Building Confidence In Yourself and Your Ideas | Dalton & Michael Podcast

One trait that many great founders share is conviction. In this episode of Dalton & Michael, we’ll talk about finding confidence in what you're building, the dangers of inaccurate assumptions, and a question founders need to ask themselves before they start trying to sell to anyone else. Apply to Y Combinator: https://yc.link/DandM-apply Work at a Startup: https://yc.link/DandM-jobs

• 0:00Speaker 00

  They will take something, you know, anonymous ardivark 42 cents as like gospel and base their entire life philosophy around it. Don't do that.

• 0:16Speaker 01

  All right. Welcome to Dalton Plus, Michael. And today we're going to talk about how fast is too fast for moving a startup.

• 0:26Speaker 01

  I'll start with a story. I was talking to a YC company, could have been this batch, could have been a previous batch.

• 0:31Speaker 00

  Yeah, let's anonymize it. We don't want to.

• 0:32Speaker 01

  Probably every batch, to be honest. A common story. And a summary of what they told me was, we got into YC with this idea. We called 25 companies, mostly startups, of course, over the last two weeks. None of them want to buy our product, which doesn't exist. It's just an idea. And so we decided to pivot.

• 0:55Speaker 01

  And so can you help us?

• 0:57Speaker 00

  And people may not know why we think that's funny.

• 1:00Speaker 01

  Okay, please explain.

• 1:01Speaker 00

  This is funny to us because that was very low effort.

• 1:05Speaker 01

  Yes.

• 1:06Speaker 00

  Trying to contact 25 people and be like, well, I guess, I guess we're done. I guess no one wants it. Is so low effort.

• 1:13Speaker 01

  Yes.

• 1:14Speaker 00

  As to be funny to us. So, so carry on with the story.

• 1:17Speaker 01

  What was interesting to me about this was that like, these two founders had a vision in their head. And the second that the path and the startup didn't line up with this vision in their head, which was that, well, I think this idea sounds good. Well, I see fun of this idea. So they were, everyone I talked to must think this idea is good. They got a little freaked out. But then the second thing that I love is that like, the instinct to talk to startup founders, it was like, I want to vet this with startup people. Often because I feel like it's easier to sell them, even though this isn't a problem that startups have. The overarching thing was like, this was not even rigorous thinking.

• 2:00Speaker 01

  Like, like where these people used to work, if someone they hired said this to them, they would like laugh at them.

• 2:07Speaker 00

  Yes.

• 2:08Speaker 01

  They're doing it themselves.

• 2:10Speaker 00

  Yeah.

• 2:10Speaker 01

  Why do they do this?

• 2:12Speaker 00

  The version of this that I see a lot.

• 2:13Speaker 01

  Yes.

• 2:14Speaker 00

  Is people, the way they start with their company is to cold email a bunch of people on LinkedIn. They're like, okay, we're doing our startup, we're going full time. Well, so cool. Well, what are you doing? Well, we, we, we LinkedIn inmailed, we spammed a thousand people. And we only got three responses. So I guess no one wants this.

• 2:35Speaker 01

  Yes.

• 2:36Speaker 00

  And that doesn't work, friends, like that's not sufficient.

• 2:42Speaker 00

  This is very superficial validation.

• 2:45Speaker 01

  Yeah.

• 2:45Speaker 00

  That people are doing, right? Like, and so I think people do this because no one told them differently. Actually, here's another one for you on this topic.

• 2:53Speaker 01

  Yeah.

• 2:54Speaker 00

  I think that a lot of people are trained as PMs and they're trained to do user research.

• 2:58Speaker 01

  Yes.

• 2:59Speaker 00

  And being trained to do user research, I remember taking a user research course in college. Is you're, you're trained to sort of like interview people rather than sell products to them.

• 3:09Speaker 01

  Yep.

• 3:09Speaker 00

  And if you can't even interview people, you're not really sure what to do. And so I think my argument is if you've been trained to be a PM or trained to do user interview research, you struggle with getting first customers because the skills that you learned to do this research don't.

• 3:25Speaker 01

  Don't apply.

