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I'm sure this will get downvoted into oblivion, but why should I or other engineers/entrepreneurs look at Sam Altman as a massive startup success story when his

I'm sure this will get downvoted into oblivion, but why should I or other engineers/entrepreneurs look at Sam Altman as a massive startup success story when his lone startup Loopt never really achieved product-market fit, and ended up in a firesale? Across 5 funding rounds, Crunchbase lists Loopt as having raised $39 million and then was acquired (acqui-hired?) for $43 million. He didn't create any multiples of value for his investors. Loopt wasn't a breakout hit like so many other YC startups have been. It was certainly one of the first interesting location-based apps in the App Store, but soon was surrounded by other location-based apps and never really appeared to surface and gain traction. Obviously Sam runs YC now and has dramatically improved it, but in the lens of being an entrepreneur, isn't he still essentially unproven, and not a success story in the startup world?

drzaiusapelord 10y ago
While we're at it, how about Mark Cuban? Did Broadcast.com ever work past a basic stage? Did it ever have huge, if any, positive revenues? It really sounds like he bought a domain name and fucked around a little with html and won big in the dotcom craze. A lot of "heroes" in this world are fairly fraudulent. Worse, some went from young tech luminaries to older VC sharks with questionable ethics like Mark Andreeson. I think coding and tech, in general, is mostly a meritocracy, but on the business end its practically the lottery. Right time, right place and other luck of the draws determine financial success just as much as the merit of the product, if not more so.
- hugs 10y ago
  There's yet another kind of startup founder, who merely starts a successful company that makes millions of dollars per year and is still in business almost a decade later. The company doesn't fail, but it doesn't have a huge blow-out liquidity event, either. The founder remains heads-down, in the trenches, with no interest in going the VC route. Regardless, they're in a boring B2B niche, so you'll never read about them.
  - nibs 10y ago
    So much more likely to succeed and so much less likely to make $100M. Definitely the surest path to $5-10M near the end of your career. If you only want <$5M perhaps being a corporate VP would be more optimal risk adjusted. This is my strong preference, I just wish there were more of a culture of that here. It could be the fact that this is a start-up forum but sustainable B2B niche business is really interesting and provides good opportunities to create wealth and do impactful work. It is merely less interesting to investors with large overhead and expectations. So it makes sense investors go big.
    - drzaiusapelord 10y ago
      The problem with that approach is that getting a high level VP position at a non-trivial sized company is pretty competitive and there are only so many open slots to go around. It also requires a strict career plan and the ability to play office politics very well, which I think most techies struggle with. Being the guy who sells a small app, service, or utility on the side and clearing $150k a year, or more, via mostly passive income is a much easier trick to pull off. Also this approach can come with a sweetheart acquisition deal from a larger company that wants your product and can run in the millions, on top of what you've earned already.
- eiliant 10y ago
  could you elaborate on mark andreesson?
marmaduke 10y ago
They say the lesser musicians become music teachers, maybe there's a similar thing here. Tbh this advice reads like a brainwash in making yourself more exploitable.
potatosoup 10y ago
I don't think this has to be a negative question, and can be constructive (positive) if worded differently. If anything, I'd want to learn what I can do to follow a similar path I remember reading PG saying that Sama is one of the brightest entrepreneurs he has met, and I always wanted to hear the backstory since Loopt is the only data point we have from the outside.
sama 10y ago
I turned out to be a better investor than an entrepreneur (though somewhat to my surprise running YC is more about running a company than being an investor). I think I've learned a lot from working closely with entrepreneurs that run massively successful companies that's worth sharing. If you disagree, no one is making you watch this. You're free to hit the back button.
- npezolano 10y ago
  I find you learn the most from mistakes, either your own or from others.
  - Alupis 10y ago
    > either your own or from others. If people honestly learned from the mistakes of others - I assert there'd be an awful lot fewer mistakes.
    - anexprogrammer 10y ago
      and parenting would be so much easier. It's painful knowing they won't learn something until they do the same stupid thing themselves.
  - rhizome 10y ago
    There's a huge perverse incentive lurking in there.
- loceng 10y ago
  YC's leading metric is the success of its investments, without that foundation then all other decisions will be off. Starting off on the right foot is more important IMHO than being fantastic at running a company.
- MediaSquirrel 10y ago
  @Sama – Your previous failure(s?) is probably (part of) what makes you hungry. If you were already some super-rich, uber successful dude, then why commit yourself so fully to something so hard and so new? You're not some fat happy rich dude like most VCs. You've got something to prove, and that drives you. To me, your past failure is not a liability, but an asset. YC is your chance to make a mark on the world. (I don't know if this is how you actually feel deep inside, but if it is, I wish you spoke of it so.)
tptacek 10y ago
By top 10 YC startup standards, Paul Graham's Viaweb success isn't all that interesting either. But, of course: if the model they're building with YC works, this is the outcome you'd expect. YC wouldn't be very interesting if its outcomes were capped to Viaweb's and Loopt's.
- CptJamesCook 10y ago
  Paul Graham started Y Combinator, which is a company. Paul Graham was a borderline founder of Reddit, as well.
  - dwaxe 10y ago
    By YC startup standards again, Reddit isn't a very successful company. The amount of early investment that went into it has certainly paid off, but monetization is a seriously hard problem for them.
    - CptJamesCook 10y ago
      Reddit's last round valued them at $500 million, and it is something like the 25th most visited site on the Internet. That's a successful company by any standard.
      - Alupis 10y ago
        > Reddit's last round valued them at $500 million > That's a successful company by any standard. Simply being "valued" at some dollar amount doesn't actually mean success. Revenue and positive net profit mean success...
        Reedx 10y ago
        What if Reddit is around for 50 years, paying dozens of employees the whole time while never making a net profit. Would that not be a successful company to essentially everyone? (except the investors)
sfsylvester 10y ago
>in the lens of being an entrepreneur This is a valid point, but the majority of the content in this video (and in this series) is to help entrepreneurs. As the President of YC, his entire life now is spent helping entrepreneurs and given his track record in helping companies becoming very serious brands out of quite literally nothing [1] is clearly important and something worth listening to. [1] https://en.wikipedia.org/wiki/List_of_Y_Combinator_startups https://en.wikipedia.org/wiki/List_of_Y_Combinator_startups
