The video discusses the difference between coaching and therapy, with coaching focusing on resolving problems in work and life and therapy focusing on personal relationships. The most common problem seen in startups is an inability to have difficult conversations and pinpoint the actual problem. An example is given of a startup's founders arguing about product responsibilities instead of focusing on important aspects of the business. The importance of clear roles and responsibilities is emphasized, and the role of a coach in helping founders recognize their skills and impact on the bottom line is discussed.

- The authority roles in the first company were strange and there was a lack of expertise in certain areas.
- In the second company, there was a natural hierarchy and it was easier for the CEO to delegate tasks.
- There were multiple CEOs in the early days of the company.
- Uneven equity splits can lead to resentment and negative effects on relationships.
- The CEO should consider the long-term motivation and retention of co-founders when negotiating equity.
- Resentment and passive-aggressive behavior can arise from perceived devaluation.
- Unequal equity can be acceptable if all parties are comfortable with it and there is no blow-up in the future.

- The video discusses the discomfort that can arise when co-founders have unequal equity splits in a company sale.
- It emphasizes the importance of open communication and explicit discussions about equity distribution.
- The video also highlights the difficulty some individuals, particularly women, have in expressing their value and asserting themselves in negotiations.
- Over-communication is seen as a positive, as long as it is productive and balanced.
- The importance of separating argumentative conversations from decision-making is emphasized.
- There are two types of performance problems: real performance issues and perceived performance issues.
- Real performance problems can often be attributed to burnout and can be resolved through open conversations.
- Perceived performance problems often stem from unclear roles and responsibilities, and the need for clear goals and expectations is emphasized.

- The speaker emphasizes the importance of clear roles and responsibilities in order to effectively build features and achieve desired outcomes.
- They argue that motivation is more important than raw talent and DNA in determining success.
- Creating a positive work environment can greatly increase motivation and lead to impressive results.
- CEOs should focus on managing motivation and keeping their team motivated, especially during challenging times.
- The speaker discusses the concept of the "trough of sorrow" and advises founders to expect and embrace the challenges that come with it.
- Runway problems, such as financial constraints, can have different effects on founders and their companies.
- The speaker highlights the importance of finding enjoyment in the work and having a strong anchor, regardless of success or failure.
- They also mention the need for levity and humor in difficult conversations.
- Coaching can be helpful in providing perspective and guidance during challenging times.

- The speaker initially had a negative view of coaching, believing that founders should just "suck it up" and handle the challenges themselves.
- However, the speaker realized that they already had a support system of friends and experienced individuals in the startup community who provided coaching and guidance.
- The importance of having a support system and language to discuss experiences as a founder is emphasized.
- The speaker discusses the importance of having a game plan and tools for having tough conversations, such as defining roles and responsibilities and focusing on tasks rather than personal issues.
- Trust and goodwill between co-founders is crucial in having difficult conversations and making decisions.
- The importance of clearly outlining roles and responsibilities and linking them to company goals is highlighted.
- It is suggested to check in with co-founders personally and address any feelings or concerns that may arise from tough conversations.

- The importance of having regular conversations about resource skill matching in a startup
- The importance of being brave as a founder, including having difficult conversations and seeking therapy
- The significance of launching a product and focusing on solving customer problems
- The role of culture in a successful company, with the quote that it's easier to have great culture when the product is working and the company is succeeding

The video discusses the difference between coaching and therapy, with coaching focusing on resolving problems in work and life and therapy focusing on personal relationships. It highlights the importance of clear roles and responsibilities in startups and the role of a coach in helping founders recognize their skills and impact on the bottom line. The video also emphasizes the importance of open communication and explicit discussions about equity distribution, and the difficulty some individuals, particularly women, have in expressing their value and asserting themselves in negotiations. It discusses the importance of clear goals and expectations, managing motivation, and finding enjoyment in the work. The speaker advises founders to expect and embrace challenges, have a support system, and have a game plan and tools for tough conversations. Trust and goodwill between co-founders are crucial, as well as regularly addressing resource skill matching. The significance of launching a product, focusing on solving customer problems, and having a positive company culture are also highlighted.