• 3:25Speaker 00

  Help.

• 3:26Speaker 01

  I also think that if you come from a big company, either in product or engineering, more often than not, you've never solved your own problem. Like you're working on other people's problems. And so I think that your instinct when you start a company is like. Almost a consulting and say, I need to go around, I need to talk to a lot of people. I'd figure out what their problem is and I have to solve it. Which I think is tricky because it resembles what you did in Big Co. But it probably doesn't represent what the founder of your Big Co. did.

• 3:59Speaker 00

  A hundred percent.

• 3:59Speaker 01

  To start their Big Co.

• 4:00Speaker 00

  Right?

• 4:01Speaker 01

  It's like, who should you copy? Like yourself, employee 10,000? Or what about employee one? What did that person do? So, you know, you talk a little bit about this concept of when people pivot quickly. They, they, they're not building the muscle of building conviction. Like, talk to us about that.

• 4:20Speaker 00

  You know, we have a few different metaphors, so I'll mix them. So one of the metaphors is what constitutes a high quality rep?

• 4:26Speaker 01

  Yes.

• 4:27Speaker 00

  What constitutes completing a full pivot cycle?

• 4:31Speaker 01

  Yes.

• 4:31Speaker 00

  And to learn anything, you need to complete it all the way.

• 4:37Speaker 01

  Yes.

• 4:37Speaker 00

  So again, like, being like, we built a product, we spammed 10 people on LinkedIn. None of them replied, let's throw it all in the trash. I am arguing that is not a high quality rep.

• 4:48Speaker 01

  No, you didn't do anything.

• 4:49Speaker 00

  You didn't really do anything. You didn't really learn anything. It was sort of just like a waste of everyone's time.

• 4:55Speaker 01

  You did, you did spend time, so that's fair.

• 4:57Speaker 00

  You wasted time. And so.

• 4:59Speaker 01

  Congrats.

• 4:59Speaker 00

  The metaphor I sometimes like to tell people when they're pivoting is the most important customer is yourself. And the founder psychology thing you want to do is build conviction in your own mind that this thing is worth working on.

• 5:12Speaker 01

  Yes.

• 5:13Speaker 00

  And so it's not to make investors happy or your YC partner happy.

• 5:17Speaker 01

  Yes.

• 5:18Speaker 00

  Or whatever. It's to convince your brain that more time spent on this idea is time well spent.

• 5:25Speaker 01

  Another way I like to think about that is to convince yourself this customer is worth helping.

• 5:30Speaker 00

  Yeah.

• 5:31Speaker 01

  Like you're going to enjoy spending time with this customer. And I find a lot of founders kind of want to skip. That part.

• 5:38Speaker 00

  Conviction, yeah.

• 5:39Speaker 01

  Oh, I just want to be in this industry. I just want to, I just want to them to buy my thing. I don't want, I don't like, don't talk to me. I don't really care about, just buy my thing, make my number go up. And I want to raise my series A. It's like.

• 5:51Speaker 00

  And, and so in terms of like founder personality traits or things you can develop, I think a lot of times how good of a programmer you are is one thing, how good you are at sales, how good you are at fundraising. All these things are like, you know, important.

• 6:04Speaker 01

  Yes.

• 6:05Speaker 00

  But someone that has low conviction

• 6:07Speaker 01

  Yeah.

• 6:07Speaker 00

  and struggles to ever build conviction on anything, even if they're great at all those other factors, not going to make it. Isn't that crazy? Versus there's people that are worse at some of those other things. Imagine this, this was like a baseball card of their skills. Eh, not the best programmer, not the best salesperson, not the best fundraiser, but very high conviction and able to focus their energy one direction in a superhuman way. Those people tend to succeed.

• 6:30Speaker 01

  Case in point, Justin Khan, Lekko founder. I, I totally agree. And what's funny is like every good startup team has at least one of those people.

• 6:40Speaker 00

  You need one.

• 6:41Speaker 01

  Yes, yes, you need that. And, and the too cool for school teams where it's like, oh no, like I can't, I can't be too into anything. Right? Like my bar is super high. It's like, sorry, you'll just, you'll pivot to run out of speed.

