Y Combinator Startup Podcast
00:00:07 · Garry Tan
[00:00:07] S0: So the Internet calls me one of the most AI psychotic people online. So it's only right that I start my talk with a story about one of the most canceled men in history. His name was Baruch Spinoza. And in case the philosophy elective wasn't your thing, here are the highlights you need to know. In 1929, a New York rabbi challenged Einstein by telegram. Do you believe in God? Answer in 50 words. Einstein answered in 25. I believe in Spinoza's God who reveals himself in the lawful harmony of the world, not in a God who concerns himself with the fate and doings of mankind. The most famous scientist alive asked the biggest question there is pointed at Spinoza. But here's what Baruch Spinoza's own community did to him. Amsterdam 07/27/1656. Spinoza is 23 years old, a member of a tight knit Sephardic Jewish community. He stands in a synagogue while the elders excommunicate him with the most violent curse the community ever produced. Cursed be he by day and cursed be he by night. Cursed be he when he lies down and cursed be he when he rises up. Nobody may speak to him. Nobody may trade with him. Nobody may come within four cubits of him. Nobody may read anything he writes. And this ban, uniquely among the roughly 40 bans Spinoza's community issued that century, has no repentance clause. It has never been lifted. It technically is still in force today. Spinoza was 23. His crime was evil opinions expressing forbidden thoughts. His punishment was complete deletion from the community. Before his community cursed him, they tried to buy him a thousand guilders a year. Serious money. All he had to do was show up at synagogue once in a while and keep his mouth shut. Hear that in founder terms. They've offered him a salary to stop building. He said no. Not for 10,000, he said. He wanted truth, not comfort. Shortly before his excommunication, a fanatic came at him with a knife. The blade tore through his cloak and missed him. He kept that cloak, scar unmended, for the rest of his life. He wanted to remember what ideas cost. So what does the most canceled man of the seventeenth century do next? He grinds lenses. By day, he makes optical instruments, tools that let human beings see further than their eyes allow. He makes them so well that the best scientists in Europe seek them out.
00:02:47 · Garry Tan
And by night, he writes a book so dangerous he cannot publish it while he is alive. When he dies at 44, lungs full of glass dust from making other people's lenses, the manuscript is locked in his writing desk. His dying instruction, ship the desk by canal barge to his publisher in Amsterdam. That manuscript became his posthumous works, which attracted immediate attention across Europe and inspired some of the most important philosophers of the enlightened. What does Spinoza have to do with startups, you might ask? Well, here is a man canceled by everyone he knew, offered a salary to stop, nearly killed for shipping. And his response was to build precision tools by day and write the most dangerous book in Europe by night alone with no permission from anybody. If you're gonna start a startup, you could do well to learn from Spinoza. He had a name for the engine that kept him going. Canatus. It means your striving. The drive in every living thing to keep going and to increase its power to act. Not your resume, not your title, not your job, the striving itself. This talk is about the tools that amplify it. So what did he actually say that was worth deleting a man over? The gist of the heresy was that God is not a king on a throne. God has spread through everything that exists. God or nature, he wrote. Four hundred years later, we are making a similar mistake about intelligence. Everyone is waiting for AGI as a singular event, a god in a data center. Some announcement, some threshold, some day when the sky changes color. So now I'll say a version of Spinoza's heresy updated four hundred years later. Everyone is watching the sky, and the thing they're watching for is already in the room. It doesn't look like a god. It looks like infrastructure, a terminal window, a folder of markdown files, a job that finishes while you sleep, spread through everything, which is exactly where Spinoza told you to look. AGI isn't arriving as an event, it's arriving diffused as your agent running on your context, doing your work. I call it personal AGI, not artificial general intelligence for everyone all at once, general intelligence for one person, you. This was a dream of a great many people. Vannevar Bush called it the memmex, a machine that would be an extension of yourself and your brain.
00:05:28 · Garry Tan
And I wanna be precise about what I mean because the words personal AI has already been captured by marketing departments. I do not mean a chatbot you pay $20 a month to. I do not mean a slightly better auto complete. I do not mean an assistant that knows your calendar and nothing else. That's just a subscription you rent. It's a corporate AGI you don't own. It resets when you close the tab. It knows what everyone else already knows. And when the company behind it pivots, your so called assistant gets a lobotomy on someone else's schedule. Personal AGI is a different animal. An agent that runs on your infrastructure, reads from the memory you own, executes procedures you wrote, and compounds. The corporate AGI that you don't own gets better only when the company ships something. Your personal AGI gets better every single day you use it because every day it knows more of your life. One of these is a product you consume. The other is an asset you build. Almost nobody in the world has this second thing yet, and everyone in this arena could have it by Monday. And I believe intelligence, intelligence of this kind should be owned, owned by you, not rented. If you go forth and build this for yourself, 2034 doesn't have to be like 1984. You might ask why this personal AGI is happening only now. Well, I think it's because of what agents can do and nowhere is it more obvious than encoding agents. In 2013, I was a YC partner building Bookface, our internal social network at night. I shipped maybe 14 useful lines of code a day, which if you know the literature on programmer productivity is dead on median. That was me at full effort. This year, I run y c full time, same brain, same hours, plus a 05:00 kid pickup. I did the math on my output, and I'm at about 400 x what I did in 2013. Now before the skeptic in row three deflates that number for me, let me deflate that for myself. You don't trust the raw lines of code? Fine. Apply the most pathological verbosity penalty you can stomach and assume the agent writes bloated code. Assume half of it is scaffolding. Assume I'm flattering myself, which is always a live possibility. It's still eight x at the absolute floor and 10 times that in the middle of the range. The number is large no matter how you torture it. Now this is just code. And if you're at the beginning of your career, you're in luck. This applies to design.
