Geoff Ralston and Adora Cheung Discuss Startup School

All right, Chef/Owner Dora. Thanks for coming in. As Craig, we're here to talk about Startup School.

So, Jeff, could you break down what's happening this year with Startup School?

Sure! Well, Startup School began a couple of years ago with a course Sam taught online called "How to Start a Startup." Last year, we evolved it into a course we taught at Stanford called Startup School, and we're continuing that this year. It's an open online course that is a way for us to reach as many companies as possible throughout the entire world to help maximize really the amount of innovation and the amount of value created by startups everywhere in the world.

Anna, Dora, how is the coursework differing this year from any previous version?

Well, there are a lot of similarities. So, that's a 10-week course. You can either audit the course or you can actually apply to be part of the course. To be part of the course, you get obviously access to the materials and lectures, you're put into a group, and you get an advisor who you will meet once a week to, you know, go over the obstacles that you're having. But more importantly, to talk with other founders as well who are dealing with similar challenges. And then you also have access to community, which will be a forum where you can talk to everybody else who is taking Startup School. So, it's really great because at the end of the day, what we want to do is reduce the barriers to starting a startup. I come from the middle of nowhere personally, and so you know it's near and dear to me because I didn’t learn about startups until very late. Like I would consider like a late bloomer compared to people who are from here. I think that what's important is to give people out there who are not in Silicon Valley access to community, access to mentorship, and access to really great knowledge to build their startup.

Mmm, so the amazing thing about Startup School is it's not just the content. This is really unique; it is about the community and the mentorship that every single one of the founders in this advisor track where you can assign an advisor and meet with them on a weekly basis. Now, it's also true that the content this year is going to be different than the content last year. All of the content from the last two years is available online, will remain available online, and is relevant and useful. But it turns out also that the content relevant to starting a startup is both broad and deep. There's a ton of things to cover, so we're going to cover everything a little bit differently. We're going to go over similar areas of a startup, how to get going, what the mechanics are, how to think about product, how to think about growth, how to think about fundraising. But we'll do them all in new and different ways that I think will be valuable additions to the set of content that we've already actually made available in a public library that you can get at startupschool.org/library.

Mmm, and the speakers for this year, is that list public yet?

Well, the list is about to be public, I think simultaneously with the publication of this podcast. So, we can't start to talk about it. One of my favorite speakers is going to be at Dora, and we're really focusing on YC partners and YC founders for this Startup School. A number of YC partners are going to be participating. I'm really excited to say that Paul Graham and Jessica Livingston will be taking part in the course and giving some of their wisdom, which is also broadly to founders everywhere in the world. But we're also gonna have other YC partners. Sam Altman, who's the president of Y Combinator, will be giving a talk. Michael Seibel, the CEO of Y Combinator, will be giving a talk, so we have an amazing lineup of folks who are going to be out there talking.

Okay, cool. So, we should just clarify all these questions around the tracks right now. I think that's like isn't necessarily clear for folks who have maybe participated before or just heard a little bit about it. So, Adora, could you explain the different paths of going through Startup School?

Yes, so there are two paths. One is you can audit the course, in which case you just get access to the live stream, lectures, and the notes. Or you can, especially if you're full-time founders, you can just apply and be part of Startup School officially. Which means, like I said before, you get access to mentorship. You get access to the forum, exclusive deals like with Amazon, Stripe, Atlas, and so forth. And you also can qualify to receive a $10,000 equity-free grant from us, right, if you complete the course. We're going to choose a hundred companies that get that grant based on how they do during the course and the information we're going to get from the advisors and the progress that company makes. So, we're going to judge how promising that company is.

Yeah, and those companies, could they apply at any stage? Like who are the founders that you guys are looking for?

I think the most interesting are people who are early-stage founders. They either have an idea and they're ready to work on it full-time, or they are currently working on an idea and anywhere from no users to, you know, any number of users is fine. I think we can be helpful along those lines.

Yeah, I think Startup School is, it’s fair to say, is certainly targeted at very early-stage companies. There's knowledge in that, and the knowledge base that we've built in the past and are continuing to build with this year’s Startup School that is probably useful to tech companies in later stages as well. But for the most part, this is, I think Adora put it well, about lowering the threshold for people to get started.

