SPEAKER_00: Guess what gives you passion? You want to hear the secret? Guess what keeps you attached to an idea? The damn thing working. Success, users, revenue, numbers. That makes a lot of these folks that have no particular ideas suddenly care a lot more when they actually are running a business that appears to be working.
SPEAKER_01: Hey, this is Michael Sibel with Dalton Caldwell and welcome to Rookie Mistakes. We ask YC founders for their rookie mistakes so we can share them with you and help you avoid them. YC founder wrote in and said, we chose to create a company around a hot technology. We were really excited about the tech. We eventually raised funds because there were enough investors who were excited about it too. But now looking back, I think we had it backwards. We were the classic Silicon Valley startup in search of a problem.
SPEAKER_00: Michael, let's start with the definition of solution in search of a problem. What do we mean by that? Solution in search of a problem is where you build a thing and you're like, we have this thing. We just need to find someone who wants it. We need to find a use for it. We have the solution and let's go out and find a problem for it. And as long as technology has existed, this has been an issue. Remember reading about the patent system, there's millions of patents for products like better mouse traps or whatever that there's actually no market for whatsoever. And so this is, as long as humans have been banging rocks together, there have been rocks that were not, that were solutions, but they weren't useful for anybody. And so look, this happens a lot with technologists, that happens a lot with Silicon Valley where they start with a technology they think is cool and they try to find a market for it second. Now, the core thing that I wanna talk about here that you sort of zeroed on is founders with no particular opinions about what the market should be and no ideas on who the customers are or anything, they're just sort of floating in space.
SPEAKER_01: The best explanation that I've come up with is that there's a bit of a school metaphor here. I think that people are trained in school for so long that they try to see startups like school. And in school, you're not really rewarded for having opinions on things. You're awarded for accomplishing specific tasks. And so you're also rewarded when you're doing things that your smart friends are also doing. And so I think when they apply that model to their startups, they think, okay, someone invested in me, that's like getting an A on paper. I'm doing an idea that my friends think is really cool. That's like getting into a college, my friends think is really cool. It's just kind of this rinse and repeat of the strategy that's worked for them in the past.
SPEAKER_00: Well, and you see the superficial similarity between what you're doing and things that appear to be working, and you try to hide from the fact that you have no idea what you're doing or you don't believe it. You have no particular opinions on what it is. And so what's brutal about this is you have to really look in the mirror and understand the difference between superficial similarity of what you're doing and kind of going through the motions versus the damn thing actually working. We talked about the surface issues.
SPEAKER_01: Let's go deeper. How are you actually supposed to figure out what to look like? That's the real thing. Let's say you find yourself attracted to stuff and you're like, all right, I believe you. I believe you, Dalton. I'm not gonna do a blank startup because it's the coolest technology right now. How do I figure out what to work on?
SPEAKER_00: I think a lot of people get told to follow your passion. I'm looking for a project, a project, again, that's a good tell. If you call it a project,
SPEAKER_00: it's a bad sign. They're looking for a project we are very passionate about. And so you sort of go through this spirit journey of what all the problems are that face humanity or something. And so you're like, okay, Michael, we figured out our passion is the environment.
SPEAKER_00: Yep. That's our startup. And you're like. And so again, I think when people give the advice of follow your passion, they're trying to be helpful. What do you think that actually means in a way that is actionable when someone is saying that? What does it mean to follow your passion when you're finding a startup? I wanna break this down into two parts.
SPEAKER_01: Part one, there are people out there that have real problems that encounter real problems on a daily basis. They are passionate about solving those real problems and they can actually see even in their MVPs the problems being solved. I think for those people, I wanna push them to solve the real problems in their lives. I think there's a whole set of other people who don't have very many problems in their life. And I think those people kind of reach for the UN problems or the global problem, right? The problems that they are told they should care about but they don't really encounter on a day to day and they can't really tell whether they're improving them or not. And so I think you and I always kind of get into debate on this because for that person who grew up, we have funded people who in their country when you try to swipe a bank card, the transaction doesn't go through like two out of five times. And we funded them and they've actually fixed that. And that wasn't a theoretical problem but that turned into actually improving banking in their country, right? Then we funded other people who absolutely didn't have that. So to me, I'm happy to talk about the other things that you can trigger on if you don't have that real problem in your life. But what do you think about the people who do have the real problem in their lives and they're going after it?
SPEAKER_00: I think in terms of this passion thing, like let's dig way back into history. Yes. What was the genesis of the companies, Microsoft and Apple? I mean, Microsoft, you know, flashback to the 70s, my recollection of the story is it was some folks that really liked computers when they were a new thing and someone needs to port basic, which was a programming language onto some weird hardware sold out of a strip mall in Albuquerque. And so these were just folks that were really into this weird niche thing, but no one told them to go work on microcomputers.