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elmar 10y ago
I think is unfair to classify the entrepreneur solely based on their exit multiple, my view only people that work daily with the entrepreneur can be the judges.
lpolovets 10y ago
To add another data point in support of Sam's comment, I think one can build a good understanding of entrepreneurship and how to increase the chances of success without having been a hugely successful founder. I joined VC four years ago because I wanted to learn more about early-stage startups before starting my own, and I ended up falling in love with the job. I've learned a ton about factors of success and failure over the last few years. My belief is that there's a large chunk of building a company that I will never learn or understand without becoming a founder myself. Maybe that's 50% of success. However, for the other 50%, I can actually learn things better than many founders because they have a sample size of one or two or three startups that they have started, while I can look across fifty or a hundred companies that I am intimately involved in and analyze what is different between the ones that become huge and the ones that do not. I think this cross-sectional pattern matching is what makes a lot of VCs and investors sources of good advice (in some startup topics) even though they might not have built huge companies themselves.
- mattmanser 10y ago
  I watch football. By watching football I have built a good understanding of football management and how to increase the chances of success without having been a hugely successful football manager. Maybe that's 50% of success of being a football manager. I can learn more than other football managers because I can watch lots of football games on Sky Sports. That's why many top premiership teams hire their managers by finding the people who watch the most football games on TV. EDIT: I'm sure there's plenty here who have been in more startups than me, but in the 4 or so I've been in, I've heard conversations between founders and investors plenty of times. Often little of what comes out of the founders mouth is based in reality. Sometimes they're not seeing reality as it really is, sometimes they're painting a rosier picture, sometimes they're outright lying, sometimes they're tired and not thinking straight, sometimes they've got obsessed by something utterly irrelevant. Sometimes they're not actually listening to the staff, or not even asking the right questions. As a VC or researcher or whatever, you're not actually playing the game. You're not on the team, you're not on the field, you're not even on the side-lines. You're seeing a different game than's being played.
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the_common_man 10y ago
Same reason why we read books. Most book authors just write on stuff. They are very good at communicating a topic clearly but haven't 'achieved' much themselves. Same with Sam. His observations and insights are very useful and he is able to communicate them clearly.
pg_is_a_butt 10y ago
uh... that is the point. how do you build the future? you let someone else do it, and shylock a percentage.
lifeisstillgood 10y ago
To be fair, Warren Buffet has never been much of a traditional entrepreneur but I would certainly listen if he gave me advice on my business. Perhaps some people are players, some are coaches.
- enraged_camel 10y ago
  Buffet does give great advice for running well-established companies, but to my knowledge he doesn't say anything about entrepreneurship. Starting a company requires a very different set of skills than running one. That's why a lot of founders either step down or get ousted after their companies mature.
cma 10y ago
> It was certainly one of the first interesting location-based apps in the App Store, but soon was surrounded by other location-based apps and never really appeared to surface and gain traction. I think you are selling the prescience of it short in this part. Loopt was out long before the App Store existed.
dota_fanatic 10y ago
In the 5 vs 5 multiplayer game Dota 2, a given team's composition in the game is roughly broken down into two categories (pretty big over-simplification but let's run with it), carry and support. Carries are meant to "carry" their team on their back through perfect execution in their actions, leveraging the raw potential of the character they're controlling in that particular match. Being a professional carry player demands a very high level of mechanical skill and moment-to-moment tactical awareness. Support players on the other hand, are relied upon to support the carries by getting supportive items, maintaining control over the map (fog of war is in effect), being in the right places at the right times so as to provide their carry with space to work, and generally staying at a higher level of awareness in order to make more of the big picture calls. Most teams' leader will play a support character. I suspect something similar may be at work here, in that he is very good at choosing and supporting "carries". There are probably very many people in the world who are very perceptive, empathetic, and can achieve a high level of understanding, making them well-suited for leadership positions, but without luck in addition to giving it their best effort, are never put in a position to shine. Just because someone will never be a top-tier carry, doesn't mean they can't ever be a top-tier support, but our society tends to demand the former before you're trusted to do the latter. Or not, just thinking out loud here. :)
DrNuke 10y ago
At the very least he summarises for us the YC data and puts forward (for free) the hints, the best practices, the recurrent patterns that characterise a good lot of the most successful startups in the world. He is a privileged but educated observer from within who can also relate with his own experience as a non-stellar performer as a startupper, if you want. A facilitator and an aggregator, isn't he?
bexp 10y ago
Agree with above, Sama puts himself into same bucket of people as Zuck and Musk in how to build future series. What he has build so far ? Happened to be a VC partner sitting on huge pile of cash, distributing it to bunch of YC applicants ? I could see Paul Graham as YC founder takes some credit for creating all YC unicorns, Sam is just one of many partners in VC firm, nothing outstanding though.
- jonknee 10y ago
  > Sam is just one of many partners in VC firm, nothing outstanding though. He is the President.
  - bexp 10y ago
    In VC world there are only Limited Partners (LP who give money) and general/managing partners (who invest money), everything else is non-essential.
Gatsky 10y ago
I think the answer is pretty obvious - the advice that successful people give is almost universally useless. The more down to earth less egotistical ones accept this, and don't give out specific advice (eg Warren Buffet, or Bill Gates). But others can't help it. Your premise that we should listen to only the very successful is not well based in that regard. From first principles, if you were looking for someone to give startup advice, then you want someone who has: been through the process; doesn't suffer from survival bias which just elevates all the random things they did and weird habits they have to some kind of mystical formula; has seen many other people go through the process from the very early to late stages. That's why you should listen to Sam Altman. If you want to worship mega-entrepeneurs then there are many other avenues for that activity.

