Uncapped with Jack Altman
· Jared Friedman, Garry Tan, Jack Altman
[00:00:00] S1: This is Garry’s area. How do we fix California politics? Garry has a plan. I’m kidding but actually he does have. [00:00:00] S3: Matt Mahan just announced his race for governor. I think he is the perfect example of someone who is not virtue signaling. He built more than 1,400 homes in San Jose. The year before that, he hadn’t passed all the legislation he wanted, so zero market-rate housing was built in San Jose in 2024. When he came into office, he reduced homelessness by 20%. More than a thousand people came inside and got treatment and recovery because he actually supports treatment and recovery. I didn’t want to be involved in politics. But when I saw that my Asian American grandpas and grandmas couldn’t walk down the street without being assaulted and killed… When I saw people like me when I was 16 or 18… I knew I wanted to participate in tech. I knew I wanted to be an engineer. I didn’t know that I would get into Stanford. I wouldn’t have been able to do that if I didn’t have algebra in middle school, public middle school. My kids go to private school, but I went to public school. We should have a government that doesn’t require you to be rich to become a startup founder or be good at math. How did we get this bad? [00:00:00] S0: I’m glad you’re fighting for it. It’s very important and it’s not pleasant. I see you fighting on Twitter in a way I would not have the stomach for, and I’m glad you’re doing it.
· Jack Altman, Garry Tan
[00:00:00] S0: I’m glad you’re fighting for it. It’s very important and it’s not pleasant. I see you fighting on Twitter in a way I would not have the stomach for, and I’m glad you’re doing it. [00:00:00] S3: I appreciate it. For people watching, look I’m not going to get every take right. I want to hear when I don’t get it right. But on the flip side, let’s have the debate. Let’s actually talk about it. [00:00:00] S0: It takes a lot of courage to say stuff that you think and you might be wrong about, and you might get big blowback on. Even if you have it right, people are going to get mad. [00:00:00] S3: San Francisco and California got this bad because people who run businesses, who have jobs, who are trying to raise families, it was all so big and so scary that we stopped paying attention. San Francisco is on a better path because we started talking about it. At dinners, we started talking about it. “Hey, did you hear about so and so? They got assaulted? Did the police actually show up? What happened with the judge?” We’re going to try to unseat some judges in San Francisco. I was looking at the records. I’ve looked at a hundred cases for this judge, and in 90% of the cases this judge just dropped it on the floor, at an extreme rate. I think it was a three or four times higher rate of just dropping cases on the floor, purely for ideology. It’s unbelievable. How is this person serving the people? They’re not. The thing is, there’s a reason why we elect these people. There is an election coming, and we have to make sure we hold these leaders to account.
· Garry Tan, Jack Altman
[00:00:00] S3: San Francisco and California got this bad because people who run businesses, who have jobs, who are trying to raise families, it was all so big and so scary that we stopped paying attention. San Francisco is on a better path because we started talking about it. At dinners, we started talking about it. “Hey, did you hear about so and so? They got assaulted? Did the police actually show up? What happened with the judge?” We’re going to try to unseat some judges in San Francisco. I was looking at the records. I’ve looked at a hundred cases for this judge, and in 90% of the cases this judge just dropped it on the floor, at an extreme rate. I think it was a three or four times higher rate of just dropping cases on the floor, purely for ideology. It’s unbelievable. How is this person serving the people? They’re not. The thing is, there’s a reason why we elect these people. There is an election coming, and we have to make sure we hold these leaders to account. [00:00:00] S0: Totally. It’s great and it’s super important. It’s not easy work. Someone’s got to do it and I’m glad you’re doing it. Okay, politics tangent aside, although I could talk about that the whole day. [00:00:00] S3: I know, right? We’ll do the politics episode later. [00:00:00] S0: Going to get you and some politicians on here. One thing I’m curious about — which has been an obvious topic for me on other episodes — is the mega influx of capital into venture. Is that positive or negative for you? In what ways do you experience it as both?