• 6:56Speaker 00

  And, and so like, let's talk about exactly what conviction means. I think it doesn't mean believing in things religiously exactly. It's more of not letting yourself get blown off course. So this happens to us a lot. We've seen this at YC. A founder is working on an idea that gets going well, they go to fundraise. The fundraiser is hard. What happens if you're not high conviction?

• 7:21Speaker 01

  Yep, got to pivot.

• 7:22Speaker 00

  They give up. So if just meeting with investors

• 7:25Speaker 01

  Causes you to give up.

• 7:26Speaker 00

  Causes you to give up on your idea, by definition, I'm arguing you don't have high conviction.

• 7:30Speaker 01

  Yes.

• 7:31Speaker 00

  Because you're blown off course. If every time you talk to a new customer, you decide to change your product. That is low conviction. You do not have conviction.

• 7:40Speaker 01

  Let's go back to the investor one. The thing that I hate about that investor one is that if you look at the history of really big companies, so many of them, most investors thought that the idea was horrible.

• 7:51Speaker 00

  Yes.

• 7:51Speaker 01

  So it's like empirically, a lot of investors thinking your idea is horrible is not necessarily a bad sign.

• 7:59Speaker 00

  Correct.

• 8:00Speaker 01

  Yeah.

• 8:01Speaker 00

  It's not necessarily a good sign either, by the way.

• 8:02Speaker 01

  No, no, no.

• 8:02Speaker 00

  We're not arguing, hey, if it's bad, then it must be good. We're not saying that.

• 8:06Speaker 01

  It's more of a neutral, like, it's, it's, it's, it's not a key indicator either way, I might argue. But when you take it as a key indicator, when it's the only key indicator.

• 8:14Speaker 00

  Yeah.

• 8:14Speaker 01

  Oh, it's so.

• 8:15Speaker 00

  It's almost like when you spend all your time trying to triangulate what other people say is good, and that's how you decide what startup idea to work on.

• 8:24Speaker 01

  Yeah.

• 8:24Speaker 00

  You're gonna have a bad time.

• 8:26Speaker 01

  So I think that, um, I've been trying to unpack, why do people do this? And, and more specifically, like, why do people kind of think logically and rationally in their job? And then come to their startup and just their quality of thinking decreases by 90%. And, you know, you and I talked about this before, you know, a big thing is fear. And in the context of the YC batch, I noticed a big thing specifically related to fear is I literally like fake information. You know, I had a company told me like, oh, man, well, we started looking at this problem and realized it's going to take a little while to build. And, you know, we looked at our batch and 75% of the companies already have launched products that are growing. And we were like, we can't. And I'm like, wait, wait, wait, wait.

• 9:12Speaker 01

  Pause. I was like, he said it with such conviction for a second. I was like, wow, that's a good job. We're killing. 75% already launched. The batch hasn't started yet. And then I was like, wait, like, why do you, like, why do you think that? And they were like, I just assumed. I was like, what?

• 9:31Speaker 00

  You're just making shit up.

• 9:32Speaker 01

  Yeah. And I was like, you can look.

• 9:35Speaker 00

  And this is what's funny for the founders that read a lot of Twitter or Reddit or blogs is they will take something, you know, anonymousartvart42 say as like gospel and base their entire life philosophy around it. Don't do that.

• 9:53Speaker 01

  Don't do that. Especially when you can look up the real answer. You can tell which company, like when you're in the YC batch, you can tell which companies are launched, which ones aren't. Uh, the other one was, well, an alum told me I won't be able to raise without, you know, $10,000 in MRR. And it was interesting because I had to sit down with this founder and say really simply, some companies entered the batch with a post-launch product with users. Some companies entered the batch with an idea. If you were a rational investor, would you judge those two different companies with the same exact rubric? No, of course not. And I was like, okay. And if an investor did, would you not call them kind of dumb? And maybe you wouldn't want to work with them?

• 10:37Speaker 01

  I was like, yeah. So then why are you doing that? Of course, the expectations are different from something that comes into the batch with just an idea. But I think that these kind of false expectations

• 10:51Speaker 00

  Yeah.

