In 2005, I cofounded Y Combinator, the first "accelerator." Today there are hundreds of them all over the world, but in 2005 what we were doing was so unusual that most people in Silicon Valley regarded us as irrelevant.
Y Combinator began the same way as most other startups: with a hypothesis about something we thought people wanted. It turned out they did want it, and we grew and grew. Now we've funded 1867 startups with a total value of over $100 billion.
So having myself been through the type of startup journey that many of you are hoping to, I wanted to tell you my own story.
If you only know about me through the media, you might get the impression that my contribution to Y Combinator is that I’m Paul Graham’s wife. And while I love being his wife, there's a bit more to the story than that.
I was born in Minneapolis in 1971. Later that year, my mother left home, leaving my father alone with a small baby. So he took me back to Boston, where my grandmother lived. I lived with her during the week while my dad worked, and with my dad on weekends.
My grandmother was the most important female role model in my life. She was a very independent person. The term anyone who knew her would use to describe her was "free-spirited." For example, in the wintertime, after putting me to bed, she'd go out and work till late at night on giant ice sculptures she built in the front yard.
She did what she wanted, and she didn't care if people thought she was unconventional.
Despite growing up without a mother, my childhood was pretty happy. My dad made a lot of sacrifices so I could get a great education, and he constantly encouraged me.
I played soccer when I was younger, and when I was in 9th grade we played an away game against a school called Phillips Academy, in Andover, MA. The place seemed so unbelievably fabulous that I decided on the spot that I was going to go to school there.
Little did I know that this decision would have bittersweet consequences. In my old school I'd been a big fish in a small pond. I was a straight A student and good at sports. But when I got to Andover in the fall of 1986, it seemed like everyone was a straight A student and good at sports. I got really discouraged and basically gave up.
I defaulted to being a mediocre student, and did nothing impressive or noteworthy for the next decade. They were like my own personal Dark Ages.
It’s a bit embarrassing to reflect on, but I think it’s important to mention, because when journalists and biographers write about successful founders, they often focus on early predictors of success in their formative years. In my case there certainly weren't a lot of the conventional kind. No one would have voted me "most likely to succeed."
But while I had no "achievements," I did have three defining characteristics when I was younger that were critical in making Y Combinator work.
The first was the quality that caused my YC cofounders to nickname me "The Social Radar." I was one of those kids that you just couldn’t get anything past. If something seemed off or out of character, I noticed and made inquiries. I was always trying to figure things out based on subtle social cues.
The second was that I never liked being at the mercy of anyone else. I hated anyone telling me what to do or not do: parents, teachers, bosses, people I was forced to collaborate with but disagreed with—anyone.
And the third distinctive thing about me is that I've always pretty much been a "straight shooter." My grandmother and my father were both like that.
But I’ll come back to these in a minute.
The day after I graduated from college, my beloved grandmother died of cancer. It was a really sad and lonely time in my life. And now I was supposed to find a job, with a degree in English and absolutely no clue what I wanted to do.
I wound up getting a job at Fidelity Investments in their customer service group, answering calls from 3:30 til midnight each day. Basically talking to retail investors about why their Magellan account went down that day. Ugh. I didn’t love the job but I did love having a job. Working hard and getting paid for it and not having homework hanging over my head. It was great. After Fidelity I worked in investor relations in NYC, then at Food & Wine magazine and at an automotive consulting firm. I even briefly worked for a wedding planner.
In 2003, I was working in the marketing department at an investment bank in Boston when I first met Paul Graham, at a party at his house one night.
We started dating and I felt like I’d finally met Mr. Right. Despite having quite different backgrounds, we were remarkably similar. If I thought I never wanted to be at the mercy of someone else, Paul was that dialed up to 11.
He’d moved back to Cambridge after selling his startup, Viaweb, to Yahoo and was at the time writing essays, working on programming languages, publishing a book, and curing his debilitating fear of flying by learning to hang glide.
