Shana Fisher at Startup School NY 2014

Hello. I'm Kat Manalac, and I am a partner at Y Combinator. I'm excited to see you all here today, and I'm also excited to introduce you to Shana Fisher. Shana is the founder and managing partner of High Line Venture Partners, which is based here in New York City. She's also a board partner at Andreessen Horowitz. As an early stage investor, Shana invested in companies like MakerBot, Pinterest, 53, Refinery29, and even Y.C. Stripe. Investors know her as someone who has this incredible ability to recognize greatness in early stage entrepreneurs, even before they have traction. But maybe more importantly, her portfolio companies know her as someone who helps them realize that greatness. So, we're really lucky to have her here today, and I'm excited to welcome Shana Fisher. [applause]

[Shana Fisher] Thank you so much. It's so great to be here. Thank you so much to Y Combinator. I really am a big admirer of the program. I fund a lot of companies out of Y.C., and it's really the main reason I'm here. One thing that's important for me to say before I start is I really never blog or tweet or say anything about what I do. Um, so why am I here? I'm here really because I love Y Combinator, one, and two, I love New York for startups. So, you know, when I was invited, I thought, "OK, this will be fun." Um, there's a variety of reasons why I don't really talk about what I do, but the main reason is, I think, really the companies are the most important thing about what I do. So it's really not important for me to talk. It's really more important for them to talk.

So when I was invited here, I really had to think, like, "Do I really wanna do this?" And, you know, one of the main-- And what do I wanna say? The main reason I decided to come, um, is because the reason I don't blog or tweet or talk about what I do is that I often am told I give the opposite advice of what people normally hear. So I thought that's a great way to use this time. Um, I'm gonna just go through the major areas that I hear over and over and over again that I'm giving people the opposite advice of what they normally hear. And I thought that would be the best way to use this time.

Um, so first of all, I made this presentation with a lot of help. One of the things is it's in this beautiful format of Paper, which I think is, you know, an amazing presentation format. So if you're wondering what this is, it's one of my companies that I love very much, 53's Paper. So, the first I'll cover is runway. And I'm just gonna like hit a couple of major topics and talk about my thoughts on each one. So one of the first things I see when companies come to raise money is that they're raising money for runway.

So they'll often say, "I'm raising a million and a half dollars that's for 18 months, and um, that's what we're doing." Um, right there, I don't like that. So I like when people are raising money, um, to get their company done by any means necessary. It's not about having 18 months. It's about making whatever you raise last, and whatever you're able to raise last, whether you're raising a lot or whether you're raising a little.

And actually, one of the things that I think is really great about Y Combinator, and I've known Y.C. since it was a Boston program. If you meet companies from Y.C. and you talk to them, even the ones that were in the Boston program six, seven years ago, what you realize is that they don't think about raising money as runway in the very early stage. They think about it as, "How am I gonna get this done by any means necessary and how long is this gonna last?" And that's the most important thing. It's not about, you know, having enough because runway really about labor, it's about payroll, it's about rent.

What you often find in companies that aren't thinking about runway, they think about, "How am I gonna solve some of those problems in different ways? How am I gonna get not to pay rent?" So one of the things I try to do for my companies, especially if they don't raise a lot of money, is how to get them free space for as long as possible 'cause that's one of the-- That's just one of the ways to get the money ticking down. Another way is, of course, thinking about labor. How many people do you really need? Who are you paying? Why are you paying them? How much are you paying them? And that's a big factor.

So I think runway is sort of one of those things, it's often the thing in the beginning. That is like the most important of how to get as far as you can because, you know, your valuation only goes up after that, and hopefully, that's sort of my philosophy on runway. Um, founders, co-founders. Um, common knowledge, I think, is that it's good to have co-founders. Um, for some people I think that's true. Um, I have a lot of single founders in my portfolio. I think it's not always right to have co-founders.

