Welcome to Dalton + Michael. Today we're going to talk about how fast is too fast for moving a startup. I'll start with the story. I was talking to a YC company. Could have been this batch, could have been a previous batch.

Yeah, let's anonymize it. We don't want to...

Probably every batch, to be honest. The common story. A summary of what they told me was, we got into YC with this idea. We called 25 companies, mostly startups, of course, over the last two weeks. None of them want to buy our product, which doesn't exist. It's just an idea. So we decided to pivot. Can you help us?

And people may not know why we think that's funny.

OK, please.

This is funny to us because that was very low effort. Trying to contact 25 people and then saying, well, I guess we're done. I guess no one wants it.

That's it.

It's so low effort as to be funny to us. Carry on with the story.

What was interesting to me about this was that these two founders had a vision in their head. The second that the path in the startup didn't line up with this vision in their head — which was that, well, I think this idea sounds good, I see fun in this idea, so everyone I talked to must think this idea is good — they got a little freaked out.

The second thing that I love is the instinct to talk to startup founders. It was, I want to vet this with startup people often because I feel like it's easier to sell them, even though this isn't a problem that startups have. The overarching thing was, this was not even rigorous thinking. Where these people used to work, if someone they hired said this to them, they would laugh at them. They're doing it themselves. Why do they do this?

The version of this that I see a lot is people, the way they start their company is to cold email a bunch of people on LinkedIn. They're like, okay, we're doing our startup. We're going full time. Well, so cool. Well, what are you doing? Well, we LinkedIn InMailed that we spammed a thousand people and we only got three responses. So I guess no one wants this. That doesn't work, friends. That's not sufficient. This is very superficial validation that people are doing. I think people do this because no one told them differently.

Actually, here's an overview on this topic. I think that a lot of people are trained as PMs and they're trained to do user research. Being trained to do user research — I remember taking a user research course in college — you're trained to interview people rather than sell products to them. If you can't even interview people, you're not really sure what to do. I think my argument is if you've been trained to be a PM or trained in user interview research, you struggle with getting first customers because the skills that you learn to do this research don't help.

I also think that if you come from a big company, either in product or engineering, more often than not you've never solved your own problem. You're working on other people's problems. I think that your instinct when you start a company is almost a consulting instinct. I need to go around. I talked to a lot of people. I'd figure out what their problem is and I have to solve it, which I think is tricky because it resembles what you did in BigCo, but it probably doesn't represent what the founder of your BigCo did to start their BigCo. Right? Who should you copy? Yourself, employee 10,000, or what about employee one? What did that person do? You talk a little bit about this concept of when people pivot quickly, they're not building the muscle of building conviction. Talk to us about that.

We have a few different metaphors, so I'll mix them. One of the metaphors is what constitutes a high-quality rep? What constitutes completing a full pivot cycle? To learn anything, you need to complete it all the way. Again, being like, we built a product, we spammed 10 people on LinkedIn, none of them replied, let's throw it all in the trash. I am arguing that is not a high-quality rep. You didn't do anything. You didn't really do anything. You didn't learn anything. It was just a waste of everyone's time.

You did, you did spend time. Congrats.

The metaphor I sometimes like to tell people when they're pivoting is the most important customer is yourself. The founder psychology thing you want to do is build conviction in your own mind that this thing is worth working on. It's not to make investors happy or your YC partner happy or whatever; it's to convince your brain that more time spent on this idea is time well spent.

Another way I like to think about that is to convince yourself this customer is worth helping. You're going to enjoy spending time with this customer. I find a lot of founders want to skip that part. Oh, I just want to be in this industry. I just want them to buy my thing. Don't talk to me. I don't really care — just buy my thing, make my number go up. I want to raise my Series A.

In terms of founder personality traits or things you can develop, I think a lot of times how good of a programmer you are is one thing, how good you are at sales, how good you are at fundraising. All these things are important. But someone that has low conviction and struggles to ever build conviction on anything, even if they're great at all those other factors, is not gonna make it. Isn't that crazy? Versus there are people that are worse at some of those other things. Imagine this was like a baseball card of their skills — not the best programmer, not the best salesperson, not the best fundraiser, but very high conviction and able to focus their energy in one direction in a superhuman way. Those people succeed.

Case in point, Justin Kan, my co-founder. I totally agree. What's funny is every good startup team has at least one of those people.

You need one.

Yes. You need that. And the too-cool-for-school teams where it's like, oh no, I can't be too into anything, right? My bar is super high. It's like, sorry, you'll just pivot until you run out of speed.

