Garry Tan's Startup Advice

3 insights to thinker on

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Today’s topic: startup advice from Y-Combinator CEO Garry Tan.

Garry is a smart guy that has invested in a lot of companies.

“Yes, I’ve made a lot of money…”

I asked my minions to track down 3 of Garry’s most valuable insights to see what they might dig up.

In short:

  1. The “Why Now” behind successful startups

  2. Founder-market fit (definition)

  3. Product-market fit as continuous refinement

Let’s have a look…

Garry Tan’s “Why Now?”

Garry’s thesis is that the most powerful startups emerge when factors converge to make now the perfect time for their solution.

The three factors Garry identifies at this intersection are:

  • New technologies that enable novel solutions

  • Changes in human behavior that create new needs

  • Shifts in regulations that open up new opportunities or demand compliance

The "why now" is essentially the unique conditions that exist at a specific moment that make a startup uniquely positioned to succeed.

It's the reason why the startup couldn't have worked five years ago, but will crush it today.

Examples of "why now" moments include the rise of smartphones enabling on-demand services like Uber and Instacart, or new regulations like GDPR creating urgency for privacy compliance solutions.

Founders should focus on articulating a compelling "why now" to investors, employees, and customers. It helps tell the story of the startup's unique opportunity and builds excitement around the vision.

Key takeaway: what changes in technology, human behavior or regulation are altering the course of your industry? How can you use those to your advantage?

Founder-Market Fit

Founder-market fit is the idea that the best startups are founded by people who have a deep understanding of the industry or problem they're trying to solve.

They have "earned secrets" through direct experience that make them uniquely suited to solve the problem they’re tackling.

They've experienced the pain points firsthand and have insider knowledge of how the industry works.

The founder needs to be uniquely suited to solve the problem they're tackling.

I’m a big fan of leverage and founder-market fit is about leverage.

By deeply understanding the problem and the market, you can identify unique opportunities, avoid pitfalls, and build the right solution faster than anyone else.

My nuanced view is that some people take this too literally. An obsessively smart founder maniacally focused on solving a problem they previously knew nothing about can easily beat a half-assed guy with twenty years of experience in the industry.

I’ve seen this firsthand.

My heuristics for likelihood of success in these endeavors are:

  • High level of intrinsic motivation (curiosity or compulsion)

  • Relentlessness

  • Resourcefulness

Key takeaway: what in your business puts you in a flow state of obsessive focus? That’s likely where you’ll find your competitive advantage.

Garry on Product-Market Fit

After reading about startups for several years, I’m bored to death of talk about product-market fit.

Product-market fit is a fancy way of saying “Will anyone buy what you’re selling?”

Nonetheless, it’s often described as a singular moment, after which your path to IPO and riches is assured.

In reality, it’s more nuanced.

Garry explains that product-market fit is an ongoing process of refinement.

Initially you’ll find something that someone wants.

But to capture a bigger market or to sustain the market’s interest, the product will have to adapt to your customers’ evolving needs.

This goes back to first principles of “making something people want”.

Make sure they still want it, or anticipate what they will be wanting a year from now.

The way to maintain product-market fit is to continuously interact with your users and understand their needs and pain points.

Listen to their feedback.

Test novel solutions.

Analyze the data.

Challenge your assumptions.

Key takeaway: what are you doing today to find ways to better serve your customers?

Garry Tan Interviews

Here are the source interviews for these ideas, should you want to dive deeper:

Why Now?

8 of Garry’s best startup tips:

Unconventional advice for founders:

About Garry Tan

Garry is currently the President and CEO of Y Combinator.

Prior to becoming CEO in 2023, he was a partner at Y Combinator from 2011-2015 where he advised hundreds of startups and built key parts of the YC founder experience.

Tan co-founded the blogging platform Posterous in 2008, which went through Y Combinator and was later acquired by Twitter for $20 million in 2012. He then co-founded Posthaven after Posterous was shut down.

As a founder of venture capital firm Initialized Capital, Tan led early investments in major successes like Coinbase, Instacart and Flexport. His track record landed him on the Forbes Midas List of top tech investors from 2018-2022.

Before moving into investing, Tan was an early employee and engineering manager at Palantir Technologies, where he designed the company's logo. His tech career began early - at age 14 he got his first job cold-calling the Yellow Pages.

Tan earned a BS in Computer Systems Engineering from Stanford University. As a highly respected voice in Silicon Valley, he produces popular content sharing startup advice through his YouTube channel and social media.

That’s it for today.


PS - yes I know “thinker” isn’t a real verb.