Lessons from working with 600+ YC startups | Gustaf Alströmer (Y Combinator, Airbnb)

I drill down like what makes companies fail it's it's quite simple it's just like they don't talk to users which means they don't find proc Market fit and if they don't find product Market fit like nothing else really matters and what mistakes do people make is like is all all about that it's all about talking to customers and learning that you're building something that's actually useful why I say it's like headline is make things people want and that's it's still true and it's always going to be true thank you welcome to Lenny's podcast where I interview world-class product leaders and growth experts to learn from their hard-wing experiences building and growing today's most successful products today my guest is Gustav alstromer Gustav is a group partner at Y combinator where he's been for almost six years prior to that Gustav was at Airbnb for over four years where he started the original Airbnb growth team

and where I was very lucky to get to work alongside him for a number of years Gustav is also at the heart of YC's increased focus on climatech and in my opinion is one of a handful of people who've had an incredible impact on the increasing amount of investment and people flowing Into Climate Tech we chat in depth about what's happening in climatech why things have shifted so much recently what's new and exciting and how to think about the space if you're hoping to make the jump we also get deep into Gustav's experience working with over 600 startups over his time at YC we talk about what are the most common mistakes that early stage startups and Founders make what advice YC Partners give Founders most often the most common attributes of successful Founders the importance of having a technical co-founder and why that's the case so much more I guarantee you will leave this episode smarter and more

inspired and I can't wait for you to hear it with that I bring you Gustav alstrommer after a short word from our wonderful sponsors this episode is brought to you by linear let's be honest the issue tracker that you're using today isn't very helpful why is it that it always seems to be working against you instead of working for you why does it feel like such a chore to use well linear is different it's incredibly fast beautifully designed and it comes with powerful workflows that streamline your entire product development process from issue tracking all the way to managing product roadmaps linear is designed for the way modern software teams work what users love about linear are the powerful keyboard shortcuts efficient GitHub Integrations cycles that actually create progress and built-in project updates to keep everyone in sync in short it just works linear is the default tool of choice among startups and it Powers a

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Gustav welcome to the podcast thank you Lenny it's honestly so great to see you I'm excited to be talking to you I've been looking forward to this conversation for a while ever since we booked this we work together Airbnb for many years I was really lucky to get to work with you before you moved on to bigger and better things at YC and speaking of Airbnb you once tweeted about how special an experience that was for you and I think even more interestingly how many of the people that have left Airbnb can't find another place that's as special they just like that bar has been set too high and so my first question is just like what do you think it was that made Airbnb so special why was it such a important experience for you and other people and even more importantly just what is it that you take from that experience that you bring to startups that you work with now yeah it's funny like I think this year in a

couple months it'll be 10 years ago since Unity started MB and uh wow it was 2012. and the reason I defeated that was I asked everyone that I met after because I had this experience of like this was the highlight of my career up until then at least being in a team like that and I asked everyone have you found anything better and like I haven't heard besides maybe one or two people I haven't heard anybody say that I found something better and they all missed that dearly and I I thought a lot about why that was the case but I would say and we did not feel like a normal job it felt like more like a group of friends trying to just do something together and we were friends and we weren't like at least in the beginning it did not feel like this was a job it was sort of like a an ongoing project and an assembly of amazing people and I think in the end we managed to build two things like a really successful company

thanks to Joe and Nate and Brian just for starting this like without them like there would be nothing to build and we also I think people don't like use the word family but I feel like that way because when I go and meet with MB alumni from that team we have a very special bond that reminds me of close social connections more than anything else does not remind me of co-workers and I've asked myself why this was the case the best answer I have is probably like we brought in a special type of people we had very diverse backgrounds a lot of us was former Founders not many of us were career people from the technology industry of the early days not many of us and I think that bar that we set like the first I believe when I joined there was probably five or seven PMs and there was like 30 Engineers or something and you joined a little bit before me those people said the bar or set the standard

of what we were looking for afterwards and I think it took a long time to change that narrative I mean eventually you have to hire people that only had big Corporation careers but I don't remember we did that for a long time and when I sent my I actually read my goodbye note recently and I like that my words there are still means a lot to me and it means sort of like you're trying to reflect on on exactly these things I'm like building a great company that became successful and being part of this sort of family of of really close close friends

so it sounds like if you had to kind of like boil down what Airbnb did right sounds like hiring was the main piece that impacted the way it turned out just like the founders being very specific about the type of people they were hiring absolutely is there anything that's like I don't know I take away there of just what you recommend to Founders like hiring you know people know be very careful who you hire the first I know 10 people it will impact the culture long term but I don't know is there anything just like abstract date away there just like what to look for in that first batch of hires it's a tricky one because like like I would like to say that all the things that we did were that were were the cost of the outcome of this but that's not really how the world works like some of the things we did worked and some of the things that we did did not work and it's hard for us to actually just disentangle what those

things are but I think we can talk about the things that we did first of all be made sure we hired people that were really excited to be there right they wanted to build Airbnb and they were really excited to work on Airbnb like that was the most important thing there weren't of course people had other offers but I think you can kind of figure out from those offers um are you excited to be here or not so that was probably the first thing the second thing I think is trying to understand the true motivations of the people that were there like why are you here and we did something we call culture interviews that I think the founders have written about or there's probably content online about this we did a lot of culture interviews early on to try to figure out we got the people that were there that mapped our core values and we're really excited to work on Airbnb and I think finally I don't know how this happened

like we did pick people from diverse backgrounds like most startups don't have most of the PMS being former Founders but that I believe that was the case for the first like 10 or or 12 or 15 PM so there'd be a lot of us were former Founders and I think that that made a big difference for how you make decisions and how you get started on things and I think I actually see this a lot in the Airbnb Founders they really care about the time at YC and they try to recreate what I see inside Airbnb a couple of times with with demo day and with retro like new products completely isolated from the rest starting with doing things that don't scale and talking to customers so I think that that experience like had a made a big impact on them but it's it's hard to to say just these two things go go and apply these things it's actually kind of hard to say well that will work out as Airbnb it's I think that's a really really tricky

question to answer the last thing I would say is like everyone be had an incredible business model an incredible business from early on and it was hard to to fail and what I mean by that is it's hard to fail with a company you can fail with individual things inside the company but a company was still going to succeed and I think we all felt that and a lot of companies don't have the the ability to to sort of like take risks like Airbnb did early on because they don't have something that's so obviously great that's a really interesting point and the last piece that you may have the most amazing culture and higher incredibly well but if the company doesn't work out it's not going to be looked back as like wow that was really that was an amazing experience but we failed yeah that's interesting so you

mentioned YC and this kind of is a good segue to where I want to focus most of our time you mentioned that you've worked with over 600 companies at this point which is absurd feels like it's he gets a statistical significance on takeaways at this point or of what works and doesn't work so I have just a bunch of questions about your experience working at YZ and while all these companies the first is I think about this quote that elod gill tweeted once and he wrote a think a post about it Eli gales's you know legendary angel investor he said that starting a company is an act of desperation you're either desperate to change the trajectory of your career or you're desperate to make a bunch of money you're desperate to achieve some kind of mission or build a specific product that you're just like any of this to exists I'm curious if you agree with that sentiment and then I have a I have a follow-up question around that yeah

actually I haven't heard it before but you know me I'm an optimistic person I think it probably reflects on my my view of this question but I would say desperation sounds like a negative place that you're starting at I actually think that most people in Star company start from the positive place but the motivations I I agree with what he said can be very diverse for successful Founders right so we actually asked this in one of the early group office hour sessions we asked them why are you doing this and we don't want to hear it answers like I found this niche of the market like that's not the UI the why is like why will you come in and work late after four years when you have no money left and and everything's going to right then the niche market is not the answer there's something deeper than that and we've learned that it varies a lot for people's motivations to start companies some of them just want to make

