Garry Tan

Cofounder at Posthaven. Previously Partner at Y Combinator

THIS CHAT HAPPENED ON August 03, 2016

Discussion

Garry Tan@garrytan · Managing Partner, Initialized Capital
Hi guys, my name is Garry Tan and I am a designer and engineer turned founder and now early stage investor. I once turned down the shot to be cofounding engineer at Palantir, ended up joining as #10 and built one of the major product teams there, then started Posterous (acq by Twitter) which was a blog platform used by millions. The past five years I was a partner at Y Combinator and got to do seed investments with a ton of great founders. I've been at big companies, early stage startups, started one myself and now try to help others do them too.
Niv Dror@nivo0o0 · Words @ProductHunt & @AngelList
What's the most memorable cold email you've ever received?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@nivo0o0 The most memorable cold beer I ever got delivered was what got Instacart into YC! https://techcrunch.com/2012/08/1... I actually get quite a lot of cold email and I have been worse and worse at replying to them, which I feel bad about, because my start in tech— all my first jobs I got starting out were all cold emails. Perhaps the problem is most of them are specifically not memorable, because they look like all the others. I wish there was a better way to handle them, and get people help. The most brutal thing about starting something new is not having feedback — getting stuck on something that isn't likely to work, and nobody is there to tell you that.
Uhma@deleted-594972 · Brr
Hello Garry, Thank you for giving an opportunity to ask you questions. - What are the advantages of using Posthaven over Blogger.com, for an example? - What do you think about this feature: A blog user "calls their blog", leaves a message, has voice message transcribed and grammatically corrected by AI to become a draft blog post? Thank you.
Garry Tan@garrytan · Managing Partner, Initialized Capital
@victorpolyushko Posthaven is a much simpler blog platform and we've taken a pledge to keep it online for as long as we can, and we're in talks to turn it into something less like a corporation and more like a nonprofit with an endowment. Blogger is owned by Google, which as a public company can often shut down things without a moment's notice based on the internal politics of the people who run that company. Google Reader was once a product used by millions that was shut down because a VP or product manager saw it on a line item and made a final (granted, very difficult) call to shutter it despite its utility and many folks relying on it. Blogger is a good product that hasn't changed a lot and having worked at big companies, that's by design. It's not for lack of trying, but there's an inertia and a very real force within big tech companies that makes it hard to get things done. I still believe small teams of committed people are more likely to have a coherent and clear long term focus for a product than a large corporation.
Garry Tan@garrytan · Managing Partner, Initialized Capital
@victorpolyushko Oh, re: the call-in feature! It's interesting but probably still requires human intervention, and at that point it probably becomes too costly to be a profitable feature. The hard part about these things is that for them to be in regular use and avoid being a novelty, they have to be perfect (which is really hard!) and then they have to be connected to some larger purpose. Everything has two parts: the hook or gimmick that gets you in the door, and the meat, which keeps people around for the long haul. Post by email for Posterous was the hook, and the meat was that it turned out to be a nice, well-lit place for stuff you wanted to post. If you are just hook, then it's just a feature and not a real product, and there are too many of those!
Uhma@deleted-594972 · Brr
@garrytan Thank you Garry for very convincing answers! I am planning on bringing my blog over to posthaven.com in the near future.
Andrew Bass@andrewdbass · Startup junkie and improving hacker
What is the most counter-intuitive thing that you have learned either at Y Combinator or at Posthaven?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@andrewdbass When I first started investing I was almost entirely focused on the team - product, design, engineering, that's what mattered. The idea would come and go, but the team would be the primary reason why a product or service would live or die. I've seen too many really really talented brilliant teams march off in the wrong direction and never switch direction that now I do believe it takes both a fantastically talented, hard working team that has a true north— an internal product compass that allows them to build and ship product and then BE RIGHT. Being right is important. Too many great teams march off saying "if we build it they will come" and then never are able to change the idea towards something that people really want.