• 10:51Speaker 01

  create the fear and then the fear creates the bad thinking. And then it's like, once you're in bad thinking, you're, you're kind of fucked.

• 11:00Speaker 00

  I love that technique, uh, that you just mentioned. I like to do this one sometimes too, when someone is trying to get a first customer.

• 11:06Speaker 01

  Yeah.

• 11:06Speaker 00

  Which is like, okay, in your past job, your team evaluated different software to buy, right?

• 11:12Speaker 01

  Yes, yes.

• 11:13Speaker 00

  And I'd be like, so you have actually been on the other side of the customer conversations a lot.

• 11:17Speaker 01

  Yeah.

• 11:18Speaker 00

  So which of the sales tactics that you're trying would have worked on you? Like, how often do you respond to cold emails on LinkedIn?

• 11:25Speaker 01

  Yes.

• 11:27Speaker 00

  Oh, never. Okay.

• 11:28Speaker 01

  With your name kind of poorly replaced in the tab plate. Is that?

• 11:32Speaker 00

  Like, and suddenly their brain, the gears in their brain re-engage and like, oh, we evaluated things all the time and we would do this and I had the like, like, and I'd be like, so basically you're actually an expert at understanding your customer because you bought a lot of software on the other side of the table.

• 11:47Speaker 01

  Yes.

• 11:48Speaker 00

  What if you just tried to come up with tactics that would have worked on you and would have made you buy your product? And they'll like stop and they'll be like, I never thought of that before.

• 11:57Speaker 01

  Yeah.

• 11:58Speaker 00

  And so that's actually a really great technique is to

• 12:02Speaker 00

  remember back when you've been on the buy side for stuff.

• 12:05Speaker 01

  Yes.

• 12:06Speaker 00

  And think about what have appealed to you, what would have appealed to you or got you over the line. And then that screens out a lot of those junk because the low effort pivots. If you run the stock experiment, they'd be like, oh yeah, I would never buy this.

• 12:18Speaker 01

  I think what's so funny is like, when the founder has that realization. Oh, I actually am an expert in this. Like, oh, I can actually lean on my expertise. The thing I often say next is like, and that's why we funded you.

• 12:31Speaker 00

  Like, yeah.

• 12:31Speaker 01

  Like, it's like, almost like they didn't realize that we funded them because they knew something about the topic they were pitching. And then when they want to pivot really quick, we're like, wow, now you're moving into an area you know nothing about. And we have to like, hey, remember like.

• 12:45Speaker 00

  Now you know.

• 12:46Speaker 01

  You know this thing. Like, others will respect that too, like your customers. So no, I think this is, um, it's so tricky because fear really just fucks everything. But I do think this is one of the reasons why, um, I like the new YC standard deal. Because I think that before founders would be like, well, if I don't raise a dividend, I'm fucked. And now I can just say to them, it's like, look. Imagine you don't raise a dividend. You have half a million dollars. You're fine. Like, there is no gun. The only gun to your head is the one you're lifting.

• 13:23Speaker 00

  Because you keep pivoting over and over again and you never build conviction. Like when you're low conviction.

• 13:28Speaker 01

  Yeah.

• 13:28Speaker 00

  Money ain't gonna, no, money's not your problem.

• 13:30Speaker 01

  So sometimes it's like, hey founders, just put the gun down. All right. So we often encounter these companies, and we've talked about this before, companies that get into pivotitis, right?

• 13:39Speaker 00

  And. They got a bad case.

• 13:40Speaker 01

  Bad case pivotitis, right? And I think what's interesting is that like, a company that will build something, learn over a period of time and then pivot. Will often pivot from a place of knowledge and like actually continue to make forward progress. But we also see, uh, a different version. Uh, how would you describe that version?

• 14:02Speaker 00

  Yeah. Have you heard the term, uh, random walk people like, so a random walk is where you use like a random number generators to decide which direction you go. And basically when you random walk. You actually never get anywhere. Like, imagine a starting point and then you walk one direction and you roll the dice and you choose a different direction. You do that over and over again.