Amy Buechler is an executive coach for startup founders.

https://www.foundercoach.io/
https://twitter.com/amybue

Michael Seibel is a partner and the CEO of YC.

https://twitter.com/mwseibel

In this episode we talk about coaching and use examples from Michael’s time working on Justin.tv and Socialcam.

The YC podcast is hosted by Craig Cannon.

https://twitter.com/craigcannon

***

Topics

00:10 - What is coaching?

00:40 - How is coaching different from therapy?

2:00 - What are the most common challenges founders in coaching have?

2:55 - Challenges with roles and responsibilities at Twitch

7:15 - How would Amy have coached Michael around roles and responsibilities?

9:10 - Not being disruptive as a leader

11:00 - Switching roles at Twitch

12:15 - Uneven equity splits

14:30 - Distributing and negotiating equity

20:45 - Communicating your own value

22:20 - Can there be too much communication?

23:40 - Productive arguments

27:40 - Talking about performance issues

29:45 - Setting clear goals and managing motivation

32:45 - Enjoying the work

33:30 - Conversations about runway

36:20 - Digging your company out of the grave and continuing

39:50 - Michael being against coaching initially

42:00 - How to have hard conversations

43:45 - Removing a responsibility from someone

49:20 - Returning to roles and responsibilities

50:10 - Jeanie McCallister asks - What’s the single most important piece of advice you can give a founder?

I think a lot of people don't know what coaching actually is, so maybe you could explain it.

Yeah, that's actually a great question, because what coaching is depends a lot on who the coach is and what their expertise is and what their experience has been.

So coaching in its most simple term is a supportive relationship and it's a supportive relationship that helps people, usually founders or execs like managers, resolve problems that they're experiencing in their life.

So I think some people might be familiar with therapy and maybe have even done it before.

How would you differentiate it from coaching?

Therapy is a relationship that uses that relationship to affect change, whereas coaching is using the coach's own life experience to affect change.

Coaches often use their relationship with the client as information to help them understand the client in order to better serve their needs.

It's all about the client, the client's relationships, the client's marriage, friendships, family, all that stuff.

Whereas coaching is the client and their work and their eating habits and this, that, or the other.

Another big difference actually is the credentialing process.

So in therapy, for example, I had to go to grad school.

I had to get a master's degree and then have 3000 supervised hours before even being able to apply to take the licensing exam.

Whereas with coaching, 1 day I decided, I'm gonna be a coach.

And you can imagine the different types of people, for example, that would opt into 1 career path versus the other.

Okay, and so we've kind of outlined a few of the most common problems startups have here.

And so I think what could be most helpful to people is we're just going to talk about the problems and then we can outline the symptoms, talk about a couple examples and just go from there.

So what is the most common problem you see startups having?

The most common problem I think that I see my clients have is an inability to have difficult conversations because their emotions get in the way, and or an inability to even pinpoint the actual problem that they're experiencing.

Often the real problem that's, is like many levels below what they're experiencing as they go about their day.

Okay, and so we've broken a few of those out.

So we've called them roles and responsibilities, discussing equity, talking about founder performance, and the last 1 is talking about runway, how much you have left in the bank.

So maybe even Michael, you could give an example of 1 of these from any of the things you've worked on.

So in the early days of Justin.tv and Twitch, roles and responsibilities was something that we did a very bad job at.

And 1 of the very clear ways that I know we did a bad job is that every single 1 of us started another company and did a better job at it.

And so We did a bad job and we realized it and we fixed it.

So very specifically, we had 4 co-founders.

We were equal co-founders, and while we each sort of knew what we were supposed to do, it wasn't extremely explicit who was responsible for what.

It wasn't extremely explicit who was responsible for what.

It wasn't extremely explicit who was responsible for product.

It wasn't extremely explicit for who is responsible for, well actually, now that I think about it, it wasn't extremely exquisite who was responsible for product.

Because it was explicit who was responsible for the hardware, that was Kyle.

It was explicit who was doing the software, that was Emmett.

It was Justin's show, so he was responsible for filming.

And I think it was explicit for me that I was responsible for fundraising and customer support and press and so on and so forth.

But who was responsible for the product was actually unclear.

