Stop Innovating (On The Wrong Things)

Startups need to innovate to succeed. But not all innovation is made equal and reinventing some common best practices could actually hinder your company. In this episode, Dalton Caldwell and Michael Seibel discuss the common innovation pitfalls founders should avoid so they can better focus on their product and their customers.
Apply to Y Combinator: yc.link/DandM-apply
Work at a Startup: yc.link/DandM-jobs
Chapters (Powered by bit.ly/chapterme-yc) -
00:00 - Intro
00:13 - Innovation Economy
02:53 - Anti-Patterns
03:28 - Corporate Law
04:45 - Proving It Wrong
06:53 - Because It's Fun
08:30 - Business Models
09:52 - Being Unique
11:43 - Outro

[@ycombinator]

What other distracting innovation should founders avoid?

[@PoolMedia]

Getting stuck in analysis paralysis

[@hsuyuting1993]

conferences

[@benditovicentecosta1710]

I think we should avoid excess information!

[@StrandedKnight84]

Way too many founders try to innovate on HR.

[@chriswilfrid]

Apple Vision Pro

[@yaelfelicia5820]

I am a religious consumer of your content and cannot get enough!!! Light and funny with legit gold content. It doesn’t get better

[@megham_]

I also had this that I want to build this startup from my small hometown, I think it was because i don't see any community in my town dedicated to building internet companies. Although I know, that if any opportunity comes which helps me make a successful startup I'll take it. Other things could wait for the second time... that's correct

[@AB-xi4gr]

Visionaries love to imagine the extreme future, but they don't anticipate the sacrifices they need to make to turn that into reality. So orgs often promise the world but don't make the grounded choices to make it a sustainable business.

[@prathyusha5393]

It is a hard balance to strike to be absolutely bold and downright grounded.. Choices one makes on the kind of choices they're making, I guess, in their centre.. come from a place of wisdom.. and not passions and aversions .. This is really insightful and helpful !

[@earl.grey_]

I think that when you do something fundamentally different, you can probably earn much more due to lack of conpetition. Thats why startups may take more risks

[@AutoJourney]

Dalton + Michael = click 👍

[@rohinb97]

I love the “innovation juice” graphic when Michael said it lol. That’s an innovation for YC videos in itself 😂

[@dsolodukha]

Great stuff. I loved the part about using the best practices. We built best practices based infrastructure made as code. All best practices together casting the lowest possible costs when fully secured and compliant. We had some revenue but don’t have at this current moment. However we have long term free client who can potentially convert into … almost $100k MRR. And I’m not sure if we are at the good stage for YC combinator.

[@johnstalkernet]

Tonight my team and I just rattled off few 3rd-party services that’ll help us get to revenue sooner. We *could* reinvent the wheel and build these functions from scratch, but since they’re not part of our core differentiators, we are planning to use existing services instead. This brings me to a great question for future video: with limited resources what are some good optimization tips for when or when not to go 3rd-party integration. Thanks all!

[@taohuawen4813]

Hello! If you don’t mind me asking, when starting a startup, should you look at which industry to pursue? Does choosing a “growing” industry have any advantages? If not, can we start websites that don’t involve using the newest technology (like AI) Thank you! Any advice or video recommendations would be greatly appreciated!

[@reprovedcandy]

The company Dalton referenced "anonymously" is clearly Phoenix Hydrogen in case anyone was curious lol

[@majormajor4636]

A lot of good info in these videos regardless, but y’all’s perspective in general seems very influenced by hindsight bias. You remind me of sports analysts who act like they knew a player was great after they have one or two great games, and then call them an obvious blowout after they have a bad one. Instead of being about what to innovate on, this video should have focused on how to tell a focused story about your business and more effectively assign business value to the things/innovations you’re interested in.

