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Lessons from 1,000+ YC startu…

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1:20:52

Lessons from 1,000+ YC startups: Pivoting, resilience, avoiding tar pit ideas, more | Dalton Caldwell (Y Combinator, Managing Director)

Lenny Rachitsky

Apr 18

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Dalton Caldwell is Managing Director and Group Partner at Y Combinator. Prior to YC, he was the co-founder and CEO of imeem (acquired by MySpace in 2009) and the co-founder and CEO of App.net. During his time at YC, he’s advised more than 35 YC unicorns, including DoorDash, Amplitude, Webflow, and Retool, and has worked across 21 different YC batches. He’s also racked up more than 6,500 office hours with founders. In our conversation, we discuss:

Why founders need to adopt the mindset “Just don’t die”
The most common reason startups fail
When to pivot, and characteristics of a good pivot
The concept of “tar pit ideas” and examples of bad startup ideas
Why investors say no to startups
The importance of market size in investment decisions
The pitfalls of founders over-delegating
Effective ways to talk to customers
20 ideas Dalton is looking to fund

Some takeaways:

The defining trait of successful founders isn’t a specific personality type but rather a profound self-belief. They possess an unwavering conviction in their startup’s potential, even in the face of daunting obstacles. Refusing to accept failure, they persuade others of their inevitable success.
Beware of “tar pit ideas”: ideas that receive initial positive feedback but may lead to long-term challenges. These ideas often seem appealing and solve what appears to be an unsolved problem, attracting many people to pursue them. However, despite the positive feedback and validation, they can become difficult to pivot away from once their limitations become apparent. Understanding the distinction between a genuinely innovative startup idea and one that merely garners initial enthusiasm can save founders time, resources, and energy in the long run, steering them toward more promising ventures.
A successful pivot often entails focusing on familiar problems and refining previous solutions. Companies like Brex and Segment thrived after significant pivots that drew on founders’ prior experiences and insights gained from initial concepts.
If your venture struggles and innovative strategies are exhausted, consider pivoting. But if there are still untapped ideas, persevere and try them first.
If an investor likes aspects of a startup, they may still say no because they are waiting for opportunities that meet a higher bar. Dalton says to put yourself in the shoes of investors and consider what decisions they would make if they were in that position. This perspective can help founders understand that rejections aren’t necessarily a reflection of lack of belief in their idea but rather a result of investors seeking the most promising opportunities given their constraints.

Listen now on Apple, Spotify, Overcast, and YouTube.