- Ryan Hoover, founder of Product Hunt, and Dalton Caldwell, partner at Y Combinator, discuss the formation of Product Hunt and its journey to joining Y Combinator.
- Ryan initially started Product Hunt as a side project, which eventually gained traction and turned into a website similar to Reddit or Hacker News.
- After receiving a DM from Nicholas from Algolia, Ryan considered joining Y Combinator and met with Gary Tan to discuss the potential path for Product Hunt.
- Ryan had concerns about taking VC funding but was advised by Gary that building something with traction is rare and should be pursued.
- Product Hunt had a growth rate of 50% month over month when applying to Y Combinator, which was achieved through manual efforts of reaching out to makers and founders.
- Dalton and Ryan discuss the decision to pursue venture financing and the importance of doing it for the right reasons.
- They also mention other successful indie software developers who have built profitable businesses without raising VC funding.

- The next 5 years will see a large number of products being built, as it is more accessible and easier to do so.
- Indie Hackers is filling a niche in the maker community ecosystem for bootstrapped entrepreneurs.
- Not all companies that go through YC (Y Combinator) raise money afterward.
- The decision to follow the path of raising money during demo day was based on building something for the tech community and getting notable tech people involved.
- The experience of success at YC is not representative of most participants.
- Excitement and buzz around a product at demo day does not necessarily correlate with long-term success.
- The best investments are often contrarian and require conviction for the future.
- Many successful companies funded by YC have pivoted into something different from their original idea.
- Brex is an example of a company that was initially funded for a VR headset idea but ended up becoming a successful credit card company.

- The speaker believes that the company in question faced fundamental issues they didn't know how to fix, leading to a roadblock.
- The speaker encourages founders to pivot towards something they are experts in, rather than something they know nothing about.
- The speaker emphasizes the importance of starting a company as an experiment or side project, rather than overthinking it.
- The speaker discusses the potential for monetization and extending runway, but acknowledges the challenges that come with it.
- The speaker suggests that the company could have focused on specific areas, such as tech products, gaming, or job boards, to deepen their expertise and potentially achieve success.
- The company initially planned to expand into multiple verticals, but found it difficult to replicate the success of their core tech community in other areas.
- The speaker discusses the possibility of creating a separate domain or platform for gaming, with a different user experience and focus.
- The speaker praises the company's ability to build a strong community and suggests utilizing video reviews and unique features to enhance the gaming experience.

- The speaker discusses the focus and direction of Product Hunt, emphasizing the importance of going deep into the technology vertical rather than spreading thin.
- They mention the idea of starting a Product Hunt fund, but decided against it as it would have changed the nature of the business.
- The speaker reflects on the importance of small decisions in shaping the success of a company.
- They discuss the challenge of maintaining urgency and prioritizing tasks when a company has raised a lot of money.
- Product Hunt's current priorities include user growth, revenue, and community contributions.
- They mention plans to focus on helping users find the best products and building a true product graph.
- The speaker also discusses the idea of virtual co-working and supporting remote workers and freelancers.
- They mention the lack of tools and support for remote work collaboration.
- The speaker explains why educational content is not a core focus for Product Hunt.

- The speaker gives general advice on launching a product, including having clear imagery and taglines, getting feedback from unbiased individuals, and speaking like a human rather than a marketer.
- They mention a young maker who won Maker of the Year on Product Hunt and has since launched multiple products.
- The speaker also discusses the example of Meerkat, a company that had a successful launch but struggled with retention before pivoting to create Houseparty.
- They discuss the importance of founders being serious and committed to their product, rather than just aspiring to build something someday.
- The speaker mentions the challenges of quitting a job to pursue a startup and suggests that programs like Y Combinator's Startup School can provide support and grants to serious founders.
- They emphasize the importance of starting and making progress, as well as the significance of progress in the startup journey.

