- Michael Seibel, CEO and partner at Y Combinator, debunks the misconception that one needs experience at a big company to start a startup.
- While working at a big company can provide access to new problems, day-to-day experience is often not useful for creating a startup.
- Joining a big company can be a trap as they incentivize employees to stay through signing bonuses, stock options, and high salaries, leading to increased spending and reluctance to leave.
- Working at a big company is not necessary if you already have a problem to solve, savings, and a co-founder. Just get started and build.

Michael Seibel on why working at some big tech companies can prevent you from starting your own company.

Michael is CEO and a Partner at YC. He was the co-founder and CEO of Justin.tv and Socialcam. 

https://twitter.com/mwseibel

Y Combinator invests a small amount of money ($150k) in a large number of startups (recently 200), twice a year. 

Learn more about YC and apply for funding here: https://www.ycombinator.com/apply/

Before YC, I was co-founder of a company called Justin TV that later became Twitch, and sold to Amazon, and another company called SocialCam, which sold to Autodesk.

So 1 of the most common misconceptions about startups is that you have to have experience at a big company in order to start 1.

There's a little nugget of truth inside this misconception.

Certainly, getting experience in the working environment gives you access to a whole bunch of new problems.

Problems you might not have considered before and problems that could be the base of what you create as a founder, as a new startup.

However, your actual experience day to day working at a big company is often not very useful for creating a startup.

First, often in a big company you're an extremely, extremely small part of a very large machine.

And so the amount that you can actually learn is less, and the pace that you learn is much slower than when creating your own startup, where in effect, you are the entire team, and everything works or doesn't work because of you.

A second issue with joining a big company is that big companies are very good at retaining their workers.

And this is not something that most young people really have any experience in.

A lot of big companies will give you a signing bonus, will give you every 6 months or every year an additional stock option grant.

And basically they will structure your comp in such a way that at every point you feel uncomfortable leaving.

They couple this by giving you a lot of services and paying you a high salary, which at first seems like a great thing, but in reality it often causes you to increase the amount of money that you're spending every month.

You get a nicer apartment, maybe you get a car, maybe you go on nicer vacations.

So While you were trying to spend this time in a big company to get experience to create a startup of your own, in fact, you increased the amount of money you were spending.

You weren't really learning at a fast pace.

When you want to leave, all of the money that you're leaving on the table motivates you to stay.

And so in reality, it's often the case that working at a big company can be a trap, especially if you don't go into the company knowing what your goals are.

You know, if your goal for working at a big company is to save some money, to get some experience at a specific technology or to meet a co-founder, that's great, then go there and do that specifically and don't fall trapped to all of the techniques they're gonna get you to, they're gonna apply to you in order for you to stay.

But if You actually don't need to work at a big company.

If you already have a problem that you want to solve, if you already have money and savings, if you already have a co-founder, then just get started.

You can't believe the number of YC companies we have funded that do not have a blue chip tech company on their resume.

It's absolutely not required to get into YC.

It's absolutely not required to be a good tech startup founder.


Speaker 0: Hello, my name is Michael Seibel. I'm a CEO and partner at Y Combinator. Before YC, I was co-founder of a company called Justin TV that later became Twitch, and sold to Amazon, and another company called SocialCam, which sold to Autodesk. So 1 of the most common misconceptions about startups is that you have to have experience at a big company in order to start 1. There's a little nugget of truth inside this misconception.

Certainly, getting experience in the working environment gives you access to a whole bunch of new problems. Problems you might not have considered before and problems that could be the base of what you create as a founder, as a new startup. However, your actual experience day to day working at a big company is often not very useful for creating a startup. First, often in a big company you're an extremely, extremely small part of a very large machine. And so the amount that you can actually learn is less, and the pace that you learn is much slower than when creating your own startup, where in effect, you are the entire team, and everything works or doesn't work because of you.

A second issue with joining a big company is that big companies are very good at retaining their workers. And this is not something that most young people really have any experience in. A lot of big companies will give you a signing bonus, will give you every 6 months or every year an additional stock option grant. And basically they will structure your comp in such a way that at every point you feel uncomfortable leaving. They couple this by giving you a lot of services and paying you a high salary, which at first seems like a great thing, but in reality it often causes you to increase the amount of money that you're spending every month.

You get a nicer apartment, maybe you get a car, maybe you go on nicer vacations. So While you were trying to spend this time in a big company to get experience to create a startup of your own, in fact, you increased the amount of money you were spending. You weren't really learning at a fast pace. When you want to leave, all of the money that you're leaving on the table motivates you to stay. And so in reality, it's often the case that working at a big company can be a trap, especially if you don't go into the company knowing what your goals are.

You know, if your goal for working at a big company is to save some money, to get some experience at a specific technology or to meet a co-founder, that's great, then go there and do that specifically and don't fall trapped to all of the techniques they're gonna get you to, they're gonna apply to you in order for you to stay. But if You actually don't need to work at a big company. If you already have a problem that you want to solve, if you already have money and savings, if you already have a co-founder, then just get started. Just start building. You can't believe the number of YC companies we have funded that do not have a blue chip tech company on their resume.

It's absolutely not required to get into YC. It's absolutely not required to be a good tech startup founder. Thank you you

See all Y Combinator transcripts on Youtube

Working at Big Tech Companies Can Be a Trap - Michael Seibel