I think certain people, certain people that can take a company really far actually are not-- are not actually equipped to have co-founders. They're actually better being a single founder, and so I don't make exceptions to that. I like to see people that can take the company the distance, and having a single founder might sometimes be the best way to do that. If you do have co-founders, I think it's really important not to have repeat skills. Developer, designer, obviously incredibly important, um, product.

Sometimes that's inside a developer, sometimes that's outside. Sometimes that's inside the designer, sometimes that's outside. I think it's really important when you're looking at who you're starting a company with. I can't, I'm not going to make a generalization. Sometimes, you know, people who have known each other forever, they may have overlapping skills. They may have known each other growing up and may be the right person to start a company with. But a lot of times what I'm seeing are people, they're like they just met the person a couple of weeks ago or months ago because they wanted to start a company. Now that starting a company is so-- it's just something people do when they graduate.

There're so many companies, people feel like that's the only way to do it. And I think that some people are just better to be single founders, and you should structure the company around your own skills. Um, time. That's time to launch. That's what this means to me. Um, common knowledge I think is you should get product out quick, you should iterate, and it should be live.

Um, actually, I often take the opposite view on this. I think four years ago I might have said, "Launch quick. That's actually important." Today, there's thousands of startups, and it's a thing that many, many people are doing; I actually think you should take as much time as possible to make your product perfect. And because there is so much competition, you have to really think differently about what space you're in and how much time you're taking to launch.

It's actually possible today to have smaller groups of users. It doesn't have to be live, but I actually don't think it's good to rush products out. I think if it takes you a year to make your product perfect, then you should take a year. It's not about getting it out. Because I think you have to have like the hooks in it and a couple of traps that are gonna be the reason why consumers love your product, and it can take a while to craft that. And it's not so important, I think, today to just get something out there, a minimum viable product.

I think actually what is important to do today is to try to figure how you're gonna raise above and level above all of the competitors. And that's something that timelines, and it kinda goes back to the runway, are really important to think about initially. Location. Um, New York versus San Francisco versus everywhere else. Um, I really like-- I love New York to create companies. I think New York is a very creative city. I think it gives people a lot of inspiration.

There's certainly a lot of input you get for your product that you don't get in a community where everybody is doing tech. There's a lot of money in the early stage in New York, so I think that's excellent. What there isn't is a lot of money in the middle stage. It's still California, I think, primarily that has a huge advantage with the trajectory companies are able to get. And doing things like Y Combinator, actually if you're gonna be located in New York is extremely strategic.

You might not even think about the relationships that you're forming there, how valuable they're gonna be two years from now. You're just thinking about, "How do I get my thing funded? How do I get my startup to be separated from everybody else?" which Y.C. is excellent in that. But what it's also good at is really putting down roots in California so if you're gonna in New York, you have to have some roots there. If you're ever gonna-- if you're gonna wanna go back there.

And having investors in both cities, I think, is also really important because you get very different perspectives, and that's why I think location has to be thought about very strategically. Certain companies, I think, have real advantages to be in a city and an urban environment like New York or other cities. Others have real advantages with the amount of people you can hire and the talent that you find in California, northern California.

So I think, um, that's my view on location, and I sometimes hear... I sometimes hear the opposite or not an honest evaluation of what are really the pros and cons. So this is like my favorite one. Um, nobody knows anything especially when it comes to investors. And I think about that all the time myself, and I find actually it's very liberating. It's very liberating 'cause I know many of the great companies that I found, when I found them, absolutely nobody else was looking at them. Most people didn't like them, and it was very difficult to tell that what they were going to become was gonna be as big as they did become.

And I think it's important for all of you starting companies to really remember when you're talking to investors, it's very personal, it's very subjective. So, if you hear negative comments, if you hear like, "This doesn't make any sense," nine times out of ten, that might be true. But one time, it maybe that what you're doing is so new that like nobody can evaluate it. And that's when really great things happen.

You also might be talking to an investor that has just made 10 investments, and they're not even in the headspace to do yours. So I think it's really important to, you know, when you sit down with investors, talk about it like, "What are the last couple of deals you did?" Look, if you get someone that hasn't done a deal in a while, they're actually maybe more open-minded to you. And I think you have to be more strategic about-- You can be more strategic about the people you're talking to, not just closing your round.

