20VC Y Combinator's Paul Buchheit on Creating Gmail Version 1.0 & Leadership Lessons from Working With Zuckerberg and Larry Paige

In a deep dive into Y Combinator's impact on the startup ecosystem, the 20 Minutes VC podcast features Paul Buchheit, a partner at YC and the 23rd employee at Google. Buchheit, who created Gmail and the 'Like' button, discusses his journey from Google to founding FriendFeed, and eventually joining Y Combinator. He emphasizes the importance of creating products with a deep appeal to a small market segment, which can then be expanded. Buchheit also touches on the conviction needed for startup success, the challenges of seed investing, and the distinction between vision and stubbornness in founders. Additionally, he reflects on the potential for social networks to be a force for good and his latest investment in Grio, a "nontoxic social network."

• Paul Bookite's interest in startups began early in life, but opportunities in Ohio were limited.
• After college, he moved to California, briefly worked at Intel, then joined Google as the 23rd employee.
• At Google, Paul contributed to the creation of Gmail, the original prototype for Google AdSense, and suggested the company's motto "don't be evil."
• Inspired by Paul Graham's essays and the Summer Founders program, Paul reached out to YC and began investing in startups.
• His first angel investment was in Woofu, part of YC's winter '06 batch.

"Well, I guess the backstory is I've had an interest in startups I guess my whole life, but I went to school in Ohio in the really was no startups back then. So all I knew to do was to move to California and take a job out here."

This quote explains Paul's initial attraction to startups and the lack of opportunities in his home state, leading to his move to California.

"And that startup turned out to be Google, which was good. I was at Google for about seven years."

Paul shares his early career move that led to a significant role at Google, highlighting the serendipity and impact of his decision.

"I was sort of interested in getting involved in earlier stage companies. So again, I just kind of randomly happened upon Paul Graham's essays."

Paul's shift in interest towards earlier stage companies led him to discover Paul Graham's work and eventually to Y Combinator.

"So I just kind of cold emailed, introduced myself, gave a little bit background about my work at Google, and was just offered, hey, can I help out?"

This quote illustrates Paul's proactive approach to getting involved with Y Combinator by reaching out and offering his help.

• Paul Graham (PG) and Jessica Livingston have maintained a founder-centric approach at YC from the start.
• Their leadership is characterized by a willingness to prioritize the best interests of founders, sometimes at the expense of their own self-interest.
• PG's enthusiasm for potential in small ideas and the ability to envision their future impact is highlighted as exceptional.

"They've always had, I think, a very clear idea of what they wanted to do in terms of just like the values of y combinator being very much just focused on doing the right thing for the founders, and that's been there from the start."

Paul comments on the consistency of PG and Jessica's values and vision for Y Combinator, emphasizing their dedication to founders.

"One of the things that's most remarkable is just the level of enthusiasm that he can have for other people's ideas."

This quote captures PG's unique ability to be genuinely excited about and see the potential in early-stage startup ideas.

"That ability to really see the potential ten years down the line is amazing. Not many people have that."

Paul admires PG's foresight and compares it to Microsoft's early investment in microcomputer software, which turned out to be a lucrative market.

• Paul was instrumental in the creation of Google Mail (Gmail) and Google AdSense.
• He suggested Google's former motto, "don't be evil," reflecting his personal values and vision for the company's ethical direction.
• Paul's work at Google exemplifies his innovative mindset and ability to contribute significantly to tech industry milestones.

"Paul was the 23rd employee at Google where he created check this out Google Mail."

The quote highlights Paul's role in the development of Gmail, marking a significant contribution to Google's suite of services.

"He also developed the original prototype for Google AdSense and even suggested the company's former motto, don't be evil."

This quote further details Paul's achievements at Google, including his involvement in AdSense and influence on the company's ethical stance.

• Paul has made several successful angel investments, including in companies like Gusto, Checker, and Optimizely.
• His investment strategy is informed by his experience and understanding of the startup ecosystem.

"Paul's also a prolific angel, having created an immense portfolio with the likes of Gusto, Checker, optimizely and many more incredible teams in the portfolio."

