Y Combinator Startup Podcast
00:00:08 · Francois Chaubard
[00:00:08] S0: Some of the most successful companies in the world were created by founders with PhDs, including Google, Anthropic, Databricks, Together AI, and more. But these are exceptions to the rule. It's actually more common for academic led startups to fail because many of the skills you're rewarded for as a researcher can be antithetical or at least orthogonal to succeed as a founder. I know this in part because before I was a founder, I was a researcher in Fei Fei Li's lab, and many of the skills I learned there, in retrospect, held me back as a startup CEO. To make it as a founder, academics need to unlearn many instincts that have been beaten into them by their principal investigators over years of bleary eyed, coffee fueled nights solo in a lab. To become a formidable founder, you will literally have to kill part of your academic identity, which is quite difficult to do. So today, I want to break down the 10 most important perspective shifts academics need to make in order to build a successful startup. Number one, focusing on vanity metrics versus what people want. In academia, you're optimizing for what I call vanity metrics. Grades, the number of citations, the number of talks you give, etcetera. Paul Graham has a great quote about this. He said, the most damaging thing you learned in school wasn't something you learn in any specific class. It was learning to get good grades. That is an academic mindset. The founder mindset is entirely different. It asks, what is something people actually want? What will they actually pay money for versus what they say they would pay money for? You might think they want your new shiny algorithm, but will they actually adopt it? So often the answer is no. And you don't realize this until you try to start talking to people and asking the tough questions. This leads directly into number two, interesting versus important. Academics often optimize for what is interesting research, and that is a good thing. You should double click into the things to understand the mechanisms behind something. That gets you published, but it often has absolutely no real ramification on anyone's daily life. Founders must focus on what is important to their users. In founder mode, you have to be okay with saying, it just works. We don't know exactly why, but that's good enough. Ship it. Empiricism is completely fine.
00:02:13 · Francois Chaubard
As Marc Andreessen says, the only thing that matters is getting to product market fit. That means caring only about what is important to your users and working backwards from there. Number three, novelty and plagiarism. In academia, novelty is everything. When you submit a paper, the reviewer judges the original nature of your work. If it's not completely novel, it's rejected. In the startup world, plagiarism is often a really good strategy. Pioneers often get errors in the back, as they say. Joe Lonsdale makes a brilliant distinction between MIT style startups and Stanford style startups. MIT startups often revolve around a brand new invention, a brilliant black box that we patented that does some unprecedented magic. But they rarely turn into massive companies, because frankly, no one really wants your black box. A Stanford style startup, on the other hand, starts with a single boring customer problem and iterates on it forever. Something simple like listening to music online or getting people a local hotel room or getting people their groceries. Instacart has been around for fifteen years and is still iterating on that single core problem today. And Instacart didn't invent delivering groceries from an online order. Countless startups tried it before them. Instacart was just the most successful at executing it. Plagiarism is completely okay. See Lyft versus Uber, Anthropic versus OpenAI, Rappi versus Instacart. As long as you are solving a real problem that your customers have, one that the market has not adequately addressed, you're in business. Novelty is not required. Often, it's not even preferred. As Steve Jobs famously said, you have to start with the customer experience and walk backwards to this technology, not the other way around. Number four, there is no finish line. In academia, there is always some cathartic submission date or final. A moment where the paper or test is sent off and you can finally rest. Startups don't have that. You have to develop a long horizon vision of where things will go and not waver constantly. Researchers are quite bad at this. They work on five different ideas all at once, smearing the peanut butter too thin. That's a good idea for academic research, breadth first search. However, in founder mode, you have to wake up every single day and crank on that exact problem without getting sidetracked for decades.
