Why You Should or Should Not Work at a Startup by Justin Kan

In a moment, I'm gonna introduce our first keynote speaker, Justin Kahn. Justin is the founder of three YC companies. He is now running a company called Atrium, which we're gonna hear about later this afternoon. But before that, he was the founder of Justin TV, and he actually presented up here on this stage eight years ago back when he was running Justin TV. He’s going to tell you some really awesome stories from what happened back then and talk about why you should or should not work for a startup. So please welcome Justin Kahn.

[Applause]

Thank you, Jared, for giving away my talk. It’s me, Justin Kahn. I am YC's remedial student. I had lost track, actually, of the number of times I've been through YC until Jared reminded me. It's been three times—actually four at least—and some of those companies worked; some of them didn't. My newest company, which went through YC in the last batch in Winter 2018, is called Atrium, and one of my team members will be up to tell you about that later.

But what I want to talk about today—and it was supposed to be a surprise twist, but no longer is—is why you should, but also why you shouldn't join a startup. I'm gonna start with why you shouldn't join.

Okay, there are a couple of reasons, and my goal here is just to give you the most unfiltered, raw feelings that I have to help you make an informed decision. There are lots of good reasons why you shouldn't join a startup. Number one: the management at startups generally really sucks. I wish I was joking, but no, it’s true. I used to joke that there were YC companies—there were two kinds of YC companies: there were the rocket ships with bad management, and then there were the other companies with bad management.

And that's kind of a corollary to that; it is likely that if you're joining a startup, especially an early-stage one, you won't necessarily get enough mentorship or direction on what you're doing unless you really actively force people to give it to you.

The second reason: you are likely to not actually get rich joining a startup. It's statistically improbable. If you think you're gonna join a startup and then be set for life, that is unlikely to happen. So that would not be a good reason to join. I'm sorry I ever told you different.

And then the third reason, which I think is a new reason in Silicon Valley actually, is Silicon Valley has matured in the last ten years since Jared and I have kind of gotten here. One of the things that I think has changed is people, you know, and originally when I got here, I think people just wanted to work on interesting stuff, and it was a much smaller number of people. Now, I think that there's a lot of people who come to Silicon Valley because it's a great career, and there's a great trajectory, and there's stability. If you want those things, you should not join a startup.

I've noticed more and more people—even people I've recruited more recently—coming in and saying, "You know, what's the career pathing here? Where's the five-year plan?" I’m like, "We don't have five years of money, so if you want stability, I think you should go join Facebook. Maybe—maybe not today, but next week, alright?"

So now, on to what you really came for, which is why you should join a startup. When I was writing this in the parking lot five minutes ago, I identified three reasons.

Number one: you will get access to jobs that you're completely unqualified for and you might not be able to do. So my example actually comes from that very first startup eight years ago. You know, I was on stage talking about Justin TV, and we actually recruited someone from that, and his name was Jim. As if he was a programmer from France, and actually he came to work for the startup. I got two offers from two different companies—one was Justin TV and one was actually Scribd, Jared's company.

I sat down with Jim, I remember in a coffee shop after work, and he said, "Oh, I have this offer from Scribd." I said, "What was it?" He told me, and I was like, "I'll pay you ten thousand dollars more right now to sign this instant." And so he accepted—sorry, Jared!—he accepted, and he joined Justin TV. Within a year, he was running our entire Rails back-end for a site that was like a top hundred site (and I think a top 10 to 20 Rails site at the time—it was like in 2010). So the bar was a lot lower, and that was a job he was like completely unqualified for. He would never have gotten the opportunity to do it if he didn't join a startup where we didn't really have anyone else to do it.

He went on—actually, this is a pretty cool story—he went on, and we spun out a company called Socialcam a couple years later. He went on to be a co-founder of that company as we spun it out at Justin TV, went through YC, and got an even greater scale challenge when they scaled from 0 to 128 million users in like two months.

So, you know, just the rate of learning for him was pretty incredible. He's gone on to now be a co-founder at a company called TripleByte that does recruiting for YC companies and others.

Okay, so that’s number one: you are going to get access to jobs you are not qualified for. Number two is joining a startup is a really good gateway to starting your own startup if that's a goal of yours.

In the second work for a startup, we in 2012, I came back with another company called Exec, and I recruited someone else—actually someone really talented—his name was Finbar. He was an engineer at Groupon at the time, and I think he really wanted to break into startups with the idea of eventually starting his own. One of the things that's really important is to just put yourself in positions where you're around people who want to do the things that you want to do or people who are like the person that you want to become.

One of my co-founders of Twitch, his name's Emmett, always told me that you know you are the average of your five closest friends, and he wasn't talking about just me—he's talking about everybody in general—and I really think that's the case.

So, Finbar went on—he was, you know, working at Exec. That company didn't work out super well, but he ended up meeting a co-founder there and starting a startup, which is a horrible idea. There’s a terrible idea—I told him not to do it at the time—but he ended up getting his start, right? He became a founder. That didn't work out, and he ended up joining YC for I think just over a year and then started a new startup that just went through YC and is off to the races and doing super good. I won’t give away the name; it's called Shogun. You should check it out and probably work there.

Okay, so starting your own stuff—that's the second reason. The third thing is to maximize your—ah! I should slow down; I still have a lot of time! Sorry—the third thing is to maximize your own speed of learning. I think this is actually the most important reason why you should join a startup, and I have kind of two examples of people who did that working with me. They are both the two co-founders of Cruise, and I think that they're cool examples because one is kind of maximizing learning on the way up and the other on the way down, and I’ll explain what that means.

