The social radar: Y Combinator’s secret weapon | Jessica Livingston (co-founder of Y Combinator, author, podcast host)

Lenny Rachitsky (00:00:00):
I want to start with a quote by someone you may know, Paul Graham, "Much of what's novel about YC is due to Jessica Livingston. If you don't know her, you don't understand YC."

Jessica Livingston (00:00:10):
My three co-founders were deeply technical, but I would look at other things about founders. All these little social cues.

Lenny Rachitsky (00:00:17):
Your nickname was the Social Radar. Every interview, everyone always turned to you and they're like, "Jessica, what does their social radar say?"

Jessica Livingston (00:00:24):
I would look at, do the co-founders get along? Are these people committed? And if a founder would get defensive, that was always a bad sign.

Lenny Rachitsky (00:00:33):
Is there anything else along the Airbnb story that would be interesting to share?

Jessica Livingston (00:00:36):
He hated their idea, and Paul tried to get Brian and Joe and Nate to change it. But I remember specifically Joe brought out the cereal boxes, the Obama O's and Cap'n McCain's, and I just thought, oh my God, they're going to work hard to do whatever they can to make this company succeed.

Lenny Rachitsky (00:00:52):
You just talk a bit about this idea of just making shit happen, showing signs of being hustlers.

Jessica Livingston (00:00:56):
Do you sort of need that desperation. You have to burn the boat.

Lenny Rachitsky (00:01:03):
Today, my guest is Jessica Livingston. Jessica is the co-founder of Y Combinator, the first and most famous startup accelerator, which since 2005 has funded over 5,000 companies, including over 200 unicorns now worth over a billion dollars, including companies like Airbnb, Stripe, DoorDash, Coinbase, Dropbox, Instacart, Reddit, the list goes on. Jessica is also the author of one of the bestselling books about startups, Founders at Work, and hosts the Social Radars Podcast. She lives in England with her husband, who you may know, and her two sons. In our conversation, we dive deep into Jessica's superpower of being the Social Radar. She got this nickname in the early days of YC because she can read people incredibly well. This becomes a huge unfair advantage when you're evaluating and investing in early stage startups and founders, but also becomes useful in every part of your life. There's actually a quiz that I'm going to link to in the show notes called Reading the Mind in the Eyes that I suggest you take to see how you do, and it'll give you a sense of how well you are at reading people.

(00:02:08):
Jessica got a perfect score, just as an example of her unique talents, reading people's emotions along with her superpower and tips on how you can develop your own social radar. We also talk about her fabulous podcast called The Social Radars, some wild early YC stories, including how the interview with the Airbnb founders actually went down, and so much more. If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing feature episodes and it helps the podcast tremendously. With that, I bring you Jessica Livingston.

(00:02:45):
Jessica, thank you so much for being here and welcome to the podcast.

Jessica Livingston (00:02:50):
Thanks, Lenny. I'm glad to be here.

Lenny Rachitsky (00:02:52):
I want to start with a quote by someone you may know, Paul Graham. So he wrote, "A few months ago an article about Y Combinator said that early on it had been a one-man show. It's sadly common to read that sort of thing, but the problem with that description is not just that it's unfair, it's also misleading. Much of what's novel about YC is due to Jessica Livingston. If you don't know her, you don't understand YC." I'm hoping with this conversation we help a lot more people understand you. Kind of an implication of this quote that I wanted to ask you about is that there's an implication that you've never gotten the credit that you deserve for starting YC, for helping YC become what it's become. I'm just curious what that's been like for you.

Jessica Livingston (00:03:41):
It's sort of a hard question. It is true, I was one of the co-founders of Y Combinator, and yet I'm often sort of left out of news articles, Wikipedia people want to take my entry off of Wikipedia all the time. I'm not as notable and I'm sort of like, "Gosh, I'm a founder of Y Combinator, author of a best-selling book on startups. What does a girl have to do?" But it is what it is. It's the external views, and it doesn't matter to me. Do you know what I mean? People within YC know what I've done, the Y Combinator alumni know what I've done, my friends and family and people I respect in the Silicon Valley community know what I've done, most of them do. So that's fine.

(00:04:35):
But it is true, I've often been sort of erased, and in some cases it's annoying because it's a lot of people who have a certain narrative about Y Combinator that don't want me to exist, I'm maybe making that up a little bit, or the people that don't want me to be part of the narrative are the ones that think that Y Combinator, it's run by white men, only invests in white men. And gosh, if there was a woman on the founding team making choices of who to fund, that would undermine their narrative. So I think sometimes that's what happens too.

Lenny Rachitsky (00:05:15):
Fascinating. Just a convenient story to tell sometimes.

(00:05:20):
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(00:07:53):
So at YC, your nickname was the Social Radar. Your podcast is called The Social Radars. I haven't seen you talk too much about this skill anywhere else, and that's what I want to spend our time on together to better understand the skill that you've built of being this social radar. How does that sound?

Jessica Livingston (00:08:13):
I will try Lenny, I will try. I don't talk much about it because it's hard to talk about. I don't understand. It's hard to put into words exactly what it is about me, but it's true that my nickname at Y Combinator was the Social Radar. And I think it was because my three co-founders were deeply technical people, and I was not. But I would look at other things about founders. When we'd have these 10-minute interviews, I would look at, do the co-founders get along? Are these people committed? Do they really know about their product? Do they care? Are they going to quit their job? Or are they telling us that they are going to quit their job, but really aren't? All these little social cues that I'd try to pick up on.

(00:09:10):
And in a lot of cases, red flags about them that I'd add to the decision-making process. And so that's why they called me the Social Radar, and it just sort of stuck. And it's because I love people and the dynamics and understanding what's motivating people. I just love it and I love founder psychology, founders personalities. I am absolutely fascinated with it.

Lenny Rachitsky (00:09:38):
I love it. Okay, so we're going to try to unpack as much as we can with the context that you're not exactly sure if you're able to articulate exactly how this power of yours works.

Jessica Livingston (00:09:46):
Yes.

Lenny Rachitsky (00:09:48):
There's this line you wrote somewhere, and Paul's written this, and other people, that every interview that you all did early on at YC, everyone always turned to you and they're like, "Jessica, what do you think? What does their social radar say?" Can you just talk a bit about that role that you played in the early days of YC of kind of seeing that side of candidates?

Jessica Livingston (00:10:06):
Well, in the early days, especially before I knew a lot, as much as I know now, about startups and founders, early on, I was learning a lot in the first few years. And in the first few years, it was just the four of us. So I would be in charge of going out telling people, "Wait here while we do the interview, come on in." I'd be in charge of the stopwatch that would time us. And I'd say, "Okay, our time's up." And it was very administrative, and I would observe. Paul, Robert and Trevor, my co-founders would be asking them all sorts of questions about their product and their technology and blah, blah, blah, blah, blah. I would occasionally ask questions, but I'd usually remain pretty silent. And so I don't think people even really noticed me. But I would be just watching them and sort of trying to observe as much as I could, not understanding sometimes even the technology that they were talking about. I let my co-founders do that.

(00:11:06):
And then after, we'd be talking, they'd look at me and they'd be like, "Should we fund them? Jessica, should we fund them?" And sometimes I could tell based on the conversation whether they thought that the technology was good or how they felt, and sometimes I'd say, "Absolutely we should." Or sometimes I'd say, "Guys, I'm a little nervous. Did you see how that founder interrupted the other founder and wouldn't let the other founder talk?" Because my three co-founders sometimes wouldn't notice this.

(00:11:39):
They'd be so caught up in the conversation they were having about the technology, especially Paul. Paul would get really into things. And sometimes I always tease Paul, because one of his defining qualities is that sometimes someone would have an idea that he'd get so excited about that by the end of the interview he'd be giving them ideas about how to grow their product and what they could become. And they'd sit there saying, "Yeah, yeah, that's a great idea." And then he'd say, "Fund them." And I'd say, "Whoa, whoa, whoa, Paul, you can't just fund this because you love the idea. Let's take a step back and let's look. Like these two founders are working at Google and they don't say they're going to quit. That's not good." And I'd point out these things that I had observed. But I mean, we always agreed. It was very rare that we wouldn't agree on funding something. We were usually on the same page.