Ben Tossell@bentossell · newCo
What are your favourite questions to ask founders? If you had to swap lives with a tech CEO/Founder for a month who would it be and why?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@bentossell The most interesting question to ask is "Why are you working on this?" Because everyone has some story, and truly new things usually come from some sort of insight that nobody else has. Ryan Petersen started Flexport because him and his brother had to do a ton of import/export for a prior super profitable Internet business they started— I think it was importing hot tubs from China and selling them at massive profit! The hardest part about the startup world is that it's become a lifestyle, where it's just a thing you do, and then you cast about for present-to-hand problems like, Oh, I don't travel enough, or I wish I could share pet photos easier. Those are just the first order problems, and there are so many people who try them already that it's almost safe to say— nah, if it was going to work, someone would have already done it. I say "almost" only because the business is so volatile that the second we safely say it can't be a good business, someone goes and does it. :-) These days wearing my early-stage investor hat full time, I'm blown away at how limited investors truly end up being by the number of hours in the day. It's a purely human relationship business and everything happens over coffee, tea, breakfast, lunch or dinner. The unfortunate side of it is that you don't get to do deep dives into specific frontiers nearly as much. Ethereum is super interesting to me now and I would swap hats with Brian and Fred at Coinbase if I could! I'm really interested in real products and services being hosted and paid for entirely through a cloud hosting platform that also happens to be a blockchain. Running websites is still a very manual process (sys admin, payments, constant gardening), and I think there could be a cambrian era of better decentralized easy-to-use apps if we could free hackers to make good software that they didn't have to be attached at the hip to forever.
Natalya khaykis@zipjob · Marketing for Zipjob
Coinbase has really done a phenomenal job with their service. Their UI and design is spot on as well!
Akin Sawyerr@akinsawyerr · MD, Feleman Limited
Where do you see some of the best early stage investment opportunities outside of the USA?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@akinsawyerr I think the largest driver for great startups in the past 5 years has been the extreme smartphone adoption curve, but that's largely flattened out now in 2016 for the developed world. But that also means that this very same thing is only now happening in the developing world and China. Having visited China recently, I've been blown away at the number of real consumers who are now Internet-connected and have this always-on computer in their pockets. The demographics of that country are staggering — a huge set of new consumers who don't have existing behavior to replace. On-demand businesses are perfect there because if you've ever been to a restaurant in China you'll notice there are dozens if not 100 people running around in a given place. There are a LOT of people, and they all need jobs. In the United States there is a lot less wealth inequality so operationally-intensive people businesses (e.g. all on-demand, really) are an order of magnitude less profitable. There's an explosion of new types of media and live streaming because media itself was a tightly controlled state entity for so long, and now it's diversified. The rules are just different there, and we're finding tons of businesses that could never work in USA/Europe.
Tony Anastasi@tony_anastasi · Filmmaker, works with startups in China.
@garrytan @akinsawyerr I live and work with startups in China.. you investing in China? I got a clean energy fuel cell startup looking - run by a ex sv finance guy. knows his stuff!
Akin Sawyerr@akinsawyerr · MD, Feleman Limited
@tony_anastasi @garrytan I'm actually focused on Africa. Primarily Fintech, Renewables, and Media as an investor.
Andrew Ettinger@andrewett · PMM @Twitter // Previously @ProductHunt
What single event in your career has been the greatest learning experience?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@andrewett I started working back when I was 14. I picked up the phone book and flipped to the Internet section, and just started cold-calling businesses telling them I was an award-winning web designer and I wanted to work for them. Only when I showed up did they find out how young I really was. :-) My 2nd job was with a company called Adjacency, which was one of the first top tier web consultancies that did all the first e-commerce websites. They created the first Apple Store, for instance, which I fixed a few bugs for once back in 1998! The founder was Andrew Sather, who at the time was in his mid 20's too, having just started the consultancy out of a garage in Madison Wisconsin. I was 18 then, and Andrew ended up selling the consultancy to a public company for tens of millions, and all of the 20-somethings I worked with in the first boom had made it. I asked Andrew what was the thing I needed to focus on and he said something that turned out to be very true personally: If you want to be CEO and founder, you need to be able to do everything. Don't box yourself into just one thing. You should probably be really really good at one particular thing (for me I always loved the intersection of design and engineering) but you shouldn't be afraid to get your hands dirty on everything else: marketing, sales, operations, QA, etc. Why is this a big deal? A bigger truth about human nature: everyone wants to jump on board with something that is gonna take off without them, but nobody wants to join a thing that will fail if they don't join. So the more you can do, the less you need others to get it done, and the more likely you will actually manifest it. I wish there was another way, but that's a fundamental truth when it comes to creating new things. You have to be a magnet for everything, and that's what a great founder does: attract people, capital, and customers, to foment this incredible chemical reaction that grows and grows.
