# Dalton & Michael: Successful founders are OK with rejection

**Author:** Dalton Caldwell, Michael Seibel
**Type:** Video
**URL:** https://www.ycombinator.com/library/DV-dalton-michael-successful-founders-are-ok-with-rejection
**YouTube ID:** zB_SkaERWZY

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Dalton Caldwell and Michael Seibel on the importance of talking to your users, why successful founders are ok with
rejection from potential customers, and how protecting your ego by not talking to your users can kill your startup.

## Transcript

and so i just noticed a lot of these teams the really core thing going on is is ego protection and nothing else and like you can come up with all these intellectual arguments on why actually you know but when you really talk to someone and you get down to the core it's being okay with getting rejection hey this is michael seibel with dalton caldwell welcome to rookie mistakes we asked yc founders for their rookie

mistakes so we could share them with you and help you avoid them here's the first mistake that was written in in the beginning when you're still figuring out your idea or product get in as many user or potential user calls as possible at least one per day and ideally multiple it seems obvious but it's something that we personally failed at in the beginning don't brainstorm ideas in a silo you don't know what people want we have all these ideas in our heads as founders about what people want that the

moment they are subjected to reality are embarrassingly wrong like there's nothing more humbling there's nothing that makes you feel shittier than seeing real people using this thing that you built that you spent a bunch of time on and just like ripping it to shreds and not understanding it or like using none of the features or clicking on the wrong thing it's horrible so you talking to users is like the inoculation against this spending inordinate amounts of time

doing something that is completely irrelevant to your end users okay so you're suggesting then that i take surveys right i mean what's the most efficient way to learn what my customers want i should survey them right so this this this may uh be offensive to some folks uh listening to this video but um i don't think that user surveys are that valuable when choosing a startup idea surveys are a useful way to get certain kinds of feedback

i would think of it as sort of micro optimizations or trying to choose directions or say you had four idea four names for a company you want to choose which name was the best of the four choices yeah great run a survey but when you're looking for fundamental truths or you're trying to find your first customer market validation you want to be harsher or harder well what does that mean that means get someone to give you money for it do you see how it's a much higher bar to get someone to pay you money than to

fill out a survey or to get someone to actually use your thing every day or to get them to install it on site think about how many products that we would all in a survey say oh that sounds useful like oh it's you know very very useful idea that you have that you would never in a million years actually pay a dollar for i think the second thing about a survey that i've seen really be horrible is there's a tiny subset of your potential users who actually have expertise

they've actually tried 27 different products this is actually a really important problem for them but if you treat everyone you talk to the same and they felt the same questions so you never get exposed to the expertise and the best example i saw of this was early days airbnb airbnb did this fun thing to get users in the very early days where they offered people who were putting their homes online for rental on other platforms free digital photos high-res digital photos back when like digital cameras weren't a thing yet

in order to list on airbnb and instead of hiring photographer they went out they got digital cameras they went out and they took the photos and to this day i still remember that there was one guy who they met they took photos of his house he loved the photos he asked them hey do you want to sit down for coffee or tea or whatever they started talking and then he said you know i've been renting out my house on all of the platforms on the internet for a decade and i have a notebook of all of my notes on all the things they do bad and all the things they do well for the last

decade do you want to see it so in the dalton scenario a he would have received an email survey like how he would have signed up for ub not at a listing not used it would have sent an email survey like how do you like airbnb you suggest things to improve right in the real world example they got a book of all the things they needed to do and again like think about this imagine you know these guys the founders of airbnb back in the day the way they validated the idea was to

ask people on a survey where they did some user research they did interview they did a user interview would you like to rent your home do you see how what they could have learned from that is is like this versus actually trying to get strangers to rent their home out to other strangers and all the like things that popped up trying to actually make the damn business work do you see how like they learned this much from that versus this much from writing a survey well dalton it's not even this much we're not expo we're not we're not

it could be negative right like it could be negative you're right well i would never want to use that because it's uh dangerous so you need uh you know like done right you don't make airbnb do you have another good anecdote about talking to users about the feature set for twitch streamers back in the day can you can you share that story about what how you created a priority list based on tell us about that so um when we were pivoting from justin tv and twitch um emmett um sheer and kevin lynn

