We sometimes talk to people that think we're at the end of history.
Like they read so much of this stuff.
They're convinced we're basically at the end of the history.
This is the end of all startups.
This is the end of the world as we know it.
And my response is, I think it's going to be okay.
And that's what I would say to you if you were, I think it's going to be okay.
Welcome to Dalton Plus Michael.
Today we're going to be talking about tips for founders in their 20s.
I think to kick this off, we're seeing so many more young founders start startups come through YC.
And I think that, you know, our entire goal is to almost give you a head start, a running start into this adventure of doing a startup.
So to start with the practical, you've probably heard it on this channel a couple times.
What should people be doing with it?
Okay, so the first tactical thing we're going to talk about is side projects.
Side projects are things where you
You build them, but you have not yet quit your job.
And they are a great way to hone your skills, get used to building something, actually shipping it, getting customers, just going through the entire life cycle of starting something without making the full leap.
And getting experience with new technology, which you might not get at work.
So why are people afraid or hold back from doing a side project?
Yeah, I think the biggest pushback is there's no one there to motivate you to do it.
I think if you've been working somewhere a very long time, you're used to being told to do something or you're given a deadline or something like that from your manager.
This is where you have to be entirely self motivated.
So maybe we could do that right now.
We're saying, hey, if you're thinking about starting a side project,
You need external people to pump you up.
And so maybe we can do that for you.
The other thing that's great about side projects is you're not committing yourself the rest of your life.
You can just do things for fun.
You can do things to not make money.
You can make cool websites that you find funny.
All this stuff is it's just honing your craft of getting used to ship things.
So what are some what are some tactical tips you have on.
Well, I think the the other thing I'm thinking about with side projects is people are always worried about what about my job and like Oh, like I don't want to do some weird IP blah blah blah blah blah thing And to be honest one thing you should know is that?
So many founders did side projects while working before starting their company So if this was like a common cause of death, we wouldn't tell you to do it, right?
you know, don't be an idiot, like use your own computer, right?
Don't use company resources from your employer.
Don't do it when you're on the job and supposed to be working.
Like, you know, the most common kind of basic common sense can really help here.
But otherwise, don't be afraid of it.
I mean, for a lot of founders, it's their first taste of freedom.
It's also easier if the side project
in no way resembles what your day job is or what your employer does.
And as instead just something fun, then you really don't have to worry about these issues.
Number two, where you live.
An early stage founder is who you are surrounding yourself with, what city you're in, what's going on in that city.
And I think this is like the easiest thing to fix, especially nowadays.
Like if you want to be starting a company, the advantage of being in the Bay Area is just so incredible.
We have so many founders, YC founders who are living overseas who have come back in the past year and have told us the energy here is just
So this is not just us talking our own book like literally the number of YC founders who have chosen to relocate back to the Bay Area in the past year has blown my mind.
So even if you're not sure what the timing is to start a company, if you're in a position to say
transfer offices at your current job or otherwise.
Apply to grad school around here or somewhere else.
It makes all this other stuff much easier.
And so we've just recommended and that's something within your control that's something you can you can put action to today, even if you're not ready to start a company today.
And what's our third practical tip?
How do you want to set this one up?
If you are completely out of the loop on what's happening in the world, say you don't have a computer.
The odds are, what's happening in the world is going to pass you by.
You're going to be out of the loop and that doesn't help.
The argument I would make here is there's a point of diminishing returns where if you are too online and you spend, if we were to have a pie chart of what you spend time on, and the pie is like a very large section of just reading
news or consuming content about what's happening in the world, I think you can hit diminishing returns.
And a lot of the great builders I know, the size of that slice of pie is smaller than the time they spend actually building things.
And a side effect of consuming too much information all the time on this point is you can get kind of negative
And you could be discouraged from trying things because you feel like, oh, I've read about that.
That's not going to work.
Oh, this approach won't work.
You kind of lose your beginner's mind.
And it doesn't seem to help folks in their 20s to have this sort of crotchety, old mentality.
And again, when you debug it, it's that they spend an order amount of time reading about things and not doing things.
I think that if you are over plugged into the Twitter hive mind, you are even with the idea that it would help you be a founder, I think you're secretly hurting yourself.
And I think the reason why is because
of the exact points you're making, the most productive doers do not spend all of their time on Twitter.
