Much of the advice that Graham does eventually dispense to the founders in the audience is interesting, however. Graham talks, for example, about his views on competition, which can essentially be boiled down to the idea that companies fail owing to poor execution, not because of me-too startups. In fact, says Graham, though companies worry about competitors, YC’s dataset suggests that “maybe one out of 1,900” of its portfolio companies has been killed by a rival that’s tackling the same problem.
Graham also repeats another point that we’ve heard him make in the past, which is that determination is far more important than intelligence when it comes to becoming a successful startup founder. Take away determination bit by bit, and you have “this ineffectual but brilliant person,” says Graham. But subtract out intelligence bit by bit and “eventually you get to some guy who owns a bunch of taxi medallions but he’s still rich. Or [who has] a trash hauling business, or something like that. You can take away a lot of smart.”
Yet our favorite part of the sit-down centers on the audience’s questions. One of these is a question about how founders deal with the varying commitment levels of their cofounders, which often change over time based on how the company is faring, as well as external events. Graham’s answer is simply for founders to ask themselves: “Would I rather have 30 percent of this [one] person, or 100 percent of another person?” (He says in the case of Morris, he would have taken 10 percent of him over 100 percent of another individual.)
Asked about the right founder DNA, Graham also offers up an unsurprising insight but one we personally hadn’t heard him say before, which is that YC isn’t so crazy about funding people who’ve worked at “certain” large companies for long periods, as it has learned over the years that they aren’t natural founders. He doesn’t specify what the tipping point is for YC, but he offers that “if you’ve worked for a large company for 20 years, you might not be a founder, unless you were forced to [stay there] for visa reasons. Because if you were the kind of person who would make a good founder, you wouldn’t be able to stand working for a large company for 20 years.”