When Should You Trust Your Gut?

This is Dalton Post Michael, and today we're gonna talk about commit or validate. When to trust your gut as a startup founder. So I'll set this one up. I find myself encountering two situations at YC. Situation one is a founder who used to work at a company built something extremely valuable at that company. It was deployed. The company loved that thing.

And that founder thought to themselves, maybe other companies would want it. And so they left, started YC to try to productize the thing they built. Example two, Two kids maybe worked a year out of college and they wanna start a startup. They're trying to figure out what to work on. They're both technical. They're smart. They're bright. They wanna get rich.

Don't know what to do yet. We see these two patterns constantly and I find it interesting on how we give advice. I'm like, hey, when which one of these people Yeah. Which one of these examples should trust their gut? Yeah. Basically, we're saying.

that general advice doesn't apply well to these two cases. Yes. We are admitting Yes. That you actually need bespoke advice Yes. Depending on which category you're in that's a little bit different. Yes. And so, again, to make the extreme version of trusting your gut, this is when founders think they're Steve Jobs. They're like, well Steve Jobs never talked to customers.

Steve Jobs Never. And he would never give people what they asked for. No one asked for the iPhone. He had to like envision it. Right? He didn't even use a phone. He invented the iPhone. Yeah.

He just And so, the extreme comic book version of trusting your gut Yes. Is you talk to no one Yes. You somehow from having great taste or a great internal Yeah. Idea of what people want, you just manifest it and it's totally unique and different. Yes. And the opposite extreme Mhmm. Is the the comic book version of, you know, the mom test. I don't know anything.

Yep. I I'm gonna I have no ideas at all. I'm gonna only talk to people and have them tell me the ideas and have no opinion. I'm gonna assume that I know nothing and all my instincts are wrong. In my mind, the perfect.

version of not trusting your gut is like the typical investor. Like, I'm just gonna hedge. I'm gonna invest in a lot of different things and see what works. I can't even.

commit to one thing. Because yeah, sometimes we talk to founders that are like, yeah, we don't we don't know what to work on, so our plan is to talk to people and they'll tell us what to work on. Yeah. And we're like, great. How's that going? Right? So it's it's it's 0% Yes. Trust in your gut.

Alright. So let's say you're in that first category. Let's say that you you have expertise. You're solving your own problem. You've done something that's created value, either for a lot of people or maybe even just a few. How should you think about the challenge of bringing a product to market slightly differently?

Yeah. I I think we would argue that if you were inside of a company, you built a tool, everyone at the company uses the tool, It's still being used even though you don't work there anymore. Yeah. You probably know more than you think. Yeah. And that it's probably okay Yeah. To trust your gut more than you think that you do understand a problem or that you have a unique insight.

You've developed some taste. Yeah. Yeah. And to the extent in other aspects of your life, say you built consumer products or say you built an iPhone app that was like pretty popular Yeah. And you've gone through that whole thing Yeah. And you have an idea for a new iPhone app. Well, I think you might Yeah. You you understand what it takes to build and launch one of these things.

Yes. And so you might have, it might be a better idea to follow those instincts a little bit more Yes. Than thinking you have no, having no confidence in your instincts at all. Yeah. And so the more you've developed this expertise, the more you can self discern that other people validate that things you've done in the past are good. Yeah. It's not just in your own mind you're an expert. Yeah.

Yes. Those folks should feel, I don't know, like a look, like I think it's sometimes helpful to just be like, no, you should just listen to your instincts. Just do the thing you know more than most people, so listen to yourself to get this off the Yeah.

I often find myself saying in this situation, like, make something that would impress you. Yeah. Like, make something that you would be proud of. Like, you and then, like, you know, you can sell that to other people like you. Yeah. You know? And so I think that's kind of a really cool superpower when you can be like, oh, yeah.

I can tell whether this is good because it's solving a problem I have or a problem I've solved before. Yeah. I can tell whether this is good. If you wanted to build a new compiler,.

if you wanted to build something that's like really arcane Yeah. But that you know a lot about and you have a lot of taste to get a lot of opinions about, a lot of expertise on Yes. Often you should listen to that expertise. Yeah. Well, I think that's what's fun for us as advice givers is sometimes we get to work with those kinds of people.

and the biggest mistake we can make is try to have opinions. It's like, build what you want. Would you have liked this? Would you have bought it? Yeah. Would you have talked to yourself? Would you have read this email that you just sent about this thing? Yeah.

Like those tests all work when, you know, you should trust your gut when you have some preexisting experience. Now what about when maybe you shouldn't trust your gut? I think one way to self diagnose that maybe, yeah, your your gut instinct may not be dead on is where you find that you don't.

have a lot of opinions about what to work on. Yeah. Or that your opinions are very mid. No. Was kidding. Where your opinions are just very similar to the fiftieth percentile of other people. Mainstream. Mainstream.