[@octavioavila6548]

I hypothesize that the reason people try to do the risky, innovative, wacky stuff is because if they fail, they can always blame the risky, innovative, wacky stuff and protect the ego. If, instead, they try using proven methods, best practices and techniques and they fail, then they are going to have to take more of the blame as individuals and that is a blow to the ego. “Oh you did all this risky, wacky, creative stuff and failed? Well that’s alright, after all, you were innovating, pushing things forward. Surely, if you had gone down the traditional path you would have succeeded. Therefore, you didn’t really fail, you were just trying out new stuff.” “Oh so you did things the way everyone else did and still failed? There must be some inadequacy, incompetence, flaw about you that led the start up to fail then. It’s all on you, you suck!” Now you see why someone would want to avoid the second scenario.

[@mindlessthoughts5592]

Some people like pushing the envelope. People are risk takers. Without those willing to fail we wouldn’t have breakthroughs. Following the same path as everyone else is boring and predictable. No everyone likes that life style.

[@allanshpeley4284]

Some people just love innovating. The process of creating something that's never been done before can be very intoxicating.

[@thepanafricanman]

Love these conversations.

[@jonathanmerritt8712]

Most startups are the modern equivalent of “put a digital clock in it”, and these guys love to encourage that limited outlook in founders that have no business founding anything. This is all just ordinary business advice for ordinary businesses. Here’s an exercise: go watch the groundbreaking “Mother of All Demos” video from 1968. While watching, ask yourself what parts of that video would still be there if they had followed modern Y-Combinator advice to the absolute letter. I know it was a different time, but the answer is: none of it would have existed. That’s often the case with amazing skunkworks customer-free innovation that becomes something amazing. (You can’t always sell it though…)

[@miguelacevedo8649]

There’s a reason YC is becoming known for being a B2B SaaS mill. There’s no spiritual desire behind the creations anymore.

[@djone916]

I am proving startup advice wrong, that you can be a good founder who was non-FAANG, non technical (initially), community college and state school educated, and grew up in difficult circumstances. Some innovation in your startup outside of your product can help reject antiquated views, such as those who "should be" able to build a successful startup.

[@fezilenongogo]

You had me at Floozles 😂😂😂, great video, clear points.

[@ordinarygg]

Love the quality of videos! Yes, Yes, Yes, Yes, Yeah, Yes, Oooh, Yes, Yes, Yes, Yes, Yes, Yes

[@RishiKumar]

Always love to hear michael.

[@hsuyuting1993]

I just love the Dalton + Michael series. I watch every single video at least 10 times! (Not kidding.) These videos just bring so much value.

[@SpencerDwight]

This is how I felt about the Figma subscription earlier - so I can subscribe/m but it applies to one team when I had three teams on the free account? I have card in hand but I’m not going to subscribe to get less than what the free offers. … ?

[@stevekatz4696]

What an outro! Actually a good example of what to innovate on, fun stuff, not the core thing

[@FIN-LYTbyEWA]

Thanks for sharing!

[@hello-4229]

I really enjoyed thank you

[@opioo.4998]

This is dope!

[@winkletter]

When you hear the words "technical bets" replace them with the words "stupid choices."

[@zeydtc]

I really love these videos but I have a recommendation: the audio on both of them seems like it has very high highs and very low lows. Sometimes it's really hard to understand what they are saying even though I am listening on high volume.

[@ycombinator]

Thanks for the feedback

[@sadiqkhawaja7019]

I was wondering if you could have talked a little bit about Google, when Larry and Sergei did their best to do everything different from giving their employees free food to thumbing their nose at the SEC during their IPO

[@emmanueloluga9770]

Yeah, the holy spirit is undefeated! To have a superficial peek into why I am, look no further past this video. It's prescient I got recommended two hrs after I focused directly on our ICP and separated the different startups into multiple brands! 10:43 is all the insight you need. Then, 11:20 is extra candy. Let's Build! ... Then, Bundle!!!

[@louis3195]

When you're building something new, the complexity generated by variables multiplies, so you want to modify as few variables as possible.

[@alxcdog9578]

Maybe the thought process behind some of the startup businesses is that they are on a FOMO of disrupting their market niche. They all want to be the first, that all want to disrupt market flow, and they are hoping to change ideas. But in the end their motives might be selfish which takes over logic. Then wanting to raise capital becomes the overall property. Just my thoughts

[@jtritell]

Im not thrilled to register a Delaware C Corp after what happened to Elon's shares of Tesla. Hopefully Clerky or Stripe Atlas going to be can offer another option.

