The Most Memorable Quotes (I Could Capture) From Startup School 2012

Startup School is a fantastic event put on by Y Combinator. They bring together some of the most important and interesting people in tech startups and have them give candid, non-pitchy talks about what they’ve learned as a founder or investor.

This year, Stanford’s Memorial Auditorium was packed pretty much wall to wall on both levels. I’ve really enjoyed the talks in the past but it’s unfortunate that lots of people are unable to attend. So this year I tried to jot down some of my favorite quotes by the 2012 speakers both to save for myself and to share with others.

Note: I did my best to capture their statements as they said them but also had to patch from memory so this shouldn’t be considered a perfect transcription of the talks! Also I had to leave at 5pm so I missed the last 3 speakers: Joel Spolsky (StackExchange), David Rusenko (Weebly) and Hiroshi Mikitani (Rakuten). Darn!

Mark Zuckerberg, Facebook (interviewed by Paul Graham)

Paul (pg) interviewed Mark (mz) in an entertaining and enlightening recollection of working on Facebook in the early days.

Growing

  • mz: [Looks around at the Startup School audience]
  • mz: “Getting bigger!”
  • pg: “Yeah, well I heard you are too.”
  • Audience laughs

You can’t 80/20 everything

  • mz: “We had to do a bunch of manual work to sign up every school – looking up all the course catalogs. Dustin thought we could grow faster if we didn’t have to do that. We had this big debate on this issue and what quality meant for us. It definitely set this tone early on that we had clean data and it was a college specific thing.
  • mz: “You hear a lot about the 80/20 but you can’t 80/20 everything. There are somethings that you have to go beyond that and be the best in the world at.”

Flexibility is important

mz – “I have this big fear of getting locked into doing things that are not the most impactful thing. This is the thing about entrepreneurs, is that they have this laser like focus on doing the most important thing. One of the amazing things about college is the flexibility to try a lot of projects and explore things. I think people undervalue the power of having options.”

Special kind of pivot

  • mz: “I mean Facebook went through a lot of pivots. We went from just being for college to being “not college”, then from being just a website to being a platform.”
  • pg: “There’s another word for the kinds of pivots you were doing. EXPANSIONS”

Monopoly? Us?

  • pg: “In retrospect, do you think MySpace had a chance after you got all the college students? Were they destined to get dominated by you?”
  • mz: “I don’t see it that way. there is more than one-“
  • pg: “More than one social network? Not really.”
  • Audience laughs

Everyone knew it but me

  • mz: “We raised money from Peter Thiel and told him the plan”
  • pg: [stunned] “You told him you might go back to school?”
  • mz: “Yeah, but I don’t think he really believed us.”
  • Audience laughs
  • mz: “There is a long history of people predicting I’d drop out of school before I did.” [Mark’s mom was unsurprised when he told her he was dropping out of Harvard]

Travis Kalanick, Uber

In a brash, chatty pitch, Travis talked about how Uber got started, the progress they’ve made and their battle with regulatory bodies.

Just between friends

“When we started this, it wasn’t about making transportation more efficient or whatever. It was about being baller in San Francisco. Originally it was S-Classes for us and our 100 friends. You actually had to have a code that I gave you.”

You can’t make this stuff up [assorted quotes]

  • “When I’m having a bad day, I just go out to our overall revenue graph” [Shows hockey stick revenue chart] Audience claps
  • “When we first launched, it wasn’t easy getting our angel round. Limos? In San Francisco? What???”
  • [shows a chart] “This is a cool cohort graph and .. ah, who cares. Bottom line is that people who use it once, use it again.”

Computing real-time demand

“Drivers see a heat map of the city. But if we just give a heat map of demand, then everyone is just going to go there and oversaturate the location. So instead, we show the demand minus the current supply, revealing ‘residual demand’ ”

The game has changed

“There are now more town cars in San Francisco dedicated to Uber now, than there were town cars total when we started.”