• 14:20Speaker 01

  Yep.

• 14:20Speaker 00

  You never get anywhere.

• 14:21Speaker 01

  That's kind of like emailing 25 startups and asking them if they like your idea.

• 14:26Speaker 00

  A little bit. It's a little random, right?

• 14:28Speaker 01

  Do that again and then do that again and do that again. Yeah.

• 14:30Speaker 00

  And, and what happens is imagine you're like, you know, in a rowboat in the middle of the ocean trying to get back to land. If you just keep changing direction every, every once in a while, you're never gonna get, you're gonna be lost at sea. And so you kind of have to get on a vector that even if you have to change a little bit.

• 14:48Speaker 01

  Yeah.

• 14:48Speaker 00

  There's some forward progress you're making in some specific direction.

• 14:52Speaker 01

  And I think that what we see that's so unfortunate is that when you do that random walk enough, you just run out of energy.

• 15:00Speaker 00

  Yep.

• 15:00Speaker 01

  And, you know, I always see it like somewhere in like one and a half to two years. If you don't feel like you've learned anything and you've spent two years kind of doing the thing. One, your experience isn't gonna be good.

• 15:15Speaker 00

  No.

• 15:15Speaker 01

  Two, you won't feel like you used the time well. But three, you're just gonna be tired. And for no good reason. You can be tired for no good reason. And...

• 15:23Speaker 00

  Well, you've never sunk your teeth in anything. So it's like you're, you feel like you've been running a race. But the, if it's like, so what have you learned? They're like, well, I learned what not to do.

• 15:36Speaker 01

  Yeah.

• 15:36Speaker 00

  Like, it's harder, it's kind of hard to articulate why that was a good use of your time.

• 15:40Speaker 01

  Yes. And I think that what's sad is that oftentimes those people have a very bad memory of startups, right?

• 15:48Speaker 00

  Yeah.

• 15:48Speaker 01

  And I wish they didn't. Like, the folks who learned and didn't succeed are often motivated to go out and do it again or go work in a company that's space. Like, this is an additive experience in their life, even if their startup didn't work. The ones who do the random walk. Like they realized, man, this probably wasn't gonna get used to my time. So anyways, I think that the last point I always like to bring up here is another version of this kind of random walk or email 25 people then pivot is like, launch a product that will help no one.

• 16:25Speaker 00

  Yep.

• 16:25Speaker 01

  And then pivot. And in the founder's mind, they'll say, well, I launched an MVP and nobody wanted it. And, you know, we talked about this earlier. It's like, is it an MVP?

• 16:37Speaker 00

  Yeah. MVP is one of those terms where people say it so much, it's assumed that there's an agreed upon definition.

• 16:44Speaker 01

  Yeah.

• 16:45Speaker 00

  But when you ask for details, I am not convinced there's an agreed upon definition of MVP. So what's your definition of MVP?

• 16:50Speaker 01

  Well, you know, I, I think that I used to not assume I had to define it narrowly. But now that I think about it, if you can't get anyone to use your MVP, it's probably not an MVP.

• 17:07Speaker 00

  Well, it's not the V. We're missing the V, which is viable.

• 17:10Speaker 01

  Yeah.

• 17:10Speaker 00

  Like basically, if it doesn't work for anyone.

• 17:13Speaker 01

  Yeah.

• 17:13Speaker 00

  How, if it's hard to argue that is viable.

• 17:15Speaker 01

  No. And like, shouldn't an MVP, it seems like the cool thing about an MVP is you can do things that don't scale and cheat. Like you can make it, you can kind of will it to work for one person, right? So the fact that it doesn't work for one person usually means that like you weren't even trying to make it work for them. Like you were trying to do something else.

• 17:36Speaker 00

  This is something that comes up a lot when I'm reading applications or in interviews.

• 17:39Speaker 01

  Yeah.

• 17:39Speaker 00

  For specifically developer tools. You ready?

• 17:41Speaker 01

  Yes, yeah.

