How To Change The World? Get The Small Things Right artwork

How To Change The World? Get The Small Things Right

Y Combinator Startup Podcast

October 6, 2022

Dalton Caldwell and Michael Seibel talk about the importance of understanding incentives and doing research when it comes to building a world-changing startup.
Speakers: Michael Seibel, Dalton Caldwell
**Michael Seibel** (0:00)
Let's say that changing the world is like uprooting a tree, like a big old tall tree.
Imagine there were two founders. One founder knew that trees have roots, and the other founder had no idea, right? Like, the trees with roots person, they have an advantage, they have a very large advantage. The tree without roots person, they're gonna have a lot of very horrible, how do I phrase this, on-the-job learnings.

**Dalton Caldwell** (0:32)
Yeah, it's not moving, like we don't get it. Like we're pushing it, it won't fall over.

**Michael Seibel** (0:38)
Yeah, we've done all the math. Like if the tree ends right where the ground begins, like pushing like this, it should work. Hey, this is Michael Seibel with Dalton Caldwell, and welcome to Rookie Mistakes. We asked YC founders for their rookie mistakes so we could share them with you and help you avoid them. Here's the next comment that was written about and by a YC founder.
We built a product because we thought the world should be a certain way, not because we had a customer who actually wanted to buy the thing we were building.

**Dalton Caldwell** (1:10)
This is coming from a pure place, and we look at our heroes, right? We look at Elon Musk, we look at Steve Jobs, and we have this model of people that forced the universe to their will. And Elon, electric cars are the future. I am going to impart electric cars. I am going to make it happen. And again, he kind of did. Good for him, right?
But for most of us mere mortals, it's pretty hard to force people to want the thing that you're selling or the thing that you think is good for them. It's really hard if someone doesn't want something to like debate them, and given some they do actually want it when they don't actually want it.

**Michael Seibel** (1:47)
Most people don't have organic experience with sales. And so they kind of, their vision is like, oh, I walked onto a used car lot to look around, and this genius salesperson convinced me to buy this car. And it's like, that's not even how it works in real life. You didn't just randomly walk on the used car lot. Nobody who doesn't want a car walks on the lot.

**Dalton Caldwell** (2:10)
You made a great point. Do you know what kind of idea we always come up with, like I would come up with? Is guess what? Buying a car sucks, and dealing with car salesman sucks. Buying a house sucks.
Let's just like build a website, and we'll get rid of car dealers.
So this is an example of that. It's like you kind of run into something that's annoying, and you're like, yeah, let's just get rid of that. And again, I'm with you. Let's get rid of that.
I don't like buying a car either, but I think what happens when you, again, haven't done the research, is you were like, oh, actually, there's a reason car dealers exist, and oh, and actually there's incentives for these. This is like, the more you dig into that, you realize that you can't just wave a magic wand and make car dealers go away.

**Michael Seibel** (2:52)
You can't just sprinkle software on the problem.

**Dalton Caldwell** (2:54)
Yeah, or like realtors, like buying a house. Why is it so hard to buy a house? Well, you know, I don't even know how to summarize that. But like a lot of founders want to believe they can just like start a company and revolutionize the home sales process, right?
So I feel where it's coming from, but in practice, the simplistic engineering efficiency arguments don't always work when applied to the real world. I mean, you know about this with hiring, right? Like haven't you seen this with hiring?

**Michael Seibel** (3:24)
I see this in hiring all the time. I see the hiring startup applies to YC, and the thesis is always the same.
I'm an engineer. I'm a genius engineer. And I am being assessed by a non-technical recruiter.
This is a crime. Like this is a crime against humanity. Like it's dehumanizing that I have to go through this experience. And if only the hiring manager was empowered with software, the entire recruiting team and all recruiters would just go away, disappear off the face of the earth through the hiring manager and software. And what's weird is that like I kind of believe the premise. Like I believe an engineer is better at determining whether another engineer is good or bad.
However, I also look at the way the world is organized, and I ask myself, well, if it seems consistently organized that these massive teams of recruiters exist at all these companies, there must be some efficiency going on that I don't understand, right? And the one core thing that I've learned is that even though engineers are better at grading other engineers, there are two other facts. One, they don't tend to enjoy doing it. And two, it doesn't tend to be the greatest way to extract value out of a great engineer.

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