode where, you know, we might be co-founders. I disagree with you on this. But rather than just saying it, I might eat it, you know, I just don't even say it, right? Because I want us to have a good relationship. Like I sort of mistook this idea that you always hear the advice, like, oh, you better have a really good co-found, a good co-founding relationship. And I mistook that for like, oh, you should never fight. Which is not true at all. Great co-founders fight absolutely all the time and about everything. But mainly because they care so much and they do it in a way that, like, preserves the relationship. There is never a conflict or a fight that is so much more important than the relationship itself. And, you know, that could be a co-founder that's in marriage, that's in, like, all, you know, good, close friendships, like this is sort of the repeating thing. And so I learned that actually I shouldn't self abandon. And then my pattern would be, I would keep it to myself. I'd say, like, oh, you know, I can deal with this. Some of this is that my mental model for human beings is like, there's a horse and a rider. And, you know, I have a very strong rider, like my prefrontal cortex in my language center can like control the horse, I guess, it's just like, you know, I, that's, you would call that like a very strong will, I guess. And then this is like a very subtle, weird thing where I would use that to sort of, like, welch all of these other things that I knew was correct, whether it's like, oh, the homepage should say this or actually, like, they should, you know, actually, the startup, you know, we started like this, but we should pivot to that, right? Like, these are all things that, like, you should be able to talk to your co-founder about, but it was on my end. Like, I was a terrible co-founder to my co-founder at Posterous back in 2008. That was my YC startup. And so, yeah, these are things that you can control and you can change. And, you know, for me, I would run into a point where like, I had chosen a self-embandant enough that, you know, to use the horse and rider analogy, the horse would just say, like, F this, like, I couldn't eat, I couldn't sleep, like, it became, you know, a somatic actually. This happened a few times and it took like quite a bit of therapy and coaching to realize, oh, yeah, this is a cycle, this is something that happens and I can actually do something about it. Like, I can be aware of it. I can, you know, so today in my work with my therapist and my coach, like often, I'm trying to think through, like, okay, freeze-all motor function, what's going on here, like, and then if I'm very lucky or very, very astute and usually with the help of others, I'm not able to do this myself. I can place an if statement in there and it's like, when my face gets hot, I'm going, you know, I'm going to stop and, you know, I might have like a default reaction, like, shutting it down or like, you know, I said self-abandoning, like, the part that would happen would be, I bottled it up so much that then I'd blow up, you know, I went into a one-on-one with one of my first designers I'd ever hired and I just blew up at him. And he was like, Gary, I've never been more disrespected in my entire life, like, how did this happen? Like, where's this coming from? And so, just years of, you're just not voicing the thing and then just you had a tipping point and here's 18 things I'm laying on you. Exactly. definitely not healthy. And so the cool thing though is like, I think it happens all the time. I think that it's actually one of the more fundamental things that I really want founders to understand because like, you know, I just gave my map and it took me many, many years to like sort of map that out to freeze all motor functions like regularly every single week and figure out like what was going on. Everyone else has like, you know, clearly other things like, you know, it's my thing is not universal like mine specific to me. Everyone has sort of their own set of things. But like it or not, like, do you know how people talk about startups and you know, startups themselves take on the personality of their founders. Yeah. And so this is like a direct outgrowth of that. Like if people don't handle these things and get a chance to, you know, figure this stuff out, like it just shows up in your org in ways that are, you know, it'll just happen someplace and you'll be like, well, where did that come from? And then if you really pull on the thread, it's like, oh, because that's me. Like that's how I, you know, who you hire, who you fire, like how you deal with almost any conflict. Like that is actually how the organization deals with the conflict. So on the one hand, like most people look at this, you know, internal work. It's sort of like, oh, it's like some west coast, like do some ayahuasca and like talk about our feelings type bullshit that doesn't matter. And I'm like, no, no, like, you know, maybe psychedelics are not for everyone, like be very careful about that, you know, that's my take. And on the flip side, like, no, no, like how you do anything, you know, how you do anything is how you do everything, right? And so I certainly recognize this like repeating pattern in myself. And I mean, I think we see it play out across thousands of companies, right? And we can't be there all the time. Like, you know, being a YC partner for a company, like, we try to be there. But we also see these sort of repeating things. And you know, we have to like take control of ourselves, like, you know, if you can be a better person, like actually, you'll show up better, you'll hire better people, you'll manage better, like, everyone will be more functioning, functional, like, not afraid, more truthful, more focused on the outcome. And then that will produce a better product and actually winning in the marketplace. So it's like, it's not this, you know, in this guy, like, let's talk about our feelings thing. It's actually like it's crazy fundamental to whether or not a startup works or not. So speaking of that question, I feel like why see his published data before on these are the most common reasons that a startup fails. I think number one is you run out of money. Oh yeah. What I'm cool. And maybe number two is kind of co-founder. Yeah. Disagreement or conflict is that? I mean, maybe this is a funny aspect of YC. YC companies tend not to die because they ran out of money because they have some money. Usually they shut down because they get tired. They get demoralized. I mean, it's sort of real, it's honestly like often co-founder issues. And so, you know, a great co-founder conflict, you know, you might not agree on everything, but you're able to get to some sort of outcome. And then the outcome and decision like leads to success. And then, you know, good things, big get good things, right? So even if you have disagreement, you might disagree on everything at first, but you're able to come to a common understanding or decision and just do it. Yeah. You can just move past it and maybe not move past it in the bad sense of like bearing, but like talking about it. Yeah. And