Uncapped with Jack Altman
· Jack Altman, Harj Taggar
[00:00:00] S0: The models thing is so interesting to me because one of the things that has struck me is that a lot of the source of product-market fit actually exists outside the startup delivering the service. You take an amazing founder like Max, you put them in a market like legal where there’s just a lot of uptake for some set of reasons, and then you have this tailwind outside the startup that’s actually driving a lot of the aha moment. Not to take away from anything they’ve done, but this is the case for all these startups. That just changes some things. [00:00:00] S2: From the founders’ perspective at least — and a reason why they’re raising the B rounds — one, there’s always just the case of banking the money while you can get it. But it also feels like the surface area for the products is bigger than ever and they are still fundamentally constrained by the number of people they have to go execute on things. It feels like in the SaaS era you build one core feature, hit product-market fit with that, and maybe just run with that for a few years and then add things. Whereas now, even within the batch, people are trying to add more into the product and have it do more. So they just fundamentally feel constrained by how much they feel they should be doing. Then they have competitors and the competitors are moving faster. So I haven’t yet seen the “once you hit product-market fit, you don’t need to hire as many people”. Or at least people aren’t acting on the belief yet that they don’t need to hire as many people.
· Harj Taggar, Jack Altman
[00:00:00] S2: From the founders’ perspective at least — and a reason why they’re raising the B rounds — one, there’s always just the case of banking the money while you can get it. But it also feels like the surface area for the products is bigger than ever and they are still fundamentally constrained by the number of people they have to go execute on things. It feels like in the SaaS era you build one core feature, hit product-market fit with that, and maybe just run with that for a few years and then add things. Whereas now, even within the batch, people are trying to add more into the product and have it do more. So they just fundamentally feel constrained by how much they feel they should be doing. Then they have competitors and the competitors are moving faster. So I haven’t yet seen the “once you hit product-market fit, you don’t need to hire as many people”. Or at least people aren’t acting on the belief yet that they don’t need to hire as many people. [00:00:00] S0: One thing that doesn’t seem automated yet is sales, for example. A lot of people thought it would be automated by now, but it hasn’t been. Support has, but sales hasn’t. So you still need a lot of salespeople. It seems like engineers are way more effective, but if you’ve got the capital, 50 engineers is still going to be better than five engineers. Some of these things just haven’t played out intuitively. [00:00:00] S2: It’s great for everyone using the products. The bar for what you expect out of the products you use just keeps going up and up, which is awesome.
· Harj Taggar, Jack Altman, Garry Tan, Jared Friedman
[00:00:00] S2: It’s great for everyone using the products. The bar for what you expect out of the products you use just keeps going up and up, which is awesome. [00:00:00] S0: There are also a lot of markets that are so genuinely blue ocean. They look like good ideas and they are good ideas and it’s totally new. The result is 50 startups doing something similar. I think that’s a good thing for end consumers. Obviously you guys have a lot of companies in that situation, like we all do. In this competitive of a market moment, when every startup has a ton of competition, does that change anything? When you’re working with specific companies, do you find yourself saying “you need to go faster, you need to be thinking about something differently”? Does it update anything when we’re in this type of environment? [00:00:00] S3: Me? [00:00:00] S1: I felt like Garry was holding back. [00:00:00] S3: I’m hoping you guys have a good answer. [00:00:00] S0: I can answer my own question by the way. [00:00:00] S2: I guess the reason we’re pausing on it is just again, YC is about getting things off the ground. Especially during the batch, we’re so focused on: is this even worth investing another two weeks of your time in? [00:00:00] S0: Is there a glimmer of product-market fit or not? And that doesn’t really have anything to do with competition.
· Jack Altman, Jared Friedman, Garry Tan
[00:00:00] S0: Is there a glimmer of product-market fit or not? And that doesn’t really have anything to do with competition. [00:00:00] S1: At all. Exactly. We actually spend the vast majority of our time on competition telling founders not to worry about competition. Because imagine if the Legora founders had not launched Legora because they looked at Harvey and said, “oh, it’s over.” That’s what we see a hundred times a batch, that story. So it’s just being like, “don’t worry about it, just out-execute them.” [00:00:00] S3: We always just go back to “make something people want”. It says “make something people want”, it doesn’t say “do a market map, based on what Perplexity tells you…” [00:00:00] S0: You could say, “make a market map, then make something people want within it.” [00:00:00] S3: We should make an April Fools T-shirt that says that. “Make a market map, then make something people want.” It’s like, what the hell are you talking about? That’s definitely not how you do this. [00:00:00] S0: So let’s say somebody’s working on customer support. I’m pretty confident that market is not saturated. A good team that comes into customer support and says “I’m going to go find some more customers” could do it. So the view is just, if you can find customers and get it going, don’t even think about who else is out there, just go.
· Jack Altman, Harj Taggar, Jared Friedman
[00:00:00] S0: So let’s say somebody’s working on customer support. I’m pretty confident that market is not saturated. A good team that comes into customer support and says “I’m going to go find some more customers” could do it. So the view is just, if you can find customers and get it going, don’t even think about who else is out there, just go. [00:00:00] S2: I think that’s basically it. Go out and get customers, and if you have good competition then you’ll have a hard time getting customers. If I try to launch a new payment processor, I’m going to run into Stripe. It’s going to be hard for me to grow really quickly. That ends up being a lot of the advice during the batch. [00:00:00] S0: I’m curious how much you guys think about stuff at a macro level. I know the most important thing — which I believe is obviously correct — is to think about the micro. Get this startup off the ground and going, and then things can go from there. But I am curious about some of the macro things. One that comes to mind is the recent trend in public markets where SaaS multiples have just been totally hammered. Do you guys feel like SaaS is dead? Does that resonate for you? Do you see anything different in the companies you’re working with? [00:00:00] S1: Is SaaS dead? [00:00:00] S0: Is SaaS dead?
· Garry Tan
[00:00:00] S3: I think it’s dead. The thing is, if you run a SaaS company, you don’t have to be dead. All you have to do is embrace Claude Code. You have to embrace, top to bottom, an agentic view of how everything is going to work. Put it this way. The same week that I personally realized everything was different, I funded a team from Meta Superintelligence who had left. They were pointing out that Meta has 20,000 people working on Reality Labs and Alexa has 20,000 people. I thought about my experience. I didn’t even have 20,000 people. I had five people. Why did it take two years? Because I knew what the architecture was, I knew what I wanted to build, and then I had to farm this out. I had to have meetings, come up with a doc, and then other people have other opinions. We’d have five meetings about the architecture and argue about it. Two weeks later, maybe something happens. If you’re in a big company, it’s three months later and maybe something happens. But we don’t have to do that now. We could just try both. Go into plan mode and then just do it. Literally an hour later, we will have something done that would have taken two weeks, or two months, or sometimes two years. If you’re not a tech company and you’re an incumbent, it’s two years or never that you would even make that decision. The speed of making that decision, how decisive you can be… Going back to the transformation thing, that’s actually what I feel like I learned at YC. It’s not that I didn’t know how to do it. I was employee number 10 at Palantir. We were moving fast. I was sleeping at the office. The big difference was realizing that instead of getting 20 basis points of Palantir… That’s now an astronomical amount of money, by the way. We didn’t know it at the time.