#147 - Startup School Week 6 Recap - Tim Brady on Culture and Dalton Caldwell on Pivoting

**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 recap of the sixth week of Startup School. I've cut down the sixth week of lectures to be even shorter and combined them into one podcast.
First, we'll have a lecture from Tim Brady. Tim's a partner at YC. His lecture covers the importance of building a good culture early on and shares six things that you can do now to help create a solid foundation for your startup. Then we'll have a lecture from Dalton Caldwell. Dalton is a partner at YC, and he's also the Director of Admissions. His lecture covers pivoting and his advice on how founders should think about it.
All right, here we go.

**Tim Brady** (0:37)
Good morning. My name is Tim Brady. I am a partner here at YC, a group partner, which means I work with the companies during the batch closely. I have started three things prior, one of which was Yahoo back in 1994 So a lot of what I'm gonna talk about today stems from that experience. So as Kevin said, I want to talk about building culture, how to think about it at this stage of your company, and why it's important. Now, culture can be pretty broadly defined, so let me be super clear on what I'm talking about. Really, to me, culture is just behavior. And company culture is that implicit set of behaviors inside of your company. They should inform your employees on how to behave, I guess, when done right, they should inform the employees inside of your company how to behave when it hasn't been explicitly laid out for them.
And the good news, if you do it right, if you get the right culture, the right behaviors will support a good business, and hopefully a great business. And over the course of your company, over the history of your company, it will support that in a lot of kind of intangible ways that are hard even to describe. But that's why it's important. That's how you should think about it at this stage. Don't overcomplicate it, right? That's really it. So you're probably asking yourselves, like at this stage of the company, like you have so many things on your plate, you're so busy, it almost seems like a luxury to be thinking about culture, right? And that's kind of the, you're not wrong to be asking that question.
And the reason is, is that when your company gets going, like these are three phases that you'll be going through as you build your company. All of you really are at this top stage that I call the idea stage, right? Talking to customers, iterating the product, experimenting, iterating the product. Hopefully you'll raise some money at some point to allow you to continue to do that, and at some point in the future, you're going to reach product market fit, right? If you think back on the product market fit talk that Michael gave a couple weeks ago. And when you do that, hopefully you'll raise a whole lot more money and begin scaling the company.
Now, scaling the company almost always requires hiring a lot of people, right? And the people that you have inside of the company prior to hiring a lot of people are really your cultural DNA. Those are the people that are going to be involved in hiring and training that next wave of people. So it's super important that you get it right. You get that, that's why I subtitled this kind of the first 20 employees that you get. And there's no magic to the number 20 It's really that set of employees that are in place when you begin scaling the company. Because again, those folks are going to be highly involved in hiring and training this next wave. So if you get it right, if those first set of employees are this, embody kind of the culture and the values that you want inside your company, you have a much higher likelihood of building a strong and coherent culture.
The reverse is also true, right? If you make mistakes, if you get the wrong types of people inside of the company early on, they're gonna be involved in hiring and training, and those mistakes are gonna get propagated. And it'll be much harder later on to build, to kind of correct course and try to build a coherent company, right? So that's why it's important to be thinking about now. I know you have a lot on your plate in starting this company, but what you need to do doesn't take a whole lot of time. For the most part, it's just some conversations with your co-founder. And so I came up with a list of six things that you can do now to help you or to help the likelihood of you building a strong and coherent culture. First one, be proud of the problem you're solving.