figuring like, this is actually what this is what the decision means to us or why we should do it. Absolutely. And then the nuances like, honestly, you're, I like the analogy of an idea maze, you know, you're at the beginning, you're actually out of maze, right? And how do you, you know, you're trying to get to product market fit, you're getting to it. You want to create something that people want, make something people want is the t-shirt that we give everyone. Oh, you actually get t-shirt literally get the, like that's the, if you have to sum YC up in one sentence, one mantra, it's make something people want. Like you can just think on that, like, you know, say, you know, we should just make people say, make something people want, like as a, as a Hail Mary or something. Yeah. And it's like, here, we give you absolutely, and I just say, make something people want 1000 times and meditate on it and your startup will succeed. But then you start thinking of like, make something people want, like, what do people actually want? Yeah. Like, I feel like some people you just forget, like when I, like when I started this podcast, I was like, well, what do I want to hear in a podcast? Like it's not just, you know, what's the checklist of what you should do when you make a podcast was more of like, what would it be fun to talk to Gary about? Like, what would I actually want to hear if I had him come on? Awesome. So you kind of just, I think with that, with everything, it's like makes them people want to. Yeah. Yeah. You start with the verb, like make, right? You got to make something. And then what's funny is, make something is too short because it's missing like the interaction with other people, you know. Oh, yeah. So then you, I guess we're continuing the phases of YC. So you joined at some point. It was like, 2011 journey of, so you had raised quit. And then you were suddenly like, yeah, I read my startup and then hard said, well, you're a great designer. And you know, this is sort of the era of consumer startup still. So this is it. This is the moment when people said, like, oh, well, you need a designer with your co-founding team. And so I actually came on having no intention of ever becoming a investor, ever becoming a GP or starting a VC fund. Oh, right. I was just like, I'm really burnt out. And I need to recuperate. And Harsh and PG and Jessica said, why don't you just come and help a bunch of YC companies design their home pages? And then I just did so many office hours that, you know, my pet theory is like, maybe they, you know, saw how much work I was doing. And they were promoting other people who were great into investing partner. And they said, well, you're doing so much work. Like, we kind of need to promote you too. I don't like, I just knuck right in there. So unclear if you're actually good, but you were working hard. This is my imposter syndrome at work. But it worked out. I mean, I learned a lot. I, you know, what was really cool about it. I, you know, I really loved that moment because, you know, I was the same age. And like, I was, you know, a practitioner right at that moment. It's very interesting to be, you know, 12 years, 13, 14 years into like the other side of that. Like, I think this is probably the life of many an investor. Like you start out as, you know, a true peer to a lot of the people you're backing. And it's very funny. But on the other hand, like, I feel like I can be right back there, you know, last, this whole weekend, I was just sitting there in cloud code, like, making a new website and, you know, doing new interaction design. I'm like, oh, my god, I'm back. Back in the game. That's right. Like the investor, like, truly rolls up, absolutely using their like in their in the trenches there. That's right. All the new tools. Yeah. Yeah. So then there was a period you, you kind of started initialized. Then you were still at YC. How did that kind of go? Yeah. I mean, this was back when people could do be a YC partner and do personal angel investing. And then, Harge and Alexis and I were sort of the young partners who had not made any money yet. Palantir was still private. And Postras has sold to, it was about to sell to Twitter, but Twitter was also private. And so Jessica said, hey, you could probably be an investor by, you know, and she introduced us to some LPs, basically. And so we raised initialized fun one, which is a $7 million fund. And we ended up returning more than 55 X DPI on that one. Not too bad. Yeah. So, I mean, it was mostly coin based in Instacarp. But, you know, it's, I think, that's probably the thing in investors sort of worldview that like you read about it, you hear about it. And then until you see it, you don't believe it. Like we funded a hundred companies. And, you know, all night, if you could, you added up the DPI on all 98 companies, it was like one X. And then Instacarp was one X, but we couldn't take any ProRata because Sequoia did it. And then, and then Coinbase, we took the ProRata and multiple rounds and ended up turning the 53 X. Oh, wow. So when you see the power law, it is astonishing and unbelievable, honestly. Yeah. And then you, you see, you know, tries, it seemed like it was going really well. So you step back from YC, like on a daily basis and we're running initialized full time. Oh, yeah, yeah, yeah. I mean, basically, just like the Sam Altman era and, you know, at that moment, you know, I had helped raise the continuity fund brought in the first LPs for it. And then I said, well, YC is in pretty good shape. And it's got institutional backing. It's going to keep going. And then for me, it was like, it's more fun to be a pirate than to, you know, join the Navy. But yeah, here I am. I'm an admiral again. So then how did that come about where you had started your own fund? It seemed like it was going really well. I think you had probably raised like your third or fourth fund. I maybe I should have looked this up again before. But like, it seemed like, oh, you're set with initialized. Why would you go back to YC? How did that happen? Yeah, I mean, I guess this is a special thing. Like YC is not just sort of like a boot camp or it's not even just a school. It's like, it's a way of life now. I, you know, I guess like, more serious. I mean, all of our wins, like 80-90% of the wins were either YC or YC alumni. So, for initialized, I mean, super big ones that we're still super psyched about. I mean, ended up being the first investor in Rippling, you know, first seed investors at DemoDay for Flock Safety, I mean, we have a ton of incredible companies that are all like, you know, today worth a lot of money. And then I looked down and realized, well, this is all a part of like this larger ecosystem. And mid to end of 2022, like Sam had gone off to work on OpenAI, Jeff Ralston, who I'd worked with for many years, took over as sort of a caretaker president. And then he said, you know, a bunch of people from that era, especially PG&Geska, said, you know, we really want you to come back. And Brian Cheskey was a big part of that of Airbnb. He said, he was on the board and still is on the board