Lenny Rachitsky (00:12:33):
I see. It's interesting that you talk about these behaviors, co-founders interrupting each other, or being kind of aggressive here and there. Some people believe that's okay for founders to be like this. A lot of successful founders, Elon, for example, Steve Jobs, who are kind of assholes a lot of times, I imagine, and I've read part of the reason you thought about just the type of person is you're trying to build a specific culture in the early days of YC and you're going to be around these people. So maybe can you talk a bit about just why those elements were important to you and why'd you look for those?

Jessica Livingston (00:13:08):
I've definitely heard that Steve Jobs could be an. I've heard stories. But I think I would've funded him because he's so incredible and he was so smart and so interested in the product and knew... I'm very persuaded by people who know what they're talking about and love their product and are domain experts. But I did consciously, especially early on, less so later on, early on, I did sometimes tend to say, "I really think this person's an asshole, I do not want to fund them." And we often wouldn't. And very early on when we were just funding 10, 20, 30 startups a batch, sometimes I have been known to say, "I don't know if I can have dinner with them every week." It was that point. And I don't think we've ever regretted any of those. It didn't happen all the time, that was rare. But life's too short, and I wanted to be able to work with these founders.

(00:14:16):
And as it turns out, it was sort of important early on in weeding out explicit assholes because that was the basis of our Y Combinator community, which is now thousands of founders. Now, of course, all the founders aren't all running their company anymore, but I would say most all of the founders bring something useful and valuable to the table. So if you ask a question on Bookface, on our forum for founders, someone is going to be there to help you. And it's amazing. And that all started very early on, there was this culture of older batch mates helping newer ones, and this pay-it-forward mentality where everyone helped one another and rooted for one another and made introductions for each other. And I think it's a big part of our Y Combinator community now.

Lenny Rachitsky (00:15:12):
So I wrote down a few of the things that you mentioned you look for, and you looked for in the early days. So let me just share a few of them and let's spend a little more time here. So you looked for, did the founders get along? Are they committed to the idea? Are they ready to quit their job? Are there any red flags? So is there anything else that you remember you spent a lot of time thinking about or looking for then or even now?

Jessica Livingston (00:15:36):
There's looking for in the application and then there's looking for in the interview, and now we have software that looks for all of the red flags in the application that I used to do by hand. In the application, I'd look for just weird things, like was there a huge gap in the equity allocation? Did one founder have 99% and one founder have 1%? That's weird. I'd want to dig in on that. That doesn't feel right. Are they going to quit their job? Are they going to move to Silicon Valley? What are their current shareholders? Is like 90% of their company already owned by someone else? There all these weird things that we like to just flag. And we wouldn't necessarily not fund someone because of them, but it's just more data. So that was in the application that I'd look through all of those.

(00:16:33):
But in the interview I definitely was sort of, one thing I remember I would always look for was, when you'd have a conversation with us, a lot of times, Paul especially, but Robert and Trevor, would really be getting right into the idea and questioning you, and how do you know this? And what about this? And if a founder would get defensive, that was always a bad sign, always a bad sign. The best founders would say, "Gosh, I have thought about it and here's what I figured out." Or, they just have this almost a tennis match and a conversation rather than closing up and feeling like, oh, this person's interrogating me. You could just sort of, the open-mindedness, the flexible-mindedness of people was really important. I'd get really excited about domain expertise. Like my co-founders, we all loved that. If someone was fixing their own problem in a broken industry, we loved that.

(00:17:39):
Definitely, I'd look for co-founder relationships. And again, I'm not saying I was always right, but you could tell if... One founder, I'll give a story, one founder, once we asked a question and one person started to respond and the other founder put his arm in front of him and said, "I'll answer that question." And it was just so weird that he wouldn't let his co-founder speak. We'd have situations where we'd call people like hackers in a cage, where it's kind of obvious there'd be a business founder, business person, who had clearly convinced a programmer to join the team. They were given, the programmer was given, very little equity and just we called them programmers in a cage, like hackers in a cage. And sometimes that works out, I'm not saying it doesn't. But I'd always try to observe, okay, does this hacker in a cage have any say in the company, the direction of the product? That sort of thing. Because the programmer needs to have opinions.

Lenny Rachitsky (00:18:50):
It's so funny. I love this metaphor. And I totally get what you mean. I want to unpack a couple of these, because this is exactly where I was hoping we'd go. So this idea of looking for defensiveness and being open to change and being flexible, why do you think that was so important to successful founders? Why did you look for that? Why was that a predictor of success?

Jessica Livingston (00:19:10):
Several things. First of all, being defensive is really bad, if you're a startup founder, because you're always going to get people who question you. And it's your job to educate them, if it's a new area, you're doing something presumably pretty new, you're always going to have people who question it or say, "That product's already out there, why is yours better?" You have to educate them. You don't want to be defensive about it. Also, a lot of times, the first idea isn't bang right on, the right idea, and you have to be open-minded and maybe adjust it in a certain direction. The famous PayPal story, how it started off being the PalmPilot, or money transfer. And money transfer between the PalmPilots or whatever. And then all the customers were using a janky version on the web, and they were begging for this to be on the web. And finally, the founder said, "Oh, I see what most people want this for." You have to be open-minded to see what direction really is what your users want. And so if you find someone is defensive, usually they're not open-minded.

(00:20:26):
The other thing is that the best founders will want to learn from other people and listen to other people. You talk to the Collison brothers and say something, they ask you a question, they're listening to your answer. So many founders think, oh, I can't learn from anyone. But the best founders are always listening and having spirited debates about things. I mean, that's part of the process. And so I think when someone's defensive, it's just a bad sign. So I would look for that.

(00:21:01):
I loved when I'd find someone sort of showcase that they'd make something happen no matter what; they're scrappy, they're hustlers. I remember... Can I tell the story about the Airbnb interview?

Lenny Rachitsky (00:21:17):
Please.

Jessica Livingston (00:21:17):
Okay, because that was definitely one I'll never forget. That was one that was clear the founders were really good. The market had just crashed basically with all the banks going out of business and everything. And so we were only funding startups that we felt had really scrappy founders and could be cockroaches, meaning could live off of very little amounts of money, or could charge customers and make money. And we didn't fund that many people in that winter '09 batch. So we're being very strict with ourselves, very disciplined about things. And the Airbnb guys came in, and I just remember they had a contagious amount of energy. They just had an energy about them the way that they talked about their product, which was crazy at the time, staying in someone's bed or airbed. In fact, it's a famous part of the story, we hated their idea and Paul tried to get Brian and Joe and Nate to change it. So we didn't even like the idea. But I remember specifically they brought, at the end, Joe brought out these, the cereal boxes, the Obama O's and Cap'n Crunch's or Cap'n McCain's or whatever.

Lenny Rachitsky (00:22:33):
Cap'n McCain's, yeah.

Jessica Livingston (00:22:34):
Yeah, Cap'n McCain's. They were saying that they went to some Costco or something and bought off-brand Cheerios and off-brand Cap'n Crunch's, took them out of the box, put them in this new box, glue-gunned it shut. And I just thought, oh my God, these guys are really going to great lengths for this. And for some reason, it was silly, but it really appealed to me. They're going to work hard to do whatever they can to make this company succeed. And even though we were skeptical about the idea, I think we definitely made the right bet on the founders, and it was just very clear in that interview.

Lenny Rachitsky (00:23:17):
I'm so happy you shared that story, I was definitely going to ask about it. It's so funny because I've heard that story at least a hundred times working at Airbnb, they tell the beginning of Airbnb every chance they get at every all-hands. It's like a recurring theme. And it's great to hear that basically it went exactly the way they describe. Oftentimes, there's a myth around what happened, but that's exactly how they describe it.