And not even just Twitter or X, Michael, technically.
But even our own website, news.ycomedy.com, has had a funny thing that's happened to it, where, again, there's lots of awesome builders here, lots of positivity.
I don't want to sound about everything, but it is interesting
what a large percentage of the comments end up sort of discouraging.
Whatever the thing is that the post is about.
A lot of the comments are like pretty negative about it.
And it's become like a running joke, of course.
But you know, I do talk to founders in the batch that are discouraged from even launching their product.
And I try to like unravel what's going on.
And like, I think they're afraid of commenters on Hacker News.
And that causes them to not do things.
I don't know that the commenters even realize they have that much power, but congratulations.
So those are our practical suggestions.
Let's get into some conceptual ones.
One of the first ones I'd love to start with is the cool thing about being a founder is you get to make something for yourself.
and you get to solve a problem that you care about.
Sometimes I see young founders more interested in what investors care about or what they think will make money or some kind of abstract concept of what makes a good business versus doing things that they care about.
And I just kind of feel like sometimes that's like leaving a superpower off the table.
It's like, why not have that superpower?
Especially to go back to what we talked about a moment ago.
If you're building a side project,
You're doing it for yourself.
You're doing it for your own self-satisfaction.
So, of course, you should be excited about the thing you're making.
But why do you think it's so tempting when founders are trying to come up with an idea to figure out what they think investors want to fund versus figure out what's a problem they'd be excited to solve?
I think it's the goal function.
I think if someone is building software because they like software, they'll link computers because they like computers, they don't tend to deal with this one as much.
But if you believe the goal function is to raise money, it would make sense that all decisions would flow from having that particular goal function.
And it's tricky now because I wouldn't blame a young founder who believes the goal function is raising money because in today's day and age, I feel like investors
have put themselves in the center of the startup story, and they want you to believe that raising money is the most important thing.
It's not surprising that young founders are confused by this.
How do they, you know, oh, no, I want to solve my own problems.
But like, everyone tells me if I don't raise money, I can't do a startup.
Yeah, I think my direct take on this is that from like student groups or other organizations like that, it seems to be sometimes oriented around pitch competitions.
Or if you take a class about startups, some of the folks I've talked to, the class involves basically
Less on the building side and more on like making an investor pitch.
The goal is the deck and the presentation.
Yeah, and so So I guess I guess what we're trying to say or you know how to put words in your mouth Yeah, it's the goal should be make something that is useful to people including yourself Yeah, and that's a good place to start.
Yeah versus trying to reverse engineer what it seems like investors want and
And that includes us, of course.
It's so funny how like we give this advice and I think it's like so simple.
It's like start by creating value for anyone.
As opposed to like making that step three, four or five.
What's another conceptual thing that you want young founders to embrace?
I think some of the terminology and the acronyms get thrown around a lot.
And it's sometimes worth taking the time to really break down what the words mean.
So let's talk about the term MVP minimum viable product.
And I would argue most people skip over the V.
And every one of those words is important.
Yes, those are all three words matter.
And so viable means that someone finds it useful.
Viable means you have users.
If you have no users, if you can't get any customers, by definition it is not viable.
Users getting value, not accounts created.
You should imagine that there's more value created in the world
Positive sum post their launch than pre your launch and the reason this matters or the reason we're spending time on this point is if you refer to something you're working on as an MVP and it doesn't have anyone using it who is getting value from it.
you are not telling yourself the truth.
You don't actually have an MVP.
You have not yet built an MVP.
And so again, it's just, it's something we notice.
So you should have that be the bar, that viable, that word is very important.
To me, like, you bring up this concept of cargo culting over the years.
And I think this is one of the clearest examples where it's like,
Let me build the shell of something that's useful, but no engine of usefulness.
And then try to get a bunch of users revenue, like make the graph, like work on growth.
And I think that like somehow too many people are in that mindset versus like, let me make something useful.
And if it does help people, they'll tell people.
And even if you have to tell people, you can promise usefulness.
Like it won't be an empty promise.
And I think that all too often, especially when founders come into YC sometimes, we have to remind them, it's okay to start with making something useful.
The graph is a result of making something useful.
It's not something to be gamed.
For example, if it's a developer tool.
Are you using your own tool?
Well, but it's not that good yet.
This is a rubric for everybody.