at YC. And he said, Gary, it's time for you to come back. And were you expecting that? Not at all. I mean, I just, that was like, I never thought that would happen. On the other hand, it's like a dream job to me. I mean, YC gave me my start as a founder, gave me my start as an investor who was like, you know, probably 50 to 80% of my friends are like all from this world. I mean, basically going from like being on the branch to like, you know, handing the route of the tree of prosperity, you know, some of it was like, if it wasn't going to go the right way, I might just will retire like, you know, it's one of those only people of a certain age will understand my reference of this kind of like the hair club for men. You know, like in many, many different ways, I'm, you know, not just the president, I'm also a client. So, you know, I both went through YC and I was also one of the investors at Demo Day. And I, you know, managed to turn in like multiple 10X, you know, plus, you know, sort of legend VC funds. And so I'm like, no, no, no, I understand this ecosystem really, really well. Yeah. You'd almost been like every sort of like constituent that you serve in the ecosystem, you've been on the other end of it. Yeah. And I mean, I'm sure that most of my VC friends would like agree with this at this point, but that was like a concerted effort the last two or three years to basically realize that YC is a managed marketplace. And that's a good thing. Like basically it's a managed marketplace for all the smartest people starting the next companies, you know, we're about 20% of all the names, all the companies worth $5 billion and up started from 2012 and later. I did. They participated in YC. Yeah. So, I mean, and frankly, like it's a network effects business. So it stayed about 20% for going on like, you know, 15, 18 years, I would say. And why shouldn't, why can't that be 30? So, you know, you can, you know, mark 2026 on the calendar and, you know, if I'm successful in five or 10 years, like I'd like that to be 30, I'd like that to be 50, like why not, you know, like this is and should be a network effects business where, you know, it's not about the money. It's about like having a community of all these people who you can trust and they're there to support you, that's actively, I think of it as like, Disney Imagineering, like Disneyland is this incredible place and you know, if you go down into the bowels of Disneyland, like you'll realize, oh, there's like an incredible amount of care and thought about like every little detail, like every part of the experience is designed. And you know, I'd really credit Brian Cheskey for that. I mean, it's like sort of the original designer founder, having him on a board is absolutely insane because it's like, you know, mile a minute ideas about like what we need to do to create, you know, it's no surprise at all that he created Airbnb because he's that good thinking about human experiences. So any, any examples of that, like what have you learned from Brian Cheskey in terms of designing human experiences or ways to make YC better product? I mean, a lot of it is just focused like his, I'm sure people, I mean, if people haven't seen it, like they should definitely go and watch, I mean, you need to read Paul Graham's essay about founder mode and then Brian's done a bunch of things like, actually, I like the one he did with Jessica Livingston on the social radars podcast about founder mode. And basically, he had a remake that company from scratch like during COVID and he basically realized that you have to like, like, like leadership is like his presence, not absence. Like he, the classic advice that people give to startup founders who reach product market fit is like hire the smartest people you possibly can find and give them the keys to kingdom. And his advice, like flies in the face of it and he's like, oh, I did that. And it almost, and it created a company that I did not recognize, like my directs with like, I mean, there's just so many different things that he sort of realized. And then I think as founders, especially post product market fit, you just don't listen to like, basically your own beating heart around what you need to do for the company. And so what he said, you know, I'm not the founder of YC, but I feel like he gave me sort of, you know, between him and program in Jessica Livingston. This like incredible sense that like, no, no, like, I'm not the founder, but like, you know, we are going to run it, you know, like founder mode, like I, you know, I need to take like a really, really radical ownership about what is that experience? Like, what's demo day like? What is, you know, the application process like, you know, we brought back in person interviews, we moved San Francisco, we got an office right here in San Francisco. We told all the founders, moved to the dog patch, like moved to the center of where all the stuff is being built and be surrounded by all the other people who do that. You know, we were, when I came back, it was a remote program. We do basically, the batch is not remote at all. You cannot do YC remotely. But, you know, it wasn't really working as a remote program, you know, so when you talk with that 20% number, like, did it, did it sort of dip or did you feel like you were losing that 20% and it wasn't going up anymore? I mean, that's what it felt like, honestly, right? And I mean, some of it is, you know, we did a lot of really amazing things, like, you know, YouTube started becoming a really big factor for YC, but YouTube is not enough. Like, this is part of the reason why we're going to open an office in Cambridge. Like, we need to be on the ground with the world's best founders, and, you know, frankly, some of the best ones are right there at MIT and Harvard. And. But it's kind of like you, so you're still trying to scale it, because it sounds like before the interest of scaling the YC experience was on my application and interviews and, you know, maybe it's like a little bit more decentralized, I think I saw a chart of like international YC companies. It was kind of going up quite a bit where you guys funded more teams around the world. But now it sounds like it's still trying to hold that like in-person, what makes it special, or creating this like network, but maybe trying to scale that, like maybe try to recreate what exists currently in the dog patch in Cambridge. Oh, yeah. I mean, the thing that keeps me up at night, you know, some of it is like, we meant 99% of people who applied to YC end up getting somewhat of a mortal ego wound by being rejected. So it's going to ask you whether I see a lot of like, I don't know, it's like people who are upset that they didn't get in. I mean, it keeps me up at night, because like, you know, it's not a good thing, right? And this is something we talk about inside YC, it's like, you know, something like a third of the batch, maybe even depending on the batch, sometimes half of the batch will have been rejected prior to getting in. And that number has been going up. People sometimes have to, you know, it's quite common for people to apply