were kind of leading the twitch team and they took this to heart we had not done talking users for years they took this to heart and they basically just started interviewing video game streamers and asking what they wanted and the funniest thing is that at this point we had built every feature a live video social media site could have we had chat we did messaging we had a feed we had social media stuff we had embedding we had every kind of sharing we were on multiple platforms

and so they were really surprised when the first thing people said was can i stream in higher quality and we're like really that's like you don't want like some big we'll build you anything like yeah can i you know what they said they're like well you know my computer costs like four grand and i paid for like the best internet connection in my neighborhood and i'm streaming this hd game

and it looks like crap and we were like huh well because we built our own um media server and we were controlling our old streaming that was like a like a an integer like that was like the easiest easiest change you could ever make and like it would cost us incrementally more but it was like what but like from uh from a building product perspective it was very anticlimactic and so i think like three days later

like you know we introduced like you know higher higher you know hd or something and these people went crazy they were like i've never first of all they're like i never imagined you could do this like i thought it was some massive technical issue that was like where you were screwing us for like a year just because it was too hard and like suddenly you fix it and then two i've never used the website where i talked to someone about it and then it got better and so um

this kind of started a series of in hindsight what looked like extremely obvious things to build right one was i want my stream to look better um very quickly too was i'd like to make money please like can you help me make money you guys don't you want a social network dude don't you want to customize your page more with different colors and themes it's like no but like i'll run ads on my own stuff it's like what do you mean it's like oh if you give me a button

where i'll just run a video out on my own users and i can make money i'll click it and really but wouldn't that what and then once again we already had video ads like once again it's like like that's not even hard to build like like the hardest thing was like what what should the button look like and again dude you were experts you were running just in how many years in were you just it was five years in we were five years into your startup you knew everything about everything but then you were like oh yeah i guess we should talk to some of our users and

they said a bunch of stuff that blew your minds that none of you would have thought and not only did it blow our minds like the engineers listening should appreciate it it wasn't hard to build like we could make them happy so easily compared to all the other on our brainstorm list that was like you know months long projects and i was like oh damn so anyways clearly um going a little deep helps

putting yourself in a situation where you can have a deep conversation is way better than anything else um we touched on this and i want to bring up a a quote because it we can dig a little bit deeper a yc finder wrote in a potential customer's opinion is not valuable unless they're willing to pay you or use the product regularly or share the product with their friends they call this financial capital

pay you time capital usage or social capital give it to their friends i think people really struggle with this because i think it's it's getting at the core of like a human condition thing which is we want to be loved if we don't want to be rejected and so you know getting through all these layers of defense that you've created for yourself to protect yourself from rejection is really hard and it's like yeah man it's personal work like it's

work you're doing in your head it's not work you're doing in the external world and so i just noticed a lot of these teams the really core thing going on is is ego protection and nothing else and like you can come up with all these intellectual arguments on why actually you know but when you really talk to someone and you get down to the core it's being okay with getting rejection i always like to think about this a little bit like science

like imagine that you're a founder oh sorry if you're a founder imagine you're a scientist right and you could design one of two experiments one experiment that actually tests your hypothesis and will give you actual information about whether your hypothesis is right or wrong another experiment that doesn't test the important variable at all how many founders do we know who are never testing the important key hypothesis of their company

for the exact reason you talked about because if i know that i'm wrong my ego shatters or my my investors will hate me or my co-founders will leave or some other reason i've told myself for not just figuring out is the thing i think true or not and what i find so surprising is that some founders just it doesn't occur to them to think this way you know we the stripe founders come in and talk last batch and we always get founders asking us about pricing i've got to discount my

product got to make it free early and duh-duh-duh-duh-duh-duh-duh duh and the stripe founders said we thought that startups had a problem accepting credit cards we thought that all of the existing products out there back in the day were too hard to use and it's too much of a pain in the ass see now we tested our hypothesis we built something for developers that was a lot easier for startups to use and then we charged more than the competition for it now any scientist would say okay well if we're trying to like test this variable charging more to figure out whether startups would use this thing it seems

like a great just logical test but for a startup founder that seems like a crippling decision and what i loved about the stripe founders here is that they just went with the logical test like they they kind of put their ego to the side and they said hey what's the fastest most logical test that we can run to see if this thing is something that people want anyways so we've talked about this like problem this this mistake of like are my