- Progress is crucial for companies and investors
- Even small day-to-day interactions and user interactions can make a difference
- Following a company for just a few weeks can provide confidence in their progress
- The speaker appreciates the opportunity to discuss these topics

- Ryan Hoover, founder of Product Hunt, and Dalton Caldwell, partner at Y Combinator, discuss the formation of Product Hunt and its journey to joining Y Combinator.
- Product Hunt started as a side project and grew into a website similar to Reddit or Hacker News.
- Product Hunt joined Y Combinator after meeting with Gary Tan and considering the potential path for the company.
- Product Hunt had a growth rate of 50% month over month when applying to Y Combinator.
- The decision to pursue venture financing was made for the right reasons and based on the advice of Gary Tan.
- Indie software developers have built successful businesses without raising VC funding.
- The next 5 years will see a large number of products being built.
- Not all companies that go through Y Combinator raise money afterward.
- Success at Y Combinator is not representative of most participants.
- The best investments are often contrarian and require conviction for the future.
- Many successful companies funded by Y Combinator have pivoted into something different from their original idea.
- Founders should pivot towards something they are experts in rather than something they know nothing about.
- Starting a company as an experiment or side project is important.
- Monetization and extending runway present challenges.
- Focusing on specific areas and deepening expertise can lead to success.
- Product Hunt considered creating a separate domain or platform for gaming.
- Building a strong community and enhancing the gaming experience are important.
- Product Hunt's focus is on going deep into the technology vertical.
- Small decisions shape the success of a company.
- Product Hunt's current priorities include user growth, revenue, and community contributions.
- They plan to help users find the best products and build a true product graph.
- Supporting remote workers and freelancers is a consideration.
- Educational content is not a core focus for Product Hunt.
- Launching a product requires clear imagery, feedback, and human-like communication.
- Progress is crucial for companies and investors.
- Following a company for a few weeks can provide confidence in their progress.

Ryan Hoover is the founder of Product Hunt which was in the Summer 2014 YC batch and was acquired by AngelList. He also invests in startups through his Weekend Fund.

https://twitter.com/rrhoover
https://www.producthunt.com/
https://angel.co/
https://weekend.fund/

Dalton Caldwell is a Partner at YC where he runs admissions.

https://twitter.com/daltonc

The YC podcast is hosted by Craig Cannon.

https://twitter.com/craigcannon

***

Topics

00:00 - Ryan's intro

00:25 - Dalton's intro

1:00 - Forming Product Hunt and applying to YC

4:50 - Product Hunt's growth rate when they applied to YC

6:00 - Raising money for the right reasons

9:15 - Maker communities

11:00 - Why raise money for Product Hunt?

12:45 - Having buzz during the batch

17:45 - Brex changing their idea during YC

19:50 - Pivoting into something you know well

21:15 - In retrospect, how would Ryan have advised himself around monetization?

28:00 - Trying to build out other verticals

34:00 - Don't act like you have infinite runway

35:30 - Creating urgency and developing products within AngelList

39:50 - Tips to launch on Product Hunt

44:40 - What Dalton looks for in applications

46:30 - Giving people the opportunity to start

48:20 - What motivated Ryan to leave his job before Product Hunt

So for those of our listeners who don't know who you are,

So I started a company 5 years ago almost, or actually just over 5 years ago, called Product Hunt.

You see a lot of makers and companies launching their new apps or their new products to the world and kind of like Reddit or Hacker News.

You have people commenting, asking questions and upvoting what they think is most cool.

So that's the selection process for who we fund.

And I actually worked at YC when Product Hunt was in YC.

And so I remember it from the inside, kind of what the story was.

I was not, I did not interview him, nope.

It was 10 minutes of just rapid fire questions, and I was like, all right, anyway, I can't remember who else it was.

Yeah, so Dalton, I think he has a question for you to start it off.

Yeah, so maybe to start with, because I remember it so well from being there, walk me through from the formation of product hunt into applying to YC and to getting into that interview that is already a blur.