Jessica Livingston (00:23:41):
No, it was definitely a whole crazy story and how Paul called them to accept them, and they were on the 280 or something or the 101 and the reception went down. And so he didn't hear if they were accepted or not. Did he tell that part?

Lenny Rachitsky (00:23:58):
No, I haven't heard that part.

Jessica Livingston (00:23:58):
Oh yeah, that's part of the story. And they had to keep driving to get to talk to Paul again and find out that they were accepted. Oh, yeah. It was just a crazy interview.

Lenny Rachitsky (00:24:09):
The element of the story I'm also curious about is, the way Joe tells it, is he had the box in his backpack. And as they were walking out, Paul or you is like, "Hey, what's that? What's that cereal box doing there?" Is that how it went, or is it more like, "Hey, we have this cereal thing."?

Jessica Livingston (00:24:24):
I don't think Paul and I looked in his backpack and asked. I think there was definitely some pressure on Joe not to show us the cereal boxes. I think Nate was really down on that, especially. And I think they were walking out the door and they're like, "Hey, we just brought you a little something." I think Joe did pull it out, and we had an extra minute or so around the cereal boxes. That's how I heard about the glue gun story and everything. But I think Joe had been reluctant, but he did it at the end and I think it was a good call.

Lenny Rachitsky (00:25:00):
That's so funny. And after that meeting, what was that conversation like between you and Paul? Was it just like everyone's like, "We definitely got to do this."? Or was it like you being like, "Hey, these guys are really interesting."?

Jessica Livingston (00:25:10):
No, I think we all liked them. We all liked them. But I remember saying, "We have got to..." I just remember being like, "We've got to fund these guys. I don't know about the idea. Maybe they'll change their idea, who knows? But they seem really great." Again, the energy level and the passion with which they spoke about their experience hosting, because they'd been around struggling, but had been a company with an idea for a little while before they applied to YC. We were there basically their Hail Mary, their last resort for them. And so they could tell us about their story about how they hosted the people at a conference, and there was definitely some magic to it, which was convincing.

Lenny Rachitsky (00:25:57):
Is there anything else along the Airbnb story that would be interesting to share while we're on that topic?

Jessica Livingston (00:26:01):
I mean, the only interesting thing as it relates to being the social radar is that there were just some interviews that I remember because I just thought, this is great. These founders are so good. I'm totally convinced. What they're working on might not work, but I feel like it's so worth the bet based on these founders. And that happened. There were definitely a couple other of our most successful companies that I clearly felt that way about. You just feel like they know what they're talking about, they thought about the problem. They're not solving this problem because it's sort of the problem du jour or fun and exciting. Some are very unsexy problems like when Parker Conrad applied with Zenefits, unsexy HR stuff, benefits stuff. But he knew how broken it was and was trying to fix it. And I love stories like that. There was one story in terms of... The one time I did sort of persuade the rest of the group to fund someone was, do you know the company GOAT, the sneaker?

Lenny Rachitsky (00:27:13):
Absolutely.

Jessica Livingston (00:27:13):
Okay. When Eddie and Daishin applied, they were not doing the sneaker company, they were doing this group sort of book-a-group-dinner at a restaurant with people you don't know as a way to meet new people. And for some reason, I loved the idea because I thought maybe it could be a secret dating, like a Trojan Horse for a dating sort of site. But I really loved the two founders. And one of the reasons, again, they had this passion about their idea, but they had had this cream puff company before that they had run, and they just told these stories about how hard it was and all this stuff. And I, for some reason, just thought, these are hustlers. These guys are scrappy. They're going to make this succeed. And they didn't make that company succeed, but they pivoted and made GOAT succeed and it's doing really, really well. And I remember that one I definitely had to convince... I mean, not that Paul, Robert and Trevor didn't like them, but I think they really didn't think the idea was that great or just sort of were meh. I was like, "We have to fund them."

Lenny Rachitsky (00:28:24):
I love sharing these stories. If you have more to share, please keep throwing them out there.

(00:28:27):
So a few things I've noted so far, of things that you look for, and I think it's important to note this is very early stage evaluation where the founder and the team is, it's incredibly important, because the idea often shifts.

Jessica Livingston (00:28:42):
Oh, yeah. This is as early as it gets, Lenny.

Lenny Rachitsky (00:28:43):
Yeah. Oftentimes, just an idea, I imagine.

Jessica Livingston (00:28:47):
Yes.

Lenny Rachitsky (00:28:48):
So a few things, so far, things that you found to be really valuable to look for. One is this idea of just making shit happen, showing signs of being hustlers, just getting shit done, Obama O's, things like that. And then I think along the same lines, just passion for this idea and just like almost charisma. Is that how you think about it? Or is it just like...

Jessica Livingston (00:29:11):
I hate using the word charisma because there are a lot of charismatic people who are full of baloney, and are just doing a startup because it's a cool thing to do now. And I wouldn't want anyone to get fooled by charisma. There has to be some substance behind that charisma. Of course, we all love talking to more charismatic people than less, and I've certainly talked to my fair share of totally uncharismatic people, but sometimes they're really good founders too. If they know what they're doing and care about the user and are fixing a problem that they have a deep connection to. So I don't want to say someone who's charismatic, but it definitely helps because, as you know, as a founder, you have to do a lot of sales and you have to recruit people and you have to convince investors to fund you and you have to convince users to use your product and all of this stuff. So it does help being charismatic, definitely.

Lenny Rachitsky (00:30:19):
Okay. So there's being super hustler, making shit happen. Domain expertise, something you've mentioned a few times. Just like having deep domain expertise in an area, and I think that's probably where they probably don't pivot oftentimes, where they've actually have experience in that specific problem.

Jessica Livingston (00:30:33):
They might pivot a little bit, they might pivot a little in terms of the actual solution. They might be trying to solve a problem and the first attempt doesn't really work. I haven't mentioned earnestness though.

Lenny Rachitsky (00:30:45):
Oh, do tell.

Jessica Livingston (00:30:47):
Earnestness is one of the most important because earnest, sort of to me, is bucketed with authenticity. And to be a successful startup founder, you have to care so much about the problem you're trying to solve, the users you're serving and being earnest about it is so key to success. There are so many wannabe founders, so many people doing it because it's cool or they think this idea is cool, but they don't really, deep down, have what it takes. And I think we always try to fund earnest people.

Lenny Rachitsky (00:31:30):
What does earnest look like in practice? And how does that come across?

Jessica Livingston (00:31:33):
I think it means being sort of humble about... And if you get asked a question in the interview and you don't know the answer, they say, "I don't know the answer to that. I'd have to think about it." Or, "I don't know the answer. I've given it some thought and here's what I have come up with." And they're just honest about things, and they're not trying to do the whole smoke and mirrors thing, which we've definitely gotten people like that, that avoid the question or are doing it for the wrong reasons.

(00:32:08):
I remember there was one group that were 45-year-old men and they were building an app for teenagers in fashion. And I remember just thinking, we were asking them, "Why have you chosen teenagers in fashion?" And it was so clear that they thought they could make easy money, and it wasn't because they cared about fashion. It wasn't because, "Oh, I have a daughter who's really into fashion and I've seen this need." It was just like, they made up the idea. And that is not earnest, that is not authentic to me.

Lenny Rachitsky (00:32:47):
You talked about it, so there's this earnestness you look for, also not being defensive. There's this also spectrum of confidence and people believing in what they're doing. Do you have any thoughts on just how to find that? What does that look like when they're too defensive versus they're just confident and then they know what they're talking about?

Jessica Livingston (00:33:03):
Confidence is good. You definitely want confidence. It's hard to... I think you can see it when you experience it. Like someone who's confident in answering your questions but isn't defensive, there's definitely a difference. And I don't know, this is why I'm saying it's sort of hard to articulate these things, but confidence means you can say, "I've thought about that and I don't know the answer." That's confidence. And they'll say, "But here's what I do to try to figure it out. Here are my plans to address that." Confidence, I should have put that upfront because that's very important, especially when it comes to fundraising, you cannot go into an investor meeting lacking confidence. You can come into YC's interview lacking confidence, but we will then help you in the next three months to gain more confidence.