users willing to spend some capital any kind of capital and using my product here's here's the last one that i love um the last one is kind of sometimes what i call the terrorist user or like the user that you love more than they love you so here's the quote from the yc founder when the customer you're pitching says we really love your tech but we can't pick it up today because x but we want to use it in our next project and we'll be in touch soon um

this is a rejection they don't want your tech they just said they loved they just want you out of their office this is a don't call me i'll call you so how does a founder interpret whether they're talking to a real customer or someone who's just trying to be polite or just trying to move on or doesn't have the need like how do you figure out you we told them to talk to their potential users how do i figure out what are they talking to a live one

i think if we talk about being scientists again like we did a moment ago a scientist would be dispassionate and would say okay no and they wouldn't think about it anymore and they would go on to the next thing you know dalton i think a lot of the reason why founders get caught in this trap is because they were never taught what sales really is like they were taught sales in the context of i would almost argue argument

like i think what a lot of founders think sales is is more like what lawyers have to do to convince a jury like a jury's has to be there and like they're gonna make a decision and as a lawyer your job is to convince them one way or the other i would argue that the best sales people convincing is really low on the list of what they're doing like i might say convincing isn't on the list of what they're doing

right i would argue that the best sales people are spending a lot of their time doing two things learning and filtering learning and filtering it's a successful conversation with the customer if they say no quickly and they teach you about other kinds of customers who also are going to say no quickly that's a success and like filtering out the customers who will never get to a yes as soon as possible is a success

and i think that a lot of founders have never done sales are like oh no if they say no that just means that they don't understand how good my thing is and i have to explain it better as opposed to like no that no is a gift figure out what you could have asked them so they would have said no in the first three minutes of the conversation you know so why see we kind of talk about this as customer validation like every sales call should start with three questions that allow the customer to disqualify themselves from your product

right a lot of your calls should be ending in the first five to ten minutes like you know i don't think we're right for you now we're happy to call you back when we can do this this thing or that thing but i don't think we're right for you now and and if enough founders and it's funny because the themes are all the same being willing to say no being willing to test the core hypothesis oh sorry being willing to accept a no being willing to test the core hypothesis not feeling bad when someone doesn't want your thing like having

yeah of self-recrimination and self-doubt and you know like you can get really dark and it's like someone just doesn't want to buy your thing like who cares you have to get used to it it's like lots of people out there so um if we were to wrap this up this has become commonplace advice now to talk to your users and i think that the reason why people don't do it and and you know clearly what you've kind of

played out is they don't do it because it makes them feel bad and they don't want to feel bad and you know here's what i told you startups i hope you're passionate about what you're working on because you're going to feel bad all the time like that's what you signed up for so like don't run don't like like it's kind of like a marathon runner being like man i hate that feeling when my legs are super cramped and i don't want to run anymore it's like well you're going to feel that way all the

time like you're good because you can deal with that feeling and stay productive and stay logical and stay scientific about what you're doing i think about a lot of what you just said in terms of the trade-off of being an employee versus being a founder when you're an employee if you're working at apple or google you don't have to worry about any of this stuff you're like you got 15 layers protecting you from external world feedback that you

don't want you have several layers of managers telling you it's all going to be okay and giving you constructive positive feedback you have them getting fired when it doesn't work out right that's their fault it wasn't your fault you have company all hands where you can exp you know like you have all these layers where your your this is all the stuff that's filtered out from you man like this is not your problem when you have a job when you're a founder there is no filter and i think people freak out because they treat being a founder is on

the same like the same sort of thing as being an employee they're like oh either i'm going to work at google or i'm going to start a startup it's like well no this is different right one of them in one of those things you're like a worker bee and like you can just work on your thing and it's really low stress and like you know you have to worry about your manager liking you and stuff like that is this there's no managers there's no filter you're just out there dangling in the wind and every breeze that comes your way you're gonna feel yeah you you the the the inputs that you

experience as a founder are like completely unfiltered yeah it's just and and you have to be the person that tells the people working with you that it's all gonna be okay you're now on the role of the filter like you are the filter not the person being filtered to yikes i think a lot of folks aren't mentally prepared for this um reality is tricky when it's not filtered but i'd argue it's more fun it's more fun to look at the sky with

your own eyes than to look at a drawing of a picture of a movie of a da of the sky like it's more fun like you gotta live your life right like you know we only get a short time in this earth so you might as well use your own two eyes um that's that's at least my thought on this all right well this is a great this is a great wrap up on talking users why and why it feels like crap