two to four times before they get in. So, you know, I think we're always worried about over rotating, like, you know, basically being too small can be bad, being too big can be bad. We're always trying to figure out what that number is, but I think we're pretty clearly right now, like there are way more really, really capable founders who we are rejecting. And that keeps me up at night, you know, we should not have to ask people to be rejected like time after time. I will say though, if you can survive the mortal ego wound of being rejected, you know, once, twice or three times, you're actually made to be a founder. If you cannot be rejected even once and you, like, mortally hate, why see after being rejected once, maybe try a different profession because being a founder really does require an absolutely insane amount of resilience. And one rejection, you know, to get ready, buddy, like it's going to be a thousand more, you know, like in every possible way. Yeah. And a really great founder just says, you know what, like they got this wrong, but I'm going to prove them right. I'm going to prove myself right. And you know, to be frank, that is what we love. Like we, I particularly love funding founders who, you know, we might have gotten it wrong. There's actually an example of this in fall batch actually. There's a company that they're, you know, very active on Twitter right now and, you know, Diana picked them up for the winter batch. But, you know, both Nico and I had interviewed and we should have accepted them for fall. And so, you know, if you're watching. If you're watching, I'm so sorry I made a mistake. And I said that on Twitter already. So, yeah, I mean, this stuff keeps me up at night. Like I, you know, I don't like to hand out, you know, honestly, like, you know, how many is it? Like we get about 80,000 applications. So it really is, you know, something like 70,000, 500, you know, like mortal wounds, you know, this is per year. Yeah. Do you expect probably like 200, 253, 300. I mean, I think we're doing about between 700 and 800 companies a year. So. Yes, it's a lot of companies, like we reject a lot of companies. And, you know, on the one hand, like, hey, please apply again, you know, there's that meme I try to post that's like, hey, you know. Getting rejected from YC is sort of the first step to, you know, kind of sort of being accepted to YC. Yeah, yeah, it's the adventure time meme. So, what would you reckon somebody's listening to this and they have or haven't applied to YC yet? Like, what are some of the things that maybe they're obvious, maybe they're not obvious, but like, what are you looking for someone applies to YC? I mean, I love builder. So just being able to see, I mean, honestly, what cloud code can do today. What's funny is like boilerplate, like what just comes out kind of sucks. And so, you know, one of the things I'm even realizing from the last weekend of like going deep on it is that like, you can still, you can create. Like, there's pretty much no excuse why people can't make beautiful, super well made stuff. Like, there's sort of, I'm sort of worried. Like, maybe this is, you know, the boomer 2010 startup founder talking in me right now. Yeah, you know, I think that there is a craft to creating online and, you know, sort of startup experiences for people. I mean, if you're building software anyway, like, there's just something there that I think it's easier than ever to create something that is like all the way sanded down. Like, the story I always think about is Steve Jobs would famously talk about how like a cabinet maker can recognize other cabinet makers as being really great at their job, not by like looking at the front. Everyone can look at the front. Like, you know, most everyone thinks about the fit and finish of what's in the front. A great cabinet maker will finish the back. And then that's how, you know, you can really, like, game really does recognize game. And when I look at the partners that we have, like, we have people who have sold their companies for, you know, hundreds of millions of dollars that you know, they're people who have like. Like, you know, they're really great practitioners of getting to product market fit themselves, you know, like Tom Blomfield created Monso, which is worth billions of dollars is one of the absolute top into companies in the world. And so, you know, we have 15 people all of whom I can say without a doubt, like, you know, especially after doing funding, you know, even two or three years of companies like, you know, two or three years of YC time as a partner is equivalent to like 20 years. And like venture, I would say, you think about like, isn't the reps. The reps are unbelievable, right? Like, if you are reading personally, you know, a thousand to 2000 applications every single year, you're working very directly writing, I mean, frankly, like, even as a seed investor, that's pretty wild, like writing 50 seed checks in a given year, like, sometimes 75, like. 60, yeah, not quite as much. So if you get those reps, like, you know, the organization learns, you know, and actually that's sort of the reason why it works. I don't think that I can, you know, I can try to pull out the, you know, billion dollar idea for founders. And, you know, that's hit or miss, like, that just requires inspiration. Like, I think that people like Paul Graham or Vinod Coastal, for instance, like par excellence, incredible. I would say that, like, all of the YC partners are, you know, top two to five percent in the world and like, being able to do that. But on top of that, because we get so many reps and we've seen so many things, like, it's actually about stopping you from blowing yourself up on like the sort of 10,000 landmines. It's like, oh, that's going to lead the co-founder to conflict. Oh, like, be careful about taking money from that investor. Oh, like, you got single, single channel concentration. And they're sort of like literally 10,000 things. Like, the good thing is, like, because we've seen everything, like, we'll never freak out. I mean, that's actually really good investors are like that. They're like soft advisors who never freak out. They're like, oh, this is happening. Interesting. Like, your company is probably going to die in a month if you don't make this change, but there's three people that have actually done this before. Exactly. Yeah. And then, you know, look, like, I can tell you this, but also talk to the person where it happened. And that's where, like, you know, it takes a village to create these things. And so, yeah, if I look at, like, why is it that YC can do this? Like, well, you know, whoever is in that batch is the top 1% of what's going on. And then if you put them in a room, like, they just, like, by default create this community of like, you know, default trust. And then the partners themselves, like, you get, you know, one out of the 15, it's like, hey, we're here for you for like the life of the company and beyond. Like, we're, you know, actually, they are to fund the founders, you know. Yeah. We're talking a little bit more with the app. Is there a