# Dalton & Michael: Secrets You Can Learn From Your Customers

**Author:** Dalton Caldwell, Michael Seibel
**Type:** Video
**URL:** https://www.ycombinator.com/library/IP-dalton-michael-secrets-you-can-learn-from-your-customers
**YouTube ID:** IdwYMfM2QMs

---

YC partners Michael Seibel and Dalton Caldwell discuss how spending real time with your users can unlock insights and
growth.

Hear the stories of how Airbnb and Brex built billion-dollar companies by forging genuine connections with customers.
Learn why having too much money and too many people can actually slow down learning. And discover how to accelerate
insight into your product by making your users feel special.

Successful startups don’t just build technology – they solve human problems. The key is listening to the people who
really matter: your customers.

## Transcript

and some point during this coffee session the guy was like Hey Oh you want my nose you want to see my would you like a gold mine yeah for all of my thoughts all of my everything [Music] hello this is Michael Seibel with Dotson Caldwell and today we want to talk about our secret for learning as much as possible from your early stage customers one of the things that we have to fight a lot for these Founders early stage Founders we had to fight is this idea

that when we're started the company we understand the problem really well that we're trying to solve we understand the customer really well we understand the solution really well yeah we have it all figured out right day one we got we nailed it we we know you know we have our next 10-year plan all lined up and why would you start a company if you didn't have the plan like if you didn't know right it's true overconfident foolishness is a key part of doing anything ambitious in life so I just you're right you gotta love that you gotta start there and then immediately switch

maybe we don't know anything that's not possible but you only switch after you burn the bridge behind yeah that you can't quit yeah you have to hear far enough along quitting's not an option before you realize you don't actually know too much and then at that point you have to learn and you know one of the things that we've seen and we'll give some examples today is that the fastest way to learn what you need to know both about the problem and how to solve it is to care about your customers right if you care about your customers and then as a result you spend

time with your customers you can really learn what their problems are and how to solve them so much faster you know one example and we we talk about Airbnb a lot but one example that came up when they most recently spoke to the batch that really clicked in my mind was they retold a story about how they were emailing their hosts and they saw their host had horrible photographs on Airbnb and they knew their hosts were listing their properties on other sites and they had horrible photos there too and they said okay we're just gonna help

them get better photos right we're just gonna help them get better photos we're gonna email them we're gonna go to their homes and give them better photos and I think what's interesting about that was that they knew that those hosts were going to use those photos in other places right they sure did they knew that like maybe their company was going to be dead in three months right yep and they knew they were kind of losing money on the deal because they flew yeah yeah exactly they won 100 losing money on the deal didn't pencil out yeah it didn't pencil out but they

did it anyways and and they had empathy for the users and they're like you know those photos suck this is something we can solve for them and it's kind of human nature that if you do something nice for someone they'll appreciate they remember it okay it helps you to trust like you establish some trust when you break down the barriers between yourself and the folks you're trying to serve and and do something nice from them who knew something valuable who knew and they didn't they were like here's your here's your invoice yeah no no no no no no um and I think what was interesting was

that when Joe tells the story he talks about one host who after they took all the photos and they arranged the lights the right way and were like they showed them photos like oh the place looks great the host was like hey do you want to sit down for coffee and it was so funny because that was the moment in the story where I was like a lot of Founders would have said no yes a lot of Founders would have been like I have someone else on the list I'm just doing this to try to make my website better I don't really like you I'm actually kind of pissed that like you have shitty photos of my site so like I got what I need I'm

getting out of here and Joe actually cared about his users and Joe was like sure and as he tells that story he learned that that host had been renting out his apartment for I think 10 years and throughout the process of learning how to do it he had taken notes in this notebook and some point during this coffee session the guy was like Hey Oh you want my note do you want to see my do you want my notes on being a host for the last 10 years it's like would you like a gold mine yeah for all of my

thoughts all of my everything and Joe's Lou yeah and um what was so funny was that that whole process that whole thing of learning what he probably couldn't have learned if he had talked to a hundred hosts casually he got by caring about one Coast those moments never happened that learning never happens if you don't care yeah we always we talk about about these guys a lot but you know something that you can't fake that they always do is they remember the names and the life stories of their

first customers like when they talk about the original Airbnb they weren't like yeah we we hid behind our keyboards and we bought some Facebook ads we did we put out a landing page and we spam some people and they signed up and you know we scraped vrp no yeah when they tell the story it's a story about people yes and they they know all their names and they they keep in touch with all their original hosts and the people that stayed with them yes to this day and they just cared more yeah and you can't

fake that in many ways they didn't have many other advantages like it didn't have many other events so that's Airbnb talking before you were saying that the the brex folks have figured this out a little bit too what yeah other story we've spoken about the brex pivot in various other contexts and so folks know they started with an idea that was like Hey VR is the future I guess let's make some VR headsets hypey scene stir idea of the moment yes and again it makes sense they had the sense

that that was what a startup should be is whenever the current zeitgeista was popular fair and the issue was you know I don't know where to begin uh they didn't know a ton about that they were programmers but they had only worked on fintech stuff before they didn't really understand the use cases they weren't really sure why the other products weren't good enough like it was just basically DOA it's a complete mess it was a mess yes and then they tried a couple of ideas again you know the story but at the end of the day they really understood other Founders other people in the YC batch yeah and once they got

the idea for brex was very clear what to do next which was to talk to the people all around them NYC literally in this building we're in right now yeah and ask them stuff like oh do you do you have a credit card oh you don't cool do you want to use our thing okay and then they were able to spend so much time with these customers understanding the complexities what they're trying to do they could very quickly ship the product and again let me give you another example for them is um a lot of folks that have companies in different countries or employees in different countries there's all this complexity that you get if you're not