Capturing the top and bottom of the market

  • “We had this high end thing, it costs 50% more than a cab. And people say, ‘Let’s do a low cost Uber.’ And a few people have done this, I can’t remember their names.”
  • Audience laughs
  • “And they flatter us by copying our app pixel by pixel. But guess what? Uber is going to be the low-cost Uber.”

Crazy marketing stunts

“We did a Valentine’s Day promotion where every girl who got in an Uber after 4pm was given a rose. That, fellas, is what I call a strong move.”

Legal absurdities

“When we were going into Washington DC, we thought we were going to be totally legal. Like white glove legal. Nicest laws in the country. But then the Taxi Commissioner called us out saying it was “improper fare” to charge on the basis of time and distance.”

“Even if that was true, what’s so evil about that? The law says that a for charge sedan can charge on the basis of time and mileage. Here’s what we got back from the Attorney General:

“That law is a typo.”

Jessica Livingston, Y Combinator

As a partner at YC, Jessica has seen the trajectory of a lot of startups (over 467 funded) and spoke about the many “monsters” that founders must defeat in starting their startup.

The value of determination

“In general, your best weapon is determination. Even thought we usually use one word for it, it’s actually two – Resilience and Drive. One reason you need resilience is that you’ll get rejected a lot. Everyone you encounter will have doubts about what you’re doing.”

Every startup faces rejection

“Even Y Combinator got rejected at first. Nowadays there are a lot of groups that do the kind of investing we do, but when we started no one was. Even our own lawyers tried to talk us out of it.”

Resourcefulness

“One time, Lockitron got an order for 40 locks from an investor who wanted them for one of his startups. Each commercial lock cost $500 and they didn’t have $20,000 on hand. So they went to junkyards and bought locks for $10, fixed them and fulfilled the order.”

Building a competitive dynamic when fundraising

  • “Investors, most of them, have a herd mentality. They want to invest only if other people are investing. It’s like a Catch-22 like not being able to get a job because you don’t have enough experience.”
  • “One of the founders of one of our more successful startups, had a long standing relationship with a VC. The VC stayed in touch, attended Demo Day and never invested. Then the founder received a term sheet from a prestigious VC firm. And when that first VC heard about it, it went into a panic and faxed a term sheet with the valuation blank. He told the entrepreneur – “Just fill in the blank and we’re in!”

Avoiding distraction

While no one is dumb enough to play video games all day, there are other kinds of distractions that can be dangerous. During YC we tell founders to focus on 3 things: writing code, talking to users and exercising.

The fiercest monster of all

“Now we’ve come to the fiercest monster of all, making something people want. It’s not enough to be smart and determined to make something people want. Ordinarily you have to change your idea a lot, even if you start off with a good one.”

Changing your idea

“OrderAhead was the founder’s 6th idea. We funded them for the first idea, they presented their 3rd idea at Demo Day and only started succeeding with this final idea.”

Patrick Collison, Stripe

Patrick sought to explain what founders don’t talk about when it comes to growing a startup and shared some of the nitty gritty details of the process.

A lot can happen in two years

“When Brian Chesky [cofounder of Airbnb] spoke at the 2010 Startup School he showed a picture of the audience at the 2008 with a random head circled – that was him, just a guy with startup seeking inspiration. I remember, because I was just some random guy watching him at the 2010 Startup School, and now I’m speaking up here. And I bet that one of you will on stage at Startup School in 2 years.”

What everyone really wants to know

  • “When I thought about what would be most universally helpful for web startups, it became clear what I would talk about”
  • [shows slide entitled: Hack Hacker News, defeating the voting ring detection algorithms]
  • Audience laughs

Startups up close

“It’s hard to understand startups in part because it’s hard to see them up close. And the stories that are told, it’s misleading. It’s always about rocketships and just trying to hold on. It’s not about the late night arguments and all this other stuff that happens even in the most successful startups.”

