How YC fosters AI Innovation with Garry Tan

**Elad Gil** (0:05)
So, today on No Priors, we're very lucky to have Garry Tan. Garry is currently the CEO, is that the right title?

**Garry Tan** (0:11)
Yeah, president and CEO.

**Elad Gil** (0:12)
The president and CEO of Y Combinator. Prior to that, he ran initialized, early stage venture fund.
He started Postris, which was acquired by Twitter, and has had a storied career working at a variety of Silicon Valley companies, including Palantir and others. Thank you so much for joining us today, Garry.

**Garry Tan** (0:25)
Thanks for having me.
Well, this is going to be our first Collabo episode. So part one on this podcast, part two over at the Garry Tan YouTube channel. So thanks for having me. Thanks for doing the collab.

**Sarah Guo** (0:38)
Super excited about it. Love to work with like a real creator. Okay, let's start with, like you obviously need no introduction, but people want to know the story. Like how'd you go from being a founder to an investor at all?

**Garry Tan** (0:50)
I think Paul Graham basically took a chance on me as a founder, and then later I got burnt out. And YC itself, I like to think of as, today people sort of look at it as this sort of institution. It's sort of the defining place where people want to start their billion dollar companies. But I feel like in 2008, when I first found out about it, it was a little bit more like a punk club in the 90s in Seattle, and sort of grunge was just getting started or something.
Like these things are basically subcultures, and they sort of start off of the internet. And so one of the reasons why Y Combinator was so dominant and even had its chance to start was that Paul Graham's essays for sort of time immemorial, from his experience creating Yahoo Stores, that he would write these essays that basically spoke to the experience of trying to start a company at that moment.
So when you go around sort of the legends of YC, whether it's Patrick Collison at Stripe or my buddy Harge, who I work with, who co-founded a company with Patrick, lots of people, even me, I mean, I basically found out about starting a startup from the news that suddenly, hey, there's this person who could sit in front of a computer, create software that could then touch a billion people. And I was like, oh, it's like perfect mimesis. You're like, oh, I want that. How do I do it? And then you go into Google and you type in, start a startup and you find Paul Graham's essays.
And then increasingly, they're finding this pod and they're finding my YouTube channel and they're finding the Y Combinator YouTube channel. And I think all of that is sort of the direction we're going in, but that's how it started. It was like literally starting a company was a very strange thing. Like when all of us came into tech, that was, I think, more true. Today, I think it's something that a lot more people aspire to and that's a really, really good thing. That's sort of what we want.

**Elad Gil** (2:56)
Yeah, it's funny. In 2007, I started my first company. And I remember at the time, people, if you talk to the investor community about Y Combinator, they'd say things like, oh, there's probably adverse selection and who would take that deal and all this stuff. And that's right when Airbnb got funded by YC, when Dropbox got funded by YC.
And so it's always striking how right when people start naysaying something, that's actually the moment you know it's working. I'm a little bit curious, in 2008, when you were going through YC, who were some of the other people who were in your batch or in that same year?

**Garry Tan** (3:23)
Yeah, I remember, actually, there were probably three or four companies that ended up quote unquote making it, I think.

**Sarah Guo** (3:31)
And how big was a batch at that time?

**Garry Tan** (3:32)
Oh, it was only, I think it was 25 companies total. So, which is funny because that's the number of companies that a group partner now has. We have 14 group partners at YC now and each of them fund between 15 and 25 companies each. So, I like to say that we basically have 14 of those sort of 2008 era batches happening all of the time.
Let's see.
There was a company that actually also sold to Twitter, Mike Montano and Chris Golda startup. And I think it was in basically like comment analytics. And then Mike ended up being VP of Eng at Twitter for many years.