Y Combinator Startup Podcast
00:03:13 · Peter Steinberger
We opened the terminal and you type something in and you get a reply. But the magic is how it felt. It wasn't a terminal. It wrote concise answers. It was proactive. Like sometimes it would just like check on me during the day. I made it so the complexity would melt away. You don't have to think about which model, which context size, or when you start a new session. And I I prompted the weights to a little bit outside the default distribution, make it feel more like a friend. And I was using it. I had I had so many moments where I felt like, this is the future. This is this is AGI. And you know what? Nobody cared. Back then I already had a good following on Twitter. I know it's called X now. I don't... I'll always call it Twitter. People were not getting it. I would keep trying to like make them make them understand like how magical this felt to me, but week after week I failed. And you notice a pattern? It annoyed me. So I would create group chats with friends, and I added them WhatsApp relay, and I would show them. I would let them talk to it. And every time I got a strong emotional reaction. Some people were amazed. Some people were scared or freaked out even. But each time, there was a strong emotion. And the best part, there were quite a few people that really wanted it. And like, especially to my non technical friends, I told them, no, this is not yet for you. And they got mad. So if that's not an indicator to have product market fit, I don't know what is. So I spent another month tweaking the details, thinking, what could I do to explain the world? You know? And then the audacity, someone sent me a pull request to my WhatsApp relay to add Discord support. You know? Like, what parts of the name are you not getting? I let the PR sit for a while, and I was thinking and I was thinking. And then eventually, was like, ah, what the hell? And out of our relay became Claudius, because I'm good with names, and there's no more than one message channel. And so you understand how early this was. I didn't even had compaction built in yet. So like at some point it would just like stop, and just just for... In time for Discord, I I added a very hacky version of Compaction, so Mario could make a good one in Pi. So it was around New Year's Eve, and as you do, I I went home early to hack on it some more.
00:06:15 · Peter Steinberger
And then in the first week of January, just as the geek world collectively was learning about coding agents, I created a Discord room, server, guild, however we call it, and I put my claw in it. And I remember the the first night vividly. People would be joining Discord, and they were like, watch me build it in the open. They would try to hack it. They were like talking to it. They were getting smart replies, and they see what they can do. And they finally got it, you know? Like, this was this was the moment. I sit up all night. I let people interact with it. I had this prompt in my agents. Md that would instruct it, don't do any dangerous tool calls unless the prompt comes from Peter. You know, this was like six months ago. Where all the things we wrote in our HSMD felt more like suggestions. So I watched it very carefully. I could always pull the plug, and then at 7AM, I finally I was done. I said goodnight, I pressed control c, and I went to bed. But of course, I could build the software to be resilient, so it was a launch daemon. You know what happens if you like press control c on the launch daemon? Yeah, it'll just... It'll be dead for five seconds and it'll start up again. So while I was walking into the bedroom, my agent happily started answering God in the world. And then I slept for like ten hours. When I woke up, I woke up to around 800 messages. People tried to hack it. I pulled the plug. I freaked out. I read through everything, and nothing actually happened. But this was the moment, this was the moment where it went viral. And you all been here, you know what happened next. My inbox exploded, reporters tried to call me in the middle of the night. Did you know about this feature that Apple built when you put it on do not disturb, but people call you a few times in a row? That often would think it's an emergency and would list... Would still let calls through. I didn't know about it, but reporters did. My email inbox was more like a waterfall. Yeah. The Mac mini sold out. I think they're still sold out. I got more invites to podcast in a month than I did in my thirty nine years before. And Anthropic sent an email demanding the name change and, like, dropped the lobster. And the project molted a few times. Claudius became ClaudeBot, then there was a very short time where we don't talk about the name, and then it started on OpenClaw.
00:09:22 · Peter Steinberger
Jensen called it the most successful open source project in the history of humanity. And meanwhile, my inbox was flooded with reporters, security people, and countless curious humans and also agents. You know, the numbers still don't feel real to me. In eight months, more than 18,000 different people opened an issue or a pull request. Over a 111,000 in total. I did the math, you know, where am I lying to? My agent did the math. Almost 3,000 people have commits in the repo. And some people were mad at me because clearly they did it first and I stole the idea and they sent me links of something I've never seen. Some people call me AI Jesus. For summer, I became the antichrist. At some point, I started collecting the Obotarios. There's a new one every few weeks. The the most recent one is actually from yesterday. What do we learn here? Be careful what you wish for. I was not ready for all this attention. It almost broke me. Like, I was that close of just deleting the whole thing. I stopped answering my friends. I didn't even wanna look at my phone anymore because it was just a stream. And of course, somebody leaked my phone number and also a lot of private details because I'm an enemy of humanity. And here I am just wanting to build something cool. And now we're getting to question two. Did you sell out? You know, wasn't my first ride. I spent my my twenties and my thirties building a b to b software company. I wrote a PDF framework by hand, like an animal. I bootstrapped the company, I grew it to almost 80 people, I ignored the competition, it became the thing most enterprises would buy, and eventually I passed things on to my co founder. I sold my shares and I very badly burned out. Retirement. The idea of it sounds great, and I spent almost three years wandering around aimlessly, catching up on life and parties. I did all the things that I kinda missed out on life. I had months where I didn't even open my computer, know, just casually checking the the Internet with my phone, like a normie. I always knew that if I if I give myself enough time, the urge the urge would come back. I always thought the urge would be code. I always loved programming. But it took me a year to understand that that's not entirely correct. I loved building. Programming was just a means to an end. And here I was, eight months after I found my spark again.