00:04:19 · Francois Chaubard
Many academics just get bored, and this distracts their team from the core mission. Number five, get on a plane and talk to some people. Finding product market fit is a brute force exercise. It requires iterating quickly and talking to customers constantly. Academics like doing this in a vacuum. They presume they know what their customer problem is without talking to anyone, without leaving their office. But very often, if you spend years solving a problem, it turns out that problem isn't big enough for anyone to care, and you just wasted years of runway. And when I say talk to people, I do not mean investors. Most investors have no clue what is going to be a great product or not. This is why they so often miss adventure. Talk to the people who have the problem you are trying to solve and ask them, if you did x, would they pay money for it? We made this mistake at Focal. We spent a lot of time collecting training data, training models to solve people tracking for retailers, to know where people are and when in retail stores. Every retailer told us this was a major problem. Three months of work later, we gave it to the stores, and it told them that people spend a lot of time in the checkout counter and the deli counter at lunchtime. I asked them, will you pay for this? And they said, absolutely not. Because there was no value delivered. I could have manually labeled a few videos a day and given them the same data and gotten the same conclusion. And that would have saved me three months. So that's why I advise, if you are an AI company, start with a human in the loop. Validate that your customers actually want what you're serving before you spend millions on compute training a model. Number six, hyperbole is okay in a sales pitch versus being scientifically exact. Think about one of the most famous advertising slogans of all time. Fifteen minutes could save you 15% or more on your car insurance. What a beautifully inexact statement. What does that even mean? Where was that measured? Was there some ablation study somewhere? Was it independently reviewed in some double blind conference submission? Absolutely not. Yet this was one of the most successful slogans of our lifetime. If you obsess over rigor in your marketing, it will destroy you. By no means should you lie, but using punchier language is necessary to get people excited. Number seven, the 70% rule.
00:06:25 · Francois Chaubard
Jeff Bezos famously said that most decisions should probably be made with somewhere around 70% of the information you wish you had. Publishing with 70% confidence in your results isn't exactly a great strategy to get into NeurIPS, so it's natural for academics to hate this. In startups, if you wait for a 100% of the data, you are way too late. By that point, your competitor has already launched and you've lost your first mover advantage. In the great database wars, Michael Stonebraker had a technically superior product, Quel. But Larry Ellison, founder of Oracle, pushed SQL into the market faster. Ellison famously said, Quill might be better than SQL. I don't care. SQL is going to win. And he was right. Speed beats perfect information. Number eight, you can't delegate the hard stuff. Researchers love doing research. But as CEO of a startup, you can't be doing research, likely ever. In a startup, you're responsible for everything. Team management, cash runway, hiring, firing, marketing, sales, product development. A lot of academics love the idea of a startup, but they don't actually want to do these messy jobs. They think, oh, I'll just hire an MBA to do the business stuff, and I will do the cool research on VC's dime. This is a terrible idea. If you abstract yourself away from sales and marketing, you will never develop empathy for your customers. And without customer empathy, you cannot build a product they really want. Number nine, outdoor animal psychology. To be a successful founder, you must adopt a more aggressive psychology. You must become a capitalist. Starting a company is the most capitalistic thing you can possibly do, and frankly, a lot of academics are deeply uncomfortable with that. You have to be comfortable charging people money for things, winning talent, making 80% margins, raising capital, and most importantly, beating your competition. To paraphrase Larry Ellison, your competitors want to kill your company and take the food out of your child's mouth. This is the world you're walking into. Number 10, nobody cares how smart you are. Academics love explaining how smart they are to the world, completely unprompted. They will talk your ear off about finite automata or their point of view on P versus NP, but this does not work in sales. It doesn't work in product development, and it certainly doesn't work when pitching VCs.
00:08:30 · Francois Chaubard
You need an innate curiosity about people. You need to think from your user's perspective constantly, and you only get that perspective by listening. Whether you're selling into an IT department, an intern, or a procurement officer, or a consumer, you must empathize with them. As Dale Carnegie once wrote, you can make more friends in two months by becoming interested in other people than you can in two years by trying to get others interested in you. This is exactly how sales and product development work. To summarize, the most common piece of feedback I give to academics turn founders is this. Get out of your office, get on a flight, and go meet with your users where they live and work. Validate your assumptions. Will people actually pay you for this? Because that is exactly what your competition is doing, and if you don't do it, they will beat you to it. It will be uncomfortable, but it is entirely necessary. If you want to quiet your academic brain and start growing your founder brain, I highly recommend reading Spin Selling, High Output Management, The Seven Habits of Highly Effective People, and How to Win Friends and Influence People. I'll leave you with a quote from Mahatma Gandhi. If you want to change the world, start with yourself. You already have the intelligence. The only question left is, do you have the will?