The quote underlines Paul's active and successful role as an angel investor, contributing to the growth of numerous startups.## Approach to Product and Customer

• Startups face the challenge of entering markets with incumbent solutions that have been developed over long periods, often decades.
• The strategy is to focus on creating a product that a small market segment will love deeply, rather than trying to appeal to everyone from the start.
• This philosophy stems from the experience of developing Gmail at Google, where the aim was to get 100 happy users within the company before launch.
• Focusing on depth of appeal allows a startup to gradually build a product that can later broaden its appeal and add more features.
• The inflection point for adding features and broadening the user base comes after establishing a product with depth of appeal.

"So the challenge when you're coming up with a new product, especially if it's in a space where people already have solutions, is that the incumbents have been working on it for sometimes 10-20 years."

This quote highlights the difficulty startups face when entering a market with established competitors and the importance of finding a niche where they can excel.

"And so what I believe you try to do is just create a product that even just some small fraction of the market will absolutely love."

This quote emphasizes the strategy of targeting a small segment of the market with a product they will love deeply, as opposed to creating a product with broad but shallow appeal.

"We just had to get 100 people who were happy. So that was kind of like the milestone for when the product we thought was good enough to take out to the broader neos of the world."

This quote explains the milestone of achieving 100 happy users as a benchmark for when a product is ready for a wider release.

• The right time to add features and expand the user base is after establishing a product that has a deep appeal to a core group of users.
• The goal for the Gmail team was to first satisfy 100 users within Google before considering a broader launch.
• The focus should be on users at the margin, looking for simple changes that can convert them to happy users.
• Word-of-mouth from early adopters and enthusiastic users is a powerful tool for expanding the user base.

"You really want to first establish that you have something that someone wants. First. You have to have the depth of appeal before you go for breadth."

This quote underscores the necessity of establishing a product with a deep appeal before attempting to broaden its user base.

• The distinction between inventors and hackers is not seen as a dichotomy; inventing often involves hacking.
• Building something new often includes overcoming constraints and experimenting with solutions.
• The decision to build Gmail entirely in JavaScript was controversial but ultimately successful due to persistent hacking and improvements in browser stability.

"Inventing is a lot of times hacking, you're doing something that is maybe impossible."

This quote reflects the view that inventing and hacking are intertwined, with both involving the pursuit of seemingly impossible tasks.

• Assessing founders and investing in startups is acknowledged as a challenging task with no simple formula for success.
• The patterns in a founder's thinking that suggest the potential to change the world are particularly exciting.
• The experience of seed investing and working with founders at YC has highlighted the difficulty and complexity of the process.

"It really is not an easy thing. There is no simple task. But I can tell you one of the things that really stands out to me, having worked..."

This quote acknowledges the challenges faced in the process of investing and assessing founders, emphasizing that there's no straightforward method for identifying successful startups.## Conviction in Founders

• Founders of successful companies often exhibit an unusually strong conviction in their vision.
• This conviction can seem unrealistic to ordinary humans.
• Examples of founders with strong conviction include Larry Page, Mark Zuckerberg, Patrick Collison, founders of Airbnb, and Elon Musk.
• Conviction is necessary to pursue ideas that are counterintuitive and may initially seem like bad ideas.

"They just have a level of conviction that I think ordinary humans just don't have. They believe in their view of the world to an almost unrealistic extent."

This quote highlights the exceptional belief successful founders have in their vision, often to a degree that seems unrealistic to the average person.

• Social pressure can strongly influence people's decisions and actions.
• Successful founders often resist social pressure and maintain their beliefs despite widespread skepticism.
• A psychological experiment demonstrates the power of social pressure in influencing individuals to conform even against clear evidence.

"Most of us are so susceptible to social pressure... almost everyone will go with the group, even though you can look right at it, and it's clearly not the right answer."

This quote refers to an experiment illustrating the influence of social pressure, suggesting that successful founders may have a unique resistance to this pressure, which allows them to pursue their unconventional ideas.

• Founders need to distinguish between having a strong vision and being stubbornly attached to tactics.
• Flexibility in approach is crucial when initial strategies do not work.
• Being fixated on a specific path or feature can be detrimental to a company's success.

"You have to be flexible in terms of your approach... You don't want to get fixated on just a very specific tactic or a feature that you just absolutely have to launch, because that can be deadly."

This quote emphasizes the importance of flexibility and the dangers of stubbornness in executing a company's vision.

• When rectifying issues, looking for simple solutions can be effective.
• Basic, immediate solutions can provide valuable learning opportunities.
• Founders should remain connected to their market to ensure they are building something people want.

"There's almost always a worse solution... There's always a crappier way of solving a problem, a hackier way."