And I know that because we fought about it all the time.

So this is kind of only 1 degree of separation, right?

So you were just like bickering about product in particular?

Justin and I had a three-day debate about what the background color of the website would be.

Justin wanted black and I wanted wood grain.

And our solution, instead of actually deciding who should head product, was to allow the user to select different background colors for the product.

Yeah, and that's exactly what a coach would help with, because they have laser vision.

They can see past all the layers of criticism and arguing and stuff, and they would quickly, I would guess within an hour, probably have been able to see that that was the actual problem, which would have saved you how much time.

I mean, we didn't figure it out for 6 years.

And you didn't even figure out until like this 1 moment that it was

It wasn't roles and responsibilities, it was just product, totally.

But this is tricky, though, too, because so many things in startups and in life are gray areas.

And so you may not have actually known, maybe black would be better, maybe a grain would be better.

S e most important thing is it didn't matter.

So when you're arguing about something that's not a top 3 thing, probably there's a problem.

And would you say that you were able to argue about that because you didn't have a clear goal in mind?

You know, like I was the non-technical founder and so there were few things to care about early days pre-launch and this was something that I could think about.

I couldn't think about how to build our first chat system or our first video camera.

And what we should have decided is that no, Justin's going to think about this and Michael, you're gonna think about these other things.

And what's interesting when I think back is in areas where the responsibility was extremely clear, we actually did a good job, right?

Kyle's responsible to build a camera, he built a camera, Emmett built a website, Justin had a show, Like I actually did do tons of customer support.

I actually organized all these sponsorships.

And in those areas where there was no debate about responsibility, like we excelled.

And areas where there was debate, strangely we got to the right solution and the screwy thing is we didn't even debate the important product things.

The most important product thing about Justin.tv and Twitch is videos on the left and chats on the right.

Day 1, videos on the left, chats on the right.

Today, videos on the left, chats on the right.

Well, people call this bike shedding, right?

We're choosing what color to paint the bike shed.

That's the big debate, rather than building it.

So Amy, if you were Michael's coach in this situation, how would you go about walking through, putting a stake in the ground and saying, hey, I'm Michael, I'm going to run product?

Or not, yeah, that's sort of something that's on my mind as I'm listening to you, and I'm thinking through a couple of sessions I've had this week where you were a team of 4 founders, you each had your kind of your own world, although of course they overlapped because it was early days, but you also had your own skill sets as individuals and humans.

Hopefully those aligned with your, with what your responsibilities.

However, I'm just kind of like imagining you back in the day, Michael.

External partnerships, sales, business dev?

And you have, I think, probably the personality to match that.

And awkwardly, I'd never built product before ever.

But back in that day, like your skillset and stuff maybe wasn't needed as much.

And so like, there's almost this rotating set of gears and wheels where you had all this capacity, you had the bandwidth to worry about everything.

And so instead of being able to recognize that in the moment and put your skills to use immediately, right.

Because you're not really needed until all the hardware and everything like gets into place where you can sell it or whatever.

Like, I forget your question, Craig, but as your coach, I would have been able to recognize that and been like, what is the most impactful thing that you with your skillset and your particular piece of the pie, how can you impact the bottom line right now today?

Knowing that right now, yeah, what you want to do isn't important and that's fine and that's good.

Not all cylinders need to be firing at all moments.

It's funny that I think that I certainly didn't realize that in the first go around.

And I remember in Social Cam, my second startup, there were moments where I literally was like, the most important thing I can do is be here, but not talk.

Because it's like we had decided what we were building this week, everyone knew what they were supposed to do.

And the only thing I could do in a conversation with other people was either waste their time or change the plan.

And I ended up, I kind of realized it's just TV, but I ended up printing out this thing that was like, good leadership doesn't require being disruptive.

And it was something I always kept in the back of my mind.

At some point, you just need to sit there and build something, and having someone in your ear is not really helpful for that.

And I'm curious, how did you realize that?

You know strangely in the second company our Authority roles were different, right?

So in the first company, our authority roles were so weird.

It was like Justin and I had done a startup before, but they weren't really business-y.

And Kyle was extremely technical, but he was doing this hardware thing that none of us had expertise in.