00:08:14 · Garry Tan
This applies to product management. This applies to growth. This applies to every part of what you might want to do. The multiplier for coding is not just for coding. It's for every piece of knowledge work. And it's not just me. At YC, we get to watch this at portfolio scale. A year and a half ago in the winter twenty five batch, a quarter of the companies had code bases that were 95% AI generated. Those companies use AI agents for everything now, not just code. And that batch is on track to becoming one of the fastest growing, most profitable batches in the history of YC. Now I know what a correlation is, so let me say it carefully. I cannot prove that the AI generated code and everything else caused the growth. But what I can tell you is that the fastest growing founders we fund are not treating AI as autocomplete. They are treating it as a workforce. There are two x people and there are 100 x people who are using the same Claude, same weights, same context window size, same API. But the leverage is not in the weights. It's in what context you give it, how relevant it is, and does it happen at the right step. We'll come back to this. Now, Spinoza has a definition I think about every single week. In ethics, he defines joy as the feeling of your power of acting increasing, which is why the first time an agent does a week of your work in an afternoon, it doesn't feel like a convenience. It feels like joy. And that's not me being poetic. That's the technical term. Your power of acting increased. Your canatus just got bigger. He defined the opposite to you, by the way, sadness, the feeling of your power of acting decreasing. If your Sunday nights have a specific heaviness, like your ability to influence the world is receding, that you feel like you're quiet quitting, then this is what you feel and hold that thought because we're coming back to this in the second half of this talk. And it gets political. So here's the equation for the next decade of your life. A frontier model, which is rented and a commodity and getting cheaper by the quarter, plus your context which is owned by you and unique. No. And ideally nobody else on this earth has it. Plus a harness that wires them together. That harness might be Open Claw, Hermes agent, Claude code, or Codex. Add that up, and that gives you an agent that acts like a very fast version of you.
00:10:59 · Garry Tan
Model quality is rented, but your brain is owned ideally by you. Marshall McLuhan said that technology is an extension of man. Steve Jobs called a computer a bicycle for the mind. And if you have what I'm describing here, then you have a self driving rocket. Paul Graham taught every founder in this building two things. Make something people want and do things that don't scale. Both still govern everything. What's new is the multiplier on the second one. Agents are how one founder now does unscalable things at scale. The advice didn't change, but the physics of all startups and of what you can do did. Spinoza ground lenses, instruments that let people see past the limits of their eyes. I wanna spend the next fifteen minutes showing you what grinding lenses for the mind looks like. This is the machinery I actually run my life on, and every concept travels to whatever stack you use. Let's start with working memory because it explains everything. You and I, as human beings, hold about seven things in our head at once. Seven plus or minus two. It's the most famous paper in cognitive psychology. It's why local phone numbers are seven digits and why you forget the eighth item on a grocery list. That is the entire working memory of a human being. And every institution humanity has ever built, every checklist, every org chart, every filing cabinet, every stand up meeting is a prosthetic for that limit. An AI agent though holds a million tokens. That's about a thousand pages. Three Harry Potter books sitting open on its head all at once. And it can find a needle in any of them and synthesize across all three in seconds. Three Harry Potter books versus seven digits. You could argue that's not quite AGI yet, but it is already a different operating regime. And almost everyone on Earth is still running their life on an org chart and a way of doing things designed for the seven digit brain. Run that number in the other direction. A thousand pages is a lot, but it is also very little. Your life is not three books. Your life is a library. Every email you ever sent, every meeting, every decision, and every reason behind it, every conversation with every person you know. The question that determines whether your agent is a genius or a goldfish is this. Who decides or what decides which three books are open on the desk. And that's what a brain is.
00:13:44 · Garry Tan
That's what g brain is meant to be, the library plus the librarian. I've been building g brain in the open. My personal Open Claw has a Karpathy style knowledge wiki with about 220,000 markdown pages. Twenty five years of my life diarized. Every email, every meeting, my notes, my photos, my drafts, the things I got wrong. Compiled mostly by agents, curated by agents, searched for by agents. But I never re ask a question I already answered. And the lived experience in the system is the point. A founder emails me about a crisis before I finish reading the email. My agent has already pulled every prior conversation I've had with that founder. Three portfolio companies that hit the same wall and what actually worked for them. When my agent does anything, it does knowing everything I know. And that's the difference between an assistant and a colleague. Let me walk you through an actual day because that matters more than an architecture diagram. While I slept last night, my agent processed my inbox. Not sorted it, processed it. It knows which emails are from founders in trouble, which are from people trying to sell me something, and which are from the 17 mailing lists I never quite unsubscribed from. The ones that matter are triaged with context pulled from the library, who this person is, my whole history with them, what they're really asking under what they wrote, and what that might mean for me. I wake up to a briefing, not a pile of emails. Before every meeting, a prep doc, who I'm meeting, what we said last time, what changed since, and what I should ask. Research I was curious about at midnight is finished by morning. And when something interesting happens in the world, my agent has usually read it cross referenced against what I care about and filed it before I've had coffee. On top of this library sits my agent coding framework g stack, a 123,000 stars now, which put it in the top 100 open source projects in the history of GitHub. And what's actually in the punchline of this full architecture? It's mostly skill files plus a browser that the agents can drive. Pages of English and a way to act on the world. Markdown, not magic. Fat skills, then harness. Let me show you what a skill file is because I keep saying this phrase, and I want you to see how unmagical it is. Here's a real one, lightly redact is.