Altman is interviewed by Chang on Bloomberg Business.
It’s been a really fun job. We’re sort of the flagbearer for this movement towards more innovation, and more startups, and it’s a particularly fun time to be in that place. We’ve really been able to scale up the organization and the number of startups quite a bit. The best part is that we get to work with the most incredible startups each day…We think that generally our role is to increase the innovation in the world as much as we can, and we are not tied to any sector, or stage, or startup. We see a lot of new ways to do that. If we can fund 10,000 companies over the next decade with our fellowship that would be incredible.
In an interview with TechCrunch, Atman talks about YC’s Fellowship program:
I think we all get a little screwed up in the way we think about money in Silicon Valley sometimes; $12k is actually a lot of money to most people. It should be enough to live on, build a product, and get initial users. I think it’s fair to say that YCF is targeting people with low personal burn rates. These are often younger, but certainly not always. And I’ve met some 24 year old Google engineers that get their personal burn rates up pretty high…
On giving advice to startups:
We usually (but certainly not always!) give good advice. This is surprisingly hard to get for startup founders… The general principle is to identify the startup’s single biggest current problem, and help them figure out how to solve that. This is hard because a) most startups have a lot of problems and b) most founders are bad at knowing what actual problems vs fake problems are. For example, most founders worry a lot about competitors, but not much about users not staying engaged.
In an ask-me-anything session with the Hackathon Hackers public Facebook group (link) Altman talks about YC, investment and his daily routine:
When considering a startup for YC, would you say you spend more time getting to know the team, or getting to know the product? The team, but the product is important evidence that the team is good. I need to believe in all 3 of the the team, the product, and that the market will be big in 10 years.
What is your morning ritual: I get up late, have an espresso, and immediately start work. I try to get roughly caught up on email before I leave the house, then if I need to write anything or review a complex deal I do that, and then I head to the office and work on my top few priorities for the day. I try to schedule my meetings in the afternoon.
Altman is interviewed by Entrepreneur magazine,
We don’t have any preconceived notions. We don’t know where the next $10 billion company is coming from. They’re all non-obvious. We try to have a totally open mind. I tell the partners our goal is to find as many $10 billion-plus companies as we can, and because that is so restrictive, we have no other restrictions. If we believe a company can be huge, then we’re going to fund it, no matter what their business is…I don’t invest in companies where my mental model is that they need to get themselves acquired in the next few years, or ever,” he adds. “I suspect the companies we’re investing in will go through multiple down periods between now and when they become $100 million companies. Because I think that way, I don’t worry about the cycle.
In an interview in the Wall Street Journal, Altman says hardware could yield more $10 billion startups, but finding them means looking beyond companies that just want to make “little things that get sold at Best Buy”.
It’s the software-ization of hardware. All the reasons that have made software so successful are beginning to happen with hardware. So much can be done so quickly, prototyped so rapidly, and the costs are so low…The two things I look at most in a startup are cycle time [building a prototype] and cost. When those come down I think an area is now ripe for disruption. And I believe that’s really now happened in hardware.
Altman is interviewed at Startup Grind. He talks about how YC has yet to miss picking a unicorn company in the application process.
We track this obsessively through. We have custom software that just tracks this. There are a few companies that are doing pretty well but we have not yet missed a billion dollar company…The thing that makes me sad is I’m sure there’s someone that we would have funded that we didn’t, that had we funded, would have been a multi billion dollar company. Probably many of those. There are a lot of companies that we fund that if we didn’t fund them, they just would never have happened.
On raising capital:
Generally you want to raise capital either when you have to or when it’s really easy. If the company desperately needs money and they can’t figure out any other way, then they need to raise money. Or if someone’s offering you easy money on good terms, you should take it because you can use it for good things…We are the most successful when we fund things that other people don’t yet think are going to be a really big deal but two years later become a big deal,” Altman says. “And it’s really hard to predict that.
Altman interviews Andreesen, Conway and Parker in the ninth How to Start a Startup lecture, How to Raise Money, at Stanford University.