How it all got started

“John [his brother] turned me and said ‘Why are we talking about this stuff? Let’s just go build this [payment system that would turn into Stripe]. It can’t be that hard.”

Picking good names

“We originally called it “/dev/payments” which is actually a terrible name for a number of reasons.”

A working vacation

“We read a blog that Buenos Aires was a great place to work. Bars are open till 5am, nothing is open till noon. It’s basically a programmers schedule. So we spent all of January in Buenos Aires working out of cafes. I still haven’t seen any of the tourist spots there.”

Getting crazy investors

“Our first investor, after YC, was Peter Thiel. We hadn’t told many people about that we were doing. Most people that we told said we were crazy. Lucky, Peter Thiel is crazy! And so it was great to get him on board.”

Location independent bug fixing

  • “So this is a picture of us tethering from our laptop in the Redwood City cinema to fix an error. And I think Derek is still a little bitter in missing the beginning of the movie. The movie may or may not have been Twilight – Breaking Dawn.”
  • Audience laughs
  • “Look, startups are stressful and you need to find ways to decompress ok?”

The doubt is ever present

  • “This is the unglamorous side of startups … There are late night sessions, soul searching debates: ‘Is this a good idea? Maybe this is a good idea, and is too hard for us.'”
  • “What I didn’t realize is that this doubt thing before it doesn’t go away. I figured you might have those doubts early on, but then things get better. But there will always be doubts.”

Ingredients do not mix

“We were inspired by Amazon’s EC2 and AWS. Because it’s easy to start with, but also scales up to millions of users. And we wanted to do that but for payments. But in order to do that, we had to work with great banks. But startups and banks are like the business equivalent of oil and water.”

Efficiency in shipping (and payments) could change the world

  • “Has anyone looked into the history of shipping containers? It’s fascinating stuff. 60 years ago, before the invention of the shipping container, transportation of physical good was a big deal. Transportation and shipping were up to 10% the cost of goods sold.”
  • “The shipping container dropped costs enormously – 95%. One government report basically said that you can now assume the cost of shipping to be negligent. The shipping container literally reshaped the world economy.”

Ben Silbermann, Pinterest

Ben gave an open and humble talk with clean slides about the challenges Pinterest faced starting out and the lessons he’s learned as it’s grown.

It can take a really long time to build something worthwhile

  • I found an email from June 2010, 3-4 months after launch that was sent to as an update to our investors:
  • [Reading from the email] “Just a review, we launched a site called Pinterest. People going to create pinbaord and follow their friend. Today we have almost 3000 users, and pin counts is steadily improving. We are also moving into a new space and will save money because we’re sharing with a YC company called Chart.io. We also snagged some free AWS credits”
  • “Four months in, 3000 accounts is not a lot.”
  • “Now, that wouldn’t be so bad if we hadn’t started building Pinterest in November 2009. And that would be so bad if I hadn’t quit Google to company in May 2008.”

Startups as a road trip

“People say doing a startup is like a marathon. It’s actually a roadtrip at night with no headlights. You think you’re going to Toledo but you’re actually going to Miami and you might not have enough gas so you might need to buy gas from someone who might take you out if you aren’t driving well.”

Committing matters

  • “For some reason, I always came back to building products and growth would always stall out eventually. I always had a reason for why things stalled. But I realized I was always the common factor.”

Getting rejected from Silicon Valley

  • “There are a lot of ways for an investors to say no. And I’m pretty sure I’ve heard of all of them.”
  •  “‘Call me back in a few months.’ That’s like the worst one, it’s like asking someone out on a date, and them saying ‘Hmm. Not right now, but maybe in November?'”

The future is unwritten

“People are going to give you all kinds of advice. And you’ll really want to take that advice. But when you look at the returns at VC, it’s pretty shady. We are in a volatile industry. Fundamentally, the future is unwritten. If they knew, they would be done.”