drzaiusapelord 10y ago

While we're at it, how about Mark Cuban? Did Broadcast.com ever work past a basic stage? Did it ever have huge, if any, positive revenues? It really sounds like he bought a domain name and fucked around a little with html and won big in the dotcom craze. A lot of "heroes" in this world are fairly fraudulent. Worse, some went from young tech luminaries to older VC sharks with questionable ethics like Mark Andreeson. I think coding and tech, in general, is mostly a meritocracy, but on the business end its practically the lottery. Right time, right place and other luck of the draws determine financial success just as much as the merit of the product, if not more so.

hugs 10y ago
There's yet another kind of startup founder, who merely starts a successful company that makes millions of dollars per year and is still in business almost a decade later. The company doesn't fail, but it doesn't have a huge blow-out liquidity event, either. The founder remains heads-down, in the trenches, with no interest in going the VC route. Regardless, they're in a boring B2B niche, so you'll never read about them.
- nibs 10y ago
  So much more likely to succeed and so much less likely to make $100M. Definitely the surest path to $5-10M near the end of your career. If you only want <$5M perhaps being a corporate VP would be more optimal risk adjusted. This is my strong preference, I just wish there were more of a culture of that here. It could be the fact that this is a start-up forum but sustainable B2B niche business is really interesting and provides good opportunities to create wealth and do impactful work. It is merely less interesting to investors with large overhead and expectations. So it makes sense investors go big.
  - drzaiusapelord 10y ago
    The problem with that approach is that getting a high level VP position at a non-trivial sized company is pretty competitive and there are only so many open slots to go around. It also requires a strict career plan and the ability to play office politics very well, which I think most techies struggle with. Being the guy who sells a small app, service, or utility on the side and clearing $150k a year, or more, via mostly passive income is a much easier trick to pull off. Also this approach can come with a sweetheart acquisition deal from a larger company that wants your product and can run in the millions, on top of what you've earned already.
eiliant 10y ago
could you elaborate on mark andreesson?