This quote suggests that sometimes the simplest or most straightforward solution can be a stepping stone to learning and improving a product or service.

• The concept of focusing on the 10% of work that delivers 90% of the value is crucial for productivity.
• Implementation of this strategy involves finding simpler ways to achieve goals.
• Close interaction with customers from day one is essential for continuous improvement.

"The very first version of Gmail, arguably, I wrote in a single day... Ship on day one and then just keep improving the product."

This quote illustrates the practical application of focusing on high-impact work and the importance of rapid iteration based on customer feedback.

• There is a discrepancy between which companies receive the most funding and which companies should receive funding.
• Biotech companies and those working on significant problems often struggle to get funded.
• The speaker wishes for a shift in investor priorities to support more impactful ventures.

"The companies that get the most funding aren't the companies I wish got the most funding... I wish that investors were a little."

This quote expresses the speaker's frustration with the current funding landscape in Silicon Valley, where potentially impactful companies may be overlooked in favor of less significant but more fundable ventures.## Investment Approach and Excitement

• Paul discusses his investment philosophy, which involves imagining the world with and without a potential product.
• He expresses excitement for revolutionary products that significantly change the world, such as supersonic jets.
• Products that do not add value or whose absence wouldn't matter much are not exciting to him.

The general principle I always think about is one of like, let's imagine the world where this thing exists, and then let's imagine the world where this thing doesn't exist.

This quote explains Paul's fundamental approach to evaluating the potential impact of a product or company.

And so all of a sudden I could get over to Asia in 6 hours or something like that. That's amazing. That's very exciting.

Paul is highlighting the transformative nature of supersonic travel, which is an example of the type of innovation that excites him.

• Paul is not particularly interested in business books.
• He often revisits "The Power of Now" by Eckhart Tolle, which he finds helpful for mental clarity.
• The book assists in breaking free from repetitive thought patterns, which is valuable for both personal and professional life.

Probably the book that I find myself going back to the most often is actually Eckhart Tolle.

This quote reveals Paul's preference for books that offer mental and emotional guidance over technical or business-oriented literature.

• Launching Gmail is a significant career highlight for Paul.
• Working at Y Combinator (YC) and being involved with numerous startups from the early stages is rewarding.
• He finds it fulfilling to see the growth and evolution of founders into successful CEOs.

Obviously, it's kind of hard to compete with launching Gmail.

Paul acknowledges the importance and impact of his role in launching Gmail as a major career achievement.

It's great to see someone who comes in very raw and unsure of themselves really evolve and a couple of years later they're this super impressive CEO or something.

This quote underscores the satisfaction Paul derives from witnessing personal and professional growth in startup founders.

• Paul suggests that being too polished is not usually a problem he encounters with founders.
• He attributes over-polish to a personality type rather than a widespread issue.

Sometimes, but not. I think that's more a personality type.

Paul downplays the idea that being excessively polished is a common or significant problem in the startup world.

• A difficult aspect of Paul's role at YC is the frequent need to reject applications.
• He empathizes with the founders' passion and dreams but must adhere to the reality of selective funding.
• YC funds less than 2% of the companies that apply, leading to many rejections.

There's a lot of saying no. And that's a little bit hard, at least for me.

This quote conveys the emotional challenge Paul faces in having to turn down many hopeful entrepreneurs.

• Paul's most recent personal angel investment is in a company named Grio, which he describes as a non-toxic social network.
• He has a history with social networking, having been involved with the creation of the "like" button.
• Paul is interested in the potential of social networks to be a force for good and improve how people interact online.

I think the most recent one is a company called Grio in its very early stage.

Paul shares his latest investment, indicating his continued interest in the social networking space.

I still believe in the potential of social networks to be a force for good as well.

This quote reflects Paul's hope that social networks can positively influence society and interpersonal relations.

• Paul expresses mixed feelings about the impact of social networks like Facebook and Twitter.
• He is concerned about the incentive structures of these platforms, which may encourage negative behavior.
• Paul is interested in ideas that could reshape social networks to promote compassion and understanding.

I'm not convinced that I find that I'm happier and healthier if I don't spend a lot of time there.

Paul is questioning the personal benefits of using social networks, suggesting they may not contribute to well-being.

The incentive structures are a little bit wrong.

This quote highlights Paul's concern with how current social networks may incentivize negative interactions and behaviors.