If you're in the position to be your own user, you should enjoy using your product and give value from it every day.
It's entirely within your control.
And if you do that, it's a higher bar.
Well, and the last one at this point, I often tell founders, don't be too opinionated about how your product works.
before you've created value for anyone.
It might turn out the world is different, the customer is different than you think.
The user, the value to be created is different.
Be flexible in this time we're trying to figure out how to create value.
Next, one of the ones that I really would love to imprint in Young Founders is how do you set expectations that can help you win versus help you lose?
Sometimes we encounter young founders who come into YC and they believe that they should go from first line of code to million dollars in ARR in two and a half months.
And when that doesn't happen, they're distraught.
And we kind of watched this and was like, what?
This feels like a complete self-own here.
We didn't expect you to do that.
Why did you expect to do that?
And somehow in their minds, they define things like that as what winning looks like.
What advice do you get people when you find them kind of slipping into that zone?
I hope I'm getting this quote right.
I hope I'm not butchering it.
But it's we chose to do this because we not because it's easy, but because we thought it would be.
So there's a nuance here where we're thinking something will be much easier than it is.
Helpful is very helpful to do anything hard.
It's like the interview with the Nvidia guy where where the interviewer was like, would you would you do this again if you knew how hard it would be?
And he's like, absolutely not.
And so there's cases where actually having an accurate representation of how hard it is to build something that is successful.
Prevents it from happening.
Prevents it from happening.
And so, hey, maybe it's good to have bad expectations.
But on the positive side, maybe it's good to underestimate how hard it is to do things.
I think it's very helpful.
I think the flip side is being so freaked out when it is hard that you flip into like hyper negative mode.
Like winning must be easy.
Like winning the whole game must be easy or else I must be doing something wrong.
So this is the tension is you want
to engender a sense that, oh, this is going to be easy.
We'll just launch a product that's going to take off.
And if it doesn't take off, be like, yeah, OK, it doesn't usually take off.
Just hold two half truths in your mind at the same time, and use whichever one makes you feel better.
It's good tactical advice.
Everyone makes you feel better.
Another one that comes up that we hear a lot is this idea of who
Who are you trying to help?
Like this concept of, are you trying to make something for some employee inside of a company?
Or are you trying to make something that helps further the goals of the company as a whole?
And the way I try to break into this as a founder, for founders I work with is I just say, imagine you switch roles with your customer and you're now the CEO of your customer's company.
what would your top three goals be?
And like, can your company help with any of what your top three goals would be?
And it's funny because oftentimes I talk to founders, their first response is, I have no idea what the goals of the CEOs, but that usually starts the journey of being like, well, maybe I should go
Like maybe I should go think about or maybe try to talk to someone who would know.
How do you kind of deal with this disconnect between I'm trying to help worker 3,500 versus I'm trying to help company with its goals?
I think this is where the
to your users advice yet again becomes very useful.
And the reason is if you can't really empathize with the decision maker, you're completely fabricating what their goals are.
And so often founders are shocked when you talk to a decision maker that makes a buying decision in a large company.
What the founder thinks they should be worried about and what the person is worried about are completely opposite.
But maybe are we to blame here?
Because talk to your user, you just said three things.
Talk to your user, talk to your customer, talk to decision maker.
Did we oversimplify with the talk to your user's concept?
We've done that in the past.
But yeah, now I do think there's this weird world, especially in enterprise software, where the user and the buyer are just worlds apart with worlds different expectations.
I talked to a company yesterday who was just like, my user wants to do an hour's worth of work in a half hour.
The executive three levels above that makes all the buying decisions wants to save 10%
on the budget for the year.
I think what they found puzzling too is that the user they were talking to didn't know the executive's motivation either.
Like it wasn't like they could talk to the user and learn about what the executive wanted.
The company was so big they were separated too.
But if you're not building with the buyer once, harder to get sales.
Other useful concepts for young founders who are just getting rolling here.
I guess a really, really big idea that
sort of explains why investors and others are so excited or worked up or whatever word you want to use about AI is the following.
If you ask Claude or the LM of your choice to break down how much of the GDP goes to payroll expenses versus goes to purchasing software,
you will learn people cost a lot of money that most of where money goes in the world goes towards payroll versus software and that on a relative basis, software spend is like a pretty small.