00:12:28 · Peter Steinberger
And my inbox was full of VCs begging me to take their money. And I did not want to. So when the big labs came knocking, and suddenly I was on the phone with Mark, Sam, a few others, this seemed like a much more interesting pass. It also felt unreal. Right? Talk about impostor syndrome. Maybe that's an important lesson for you. Everything that... Everything you can build can be forked or cloned, but your name cannot. So your personal brand is way more important than any single product that you ever will. Start working on that before you need it. So, yeah, I know how to play the game. I also know that doing this was the equivalent of selling my soul.md. If you know, you know. The decision was not easy, but I... If I learned anything during my time after the burnout, it's it's this, it's trusting your gut. And my gut told me that I like OpenAI the most. Did Hermes win? And the short answer I can give you is, it beat us where it hurt. We're still there. And both of those are my fault and my doing. In the months after the release, we got absolutely crushed by security reports. In some ways, wrote a prototype of what many open source projects now experience. And even though most were super HKC, I felt the pressure. And then the press, The press said 20% of our skills are malicious. Now, we actually bought a paper up at this. We did the numbers, and the numbers are more like 0.3%. We scanned all 67,000. We shipped the we shipped the paper. And you know, a correction never travels as far as a scare. I felt this responsibility. The world discovered OpenClaw. And even though there was this big scary disclaimer, actually much bigger than I could on the slides, when you install it, I knew many people wouldn't read the docs. So I really focused on that, hardening the code base, building layers and layers of security, added sandboxing, allow lists, a web protocol with permissions built in. We were shelling out to Python for some file operations, because there was some primitives that are simply lacking in TypeScript to ensure your agent stays in the workspace, it doesn't follow symlinks, and that the configuration files are written atomically. Most of the users didn't care a bit about that.
00:15:21 · Peter Steinberger
Sure they, they liked the abstract term of security, but in all practical terms, they updated, I broke something they depended on, I made things slower, and I made things more difficult to update. And another thing I have to admit, I got sloppy because now I had to... My time shifted between open source, the press, spending countless times on the phone with lawyers to set up a a five zero one three American nonprofit. I worked on my own one. And, you know, OpenAI is its own world that is interesting and demanding. I brought on help, and we got such an amazing community of maintainers that are very much respected. And everyone added their own little feature. I felt, I felt like I'm a bit in a hard place. After all, these people work for free, right? So who I am, who I am to tell them what to do, and also my attention was all over. So, we added a lot of features. You know, features are the fun part. A new feature is just a prompt away. The real cost comes after. Every feature we shipped, of course, with a configuration option, because we didn't wanna break everyone's setup. At our highest, I had to count that, we ended up with around nine and a half thousand configuration options, if you count all the permutations. You can write all the tests you want. It is impossible to cover all of these and not break things from time to time. It is infinitely harder to evolve software that has users. Meanwhile, other companies, they were fueled by VC money. They pushed ahead. The Anime Girl company did it especially well. People started inserting themselves into pretty much any conversation on Twitter while we were burned in security ground work and features. They had a simpler story, an aggressive marketing campaign, and a one liner to migrate people's claws. The main thing though that really hurt the project was Anthropic. Not the name, the part was stressful, but I kinda understood, and they were really nice about it. It was the fact that I optimized too much on the model. I built OpenClaw with Codex and GPT, but the harness for a long time really worked the best and was optimized for Opus. So when they pinged me with around twenty four hours notice that they're gonna disable a subscription for everyone, there was not really enough time to change course. I mean, sure, support open rate models. We did a lot of work on them, but they really weren't that great yet.
00:18:29 · Peter Steinberger
And the early OpenAI models simply lacked character. So maybe write this one down. Your dependencies business model is your business model. You know that's how fixed now solves pretty awesome. Open weight models are actually good. I learned a lot about harness engineering, but in many ways people moved on. You can see that in our download charts. We bottomed out at around 835,000 weekly downloads in May. And then after being declared deaths in in June, we peaked at 4,700,000, the highest ever. Both of those are true at the same time. A hype is like the weather. You might see it coming, but you can't control it. In my case, it was a storm. Question four, is it still fun? You know, somewhere around February, it stopped being fun. I started to feel like, it started to feel like a responsibility. I woke up, and the man who didn't want to build another company found himself in a situation where he had two jobs, or should I say a job in a calling, I was struggling. And worst of all, I stopped using my own product. Somewhere in that time I stopped making a product I love, and I worked on making something for everyone. It became less of a thing that I use every day, and more I think that I saw and felt was work. And I wanted to picture who everyone really is. One of them had a grocery agent, another one tried to social engineer my bot. Between everyone adding features and all the organization work, I became the person that fixed the bugs, fixed the security issues, and provided support and built a foundation. And because all these people were like giving the rumor mill, oh, OpenClaw is not owned by OpenAI, I didn't wanna take too much help from OpenAI. I mean, yeah, they gave me token, and I... Boy, did I use that. But I was also pulled into other projects, and there was a whole flood of people that I couldn't as easily block who wanted to talk to me. In hindsight, I could have many done differently. Like, could have asked for more help. I could have moved responsibility off my plate, but I was so deep in everything that I didn't take time to think through strategically. Luckily, met a bunch of amazing people, and little by little things aligned. I figured out my visa, eventually formed a nonprofit, we got amazing companies as donors, and I found some really good people that believe in open source and started working with me.