common reason maybe between that, like, top 5% and 1%? Like, the, you guys send an email that's like, hey, you're in the top. I think it's either 5 or 10%. There's like a common reason that maybe people don't quite get to that accepted, but they're ranked pretty highly. Like, is there something where you kind of usually get tripped up in the application, or it's like somebody who, maybe the first two times they didn't get in, but then the third time they get in and they're really successful. Like, are there things that you feel like they're like fringe, almost make it into YC types of things? Oh, man. I mean, the hard part is it's, you know, I couldn't tell you like every single company is such a different unique snowflake. There's a lot of subjectivity probably too, where you just kind of had like a gut feeling on this one, but not this one. Yeah. I mean, we often try to do re-interview. So it's actually more and more common that, you know, if one partner says like, well, there's something here, you know, it's not, I don't, I can't do it. I mean, sometimes people just get full up. Like, we definitely, we don't want each, you reach like pick your, yeah, each partner picks their own cohort. And, you know, basically sometimes are, you know, our eyes are bigger than our mouths and bellies. I guess I don't know. I mean, so we try to pass it, we pass it to other people who might want it. I think a lot of it is just about, yeah, what, you know, what you, it is that snap judgment in 10 minutes. And, you know, all we can really do is give you more shots to like sort of have it click for someone. Because it, I mean, it's, it's a considered thing. Like, why see done wrong. It sort of feels like, you know, random winning the lottery. And why see done right is like you're meeting someone. And, you know, it's actually a pretty high pressure for the partners because like it or not, like we're going to get text messages and emails and like, you know, it's, we're signing up for like the long haul like work. So it's considered, you know, so what is, you talk a little bit about like you get into YC, there's this batch. What is, how does it kind of go just for someone who's not familiar from the outside. And then what would you recommend to get the most out of YC? Like if I just got in and I'm listening to this, I'm super excited. Maybe you tell me this when I get in, but what would you say to someone to get the most out of YC? Yeah, I mean, we just extended it to a 13 week program. I mean, this is what I mean by like it's, you know, Disneyland. And like, we have to imagine here this stuff. Right. Like, like we pay attention to, we talk to people and it's like, how did it go? Like, what can we do better? We went to four batches and realized, oh, yeah, actually like the batch got a little bit shorter and people need a little bit more time. So you added, you added two to four and you shortened it when you went to four. Yeah, yeah, we went down to like maybe 11 or 11ish weeks, 12ish weeks. We realized, oh, yeah, no, we need to add like two more weeks and get this to 13. And so, you know, the first sort of nine to 10ish weeks, I would say, we're just trying to find product market fit. Like, let's get in market, let's nail our messaging, let's figure out who we're building it for and let's build it. Like, let's get, you know, a set of real customers, sometimes enterprise, sometimes, you know, in DevTools is very funny because DevTools is actually like consumer startup, but your total address market is like 20 million people. So now with code gen, like maybe that's 200, you know, like it's, and so yeah, AI infrastructure is growing really, really fast and, you know, that's just ongoing, like always changing, like I, I think YC is like totally insane for. And cloud startups in that respect because you basically look to your left, look to your right and look like at, you know, 800 companies that were funded the prior year and like all of those people will reply to your email and like will at least give you a fair shot, like, you know, it's not a guarantee they're going to sign on. But you know, man, the first like three to five customers matters a little. lot and that sort of sets the tone for the whole company. And then, you know, we actually tried to keep the amount of time spent on fundraising to like, maybe two weeks. Like basically, the funny thing about fundraising is like, I think the mistake that people make as founders is like considering that like the, you know, that's the finish line. And it was like, no, no, that's not the finish line. That's the starting gun guys. Like, you know, have a party and then like actually get back to work the next day, because like, you know, they're not actually dead, but you should sort of treat it like that. Like, you know, someone gave you a million dollars. They gave you five million dollars. But guess what? Like, you sort of signed up to say that, hey, we're going to return a big multiple of that based on the things that we're going to, you know, we're going to do from here. Like that, you know, that million dollars is going to be worth a hundred million. It's going to be worth a billion. And you mentioned earlier, you alluded to like things her investors you should take money from or shouldn't take money from. If I'm doing YCM approaching Demo Day, maybe explain a little bit how Demo Day usually goes for someone who's, you know, has only heard of this but never been there. And then how do you usually recommend somebody kind of picks what investors they should or shouldn't work with? Yeah, totally. I mean, I guess the reality is people start basically towards the end. Like, we want people mainly working on the startups because that's what actually matters. And then there is sort of a starting gun inside YC or going to talk to investors. So if I were an investor, I want to sort of talk to them that like probably Saturday. Like, you know, we sort of do the send off like you're done with fundraising prep. You're ready to talk to investors. And then usually that Saturday. It's like, all right, off to the races like let me start meeting people. And so it's pretty important. I mean, the number one thing that a startup founder can do going into YC is like make really, really valuable things and get real customers that pay and retain. And then fundraising is easy because everyone can see it. Yeah, because it's like you're, you're trying to give someone like an attractive asset to invest. Yeah. And that's, I mean, that's what they want to make money. They want to give you money. And then in 10 years, give them back 100,000 times more. Totally. That's because you made a valuable thing that's worth a lot of money. Yeah. I mean, the cool thing is about 20% of YC now is hard tech. You know, defense tech is up more than 2x in the last batch. Like, you know, defense tech is interesting because it's sort of both like you want commercial validation. Like Icarus was the, you know, one of the top companies from the last batch. And they literally got, they, they booked more than a million and a half dollars from the Department of War during the batch. So