Emily Hodgins@ems_hodge · Community and Marketing, Product Hunt
Hi Garry thanks for being here today! What one piece of advice have you often found yourself giving to new founders?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@ems_hodge It's kind of obvious but is the most common problem: The perfect is the enemy of the good. Most people are really afraid to release software, because that's the moment at which you are face-to-face with failure. If you release it and nobody likes it, you've failed. But if you are "still working on it" then you are just "in progress" and you can still go to startup events and "play startup." That's really why startups as a lifestyle are so toxic. It becomes a place where people can go play house, and basically waste their own time and effort. It's not a scene and really shouldn't be. Focus on shipping and then making it better! Don't play startup!
Kalle Freese@kallefreese · Co-Founder at Sudden Coffee
What are some recruiting tips/advice you would like to give to a first time CEO starting to grow their team?
Bharath B Lohray@lordloh · PhD student at Texas Tech University
@garrytan - I worked as an instructor at grad school for two semesters and noticed that when I set the rules on the first day of class (I don't just expect you to stare at the board, but also solve the problems. I shall leave some problems half completed - I expect you to solve it to the end), students followed it throughout the semester. When I filled in for a colleague in another section, they refused to take up the pencil and solve any problem. The lesson I am taking form this is that the first day for the first employee is the day I am going to define the company culture. It may be the most important day in the company history. I am not a CEO / startup founder yet. Do you think I have got this right? I am replying as I do not seem to be authorized to post questions yet.
Garry Tan@garrytan · Managing Partner, Initialized Capital
@kallefreese Biggest mistake I've made and I see people consistently make around hiring is not going after the people they know and trust in their life to get them to work together with you. Because what if your startup doesn't work out? Folks have plans. You don't want to mess with that. The opposite is actually true— if you're going to be successful, then it's a waste if you don't bring your closest most talented friends along. A company is built by its first 5 to 10 hires, and then the trajectory is set. So hire the people you know the best. Chop down the tree if you have to— they may not say yes the first time, but one day they'll wake up and realize this is the thing they really do want to work on, and they don't have that many other people they would be willing to quit their jobs and work with too. And then it'll be more real. And perhaps, maybe, you'll even succeed together.
Garry Tan@garrytan · Managing Partner, Initialized Capital
@lordloh @garry Yeah great founders are really cult leaders. You get to create the cult: a cult is a bunch of people who believe X and the rest of society doesn't believe X... YET.
Kalle Freese@kallefreese · Co-Founder at Sudden Coffee
@garrytan Thanks for the answer Garry - one of the best hiring advice I've seen! 💪🏻
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
How was your sabbatical in Europe? Are you working on any new projects?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@tomstocklein We ended up spending a few months in Spain last year with our 4 month old at the time— we ended up coming back early because it was a little unreasonable to expect a little baby to be able to sleep in new and different Airbnbs every 2 or 3 weeks! I'm mainly focused on funding the next generation of great software startups at this point! I want to spend as much time as I can with 20 companies a year, which I think is totally manageable since we're used to doing 10X that amount at YC previously. Beyond that, I've been working on Posthaven themes with my cofounder Brett. It's really in good shape. I made a new theme in about 5 hours, and it was built using Liquid, which is the theme engine from Shopify. If you've ever themed a Shopify store, you'll know how perfectly geared it is for frontend engineers who know their way around HTML/CSS/JS. The nerdiest thing I did was wire up the theme so that it used Guard and Rails's asset management system so that you could use CoffeeScript, SASS, and whatever else you're used to using. It's like having the static site generator Middleman that generates a Posthaven theme, and you can use Posthaven as a CMS for end users — folks who don't know how to code can still edit pages and links, and add/manage blog posts pretty easily.
