#103 - Michael Seibel

**Craig Cannon** (0:00)
Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is with Michael Seibel. Michael's a partner and the CEO of YC. He co-founded Justin TV, which was in the Winter 2007 batch, and Socialcam, which was in the Winter 2012 batch. In this episode, Michael and I go over five of his essays.
They're linked up in the show notes, and they are, Why Should I Start a Startup? One Order of Operations for Starting a Startup, The Real Product Market Fit, Users You Don't Want, and Why Does Your Company Deserve More Money?
If you have comments, you can reach out to Michael on Twitter at MWSeibel. All right, here we go. All right, Michael Seibel. So today, we're going to do something different and talk about a few of the essays you've worked on in the past. I think these are maybe the past two years.

**Michael Seibel** (0:51)
Yes.

**Craig Cannon** (0:52)
So the first one is, Why Should I Start a Startup? Why Start a Startup?
You start this essay by saying, a lot of people ask themselves this question. They often mull over one or more of the following facts. One, the vast majority of startups are not successful. Two, for talented technical people, it's relatively easy to get a job and make a large salary. And three, large companies offer opportunities to work on very difficult problems that only often occur at scale.
My answer to why you should start a startup is simple. There's a certain type of person who only works at their peak capacity when there is no predictable path to follow. The odds of success are low, and they have to take personal responsibility for failure, the opposite of most jobs at a large company.

**Michael Seibel** (1:37)
Yes.

**Craig Cannon** (1:38)
Why did you write this essay?

**Michael Seibel** (1:41)
So I think that there are two reasons. One, I talk to a lot of smart technical people who I think sometimes feel like they should start a startup, but they're conflicted because they either don't know if they have a good idea, don't have an idea, don't have a team, and I think they're really trying to figure out, like, what should I do with my life? You know, like, what should my real career path be? And when I first started giving people advice, I think that I really assumed that because you could start a startup, you should start a startup.
You know, if you have the money to afford, if you have the time, if you have the ability, you should be doing it. I quickly realized working at YC, that's a bad idea.
And I think what I quickly realized is that there's probably, like, three sets of people. There's probably the set of people who the only thing they can really do is work in a radically entrepreneurial job. Like, literally, like, they will not enjoy their life inside of a big company, but they will enjoy their life inside of a big bureaucracy. And I think back in the day, those are the kinds of people who start small businesses. And so there's that type of people, and they're relatively few and far between. I wouldn't be surprised if that's only 1% of the population. The second group of people are the people who are on the fence. They want to be really challenged by work, but they can easily apply themselves in either an entrepreneurial world or in a big company world.
And I think those people are the ones where they have some choices to make. I think a lot of people confuse themselves for this group, when in reality, this group is also probably pretty small. And then there's the last group.

**Craig Cannon** (3:33)
Pretty small. How small?

**Michael Seibel** (3:35)
I bet 1%. I bet there's only 2% total so far. Yeah. I think it's a really small group who can actually be equally capable in either role, as a founder or as a really effective person inside of a big company. And I think you do see this. I think you do see founders who get acquired, who are actually really functional inside of big companies and vice versa, right? Exactly go out and start companies, and they do well. But few and far between. I think the last group, and by far the biggest group, are the people who are going to operate best within a large company.
And the mindset of this type of person is, at least from what I've seen, is they want a system to optimize. They want an existing system, an existing path, an existing set of rules that they can operate and play by. And what's interesting is that almost everything up to this point in your life kind of has that. Kindergarten through 12 has this, even college has this, and they kind of want to continue that. Someone else defines what's an A and what's an F, and then I optimize.