(00:33:58):
And by the way, one of the things we do to help people gain more confidence is to make them believe that their startup is a great investment, to help them create a startup that truly is possibly going to make money or at least worth being a good bet. That's the thing, early stage, the best you can offer is like, "I might not succeed, but I'm definitely a good bet." And we help them with their product, we help them with their ideas, and we help them that, by demo day, they can get up on stage and legitimately say, "We're a good bet and here's why. Let me tell you about our idea." And so we definitely help with confidence.

Lenny Rachitsky (00:34:43):
Awesome. A couple other things you mentioned earlier, just to unpack a little bit. So being committed, something you look for, and co-founders getting along. In terms of committed, I imagine, these are very practical things. How are they actually going to stick to this? Are they actually excited to work on this? Maybe talk about that a little bit.

Jessica Livingston (00:35:00):
We all know how hard startups are, but I think you don't really know how hard it is until you actually do it. A lot of people would start a startup still having a job at Google or wherever, and they do it on the side. I do recommend, if people are just getting started and don't want to raise money yet, starting it on the side is a great way to get going, but at some point you have to commit, you have to burn the boat, because we found that founders who were still getting a paycheck and health insurance, once the going got tough, they did not quit their job. And you sort of need that desperation like, "I have to make this startup succeed because it's my job." Not like, "Oh, I'll just stay at Google." You need that. And we found that founders who weren't leaving their jobs, it was just not working out. Or that co-founder would always wind up leaving the company because they didn't want to actually leave their job.

(00:36:01):
And that's fine, there are people that can't leave their jobs for financial reasons. That's fine. You just shouldn't be starting a startup if you're not going to be prepared to leave your job. So that's the leaving of the job thing. And the co-founders getting along, oh my. I spent a lot of my time at Y Combinator when I was there all the time, full time, mediating co-founder disputes. And so many startups died or had near-death experiences because the co-founders didn't get along or broke up. It just happens all the time. And so that's why I think, during interviews, I was desperately trying to search for any clues that the co-founders didn't get along, or if they blatantly contradicted each other. But you could also tell if they were answering, finishing each other's sentences.

(00:36:59):
I love co-founders that have a history together; either they went to school together, they went to college together, work together, maybe they're siblings. Because when you have a long-term relationship, you trust each other and you know each other's weaknesses, and you're usually on the same page with your aspirations and everything. It's really scary when two founders get together just to start the startup and don't have any history. Massive red flag. Sometimes it works out like in the case of Dropbox, Drew and Arash both went to MIT, but I think they didn't know each other before they started Dropbox, and it worked out. But most of the time it doesn't.

Lenny Rachitsky (00:37:46):
So we've talked about co-founders getting along, looking for defensiveness, domain expertise, the sign of making shit happen, earnestness. Is there anything else that we've missed that you look for in the founders that tell you maybe we should, maybe we shouldn't?

Jessica Livingston (00:38:02):
Relentlessly resourceful. Paul wrote a whole essay on that. Every founder is different, I never try to say, "Oh, this person doesn't have this. I'm not going to fund them." You always have to... Everyone's different. But I mean, you're an investor. I'm curious, do any of these things surprise you or do you care about these things too?

Lenny Rachitsky (00:38:24):
No, absolutely not. Absolutely. And I actually try to avoid pre-seed and early stage because I'm not amazing at it, maybe. This is why I want to learn how to build my social radar skill.

Jessica Livingston (00:38:37):
Oh gosh, okay.

Lenny Rachitsky (00:38:38):
Yeah. Tough. It's so tough. It's like so few things actually work out.

Jessica Livingston (00:38:42):
Well, it's because you don't have a lot of data. If someone is just applying with an idea, you have very little data. You can look at where they went to college, what have they built in the past, that's always a great predictor of their ability. And so on the YC's application, we ask them, "What project have you worked on before?" Or whatever. But it's really hard to tell when you're the first investor.

Lenny Rachitsky (00:39:07):
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(00:40:00):
When did you first notice that you had this social radar-ish skill and you're better at this than other people?

Jessica Livingston (00:40:08):
Paul used to always call me Detective Livingston. Before I was a social radar, I was Detective Livingston. I cannot help myself noticing weird things, just dumb things, like if Paul had on a yellow T-shirt and then an hour later came in with a blue T-shirt, I'd be like, "Why do you have a blue T-shirt on?" I have to understand what happened in that hour where that T-shirt is different. Or people's what, their relationships, what drives them? I was always like this, and I think it goes back to my childhood.

(00:40:44):
I spent hours and hours on the phone with people, with my girlfriends, dissecting situations, and then all through high school, and college, I mean the amount of time we wasted discussing social matters with people, and boys, and things like that. It was just frightening how much time I wasted, but I just was genuinely interested in it. And what drives people and why did this happen? I don't know if I ever noticed I did this, but it was just, my point is, it's always been a part of me. And I definitely notice and having an aversion to phony people. I always have. I've never been one to fall for someone who's super phony and tried to have them as a friend or anything. I just can tell, and ugh, I hate it.

Lenny Rachitsky (00:41:34):
Do you feel like it's almost all genetic or do you think there was something in your childhood that pushed you to be good at this?

Jessica Livingston (00:41:42):
I don't know. I really don't know. So this is why I think I'm going to be a bad guest, because I can't give a practical understanding. I mean, I don't really think... I can't say other people in my family are like that, and I can't say that it was part of my upbringing. I just notice these things. I don't know. I should be paying attention to other things, but I'm not, but I'm paying attention to this. I'll give you an example with you.

Lenny Rachitsky (00:41:42):
Please.

Jessica Livingston (00:42:13):
So I looked up your bio to read a little bit about you, and I loved the Dalton Caldwell Podcast. I listened to that.

Lenny Rachitsky (00:42:23):
Fourth most popular of all time.

Jessica Livingston (00:42:26):
Dalton's was?

Lenny Rachitsky (00:42:27):
Yes.

Jessica Livingston (00:42:28):
Oh, go Dalton. That's awesome. Yeah, it was really good. I learned a lot from it. I love listening to Dalton. But what I really want to know about you is, on the release that you sent, or on the instructions for this podcast, you said, "There might be some edge cases where your podcast isn't good enough to go out. We just want to warn you." And all I could think of is, what prompted that? There has to be a story of what prompted that. No one else would pay attention to that, but I'm just so curious. It's so weird. I'm just a weird person like this.

Lenny Rachitsky (00:43:07):
Yes, I did add that. There's a story, basically, it was just an episode that wasn't amazing and we didn't have that caveat in the prep beforehand, and it felt bad to tell the person.

Jessica Livingston (00:43:19):
See, I knew it. I knew that that had happened.

Lenny Rachitsky (00:43:23):
That's exactly right. Is there kind of a way you've thought about honing this skill over time? Once you kind of got a sense, "Hey, people keep telling me I'm really good at this." Is there something you've done to help strengthen it?

Jessica Livingston (00:43:35):
No, but one of the things I do try to do is sort of reinforce. Sometimes I'll have a feeling about someone, maybe we fund them, maybe we don't. I'd sort of like to know what happens a few years later. I like to follow up. There definitely have been some situations where I haven't liked someone that we funded and it's taken 5 to 10 years before they failed. And in some cases, for a bad reason. Where I'll say, "Oh, thank God, I was right about that. I did have this feeling." Or, "I knew they'd be successful." Like the GOAT guys who I was saying before, there was definitely a period when Grubwithus, their first startup wasn't doing well, and they were starting, that maybe some people would've given up on them. And now I can say, "I was right about them. That feeling was right."

(00:44:35):
So I do try to sort of follow up with some of the really strong gut instincts that I had, to see if I was right. Often, when I have a gut instinct, it's like a negative thing. So we wind up not funding someone. So I really need to know if that person went on to be super successful. And I will answer your question right now, there's no one that I had a strong dislike for that I sort of said, "We should not fund them," that has gone on to be a super success. Thank God.