With SocialCam, even though we all had equal equity the second time, I had been the CEO before and they'd been employees.

And so I think each of us were more, there was already kind of a natural hierarchy.

And I think that it was easier for me to give things up because I didn't feel like I was giving up power or authority, I felt like I was delegating.

Whereas like in the early days, it was like, it was almost like there were 4 CEOs in a weird way.

It does kind of sound like it was a free for all.

For teams, because I know this is also a common thing, where you did have equal equity, you did have equal-ish sounding pie pieces.

In a perfect world, who would have been able to make the decision and delegate or tell you, Michael, stay in your lane or whatever?

I think the story of JustTV Twitch is funny, because Justin started as CEO, And so I think there was probably a time in the early days where you would argue it was his responsibility.

Post launch, when we needed to start fundraising, we switched.

I did this extremely poorly, but we switched.

And I became CEO, and I carried us through for the next 5 years.

And then when we decided to focus in on gaming, that was kind of Emmitt's expertise and his interest.

It was like there were 3 embedded CEOs, right?

So I think that at various times, it was various people's responsibilities.

I think by the time we came to Emmet, we were just older and we had seen dysfunctions.

Man, if you see dysfunction for long enough and you're reasonably smart, you're going to be like, oh, okay, dysfunction's not good, we should fix that.

But in the early days, we were just like, we don't know, we never worked in companies, we don't know what good looks like.

Paul Matzkoff Right, plus a little bit less ego at the time.

Yeah, well, 3 out of 4 people went into Yale, so that also, I wouldn't advise that.

And what are the symptoms of maybe an uneven or just like a perceived uneven equity split?

In my experience, the way it comes out is the person who feels as if they have less equity than they deserve is usually the 1 who calls me.

They call me usually at the point at which this conversation is boiled over, such that they feel so much resentment towards the person who has more than they deserve or whatever that they don't know anymore if they can even continue on.

And as you can imagine, when you feel resentment, that causes so many other downstream effects.

It sort of pervades every part of your waking and sleeping life.

The solution there is just to like have sort of a come to Jesus moment with yourself and ask yourself, like, should we renegotiate this?

Or, and, or is there a price at which I will, can I present a different deal at which point I might walk?

And, or an exploration of the past reasons why it was okay for this person to even find themselves in this situation at hand.

And that actually to me is the more interesting, like that exploration is more interesting to me as a coach.

Usually the person from the very beginning felt as if something wasn't quite right.

What was it about you that didn't allow that, like you to negotiate for your own self.

What was it about you that disallowed you from seeing your own value?

And those are patterns that often not only affect the relationship with the co-founder, but many, many other relationships in that, many other relationships in that person's life.

So it's funny because you talk, we talk to the opposite person.

So you talk to the person who feels like they didn't get enough.

I talk to the CEO who's usually in the role of distributing.

And This was an area where Justin was amazing from day 1 and kind of set a precedent.

I remember that in Justin TV when he and Emma asked me to join up and I was like, hey, I will but I want to feel like an equal partner.

And he was like, great, you're an equal partner.

And I remember that moment, I felt like I am all in.

And we were doing an online reality TV show.

There was no reasonable reason to be all in, but I was like, well, if I'm an equal partner, I'm all in.

And it was interesting because when Kyle started, he had only 10% equity because he had started as this quasi-employee, quasi-contractor kind of thing and we were trying to convince him to join up.

And there was a point, I think 3 or 4 months in, where Kyle was like, I'd like to be an equal co-founder.

And I remember thinking to myself, okay, what's my model for whether you should be?

And it was like, well, Justin established it.

So I remember thinking, immediately my first reaction was not you negotiated this, you should stick to what you negotiated, or da da da.

My first reaction was like, well what Emmett and Justin think?

Like, it's like, they're cool, I'm cool, right?

You know, it was very much like open to that conversation.

And I think a lot of times when I talk to CEOs now, You know, the reason why I like to default to equal is it's kind of cheats.

It kind of just gets rid of this conversation, right?

But it's not a best fit for all circumstances.

But when I talk to CEOs now, the number 1 thing that they say to me is, well, we negotiated it.

