#137 - Startup School Podcast Preview with Kevin Hale

**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 a preview of the Startup School Podcast. We're putting all the Startup School lectures on their own podcast feed. I've linked it up in the description, so you can subscribe.
This is the first lecture from Startup School 2019 It's Kevin Hale on how to evaluate startup ideas. You can find Kevin on Twitter at I Like Vess.
And it's not too late to sign up for Startup School either. The course just started, and the deadline to sign up is August 4th. Select companies who complete the course will also receive $15,000 in equity-free funding. Sign up for free at startupschool.org. All right, here we go.

**Kevin Hale** (0:41)
Okay, so this is how to evaluate startup ideas. And this is actually a new set of content that we've developed based on a lot of feedback that we saw from the last Startup School, and what we noticed is a lot of people's challenges. So last year's curriculum actually had a lot of content that ended up being when we looked at the data for who's participating in Startup School, was like, oh, this is much more advanced. It's much further along. A lot of people, for instance, like I had no idea, or like I have too many ideas that they don't know which one to pursue. It was a main reason why a lot of people are only able to work on their startup sometimes part-time. Yes, they might be stuck without resources, but they didn't have conviction. They didn't know, like, oh, what would I have to believe in order to say, like, I want to quit my job?
This is also a really great sort of skill to sort of have because if you are realizing you need to pivot, how do you evaluate if you need to do that? And then also, if you're pivoting to something else, like how do you evaluate whether something is worth going to? And if you already have a launched company, then you might have problems with like, why isn't this growing? Or how do I improve it? And evaluating your startup, especially in the way that sort of investors evaluate startups' ideas, we find is going to be really, really useful.
There's just like myth about Y Combinator is that people think YC only funds companies who have tons and tons of traction, right? That nowadays, the only way to get into YC is you have to have lots of revenue or tons of users already. And part of that has to do with like the press and then the exposure of the companies that make it to demo day. Those are the stories you tend to hear. But that being said, there's lots of great examples of companies who actually got accepted just with an idea. And so, Zenefits is a really good classic one. Parker was a single non-technical founder who pitched an idea to YC and he got in that way. We also had Reddit. So technically, they were forced to pivot right away. So they hadn't written a single line of code. And then my experience in YC is actually exactly the same. So when I founded Wufoo and we entered that second batch, we also had not written a single line of code. PG had invested us at just the idea stage. And so I feel fully committed now as a partner to always be trying to find and dedicate time and energy to funding companies who are just at the idea stage. A lot of our efforts here for working on Startup School is to help us help you work on how to talk and think about your startup. And that if we can fix that, it can help you sort of inspire us to be like, oh, yeah, I can believe in what you're doing. And a lot of times founders get in the way when they're telling their narrative.
So how can I predict if an investor will like my idea? That's ultimately what we're trying to figure out. And the answer is really easy. And so for us at YC, the definition of a startup is a company that is designed or created to try to grow very quickly. So if you're not trying to build a company that grows very, very fast, then you're just building a normal company. It's a small business. And there's nothing wrong with that, but these companies are the ones that investors are interested in. So if you're hoping to build something that will have tons of users, that will have huge valuations, that will be able to attract venture funding, then the evidence that we want is evidence that shows that your company can grow quickly. I have a confession to make. If you ever meet me or talk to me about your startup and kind of recruiting or at one of these events, I will never tell you that I do not like your idea.