some to solve some technical problem that they feel are the passionate about solving some of them want to prove themselves in front of others or prove themselves for towards themselves some have grand really important motivations to change the world and they will say things like I want to give everyone water or I want to solve climate change or I want to democratize publishing like you can imagine any number of like really large ideas and some people just want to start a big company and just want to like be successful and it doesn't matter in my experience what your motivation is I don't think either of these motivations like it sounds like some of them would be better than others in my experience is not the case the motivation will change over time to just running the same right like like when something becomes big it's hard to think every day about like exactly why you got started because the motivation

just like it can be fun and work on boring things because it's fun to build something big everything doesn't have to be shiny and and big and grandiose because there are many ideas that are quote unquote boring but they just the idea of running the company becomes the motivation eventually that is really

interesting that one of the main things you look for it sounds like when you're interviewing is how strong and durable is that drive to build this company is that what you're saying it's actually kind of hard for screen for motivation I would say interviews because the purpose of this kind of office hour question is to highlight why someone is there and highlight that diversity of reasons people are there and sometimes even highlight to from one founder to another co-founder why they are doing this they might have never talked about this actually surprisingly often Founders have not talked about why they're doing this and just knowing why someone is here really helps with conflict resolution for example really helps with sort of like understanding why someone is there on a certain day or or something like that so it's not something we screen for as much as I think we try to help Founders discover

this among themselves and really know this about themselves and I've just accepted that the motivation since our companies is widely diverse do you ever

discourage Founders from starting a company when you see that maybe it won't be a durable kind of lasting motivation or whatever other reasons just knowing how hard starting a company ends up being it's a good question I would say sometimes if someone doesn't have a motivation or don't know why they're doing this they're doing this because they read that it would be a natural career step so like a good reason to not start a company is if you think of starting a company as a career step well it is not because if it's successful it'll be your entire career it'll be 10 years most likely and if it's not successful then it's not something that like people generally aspire to to start so I'm not non-successful startups so I think people let's start companies because this is sort of like something they want to put on their resume they have not understood what startups are or or why you should do them sometimes you can

screen and kind of figure this out but sometimes people don't even know why the Australian company when they get started and you kind of gets figured out along the way and that's okay so I don't want to discourage people who don't know exactly why I don't why starting this company to start a company like they might figure out along the way and find find the true motivation sort of like after doing this for a little bit or finding that is really fun so I think I discourage people to start startups if there are so many other things that are important in their life that are more important than the startup so if if there are Financial constraints or family constraints or relationship constraints and they are going to Trump this then yeah you should think a second time perhaps because startups are hard they're much harder than a normal job like equally hard if they're successful or failure right they're not actually

there's no middle way we're like oh my company is doing great so I can chill that's not doesn't work that way either so I I don't really discourage or encourage people I just want them to have all the information

you mentioned YC office hours and I had a question around this I'm working on this piece where I'm interviewing a bunch of B2B founders of companies that are doing super well and I'm I asked them a few questions like how'd you come up with idea how'd you find your first few customers and it's shocking how many of them bring up a conversation in YC office hours as the most pivotal point that set them on the trajectory that there are now and I'm curious what what happens in these office hours what are the most common pieces of advice that you give or maybe most surprising piece of advice that you give in these office hours so that people can get maybe a glimpse into these these conversations you have so I say we have two type of officers two of the common ones we have regular office hours which is usually a 101 or basically the Founder's talking to me or me plus another partner and they happen

every week or every other week throughout the entire program and they happen years after the program on a regular basis then we have group office hours which is you and like six or seven other startups talking to us and and they have feel a little bit different purpose so the goal of the regular officer I always ask the question what's holding you back from moving faster and we don't want to hear updates we don't want to hear um strategy questions we want to understand what's slowing you down or what's what's holding you back from moving even faster you generally have a specific goal and I think that question like what's what's slowing you down or we're holding you back crystallizes like the priorities there are only so many things you can do as a startup and there are only only so many things that matters at that stage and by asking that question so we can start digging into okay what's the goal what are the things

that drives towards that goal what are the things that slowing you down towards that goal and usually the founders don't know what's slowing it down so the conversation and and US probing questions actually leads to us or them discovering what it is to slowing them down in the group office hour is a little bit different group office are both a couple of different purposes one of them is if I think back on the Paul and Jessica's motivation started YC this is a surprise to them but but starting a company is incredibly lonely you can't really lean on your employees and say hey I'm feeling really shitty as a Founder today like everything is going to and please isn't going to take that well so you lean on perhaps your investors and but they're not really available but what you can lean on is other Founders because they're all in the same situation and it's sort of like when you ask your founder the question how are

things going it's so emotional for them to ask that question because there's it's never going well right it's never like oh everything is going fantastic like they might say that but everybody knows all founders when it look each other's eyes then no that's not the answer so Founders have infinite number of problems that they're thinking about all the time which is why they're allergic to the question how are things going but when YC started we put all the founders in the group together in a room and they started learning that all founders all companies are broken in some way right they're all having these massive problems and they're all feeling that anxiety when they hear the question how are things going and just hearing other Founders explain their problems perhaps solving their problems is a really good way for yourself to both feel motivated to do it yourself and see how problems get solved

when other companies having similar problems nowadays because of the scale of I see we group companies together that have the same problems or the same area that they're operating in and the second thing that group officers do well is accountability right we ask you what are your goals and what were the goals for the last two weeks did you hit them and then that gives Founders accountability because they Founders are competitive they don't want to look bad they don't want to come back after two weeks and say nothing worked or like or at least like we didn't learn anything they want to learn something and make progress whether it's positive or negative and group office hours to me is the most magical moment because it really creates this very intense three or four month period and Founders often come back to us after I see and say hey we wanna do that again we'll have this really intense like really productive period

and we don't have a program exactly like we see that we have other programs but we don't have anything exactly that mimics that that experience but we do encourage Founders to continue with group office hours after YC and many of them do and many of them ad hoc continue to meet for years in this group setting where they ask the same kind of questions to each other to hold themselves accountable to learn from each other and to just have someone else to lean on and I think this was unknown and and somehow the world didn't know before that starting company is super lonely and and you have all these anxiety and by just talking to other people have the same problems it's just like one of the best thing you can do

there's so many things that come up when you talk about this one is I I work at a startup at one point we worked in a co-working space and we joined the co-working space because we're like oh we'll meet other Founders it'll be social we won't be alone but it turns out everyone's just like heads down headphones on I just I don't have time for anything I just need to work and it it's it's like a microcosm of that experience that even if you're surrounded by Founders no one has time to do anything they're just they're working you got to schedule it and force it and put the laptop on the floor and the phones on the floor and you just like sit there with a pen and paper that's how you have to do it and we try to mimic that as much as we could over Zoom but honestly the best experience of this was in person in a ring in Mountain View with no computers and everyone just paying attention to everyone that was

the best experience and um yeah that's what I remember is like one of the most meaningful parts of YC I didn't have it myself when I did my seat but now everyone has it the other thing this

made me think about is someone tweeted once don't ever ask a Founder how how they're doing or how it's going it just creates all this anxiety because nothing's ever good don't do it everybody looks at each other's eyes and they know that the question the allergic to that question that's hilarious so just to summarize the questions you said you asked the one is in the individual office errors it's what's holding you back and then in the group setting what was the question again that you ask what are your goals for next two weeks and what were your goals for last two weeks and did you hit the goals and if you didn't hit them like what came in the way of hitting the goals it's very simple and that can uncover lots of problems that other Founders are having exactly in the same way and just by talking about the things that held you back or the things that allowed you to hit your goals uncover something