Laf. Julius@laf_julius · co- founder @evolvesports
What are some of your favorite apps to use on your phone and what do you feel is the next big company in tech?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@laf_julius I haven't found new apps that I'm really addicted to in about a year, which I think is emblematic of the problem with apps at this point! I really agree with what Elad Gil has posted about how we are a bit at the end of a cycle and are waiting for the next platform: http://blog.eladgil.com/2016/07/... On the other hand, I'm still trying to meet mobile-oriented startups, because I do think we are at a bit of a 2003/2004 sort of time frame. Back then when I graduated from college there were very few startups focused on the World Wide Web. By then I had been making programmatic websites for five years, and knew that really well. I got tricked by the conventional wisdom that the web was dead, and so I stopped coding for a bit and became a PM at Microsoft in 2003 for mobile devices. I was looking for that next platform. In the end, that was the wrong place to go (Microsoft at the time was totally focused on just copying RIM's Blackberry instead of creating something new) and the new platform wouldn't exist for another 4 years with the iPhone. So I'm trying to be careful about the "end of cycle" doom and gloom. We may well be back in 2003/2004 and while nobody is looking, the next Facebook will emerge.
Will Dinkel@dubyaemdee · Founder of ObeeMobee
Hi Garry. Thanks for taking time to answer questions! Given your extensive experience with startups and founders, what advice do you have for those companies that might not fit the standard "Silicon Valley" mold? Case in point: I'm a solo founder, working in my spare time, located near a major metropolitan area that doesn't happen to be San Francisco. How often do you see success stories outside of that "standard"?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@dubyaemdee Yeah all the time. But you need to win by revenue. The hype cycle is not your friend, and the only way you get to where you wanna go is growth. The main benefit of being in SV is actually the culture around growth. You'll be around people who are all crazy focused on trying to make a good product and make it succeed. If you can foster that environment internally and on your team and among your friends where you are, then you've already created the main driver for success where you are.
Thomas Stöcklein@tomstocklein · FoundersFundersFuture.com
Part of PostHaven's core philosophy is its pledge to "never shut down" and "never get acquired". I love this concept, because in some cases when BigCo acquires a great startup, BigCO shuts down the startup's platform/product and just makes the newly acqui-hired team work on BigCo's old existing products to make incremental improvements. Are there any other companies that you wish would follow Posthaven's lead?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@tomstocklein It all depends on what people want and why they're doing it! The classic startup culture is to try to squeeze 40 years of work into one or two years, so that you can get to economic independence. I think that will continue to be a valid and important option for folks to build wealth quickly, and it certainly worked for me and many of my friends. But that's not the only way to do things. There's space for both. A lot of great founders get stuck in the hedonic treadmill — get the exit, buy a Ferrari, impress friends, and then rinse and repeat. Enough of those people are really good engineers and product people who just love products for their own sake (like a lot of the people reading this!) so I'm hoping there's another model here where folks can make a good product that makes money and is ideally over the long haul a good place to work. It's more like opening a nice coffee shop than jumping back on the Silicon Valley rocketship assembly line.
Syed Ahmed@tabishis · Altimus Solutions, Inc.
Do you think MOOCs will eventually replace traditional learning, specifically tech focused learning? Do you invest in products that are focused on solving problems for MOOC students?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@tabishis I think MOOCs need to solve the accreditation problem. Knowledge is half of it. Knowing that someone knows a thing is the other part. The one intangible that is a little un-PC to point out is that colleges are brands because they are years and years of shorthand about diligence, conscientiousness, and how reliable and dependable a person can be. Frankly it'd be great if there were ways for people to show that without the privilege needed to be able to go to college. There's really big impact if you can show folks can go through a MOOC, get a proper certification or accreditation, and then have that directly impact their work and career and life. That latter part is the the most important to get right now.
Harry Stebbings@harrystebbings · Podcast Host @ The Twenty Minute VC
So great to see you hear! I would love to hear what was the biggest takeaway from @ycombinator and how have you applied that learning to now with PostHaven? Always welcome on @twentyminutevc would be a pleasure to have you on the show having just had @justinkan who was amazing!