You can close people that are really gonna spend the time and actually have an open mind on what you're doing and give you good feedback. So it's really important when you're talking to investors to realize, look, they probably aren't in any better position to evaluate what you're doing in a weird way, than you know the next person sitting next to you. There are a lot of patterns. People get stuck in patterns. I don't actually believe in patterns.

I think patterns actually can trap you into wanting to see the same thing that worked before. But, you know, the river is always flowing and the markets are very different. What worked today is not gonna be working, you know, it's not gonna be something that worked four years ago. So personally, I try not to look for patterns.

I'm also known I contradict myself a lot, so I'm talking about patterns. But, I'm talking about, you know, my advice. But I think when you're starting or crafting your company, just thinking about the role that investors play and who you're talking to and where they're coming from, kind of do some research when you sit down with them before you just launch into your presentation, and you'll get a sense, "Hey, is this person even like a candidate, or are they probably, you know, kind of like, is their plate already full?"

A lot of investors can't even really-- You know, if they're a lead or a board member, you know, if they're on more than 12 boards, that's like a lot. So if you're talking on someone on 12 boards or someone who's new, you're much more likely to get the results you want with someone who is very open-minded to what you're building. And these are some of the things to look for.

Um, product development. I have a couple of things on product development that I find myself going over a lot. Um, one actually-- I got this advice from Paper. I was with the Paper team this morning, and I asked them like what, you know, "How do you guys think about product development as a startup? What are some of the things you did that you think are valuable and what are the things that you think you wish you knew?"

And one of the things that's really important, and I really believe this goes back to the number of people on the team, I think it's really important to build for today. If you read development blogs and many people that have worked at bigger companies leave those companies with the same disciplines, a lot of those disciplines you might read about in development blogs like art, you know, you're gonna spend a lot of time on infrastructure, but you're not gonna spend a lot of time on the product you're trying to build for today.

And prioritizing what actually is building for today, having a big vision. 'Cause when you start a company, you often have a big vision like, "This is what we're gonna do. This is our business. This is an area we're trying to disrupt." But from a real product development standpoint, like what's today's problem you're actually gonna solve.

And I often advise companies that are also going to Y.C., "Go to Y.C. to grow." Because some of the connections and the relationships you're making have really been incredible difference makers for companies to either get other startups using their product or take advantage of the mentors there to teach them, like really how to craft growth when you have that solid product. And I think that's one of the best things to remember about building.

Another thing I like to think about, again, time. I think you want as much time as possible to build the perfect product. One thing that's related to this is design. Um, I think today design is really becoming-- It's like all the same. Great design is all the same. There's the same CSS templates a lot of people are using. And so the designs kind of bleed into each other.

You know kind of what makes great design today. It's like flat, it's whatever serve Apple is also, um, bringing forward, which is great, but you don't have any breakthroughs. So if everybody is using the same templates, the same full bleed photos, the same Sans-serif font, the same saturated colors, which are all beautiful. And today, we're trained, especially investors are trained to look at the design and be like, "Oh that's clean, that's beautiful. That looks like it's supposed to look, but it looks like everything else."

So what I actually like to look for, and I funded a lot of stuff that did not look good, 'cause I knew like all you have to do is like a tip of the iceberg, you have to put some design onto that. But if you have something really breakthrough, don't worry about how it looks because how it looks is often gonna be something you can do, use one of those CSS templates that everybody else is gonna judge you by.

But I think if there's any designers in the room, I think it's time to push past what everybody is starting to look like. And that's something that I look for. I know that, you know, we got to this design because there, you know, this kind of pervasive design because, you know, there was another pervasive design that kind of got overtaken by this one, and I think we're ready to have a new look.