Altman sits down with founders from Salary Fairy, which crowdsources salary information from LinkedIn, Pair Up, which connects retailers with unused food to buyers who will pay a discount, and two founders building an app that allows couples to split expenses more easily. Altman:
It’s really hard to try to do multiple things as a startup… You have to just focus on one tight little thing and then you can expand from there, but until you have users telling you, This is the best thing ever…you really can’t expand the service
Altman takes questions in a Reddit AMA. He discusses the investment in Reddit and various themes, including creating a work culture:
Founders should never expect employees to work as hard and care as much as they do, but still, if you join an early-stage startup, expect to work very hard. Most people at Facebook still seem to work very hard. Generally, I think companies should hold off the transition to feeling ‘corporate’ as long as possible, but transition to something with better work-life balance after a few years–no one can work around the clock forever. All of that said, I do think most startups need to get some basic HR in place sooner than they usually do.
Sites that rely on user-generated content should be owned by the users:
1) People take care of what they own. 2) It just seems fair–users create the value, they should get to capture some of it. 3) I do think more sites could benefit from this, and honestly I’m somewhat surprised others haven’t tried it.”
What companies need to focus on
Focus on getting a small number of super-engaged users that love you, and them spread the community. If you’re building it for an exit, you will probably be disappointed. That’s not a specific statement about a community site but a general comment about startups.
Altman tips tougher competition for early-stage food-and-beverage startups looking to raise money. Dow Jones data show F&B-related companies attracted $1.1 billion in venture capital worldwide in the first half of 2014, while in 2013 the sector received $1.59 billion, up 39% on year. Altman says that wherever there are three or four F&B ventures, there likely won’t be room for another one that…
…does something similar with a small twist
Altman discusses whether Y Combinator has a monopoly on early-stage startups with former TechCrunch editor Michael Arrington. Arrington:
You consider yourself a monopoly
Altman says in an interview with Arrington that Hacker News could be worth $500 million if sold, but he says that it is worth more to Y Combinator than to anyone who would potentially want to buy it. He adds:
Intermediate valuations are completely made up and silly.
Altman talks about meeting Steve Jobs, working with startups in the risky early stages, and the challenge Y Combinator faces in convincing people to start their own companies instead of joining Facebook and Google:
How do we convince that brilliant engineer that has the idea he’s really passionate about, that can change the world, to start a startup and not go work as an engineer at a big company?
Graham and Altman host a chat with three Y Combinator startups: George Saines and Nick Winter of Code Combat, a way to learn code though gaming; Karen Cheng and Finbarr Taylor, of giveit100.com, a site where users share their progress at different skills, and Ryan Petersen of Flexport, a digitized customs brokerage.
The newspaper profiles the firm’s Demo Day, speaking with Graham, Altman, and Livingston about the company’s strategy for picking startups to support. Graham:
Imagine an assembly line where Facebooks and Googles come along every few years. You can either pick that cookie off the assembly line or not. If you pick it off, it’s market price, which varies. But if you don’t pick it off, you’re out of the game.
Altman discusses the $43.4 million cash buyout by Green Dot, which includes $9.8 million set aside in retention payments for key Loopt employees. Loopt’s services will be shut down and its Silicon Valley team will develop mobile services for the payments provider. Altman:
Many of the companies in the mobile location space are trying to figure out different ways to tie what they’re doing to commerce … We’ve all realized the critical piece is how you tie in commerce and payments.
Altman tells O’Reilly Media online managing editor Mac Slocum that Loopt is shifting from its focus on connecting people socially:
A big change over the last year has been an expansion of that to connect people to the places around them as well
Altman tells CrunchGear about Loopt’s plans, saying the company is aiming to focus on data over the coming year:
[…] we’ve really been focused more and more on [Facebook] Places, this hyper-specific data layer
He says the deals that work best for the company are things like free stuff being given away on a street corner for a limited time, or 50% off a restaurant for one night only:
The things that work the best are what we call flash deals, these are very, very time-limited, high-value, and they are pushed to the user.