SPEAKER_00: They weren't following, you know, their professors weren't telling them that it was a great market. I don't think anyone would have, but there wasn't that stuff. It wasn't hot. They probably wouldn't have been working on that stuff even if there was no money in it, right? Yeah. That's how I define passion is, would you be doing this stuff even if you didn't make any money doing it? Yes. And I think with Apple, same deal. Like, you know, they were working on stuff they thought was cool, like Homebrew Computer Club and welding, excuse me, soldering stuff in your garage and trying to make software run on it. That was, I think, how they were passionate about the ideas. And so going back to having an opinion or being passionate, I think it's finding stuff that like you care about
SPEAKER_01:
SPEAKER_00: even if there was no money in it and that you're doing it even if there's no approval from it from authority figures. It's a bit of an anti-authoritarian deal that you're like, yeah, yeah, I know this is stupid but I think it's cool.
SPEAKER_00: And I know everyone thinks it's stupid.
SPEAKER_01: I think the no money of it in it is like the easy one. I think the no approval from authority figures, like, you can't imagine yourself becoming Elon Musk solving this problem. You can't imagine the press loving you. You can't imagine, because like I would argue that when Elon Musk was starting, he couldn't imagine that that would, you know, how much of a Cinderella story he's become, right? And so I do feel like there's this like, I'm gonna be fulfilled if I solve this problem even if no one else gives a shit. So that is an area of, okay, I'm passionate about a problem. I would argue that in a lot of the teams that we fund, two, three, four founders, they're not all equally passionate about the problem, right? That's hard, right? Like, oh, we're all in love with this. So one of the things that I've thought about a lot is what are the other things you can be passionate about in the context of startups that can motivate you to grind it out for years? Cause like that's the bar, right? Like what are you gonna work on when everyone thinks it sucks for years? So again, like let's,
SPEAKER_00: to dispute what we ourselves are saying, we're gonna have a debate with ourselves. Look, the problem with being like 19 or 20 is a lot of people aren't passionate about many things and they all tend to have the same startup ideas. And so let me give you a great example.
SPEAKER_00: I wanna find a way to plan to do activities in the real world with my friends. It's too hard to coordinate and plan activities with them. And so I'm really passionate about this, Michael. This is my-
SPEAKER_01: One of my biggest problems in life.
SPEAKER_00: This is my, we thought about it, finding a way to coordinate, going out with my friends is like the biggest problem we know about, we care about it, we're experts. So, we're gonna do it. What these people don't know is this is literally the most common college kid idea that's been tried for at least 20 years, right? Nope.
SPEAKER_01: Well, they would know if they did any Google searching.
SPEAKER_01: But they're experts, so they don't have to do any Google searching. Well, Michael, no one just implemented correctly.
SPEAKER_00: See, we have a better UI dynamic. So all the thousands of companies that tried this, they were all wrong and we're right. I'm passionate- It should have been by voice.
SPEAKER_01: That was the problem. So where I'm going with this is,
SPEAKER_00: to the extent that the stuff that you care about the most is the same as everyone else, or you don't actually have unique passions, you might want to zoom out a little bit and not have passion be your primary mode of making a decision. Because guess what's really fun? Guess what gives you passion? You want to hear the secret? Guess what keeps you attached to an idea? The damn thing working. Success, users, revenue, numbers. That makes a lot of these folks that have no particular idea suddenly care a lot more when they actually are running a business that appears to be working. Do you know how fun that is? I don't think people get this. Running a startup that is not working is not fun. Every day you wake up and it feels bad and you feel like you're free falling or something. And you're like, you know the music's going to stop. You know you're dead. Running something that's working where you're getting customers and every day you see your Stripe account inching up where you're making thousands or tens of thousands of dollars is awesome. And you might actually develop passion
SPEAKER_00: for the thing you're working on and come to understand your customers' problems. Because the gravity of the damn thing working brings you in deeper and deeper. This shocks a lot of young teams. Have you seen this Michael? Where teams with no ideas that somehow find like a business that works or that there's market demand for suddenly fall in love with the thing they're working on? Talk to me about some of that.