It’s got to look cool

“We realized that the thing about collections was that it had to look cool. If it didn’t look cool, no one would share it with their friends and show them what they had made because it didn’t look cool.”

Information is distributed

“Investors read the same Hacker News articles that everyone does. There’s no secret Hacker News site that lists all the real startups you want to invest in.”

No one will want to work here!

“We called ourselves Cold Brew Labs because all the cool companies called themselves labs. I was like ‘Oh my God, if we don’t call ourselves labs, no one will want to work here'”

Don’t Give Up

“Those early parts of building a startup can be really lonely, and a lot of people toil. People tend to think, we just need to work harder. I need to go out less, turn on the lights less, sit closer to the screen.”

Build Something You Believe In 

“If you are going to go on this 5-10, 15 year journey, build something you love. You’d have to be the most mercenary person in the world to give up 10 years of your life just to make money.”

Ben Horowitz, Andreessen Horowitz

Ben split his talk into three parts: what’s it was like building Loudcloud/Opsware, whether innovation is dead and what their VC firm looks for.

Fashion statement

“This shirt is my motto.” [Ben’s shirt said: “No Bitch Ass Ness”]

Wealth has its benefits

Warren Buffett told me something at this event at Ron Conway’s house: ‘The greatest thing about being rich is that you don’t have to do business with people you don’t like.'”

What Michael Jackson taught him

  • “When I met Michael Jackson, I had just watched a movie called the Wiz, where MJ plays the Scarecrow. He does this incredibly awesome spin move on the yellow brick road.”
  • “I said Michael that was the coolest dance moves I’ve ever seen. He said, ‘Actually, it was harder than it looks, I was spinning backwards up a hill.'”
  • “What I learned from MJ was this: no matter how hard it looks, it’s even harder to actually do.”

The two things that matter

  • “Building a product that improves how some large group of people does something important by 10x - products matter.”
  • Taking the market – there’s no crying in baseball, and no profit for number 2 in technology markets”

Don’t believe the hype

  • “When you talk to your friends who are startup CEO’s, and you ask them how things are going, they will usually say:
  • ‘Things are going great. I work with amazing people, it’s the best thing we’ve ever done.’
  • And that’s a bunch of bullshit.”
  • Audience laughs

How do you sleep?

  • People would ask me, ‘How’s your startup doing?’ and this is after I had done several rounds of layoffs. I would say  “I sleep like a baby.”
  • and they’d say really?
  • “Yeah I wake up every two hours crying.”

Is it over?

  • “Is innovation dead? Has everything been invented? Pinterest is out. Facebook is out. I don’t know why you’re at startup school. It’s over. You should probably go into consulting or become a lawyer.”
  • Audience laughs

People will always want more

  • “There is no important distinction between wants and needs. Because things that people eventually want, become things you need. Like Facebook.”
  • Audience laughs
  • “Don’t lie, you all know you need Facebook.”

How could they be so stupid?

“People were sending me this article in 2003 about IT being a commodity and not being of strategic value. And I read and thought, ‘How could someone from Harvard say something so stupid?’ And then I realized, only someone from Harvard could say something so stupid.”

Gotta be one of the winners

  • Technology companies follow an extreme power law curve. Of all tech companies started in the US in any one year, around 15 ever generate $100M in annual revenue
  • Those 15 companies are ultimately be responsible for 97% of the market cap for all companies started that year.
  • 15 companies! That’s way harder than making the NBA in any given year – most of you would never attempt such a difficult thing. And yet here you are.

One-Two Punch

“We look for two things: a breakthrough idea and a founder with the courage and skill to build the idea into a great company … Courage is something you develop, it is not something you are born with”

Stay off the Purple Drink

“Jamarcus Russell was the number one draft pick out of college for the NFL. He had a problem with this thing called the Purple Drink. All that skill, and it didn’t play out. The lesson here is: Stay off the Purple Drink!”