material for the other seven companies sitting in that ring if you kind of

zoomed out a little bit and thought about the startups you've worked with what would you say are the most common mistakes that early stage startups make broadly there's so many I mean like this is uh how I initially learned about startups by going searching for that that on Google and landing on programs articles because he kept well I think I've written many articles about this topic because it is so it is so common so this topic can go on forever but if I take like the most recent experience about NYC I would say startups fail one because they don't talk to customers if you don't talk to customers or users you don't actually know what's important and if you don't know what's important it doesn't matter what you build it doesn't matter kind of what ideas you have in your head if you don't actually know what it is that you you need to build and you don't validate with customers that's where a lot of the failure stems

from and a lot of early YC for us or early part of the program is us pushing and probing Founders to be like tell us about the conversations you've had with the customers what did you learn can you show us the organizations or like all these questions like what other software are they using what are they paying for what problems do they have how are they just about describing the intensity of that problem so that's what we spend a lot of time early on on NYC after that I would say one of the common mistakes in twice I'm not talking about generally startups here I'm talking inside YC the second most common thing as the NYC is people are just afraid to talk to customers so once they they're just not trying hard enough to to get in front of customers and I think this comes from technical people tend to think that software is just a solution to everything but really what you should do you need to do is to talk to someone

or resume or over phone or in person even better and people are just afraid of doing that and they're afraid of being rejected they're afraid of these are common people that want to build good products are just really afraid of people saying no the problem is which anyone who hasn't done sales before that John YC they realize this is that if you take the average customer group in the world 90 are not early adopters it doesn't matter if you have something new and cool then just not interested they are not incentivized to take risks in their job to try something new they're just incentivized to not take risks and just continue what they're doing and those ten percents are the early adopters are the ones that you actually want to reach budget that means you have to reach 10 to find one and they've got commenced that one person to get on the phone or a video call with you and that takes work

and it takes a lot of work and I think people don't really think of this this is common knowledge basic stuff for sales people but Founders have never done sales before just get surprised by the percentages and so like what it means to do this if I think of like more generally outside of YC so these are two kind of things I experience with NYC I think generally outside of YC I would say the two most common problems the same one is stop talking to customers that the other one is not being Technical and not knowing what it takes to build a successful technology company and it means having technical Founders and it means being able to build the first prototype and this is something we screen for when we interview people NYC and we aren't accepting a whole lot of team that don't know how to build or get their first prototype built themselves because we know it is like a super common value pattern

and I can go on and on and on and on for this one but honestly if I drill down like what makes companies fail it's it's quite simple it's just like they don't talk to users which means they don't find proc micro fit and if they don't find product Market fit like nothing else really matters and what mistakes do people make it's like it's all all about that it's all about talking to customers and learning that you're building something that's actually useful when I say it's like headline is make things people want and that's it's still true and it's always going to be true this is really

interesting and good advice it's interesting that like talk to customers people hear that all the time like of course we're going to talk to customers we're going to do that of course and your your experiences they know this but they just don't do it probably because they're afraid yes maybe also because they think they already know what they need to build and like yeah we're good and you have all these validators right so the people are validating that even if you don't talk to customers why is he accepted you this investor invested in you this investor said you were great like blah blah blah like all these different validations that you confuse would probably Market fit right like we have to remind everyone on the first day of YC none of you have product Market fit because you probably don't right almost nobody has because people confuse this external validation with the thing that matters

the most which is talking to customers and learning what matters and and people just don't it's it's just like a thing that just keeps coming back some get really good at it and that that is the source of successful startups is when you really get good at this it reminds me coming back to Airbnb one of the most important moments in Airbnb history was Paul Graham telling the founders of Airbnb where are your customers and they're like oh they're New York and he's like why are you talking to me and not in New York right now talking to them they talk about that all the time yeah it's absolutely true I think he wrote the article do things that don't scale as as a learning like the learning there was the Airbnb Founders doing the trips to New York and learning about how to build MB which is a very counter-intuitive idea which is when you have to spend the most amount of time with your customers and I think MB is

sort of like the one of the best stories inside YC of of doing this well

this also reminds me I've been talking to a bunch of Founders recently I asked them how many customers have you talked to to help figure out this idea so just the other day it was 150 uh Financial like cros that they talked to before they actually started raising this round another company actually to Airbnb guys that started they talked they actually like ran ads I think on LinkedIn to find specific people to talk to in that specific role and they talk to probably at least 100 Maybe 200. so there's a strong correlation there yeah I think that's the volumes that people don't expect like they think they might have to talk to five but I think you have to talk to like 25 to 50. that means you have to reach out to a lot more to be able to get to people that are potentially early adopters and those ones you talk to are also the ones that become your customers so like you're already doing most of the sales by just

doing this work anyway do you have maybe like one tactical tip you could share just either getting over your fear of talking to customers or just like holding yourself accountable to actually doing it yeah I tell this story I actually told the story yesterday so remember when you sign up for a service that's a cool service and you hear about in TechCrunch or something like that and then you realize you already signed up a year ago right and then you're like from the founders perspective you sign up to something you've never used it so so the founders who build those Services they're they're in inclination to think is that everybody hates me because they sign up and they never use me they never never use the service and the fear of that is is that basically the fear of rejection so if I put my thing out there and most people use it then they will tell all their friends how shitty this thing is you should

never even sign up for it that's the fear people have but the truth is that people sign up for it and be like Oh I'm busy I got something else to do and they actually don't remember or care so whenever you stop for something that you stop a year ago think of yourself if that is the common customer experience which is that you just sign for a lot of stuff you don't even remember you don't it just doesn't like you never have this like I hate this thing reaction you always have this like I'm I'm indifferent to this thing I don't actually care to even like complete the sign of flow or or try it out right and I think that's the thing that people need to remember is that that the worst thing that can happen to Startup is not that people hate what you're doing is that they're completely indifferent to what you're doing so not not the worst thing but the most common thing that happens is people just indifferent but

it doesn't give you a second chance let's say it always gives you a second chance and you really need to internalize that people have busy lives and if people don't actually use what you sign up what you're building that's fine you can reach out to them a year from now or six months from now or two weeks from now and they probably will if you if you make some improvements and I think people just have this fear that if if I get a lot of rejection that means everything is bad but the rejection should be put in context to the early adopter idea and that most people don't care are not early adopters don't want to dig into new things and that the more narrow of a solution you have to a specific problem the fewer people actually want to dig in but that's where you have to start because you cannot build the whole thing right up front and and and make everybody loves you that doesn't really work that way even Airbnb was like air

mattresses or staying in someone's homes when they're home like that was not the complete solution of Airbnb but there were early adopters who dug in and be like yep I like that I like those two things I want to have people stay in my in my living room on a mattress but that's not what MB is about today and a lot of those things were unknown at the time but I think people are just afraid of rejection and you just need to overcome that fear and just learn that like it's there's nothing that's really that bad that can happen when people don't use your service or sign up and don't care like it's not really that bad it reminds me of a quote that I always that I love from Mark Andreessen that everyone's time is already allocated they don't they don't have space for your product right now they already have plans for their day and it takes a lot to convince someone to like change their like pay attention to anything

and I guess that just comes back to why it's so important that your product is solving real pain and not just like a nice little toy that you know is like better than what's out there but not so much better that you're like I need this right now so maybe just along those lines do you have any any thoughts on just like the importance of that pain and just like how critical that is I actually recorded I'm I'm happy about these videos but I've recorded two videos on on YouTube as part of YC startup school last last fall and you cannot watch them on YouTube right now one of them is is how to talk to users and the other one is how you sell sell or how you sales and the one about talking to users I think there's there's a difference in asking someone do you have a problem with XYZ is this podcasting setup working for you and people say yeah it's kind of working but if you are in podcasting setup