SPEAKER_01: That was Twitch. That's exactly Twitch. Tell us about it. So, you know, in my mind, the thing that kept us motivated with Justin.tv and Twitch
SPEAKER_01: was that users wanted to stream live video online. And I can't say that we were that passionate about streaming live video online, but certainly when we put something out there and we started seeing people use it, they were. And even though the company wasn't doing well for years, we always had a lot of traffic. The company wasn't doing well, and we had like 30 million monthly visitors. And we were streaming years of video to them. And so it was shocking how we didn't lose employees as fast as you would think. Once you had something going, keeping it going, was motivation in and of itself. And the other thing I was thinking about when you were talking was like, I always like sports analogies on this, right? Like, is the person who becomes the best in some sport, the person who was nerding out on it the earliest? Or is the person who's a great athlete and when they play the sport, they do well. And they're like, oh shit, like I'm pretty fast. Like, oh shit, like I can do this. Oh shit, like I can jump higher than my friends. When I'm playing against my friends, I'm disproportionately doing better. And then that creates the positive feedback. Like, I wanna do better, I wanna do better. Now I'm gonna become a student of the sport. Now I'm gonna specialize. Now I'm gonna, but it started by like, oh this is fun because I'm doing well. And so I think. Winning feels good. Exactly, winning feels, it's that simple. And so when I talk to founders about this, I say, hey look, you got a team of two, three, four people. Maybe you're gonna have one or two who are passionate about the problem because they've experienced it or because it's a life work or so on and so forth. But the other things that you can be passionate if you're on the team on is one, your co-founders. Working with friends is so much fun. Compared to a job at Google, working with your friends feels like winning. Not having a boss feels like winning. Being able to choose what you get to do every day feels like winning. I think there's a certain set of somewhat broken people, and I would put us in that group, where having consequences feels like winning. If I'm playing in a sandbox and everything is controlled and I can't do anything wrong, it doesn't feel like winning. If I can lose, games have losers and winners, right? If I can lose, it's much more likely to feel like winning. I think those are the things that you can kind of tie yourself to, at least for a little while, before you've got clear evidence that you're customers, you're solving a real problem for your customers.
SPEAKER_00: So- And it's a riff on this, man. I actually think what you're talking about and what I always suggest founders do is intentionally set up motivators, like psychological motivators around you, to intentionally game yourself. Very intentionally, the same way you would be training a pet or something, you train yourself, right? And when you set yourself up with a startup idea, with no opinions, with no customers, with no revenue,
SPEAKER_00: searching for amorphous goals that are ill-defined- Working with strangers. Working with strangers, you could not create a shittier environment to ever do anything good, because there's no rule. And you just wake up every day and you do things, and maybe something happens, maybe it doesn't, but you're hoping that you'll be discovered someday. I don't even know what you're hoping for. So you're hoping magical things will happen to you, okay? Versus when you set it up so that you're like, okay, our job is to get revenue. But so many founders are like, well, I don't want revenue. I think that'll slow our growth. They have theoretical reasons, but what's good about having revenue is it's a number. And you can look at the number every day. If the number goes up, your brain will feel good.
SPEAKER_01:
SPEAKER_00: Your brain will release chemicals when you make money that is fun.
SPEAKER_01: And you'll work hard another day. It's weird.
SPEAKER_00: And so again, you're like, yeah, yeah, yeah, I know, I know. No, but really, this is one of those hacks to hack your motivation if you're not motivated to work on your idea or work on your startup is you just decide to make money, make that a metric you care about, and then feed the beast as the money comes in, as you search for the money, you'll feel better and better and it becomes addictive. And that's how you create the passion. That's how you bootstrap it if you're floating in space with no opinions.
SPEAKER_01: So if we wrap this up, I think what we're trying to say is that the failure case, the startup in search of a problem, doing hot tech, raising money and their friends think is cool, this is the type of person who's thinking that there should be extrinsic motivators, that startups are based on these extrinsic motivators. The folks who are willing to work on something that's not cool, who are working with friends or people they enjoy spending time with, who are willing to work on something even if it doesn't work, even if they won't get famous, even if they won't get rich, those people are searching for intrinsic motivators. Those people are trying to figure out what can I do every day to make myself feel better at the end of the day, the beginning of the day. And counterintuitively, because this thing is so hard, startups, the intrinsic motivator folks win in the long run, even though the extrinsic motivator folks tend to look like they're winning earlier. And so that's the mental trick you've gotta do, right? It's like 95% of your friends doing startups are extrinsically motivated and their startups are gonna die in the next two or three years. And a lot of those are gonna raise money and hire people and get offices and so on and so forth, but almost all of them are gonna die. And the person who everyone thinks is a little too weird, like not working on the normal thing, not growing as fast as they might think is normal, not caring about what the press and yada, yada, yada, those disproportionately end up surviving that two to three years and building something people want. And so, man, avoid the trap, right? Avoid the extrinsic motivation trap. It's great for getting into a good high school or good college, not so good for the whole startup game.