It's almost like an out of body experience.

And you try to, well, someone gave me this advice actually during YC, is before you do anything like that, before you do a pitch, pump your chest physically.

It might have been Kevin Hale that said this.

Yeah, I could be wrong, so sorry Kevin if I'm putting words in your mouth, but there's a step where you can pump your chest physically and that active physical nature of doing something that feels a little bit aggressive can inspire some confidence.

It's actually, I may have done that a few different times throughout my career, I'm not gonna lie.

That was in Jordan Peterson's first rule in his book.

It's stand up straight with your shoulders back.

Okay, so You blacked out during the interview, basically.

But yeah, what else was that process like?

So Product Hunt, I'll do the beginning really, really quickly.

It started off as a side project, and it was right between startups.

I was leaving another 1 and kind of tinkering and interviewing at other startups.

Started Product Hunt, it started off as an email list, got some traction there.

That then turned into a website, and we looked a lot of inspiration at like Reddit and Hacker News and other communities, and like how do you, what systems do we want to take inspiration from, how do we want people to engage?

And it was probably 4, I want to say 4 months after the email started and when the website was kind of operating.

It was still like a thing I woke up every morning super excited about and found my mind continually 24-7 focusing on it.

But I still didn't know what we wanted to turn it into.

And then it was around the four-month time period, I actually got a DM from Nicholas from Algolia.

He DMed me and said, hey Ryan, a lot of people in YC are using Product Hunt.

Have you thought about joining YC?" It was the perfect time because I was sort of at the crossroads where I'm like, what do we do with this?

We could keep doing it as a side project.

If you make it a company, How do you build?

So I initially said, oh, I'd love to meet Gary.

We went to the Grove on, I think, Mission Street.

And my questions for Gary were pretty transparent.

But I'm not sure I want to take VC funding.

And if I go into YC, if we do YC, does that mean we're on that path?

And Gary said something along the lines of like, well, when you strike lightning in a bottle, that doesn't happen very often.

And I say that not arrogantly, it's not that like product is the most amazing, best thing in the world, it's not.

But very few times in your life do you build something that is like, wow, there's something there.

And Gary was not ever, he would never pressure me to say, you should do YC or you should raise VC funding, but that advice or that feedback was really insightful because he's right, it's like, am I ever gonna have a time in my life where I build something that is starting to show some sort of traction, that's something that people want ultimately.

remember what the growth rate was when you applied to YC?

Yeah, we, if I'm not mistaken, I think we were like 50% month over month.

And that's not counting like with 100 users in month 1, but it was like over the course of a few months with some users.

And so it was, and actually going into the interview, I'm fast forwarding a little bit, but we found out some things that worked on the growth side and a lot of it was very manual.

Me basically emailing makers and founders and tweeting at them.

And I found out that when I messaged them, they would join the conversation, they would share, and that would drive more traffic to the site.

And so there's a nice flywheel effect that still exists today.

And when I discovered, when we discovered that, I was like, well, shoot, let me just do that more often.

And let me do that as fast and as quickly as I can going into the interview so that I can say honestly in the interview, yeah, we have 50% month over month growth in the past like 3 months.

And so anyway, that was, having those types of metrics gave me a lot more confidence.

You know, I didn't have to pump my chest, or maybe I should have, but I didn't have to pump my chest to feel confident going into the interview, even though it was kind of anxiety inducing because it's such a quick process.

Yeah, I've had similar conversations with folks like the 1 Gary had with you.

And sometimes what I do is actually discourage someone from doing venture financing if they have a side project working, especially if they're making money and they never will have, like they can support themselves on it and they can basically have the job forever and you have this like cool freedom that so many people dream of.

I'm sometimes like, hey, like keep doing that.

The grass is not greener on the other side.

And if you do wanna decide to raise money, just make sure you're doing it for the right reasons that you're really excited about it, not that someone told you to or you're seeking approval from authority figures.