experts and you watch people use some other thing that's really shitty they might also think that is pretty good but you you have to watch them do it and the best way for you to figure out what is the intensity of the problem is not to ask them but to watch them or to watch them solve the thing that they do you know like a lot of non-technical people don't know how to automate things so they will do the same thing in like Excel like a million times like by just like tabbing because that's the only thing that they know and they're not technical enough to write some kind of script to do it and you just have to watch those people to just feel the pain you can't actually ask them how difficult is it to do XYZ because they won't even know that it's that difficult to them so the best thing I've learned about how to discover the pain is to watch people have them screen share have them walk walk you through

their daily workflow about the area where you're doing some discovery that is the best thing and like I'll give you another example right so there's a bunch of ways companies that are doing EV charging for electric cars and and they're like what are the problems in eBay charging and I was like you know just rent an EV and go and charge at all the non-tesla Chargers and see what see what they say I'll see what you experience and the truth is that it's just like garbage a lot of EV charting systems are just so shitty and the apps are like terrible you just have to just use them yourself to know how bad it is it's cool how often it just comes back to just like go do the thing like do do things that don't scale uh classic classic YC Vice

I wanted to come back to something you mentioned that I want to pull a thread on is the technical co-founder of being technical early on just to kind of cover that so I know YC looks to having a technical founder it's an important variable and you're deciding to accept the company say someone doesn't have a technical co-founder do you have any advice for what they could do like what often can work yeah I I think the first thing is to understand the value protecting Google funder so some people are in this trouble or in the situation whether they have an idea of something they want to build and they don't have anyone to help build them building it I had a friend Paul who gave this incredible quote he said I have an idea for a song I just need a musician to help me make it right that's kind of similar to how it is with engineering and if you if you view output of engineering as like I just

have an idea first song I just need someone to actually make it for me and then you're not valuing software engineering or mechanical engineering or any engineering skill set like deep enough right the truth is that the engineering part is the really hard part and the first thing I would say is you need to learn how to Value the engineering piece and let me give an example how you don't do that you applied to YC and you have 90 for yourself and 10 for the engineer like that's you're basically saying they're like oh the engineering part of this company is only worth one tenth of me on the non-technical person so that that to me is a signal that you're not really valuing it value engineering okay so how do you go go out about find someone well the truth is that there are a lot of technical co-founders like technical people they also want to find business co-founders they don't want to do other part they don't want to do

sales and they actually don't really care that much about fundraising they just want to solve the problem and that's fine and we built something called co-founder matching with those funders can meet but if you don't if you don't participate in that you can just start by asking the best technical people that you know are you interested in starting a company with me you know same thing with rejection many of them would just say no I have a great job I'm really happy but some of them will will have thought about starting the company for a while and was hoping to somehow would come and ask them to do that so you have to kind of like remove your fears and go and ask the best people the reason you want to have a detection co-founder and not a hired engineer or not a hired Contracting team is because so many of the decisions you're going to make are Technical and so many of the iterations you're going to make relies

on engineering and if you don't understand that you won't actually make the right decisions anyway it's not like service you have an idea of a product you build a product you're done there's infinite number of iterations in that process and then finally I would say a lot of people learn how to code themselves right so there are a lot of places online that you can learn the skill set that you takes to build a prototype you might not be the best engineer so there are many successful start Founders who are not the best Engineers because they they stopped coding when they hired three or four engineers that's fine but you need to be sufficiently good that you understand the value of engineering and the and you understand that the best way to solve most of the problem is with software and there are a lot of Founders who just for whatever reason study something else like that doesn't have to be a conscious

or very precise reason that you had when you were like 18 or 19 and then you're 25 you know like I always had a code and then just learn the code and they learn how to code like it's like not not that more difficult than that

have you ever seen a startup work out if they had a Contracting firm like engineering firm build the product like does that ever work or where you just like no do not ever do this basically I can't recall any specific ones where people have a Contracting firm but I recall Founders where let's say you're two non-technical Founders but they valued engineering and they had an ability to build a team of great people that were not co-founders and they gave them equity and they and they become successful the main examples of that I would say but I don't remember any specific examples where like you had a Contracting team building the whole thing and I think the reason for that is it takes more than just sort of like writing a spec to build a product you can't actually expect yourself to a great product you have to just like be part of the iterations yourself and and that's why I think like someone

being the engineer having the idea of what the iteration looks like and just doing it is is how you do things and I think that the cases where I've seen non-technical Founders make this work is that they have a really good engineering teams who feel like their founding team they might not be co-founders per yc7 definition of having 10 but I feel like they're the bounding team this reminds me of a story of just a recent podcast interview I did with the CPO of calendly she talked about how when calendly started they actually had a Ukrainian deaf team built the first product and not only did they help them build the first product they actually ended up driving the first all the growth initially because they saw callumly and started using it within their firm and then everyone that they need started using it and spread within Ukraine and they actually continue to work with that firm like they're still the inch team

for calendly or some part of wow yeah wow that's cool I would say it's certainly the case that in some countries people have other jobs while they start the startups so like the engineers like if you like in Ukraine for example or in Europe it's very common that if they start their own startup they actually have a full-time job as a contractor while they're starting the startup because that's how you pay the bill because often you can't raise money and that's that's fine too amazing just that's that's some Hustle this episode is brought to you by Pando the always-on employee performance platform how much do you love the performance review process yeah it's time consuming subjective biased and there's rarely any transparency with the rapid shift of distributed work it's a struggle to create the structure and transparency that you want to help your employees have the highest impact and growth in their careers Pando is

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I want to zoom out a little bit and ask another big question and see if you have what answer you have for this if you just think about the most successful startups NYC or even just the companies you worked with you had to pick just like one or two attributes of what's most common across successful companies what would that be I would say the most common reason that I've seen Founders so come succeed or company succeed it comes down to the founders and characteristics of those individuals the most important characteristics of those individuals are they're really determined to win and they don't give up when things are hard and they have an internal motivation that's just really infectious to people around them which is how they end that building really good teams around them people you're actually going to want to go and work for them and I have numerous examples of people like this where they the CEO or

one of the founders are just like just really inspirational people the second thing I would say is they are technical so like like that's kind of like they're technical enough and like if I would grade companies on a scale of like technical to less technical more technical founders are more successful are more likely to succeed I would say and then I would say they figure out how to talk to users and move fast early on so they don't wait for permission from their investors or from YC or from someone else to to make progress they're like every day or every week There's continuous progress and they're not doing this for someone else they're doing this for the customers there's no one else that's like actually the they're not doing this for the investors that's for sure the investors is sort of like in the way more more or less and and that they're just naturally focusing on the customers finally what I would say is the skill

that's really attributed to Great Founders is excellent communication skills so the ability to communicate really complicated ideas clearly to enjoy the communication part right enjoying communication is often kind of correlated with enjoying during fundraising which is important part of some companies success not all of them but for some of them and and I would say communication and storytelling is part of the same Arc right and those are part of the same thing that actually motivates people around you if you can communicate why you're building what you're building and why it's important to the world tell a story about that that can motivate people around you just want to follow you and and I think it's rare that I've seen Founders succeed where the founder isn't in some way an inspirational person or someone that is a good communicator like most of the time like you at least have respect or you have you you somewhere

