Hunt for BS in the startup world (YC)

🔮 Strategy & Leadership
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In this video, Michael Seibel explains what a Minimum Viable Product (MVP) is and emphasizes that it's not a product but a process. He then discusses various topics related to startups, such as the challenges faced by scenesters and inexperienced founders, the low success rate of startups, the economic argument for startups, and the role of accelerators. He also talks about common startup problems like pivotitis and the desire to get rich quickly. Finally, he touches on work-life balance, startup trends, and answers audience questions.
Published/Updated on Jul 21, 2021

After a quick definition of an MVP, Michael Seibel speaks about all the stereotypes about the startup’s world. Which one, how to recognise them and how to treat and avoid them at the same time. A lot of BS in the startup world and how to navigate it :

1:18 : Definition of a MVP
3:03 : MVP is not a product, but a process  
8:11 : Introduction from Michael Seibel and presentation of the topics
14:53 : Scenesters
18:06 : Investors who haven’t done anything
21:46 : Low success rate
24:35 : The economic argument
26:29 : Accelerators
29:21 : Dropping out of college
33:39 : Too young and inexperienced
37:45 : Pivotitis
41:04 : Getting rich quickly
47:44 : Work life balance
50:44 : Startup trends and VC twitter
57:40 : Q&A
1:54:32 : Outro 

Peak hype cycle (new stuff with low quality)!

Scenesters/fake founders (14:53) :

  • Doing a startup to be part of the startup scene but don't want to do the hard work it takes to build a successful company

  • "Working" on a startup part time (not solving an important problem)

  • Hype cycle allows for many low quality ppl get involved

  • Spending more time impress others than the actual users

  • "Noise that prevents you from hearing the radio clearly" (The pollution of the system) → don't get influenced by them!

"Investors" who haven't done anything (18:06) :

Many funds are started, scouts, college programs, college VCs...
--> Why?
1: Interest rates low
2: technology main driver for returns for large institutional investors
3: tech companies stay private longer and longer
Investors in VCs (institutional investors) are piling money into VC funds for the past 8 years (early stage tech is where they can make returns still)
→ Be aware of investors who talk a good game BUT NEVER DONE ANYTHING

Low success rate (21:46) :

  • Most startups fail (99%)

  • Twitter hype cycle fucks people up, success stories in the news all the time - seldom failures.

  • Investors expect 1/10 to be a big winner, 7/10 to return 0 or just the money back

  • Most startups never raise a series A or hit PM-fit.

  • YC: 5 out of 200 companies are successful (solves a real problem and goes to 1BUSD valuation)

    → Odds are more like becoming a successful rapper or a pro athlete / not like

Make less money (24:35) :

You most likely make less money running a company than taking a job at big tech. You can get a good job and learn a lot when coming from a top 100 univ's

Accelerators (26:29) :

Worth it or BS? (spoiler - not required for success). Most accelerators have never worked with a successful company - worth the risk to engage with? Talk to accelerator alumnis before giving away 7-10% equity

Dropping out of college (29:21) :

  • Too many young founders think it's cool to hang with cool older people and tech parties

  • Vast majority of startups are not started at college, not a clear strategic use of your time,

  • You cant work full time on it (just resume fodder to get that google internship) \

  • Dropping out of college is not required to be a successful founder

  • You'll never be around such a group of smart people with lot's of free time - make friends and then start companies

  • What hard skills can I pick up at college to solve problems?

Too inexperienced (33:39) :

  • You are too young/too inexperienced (ignore them, many founders started young)

  • Many work on problems that they don't know anything about (don't use your friends for feedback on ideas)

  • Don't do a warmup startup (have personal unfair advantage) - what problems have I encountered myself and maybe I can solve them?

"Pivotitis" (37:45) :

  • Used to be called failing (don't assume that your solution should work and all other solutions suck - either your are solving the problem or not)

  • Pivotitis is when you do the cycle more than twice without really understanding the problem you're trying to solve

  • Don't have false expectations: your first solution probably wont work and take more than 3 months (probably 3-5 years)

  • Work on something you are passionate about

  • Money doesn't increase your chances of success

Getting rich quickly (41:04) :

  • You'd be surprised how long it takes to get rich

  • a lot of people are worth a lot on paper

  • Get rich quick doesn't happen

  • Acquisitions are not generally a great deal (investors want their money back fist, dept, you loose half in taxes), dilution, morgages, and pension savings etc.

Work/life balance (Hussle porn) (47:44) :

  • Complete BS, if you want to win you need to make sacrifices (you are competing against the smartest and most motivated people)

  • Stay healthy and socialise but you got to put in the extra hours if you want to make it

  • Startups are not a career

  • How do you hack your motivation? How to setup an environment that you don't quick when you're constantly getting punched in the face?