Tom Preston Werner, Github

Tom bootstrapped the widely used git hosting service for many years before recently raising $100M in venture capital and talked about the three things that matter.

Founders solve their own problems

  • Tom: [After previous speakers had issues knowing how much left] “This is a timer – I’m going to put it on the ground, because as a founder, you solve your own problems”
  • Audience: “Ohhhhhh!”

Asking the right question

“Many of you in the audience are perhaps thinking – ‘How do I, as a budding entrepreneur, raise 100M just like Github?’ That’s the wrong question. The right question is figuring what ‘What really matters in building a startup?'”

Where do decisions come from?

“A company is nothing more than the decisions it makes. Decisions are made by people. So then, the only thing that matters is people.”

Learning from the mistakes of others

“Working on other companies is not bad, because you get some great experience on what NOT to do.”

People are the engine

“When you hire someone, ask how they are going to push the company forward. Because companies don’t do things, people do things.”

Taking a step back

“But wait a minute, your customers don’t interact with people. They interact primarily with your product. The actual service itself. So then, product is the only thing that matters.”

Drivers wanted

“Products are like vehicles – people understand how cars work. Turning this thing directs the car. Stepping on this thing makes it go. Your product should feel just as natural and make sense.”

Low bar

“Don’t worry too much about when you enter a market. In every market, most products are terrible.”

The evolving mission

“Our mission in the early days was very simple. It was on the site – “git hosting – no longer a pain in the ass”. Then as we grew, our mission changed to more than that. It became “making developers lives better, every day”. Finally now, we’ve expanded it even more. “Making it easier to work together, than to work alone.”

Bringing it all together

“Just like the 3 quarks of an atom cannot exist on their own, people, product and philosophy do not exist on their own.”

Ron Conway, SV Angel (interviewed by Paul Graham)

Ron (rc) is the founder of SV Angel, which has funded over 650 companies since 1994 including Google, Facebook, Twitter, Square, Pinterest – and was interviewed by Paul Graham (pg).

Apologies for the dearth of Ron Conway quotes. I’ve heard him speak a few times and he told many of the stories I’ve already heard, which I didn’t end up writing down.

The stories you can’t tell

  • pg: For every story that you hear Ron Conway save the day, there are several that you can’t ever tell. Have you ever seen Pulp Fiction? He’s like ‘The Wolf’.”
  • rc: Laughs
  • pg: “He laughs, but does not contribute any stories”
  • audience laughs

Drinking at work 

  • pg: [Ron Conway cofounded a startup called Altos Computers in the 1970’s] “What’s changed about startups since then?”
  • rc: “I’d rather talk about what’s not changed. You have to have determination and conviction and be a leader. What has changed, people drink less.”
  • Audience laughs
  • rc: “At Altos, we had a CFO in her 60’s, she would wheel around a drink cart. Everyone would have a drink, not a happy hour, more like 10 minutes, but it motivated people to stay in the office and work until 9 or 10pm. Our motto was ‘work hard, play hard’.”
  • pg: [Laughing] “At the same time!”

What matters now

  • rc: “One thing that has changed about doing startups now is that there is so much more of a focus on UI and customer satisfaction. There wasn’t as much of that back then.
  • pg: “Hmm, because back then, hardware was so hard that just shipping was consumer satisfaction.”
  • rc: “Exactly.”
  • Audience laughs

An early start

  • rc: “When we were talking about the internet back then, it was referred to as ‘TCP/IP’. When people wanted to do an email startup, they had to explain that it was ‘a kind of TCP/IP protocol’.”
  • pg: “So you didn’t get in on the ground floor of the internet, you got in on the basement.”

What investors don’t get

  • pg: [After Ron discusses investments he passed on] “Is there a pattern of things that investors don’t get in general?”
  • rc: “I think investors don’t get the stuff that is the first one. Pinterest is a good example, how hard it was to make money. The first time you look at a virtual pinboard, it is not familiar.”
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