Paul is the best problem solver I've ever met. He’s also a genius at expanding ideas and making radical improvements to things. One of his defining characteristics is telling people "You know what you should do..."
Paul and his circle of friends exposed me to this new world of startups. It felt much more exciting than the later stage of publicly-traded tech companies that I was involved with at the investment bank. I read the book Startup by Jerry Kaplan, about his pen computing company called GO, and I was immediately hooked. It was like some light shining down from the heavens.
I wanted to hear more stories about the early days of startups, so I started working on a book of interviews with startup founders. The book was called Founders at Work, and was published in 2007.
At the same time I was becoming more interested in startups, I was becoming less interested in my job. The Bubble had burst a few years back and the investment bank was making drastic cutbacks. Working there had become boring and unpleasant.
So I applied for a job doing marketing at a venture capital firm, where I felt I might be one step closer to the more exciting world of startups. While I was interviewing with the VC firm, Paul would “you-know-what-you-should-do” me each night at dinner, telling me how I should change the VC business once I got into it. We’d talk for hours about how broken early-stage startup funding was, and most importantly, how more people would start startups if it could be made easier for them.
As the VC firm took longer and longer to decide to hire me, the ideas grew more and more compelling until one night Paul said, "Let's just start our own." The next day we convinced Paul's cofounders from Viaweb, Robert and Trevor, to join us part-time. The initial plan was that they would pick and advise the startups and I’d do everything else.
Instead of giving large amounts of money to small numbers of established startups, like traditional VCs did, we'd give small amounts of money to large numbers of earlier stage startups, and then give them a lot of help.
Our initial target audience was programmers, who we felt could handle the technical aspects of a startup but were clueless about everything else, just like Paul, Robert and Trevor had been.
We also had more faith in young founders than most investors did back then. This was back in the days when Google’s VCs had insisted the founders hire an outside CEO as a condition of their series A round.
None of us had any experience at angel investing, and that's where the idea of funding startups in batches came from. We decided to fund a bunch of startups at once, during the summer, so that we could learn how to be investors. In March 2005 we launched Y Combinator’s website, inviting people to apply for what we called "The Summer Founders Program."
We funded 8 startups that summer and recognized almost immediately the power of investing in batches. It was so much better for the founders. They had colleagues to help them during what had previously been a very lonely process. But it was also a much more efficient way for us to help the startups, because we could do things for them all at once. Every Tuesday Paul cooked dinner for all the founders, and at each dinner we brought in a speaker to teach them about startups.
Paul talked to all the startups about what they were building, and I helped them all get incorporated as C corporations. This was a big deal in those days, because back then to become a C corp you had to pay a lawyer $15,000 to do it for you.
The first summer, we gave the startups $6k per founder, which was based on the stipend that MIT gave grad students during the summer. At the end of the summer, we hosted the first Demo Day, for an audience of about 15 investors. Reddit was in that first batch, and the founders of Twitch, though they were working on another idea, and Sam Altman’s geolocation startup.
Though we'd only tried funding a batch of startups as a way to learn how to be investors, we realized within a couple weeks that we were onto something promising. So we decided to do all our investing in batches. And we also decided that we'd fund the next batch in Silicon Valley. We knew that a lot of people would copy us, and we didn't want someone else to be "the Y Combinator of Silicon Valley." We wanted to be that ourselves.
Despite the fact that we’ve grown significantly and have expanded in many ways, YC’s core program is remarkably similar to what it was 13 years ago.
The question I always used to get from people over the years was, "So, what's your role at YC?" It used to really bug me because no one ever asked Paul, Robert, or Trevor that question. But now I think it’s kind of an interesting question to think about. What was my role as the only non-technical founder of Y Combinator?
At the beginning there were tons of errands, like with any startup, that just had to get done and there was no one else to do them. Paul and I divided up responsibilities perfectly, which I think is critical when you start a startup with your partner or spouse. He made our website and the application form, and I got other stuff set up for that first summer: I worked with the lawyers to set up Y Combinator the entity and to create all kinds of template legal paperwork for our standard investments and everything founders would need to set up their company and assign stock properly (which is a lot if you’ve ever done it!).