I don't know what it is, of course. That's what I look for every day. But I'd really like to see products not be so skin deep because I think that you can get trapped in the skin deep-ness of a product and not worry about like what you're really trying to do that's breakthrough underneath, how hard is it, how much time does it take to get perfect. And often design is last. Um, and I hope there are breakthroughs there, but I really would focus on sort of the iceberg of the product versus the surface.

People. So related to runway, you know, people raise money and they say, "We're gonna go hire five people. We're gonna hire seven people. We're gonna hire four developers 'cause we need four developers to get this done by three months." And what I found is that most people that are starting startups don't know how to manage people. And you know you're gonna find yourself overwhelmed.

And it's really important to perfect how you manage people one by one. So if you say, "Have a single founder," you should hire one person and perfect it with that person. If you have two founders, hire one person, perfect how you're gonna manage that person and build the team that way. Um, I think another thing is, um, this is gonna sound really cheesy, I guess, but diversity is really important.

And you know, if you look around and you founded your company all of the same, you're just not gonna have enough views of your user. And a lot of founders-- I don't know if this sounds controversial but most founders are male. I have certainly funded a lot of female founders. I funded a lot of products that are for women created by males, but they prioritize hiring women pretty early on.

So it's sort of a, you know, equal opportunity thing. I mean, you wanna find the best person for the job, but you really should think about bringing other people into the company, not just being female founders, but bring women into the company either in design roles, development roles. You know, there's a lot of times in my companies. They probably get tired of me doing this but I meet a young female developer who I think has promise, and I was like, "Just tell a company you have to hire her. You have to train her."

Because there is no way you're gonna get opportunities unless founders, founders who really in the position of taking their companies forward do that. And you're gonna find those people are so valuable. You're not even gonna-- And partly it's karma, but I actually believe it's one of those things that if you bring these people into your company, whether it's, you know, racial diversity or gender diversity or just people that don't think like you, you know, mental diversity, however you wanna say it.

I just think it's so critical to building great companies. And I think when I look back at my companies that have succeeded, this is what they've done. They didn't always know how to do it, but they did it. And I think it's actually indisputably a great thing to do. Um, we're not gonna have female founders unless they get more experience. They're not gonna get experience unless they get great experiences in other startups. So sometimes, I think it's really important to prioritize these things.

That's just my view. Um, can I talk to you for a minute? This is a big one. Back to people. You think you're building a startup to create a product. You think you're gonna launch your product and you're building technology. You're actually building people, you're building a team. And if you don't take care of managing that team, it's gonna come over you like a tidal wave. You're gonna have people coming up to you, "Can I talk to you for a minute?" That's kind of like what the symbol is.

People want to take aside, people wanna know, "Where am I? What's my standing in the company? What's my position in the company? What's my role? Why is this person getting that role?" Here's an idea I have. That will happen if you don't work on managing the people. There's a really great paper called the Scarf Method. One of the things I do is I love C.E.O. coaches who really help founders grow as managers.

The Scarf Method is something that he recommends. I read it's sort of a neurological approach to how to manage people, what people need to be managed. If you just type S-C-A-R-F...you'll find the paper. If you don't, you can e-mail me. I'll send it to you. It's just about what people need, and you'll find if you take time to think about how you're managing the people on your team, and you are actually now managing a group of humans.

Let's say you raise more money, you take your company a little further, um, you're gonna hire people. I do advise not to hire people very quickly especially if you've never managed anyone. I think you're gonna perfect it, and you'll make mistakes, and those mistakes will become part of you as another manager, as a good manager, and you'll be able to hire someone else and retain someone else. So you'll make mistakes. I think you should make mistakes early so that you go, and then you can correct that. And it's not at a mission critical time.

So that's a big one. If you see yourself surrounded with "Can I talk to you for a minute?" out of your work, then you realize, "OK, I need to step back and I need to figure out am I managing the people around me? What's happening?" Because, you know, the startup can be such an intense, some very empathetic. It's very intense environment. You feel like, you know, what you're doing is extremely important. You lose perspective almost for everything else around you, and that's actually really important.