know that they're going to succeed right and that is what inspires you to be around them or be on their team that is a really cool list so just to kind of summarize the one they have the strong will to win and with that they're inspirational they kind of pull people along and get people really excited yeah two is they're more likely to succeed if they're Technical and can build a thing three they figure out how to talk to customers don't wait just start doing it and they're just like obsessed with that versus like what investors want them to do and they kind of don't want to talk to the investors it's to make time for their customers and then excellent communication skills which kind of goes back to the first they've like they're able to storytelling get people excited is that right yeah I would say those are those are the attributes of successful things to be a super successful company there's something else that happened to

happen and those things are not things you can put on a list because they're they are the outliers right like if you look at it's like startups on a typical YC bash to be a couple billion dollar companies those are the outliers they'll almost certainly have all the things that we talked about and many other companies in the batch will have that too but then what makes someone a true liar is something that is unknown that's why so many investors said no jfmb when they were not trying to raise money because there was that was an outlier idea like it was an idea that was not logical and did not make sense to most people and those kind of ideas like the ones that end up succeeding often don't make sense to people and there's something there's some reason that they that no one has done this before because they're just not natural next step of the world

that's a great segue inside question I've been meaning to ask which is how good are you at predicting in a batch which startups are going to be the monster Hits so maybe like you and then just generally YC like how good are you all at knowing what's going to work out like is going to be the next Airbnb or Dropbox I think the truth is that we're not not very good at knowing what's going to succeed we're not certainly we cannot figure out who's going to be the really successful company in the batch like that's not possible what we're good at is knowing what failure looks like and what we sometimes like to tell Founders at the beginning of the batch is like if you fail please do it in some new exciting way not one that we've seen 100 times because we have seen people fail for an a large number of reasons and and the best way for us to make to sort of like not predict but like the best way for us to make more companies

succeed is to tell them how they might fail right like be very direct and honest with them and say you're doing these three things these things are likely going to lead that you won't succeed right and if we do our job well most people get that feedback and they're on the track for succeeding now which of those companies end up becoming the best there are so many things that are uncorrelated to being the best and it's the things that people don't like I'm in a hot industry I was written up on TechCrunch like this investors are talking to me like you'd be surprised how many of the things I just mentioned are uncorrelated to outlier success right and that's why it's so hard to to actually do this and I think people really want these questions to be answered people really want to believe that you can pick really great companies at the seed stage but everything I've learned from the plus 600 companies that

I've worked with is that it's just not that that easy and it's maybe not even possible and certainly not possible when you talk about like finding the outlier companies I I don't think it's that that easy and if it was easy then we would accept a lot fewer companies we just accept those ones but it's just not that easy

do you have a sense of which ones are like likely to work out better than others or is it just like we have 150 really unclear but one of these hopefully one good good indicator is if each new office hour there is really exciting new stuff right we're not talking about the same thing we talked about two weeks ago or four weeks ago they've already done that stuff right like oh I was trying to sell to these three customers well they already bought it I'm actually talking to seven others and now we are talking about a different price and different products because they're like they want more of what we're doing right if I'm experiencing that and that's like a consistent trend then when people draw this Revenue graph like this like 10 weekly growth rate kind of situation those are the companies that we attribute that to it's like if you're able to make that progress on that short amount of time

scale you're on track to do something well now a lot of other things have to go well for you to be ultimately able to succeed but progress on this like weekly or bi-weekly time scale is a really good indicator of someone who succeed to me much better indicator than I am in this market or I'm talking to this investor or something like that but those are much worse indicators of someone succeeding then I'm making progress and it's it's pretty fast clip interesting and so what I'm hearing is at the beginning of a batch we're just like in a bed on a bunch of companies that have a lot of potential Founders technical maybe they have the strong will to win all these things through the batch you're looking at the companies that are exceeding your expectations week to week in terms of progress that they're making I mean sometimes it could be different reasons for people not making progress but if you're making continuous progress

I think Paul and Jessica said this this was true early days NYC if you are hitting your goals and you're making progress like continuously if that continues like that's a really strong correlation to some success but again going back to the question can we predict who's going to be the best ones no and that's why we really focus on trying to make people not to fail especially good teams Can't Fail like if you have a really talented team who's really Technical and not a build product but they make some other basic mistakes like not talking to customers or something like that or trying to build everything all at once I feel like it's our responsibility to make sure they don't make the basics mistakes that we've seen many times we need to help them at least make some new spectacular mistake that we haven't seen before yeah but then that's a high potential team if someone is on a good track for a decent

a decent idea but they're still early that's that's really good good potential I have kind of a fun question that I wanted to try which is kind of connected to this idea around attributes of successful Founders and companies so this founder friend named Flo and he was asking me recently if you had to think about the most successful Founders which attributes do they have and he kind of gave me this list and there's kind of like two ends of a spectrum so I thought it'd be fun to just go through this list and see in your experience which end of the spectrum if any are associated and correlated with the most successful Founders that sound good sure sure okay

so the first is speed versus quality is there in any of the spectrum where you find that most successful Founders are either speed focused or quality focused sometimes Founders ask us this question what should I focus on growth or retention and the answer is they're asking us for permission to not do one or the other the truth is you to succeed you have to do both I would argue that speed versus quality there's different level of speed and different level quality different stages of the company but the truth is that you always have to move fast and you have to understand what the meaning of quality is right so I think I'd actually don't see that as a spectrum but I would say if you move fast with talking to customers you'll build something that have potentially having quality because you know a lot about the problem I think what people think about quality they often think about what is my

personal definition of quality I have a bar of quality but quality to me of a good product idea a good startup idea has more to do what's the customer think is valuable and if you move fast by talking to customers and having customer learnings and know the problems then you will actually come up with something that's high quality so they're not at a

spectrum all right let's try another one confidence versus humility as a founder I don't think that they're on a spectrum I think that learning to predict confidence as a Founder is critical going back to this communication piece of motivating people around you right I wouldn't want to join a a company where the founder is completely not confident in their own idea right because that's going to shine through an investor isn't going to want to invest in someone who's completely not confident in that idea so learning to First build your own confidence for what you're working on and then protecting that confidence to the people around you I think is critical and a lot of people will have doubt around you and if you're not protecting that confidence there's not clear that anybody else will if you're the founder like you're the one who's have to do it and I think that you can protect that confidence while having a strong sense

of humility towards the people around you but I think when it comes to startups learning to have that confidence is important piece of the early days right especially if you're building something that's very difficult that takes a lot of work a lot of money protecting the confidence that you will succeed is critical for everybody that's doubting you and those doubting you is a lot of people around you right and you just need to like have an unnatural amount of confidence to prove them wrong and and I think that that again this is not an inspection with humility in fact the most successful Founders are often the most like you cannot inspire people around you if you don't have a strong sense of humility people don't actually want to spend time with you which means they don't want to work for you or invest in you so these are again you need both but they serve different purposes when you get started tough gig this founder life

you gotta gotta be everything let's see if there's a big difference in this next one execution and tactics versus focusing on strategy and kind of higher level stuff like how deep do founders go that you find that are most successful so this one actually I have a strong opinion about I think that the reason that we talk about strategy a lot is because it goes back to business school and business school the origin of business school was to teach people to join the corporate world in the corporate world strategy matters right so like when you join a big company at your employee number 2010 something then you probably might have a business school like job where thinking about corporate strategy is an important thing when you are a small startup strategy does not matter because there's not that much a strategy is about maybe later on it might be fruitful to think about strategy but charity kind of

assumes that you can do multiple things at the same time which small Subs cannot they can just do one thing at the same time so execution is the thing that matters for companies and whenever someone wants to have a strategy conversation it assumes that they don't understand their priorities and the priorities is always a list from one like from top to bottom where there's one thing that's more important than the others and you can't really they can't really have a strategy session about about like the other things because there's only one thing to work on so to me there's a clear answer here is the good Founders are execution oriented and they just continually have one priority of what they're trying to go for and then just hitting that priority all the time and then new pages will will come up and you don't really have time to have a discussion about company strategy company strategy also