I also had to learn quickly about how to advise them on filling everything out, so they wouldn’t have to pay any legal fees. I had to set up Paul’s small office building in Cambridge to be our weekly dinner gathering space for 25 people. I set up our bank account and contacted people to speak each week at our dinners. I bought the groceries that Paul cooked for the dinners. I even delivered air conditioners that I’d bought at Home Depot to the founders. I was the only one of us organized enough to make all that stuff happen.
When it came to investing, I had something that my cofounders didn’t have: I was the Social Radar. I couldn’t judge our applicants’ technical ability, or even most of the ideas. My cofounders were experts at those things. I looked at qualities of the applicants my cofounders couldn't see. Did they seem earnest? Were they determined? Were they flexible-minded? And most importantly, what was the relationship between the cofounders like? While my partners discussed the idea with the applicants, I usually sat observing silently. Afterward, they would turn to me and ask, "Should we fund them?"
From the beginning I was careful about only funding earnest people. Back then, I never envisioned the people we funded growing into a community of thousands of YC alumni, but I always tried to create an asshole-free culture. If I could tell someone was a conceited asshole, we didn’t fund them. I’m sure we’ve since funded some conceited assholes, but early on I was pretty rigid about this. And I think it’s the basis of the culture of our alumni community.
So far this stuff might sound a bit different than you’d expect in a successful investor. But when you get to an extreme in something, things get qualitatively different. Y Combinator was a new extreme in the venture funding business, so what made someone a good investor was different. VCs relied on growth figures and estimates of market sizes, but those didn't exist at the stage we were investing. What YC needed was deeply technical people to understand the potential of an idea, and someone like me to understand the founders' characters and the relationship between them. And to do that well you needed abilities no one had previously considered important in an investor.
It was doubly hard because some of the applicants were so young. We had to judge the founders not by what they were, but what they could turn into. Imagine Mark Zuckerberg back in his dorm room in 2004, with a website that let college students see what other students at their school were doing. Not super impressive-seeming to traditional investors.
Another secret weapon of mine that was strangely well-suited to Y Combinator was that I was a very experienced event planner. Events are a critical part of what YC does. When you fund startups in batches, everything’s an event. Interviews are an event, each dinner is an event, Demo Day is an event. As the alumni network grew we started doing events for alumni too, and from the very first year we did big events like Startup School. I’d been doing events for years in my marketing jobs, so I could run all these practically with one hand behind my back.
Probably the thing that was most different about YC as an investment firm was that it felt like a family. And I was its mom; I was soft and sensitive at a time when investors tended to be hardened and aggressive (and I’ll throw in ruthless too for a few of them). I cared about how the founders were feeling, if they were overwhelmed, if they were eating properly. I’d counsel them on relationships that were under strain due to the pressure of the startup. I’d listen at length and help them with their cofounder disputes and breakups.
Starting a startup is emotionally draining for founders, especially in the beginning. Sometimes they just needed someone to listen. Luckily, my entire college career had trained me to be a good listener to people’s social problems.
And I tried to always be a straight shooter with my advice. In fact, we all were. Paul is the straightest shooter I know, which is why his advice is so valuable. He doesn’t bury it in euphemisms. Or worse, withhold the truth in order to preserve people's feelings. And as tough as they might have found his advice at the time, founders always wind up thanking him for his candor.
One other thing Paul and I had in common was that we weren't driven by money. We were interested in startups and we wanted to help people start more of them. This was the basis for everything we did at YC. It was what allowed us to do something as weird as YC in the first place.
Because YC didn't have any LPs early on, we weren’t even constrained by a vague fiduciary responsibility to anyone. This allowed us to take more risks with which startups we chose to fund and also allowed us to be benevolent to failing startups.