And so what it sounds like, what was good in your case is you were like very on board versus again, sometimes you see people being pushed down this path where they have something working and then they regret it in the future because they feel like they gave away a good job, right?

Where you think like startup equals software, right?

So like, because I'm making profitable software, therefore it is a startup, but it can equally be a small business.

Semantically, you can call it a startup too.

And especially, like, I really respect, there's so many great indie software developers building Mac software.

And I think they have a lot figured out that other people don't.

And so those people, I'm like, yeah, I don't know if this is, I think you keep doing what you're doing.

That's the thought process that went through my head.

And so there was a scenario, and I was trying to imagine, well, let's see.

First off, I didn't have much shin savings, and I'm not an engineer.

And so that was 1 of the things is, well, I need people to help me to build this thing and build out this roadmap that I have in my brain.

And so 1 way to do that is you get money to pay them.

You could do it through VC or you can, you know, make money in the project itself.

You know, there's other means to get money.

But I was certainly evaluating, well, what if we never raise VC money?

What if I could pocket $20,000 in my pocket per month on 100% of the business?

Didn't they bootstrap it off the affiliate links and never raised a dime.

I don't know if Brian and team raised, maybe they did a friends and family, I'm not certain, but they never raised a real VC full round.

And even look at what Gabe's done with the tech meme, which has been around forever.

It's basically a force and a thing that everyone in technology knows about.

And if he did raise money, the product would change dramatically.

They'd have to figure out a lot of things to change it from what it is today.

I'd have to throw conferences, that would be my guess.

I don't think that would be his first choice.

Gate doesn't seem like the conference kind of guy.

This is a little bit of a tangent, but what did you think of when IndieHackers started to come up?

Because that was a little bit after Product Hunt and it's very similar and it's within this exact niche.

Yeah, I've been thinking more and more about, in my head, I describe it as maker communities.

And I would put Protent in that category, IndieHackers, LPath is certainly 1 of those, and a bunch of others.

And these are communities that are designed, and some of them are verticalized around a specific function, whether it's Dribbble for designers, Stack Overflow for engineers, or it's demographic-based, like LPath for women.

And there's this whole ecosystem of maker communities on the internet.

And I find it really fascinating, because it's largely built into the thesis of Product Hunt, which was always, well, I love discovering products.

There's this cultural relevance and interest within products and technology.

And more and more people are building products.

In fact, in the next 5 years, we're going to see a ridiculous number of products being built, partly because it's more accessible, it's easier, you don't actually need any money to build anything.

Anyone with the motivation and internet access can build something.

So I'm going off on a tangent a little bit now, but I see Indie Hackers is certainly filling this sort of niche in this focus around bootstrapped entrepreneurs.

And that's their focus within this kind of maker community ecosystem for me.

I've, you know, I've participated in the community, I've been on this podcast.

Okay, but not all companies that go through YC ultimately raise money afterward, right?

right, and so, And they predated product hunt, right?

So I think kind of what Dalton was alluding to.

So you had this point where you could have raised money or could have not raised money.

And so demo day, why do you decide to follow that path?

So The story with us going through YC, so we raised around the same time we got into YC.

And part of the strategy was, 1, we're building something for the tech community.

And strategically, it was important, or rather beneficial for us to get a lot of notable tech people involved.

So we raised money from GV, Greylock, SV Angel, they were the first check in, a bunch of other strategics.

And having them involved was just helpful to have this support community.

And granted, we probably gave up more equity than we needed to.

We raised a million before, like going into YC before demo day when we were targeting like 400K, but we got great people around us.

And then fast forward through demo day, Mark Andreessen reached out kind of in the middle and he'd been following it and was interested and we met up and that happened and then 3 or 4 weeks later he contacted again and this was pre-demo day and it was sort of, you know, how are things going and I knew what that meant.