• 17:41Speaker 00

  It'll be like, oh, cool. So I built this tool and it helps you code and you're way more efficient and it's better and it's, you know, we're building our MVP. And like, we're getting, we're emailing people on LinkedIn now.

• 17:51Speaker 01

  Yeah.

• 17:52Speaker 00

  What is the question I ask them?

• 17:53Speaker 01

  Do you use it yourself?

• 17:54Speaker 00

  Yes, I will say, great. So tell me about your usage of it.

• 17:59Speaker 01

  Yeah.

• 17:59Speaker 00

  And they'll be like, huh? And we're like, okay, so let me get this straight. This is helping programmers and you're outselling it. You're trying to get stone cold strangers to use it. But it's not good enough for you to use yet, right?

• 18:13Speaker 01

  And then usually there's like, well, it doesn't have. Like they can list the thing, well, it doesn't have this, this. And I mean, like, I would never use it.

• 18:19Speaker 00

  And so the argument, the earnest point is you should at least be able to use your own tool.

• 18:25Speaker 01

  Yes.

• 18:25Speaker 00

  And be proud to use it or feel like it's providing some value. The V and the V, it's viable for you.

• 18:32Speaker 01

  Yes.

• 18:33Speaker 00

  And if you can't even get your, you can't bring yourself to use your own product. It's a little weird to be trying to sell it to people.

• 18:40Speaker 01

  More than a little. More than a little.

• 18:42Speaker 00

  So that should be the bar for a lot of folks.

• 18:44Speaker 01

  Yes.

• 18:45Speaker 00

  Is that they are willing to use their own product.

• 18:47Speaker 01

  Yes.

• 18:47Speaker 00

  Right?

• 18:48Speaker 01

  That's a good bar for, especially, I mean, if it's solving your own problem, then like at a minimum.

• 18:53Speaker 00

  Yeah, that doesn't apply. There's some, that doesn't apply in some cases, but for a lot of things.

• 18:57Speaker 01

  At a minimum, you should be able to use it. So yes, so once we started looking at it this way, I started realizing like, how many companies never build an MVP? Cause that's like, it's typically seen as kind of like the first real baby step, right? And how many folks never get there? They never made one customer happy. And sometimes when I talk to founders who have these big highfalutin plans, like I bring it back to like, can we? Just one, can we just go one? You know, the path to 10 million happy users.

• 19:29Speaker 00

  Yeah, let's talk about that later. For today, how about one?

• 19:31Speaker 01

  One. And you know, you can't do that. Like you can, you can, everyone can do that.

• 19:39Speaker 00

  Yeah.

• 19:40Speaker 01

  So maybe the long story short here is that, one, it's going to take maybe longer than you think. So don't have expectations that screw you up. Two, fear makes you think real bad. Like, don't let fear turn a really smart person into a not very smart person. Three, man, it helps to solve your own problem and then to be your first customer.

• 20:05Speaker 00

  Yeah, that's a good bar. At least you can say you did that.

• 20:08Speaker 01

  You know, if you're doing a random blog, maybe start with.

• 20:12Speaker 01

  And then four, like, understand that like you're gotta do, you called it a good rep. Make the analogy, because in lifting, like make the analogy.

• 20:22Speaker 00

  Yeah, I think it would just be in any kind of exercise or movement, if you want to build strength, you want to like have good form.

• 20:30Speaker 01

  Yeah.

• 20:31Speaker 00

  And you won't get better if your form is bad, or you might even injure yourself, actually, right? Like if you want to learn, I don't know, how to swing a golf club.

• 20:39Speaker 01

  Yep.

• 20:39Speaker 00

  And your form is bad, A, you probably won't learn. And B, you might injure yourself.

• 20:46Speaker 01

  Yep. And you're not gonna have fun.

• 20:48Speaker 00

  You're definitely not gonna have fun. And so you kind of want to have good form.

• 20:52Speaker 01

  Yeah.

• 20:52Speaker 00

  When you're trying to do something that's hard.

• 20:54Speaker 01

  Learn a good rep. I like it. All right, man. Great shot. Cool.

• 20:57Speaker 00

  Thanks, man.