That often brought us into conflict with other investors who had different priorities. Early on, we funded a husband and wife team who had a baby. They worked hard on the startup but it was clearly failing. One of their investors tried to get them acquihired by a big company in the Valley, who ultimately passed.
Paul talked to the founders and learned they just wanted the security of jobs, so they could take a break from the constant stress of a startup. So he talked to the big company and got one of them hired there. The founders were delighted. The investor, on the other hand, was livid. He ripped into Paul harder than almost anyone I’ve ever witnessed (well, before Twitter) saying that Paul had blown any chance of an acquihire. I still don't get why investors squeeze founders even over small outcomes like this.
I also never cared much about fame. Or my personal "brand". I just wanted Y Combinator to succeed.
One thing we've learned from Y Combinator is that the most successful startups tend to grow organically out of the founders' lives. This was true in my case too. I was almost uncannily well suited for the kind of work it took to make YC successful. But the things that made me well-suited for it were so far from the qualities most people associate with startup founders. I'll list them so you can see for yourself. I was the social radar, a good event planner, maternal, empathetic, a straight shooter, and not driven by money or fame. Think how far that is from the profile of the typical startup founder you read about in the press. Maternal? Since when was that an important quality in a startup founder? Let alone the founder of an investment firm. And yet it was critical to making YC what it is.
That's why I wanted to tell you my story. It's not true that every person can start every startup. But a lot more people have what it takes to start some startup than realize it. A lot of people, perhaps all people, have some distinctive combination of abilities and interests. And a lot of those combinations match some startup idea.
So if you want to start a startup, I recommend you try asking yourself what's distinctive about you. What unique combination of abilities and interests do you have? And don't edit your answers, because as my example shows, the most unlikely ingredients could be the key to the recipe.
In fact, it may even be that the strangest combinations of qualities are the most valuable. I had a weird combination of qualities, but they matched YC because it was such a weird company. And the most successful startups do tend to be weird. They're usually such outliers that the idea sounds preposterous at first. To everyone except the founders, because the company has grown out of their experiences.
So what can you learn from my story? Here are 9 things:
1) There is no one mold for a successful founder. Just because you might only see a certain type in the news, that doesn’t mean you need to turn yourself into that.
2) Do what you’re genuinely interested in and try to play to your natural strengths. A startup is so much work that you'll give up if you're not genuinely interested in it.
3) Don’t pay attention to the mainstream’s opinion of what you're doing—whether it’s your skills, your idea or whatever. Unless they’re your users, their opinion does not matter. (Pay a lot of attention to your users' opinions though!)
4) Find a cofounder with complementary skills, but the same moral compass as you. Paul and I had the perfect combination of skills to start something like YC. We agreed on all the big questions, and we each deferred to the other's expertise on the small ones.
5) Focus on making something people want. Everything follows from that. In 2005, people needed a way to get a small amount of funding easily.
6) Don’t let rejection distract you or hold you back. You’ll get rejected in so many different ways, but you must keep moving forward.
7) Start small so you can be nimble and open to change. We never could have pulled off moving our operations to Silicon Valley in a matter of months if we'd hired a bunch of people in Cambridge. To this day, YC has a tradition of trying things on a small scale before expanding them.
8) It’s ok not to have gone to an elite college. I grew up thinking that that was the be-all and end-all. You’ve been trained to believe that you’ll be judged by your credentials. But in a startup it's the users who judge you, and they care about your product, not your credentials.
9) Be intrepid. There's room for lots of different kinds of people to be startup founders, but you do need a certain amount of boldness—to work on ideas that most people would consider stupid, and to keep going when you're ridiculed or ignored.
You are a jigsaw puzzle piece of a certain shape. You could change your shape to fit an existing hole in the world. That was the traditional plan. But there's another way that can often be better for you and for the world: to grow a new puzzle around you. That's what I did, and I was a pretty weird-shaped piece. So if I can do it, there’s more hope for you than you probably realize.