Again, do your own research on this one.
AI is going to enable some of that spend to go towards buying software versus payroll.
And that therefore the size of the software industry is about to get much, much, much bigger.
Software is going to get more useful.
I'd argue that historically maybe the software industry has not been as big as the payroll industry because historically humans have actually been more useful.
And it makes sense in the concept of so much of the software we've seen over the last, I don't know, 15, 20, 30 years has been workflow software.
It's been built for humans to operate.
And with the new AI products that we're seeing now, it's, no, the software operates.
The software makes the phone call.
The software replies to the email.
Like the software is doing the work.
A human doesn't need to crank every piece of work being done.
The humans more supervising versus doing.
I don't think this thing we're discussing is a secret.
I don't know if it's widely understood.
And I would compare it to, if you knew about Moore's law,
early and you internalized it, you could predict the future pretty well versus someone that had never heard of Moore's Law.
So this is an example where just having this in the back of your head as something is likely to happen.
I think another example that I brought up in another context, what do you do with this, is the cost to get stuff into space is on a ramp kind of like Moore's Law where it's getting cheaper at an exponential rate.
And the side effect of understanding that
Again, I don't, hey, viewer, I don't know, maybe that's useful to you, but it seems like it's going to get cheaper and cheaper and cheaper and cheaper to put stuff into space.
And that some folks that are aware of that and sort, you know, go to where the puck is going are going to be in a good position.
Well, and I think that I love both of these examples because they both point to the point that like 10, 15, 25 years from now, things will be very different.
In my mind, this point is so cool because
Just from a money-making perspective, you don't have to fight some other piece of software anymore.
It's not like either the customer pays for you or pays for the other thing.
It can be like, oh, you can just give them capability.
Also, it's not necessarily that you're trying to replace the humans there.
It might be that this business can only have N humans, and you give them the power of 10 N.
And like that's also extremely useful.
So I think maybe the kind of the hack here as well is like the B2B companies of the past seem to really resigns to being workflow tools operated by humans.
You don't necessarily have to copy that going forward.
And then let's wrap it up.
What's the last, the last big boy here.
There's some irony that we're the people saying it, but it's not, it's not lost on us.
being a conventional thinker.
And what's tricky is when you're a part of a subculture, you can feel like the subculture is like really futuristic and really out there, but you end up having all the same ideas as the other people in your subculture.
And so the example we're giving is if you're really into startups and you're really into startup news, you can end up kind of diverging with all the same opinions with all the other people in the same subculture, which is a form of conventional mindedness.
And I think like, you know, there are two that I see making the rounds pretty consistently, which is funny because they're flavors of historical kind of misconceptions.
Like one is like, oh, everything is just an AI wrapper.
Like anything using AI that's not a foundational model is just a wrapper.
Like, which I love because it's like, it's a perfect example of what you said.
It got so mainstream in such the startup world.
Well, people would just say that.
And it didn't need, it wasn't like a theory that needed to be proven or argued.
It never, it skipped hypothesis theory.
It just went straight to obvious.
You're an idiot if you don't believe this, which is clearly not true.
But I think the other one is that like, oh, well, the foundation model companies are gonna win the entire game.
Like there's nothing else to do.
The foundation model is the only thing.
It's all the applications.
Playing this game is silly.
That's another one where I think sometimes the cynicism slash like wanting to be in the in-crowd can kind of prevent you from actually making value in the world like
lean back, all the value that's gonna be created is already being created by the foundation of model companies.
That's- Yeah, I think we sometimes talk to people that think we're at the end of history.
Like they read so much of this stuff.
They're convinced we're basically at the end of the history.
This is the end of all startups.
This is the end of the world as we know it and are sort of like sad about it.
And it's funny, I had someone respond to one of my posts on X the other day basically asking me about this.
And my response is, I think it's gonna be okay.
And that's what I would say to you if you were, I think it's going to be okay.
It's a weird thing about humans that we have predicted end of times, many times.
Like, I don't know if there's something about us.
Hey, positive and negative.
It wouldn't be the first time a lot of people thought we're nearing end of days.
And so it's okay to have unconventional ideas about this.
Again, maybe we're not saying we have the answers either, but watch out for
Just having the same mentality and not questioning it.
The cool kids on Twitter believe this therefore must be true.
I think that's all we got.