marmaduke 10y ago

They say the lesser musicians become music teachers, maybe there's a similar thing here. Tbh this advice reads like a brainwash in making yourself more exploitable.

potatosoup 10y ago

I don't think this has to be a negative question, and can be constructive (positive) if worded differently. If anything, I'd want to learn what I can do to follow a similar path I remember reading PG saying that Sama is one of the brightest entrepreneurs he has met, and I always wanted to hear the backstory since Loopt is the only data point we have from the outside.

sama 10y ago

I turned out to be a better investor than an entrepreneur (though somewhat to my surprise running YC is more about running a company than being an investor). I think I've learned a lot from working closely with entrepreneurs that run massively successful companies that's worth sharing. If you disagree, no one is making you watch this. You're free to hit the back button.

npezolano 10y ago
I find you learn the most from mistakes, either your own or from others.
- Alupis 10y ago
  > either your own or from others. If people honestly learned from the mistakes of others - I assert there'd be an awful lot fewer mistakes.
  - anexprogrammer 10y ago
    and parenting would be so much easier. It's painful knowing they won't learn something until they do the same stupid thing themselves.
- rhizome 10y ago
  There's a huge perverse incentive lurking in there.
loceng 10y ago
YC's leading metric is the success of its investments, without that foundation then all other decisions will be off. Starting off on the right foot is more important IMHO than being fantastic at running a company.
MediaSquirrel 10y ago
@Sama – Your previous failure(s?) is probably (part of) what makes you hungry. If you were already some super-rich, uber successful dude, then why commit yourself so fully to something so hard and so new? You're not some fat happy rich dude like most VCs. You've got something to prove, and that drives you. To me, your past failure is not a liability, but an asset. YC is your chance to make a mark on the world. (I don't know if this is how you actually feel deep inside, but if it is, I wish you spoke of it so.)

tptacek 10y ago

By top 10 YC startup standards, Paul Graham's Viaweb success isn't all that interesting either. But, of course: if the model they're building with YC works, this is the outcome you'd expect. YC wouldn't be very interesting if its outcomes were capped to Viaweb's and Loopt's.

CptJamesCook 10y ago
Paul Graham started Y Combinator, which is a company. Paul Graham was a borderline founder of Reddit, as well.
- dwaxe 10y ago
  By YC startup standards again, Reddit isn't a very successful company. The amount of early investment that went into it has certainly paid off, but monetization is a seriously hard problem for them.
  - CptJamesCook 10y ago
    Reddit's last round valued them at $500 million, and it is something like the 25th most visited site on the Internet. That's a successful company by any standard.
    - Alupis 10y ago
      > Reddit's last round valued them at $500 million > That's a successful company by any standard. Simply being "valued" at some dollar amount doesn't actually mean success. Revenue and positive net profit mean success...
      - Reedx 10y ago
        What if Reddit is around for 50 years, paying dozens of employees the whole time while never making a net profit. Would that not be a successful company to essentially everyone? (except the investors)

sfsylvester 10y ago

>in the lens of being an entrepreneur This is a valid point, but the majority of the content in this video (and in this series) is to help entrepreneurs. As the President of YC, his entire life now is spent helping entrepreneurs and given his track record in helping companies becoming very serious brands out of quite literally nothing [1] is clearly important and something worth listening to. [1] https://en.wikipedia.org/wiki/List_of_Y_Combinator_startups https://en.wikipedia.org/wiki/List_of_Y_Combinator_startups

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elmar 10y ago

I think is unfair to classify the entrepreneur solely based on their exit multiple, my view only people that work daily with the entrepreneur can be the judges.

lpolovets 10y ago

To add another data point in support of Sam's comment, I think one can build a good understanding of entrepreneurship and how to increase the chances of success without having been a hugely successful founder. I joined VC four years ago because I wanted to learn more about early-stage startups before starting my own, and I ended up falling in love with the job. I've learned a ton about factors of success and failure over the last few years. My belief is that there's a large chunk of building a company that I will never learn or understand without becoming a founder myself. Maybe that's 50% of success. However, for the other 50%, I can actually learn things better than many founders because they have a sample size of one or two or three startups that they have started, while I can look across fifty or a hundred companies that I am intimately involved in and analyze what is different between the ones that become huge and the ones that do not. I think this cross-sectional pattern matching is what makes a lot of VCs and investors sources of good advice (in some startup topics) even though they might not have built huge companies themselves.