Okay, really get your startup going. Gotcha. Do you guys recall from last year, were there any success stories that kind of stood out to you?

Whoa! So, we had 38 companies who actually got into our core YC program after going through Startup School. I think for the most part, most of them did a lot of their iteration and talking to users during Startup School, and they learned a lot about how to do that.

Which I should pause to say that that's a very high percentage of the batch.

Like 38 out of three across two batches!

Yes, but still 10%. Yep. Yeah, and success stories? I mean, I'm very excited about a few of those companies. One of them is actually I worked very closely with in my group. It's Connection IP. They actually went through a MOOC with something in the legal space, which they're still in, but they iterated towards their current product during Startup School. So, I think that's really exciting. Their Connection IP is an enabled patent law firm, so if you need any…

Just to add, Adora threw in this term MOOC, which we often use internally to talk about the course. That stands for Massively Open Online Course. And it's sort of a term most people know, but this is how we think of Startup School. It's a MOOC; it's for everyone. So, open to everyone. No matter what, if you apply to be part of the main course and get an advisor, and for whatever reason – and we do have a limited number of advisers, so we can't take everyone – but you can still take the course. Everyone who applies can audit the course, can go through all of the lectures, and see all the content. And at the end of the course, as we said, all of the content is going to be available online.

Gotcha. So, given the success of last year's MOOC which Jeff, you are organizing, why did you decide to do the grants this year if it was already working?

We want to maximize the amount of innovation in the world. It's just a hard fact that starting a startup takes cash. To be honest, it's a bit of an experiment, right? Certainly, it helps to attract companies to come to Startup School. We think Startup School is good for them. We drive no benefit unless they apply to a comma and get into Y Combinator, except that we think it makes the world a better place to have more startups, so it’s good if more do startups.

Cool. And we think that the most promising startups that don’t get into Y Combinator but still have a shot have a better shot if they have some capital to work off of. So, our fervent hope is that by giving ten thousand dollars to these hundred startups, we'll have startups that might otherwise die, not die, and succeed, thrive, and become viable companies.

Gotcha, okay. And so just to clarify the deals you mentioned earlier, what are they explicitly so people know?

The exclusive deals, so we have cloud credits from Amazon Web Services, Digital Ocean, and maybe some others. Then every company that comes through will be able to incorporate and create a bank account through Stripe Atlas. They’re an amazing company that works with us for incorporation. Yes! And we'll have a bunch of others, but those are the highlights.

Cool, so applications are open right now, and they've been open for a week.

They've been open for a week or more when this podcast airs, yes.

Yeah, what's the packet?

It'll be two weeks, and I do want to encourage people to get their application in. It turns out this is a really popular thing, and lots of people are applying. We're already thrilled by the response; it's great! We have thousands and thousands of companies already applying.

And when will the course begin?

The course is going to begin the week of August 27th. It’s going to actually have a live in-person component in Mountain View, California, at the original YC offices on Pioneer Road. Excuse me, but also, of course, we can't take everyone there since there will be many thousands of people taking the MOOC. So, all of the lectures and slides will be available online shortly after each lecture.

Mmm, and who can attend in person? How does that work?

We're actually working through that. We think the demand is going to be super high, and we want to be as equitable as possible. It’s a really interesting curve; the startup companies in the circle are the companies from around the world, but it’s also true there’s a good number who are in the Bay Area. So, we don’t expect or really even recommend people travel. If I’m going to try to come to the course because that actually will probably detract from your startup. You should be focusing on your startup, building your company, and talking to your users, and building your products, not traveling out to Mountain View.

Right? For people who are local and who want to come in, we’ll have some mechanism for them to reserve a spot and come in and actually attend the lecture in person.

And just to clarify or to add on to that, the live is just an option. It's not a requirement for course completion or to qualify for the $10,000.