Long story short, they ended up doing a Series A preemptively, like we were pretty early, especially for injuries and awards to do that type of round.

But the metrics are great, the vision, or rather the opportunity, massive.

And I felt that It was better to work with a great firm and raise more capital now than risk in 6 months raising with maybe not as good of a firm with maybe not as strong of numbers.

And that money then would allow us to continue for several years, building the company and hiring and building out what we want to build.

And so I think my perspective working at YC is your experience was 100% a side effect of the lightening in a bottle effect you had and is not at all representative with 98% of the people in YC.

And the reason is people don't have buzz or excitement.

I mean, because you're a community, they were participating in the community.

And so it was very hard in that era, you know, everyone was using your site.

And so You see these things sometimes when there's social products that take off.

I mean, I'm not going to, yeah, I can think of where there was like big things that were hot and then everyone got excited about them.

But like it's fascinating hearing you say that because like Seriously, that is no one's experience.

Like, that is like 1% of the batch has that experience.

And the other thing that I would say is like, those aren't always correlated with the companies that like do really well in the long term.

But like, when you see these and it's usually because someone has like a hit on their hands.

And so all the investors like circle around and do all this extra work to do it.

But if you look at like a great example, I like to talk about is Coinbase.

I think he got like half a million bucks.

there's companies like Coinbase where like, they couldn't get people to return their phone calls.

And like, couldn't, I think, couldn't put together that much money.

And you know, like as a long-term investment, wouldn't you love to be an investor in that I you know, like, I was like, I think the price is pretty good.

And so we so what we see from our side of the table and why see is like, excitement around the core product or feeling like other investors are excited about it and things like that definitely give a founder like yourself tons of leverage.

But that I actually have learned to not take that too seriously as an investor, as a signal for how the company will do.

It's more just like, oh, you know, like people like scooters or something.

There's other examples of these hype cycles happening.

And to try to like, remember that it's the long-term things that really matter, like retention and growth and revenue.

And those are super predictive at demo day.

So anyway, I remember that too, when everyone was so excited about Product Hunt, and everyone wanted to work with you, and they put tons of work into it.

And yeah, other founders probably were like, why can't I be that?

I think part of the challenge is, some of the best investments are somewhat contrarian, so Coinbase being a great example.

In 2012, crypto and that whole world was just like a totally different era.

And the best investments oftentimes- He was

And it was like, cool, I'm the Bitcoin guy, and it's just me.

So he had a lot of, it was not a slam dunk at Demo Day for Coinbase.

And it takes some conviction for the future.

The people that did invest saw a future of crypto and what it could become.

And that's where I think maybe it gets challenging, is if it's already super hot, then there's probably also a lot of other companies competing for that same real estate.

And I think maybe product is probably not the best example because we're not, it's not like a Lyft and Uber situation.

Like it's not like we have a 0 sum game when it comes to competition with other companies.

I've seen, you know, there's some, I'm trying to think back on the batch and who's- Yeah, who, what were you, summer 14?

Yeah, so I think Ginkgo is extreme, like they probably have hundreds of employees.

Again, like I think they raised fine, but there was not this like hot buzz.

Oh, Ginkgo Bioworks, they're from Boston.

They're, you know, they're doing synthetic biology.

Like, like I don't think Mark Andreessen was cold emailing them.

Remember the Octo and the Fusion and the Fission company were in summer 14.

So there was like stuff like that, but it would be easy to forget.

And this is also why, what's fascinating working here, man, is people think that YC funds consumer companies and this is what our bread and butter is.

And like, yeah, like I think it's like 5% consumer.

Yeah, it's funny, people think that most of Product Hunt is actually consumer as well.

It's probably, I don't know, 50% at most is consumer.

But man, if you actually look at the data, which is my job to do, a huge percentage is like, good old fashioned B2B enterprise.

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Ryan Hoover on Product Hunt's Acquisition and Lessons Learned About Launches with Dalton Caldwell