Let's talk about exactly what conviction means, I think. It doesn't mean believing in things religiously, exactly. It's more about not letting yourself get blown off course. This happens to us a lot. We've seen this at YC. A founder is working on an idea. They go to fundraise. The fundraise is hard. What happens if you're not high conviction? They give up. If just meeting with an investor causes you to give up on your idea, by definition, I'm arguing you don't have high conviction because you're blown off course. If every time you talk to a new customer, you decide to change your product, that is low conviction. You do not have conviction.

Let's go back to the investor one. The thing that I hate about that investor one is that if you look at the history of really big companies, so many of them — most investors thought that the idea was horrible. Empirically, a lot of investors thinking your idea is horrible is not necessarily a bad sign.

Correct. It's not necessarily a good sign either, by the way. We're not arguing, hey, if it's bad, then it must be good. No, I'm not saying that.

It's more of a neutral, it's not a key indicator either way. But when you take it as a key indicator, when it's the only key indicator.

It's almost like when you spend all your time trying to triangulate what other people say is good and that's how you decide what startup idea to work on, you're gonna have a bad time.

I think that I've been trying to unpack why do people do this and more specifically why do people think logically and rationally in their job and then come to their startup and just their quality of thinking decreases by 90%. I talked about this before — a big thing is fear. In the context of the YC batch, I noticed a big thing specifically related to fear is literally fake information.

I had a company tell me, oh man, when we started looking at this problem and realized it's going to take a little while to build, we looked at our batch and 75% of the companies already have launched products that are growing. And we were like, we can't. I'm like, wait. He said it with such conviction for a second I was like, wow, that's a good job. 75% already launched? And then I was like, why do you think that? And they were like, I just assumed.

Let's just make it up.

Yeah. And I was like, you can look.

This is what's funny for the founders that read a lot of Twitter or Reddit or blogs: they will take something anonymous User42 said as gospel and base their entire life philosophy around it. Don't do that.

Don't do that. Especially when you can look up the real answer. When you're in the YC batch, you can tell which companies are launched, which ones aren't. The other one was, well, an alum told me I won't be able to raise without $10,000 in MRR. It was interesting. I had to sit down with this founder and say really simply, some companies enter the batch with a post-launch product with users. Some companies enter the batch with an idea. If you were a rational investor, would you judge those two different companies with the same exact rubric? No, of course not. I was like, okay, and if an investor did, would you not call them kind of dumb and maybe you wouldn't want to work with them? They're like, yeah, so then why are you doing that? Of course the expectations are different for something that comes into the batch with just an idea. I think that these kind of false expectations create the fear, and then the fear creates the bad thinking. Once you're in bad thinking, you're kind of fucked.

I love that technique that you just mentioned. I like to do this one sometimes too when someone is trying to get a first customer, which is, okay, in your past job, your team evaluated different software to buy, right? So you have actually been on the other side of the customer conversations a lot. So which of the sales tactics that you're trying would have worked on you? How often do you respond to cold emails on LinkedIn? Oh, never. Okay.

With your name kind of poorly replaced in the template.

And suddenly their brain, the gears in their brain re-engage. They're like, oh, we evaluated things all the time and we would do this. I'd be like, so basically you're actually an expert at understanding your customer because you bought a lot of software on the other side of the table. What if you just tried to come up with tactics that would have worked on you and would have made you buy your product? And they'll stop and they'll be like, I've never thought of that before. That's actually a really great technique: remember back when you've been on the buy side for stuff and think about what would have appealed to you or got you over the line. That screens out a lot of this junk. Because the low-effort pivots, if you run this thought experiment, they'd be like, oh yeah, I would never buy this.

I think what's so funny is when the founder has that realization — oh, I actually am an expert in this. Oh, I can actually lean on expertise. The thing I often say next is, and that's why we funded you. It's almost like they didn't realize that we funded them because they knew something about the topic they were pitching. And then when they want to pivot really quick, we're like, wow, now you're moving into an area you know nothing about. And we have to say, hey, remember...

Now where you know this thing?

Others will respect that too — your customers. I think this is so tricky because fear really just fucks everything. But I do think this is one of the reasons why I like the new YC standard deal. I think that before, founders would be like, well, if I don't raise at Demo Day, I'm fucked. And now I can just say to them, look, imagine no raise at Demo Day. You have half a million dollars. You're fine. There is no gun. The only gun to your head is the one you're lifting.

Because you keep pivoting over and over again. You never build conviction. When you're low conviction, money's not your problem.

So sometimes as a founder, just put the gun down.

All right, so we often encounter these companies, and we've talked about this before, companies that get into pivotitis, right?

And you got a bad case.

Bad case of pivotitis, right? I think what's interesting is that a company that will build something, learn over a period of time, and then pivot will often pivot from a place of knowledge and actually continue to make forward progress. But we also see a different version. How would you describe that version?

