#7 - Jessica Livingston on How to Build the Future

**Craig Cannon** (0:00)
Hey, this is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is with Jessica Livingston and Sam Altman. Sam's the president of YC Group, and he interviewed Jessica for a series called How To Build The Future, which you can check out on our YouTube channel. Jessica's co-founder of YC, and she's also the author of Founders of Work, which is a collection of interviews with founders of famous tech companies.
Okay, here we go.

**Sam Altman** (0:22)
Y Combinator has funded 1500 startups, and they're worth more than $70 billion in total. More than 10 of them are worth a billion dollars or more. So in terms of how to create a unicorn, Jessica Livingston probably knows more about this than maybe anybody else in the world.
So we are super delighted you came here today to talk to us.

**Jessica Livingston** (0:39)
Thank you for having me.

**Sam Altman** (0:41)
What I really want to get out of you is how founders get on a path to build a huge company. So you have now for 11 years seen founders come in when they're just two or three people and an idea. And sometimes those founders go on to do nothing most of the time, sometimes they create a small success, and sometimes they create these companies that really transform the world. And YC has been very fortunate to be involved in a lot of those, Airbnb, Dropbox, Stripe, the list goes on.
And what I think would be really helpful is to talk about what the companies do during Y Combinator that allows them to then go on and build these super impactful companies. So what have you observed the very best companies do when they're brand new?

**Jessica Livingston** (1:25)
Well, I've now seen more than a thousand companies go through YC, so I'm very familiar what these companies do during YC. And I'm first gonna say that there's not really one path for everyone necessarily, and a lot of times, these successful startups get started almost accidentally.
But when they're at the point where they say, yes, I am gonna take this company seriously, I'm gonna apply to Y Combinator, and then they come here to Silicon Valley for three months. The most successful founders, I've noticed, are totally focused on two things, building their product and making something people want, which of course is our motto, and talking to their users. And they do not let themselves get distracted by anything else. And that seems so obvious, but what's not obvious is how easily distracted founders can be by lots of other things going on. And the most successful startups are hyper-focused on their product.

**Sam Altman** (2:28)
What are some of the things that distract founders that seem like good ideas at the time?

**Jessica Livingston** (2:33)
Oh, there's a lot of these. And in fact, in a talk that I gave at the Female Founders Conference a couple months ago, I referred to some of these things as the startup equivalent of wolves in sheep's clothing, because they really do seem like you're doing business. A few of them are talking to big companies to try to form partnerships in an attempt to get better distribution or somehow get more users, to do a lot of PR before you've nailed down the product, to talk to corp dev people.
When you're not thinking about being acquired, yet you'll still have meetings with these people. Or you'll take meetings with investors when you're not in fundraising mode, just to sort of build a relationship. I mean, or go to going to conferences, networking events. All these things that seem like important things to do as part of your business are not important in the very early stages when it's critical to build your product.

**Sam Altman** (3:39)
And how do you know when you have hit the product, as you just said?

**Jessica Livingston** (3:43)
Well, I think when you have people using it, like you can measure your growth and you can measure how many users you get, and are they coming back? Are they paying for your product? I mean, that's just the greatest thing of all, if you can charge for your product.
And that growth rate is going up.

**Sam Altman** (4:00)
So for all the YC companies that have gone on to be these sort of household names, did they all do this during YC, where they just focused on their growth rate, writing code, talking to users? Are they the companies that ended up ignoring everything else?

**Jessica Livingston** (4:12)
Yeah, pretty much. If I had to think back on the most successful startups, all during YC, they were super focused. And they weren't all over the place in terms of ideas that they were working on or things that they were doing.