seems that you have product Market fit because you already have something that's working if you don't have that then getting getting to people wanting your product that is your strategy you don't have any other strategy awesome

okay we found one that's quite different one in the Spectrum or the other how about autocratic and kind of like I don't know I think of Steve Jobs like versus kind of consensus collaborative driven if this is a spectrum at all and where do you find Founders might fit that are most successful I don't know if I have an answer that question because I think when you work at early stage it might look different than we work at late stage and I don't spend a lot of time with Founders that have thousands of employees and hearing how they are and like when I talk to those Founders I talked to them 101 and I only hear from their perspective so I don't actually know how they are appearing in a large corporate setting but when you're a small company you're three people or five people or ten people you cannot be an autocratic decision maker like the founding team have a founding team decision making dynamic

that could look different sometimes it's like everybody decides together on everything and sometimes you say I have my error expertise and you have yours and we split it up the decision making and either of those things are fine I think you just have to have a process so you don't rehash every decision after you've made them like a million times and I I would say like the thing that matters the most at that point is to be willing to adhere to the process that you and your founding team have come up with and your individual nature could be different in a different role a different company but for startup to work out you have to have it like a specific process on how you make decisions and those are on a very short Sprints like weekly or bi-weekly and everyone needs to feel good about decisions after the fact at least they feel good about the process and I don't think that you can just decide that you

can also be fully collaborative everyone gets inside of everything so small startups agree on how they decide together so like after that everyone just follow the process that's usually how things work out okay I got one more

cares more about the product or cares more about the distribution and growth strategy well there's a lot of kind of assumptions built into that I would say because caring about a product to me is caring about the customers and sometimes when if I would say something like oh great finders care about the product a lot of Founders misinterpret that as in my personal perception of the product or my ideas of what the product is and that's wrong the right perception there is the expectations or the use of the product from the customers so if if you're meeting folks on the product or cares about the product in that sense that your customers care about them absolutely I think that's a really really critical important thing to have early on like talking to users doing things you don't scale once you get big if you don't figure out a scalable distribution strategy you won't succeed and those are different for different

companies but they're not doing the things they don't scale like doing things on scale is not a scalable strategy eventually something specific will will be the things that work for you if you're lucky people will talk about your product and you'll have organic growth but in many cases that sales that is some kind of like consumer distribution strategy and you can't start with that I've seen a lot of and this is what I have to like reset my thinking coming from a growth team joining YC is you can't start a startup I think with a growth team mindset because that is just scalable things all the time and really where you need to go back to is doing things that don't scale and unscale your your way of thinking about customers but it's really useful to have the girl the growth mindset at one something is working right once you have 1000 people signing up everything every day well how do you get to 2000 well that's actually

that's probably something that looks more like this thing that the growth team would do or a distribution team would do and I would say everyone has different experiences of this based on their prior experience right so if you work for a company that was infinitely successful then you won't care so much about this if you work for Google you'll never even think about this because like distribution is just like the website but if you work for a really small shitty product then you think a lot about distribution because that's natural to you on how you succeed so I think at the end of the day talking to customers that matters the most that is what it means to care about a product to me and then distribution is something that you will definitely invest a lot in once something is working awesome all right I have probably a hundred other questions I want to ask along these lines but I want to make

sure we get to another topic which I know is near and dear to your heart which is climate Tech

so my understanding is your instrumental in pushing YC to focus on climate Tech as a focus area I believe you led the charge on their initial request for startups I think is the term where you all put out like here's what we want to fund and I think you've mentioned you funded a couple dozen climate tech companies in the last few batches is that all generally correct first request for startup is actually Sam Altman and a few other folks that was kind of that wanted to draw that the second one that we kind of wrote into our actual request to Startup I wrote that one it was carbon removal specifically focused on and then naturally the people that apply for climate Tech ideas get in my reading queue of applications and I read them and I interview them not all of them but many of them I think today we funded over 130 plus companies that are focused on climate Tech in some way or another wow and the the trend line is that

really ambitious people who want to start companies in in this area some of them want to start the companies because the climate Tech is the number one problem but they don't view this as a non-profit and I want to really kind of make this a distinction people somehow think that like starting a climatech company is doing good for the world but it probably doesn't have a lot more than that the truth is that the world have decided because climate is one of the biggest problems that we're facing if not the biggest we've decided that we're going to stop doing the things that we're doing and we're going to change our entire Energy System and change all the things that we do that emits carbon and we have just decided like governments have decided this this is already the question is how it's going to happen but this decision has been made and in that transition we're talking about trillions of dollars of money

moving from things that cause climate change to things that don't like as the scale of this transition is not something we've seen recently like a software is not that big in comparison it actually is much smaller than this decision transition so I think if you look at something like Tesla which now has a I don't know six seven hundred billion dollar market cap that's just one company that currently provides like a couple of percent of all the cars United States new car sold and that is already one of the biggest companies in the world and has now the biggest the richest person in the world we've only seen the beginning of this and the the economical motivation behind the decisions that people are making are just as strong as I want to fix climate change because this is just a really good business this change have attracted a large set of software Founders that people that you and me know that like listen to this

podcast that said my skills is relevant here there are a lot of things that I can do and if not I can learn those things but most importantly the skills of warning working for startups is really really critical to to join join the transition and a lot of them are started companies or joining companies and I used to get I still get an email every week from some accomplished software engineer who asked me which software company should I work for to fix climate change and I've gotten those emails for two or three years now and this this this thing just attracts like really really ambitious people and it's not stopping it's accelerating and I feel lucky to work with so many of these great Founders because they are like uniquely interesting people I've

noticed exactly the same thing of just how many smart driven amazing people are like I just want to move to a climate tech company like that's all I'm looking for now and just to give you credit I feel like you are ahead of the curve on the shift that started to happen and pushed YC to focus on this really early I always think like man I know Gustav and I feel like Gustav has made like such a massive impact on the investment and focus in startups on climate and so I just want to give you huge props for doing that and being so at the Forefront of a lot of this thank you I mean sometimes I I'd say I'd say that like it matters to someone who has the credibility or YC start accepting these companies like it does matter and people like I remember when I spoke to Diego from pachama in 2018 when he was starting pajama we were whiteboarding NYC he was a YC alumni starting a different company and he the word

climate did not exist and and people were unsure if investors would fund companies like these and pajamas raised 60 million dollars to have I don't know lots of lots of big customers lots of employees and it's clearly doing really well but I think at the time of 2018 it was kind of unknown and one of the reasons it was unknown is we had this previous uh bubble clean tech bubble in like 2008 to the 90s and ten that didn't work out because of a number of specific reasons and people investors were just afraid of funding things because they had some scar tissue tissue or scars from like the previous this previously man happened now that turned on like upside down what like the number of new investors that investing in climatech is as big of a trend as any other Trend we've seen in the last in the last like decade or two decades like there's just an enormous focus on the investing side and most recently me and another guy