Mmm, but there are requirements. I’m sure Adora is about to say that, but to be eligible to take part in a presentation day at the end where you can present your company in hopefully an audience of investors and others in the community to take a look at what you’ve done, what you’ve accomplished. But also, to be eligible for the ten thousand dollar grant, you need to attend nine out of ten of the weekly group meetings with your advisor, and you need to consume at least nine out of ten of the yes, 18 out of 20. Make sure that that occurs on any basis.

Okay, so the course, Adora mentioned this, runs for ten weeks starting on the week of August 27th, and it runs through the end of October. Not coincidentally, that is right in the application period going into the interview period for our winter 2019 batch. So, we actually will help people apply to YC. We’ll give you maybe not insider information, but accurate information about how to think about creating an application and having your best shot at having your company considered for membership. There will actually be a lecture dedicated to that.

Look, it’s hard to get into our core YC program. The admission rate is somewhere between one and two percent. So, we think that alone is a great reason to come through Startup School. The main reason Startup School will help you get into YC, however, is not because we have a lecture dedicated, you know that. The main reason it will help you get into YC is because we sincerely believe it will make your startup better, right? And you will have the forcing function of working with a group over ten weeks.

Well, that’s part of it. Yeah, it turns out that the forcing function of working in part of a group and having a community over ten weeks makes your startup better. It makes you focus; it makes you achieve; it makes you grow. So we expect those things to really be relevant.

So the companies that are applying, in addition to this section on applying to YC, what else is in the curriculum? Like let's go from the beginning of the first course and then just go from there?

Yeah, this is hard because we have to do it from memory, and it’s ten courses. But it follows an arc that I think will be pretty familiar to folks. We're going to start off by talking about some of the really basic ideas behind starting a startup: why you do it, how you should think about it, and how to mechanically go about doing what you need to do. Some of these things – every part of doing a startup is hard – but sometimes just getting over those first small steps is the key to actually getting on the road to building your startup.

Then we'll spend a fair amount of time talking about product. What is a startup without – what is any company without a product? YC's motto, it turns out, is make something people want. So, we’ll spend a fair amount of time talking about what it really means to make something people want, to find sort of the proverbial product-market fit.

And then we'll go on to talk about how do you think about getting users and growing once you start to have a product that's reasonable. We’ll spend a fair amount of time on that, and we’ll spend a fair amount of time on things like how to think about running your company, hiring people, and then we’ll transition to talking about fundraising: how that works, how you think about cap tables.

As we get towards the middle part, we’ll talk about applying to YC, which is sort of right in that. A lot of people think about YC as a mechanism for fundraising, although I tend to argue it’s much less about fundraising. That’s a piece of it and way more about making your startup more likely to succeed.

Then we’ll have some cool stuff at the end that will revolve around thinking big about the future, thinking about the key things that make startups succeed and fail, and even psychological and emotional things. Because as anyone who’s done a startup – Adora has been through this in as intensive a way as you possibly can – starting is an emotional roller coaster. It’s really complicated and hard, and coming out the other end as good a person as you entered at the beginning is really a hard challenge.

Mmm, what about those sessions with advisors? You know, around YC we talk about office hours and group office hours and advisors and all that stuff. I think it's not always clear what actually happens during those meetings.

And then, to be clear, like these are online sessions, and so they’re happening weekly, correct?

What’s actually happening during it? Because, you know, following the coursework is interesting, which is like the traditional model, if you're working with a TA for example, but in reality, they're more talking about product growth during the whole course.

I would say the coursework is a little bit more on the theory side and abstract in an attempt to teach everybody, you know, something relevant to what they’re doing. In group office hours, it comes down to more tactical things and very specific things. We’re going to try to group you with fellow founders who are working in similar types and obviously, hopefully similar locations so you don’t have to get up at wacky times for this.

But most importantly, I think the general structure is you come in and describe, you know, what has happened in brief, what has happened in the past week. Have you met your goal? If not, what was the main obstacle, and how can the group help you?

The mentor actually is not there to, I would say, tell you exactly what to do. They're there to facilitate the conversation. Because I think in most cases, a lot of the problems you run into, other founders have run into in just very different forms. It is other founders who will probably help you the most, and so that’s what we’re hoping for.