Lenny Rachitsky (00:45:10):
Wow, interesting.

Jessica Livingston (00:45:12):
I mean, it doesn't happen all the time that I really put my foot down, but sometimes I have.

Lenny Rachitsky (00:45:18):
And this feeling, is it like a visceral body thing for you? Or is it like intellectually, you notice, "Hey, this guy's interrupting her and this person doesn't..."?

Jessica Livingston (00:45:26):
More intellectual. But it does come from inside. I don't know how to hone it. It has to come naturally. You have to have a natural interest in people. And so I'm sometimes not listening to all the words and I'm sort of just observing them, I don't know.

Lenny Rachitsky (00:45:45):
Have you ever been tricked by someone where you didn't see something you should have seen? Is there anything there?

Jessica Livingston (00:45:52):
Oh, yeah, for sure. I can't really talk about the times I have been tricked just because I don't want to say anything really negative about people, but... Well, there was one example that I do feel comfortable sharing. Ilya Lichtenstein of MixRank. Do you know the guy that stole billions of dollars in Bitcoin from a crypto wallet? Do you not know this crazy, crazy story?

Lenny Rachitsky (00:45:52):
Please share.

Jessica Livingston (00:46:21):
I think he's in the joint now. He was definitely convicted of this, and his wife, and they stole billions of dollars. And I definitely don't remember thinking anything bad about him or thinking he could be that kind of person. So that definitely, there've been some doozies like that, where, did not see that one coming.

Lenny Rachitsky (00:46:48):
Oh my God. I think what's extraordinary about the fact that that happens rarely is that your interviews are 10 minutes long, and so you have very little time to actually find all these things. And plus, the actual product and the idea and growth strategy and all these things.

Jessica Livingston (00:47:04):
Well, you find a lot can come in reading the application. That's a lot of legwork at the beginning. You read the application. But then the 10 minutes is kind of as long as you need, in most cases. Because we found when they were longer, like 20 minutes, you'd know in 10 minutes and be twiddling your thumbs trying to get through the interview for the next 10 minutes. So we kept them short so we could interview more people. But there have definitely been cases where we've interviewed people, accepted them, and then very soon afterward, we're sort of like, crestfallen like, "Oh, these people are very limp. What were we thinking?" Definitely, we've been tricked in that respect all the time. Or, "Oh gosh, they seem so impressive in the interview and now they're just posers who can't really do anything." Definitely, I'm tricked all the time in little ways. Or, I didn't notice two founders didn't get along and then one co-founder goes missing a week into the program or something crazy. There's all sorts of crazy stuff like that that happen.

Lenny Rachitsky (00:48:14):
I think in the game you're playing, I would expect some things to slip through.

Jessica Livingston (00:48:21):
Yeah.

Lenny Rachitsky (00:48:21):
You said that there's been kind of an operationalization of some of the things you used to look for in founders, now that you're not actually in the process. Is there a Jessica-as-a-service sort of thing? What kind of stuff have they built that looks for the sorts of things you used to look for in the interview process?

Jessica Livingston (00:48:38):
No, it's all just stuff in application that automatically flags certain things. I actually don't remember all of them, but it's just, all it is, is a, "Please pay attention to this, reader of the application." It's not, "This disqualifies anyone." It's, "Just please pay attention." And those are things like I mentioned, a really crazy equity structure, founders not quitting their job, things like that, that it's important that someone is voting on them and then interviewing them knows. Because I would often, some of the questions I'd ask at the end of the interview, I'd say, "It looks like you have 90% of the stock and your co-founder only has one. Can you tell us why that's the case?" And maybe they could make a case for it, who knows? But at least I'd ask. So the flags just say, "Pay attention to it."

Lenny Rachitsky (00:49:37):
Amazing. So if we were to zoom out, in early stage investing, the main thing you need to get right and evaluate as the founder, the social radar skill that you've had from childhood is such an incredible advantage in doing this well, and you could basically say YC is what it is because of this unfair advantage that you all had in the early days. I'm guessing many people listening to this are like, "We need a Jessica on our team. We need to build this skill ourselves. We need to figure out how to integrate social radar into our process." I know you're going to hate this question, but just, do you have any advice for people that want to try to build the skill, get better at this, notice some of these things?

Jessica Livingston (00:50:20):
I really think that our advantage was that my three co-founders were deeply technical people. And I think a lot of investors back then weren't, didn't have that background. And I think that that background really helped YC choose good founders. So I don't want to make it sound like it was that big of a deal, but advice? Advice for how to hone... I mean, I think just try to pay attention to subtle cues. If you really feel like, gosh, I'm so clueless about these things, try to just tell yourself, "Okay, I'm going in to evaluate these founders, evaluate this investment opportunity. I know I'm bad at these kind of judgments. I'm going to remember, do they seem like they get along?" Because there are no trick questions. I don't have any trick questions that you could ask, or it's just paying attention. Have a conversation.

(00:51:26):
Do they understand their product well? Are they defensive? Maybe have your own little checklist that you think about. You don't have to have it written down, but you think about, and then afterward, you spend some time thinking, were they defensive? When I asked them why this is better than the competitor, how did that go? Or ask them, maybe do have some questions, if you don't know how long they've known each other, ask them that question. "How did you two meet? Have you ever worked together before? How's it going?" Just be a little bit more conscious about asking these types of questions to reveal some key information for your investment decision.

Lenny Rachitsky (00:52:09):
That was an awesome summary of a lot of the stuff we talked about. If anyone ever doubts that you are very good at this, Paul tweeted this quiz, the Reading the Mind in the Eyes quiz, that I took, it's incredibly hard. You basically see a bunch of eyes and you're supposed to judge their emotion, and it's really hard. And you got 36 out of 36, which blows my mind.

Jessica Livingston (00:52:33):
I did nail it. I do have to tell a funny story about this.

Lenny Rachitsky (00:52:33):
Please.

Jessica Livingston (00:52:36):
So Paul, sort of late at night, and he emailed me, because I had gone to bed, but I had my thing, and he emailed me. He's like, "Check out this quiz. I got 25 out of 36. What can you get?" So I got my computer out because I was like, I have to beat Paul. And I did it, and it was really hard. They'd only show the eyes and then it would say, what is this person thinking? Are they happy, sad? But some of them were really hard to distinguish. Are they irritated or are they angry? It's kind of hard to tell the difference between irritated and angry. And I remember looking into these people's eyes saying, "What are they trying to communicate to me? Are they irritated with me or are they mad at me?" Kind of thing.

(00:53:24):
And as I went through, it would tell you if you got it correct. As I almost got to the end, I was like, "Oh my God, this is going to be a near-perfect score. I have to nail this." And when I got 36 out of 36, I was like, "Yes." And I told Paul, he tweeted it. We then, a week later, had this YC event in London, and I swear to God, about 10 people came up to me to talk about this eye quiz and how they had not done well, and what was my secret? It was very amusing. I never thought that anyone would think it was that interesting.

Lenny Rachitsky (00:53:59):
I love that there's this thing that totally shows this skill you have that is better than everyone else. I took it, all my friends have taken it after that tweet, and the highest we've gotten is 31 of all the people I know.

Jessica Livingston (00:54:11):
Really?

Lenny Rachitsky (00:54:12):
And I think when people take it, we'll link to it, they're going to be like, "How can you get 36 out of 36? Impossible."

Jessica Livingston (00:54:19):
You have to look into their eyes and say, "What are they trying to tell me?" I hope you're not trying to tell me you're full of shit with your eyes.

Lenny Rachitsky (00:54:28):
I'm feeling despondent. Just kidding. That's one of the options. I'm like, "What does that even mean?"

Jessica Livingston (00:54:32):
I know. Well, that's the other thing I told Paul, also the challenge is, you really have to understand what each feeling, what that word means. He's like, "Oh, that didn't even occur to me." Because he's such a word person and knows the exact definition of every single word. But I thought some people will struggle understanding the complexities of the emotion.