[@wittenberg5]

Great video guys, but Amazon is a bit of a counter example perhaps. Jeff Bezos innovated on process things, for example, having executives read 6 page memos at the start of every meeting vs using power point, having junior most people speak first in meetings ahead of senior people, etc. Agreed, maybe don't innovate on corporate structure and things that are frankly boilerplate and add no value, but you should be ruthlessly evaluating and improving your process and disregarding convention where you have a better way to do things. Just make sure all innovation ultimately is in the service of a better run business and more customer value. Thoughts?

[@themartdog]

I agree with what you're saying, but is it actually measurable how much those specific meeting styles have helped Amazon succeed? It could honestly just be that having any kind of rigid structure to meetings that everyone expects helps things flow smoother and make decisions easier. Just like how Amazon's rigid hiring process probably weeds out a ton of people who would actually be successful there.

[@wittenberg5]

@@themartdog interesting point, true it is hard to quantify.

[@SacredCASHcow]

​@@themartdogif the idea doesnt come to you naturally as a solution to something it shouldn't exist

[@carloslfu]

Where can I buy one of those cans of innovation juice that you guys presented in the video?

[@ycombinator]

www.ycombinator.com/apply

[@carloslfu]

@@ycombinator Thanks! :)

[@damiangrasso3893]

As someone who built an app with limited market research and customer validation - don't do that. Validation stops a lot of heartache in the future!

[@noduslabs]

On the other hand, you might need these weird conditions to stay motivated when it gets too hard.

[@AdamGordon1]

Best of your videos.

[@mindlessthoughts5592]

Hahaha I’m the hydrogen guy. It’s nice to see at least I’m memorable. FYI …..I didn’t commit suicide. Never will.

[@sp123]

Strong username to post ratio😂

[@mwaffi]

8:55 AWS pricing is complete nonsense, though. I would never willingly present that to a customer.

[@AediWang]

Is it nonsense to you or nonsense to your customer finding an alternative?

[@mwaffi]

@@AediWang AWS is a terrible example of an understandable pricing model. They have a calculator web app you will need to use to have any idea of what your expenses are actually going to be assuming you're doing anything beyond just running an EC2 instance.

[@soman0078]

One more data point. That's all, every journey is unique.

[@ezrarasethe5827]

I needed this video 😂

[@ShoaibMahmudOfficial]

Never reinvent the wheel, if you do ... watch out. Better to save this experiment for your next startup.

[@IsaMutlib]

These double act videos are priceless.

[@anboffbrand]

So the general consensus is don't open a business anywhere but Delaware?

[@srzurka]

If you're going to start a business that intends to seek VC funding you should incorporate as a Delaware C-corp. That's what every VC will want and expect. Of course, if you want to open a pub in Cleveland, go ahead and be an Ohio LLC. That's not a VC-fundable business but you can still do well.

[@anboffbrand]

@@srzurka thank you!

[@c2681788]

@@srzurka Thank you very much. I'm not American and was very curious about that, and this is the best answer in the comments.

[@blacksablier4891]

Who else want that drink?

[@yanislatamene2396]

two veterans spitting facts 🔥

[@ezrarasethe5827]

Let me subscribe again 👌🏾

[@AddressHub]

Well about the Delaware incorporation part, with what’s happening with Tesla and Elon’s comp package, it is clear that this is something that founders should definitely innovate in

[@chriswilfrid]

Both are the Kazekage & Raikage of YC! Paul G is the 1st Hokage, Sam Altman the 2nd and Garry Tan the 3rd Kage.

[@AbhishekPatel-si7uq]

😂

[@kelvintran7369]

Thoughts on Elon telling us to make a Texas C-corp instead? Or Nevada or Wyoming?

[@aar0n709]

Most corporations are incorporated in Delaware for a reason. Elon got sued recently and doesn’t want to pay. That’s his problem not yours.