And it's like so funny because I'm like look as a CEO you're thinking about your co-founders motivation today but also 5 years from now and they might not be thinking about that and so it's not a fair negotiation like like victory is not you negotiated a 50 victory is like they work really hard the whole time Like you can't let them negotiate a deal for themselves that that's not gonna make them work really hard And so it's so funny.

I have to come in like hey look this isn't some business transaction.

This is You know when you're coming to get sold The company acquires you basically puts this massive retention You know if you do well puts a big retention bonus that sits out there and it's called golden handcuffs.

And I often tell CEOs, equity is golden handcuffs.

It's like, it's a, it's a, it's bondage in a weird way.

And so like, do you really want this person to be around?

Well, if you don't, then why are they your co-founders?

If you do, you should probably give them a lot of equity.

It's so interesting that you say that too, because often, again, it's so funny, I'm talking to the opposite person, like the person that feels as if they're being devalued.

And it's interesting because I always find I have to tell them how their behavior must be perceived by the CEO.

Because this person has been sitting on this thing for years sometimes, and it's like coming out in all these random, passive, aggressive, critical ways.

can't imagine, because we already decided on this, right?

The CEO often doesn't even know where it's coming from at all.

And they're like, why is this person being crazy and unreasonable and horrible to me?

They just sort of are often blindsided because in their mind, it's been negotiated.

And it's so interesting that, again, the people that I'm talking to, they're so filled with resentment.

They can't possibly imagine what's in that other person's mind.

And so, again, it pervades their experience.

I had something else to say, but I forgot it.

What's weird, too, is that I think that in situations where the equity should be unequal, like, it's honestly situations where the people with lesser equity are comfortable with that for a long period of time.

Like that is a situation where sometimes you have companies where different founders are bringing different things to the table.

And so 1 founder, with Justin.TV it was like 4 founders who had basically done nothing, right?

Equal equity felt like it made sense, right?

In a situation where like there's a massive power imbalance and someone is bringing like a lot more to the table than someone else, right?

But the reason why you know there's agreement on that is because the person doesn't blow up.

The person with less equity doesn't get pissed 2 years from now.

So let's say you are in a situation where you might be getting less equity.

Do you have a good model for playing that out in your head?

Maybe that's just a simple exercise you can do.

Ideally you would just avoid this entirely, this conversation, right?

I think ideally it requires either the...

Like the CEO needs to step up and be honest and be like, hey look, I want to make sure regardless of what you think you need now, let's talk about what was going to make you feel great 5 or 10 years from now.

Let's talk about, let's imagine we sold this company and I make more money than you.

Is it going to feel comfortable for me to get 10 times more money than you?

Is it going to feel comfortable for me to

Or I think on the flip side for that co-founder that's not the CEO to just be very explicit about, hey, these are some of the reasons why I believe you should have more equity, and these are some of the reasons why I believe I should have more.

like it requires 1 person to step up, and I see a lot of situations where neither step up.

The person with the least amount of equity will never be OK with it.

So I am always Like, this is always going to be a problem until something changes.

And so you might as well bite the bullet and change it 1 way or another.

Or at least have the conversation up front.

The other interesting thing that I'm thinking about as we're talking about this is, again, the reason why some folks sort of enter into this negotiation and then are fine with this, I mean, fine in air quotes, say they're fine with the equity split, even when they're not, is because they have such a difficult time speaking to their value and saying, I am worth this because I'm amazing and I have all the experience that you need.

I also will just say that women often have a harder time being able to do that.

And so I just want to make sure that that, again, from a coaching perspective, that conversation, I don't feel as if I have value erupts not just in the equity conversation, but in many other instances too.

Especially for example, with first time managers, especially for example, with managers who are managing really amazing, like the C-suite and they're great.

Like, They don't feel as if they're valid enough to coach the other person and say, I'm holding you accountable.

You didn't meet my expectation in this way.

So again, that piece of I don't know if I have enough, I can't see my value, That shows up in so many different ways in my work.

But in my mind, if you're the CEO on this 1, I think the buck stops with you.

See all Y Combinator transcripts on Youtube

Amy Buechler and Michael Seibel on Founder Coaching and Having Hard Conversations