that's, you know, that's why they were one of the top companies. Like they during the batch was able to go from here to here. And, you know, I think that that's the number one thing. Like objects in motion, stay in motion, objects at rest, stay at rest. And so, you know, YC is sort of the moment that you need to like learn how to run fast. And this is something that we hear from like all of the billion dollar companies, even they look back and say, oh, like if they feel like they're, you know, thousand person company is going slow, they tried to tap that energy that they got when, you know, the first week, the first eight weeks of YC when they were running fast. Like, you know, Airbnb famously talks about, you know, they on post it notes in the bathroom put like a little graph of like every single week, we need to grow our revenue on the site, manage marketplace 10% every week. And they nailed it. And that's why they raised from Sequoia at, you know, prior to demo day. But didn't no one want to invest in Airbnb originally, right? I mean, they got rejected from all the legends. So yeah, the funniest thing was I think, you know, Brian would always sort of obscure who the people were. But, you know, now it's such a legend story. Like I think I saw Mike Maple's post like, oh, yeah, that was me. I, you know, and Mike has nothing to prove. He's like one of the biggest legends in all adventure. So yeah, it's just like part of lore now, you know, I mean, and that's what gives me Harper. And sometimes like man, like, you know, if we make a mistake and we say no to a founder who ends up like creating Airbnb, like, yeah, I'm sure we're going to do it. The reality is like, I'm sure we're going to do it. And I'm going to feel bad about it. And I take that shame. I take that feeling and I'm going to turn it back into productive energy to make sure that YC fixes that. How did that happen? We're going to fix that. And then the next founder, we're going to fund them. We're going to get it right. And I mean, I guess that's what Brian Cheskey taught me. Like I need to exercise founder mode on this tree of prosperity. And then if we do that, then actually, well, yeah, actually YC will fund like 30 to 50% of all the companies that matter. And then if we're doing it, then we're actually even better equipped to help the next generation. Because like everything that we do, you know, we kind of have to take our own advice. Like it doesn't actually a common refrain we use all the time now. It's like, well, if we were a YC startup and we could do like option A or option B, like option A, spend a whole bunch of money and hire a bunch of people or option B, like let's do a quick and dirty and see what happens and like take feedback and then, you know, speed of iteration, like let's fix it next time. Like we got to do the startup way, like 10 times out of 10. Yeah. Like I feel like that's my real job. It's like, no, no, we have to do it this way. We cannot, you know, YC at 20 years by default, like almost always like post product market fit, like you fall into manager mode. And it's like, nope, we're back to founder mode. So I guess if we're kind of, if we're continuing, this has just been like an hour and a half conversation with the acts of YC, maybe we're at the end or the beginning of like, act three or four, if I don't know where we're at, but like what is the next act kind of look like for YC? I think done right, like more and more company like we actually just straight up want more companies to succeed. And so, you know, what does that look like? You know, I'm going to experiment with rebatching, like I think that rebatching what does that mean post series A, like after you get your series A, like we should give you another batch, like I'm going to start with the companies that I fund it. And then if that works well, like, I mean, we're just going to experiment. We're going to try things. And then if they work, we're going to double down and build software around it. It reminds me of standard capital, like I do the YC batch style for this first series day, which no one has really done. Yeah. And I have a PV or insane, and you know, Paul Bucke, like just super extreme legend investor. Yeah. Yeah. I have a portfolio company that I think, I think it will have been announced by the time this podcast comes out, but they they worked with them. And it was just it was like surprising. I was like, oh, that's cool. I didn't know you guys would be up for that. But like it actually is a pretty interesting value proposition to the founders. Amazing. So yeah, I'm excited about that. And actually one thing also, I heard it to YC as internal software called bookface. Oh, yeah. You actually made it. Oh, yeah. Okay. That's right. What's the story with that? Well, basically, YC started becoming a thing. And then people started pretending to be YC companies. What? And then there was no way to verify it. Like we had a Google group or something. Okay. Oh, okay. Let me just, you know, vibe coding wasn't a thing back then. I just actually real coded it in, you know, in Rails. And initially it was actually just a Facebook. And this is a little bit of an inside joke from a skit from the office, the office with a gym. Yeah, gym, but yeah, yeah, see of a certain generation. See, I like it. We, you know, we still have the 22 year olds do not watch any of our, the stuff that we came up with. So I recently had a, a showing of the matrix for all the 22 year old founders. Okay. I'm like barely on. I need to go back and rewatch it. Yeah, watch all of them. I feel like it comes up and I'm like, I watched them one to know as a kid. I don't totally. It's surprisingly relevant to startup founders. The matrix. Oh, definitely. So startup founders like Neo. Yeah. Sure. Yeah. Why not? Yeah. Well, no, I mean, you're, he's stuck in this office and, you know, sort of at the whim of like the man, right? Like, you know, you have, that's fair. You're in this like cubicle and you have no control and no power. And then, you know, he's a hacker though, right? And he goes to these cool arrays. And then, you know, he meets these other secret hacker types that like, yeah, sort of understand the nature of the universe. I mean, that's, that's how I felt when I was the software engineer and then went to become a founder. Like that's, I was like, there's nothing that felt right about me working as a level 59 PM at Microsoft. And then I started to glimpse the matrix when I worked at Palantur and, you know, working for Peter Teal and Jolansdale and all my, you know, my call, I was for any brothers of Stefan Cohen and, and Jolansdale. And I could see it, but I was still like in the matrix. Right. And so like on the, on the cusp of getting out. Yeah. And then finally, like, YC was what helped me sort of take the red pill and make the leap. And it's like, oh, no, I can be, you know, not jacked into the matrix. Like I can be like in the real real. And that's what it feels like, though, like being a startup founder allows you to be directly present and in touch with like the market, like the users, the customers, like customers can