David rosenko wrote this request for startup a new updated very detailed list of and I hope we can post it in the show notes a very detailed list of of ideas or areas where we think it might be worth looking if you want to start a company now we don't know what good ideas look like like we don't know but we can tell you like where all the areas of opportunity exist we should go and look for good ideas and we wrote this because in response to all these people that come to us and say I want to work on climatech I don't have a good idea because I don't have any specific experience in this and this stuff and then we're just like don't work on these three things but go and work on any of these like 25 five five directions and um yeah it already has generally a good response I think it will generate more response but I think it's important for YC to sort of like tell the world that we can fund these

things and there's always been the reasons we had request for startups is to let people know that these are things that we actually want to fund I actually

moderated a panel a couple weeks ago that uh this organization called the climate draft put together of PMS that are in climatech and the a lot of the questions were just like what do I need to have what kind of background do I need to get to move into climatech startup to start a climate tech company and it's interesting every single one again and again just said like like your actual regular PM skills is all we need like there's a lot of people already at the company that are experts in the science and like that's okay if you have no experience they just need the business experience how to operate how to execute like standard stuff that PM's learned and so would you agree with that that like you don't need to have this deep background in science and climate to move into the space yeah I would say if you were working on a a software company and even some of the hardware companies this that's probably

generally true absolutely and it's much more valuable to have that background than to have the specific domain expertise background like those are complementary but I said PM having the solid PM background is the more valuable pieces of piece I would say being a competitive PM coming from a really good culture of product management knowing what good looks like like that's invaluable to some of these companies because they haven't in the past they weren't able to hire these people so that's that's the I agree with that 100 in terms of founders I've seen everything right I've seen people having some domain expertise starting a company and really succeeding I've seen people who had no Dome expertise and learn everything they need to know maybe they partnered up with someone who had man expertise and then succeeded I've seen all of it and I actually think that you can succeed in in either of these categories you don't

need the Deep expertise it depends really on on the area you're in but you like someone like pajama like Diego and Tomas did not have expertise in forests besides the personal experience he just had a willingness to solve the problem and it really worked out for them you mentioned

you have this list of areas you're excited about I know we'll share it in the show notes but is there any you want to highlight just like here's areas you're most excited about want to fund and or other companies you want to mention that are super interesting super cool in the space that people should know about we wrote the list and we are highlighting companies in each of the categories I don't know if I want to highlight any specific categories but I can talk about some of the the things that we've done in the past that has real real legs so here's how I think generally think about climate Tech so we have to decarbonize all the things we do to that emits emissions and that means you have to change a bunch of things in the world change transportation change energy change homes all of these things or change how we heat and and heat homes for example and then there's carbon removal and carbon removalists are like

well even if you do all of this stuff really well it's probably not going to be enough and because there's an opportunity and there's like some some evidence to suggest that we can actually remove carbon from atmosphere in some way or another a lot of companies are also working on this at the same time I would say we need to do both and they're not in conflict and we probably are going to need to do both well we certainly have to do the first one and on the decarbonization side there's infinite number of categories of our society where we emit a lot of carbon right so I'll give you an example shipping is a really big deal like a lot of carbon emissions come from freight ships around the world that's not an it's a non-obvious solution how you would solve that because the kind of oil that they run on is really cheap and it's a very low margin business and they don't have a whole lot of incentives to change besides what is

coming down regulatory so it's not a natural solution with somebody to be a cool someone will build like a test off of ships and just work out but the two companies to be funded in that area one of them is c-bound who is building carbon capture removal for ships and the other one is Fleet zero who build electrical ships and and electrification is on and again and again and again again whenever it's being applied turn out to be a more efficient way of of doing whatever thing that you were previously doing with a combustion industry it is almost no maintenance it's cheaper to build the batteries are more expensive uh it's cleaner and it fits like the carbon calls you have there's just a bunch of benefits there but that has limitations and usually the limitations on electrification has to do with batteries it's like how far can you go another category is what I call the which is a very important kind of

critical one which is the carbonate accounting and sort of like the recommendation systems that help big company account for the carbon that they have and they are giving some recommendations of what you do so I'll give you three examples to be funded unravel carbon which is carbon counting software in Singapore focused on Asia and probably the leading one there uh this company called carbon chain which is focused specifically on supply chain and shipping and raw materials stuff like that out of UK and then this and I here in in the Bay Area and and who knows how this Market is going to play out but this Market has carbon accounting has customer Demand right now right so all the large companies of the world have other other promised the government promised their shareholders who promised the public or maybe even the employees they go into decarbonize and they don't always have an idea how to do it and these software

platforms is like the Plug and Play This is how you do it and then I'll give you two examples of things you can go into if you're not if you're not if you don't have any specific domain expertise and just a good software engineer there's a company called enode they are basically building plaid for Ev Chargers and plaid for home Energy System so if you wanna if we imagine that the future of all homes or future all charging of EVS is going to be a bunch of energy appliances that are run by small computers right they are they're all Wi-Fi connected you can connect to them and do things tell them just turn on turn off turn on when it's cheap turn off when it's whatever right like all these different things that are valuable for the energy grid then you need a software platform to connect with all them and that's what the enote has been building another related company is called Static static is the Airbnb for EV charging in

India and the reason that you need something like that is you don't have Tesla charging you don't really have public charting in general and people don't have outlets in their garage and they don't have garages so you need to build a new bottom-up EV charging system or platform and that's what static has been doing and they're actually building now public infiltrating infrastructure as well but they have their own app so if you use a static app they'll direct you to all the static Chargers and I believe that they are the biggest or the fastest large fastest growing EV charting Network in India which is the second biggest country if not the biggest country in the world right now so the potential of these ideas even that they are doing well now is just infinite like such an enormous market and if you succeed in one of these things I don't think we're going to have as many gas as many gas stations as we have today

and different networks we're not gonna have the same eBay charting it's going to be a lot more Consolidated around the use experience of the end user and the app the open to to do this stuff so I'm pretty convinced that there's real big opportunities for software entrepreneurs to figure this out there's some companies in the current Bachelor focused on this too the final one I would mention is is hard Aerospace we have a hard airspace and right electric and a few others folks in aviation and Aviation is another big difficult to kind of decarbonize and heart and right are focusing on battery electric planes so they're basically like basic making commercial airplanes that fly on batteries and find electric motors and it's it's incredible to see what a killer list we're definitely going to include links to all these companies in the show notes

something I was thinking about is so one narrative violation you mentioned is that there's actually money to be made in climate Tech it's not like impact oriented Market anymore and it might be worth chatting about like why that happened but the question I want to get to is also things are going well like a lot of progress is being made people see climate change it's like we're we're dead it's game over but it feels like battery prices are coming down solar's coming down wind power's ramping up all these startups are investing so it'd be fun to just hear like what's going well and maybe what is there to be optimistic about but then also okay yeah things are going well but there's still things that are not going so great and where we need to Double Down two specific things that went well in the last say 12 or 24 months first one was politics so in the United States we got the IRA which is like it's called

the inflation reduction act it makes sense because it's shifting to green and energy is going to actually reduce inflation because it uses anti-costs but it's really a climate bill right it really is a bill that is focusing on onshoring a lot of supply chain for the win economy and in incentivizing a lot of this change that we just talked about whether it's carbon removal or home energy or home heating whatever it might be like this bill addresses all of it and is massive so that's one really good news and politics didn't have a lot of good news in the US for a long time on this maybe not never actually the second good news and it's such a good news that Europe is now trying to conquer like they're not trying to counter the IRA with their bill because they're seeing some of the battery companies saying well I'll I'm actually going to build an X Factor in the U.S not Europe anymore I changed my mind so