mattmanser 10y ago
I watch football. By watching football I have built a good understanding of football management and how to increase the chances of success without having been a hugely successful football manager. Maybe that's 50% of success of being a football manager. I can learn more than other football managers because I can watch lots of football games on Sky Sports. That's why many top premiership teams hire their managers by finding the people who watch the most football games on TV. EDIT: I'm sure there's plenty here who have been in more startups than me, but in the 4 or so I've been in, I've heard conversations between founders and investors plenty of times. Often little of what comes out of the founders mouth is based in reality. Sometimes they're not seeing reality as it really is, sometimes they're painting a rosier picture, sometimes they're outright lying, sometimes they're tired and not thinking straight, sometimes they've got obsessed by something utterly irrelevant. Sometimes they're not actually listening to the staff, or not even asking the right questions. As a VC or researcher or whatever, you're not actually playing the game. You're not on the team, you're not on the field, you're not even on the side-lines. You're seeing a different game than's being played.
- 10y ago

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the_common_man 10y ago

Same reason why we read books. Most book authors just write on stuff. They are very good at communicating a topic clearly but haven't 'achieved' much themselves. Same with Sam. His observations and insights are very useful and he is able to communicate them clearly.

pg_is_a_butt 10y ago

uh... that is the point. how do you build the future? you let someone else do it, and shylock a percentage.

lifeisstillgood 10y ago

To be fair, Warren Buffet has never been much of a traditional entrepreneur but I would certainly listen if he gave me advice on my business. Perhaps some people are players, some are coaches.

enraged_camel 10y ago
Buffet does give great advice for running well-established companies, but to my knowledge he doesn't say anything about entrepreneurship. Starting a company requires a very different set of skills than running one. That's why a lot of founders either step down or get ousted after their companies mature.

cma 10y ago

> It was certainly one of the first interesting location-based apps in the App Store, but soon was surrounded by other location-based apps and never really appeared to surface and gain traction. I think you are selling the prescience of it short in this part. Loopt was out long before the App Store existed.

dota_fanatic 10y ago

In the 5 vs 5 multiplayer game Dota 2, a given team's composition in the game is roughly broken down into two categories (pretty big over-simplification but let's run with it), carry and support. Carries are meant to "carry" their team on their back through perfect execution in their actions, leveraging the raw potential of the character they're controlling in that particular match. Being a professional carry player demands a very high level of mechanical skill and moment-to-moment tactical awareness. Support players on the other hand, are relied upon to support the carries by getting supportive items, maintaining control over the map (fog of war is in effect), being in the right places at the right times so as to provide their carry with space to work, and generally staying at a higher level of awareness in order to make more of the big picture calls. Most teams' leader will play a support character. I suspect something similar may be at work here, in that he is very good at choosing and supporting "carries". There are probably very many people in the world who are very perceptive, empathetic, and can achieve a high level of understanding, making them well-suited for leadership positions, but without luck in addition to giving it their best effort, are never put in a position to shine. Just because someone will never be a top-tier carry, doesn't mean they can't ever be a top-tier support, but our society tends to demand the former before you're trusted to do the latter. Or not, just thinking out loud here. :)

DrNuke 10y ago

At the very least he summarises for us the YC data and puts forward (for free) the hints, the best practices, the recurrent patterns that characterise a good lot of the most successful startups in the world. He is a privileged but educated observer from within who can also relate with his own experience as a non-stellar performer as a startupper, if you want. A facilitator and an aggregator, isn't he?

bexp 10y ago

Agree with above, Sama puts himself into same bucket of people as Zuck and Musk in how to build future series. What he has build so far ? Happened to be a VC partner sitting on huge pile of cash, distributing it to bunch of YC applicants ? I could see Paul Graham as YC founder takes some credit for creating all YC unicorns, Sam is just one of many partners in VC firm, nothing outstanding though.

jonknee 10y ago
> Sam is just one of many partners in VC firm, nothing outstanding though. He is the President.
- bexp 10y ago
  In VC world there are only Limited Partners (LP who give money) and general/managing partners (who invest money), everything else is non-essential.

Gatsky 10y ago

I think the answer is pretty obvious - the advice that successful people give is almost universally useless. The more down to earth less egotistical ones accept this, and don't give out specific advice (eg Warren Buffet, or Bill Gates). But others can't help it. Your premise that we should listen to only the very successful is not well based in that regard. From first principles, if you were looking for someone to give startup advice, then you want someone who has: been through the process; doesn't suffer from survival bias which just elevates all the random things they did and weird habits they have to some kind of mystical formula; has seen many other people go through the process from the very early to late stages. That's why you should listen to Sam Altman. If you want to worship mega-entrepeneurs then there are many other avenues for that activity.