Lenny Rachitsky (00:54:55):
With the words, I almost felt like I had to do what you did where just like, "What does this word feel like when I'm reading it? Despondent, let's see if these eyes are despondent." I love that trick you shared. So basically you looked at the eyes and you're like, "What is this person trying to tell me?"

Jessica Livingston (00:55:09):
Yeah, that's the best I could do.

Lenny Rachitsky (00:55:12):
Amazing. So we're going to link to that quiz. I'm curious what people, if you take it, please leave your score in the comments, see if anyone can get anywhere near Jessica's score. Okay. So speaking of social radar-ing, you have a podcast called The Social Radars.

Jessica Livingston (00:55:12):
Yes.

Lenny Rachitsky (00:55:12):
Let's talk about it.

Jessica Livingston (00:55:27):
Yes, okay.

Lenny Rachitsky (00:55:28):
First of all, just why did you decide to start a podcast? There's a lot of podcasts in the world. What made you decide to start one?

Jessica Livingston (00:55:32):
Well, I'm really excited that you're asking that question because no one has ever asked me about The Social Radars. Yes, I mean, it's pretty new, but we launched last year. I decided to start The Social Radars because I live off in the English countryside, not really as connected as I'd like to be with Silicon Valley, partly by choice, but I do miss it a lot. And I was finding that as I was catching up with YC alumni that would come visit or I'd see, I just loved the conversations we were having, and I missed that. I missed that connection with these people, and sort of sharing their stories of triumph and failure in some cases, but mostly triumph. At the same time, I became obsessed with this podcast called SmartLess. Have you ever heard of it?

Lenny Rachitsky (00:56:20):
I've heard of it, haven't listened.

Jessica Livingston (00:56:21):
Okay. So just for the listeners, it is a podcast hosted by three actors; Jason Bateman, Will Arnett and Sean Hayes. And they invite Hollywood people, actors, directors, musicians, sometimes athletes, on the show. And the thing is, one person, one of the hosts invites the guests, the other two don't know. So there's no preparation, and it's the most fascinating thing. I love movies and I love television, and I can tell you another weird eccentric gift of mine is I remember every name in Hollywood and know all their children and all this stuff because I've been reading People Magazine since I was 13. So I loved, you'd learn so much about the actors as people because they weren't talking from a script or their media messages for promoting a movie. It was like just genuine conversations. Most of the time these actors knew the people and were friends, and I just found it fascinating. I could not stop.

(00:57:25):
And I thought there should be a really informal conversation like this with startup founders so people could understand the people behind the startups. And it's not too scripted and not too, maybe, I don't want to say professional, because I hope it's professional sounding, but it's very conversational and authentic. I was trying to mimic that a little bit. I convinced my colleague and friend, Carolynn Levy, who of course has a full-time job being one of the amazing lawyers within YC, and she's super busy. I convinced her to do it with me so I could have a partner in crime. And then we just started and I said, "We'll do a few episodes, see how it goes, and we'll keep going if it's fun." And I have had so much fun catching up with all the people I've interviewed. At this point, I forget how many podcasts I've even done, but maybe-

Lenny Rachitsky (00:58:24):
I think about 27-ish.

Jessica Livingston (00:58:26):
27 that have launched yet, and there's a few coming out. Season three, we're still in the middle of that, and still editing some and doing some. But it's been so much fun and I love it, and I hope that people enjoy listening. I hope I'm not just working this really small corner of the room. I hope people enjoy unstructured conversations. But people open up to me though, because what I copied from SmartLess that I liked, they'd say, "Hey, remember when we were at that Oscars party and this happened..." Because they had that relationship with the people they're interviewing, in a lot of cases, I feel like I've had that with a lot of people I'm interviewing and I could say, "Hey, Brian, remember when you interviewed and brought the cereal boxes?" And he could tell, he shared that story. I don't think I knew it before then that they were on the 101 and the phone went out, the reception went out before Paul said that they were accepted. So I learn a lot, and it's really just fascinating to me.

Lenny Rachitsky (00:59:27):
Well, it's an awesome podcast, I've been listening. I'm going to just read some of the guests that you've had on, just so people get a sense of who you're interviewing. So you actually just had Paul Graham on the podcast. He does very few podcast episodes. So that's an unfair advantage you have there. Patrick and John Collison, Brian Chesky, you mentioned Brian Armstrong, Emmett Shear, Tony Xu, like epic people.

Jessica Livingston (00:59:48):
Emmett Shear, by the way, the week after he was named OpenAI CEO for like 72 hours, that one launched. I was like, I could not have planned that timing better.

Lenny Rachitsky (00:59:58):
Is there an episode you'd recommend people start with if they were start to explore your podcast and get into it?

Jessica Livingston (01:00:04):
Honestly, I truly believe this, I'm not BS-ing you, I think they're all really, really good, and there's so many interesting takeaways from every single one. If I were coming to it for the first time, I'd probably choose, I'd look at the guests and say, "Who am I interested in? Have I stayed at an Airbnb and I want to learn more about that?" Or, "Do I use Reddit?" Just see who the guests are and start with someone you're kind of interested in, and I guarantee you'll learn more about this person.

Lenny Rachitsky (01:00:34):
So across the podcast episodes you've done, I hate when people ask me this question, but I'm going to ask you this question. Is there any big lessons you've learned, any stories that have stuck with you? Any takeaways so far from interviewing all these incredibly successful founders and people?

Jessica Livingston (01:00:48):
My God, I love that question. I don't hate that question.

Lenny Rachitsky (01:00:48):
Okay, I'm glad.

Jessica Livingston (01:00:52):
I could talk for an hour just on... I want to learn from you as an expert podcaster, because I'm still a noob here. What I've learned the hard way, and you probably will nod your head when I say this, is that I talk way too much. I'm a huge windbag and I hate... I don't notice it now when I'm just talking to you and going off and talking, talking, talking. But when I'm editing the podcast and I'm listening to myself ask a question in 20 sentences when I could ask it in two. So I've really had to train myself to keep things short. You want regular short dialogue, you know this, but you also have to interrupt guests if they're going off too much. So the talking of the hosts should be frequent but short. That's the lesson that I've learned.

Lenny Rachitsky (01:00:52):
Totally agree.

Jessica Livingston (01:01:46):
In terms of content, every single episode is a gem in its own right, and there aren't massive lessons because they're all sort of specific to that person, and I never know exactly which direction we're going to go in when we get into things. But it was interesting. There were definitely some themes with Adora Cheung and Tony Xu of DoorDash where they said they really made a mistake early on scaling into different cities before they had nailed the original city. And that's an important lesson. There's lessons for everyone, I think. In addition to really getting to know these founders, their personal side of their personality, there's some great lessons that they all tell.

Lenny Rachitsky (01:02:36):
I love these lessons. Is there anything else you've learned about interviewing? That's something I'm always trying to get better at. I love this point you made. I say the same thing to every podcaster. You talk too much as a host, you should let the guest talk. Just ask the question and let them talk. Is there anything else that you've learned about just how to interview more effectively?

Jessica Livingston (01:02:54):
Remember, I've been interviewing people since YC started because I was working on Founders at Work simultaneously when we started YC, and so that was a collection of interviews. And back then, I can't say I was that good at it. I've gotten much better. And then I've since gone, I used to do a lot of interviews at startup school on stage with people, and now the podcast. I think one thing that is that the guests trust me. They trust that I'm not going to try to have a gotcha moment. I'm not trying to lure them into saying anything controversial. Do I love it when they say something that hasn't been said before? Yes. But I'm not trying to trick them.

(01:03:37):
And just like you, I tell them, "You will have a chance to review this before it goes public." And I think that disarms people and they say, "Okay, I can open up because I know if I regret saying something, it's not like talking to a reporter who's going to publish it." I care about them. I care about making them look good, and I'd never want to betray their trust, and they know that. So that's part of it too. For me, with the podcast, I have some questions that I do ahead of time just so I have something down, but I also just let the conversation go where it's going, and we get into some random tangents that I find are really fascinating.

