Last Tuesday, October 7, 2014, YCombinator partners Dalton Caldwell, Qasar Younis and Kat Manalac and YC Alumni Reham Fagiri visited Penn today to talk to students about their startup experiences and answer questions in the fire-side chat.
YC Alumni Reham Fagiri kicked things off by talking about her experience building her startup AptDeco, and what her stint at YC taught her. The inspiration for AptDeco came from her own experience of having a hard time selling her furniture after she graduated from college. She then did some market research and talked to different people. Before she knew it, she had developed a prototype and beta-tested it. After the private and public beta, the idea of applying for YC came about.
It was through YC that they realized how important there customers truly are. Fagiri candidly admitted, “We thought just because we ran an online marketplace, we didn’t need to be where our market was. We were completely wrong.” Having said that, Fagiri and her team needed to fly back and forth from NYC to San Francisco during the duration of YC.
When the partners suggested that Fagiri go out there in the streets of NYC to pass out fliers, she thought that it was a ridiculous idea but she gave it a shot. It was the winter and there she was standing outside one of the bigger furniture retail stores.
It was by chance that one of the managers of the store walked out and asked Fagiri what she was doing. Fagiri quickly replied that she was advertising her startup which creates a marketplace for used furniture. The manager immediately saw the potential in this given the fact that most of his customers have a hard time finding ways to dispose of their old furniture. With that, the manager offered to help give out the fliers and spread the word about AptDeco.
This experience led to Fagiri realizing how important it is to just get out there and find out more about your customers. She then decided to spend more time sitting down with both her sellers and customers no matter how time consuming it may seem at times because according to her, “You never know what you may learn from it.”
Her final message, “You have to roll your sleeves and talk to your customers. Do whatever it takes to see what drives them and their decisions. Meet them the way they want to be met, not the way you want to meet them.”
After Fagiri spoke, the spotlight shifted to YC Partners Dalton Caldwell and Qasar Younis, as the Weiss Tech House President Nilesh started asking them questions for the fire-side chat session. Below is a transcript of the questions and the answers of the partners (Please note that some of the answers have been paraphrased for the sake of this article).
Nilesh: What makes a good founder?
Dalton Caldwell: A good founder is not afraid to get his hands dirty. You think founders are supposed to be these fancy people but really great founders are willing to do really nasty hands on stuff and they don’t have pride. Think how many times people slam the door on you and say that your product is stupid. You need to have the right kind of personality to be humbled on a regular basis.
Qasar Younis: People who tend to found companies have this sense of purpose. You have to have a vision and be very humble as well. You have to be okay with not getting positive feedback. Determination is one of the greatest characteristics as well.
Nilesh: How do you find the right cofounders?
DC: Number one cause of death is cofounder disputes. Just because you met a random person in a founder’s meetup a month or week ago, you can call them a cofounder. That’s not going to work. You want your cofounders to be people you’ve worked with in high intensity situations. You have to reach that point where you can get angry at them. Ideally, you’ll want to be able to have a cofounder where you’ve dealt with a conflict already before.
QY: We have a large portfolio of companies. We see a few patterns and the most common reason why startups fail is this. “Startups don’t die; they commit suicide,” and the cofounders play a major role in avoiding this suicide.
You have to be excited to see your cofounder. You have to have complementary skills. You’re excited to see them and you generally enjoy being with them. The success of a company depends on cofounders having complementary skills. It’s especially difficult since you don’t know what the future holds.
DC: it’s like getting married. It’s one of those intense relationships.
Nilesh: What about for first few hires?
DC: You actually don’t need to hire. You can take your business to a really far place with just your founders. It’s easier to pivot. You slow down every time you add an employee.
Two programmers and one sales guy employee won’t work. You want the founders to know how to sell. You should only hire someone when you’ve done it yourself, and that you can’t do it all yourself anymore because you’re growing too fast.
Take advantage of college to meet these potential cofounders and hires; You’ll never be in another place like college where you meet countless of people.
QY: Vast majority of companies don’t get to the stage of hiring. Successful companies tend to hire from their network, friends and friends of friends.
Nilesh: Do you think it’s a good idea to start a company in school?
QY: NO. Startups are so intense you can’t be a student and entrepreneur at the same time. If you’re an undergrad, it’s a special time to learn. It’s a special time to do things you won’t be able to do later in life.
Mark Zuckerberg had a team, high growth and everything but he wanted to go back to Harvard.
If you think you have something better than Facebook, and half a millinon from Peter Thiel, you should drop out. These startups are anomalies. So if one of you guys do end up with the next billion dollar idea, I wouldn’t be surprised.
DC: I was in Stanford. There were startups in campus but they didn’t go anywhere. I know people fresh out of school and they were successful.
Most student startups aren’t as successful. But most startups started by students who just graduated have a higher success rate.
Nilesh: So what’s the next best thing then?
DC: Learn how to build things. Learn how to make something and ship it quickly. Learn how to build stuff, make things and give it to people. Get in a rhythm of making stuff and make it second nature. You become more confident. And meet people. There’s never a better time in your life to meet people.
QY: Learn stuff. It’s so generic. The best way to learn is to hang out with people who aren’t like you at all. Go find people who are going to push you on how you approach the world.
DC: DO THINGS THAT MAKE YOU UNCOMFORTABLE. Get used to being uncomfortable. People don’t really do this.
Nilesh: What do you think about going to traditional careers like consulting, private equity, google, etc?
QY: there’s nothing like starting a startup. What you learn in Google is not what’s required in a startup. The skillsets that are required to build a startup are not used in other parts of business. Your role as a founder is to find and solve problems, and get users. And you don’t really know much about this.
Management consulting is like the opposite end of the spectrum. What you do as consultants, you optimize some previously built tings. You don’t even work in the company. You’re even more removed from being an employee. Don’t fool yourself that you’re getting closer to starting a startup.
Nilesh: Why is it hot to start a startup?
QY: I know why it’s cool. 2008, crash happened. Fortune 500 companies haven’t pulled consulting companies. People realized that consulting sucks, banking sucks, then there’s startup.
Nilesh: Why YC?
DC: I started my first company before YC started. It grew out of Paul Graham’s blog posts. It then became about growing the network and this phenomena. It feels like a name brand.
To me, YC represented this group people that were willing to fund things way earlier. They were willing to help people at a very early round. It’s a really large network now. There are network effects, as the network grows larger. You’re tapping into this thing. It’s about the people in it.
QY: We provide so much education. I’ve never learned so much. YOu get to learn from people who’ve done it. It will be surprising for you that a lot of VCs have never done it. There’s something different about it when you have startup experience versus when you don’t.
But basically, people join YC for two things:
- The educational aspect of learning
- The network
Your company won’t be successful just because you have a high valuation but because its a good business. All a startup is is a BUSINESS. TADA. You build stuff and you find ways to get people to pay for it.