And so it'd be like, oh, well, you know, all the jobs you've had are just very high level. You never went deep on any particular topic or you just haven't had that many jobs Yeah. Is an example. Yeah. And you just don't have a lot of preferences. Or to the extent you have preferences, they're the same as everyone else. Yes. And I think in these situations, and and I've seen you do this many times,.

you know, you kinda have to have a different mentality. Like, part of starting a startup is gonna be building expertise. Yep. You're not bringing expertise. You have to build expertise. And I've seen you say this a lot where it's like, hey.

If you can start in a good general idea, a good place where, like, you might think building expertise here will be valuable, and if you don't over hamper yourself with a complicated plan, you give yourself an opportunity to build to figure something out. You know?

And I and I think that we're not trying to say one path is better than the We're just trying to say like, be self conscious of whether you're bringing expertise or building expertise and then implement a plan based on Yeah. That.

And and Exactly. So let's give a concrete example. Here's one. Let's imagine that you want to work on a new real estate related software company. That's your startup idea. Yep. And in category a, let's say that you have ten years of experience working as one of the founders was a real estate agent. Yes.

Or one of the founders worked at a mortgage underwriting company for ten years. Yes. And built software around mortgage underwriting. They have a startup idea and they have a they're like, we think that mortgage underwriters want x. Yeah. What should we do to validate this? It's like, well, you probably are right.

Or like your judgment about knowing what mortgage underwriters want if you've been building software inside of a mortgage underwriting company for ten years. It's probably pretty good. Probably pretty good. You probably know way more than the average buyer about this. You've probably tried other products. Yeah. You've probably been disappointed by the other vendors. Are available.

You know why things work and why, you know. Yeah. And so those kinds of people should probably trust their gut quite a bit Yes. About what mortgage underwriters want. Yes. Now let's use a different example. With exactly the same idea. A mortgage underwriting software start up for real estate, and the founders have no experience No.

Whatsoever in the industry. Just great software development. Maybe they've not even bought a house before. Well, let's just say they bought a house. Okay, we'll give them that. Yeah. That's why they're interested. They bought house And they have some ideas where they're like, well, we think the real estate industry is broken, and it's weird that it works this way and so we just think we can fix it.

Yeah. And you kind of ask, what, you know, how much research have you done or how many people have you talked to in the industry? None. Yeah. And they don't know anyone. Again, not these folks can still be successful Yes. But you those folks should probably trust their gut a little bit less that they know precisely what to build to get this off the I think that where we see this goes wrong.

is when the founder with expertise is fearful and acts like the founder without. And the founder without expertise is too confident and acts like the founder would. Yep. And I can't say this enough, like I've seen so often the founder with expertise where I'm like, you know so much about this will be afraid maybe the thing I built was only.

no one else will want it. Or like maybe my taste is unique. Or or here's one. Have you seen this one where, oh, I know what to build and they want it, but I don't think VCs will fund it. Yeah. Like basically they're like, oh, okay. We actually know exactly what kind of software mortgage underwriters want. But we're building some AI bullshit Yes.

Because we think we need to say it's AI related Yes. To raise money. Versus the thing that we know is actually the problem Yes. That does not involve AI at all. Yes. Like, we're ignoring all of our expertise.

But It's just not AI. Because yeah. And obviously, that's the only way you can respond. And then on the flip side, it's the the the team with no expertise who are planning out their hiring and talking about how much money they need and reading Goldman Sachs reports about market sizes. And oh, well, we need two years to build it because it's really complicated. It has to be a comprehensive solution.

It's like, hey, maybe you wanna build the smallest thing possible and learn some And by the way, this isn't we're not trying to give, quote, unquote, permission to take ten years to build the magical thing. All we're trying to say is, like, when building the MVP, how much should you be trusting your gut? How much should you be trying to impress yourself versus trying to impress initial users?

And hopefully, you realize something really important, which is that if you have expertise and you impress yourself, you're you're walking a good path.

You're walking a good And if you don't, no sweat. Folks that we fund, most folks that get into YC don't have a ton of expertise. That is totally fine. Totally fine. It just means you should admit that to yourself. Yes. And start really simple and learn on the fly. Learn within the idea space that you've chosen.

Yes. And don't have a lot of prescriptive ideas on what mortgage underwriters want. Yes. Just sort of walk in with, oh, this is kind of what I'm thinking, but I'm open minded. I need to learn a And.

maybe it's helpful to choose an area that you're excited to learn about. Yes. Because you have a lot of learning to do. Yep. So maybe it's helpful to not choose an area that you think, well, I hate this area, but I think it's gonna raise money. It's like not the best way. I think that if you can figure out how to leverage this advice, it's it's really interesting.

And I wanna bring it back to the first point you made. It's really hard to give one size fits all advice. Like these two examples, you come with expertise, you don't And it's the same idea. Yeah. I'm arguing this is precisely the same startup just with different people that are the advice. Yeah.

I think this is what's fun about working at YC is how often when in office hours with a founder, I'm like, oh,.

actually, you.

should maybe do it differently than like what you might hear in the video. Like, you're Yeah. You're like, that's the kind of cool thing about being able work with people one on one. You can actually customize it. Awesome. Thank you very much. Sounds good. Thanks.