[@same.7939]

Completely disagree on not innovating on pricing models, like with the AWS example. I don’t see why you shouldn’t innovate on pricing better than the incumbent if it suits your users better.

[@andrewizbatista]

Yes

[@DileepaRanawake]

Agree.

[@winspyre]

These guys invented optimal distinctiveness. 😂

[@miguelacevedo8649]

Startup advice telling you to not take big risks 🤔. Startups are literally about limited big swings. Advice like this is why there’s like 10 deploy your own custom GPT startups in YC & 10 “no code” gpt agent builder startups

[@RunningtoCatchMyBreath]

I don’t think that’s what they’re saying

[@petedoyle]

9:12 *cough* TarSnap 😅

[@phasematerialsresearch9319]

Hilarious and so true.

[@AnthonySistilli]

Dalton & Michael are like my self adopted startup fathers

[@chapterme]

Chapters (Powered by ChapterMe) - 00:00 - Coming Up: Avoid Innovating On The Wrong Things 00:13 - Intro: Innovation Economy 01:41 - Prioritize Customer Needs 02:53 - Most Common Anti-Patterns 03:02 - Avoid Unnecessary Innovation 03:28 - Mistakes Smart People Make: Corporate Law 04:11 - Stick to Best Practices 04:45 - Proving It Wrong 06:53 - Startups Choose Fun Programming Languages Because They're Fun 08:30 - Business Model and Pricing 09:52 - Beware of Branding Bias. Don't Blindly Copy. In Tech World At Least 80% the same 11:26 - Putting Customer First and Getting One Successful Startup 11:43 - Outro

[@natarajanshanker5103]

Hahaha I like how you sneaked "Hire people all around the world" in there. Naaah, that's not one of those things. To the contrary, "Murica!!" jingoism s a classic example of mixed up goals. Hire where you get the best talent for your money. That's not innovation, it's straightforward common sense.

[@euanzhangmd]

New idea for a drink… 🤔

[@Alex-xf8pl]

Bring Paul Graham back!

[@rockingbadshah1848]

🎉🎉❤

[@gorangagrawal]

I need $7 trillion to buy GPUs, launch it on Mars with a Rocket, setup a cluster to serve my 10k users who will make cat videos and chat with AI Girlfriends 😂

[@BenDoesCoolStuff]

Delaware C-Corps are not good. Look at Elon Musk. Weird y’all don’t like Wyoming LLC’s?

[@umuti5ik]

This is good advice, but laughing and joking about how stupid some people’s ideas are is not the right way to deliver it.

[@hadithitv7517]

Truth hurts 😂😂😂😂

[@aaravkhanduja179]

“on wrong things”

[@vaibhavgeek]

I am offended by this video.

[@ycombinator]

I am offended by this comment.

[@rylaczero3740]

This is nothing to be offended about, there is humility to be learnt. Things are more difficult than we think they are. And sadly creating additional risks in name of innovation is what every innovator is prone to.

[@vaibhavgeek]

@@ycombinator A lot of your advice contradicts itself, although I agree one should not fight battles in every area. Depends on the tradeoffs.

[@marionogueiraramos9488]

bro, do you even code?

[@amirnathoo4600]

Maybe it’s the tone of their conversation. But what they say is the truth. And unfortunately it’s not just the founders going after the wrong innovations. It’s encouraged and promoted by so called investors or even other accelerators. The absolute best startup you can launch is one that simply look at how other companies solve your problem and you solve it just a bit better. Maybe it’s only one thing better than your competitors. Being transformative rather innovative is a much safer route towards success.

[@tebe652_]

What's going on here? "(Laugh) Look how stupid these people were".

[@ahsanmohammed1]

Haha. Miracles. Religious. Buzz words of a different kind. Haha.

[@pencilcheck]

c corps sucks

[@BizLytInteractive]

[@benditovicentecosta1710]

You guys described me in this video!!! 🫡

[@Omnicronnn]

🧃Innovation Juice™🧃 or NGMI

[@yanislatamene2396]

two veterans spitting facts 🔥