go anywhere, like customers don't have to use your stuff. And so, you know, being in the real allows you to create products and things that like actually get good outcomes. And so I don't know to take it full circle like That's why like this billionaire tax they call it the billionaire tax I call it the asset seizure tax like Gavin use them himself like is just running around saying like guys like we can't do this. Why are we doing this? They're 49 other states You know people can just go they then that's what they're doing like Larry and Sergei have left more than a trillion dollars Of you know people have left the state and so in like once they leave they go through all that hassle Settling across the country and they're like, you know what? Florida's actually pretty nice. So or Michigan or Montana or Any of the other 49 states Do I need to go back? Yeah, I mean if people are watching and their startup founder they would be startup founders and they're sort of in their You know, I too was working as a entry, you know sort of cog in the Microsoft machine when I was 22 years old and There was something about like go go home and watch the matrix Yeah, and then realize like starting a company is taking the red pill and you might just turn out to be neo One one question I want to ask you You do have like a personal AI stack like how are you using it? I talk about using clawed a little bit Just like how do you use it today? Like what are you taking the most advantage of like if There was like Gary's top three hacks of using AI. Oh, yeah, what are you using it? Everyone thing, you know, I sort of learned this from Jared Friedman and Pete Cuman on my partners at YC, but I call it metaprompting So you can take almost anything that you might do all the time and you just drop it into a context window And then say, you know, here's a bunch of inputs and outputs like you know Maybe you have like a bunch of notes and then for me for instance, I have YouTube outlines where it's like oh, you know, I don't you know Turner had a really funny tweet like I you know would put that in the outline And then you know, I might find two or three other things that like sort of flow together And then I would write YouTube script for me to like sort of you know go on the teleprompter and like sort of recite so I could get it recorded But you can take like a bunch of these inputs and outputs and then just drop it into a context window and tell it Write me a prompt that can Act as an agent that does like you know take this input and output over here And you can even introspect you'd be like what are things you notice about You know things that I did to convert this you know from the input to the output you do this for like almost any knowledge work And then you can just start using it and you know initially it's gonna suck because it's just not that smart yet Yeah, but you know what's funny is like now I also use it to Like iterate my writing And so you know for something like a YouTube script like you really want it to sound like your voice And so you can be like very direct about well, I would never say that or don't say it like this or oh Like you used a long word when use the short word man like you just like speak to it conversationally And then you you know simultaneously you start with the prompt then you have an output But then You can use that new output, but at right after you get that new output and you're happy with what happened You'd be like give me the next version of the prompt Like evolve like yeah, based on what we talked about in this conversation give me a better prompt that incorporates all the things we talked about And you can do this with like literally everything yeah, and you know in theory like Honestly, like there's so you know, there's so much about what people do day-to-day like you could use it for tweets Like you use it for like editing podcasts you use it for like Pretty much everything like meta like I just have a folder now of like prompts that You know, I use all the time and I'm trying to iterate like my YouTube prompt one is like I think I'm like V27 or something. Oh interesting. Okay. I have not used it a whole lot yet for content creation I've done a lot of like just throw into chat GPT and it has memory like it kind of gets context But I haven't done like prompt evolution. I guess I need to master it. I mean the other thing that's great is Sometimes when it's not quite working right. I'll use GPT 5.2 pro I'll use whatever the max thinking like I'll even use GROC and then I'll take for whatever reason Claude seems to be the best at like evaluating the outputs I'll take all of the outputs from all of the different like max models And then I'll put it into Claude and I'll ask well given you know, here's my here's my prompt Here's the output from you know for LLMs including yourself rate each response And tell me what the pros and cons of each approach are and then it'll spit it out And then you know, you can sort of agree or disagree with like all you know, I usually like to say like Give it to me in numbered form. So I can say I agree with one. I disagree with two like three is this But the nuance is blah And then after that you can actually just say like okay, well given all of this like synthesize. Yeah That's interesting. I like it a lot for Rapid ideas like it's just like you get a hundred ideas and one of them's good like you can just you can kind of give it feedback on like I really like this one or Because like it just comes up with stuff that you maybe you would or wouldn't have came up with But it just it just speeds up the process a little bit. Yeah, and then I use perplexity for anything that has to search the web So you know, I think that like the you know Claude and Gem9 these things are pretty good But I still think my experience like perplexity still draws on and synthesizes way more sources So I really like that the Jackson mode. I like that about perplexity where because one of my Holdups or one of the things I really like about Google is it shows you all these sources you can kind of see where things come from And if you just like the default kind of chat gbt response like you don't know where the stuff is coming from and like Maybe it's like the correctness or bias or whatever but on perplexity It shows you all the sources and you can jump in but I do like that I still use perplexity a little bit too. I like perplexity for I feel like it does the best when I say I'm having Gary Tan on my podcast. What should I ask him totally? I kind of kind of throw it in all of them, but I feel like perplexity always gives me the best on average Yeah, it's incredible times we live in right now. Yeah, do you have one one last question for you? Do you have a favorite CEO founder or business that you've gotten inspiration from over The years like what are you drawing from the most today? And maybe it's just Brian because it sounds like he's at a pretty big influence. I love Brian Getting to work with him on the board is insane and then Actually watching Aaron levy from box Has been really really well like you know, I only befriended him