It's really important to be in that no perspective place because that's how you can, I think, execute and do superhuman and great things. But it's really important to step back and realize like, "I'm managing people, not just the product." And many of my founders, many founders I meet or engineers, it's just not something that they've done. But if you can do that, you'll be great, and no one will be able to kick you out of the C.E.O. spot.

Um, the equinox. So the equinox is something I like to think of as like that time horizon, the line between when you don't have to make money and when you do. So personally, I like companies that make money. I like companies that have business models. I like companies that like to think about the business model ahead of time even if, I think there's no greater value in what you do than if somebody is willing to pay.

So I like companies with business models. However, I have definitely funded things without business models, and they've even had a really good idea, a clear idea of what they're gonna do. Even if they don't do it in the first year, they may not do it till the third year, but they have a very clear idea of what they're gonna do. And I know there's a lot of examples out there of companies that don't have that.

But I think you'll find, you really control your destiny when you do control the money. Either you're in control of raising the money; some people are really good at raising money, or you're in control of making money. So the equinox is like that time between it's like acceptable to not make any money and when it is. And I think that's really important to recognize. Many founders don't recognize with enough time when that equinox has passed.

So there is a certain amount of time where it's all potential. And investors invest in potential. You know, a very rare... I mean, they like to look for what they like to look for. But a lot of that is what's potentially, you know, what's potentially gonna be valuable, and they project onto a company. Now, there's a certain time when you can do and a time when you need to stop. And as a founder, you need to say like, "This is the time we need to cross over 'cause we wanna control our destiny."

And I think that's how I think of the equinox. I think it's a very important concept that I try to help my companies with. So, I'm wrapping up. Cosmos. Um, this is really meant to be about inspiration.

So I don't know if anybody is watching Cosmos on TV. It's so good, you know. It's so good. And I went back and watch the old Cosmos. I remember growing up how much I loved the old, the original Cosmos, and that really had a profound impact on me. And if you're watching Cosmos, and I really recommend everybody do it, it's on Fox. It's just... The head of the planetarium is a narrator. And I recommend going to the Dark Matter Show, actually at the Hayden Planetarium. It's really extraordinary.

And what I think of when I'm inspired by Cosmos is just the big problems that aren't solved, and how, you know, on earth, we...we don't really understand the edge of the observable universe yet, and how deeply interesting that is to me, and the problems of carbon and all the kind of things that are outlined through the narrative of that show. And I don't know what-- That inspires me. That inspires me, so if I see lots of little apps, I sort of like, "What is this? This is lots of the same stuff."

I really love to see breakthrough things, I think people really truly are. You really only are going to achieve as you big as you do dream, and that's very corny. But I think a lot of what I do is look for people that have really big dreams and they know how to build for today to get there, and they know how to look at and say like, "I just don't wanna do another app. I actually want to do something that is meaningful." Whether it's maybe thinking about design and breakthrough ware, whatever you view as meaningful, whatever you view as inspirational.

It's really important, I think, when you're starting your company to have that spark. Because if you don't have that, it's going to show. The authenticity shows. It takes Pixar five years to make a movie. Why are they the best movies? 'Cause they took five years and they're made with a lot of heart, a lot of people, and a lot of ideas.

And there are so many companies right now. To level up, you have to do that. It's going to be very hard to level up if more people aren't doing that. So whether you're watching Cosmos or you're finding some other way to inspire you, you know, I really encourage everybody to dream big because you could get jobs, and jobs would be a lot easier, a lot easier. Startups are really hard. So if you're gonna do it, you gotta go for it, and that's what I wanna see.

So that's all. I just wanna say thanks. E-mail me if you have any questions on what I said. I hope you don't quote me though 'cause that would, you know, I don't wanna debate it, you know. I just wanna put my shoot out there and see what happens. But, you know, if anything I said interests you, I'd love to talk to anybody. Thank you, Y.C. Thank you, 53, for helping me and this wonderful illustrator named Julia Lu, who just put together these incredible visuals. Thanks again.