American and your company's not American and your employees aren't in the United States yes right yes and these guys are building all the software now to this day which involves really going deep and caring about all those edge cases yeah and it's because they employ people what's funny is they can be their own guinea pig on this stuff yes there's no way you could fake that if they weren't Founders if they hadn't gone through this themselves it'd be much harder to hire some PM in a big company to build all these Solutions what I love about this story is that while they were in

the YC batch and they were asking people do you need this they were finding people who were getting screwed right it was like oh you're under 25. yes you can't get a credit sorry no can do yeah there's no like fill out extra forms it's like completely getting screwed oh you're not from America that's a no sorry you don't have a credit you can't get and so like what I loved about it was that their product didn't even have to be amazing to start because the alternative was nothing yeah when you're competing with literally nothing no and

it's like it's like the perfect example of the big company not caring it's like I don't care so much that you just can't use my product at all and like all they had to do was care more than that right more than no like we'll figure out how to make it work for you and I think that it always just comes back to this like those Founders in the batch love those guys yeah their customers were their friends there were people they knew yes and they could relate to them they could talk to them they would go out to dinner with them and they they genuinely knew the stories

they're customizing and cared so I would say the last story on this um was a story I experienced to Justin TV and twitch and I would say to be honest right we experienced both sides of this in the early part of the story we had a very troubled relationship with our users on one hand they were streaming content on our site it made a lot of traffic and we were able to monetize traffic a little bit but on the other hand they were streaming content they didn't have the rights to yeah didn't have the rights too it was like soccer soccer sports movies TV boxing boxing was big UFC I guess

they like they liked us it's very popular very popular and they were creating problems for us like we could get sued we were getting sued like all kinds of issues we had really complicated relationship with our customers and even just the ugc content right or people in chat saying bad things right it was like like for a lot of the time I only said nice things I know sometimes you say bad things in chat and so for a lot of the time we had this really complicated relationship with their users and then I think that really changed when Emmett and Kevin started talking to streamers right the

way the story goes is that you know some people started streaming Starcraft 2 and it was a big Starcraft fan and he just loved watching this stuff and he started talking to the streamers and like not sending a mass email to all streamers yeah if you're a streamer 257 like you know you know it was like weird like yeah she literally reached out one by one with Kevin and if you're a streamer Justin Timber at this point just a TV is like five years old and you're on a phone

call with like the CEO and the CEO that's pretty cool right and you care about your like Starcraft Channel yes you're starting what did they play were they like they were his name is he a protoss guy Emmett could kill me with every race and start okay so I don't even know we should ask him yes I was like a Zergling Rush guy okay Emmett figured out in four seconds and then just had infinite ways I would play Taryn back in the day that's really yeah siege tank I don't know anyway carry on sorry sorry yes yes so um I'm gonna get

on the phone with these streamers and basically just asking them what do they need and I think that what was funny is the the streamers tested them a little bit the first things they said were things like well can you let me stream in higher resolution right and you know it was it was funny because talking to Emma and Kevin afterwards is like yes in fact that's one of the easiest things they thought that people would be asking for all those really hard stuff and what they asked for was embarrassing because it was so obvious and easy to implement so it's just that they never bothered to

ask never bought the desk and and actually it was even more it was even more Insidious than that for these users they made a complicated relationship with increasing the bit rate of their streams increased our costs yeah that was kind of a negative feedback loop end but for these folks like there was no issue with their content it was it was perfectly fine there were no rights issues and so and so forth and hilariously because we had a really strong technical team and Tech co-founders we built our own video system changing the bit rate was like a number like yeah it was probably setting

spy it was like the easiest thing in the world and so bam we had that feedback loop of like they asked for something we call them two days later we built it all mind blown and then after a couple other conversations they started teasing the city I was like can you help us make money and once again we Kevin M are like not a lot of money but we are barely alive so so like how much money do you want to make and there was like any money and and once again Eminem was like really any money like and they would do the

math on some Channel and be like well if we split that Revenue with you on this channel we could send you a check for twenty dollars a month and the people the stream's like that's amazing and it was like oh really that's that's amazing okay well you know and I remember back in the day like Kevin would hand write and mail the checks and so to me it was just like the third example of putting yourself out there five years in not in the beginning five years in caring about that customer asking what

they want and then you start learning oh crap the core learning of twitch was if you could help these streamers make money and they could quit their job and stream the content that they love they will make stuff that millions of people want to watch right that was the core learning and the only reason we accomplished it was because Emmett and Kevin called them and gave them because think about it that story could have been they asked the PM do a report exactly right go do a survey from your data science team or you you

have you asked your investors to go do a report go do some data science like think about the million different ways yeah they could have not personally cared enough to get on the call yes and everyone around them would have been okay with those yeah those all sound more professional right yeah get a real report you know yeah and so I think what's interesting about all three of these stories is that they all start with just caring just like giving a right about the people using your product or wanting to use your product

or having a problem and so much value is created so much Learning Happens so quickly and we see so many Founders that are just flailing putting so much effort and not getting results yeah and it's like if they were just doing these things yeah and it's not a question of money I think a lot of folks think you need more money to get these insights and I again I think what we're saying is you know maybe less money would help getting these insights but you see what I'm saying it's almost like money's tangential money's tangential in fact if

you think about doing these things with a lot of money that's how you get to the let's hire let's have many people between me and the customer the more layers there are between the better we'll do the smarter the more we'll learn the more people we can talk to all right so the final takeaway here is that if you really want to accelerate your learning care about your customers go talk to them go spend time with them one-on-one and you'd be surprised at one how special they'll feel and two when they feel special how much they can help you learn about their problems and how to

solve them it's often it's great to see you man thanks [Music] [Music]