maybe like a year and a half ago and He is very very funny. You should ask him for magic tricks if you ever meet him So I've had him on the podcast actually I've never talked about magic. Oh my god. Yeah, but I mean I think There's something really special about Aaron and that like he's stuck with box all these years and then the way he's thinking about How AI is gonna change sass. I think is like Just I mean I really look to him for just like how's this song gonna change in work. Yeah, he's like really I mean, I love his tweets. So he's I've learned a lot from him. Yeah, it's so fascinating where you would think All of these scaled and condensed software companies are so well positioned to just capture Everything is gonna happen in AI and maybe it's sort of like that sort of happened in some cases, but there's also a lot of cases where like Like elements have been around for three years and the product hasn't changed at all aside from the website saying that it has Hey, I like they throw on a chat box. Oh my god So what's funny is like I'm pretty sure you can just make a long short fund on whether or not the CEO is a hacker and has used Code and like that would be it would outperform the S&P probably yeah Well, I actually right after this I'm recording with chase and a benchmark. I don't know if that's gonna come out After or before this one. I have to figure out the schedule But that's one of the things we're gonna talk about fantastic like this universe of all these software companies In the tam is like trillion dollars in software spend especially when you consider how it's gonna change with AI And it just seems like a lot of the big players have not done anything yet. Yeah Well, they win anything or a little more should be startups Yeah, I think people are underestimating to what degree like software is a very very small part of like the majority of people's lives in the world And the reason why is that you know, there are only 10 to 20 million people in the world who are actually good at code And then we're about to enter this other moment where like actually you know billions of people can actually just very directly create their own stuff And then the hope is like I mean my hope would be Actually a lot of things get better faster cheaper like we need more markets and we need more ability to enter You know basically Capitals like we need we need actually not fewer markets, but more markets actually And I think that that's what's gonna happen like the there's A tiny tiny percentage of VDP is touched by software at all and then the result is like all kinds of just loss just Yeah, this person was there and they could have I mean you know Uber or Airbnb or any of these marketplaces are good examples of There was not going to be a market and then a market was created out of the air and a lot more of it is done And then what's the result the result is like I can get around like The nature of cities has changed really fundamentally. Yeah, you know millions of people perhaps maybe tens to hundreds of millions of people Like who maybe would have been hurt by drunk drivers like that doesn't have to happen anymore and so Now sober drivers also, that's right, with Gweemo. - That's right, like a car objectively, like I will not injure a human. - Yeah. - And I will just follow all the rules. And I'm not, you know, I was scratching my nose, I got distracted for a second. It's just objectively like the software decides and knows, oh, this door opened and I sensed it within a split millimeter of a second and got out of the way. - Yeah. - So yeah. - I mean, there's basically like extreme tech pessimism, but to me, it's like, I mean, tech is here to make things better. And then, I mean, granted, like, I have a bias. Like yes, I am surrounded by the top 1% of people who earnestly are trying to build technology in service of humanity. And if that happens, like all of these things can happen. And so, I mean, even with AI, like there's sort of, the dominant narrative is like somehow all the jobs are gonna go away. But, you know, I really like what Ryan Peterson from Flexport says. He says, look, like humans just want staff, man. Like you're never going to get to the end of like the list of wants that people have in the world. And like technology, like in the hands of people who can harness it, you know, and put it into the market. Like that's the mechanism that actually literally improves the life and well-being of like every person. Like people today, like I think, you know, middle-class people today live lives that like the kings and emperors of like 200 or even 100 years ago, or even like 80 years ago, like they couldn't even dream of having the life that we have like just day to day or access to healthcare, or access to transportation, or access to education, like, you know, they couldn't even imagine that like you can fly around the world. Yeah, like you can literally just, you can go to bed and wake up and then I'm the other side of the planet. Yeah, like that's insane. And then, you know, soon it'll be the moon and Mars. Yeah, so actually probably like one of my most insane stats, if you ever heard the one about firewood in the US, what's that? Firewood used to be like 25% of US GDP. Just like the sale of firewood. That's insane. Which it's like, that's not even a blind item anymore. Yeah. It's probably like a couple, maybe 50 million bucks that we spent a year on firewood. That used to be the majority of the economy was people buying and selling firewood. I gotta look that up. Yes. I can, I'm, I'll make a YouTube video and I'll credit you. Okay, yeah, no, it's super fascinating. We'll do a collab. We'll do, we'll do like a special. I'll try to find the tweet and I'll send it to you, but it's just crazy. And it's just like shows. It's like this charge just kept going down and it's like 0.02%, I don't know, 50 years ago. Whenever, whenever this this chart was, go back a couple hundred years and it's subsistence farming, right? And instead we get to sit here, hang out. As friends, just like talking about ideas, this is so cool. Yeah, this is a lot of fun. Thanks for doing it. Thanks for having me. And thank you for listening. And thanks to New World On Flex for supporting this episode. Put your sales tax on [email protected] and upgrade a Flex Elite to get $1,000 on your first card using code Turner. Hit the waitlist link in the description. If you enjoyed this conversation, please like, comment, subscribe, and share with a friend who should apply to YC. And make sure to check out the back-end log of over a 100 episodes with the founders of companies like Robin Hood, Mercury, and Box, and dozens of YC founders. Tune in over the next few weeks for guests that include Chatham Buddha Gunter, Benchmark, Jake Stalkett, Serval, Mikey de Kiela, Footwork, and Scott Stevenson at Spellwell, the fastest growing AI company in Canada. If you don't want to miss any of these, subscribe to my newsletter, the split links in the description to get each episode plus a transcript emailed directly to your inbox every week. Thanks again for listening. See you next time. (upbeat music)