How to Create Luck - Dalton Caldwell, Y Combinator Partner

I'm Dalton. I'm a partner at Y Combinator. I was the founder of a company called imeem in 2003 and a company called mixed-media labs in 2010. I'm working at YC since 2013.

Okay, how do you create luck? The way to create luck is to move much faster than everyone else and to give yourselves as many opportunities for that lucky thing to happen to you. So, say that everyone is running at five miles an hour. Imagine that you're able to run at 15 miles an hour. You can run circles around everyone.

So, if you're a startup that's moving really fast, it gives you more opportunities to talk to more customers, to change your idea more often, to write code more quickly. Everything gets way easier if you've moved much faster. We've seen the founders that get the luckiest are actually the founders that move the fastest, giving them as much surface area as possible to get super lucky.

One example, of course, is Breck's, which is the credit card for startups—a company that's been doing extremely well. When we initially funded them, it was for a completely different idea. It was for a VR headset idea. If the founders weren't lucky, they would have worked on that idea, realized it wasn't gonna work, and given up.

The way they got lucky is they realized very quickly that that idea wasn't gonna work—probably a month or two into the batch, probably like six weeks. They decided to change ideas, and they didn't just decide on one idea to change to. They iteratively went through half a dozen or more different ideas. Very quickly, they talked to all the world's experts about their other ideas and were able to cross them off a list as being not good ideas.

By doing this really fast process, really quickly during the batch, they zeroed in on what became Breck's. If they were way slower moving and they weren't creating luck for themselves, the odds were definitely the case that that company was not gonna work. I've seen other companies do the same thing, the same thing for Retool, where they had to change ideas, and they moved very quickly to find a much better idea.

Also, a company called Magic did the same thing that I worked with, where they originally were funded to do something completely different. They moved so fast, going through different ideas, actually building full prototypes of the ideas, and even launching the ideas to customers. They got lucky and found an idea that really took off.

That's how all of those companies dramatically increase the surface area of luck. If you're a pre-company, how do you create luck? It's to know as many interesting people as possible and to learn from as many interesting people as possible. I think another way you can create luck is to do things that make you super uncomfortable.

A lot of the time, founders that may not get as lucky just stay at home, and they wait for the world to come to them. They wait to be recognized for their secret genius, whereas the folks that are able to create luck just go out there, interact with people, and tell other people about their ideas. They build things.

A great example is if you look at the history of Facebook. Mark Zuckerberg was constantly creating prototypes and giving them to users. He was creating music plug-ins for Winamp. He was making hacks for his friends. He was always just kind of making stuff and giving it to people. That was the surface area by which the genesis of Facebook was created. He was just kind of making stuff.

You can dramatically increase the chance that you will get lucky if you just make things. You learn how to make things really fast. You learn how to make things by yourself or with other people that are interesting, and you give them to other people. You don't just hide them to yourself. If you just do that a lot, things start happening for you, is what I've noticed in life.

So, I would definitely recommend that. When do you know when to double down on your strengths versus to go outside of what you know? I think you could go both ways on that. For instance, if you know literally nothing about science and you know nothing about biology and you decide you want to cure cancer with your startup, that's a pretty tall order.

Maybe it's possible; I can't say it's impossible, but the odds that you will get super lucky creating a cure for cancer as someone who is a complete outsider do not feel like playing to your strengths. On the other hand, sometimes it's the case where experts in a space are very uninterested and give up on anything in the space. It takes sort of an outsider's philosophy to be able to see the greatness in it.

So maybe the delineation is if you have the technical skills to build the product you want to build, then I think it's okay to get in way over your head. But if you have absolutely no relevant skills and you're trying to break into something that requires technical skills, I think you're gonna have a pretty hard time.

I think the way that you create luck when you're Series A or later is by continuing to move really fast and having a culture of fast-moving experimentation. Also, hire people that move so fast that they get lucky too, right? If you're a very fast-moving founder and you continue to hire people that are able to iterate through ideas quickly and have this culture of getting more done in a set amount of time than most people would be able to, that's how you can make your culture continuously lucky.