Lenny Rachitsky (01:04:26):
Is there a story that stand out to you just that sticks with you from the interviews that just like, "Wow, that was such an incredible story someone shared with me," or, "a lesson learnt."?

Jessica Livingston (01:04:29):
The podcast that really sticks with me is the Parker Conrad episode, of Rippling, but we spent a lot of time on Zenefits because if you didn't follow that story years ago, the press annihilated him. And in talking to him, I learned why. There was a smear campaign paid for by someone still at Zenefits. There were legal threats made to force him to sign this legal document that would allow them to have a non-compete in California so that he couldn't another company, basically making his life miserable, disparaging him. Stories planted in the press. And I had him come on and I had him tell what really happened.

(01:05:29):
And even I, who have seen so much shit behind the scenes with startups in Silicon Valley over the years, stuff you just couldn't believe. This was unbelievable. And the thing that really sticks with me is that no reporter ever, maybe no reporters listened to it, but no one said, "Hey, I got that wrong years ago. I shouldn't have written that. That wasn't true. Let me set the record straight." So he doesn't care. Parker's moved on, he's successful with Rippling, he doesn't think about this stuff. But I do. I care about justice. And it was a horrible thing that was done to him and it affected his health, it affected his life, and I just am glad to have sort of been a conduit to set the record straight.

Lenny Rachitsky (01:06:24):
That's an awesome episode maybe for people to start with if they want to check out the podcast. And then generally, I just love this rise of ways for tech people to share their story without this drive to create clicks and create gotcha moments and things like that. Just this, I think people call it techno optimism, this idea of just like tech is great, technology is doing great things for us, let's just tell these stories in a really positive way versus look at all the harm they're causing, technology stop, slow it down.

Jessica Livingston (01:06:50):
And I just want to have conversations that I personally find interesting. I'm very selfish about it, Lenny. As long as I have an interesting conversation, I tell Carolyn this all the time, as long as we have 20 listeners, that's all I need. 20 really interested listeners, we'll keep doing it.

Lenny Rachitsky (01:07:10):
I love that attitude. I wish I had that same feeling. What I look for is, is it growing? That's the thing. I'm like, is it growing at least? If it's growing, no matter what it is, I'm feeling good.

Jessica Livingston (01:07:20):
I need to be a little bit more like that. I don't know any of my statistics. What statistic, you tell me as an experience podcaster, what statistics should I have taped up to my mirror every day and track?

Lenny Rachitsky (01:07:34):
There's the correct one and there's a simple one that I look at, which is just downloads of the episode. It's the most basic one you see everywhere. And downloads is a weird one because they might download and not listen to it, but that's just the one that podcast platforms tell you how many people have downloaded it. And that's the one that just tells you generally, are people listening? Are people continuing to listen? Did they remove it from their phone? In theory, you should be looking at retention like how many people are finishing the podcast episode?

Jessica Livingston (01:08:02):
Can you tell that though? I thought these platforms don't share that with you.

Lenny Rachitsky (01:08:06):
Some do, some do. Spotify gives you some of that. Apple, gives you. The worst part about podcasting is the analytics are extremely bad and inconsistent, but there are some of those stats. The other one, okay, here's one to pay attention to, is number of subscribers on the different platforms, people that follow you. That actually is a really important metric to watch.

Jessica Livingston (01:08:26):
Number of subscribers, okay. One thing I also, this is just my personality, I can't bring myself to do what I want to, is ask people if you like The Social Radars, please subscribe and leave a rating and a review. I would do anything to have people leave rating and reviews.

Lenny Rachitsky (01:08:46):
If you're listening and you either checking out the podcast or you're already a listener, please leave a rating and a review and subscribe and follow.

Jessica Livingston (01:08:54):
Thank you. Can I ask you a question about podcasting really quickly?

Lenny Rachitsky (01:08:58):
Sure, let's do it.

Jessica Livingston (01:08:59):
When you do a podcast, after you hang up with a person, can you tell, do you have a gut instinct like, "Oh, that was a really great "?

Lenny Rachitsky (01:09:07):
What's interesting is, the ones that I sometimes think, holy moly, that was incredible, don't do as well as I would think. And sometimes ones I think didn't go amazing, actually do a lot better than I think. And I think there's a difference between the energy and the fun of it versus the content and the interesting value of the actual conversation. And so sometimes you feel like that was so fun, so good, I loved it, but people are like, "Nah, I didn't learn anything." So those are interesting. That's something I've learned.

Jessica Livingston (01:09:37):
Okay. Yeah, because people come to yours expecting to learn things. Now I'm a little nervous, I'm going to get axed because I'm not teaching them anything valuable.

Lenny Rachitsky (01:09:46):
You're so modest. This was incredible. I think we've taught people a lot of really important and really actionable things and I know you don't think you did, but you did. And with that, we've covered a ton of ground. We've talked through every single thing that I was hoping we talked through. Is there anything else you wanted to share or maybe leave listeners with before we get to our very exciting lightning round?

Jessica Livingston (01:10:08):
No, I mean, honestly I can't think of... I think I windbagged enough.

Lenny Rachitsky (01:10:14):
This was incredible. You talked exactly the right amount of time. With that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

Jessica Livingston (01:10:24):
Ready as I'll ever be.

Lenny Rachitsky (01:10:26):
Okay. First question, what are two or three books that you recommended most to other people?

Jessica Livingston (01:10:31):
Well, I definitely would recommend my first, second and third books would all be P.G. Wodehouse books. Do you know him as an author?

Lenny Rachitsky (01:10:40):
No.

Jessica Livingston (01:10:41):
Ask Jeeves. Okay, so he was an old school author and he wrote the Ask Jeeves books about the Butler and Bertie Wooster.

Lenny Rachitsky (01:10:52):
Not the search engine.

Jessica Livingston (01:10:54):
They're so funny and fabulously written. His use of words makes me laugh so hard. And so I would specifically recommend the starter books that... He wrote tons of books and he lived till he was like a hundred. Start with Very Good, Jeeves or Right ho, Jeeves, Carry On, Jeeves. Those three are really good books. And then I tend to read, so Paul's the big reader in the family, he reads riveting books on Roman grains and anything that has to do with medieval history. I tend to read biographies of people, especially musicians, especially English musicians, strangely. And so I've recommended, to a lot of people, if you really want a good autobiography, because I sometimes hate autobiographies because I feel like people hold back and don't really share everything. Keith Richards, his autobiography called Life, is really good if you're a fan of the Rolling Stones at all. That was really good.

(01:12:04):
And then I recently read Barbra Streisand's biography called, I think it's called, My Name is Barbra something, and I kept thinking as I was reading this, every female founder should read this book. And you're looking at me like that's so random, but it's because she was such a success within this totally male-dominated world of Hollywood and just treated like garbage and dismissed and called a diva when she was very particular about something. Whereas, a man would be called a great director and she was called a diva, and I felt like every woman should just read this to inspire them. It was such a great book. Long, but very good.

Lenny Rachitsky (01:12:52):
Incredible recommendations. Next question, do you have a favorite recent movie or TV show?

Jessica Livingston (01:12:57):
I don't tend to watch recent movies. I watch old school movies from the 50s through the 90s and stuff. My favorite new TV show, just off the top of my head right now, is Clarkson's Farm. Have you heard of that, on Amazon?

Lenny Rachitsky (01:13:12):
Nope.

Jessica Livingston (01:13:13):
Jeremy Clarkson, he's in the show called Top Gear. I don't watch that. But he lives out in the English countryside. He has a farm, and he decided that he'd farm it. And the whole show is about him getting into this business that he knows nothing about, everything goes wrong, but it is hysterical and heartbreaking at the same time. I've learned so much about England and about where I live and the crops that are grown, and how hard it is for farmers. He's really shone a light on the difficulty of being a farmer these days and it's fabulous. Clarkson's Farm. And it has some bad language in it, but I do recommend that kids watch it, because it's just a good show to watch as a family if you can deal with a little foul language. The Brits drop a lot of F-bombs.