Europe now has to encounter with their incentives as well the second good news is corporations are now customers so maybe three or four years ago you went to a Fortune 100 company and you're like hey do you want to buy my xyc decarbonation solution like what it's like the software platform or EVS or whatever it might be they're like well talk to this person on this floor right and maybe they can help you this person was not really empowered to make decisions that has changed now they're like actually we promised our shareholders to reduce emissions by two percent every year and we also promised the government and we promised whatever publicly to do that so we got to do that like where do we start what's the first two percent that we got to decarbonize maybe that starts with energy oh we'll change our energy providers but they are now showing up as customers not just with Lois but paying actual for contracts

right doing investments in these companies because they all have seen the future and they don't want to be behind there's financials motivations for this they want to get access to Capital that it has some strings attached to some of these things but they don't want to fall behind and they don't want to be the Toyota to Tesla right who told us that we're not going to do battery electric it's like they're still saying that sometimes and everybody else is like Tesla is the one we got a copy because that's the one that's winning and all these corporations are really afraid of being the Toyota right they're really afraid of being the last one who's not changing and then the world will move past them and then they're gonna die so I think the motivation here is like intrinsically survival and it's really about sort of like adopting this because this is where the world is going I think these are the two best news and

the thing that we I think we also wrote about this in the request for startups this is not a thing where you can convince everybody to just like agree with you and even if you did people wouldn't know what to do so you have to view this as an economical opportunity and say if we don't we can't convince everybody that this is going to be the thing that's going to happen it doesn't actually matter if it convince everybody like what matters is that sufficient amount of corporations are convinced that they change their habits and then you can sell the things you're building to them as sort of founder just focus on your customers and focus on B2B that's what most people I recommend to do here because that's where most of the change is going to happen and that's why I'm really optimistic about these these startups and these Founders what they are doing is in my opinion more impactful than someone running a

campaign trying to convince someone some other people that this is a big problem like even when people know that climate change is a problem they don't know exactly what to do about it but the startup Founders they know you touched on this but it feels like one of the biggest shifts is like capitalism is kicked in and is now leaning into climatech startups and yes that's absolutely absolutely making a big dent well with that we've reached

the final part of our chat which is the very exciting lightning round I've got six questions for you are you ready yeah what are two or three books that you recommend most to other people the first one I recommend I think I have it here yeah this one uh it's called 100 solution this book is for it's written by Solomon Goldstein Rose it's four people who think climate change is the problem but don't know what to do about it or think that or they're just kind of in despair or think they're like oh I'm gonna die right and there are some books written where the outcome of the book is like we're all going to die but the truth is that we're not all gonna die and this book is trying to cover the hundred percent of all the solutions like in detail kind of like a much deep more detail version of the request of sharp that we wrote and it gets you freely optimistic and and I give that to anybody who's

care about climate change because it really lays out this from a very optimistic way of looking at the world and that's that's why I recommend that book more than almost anything else that's probably my number one book amazing I love it just the one book here's the book you gotta read I like that yeah that approach what's a favorite recent movie or TV show that you've really enjoyed oh I watched so much I don't know like I I I love Emily in Paris on Netflix uh I think I just have TV for serves different purpose for me these days it's just like uh it's just entertainment yeah I get that but what else movie do I watch we watch the um everything all at once I thought that was a really good movie um might win best picture we have a drinking game here people say White Lotus we drink and so you did not so that's probably for the best favorite interview question that you like to ask YC Founders when you're

interviewing them what have you done since you applied to my seat on your product like what are specific things that you've accomplished since you applied because that usually is like a month or two monthly months ago that's awesome connect so much with what you earlier and and I I hope the answer is like here are all the things that we did versus we just prepared for this interview exactly exactly most out there wild startup you have funded I think I would say like when I stepped onto the hangar floor of heart airspace and I can send you a photo and I literally I am looking at an airplane that's being made and I'm like like there's no SAS companies office you can walk into and you just like open your mouth and you're like what the hell is this and there are a few of those companies that are space companies or aerospace companies or something like that where that there's just a different like

it's just a different feeling that you fund them and like you can touch it and and I have a lot of appreciation for things like that now because they're much harder to do but when you succeed they're much more tangible you can be like I like had a tiny little piece in like this space rocket or this airplane that we that we funded or the satellite is above above us and I really think that that's in some way like a strong Legacy compared to some other things that exist and just replace other other softwares and always better businesses but they are strong Legacies what's a pro tip for applying to YC Pro tip uh number one thing is go to YouTube and type in like I think there's like there's a video that we recorded which is about how you succeed with your application with you it's like an hour long video that gives you all the pro tips on how to do it like we told people in advance once you've watched that

video then see if you know anybody who've done YC and then reach out to them and ask them maybe ask them is right for you but I also asked them like what's important for you to as you kind of approaching applying to IC right in the application during the interview like what were the things that mattered those are probably the two things I would I would do final question what's one pro tip for visiting Sweden first of all you should visit in the summer it's a really good time to be there it's a very different country in the winter and uh try to go outside the cities into the nature and then like prepare yourself for swedes not all being like Americans they're a little they're a little bit more colder and have a little bit more distance to you and they don't randomly talk to you like I've learned to do here in America and I think you just have to go along with like a little bit different of a Vibe than you have here

in the US and most people actually love it like most people live here speaking to love it but most of them go go in the summer this reminds me I wanted to close it but uh there's a tweet once about how in Sweden when you go to someone's house they don't feed you it's like not expected that you will have food you have to kind of bring your own food is that true and what's that about it's absolutely true I actually gave a unconference talk about this topic uh and the coffee stock was all of the the strange things the Swedish people do and why and if it would summarize it like yes we do that I actually experienced that I went to a friend's house and they had dinner and I waited in my friend's room while they had dinner and that was just normal and why did that happen I think there is a strong sense of individual responsibility in Sweden which kind of like reaches over to unfriendliness or or situin from an American or foreign

lands because this is so crazy but in Sweden it's just like well you take care of your kids I'll take care of my kids and it's not really a question and I think that a lot of the motivations of why speech are strange one of them is is we don't want to be indebted to someone else right so we never want to feel like which is why like you wouldn't for example if you go to a bar in Sweden like you don't buy around you buy your own beer because like maybe you have to like figure out the money at the end of the day things like that and I think it's just it's actually quite individualistic Society but it's individualistic with heart I would say there's a warmth to it but it will definitely be appeared strange to people that don't really understand understand this they think people are cold and like Mo like they're just like they don't understand that there's actually a heart behind this stuff that

sounds really smart to be honest the system I would I would be into it but I can see how people are very confused Gustav I can't thank you enough for doing this this is incredible I know that people listening to this are going to leave informed inspired motivated hopefully motivated to move faster and make more progress two final questions where can folks find you online if they want to learn more or ask you maybe follow-up questions and to how can listeners be useful to you I tweet sometimes on twitter.com Gustav the most uh useful things that I put out is probably on the YC's YouTube channel so I record a couple videos on growth on sales on how to talk to customers I actually send them to people all day long because it's like the startup school videos that we made are like a lot of preparation went into it and it answers most of the questions that people have so watch those first I would say but yeah sometimes I tweet

other stuff that people can follow this fine how can people be useful to me I love hearing feedback from Founders what they're working on I want to hear kind of questions they have about their companies but I want to also really emphasize that to apply to AC you don't need to know any of us you don't need to reach out to us it doesn't make any specific difference the principles that YC is that you should be able to get become an Insight in West in Silicon Valley without knowing anybody and that's kind of what the application process is about so feel free to reach out to us if you have questions but don't feel like that's required to be a good wise applicants it's actually the opposite and that that we read and and treat all the applications equally and thank you so much for for listening to this podcast I mean it made me happy you made all the way to to the end yeah extra credit for listening to the end uh

I also just want to say while you're saying that it feels like YC is such a good Force for the world just us just enable so much Innovation and progress and if technology is what drives the world forward I see is so at the center of a lot of that so just huge props to what YC is doing and what you're doing good stuff we feel a lot of responsibility towards that that's for sure all right I'll let you go again Gustav thank you for doing this thank you so much thank you so much for listening if you found this valuable you can subscribe to the show on Apple podcast Spotify or your favorite podcast app also please consider giving us a rating or leaving a review as that really helps other listeners find the podcast you can find all past episodes or learn more about the show at lennyspodcast.com see you in the next episode