Garry Tan@garrytan · Managing Partner, Initialized Capital
@harrystebbings I'd love to come on! How's September looking? :-) YC is a lot about startups, and Posthaven in a lot of ways is the un-startup. We aren't trying to make a lot of money with it. We're trying to provide a simple good service that will survive on a time scale far beyond the typical venture-backed time scale. If startups are about moving fast and breaking things, Posthaven is about keeping things online, and the tradeoff is that things move a little slower. But that's OK, we're happy with a few thousand paying users and a site that stays online.
nasir uddin masud@ahamadmasud
hi how r u
Garry Tan@garrytan · Managing Partner, Initialized Capital
@ahamadmasud Good, Nasir! Thanks for asking.
Jason Cavness@jason_cavness
From your experience, when is the best time to start thinking about HR? As early as possible or can this wait until the company is more established?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@jasoncavnesshr Don't hire until you need to! Hiring prematurely is another form of playing startup. You'll notice startups that play startup always talk about number of employees and how much they've raised. Those are cost centers. I'm always impressed when founders talk about their customers and what they've done for them, and how they've been growing revenue. That being said, be sure to scale when you're growing. At Posterous we made some big errors early where we didn't hire while we were having sustained 18 mo of 40% monthly growth. That's a mistake. Hire when you're growing.
Seth Lesky@sethlesky · Web dev, founder, climber, nomad
Hi Garry! Do you think we are going to continue to see diminishing effectiveness of advertising on the web, and if so, what do you see as the alternative?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@sethlesky This one is tough because everyone reading this right now is basically ad blind already. So when you go n=1 on the sample size, it will seem as though all ads are totally ineffective because they are ineffective on you. I know that's true for me. I just ignore them and use ad blockers. I think advertising may well end up becoming more effective over time due to greater and greater behavior and user data being tracked and merged together. This huge raft of successful Internet-enabled new brands and retailers can emerge purely because online advertising is getting better and has a very highly trackable ROI. I wish referrals would work better, but I remember polling YC startups about doing Dropbox-style referral systems and I think across dozens of companies it has only really worked fundamentally for Dropbox. We keep hoping for other ways to get in front of people, because acquiring customers is often the one key to success for founders we work with. The most potent version of solving the user acquisition problem I've ever seen was clearly Soylent. When I did office hours with them back when they first pivoted, I am pretty sure I told them that was a horrible name and they shouldn't use it, but I am really glad they didn't take my advice. (Don't always take investor advice point-blank!) The name alone unlocked hundreds of millions of dollars of free advertising in the form of totally organic real conversations people had... probably usually over some really delicious food. It didn't matter if a lot of people recoiled. It just mattered that the 10% of people who would use it found out about it, and for zero marketing spend. So, clearly, the best advertising is no advertising. :-)
Kirill Zubovsky@kirillzubovsky · Troublemaker. Founder. Dad
@garrytan This is so on-point about Soylent. I have been running with a buddy of mine for many years now, and the first time I had Soylent in front of him (early beta edition) was after a 10-mile trail run. My friend is a foodie, and back then he said: "I would never drink anything called Soylent." Well, he's now drinking it for lunch every day... People change their opinions all the time :-)
Todd Goldberg@toddg777 · 👀 crypto
Hey Garry! What's been the most surprising thing you've learned/experienced as a full time partner of your own fund compared to when you were investing at YC.
Garry Tan@garrytan · Managing Partner, Initialized Capital
@toddg777 The most surprising difference between being an angel investor and running a fund is that as an angel investor you don't answer to anyone but yourself so anything good that happens is all gravy. Fund dynamics are very different and you have to have a coherent strategy. It's not enough to be in the right companies. You have to be in the right companies with the right deals! Percentage ownership matters, because there are a finite number of companies every year that have real and meaningful exits. That's the power law at work. The other consequence that comes out of that which really sucks is that you end up not being able to invest in everything you would normally want to. YC can fund things that are pretty extreme, where there is an infinitesimal chance of success. But a fund can't do it because there's a specific return output that you're looking for that is the only way the fund can be successful. I guess that's why things like indie.vc are a really good development for people who want to make things. VC funding is not for everyone, and there are many other ways to make a great product and bring it to market.
adrian sanders@sandersak
Why are you such a G and how did you get that way?
Garry Tan@garrytan · Managing Partner, Initialized Capital
@sandersak Mainly you have to be a producer who can rap and control the maestro. http://genius.com/10908