So the first co-founder of Cruise, his name’s Kyle Votey. We recruited him at Justin TV in the early days. He was an MIT student, and we had found him, and he was like kind of this person that we thought we needed because he was a hardware hacker, and we thought we were gonna build a hardware company.

We convinced him to come out from MIT for his month-long break during January, and we bought him a one-way ticket. We were like, just work for a month, and then we never bought him a ticket back. Kyle basically became our VP engineering, and he became a co-founder, actually, and the VP engineering. Kyle’s an amazing hacker; he always has been a very amazing tinkerer and one of those people with a can-do attitude. If you're like, "Hey, let's build this thing," he’s gonna go figure out how to build it.

But he didn’t know Jack about scaling systems or building, you know, scalable system architectures. That was like the job that was available, though, as soon as we stopped— we figured out that we should not build hardware.

That was the job we kind of assigned him, and he had to figure it out, really, like on the fly. He ended up packing this live video system—there was no precedent, right? We basically built this scalable dynamic live video system that he engineered and architected, mostly badly, at first, actually.

It would go down all the time. There was this one kind of funny story where we had no idea about—like we did no idea how to build reliable systems. So every time it would go down, we would call him, which was like every 36 to 48 hours. He could never go on vacation, which was like not really acceptable to him. So it was just like one time he was just like, "I'm going, goodbye," basically, and we're like, "No, what's gonna happen if you're not around?"

He ended up going to Tahoe or something like that, and we ended up, of course, like clockwork, after 36 hours the site went down. We had no—we were calling him on the phone like 10 times. It’s a live video site; so if it doesn’t work, it doesn’t have any value, right? Just right then, we started calling him, and he didn’t pick up. Luckily, he had left the address. We ended up having to order a pizza to go to his house to read a message to him. Like a pizza delivery driver read the message: "Answer your phone! The website is down!"

So that was like our concept of a pager system at the time, right? Really figuring everything out one step at a time—kind of inventing everything from scratch. The end of the story is he eventually architected this live video system that by the time Twitch sold to Amazon in 2014 was the fourth largest bandwidth consumer in North America, with fifteen points of presence around the world, and did 90 petabytes of data transfer a month. So, you know, I mean, his rate of learning was incredible as a software architect.

And obviously, he went on and took a lot of that to Cruise, which is also an incredible story. The other co-founder of Cruise was my brother, Daniel, who met Kyle actually as an intern at Justin TV when he was a college student. We recruited him—not really recruited; it was more like nepotism. I’m sorry, I hope he’s not watching right now; I just—that's to say.

So now he was—he also had a crash course in startups over the next couple of years. He didn’t work for me for very long, but when he did work for me, he recruited these guys to the site. I remember at Justin TV, when we were doing like the live streaming site, he recruited this unknown band called the Jonas Brothers, and they ended up like crashing our— I mean, they were part of the reason that Kyle hated his life—crashing the site over and over again.

But the cool thing was he joined as this intern who got to, you know, interact and kind of make a deal with like what was basically the number one kind of teen band at the time in 2007. And then later on, you know, he joined me as a co-founder when I started this other company, Exec, in 2012.

The cool thing—I mentioned that Kyle's kind of the example of how you might learn how to startup as the startup’s growing and on the way up. I think Daniel is a perfect example of how you will also learn and maximize your learning if the startup is completely and horribly failing.

By 2013, by the time we had worked out Exec for a couple of years, we realized that the home cleaning business is not a great business. I'd recommend you don't join a home cleaning startup. We ended up trying to sell it, and this is a great story. This is my last story; this is a great story.

We were trying to sell it. We ended up negotiating a deal with a company called Handy that's in the East Coast and against all odds has survived in this industry. We negotiated the deal, and it was taking forever. There were like tons of lawyers; it was dragging and dragging and dragging, and I was so burned out. I was just like, "I'm going on vacation. Daniel, you have to deal with it." It’s not a very responsible thing to do, but he ended up having to be the one who closed this deal over the next month while I was in Thailand. I mean, I was like kind of doing stuff on the phone, but he was mostly like running this deal for not a lot of money—just a bit of stock from Handy.

He ended up—like it was a horrible experience. He learned all about negotiating; we know from when you want to have leverage in a deal when you, you know, what when you should—like all the things—the different minutiae of negotiating a deal. He learned on this very small, horrible deal, which we were mostly trying to offload because we were so burned out. We wanted to get out of the business.

Two years later, fast forward two years, he had become a co-founder of Cruise. Cruise had built an amazing technology team that was executing super well, and you guys know the end of the story: they ended up selling to GM for a billion dollars. The cool thing, I think, is that Dan applied all those horrible lessons he learned from trying to negotiate this shitty, piddling deal for our company to his next company, and ended up, you know, they sold it for over a billion dollars.

So you’re gonna learn something whether the company succeeds or fails. You’ll probably walk away with something valuable. The last thing I'll say is that the way I think about it is the way I think about growing and maximizing your speed of learning is from a quote that our YC partner, Paul Buchheit, generally said. I think he says it to every batch, which is that, you know, it’s not your y-intercept, but it's your slope that’s important.

So I think you wanna, you know, the way I've always thought about it is how do I figure out ways that I can put myself in the position to maximize my own personal rate of growth and rate of learning? And I suggest that you do the same, regardless of whether that’s at a startup or not.

Alright, best of luck!