Lenny Rachitsky (01:14:09):
Do you have a favorite life motto that you often come back to, share with people, find useful in work or in life?

Jessica Livingston (01:14:16):
It's so boring, but I always try to treat people the way I'd like to be treated myself, really, is fundamental life lesson.

Lenny Rachitsky (01:14:26):
It's like boring but so powerful and important. And I try to live that same way. And I think it's a good reminder to people, sometimes the most, I think it was Michael Pollan had said that, "Cliches are cliches because they're so true." They're so true, we're tired of hearing it. Sometimes it's important to be reminded of them. Who's most influenced you in your career? Who do you think of when you're like, this person's really had the most influence on me?

Jessica Livingston (01:14:51):
In my career, I definitely have to say my husband, Paul Graham. I've just learned so much from him over the years, and he's such a good person and I think people who know him, all know that he is. It's just, he has such a big online personality either through Twitter or through his essays. And so he has a lot of people that don't like him, because he also speaks what he believes. And he is not afraid to say anything if he believes it's true and needs to be said. Whereas, I'm the exact opposite. I'm like, "Oh, I'm not going near that. I'm not touching that with a ten-foot pole. I don't even want to get in someone's crosshairs or fight with someone." And I admire that so much. There's so much that he's done with Y Combinator and just in our personal life that is just so admirable and I've really learned a lot from him.

(01:15:53):
It's such a boring thing to learn from your husband, but at the same time, I'm going to extend this, I'm going to windbag a little bit longer. I have learned so much from the founders that we funded. Some of them are just incredible people and have been through so much and survived so much and built these amazing companies that I couldn't have even imagined when we funded them, that these companies would be as successful as they are, and they're all, so many of them, are just great people. And they now teach me things, honestly. Like Brian Chesky teaches me things. The student has become the master. He knows so much more about me and running a business, and I often will go to him for advice. And so I'm really lucky to be surrounded by so many smart people in the startup world, because as a startup nerd, I could talk about startups and think about them all the time, and it's so great to have all these people around sort of lifting me up.

Lenny Rachitsky (01:16:58):
Would you believe that a cereal experience led to a 92 billion business today? I just looked it up, how big they've gotten.

Jessica Livingston (01:17:09):
Honestly, I wouldn't. I wish I could say, "Oh, I knew they'd be this big." But the truth is, with all of the super successful startups, yeah you can remember feeling very positively about them and certainly feeling like, as they went along in the first few years, like they're doing really well, they're really determined, they're doing a great job, but you just never really think. They themselves, probably didn't realize that they'd ever be that big. Let's face it. That's just the way startups are.

Lenny Rachitsky (01:17:43):
Okay. Here's the actual final question. Is there a fun story of early days YC, whether it's with Airbnb founders or Paul or anything that comes to mind as just like, wow, what a different time that was, or what a surprising thing that happened then?

Jessica Livingston (01:17:58):
It's funny you ask, because actually one of my ideas I've had lately is that I want to start thinking about writing sort of a YC biography kind of book. I don't know when the time is, but the point is, I have to remember things because it's hard. When it's been 20 years to go way back, you have to remember specific things that happened. YC, I just remember the early days being so magical and so pure. When we started, no one knew about us, no one was bothering us. We just did what we were doing with no distractions. We were helping, albeit a very small group of founders, eight in that first summer, we were just doing what we loved doing and growing organically. And no one was scrutinizing us or blaming us for things or writing negative news stories about us. The negative stories in the press, because I'm a people-person and I'm very sensitive, Paul's not as sensitive as me, and so he doesn't care if there's a negative story in the press that's not true.

(01:19:09):
I do. It really affected me, and I hated when we got big enough that people would lie about us and say bad things. So I look back fondly when we first started of it was the most fun time of my life, the most productive time of my life, didn't have kids then, and I could just help the founders and learn about all these exciting things that happened in the startup world, because it was new to me then, the startup world was new when we started Y Combinator, so I had a lot of learning to do. And I met all these cool people, and it was just very authentic, no one was doing it to be cool.

Lenny Rachitsky (01:19:48):
Okay. Well, let me ask maybe one other question. Was there a moment when you felt like YC was working? When it felt like, wow, maybe this is going to make it?

Jessica Livingston (01:19:56):
There were sort of two moments that I remember I felt like YC was working, because remember, we started Y Combinator as 100% like an experiment. Could we fund younger founders with small amounts of money? That was it. Then that summer we created this batch investment idea, and then that became the idea of funding them in batches. And that was the first aha moment was after that first summer when we invited people to participate in the Summer Founders Program, which is what it was called. And remember, that first summer had Sam Altman, Emmett Shear, Justin Kan, Alexis and Steve of Reddit, they were in the first batch. And the batch thing worked really well because they all became friends. We could have dinner every week, and bring in guest speakers and then introduce them to investors at demo day, and that whole batch-investing thing was an aha moment and we said, "Oh my gosh, let's keep doing this. This really works." And so that was a moment where we knew we were onto something, and that's when we then did it in California in the winter.

(01:21:11):
But the second big moment was probably, I remember it was like a year later, and no reporter would write about us, investors really didn't think that much of us, but I remember when Reddit got bought by Condé Nast in 2006. It was that, and then at the same time, I think it was like Charles River Ventures or one of these Boston, maybe it wasn't even Boston, but it was a VC firm, did the seed program where they invested maybe a 100K in startups, and the press loved that. They wrote all about this $100,000 investment, and they'd sort of mentioned Y Combinator as doing small investments. And then that, coupled with the Reddit press, sort of made us feel like, oh my gosh, we are sort of legitimate, and the eyes of outsiders became sort of aware of who we were. And I sort of felt like we've arrived, we've been in the press, people are finally paying attention.

Lenny Rachitsky (01:22:17):
That's amazing. And it's funny that Reddit just went public, it's kind of the other side of that coin.

Jessica Livingston (01:22:21):
I know. Pretty impressive. Definitely didn't necessarily think that was going to be happening.

Lenny Rachitsky (01:22:27):
I know you have to run, but I can't help but ask around what you just talked about where you decided to invest in batches. You wrote this really interesting point that none of us had any experience angel investing, and that's where the idea of funding startups and batches came from. We decided to fund a bunch of startups at once during the summer so that we could learn how to invest. And I love that your inexperience in doing it, created this structure. That unique weakness/strength is what led to the way YC operates, and I think that's really interesting.

Jessica Livingston (01:22:59):
Yeah, we definitely wanted to learn more about how to be investors, so that's when we decided to do this summer founders program where we could invest in a whole bunch at once, and then the plan was to go to asynchronous investing like normal investors, but we realized that there was something magical about this batch thing. So sometimes, I always say we love domain experts, but sometimes maybe ignorance is sort of bliss and you just discover new things.

Lenny Rachitsky (01:23:27):
Jessica, this was everything I hoped it would be. We covered so much ground. I think people are going to love it no matter what you think.

Jessica Livingston (01:23:33):
Oh, good. Good, good, good.

Lenny Rachitsky (01:23:35):
Two final questions. Where can folks check out The Social Radars and anything else you want people to know about? And how can listeners be useful to you?

Jessica Livingston (01:23:41):
Well, you check out The Social Radars on all the podcast platforms; Apple, Spotify, Amazon, all of those. And then there's a website, socialradars.com. And they can be helpful by just listening to it and spreading the word because I don't do any marketing for it besides posting on Twitter, just because it's expensive doing a podcast and stuff. So I don't do any marketing. So if it resonates with you, if you find an episode interesting, please spread the word and write a review and rating.

Lenny Rachitsky (01:24:21):
I was just going to add that, I'm glad you threw that in there. Jessica, thank you so much for being here.

Jessica Livingston (01:24:25):
Thank you so much, Lenny. It was a lot of fun.

Lenny Rachitsky (01:24:28):
Same for me. Bye, everyone.

Jessica Livingston (01:24:30):
Bye.

Lenny Rachitsky (01:24:32):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.