· Jack Altman, Jared Friedman, Garry Tan
[00:00:00] S0: Going to get you and some politicians on here. One thing I’m curious about — which has been an obvious topic for me on other episodes — is the mega influx of capital into venture. Is that positive or negative for you? In what ways do you experience it as both? [00:00:00] S1: I think it’s mostly positive for us. YC at its best is not competing with other venture firms for deals. YC at its best is convincing people who didn’t seriously think about starting a startup to go for it, and then being their first believer. YC only works if there’s a large pool of downstream capital that can then fund all the subsequent rounds for those companies. So I think actually YC does best in those environments. [00:00:00] S3: We’re a managed marketplace, so we need as many great investors as possible. Actually what’s funny is that in that managed marketplace, if the supply of capital goes up, we need to go out and find the best possible people. We’re actually really good partners to the rest of the industry. VC can 2x, 5x, or 10x over the next ten years. We will meet the demand. [00:00:00] S0: With companies? [00:00:00] S3: With really, the smartest people of our generation. And if that happens… [00:00:00] S0: So you’re saying you feel limited by the amount of capital still?
· Jack Altman, Garry Tan
[00:00:00] S0: So you’re saying you feel limited by the amount of capital still? [00:00:00] S3: How about this? Capital from VCs like you, VCs like our friends… You’ve got to do the work, show up, don’t disappear, don’t be a dick, do no harm. When I first came back to YC, one of the most interesting evolutions in how to deal with investors was that most investors are actually B or B+. You should be so lucky to have someone who does not mess with you. That’s really good. [00:00:00] S0: The bar is so low. [00:00:00] S3: Basically yeah. [00:00:00] S0: Just don’t damage the company. [00:00:00] S3: Right. If there’s someone who has a great network or can make the Keynesian beauty contest happen for you and your company and your round, obviously they’re an A investor and they’re going to catalyze something crazy for you. You should work with them. Last time we were here it was like, “yeah, if you can get Keith Rabois to invest in your startup and give you twenty million dollars, you should probably take that money. Do it.” But for everyone else, you’ve got to find people. Sometimes you’ve got to do B+ capital. It’s okay. [00:00:00] S0: It’s interesting. You made the point — which I agree with — that despite the total volume of dollars going up, there’s in some ways a consolidation of the number of venture firms and players. I don’t know if it’s more companies getting funded or just a lot more dollars going to a couple of breakout successes. I guess both of those help. [00:00:00] S3: We actively think about how we need more A and A+ investors. [00:00:00] S0: Humans doing the work.
· Jack Altman, Garry Tan, Harj Taggar
[00:00:00] S0: Humans doing the work. [00:00:00] S3: Exactly. And I think they’re all going to be YC alums like you. You’re great. Ilya Sukhar is incredible. Dan Levine at Accel. Yuri Sagalov now runs the seed program at GC and he’s incredible. I fully hope and expect that 80 out of the top 100 spots on the Midas list in the next 10-20 years will be all YC alums. [00:00:00] S0: That’s funny. You’re funding VCs, just on a 10-year delay. [00:00:00] S3: Liz at First Round is great, is killing it. She’s incredible. I think that’s scratching the surface. We’re going to have dozens of the most legendary investors, and they’re all going to be YC alums who deploy all the world’s capital. [00:00:00] S2: Increasing the number of great startups in the world is, I would argue, just the core founding principle of YC. When I first started working at YC in 2010, it was the first thing PG said to me. I wasn’t actually clear why he even wanted to hire anyone. I was like, “This seems like it’s a nice little family business, two of you working on it, seems great.” But his whole point was that conventional wisdom in the VC industry, which all comes out of Andy Rachleff’s research, is that there are only going to be about 10 companies per year that will go on to reach a hundred million dollars in revenue and be significant and IPO at some point. You just have to be in one of those 10 companies every year or otherwise you may as well have just stayed at home. PG was like, “I’m not a VC. I don’t want to go out and fight for those 10 companies. I’m going to—”