Mmm, the important aspect of the hours, even though they're done in a group, is that there's actually individual attention for each company. Each company gets to spend time talking about what they’re working on, what progress they're making, what problems or barriers they’re running into. And it's the advisor and the other founders within that context who can help and take part in the community of startups trying to be successful.

It’s actually the coolest part. I just actually, it's worthwhile saying just a word on the advisors, who I think more than anything make this work. It’s really a test of the YC network that YC founders are so interested. I don't know how open I should be about this, but I'll just say we don’t pay these folks to do this. They volunteer their time for a free course to spend time with companies that they've never heard of before and to help them be successful.

These folks are amazing. They’re, in many or most cases, working on their own startup at the same time, but they dedicate their time – their very valuable time – to help these strangers make their startup work. It's really more than anything else what I think makes startups cool, powerful, and interesting beyond sort of any online course you can follow and any book you can read about how to start a startup. This is way more real, way more effective, and I would say way more substantive to the future success of your startup.

Yeah, well, I think it really helps you stay locked into the course, because that’s been, you know, churn has been a huge problem with many MOOCs. Right? I think it’s not uncommon to have less than 20% of the class percentages. Last year, 56% finished, and you know our goal is higher this year. I think Adora pointed out you only get a chance at the $10,000 if you finish, so we expect that is one of the reasons we hooked this in place at the tail end of the course because we think that is going to incent people to finish because we think it’s good for them to write your start, then as a better shot, right?

So before we move on, I think we should also shout out the people at YC that are working on this with you guys, because it’s not just you two. Do you know who else was working on it with you?

Well, Steven Pham is the main one. I mean, you know Steven does more than anyone. He’s amazing. He worked on it with Sam last year.

Yeah, and I think he worked on Startup School too. Didn't know how to start a startup too as well, but he’s amazing. He’s who handles the advisors; he puts a little of everything together. He makes it work when it works, so he’s sort of the guy.

Yeah, and then we have two engineers who are working with us as well, Ramon and Kyle.

Otherwise, he’s the software team. Because there’s a whole software side to this, obviously. Yeah, we built, like, for the most part, we build this ourselves, we use our own software, and we manage this with our own stuff.

We actually, it’s actually non-trivial to put together software that makes it scalable to work with, you know, thousands of thousands of companies. Yeah, we obviously have smaller scale, but even within YC1, we have hundreds of companies we’re working with. We need software to help us scale at this level; we need it all the more so. And so, they’ve done an awesome job last year. We're improving it again this year, and we get lots of feedback from the companies and from the advisors on how to make the software even better, so yeah, the Catalan and Ramon have been amazing.

Yeah, right on. So, on a personal side for you guys, when you were startup founders, which of these classes do you think would have been most valuable to you? Like, what was the thing you knew least about where you could have learned the most?

All of it when starting off. Oh my gosh! Like, I mean, I’m from a different generation, and when I wanted to start up, there was nothing available.

Yeah, the content’s awesome! Like, just if you go to that, that URL I mentioned for the library, and you start going through there, it’s incredible. There’s also a lot of startup content elsewhere on the web, and some of it – not all of it, but some of it – is pretty good too.

I happen to believe that the startup content that’s been put together both at YC is a mix of Startup School content and other content that’s been generated and some external content that we think is actually particularly good at, and we point to. But that coupled with the community and the mentorship that Startup School represents, like that alone is worth the price of admission, which is free. But that alone is amazing and game-changing as far as I’m concerned.

Mmm, you haven't answered the question. My question is that the community and the focus and having that from me. Like, again, the content is great; it’s fantastic, but you have nobody around you.

Yeah, yeah, I think I answered the question. You’re right; you didn’t question me. My bad, Adora, same.

Yeah, I think in general when you think about YC, it’s all about the network. It’s a community of high-quality entrepreneurs.

And you can’t get that anywhere else, and so we want to do this for Startup School as well. It’s like you can live anywhere and plug into a network. You don’t, you know, like this will be the highest quality place you can be at to talk with people about your startup.

All right, thanks, guys. Thanks for your time!

Hey, thanks a lot, Craig. It was fun!