Yeah, have you heard the term random walk? So random walk is where you use a random number generator to decide which direction you go. Basically, when you random walk, you actually never get anywhere. Imagine a starting point and then you walk one direction and you roll the dice and you choose a different direction and you do that over and over again. You never get anywhere.

That's kind of like emailing 25 startups and asking them if they like your idea. Then do that again.

A little bit. It's a little random, right? Yeah. What happens is imagine you're in a rowboat in the middle of the ocean trying to get back to land. If you just keep changing direction every once in a while, you're going to be lost at sea. You have to get on a vector that even if you have to change a little bit, there's some forward progress you're making in some specific direction.

I think that what we see that's so unfortunate is that when you do that random walk enough, you just run out of energy. I always see it somewhere in one and a half to two years. If you don't feel like you've learned anything and you've spent two years doing the thing, one, your experience isn't going to be good. Two, you won't feel like you used the time well. But three, you're going to be tired and for no good reason. You'll be tired for no good reason.

You've never sunk your teeth into anything. You feel like you've been running a race. But if it's like, so what have you learned? They're like, well, learned what not to do. It's harder — it's kind of hard to articulate why that was a good use of your time.

I think that what's sad is that oftentimes those people have a very bad memory of startups. I wish they didn't. The folks who learned and didn't succeed are often motivated to go out and do it again or go work in a company in that space. This is an additive experience in their life, even if their shot didn't work. The ones who do the random walk, they realize, man, this probably wasn't a good use of my time.

Anyway, I think that the last point I always like to bring up here is another version of this kind of random walk or email 25 people then pivot: launch a product that will help no one and then pivot. In the founder's mind, they'll say, well, I launched an MVP and nobody wanted it. We talked about this earlier. Is it an MVP?

Yeah, MVP is one of those terms where people say it so much, it's assumed that there's an agreed upon definition. But when you ask for details, I am not convinced there's an agreed upon definition of MVP. So what's your definition of MVP?

I think that I used to not assume I had to define it narrowly, but now that I think about it, if you can't get anyone to use your MVP, it's probably not an MVP.

Well, it's not the V. We're missing the V, which is viable. Basically, if it doesn't work for anyone, if it's hard to argue that it's viable.

It seems like the cool thing about an MVP is you can do things that don't scale and cheat. You can will it to work for one person, right? So the fact that it doesn't work for one person usually means that you weren't even trying to make it work for them. You were trying to do something else.

This is something that comes up a lot when I'm reading applications or in interviews for specifically developer tools. It'll be like, oh, cool. So I built this tool and it helps you code and you're way more efficient and it's better. We're building our MVP and we're emailing people on LinkedIn now. What is the question I ask them?

Do you use it yourself?

Yes. I'll say, great. So tell me about your usage of it. And they'll be like 🤨. Okay, so let me get this straight. This is helping programmers and you're out there selling it, you're trying to get stone-cold strangers to use it. But it's not good enough for you to use yet, right?

And then usually there's, well, it doesn't have — they can list the thing where it doesn't have this and I mean, I would never use it.

The argument, the earnest point is you should at least be able to use your own tool and be proud to use it, or feel like it's providing some value — the V in MVP, it's viable for you. If you can't even bring yourself to use your own product, it's a little weird to be trying to sell it to people.

More than a little.

That should be the bar for a lot of folks: that they are willing to use their own product.

That's a good bar for an MVP, especially if it's solving your own problem, then at a minimum.

Yeah, that doesn't apply. That doesn't apply in some cases. But for a lot of things...

At a minimum, you should be able to use it. So once we started looking at it this way, I started realizing how many companies never build an MVP. It's typically seen as the first real baby step. How many folks never get there. They never made one customer happy. Sometimes when I talk to founders who have these big high-falutin plans, I bring it back to, can we just get one? Can we just get one? The path to 10 million happy users.

Yeah, let's talk about that later. For today, how about one?

One. You can't do that? Everyone can do that. So maybe the long story short here is that one, it's going to take maybe longer than you think. Don't have expectations that screw you up. Two, fear makes you think really bad. Don't let fear turn a really smart person into a not very smart person. Three, man, it helps to solve your own problem, and then to be your first customer.

Yeah, that's a good bar. At least you can say you did that.

Yeah, if you're doing a random walk, maybe start over. And then four, understand that you've gotta do — you called it a good rep. Make the analogy, because in lifting, make the analogy.

Yeah, I think it would just be, in any kind of exercise or movement, if you want to build strength, you want to have good form and you won't get better if your form is bad, or you might even injure yourself, actually. If you want to learn, I don't know, how to swing a golf club, and your form is bad, A, you probably won't learn, and B, you might injure yourself.

And you're not going to have fun.

And you're definitely not going to have fun. You want to have good form when you're trying to do something that's hard.

Run a good rep. I like it.