WhoBuilt

How To Change The World? Get The Small Things Right

Feb 2, 2022· 18 min· 139K views·Watch on YouTube

Speakers

Y Combinator partners Michael Seibel and Dalton Caldwell discuss why founders need to understand customers, incentives, and the history of a problem before building a solution.

Build for customers who want the product

Seibel and Caldwell describe a common mistake: building for how founders think the world should work instead of for a customer who wants to buy. Seibel says persuasion rarely creates demand when someone does not want the product. He uses car buying and home sales to show why an annoying process may persist for reasons founders have not yet understood.

Understand the people in the system

Caldwell says hiring startups often assume software can eliminate recruiters, even though engineers may be better at assessing other engineers. Seibel and Caldwell point out that engineers have other work to do, and hiring managers may praise a product without using it. They argue that changing behavior requires understanding each participant's incentives and designing around them.

Get the small details right

Caldwell says major changes can happen when founders understand the subtle pressures shaping behavior. He uses ride sharing as an example: getting into a stranger's car once seemed bizarre, and early services used hired cars to make the idea more familiar. Founders need to account for the people and steps that make adoption possible.

Research what came before

Caldwell says founders often skip basic research before choosing an idea. Seibel recommends looking up prior attempts, noting that companies in the dot-com era tried many ideas that appear new today. He points to Instacart's awareness of Webvan and says platforms change faster than persistent human problems such as grocery delivery or finding a job.

Use expert advice with judgment

Seibel says founders remain responsible for understanding their company's risks, even when investors or advisors support the idea. Experts can bring biases from personal experience, so founders should compare a range of views and draw useful information from them. He describes Brex founders speaking with people who had tried challenger banks, learning from their experience while making their own decision.

Takeaways

  • Confirm that customers want the product before building around how you think the world should work.
  • Map the incentives and constraints of everyone involved in the process you want to change.
  • Study why an existing system persists before assuming software can remove it.
  • Research earlier attempts to solve the problem, even when the technology or platform has changed.
  • Compare expert advice, account for each person's experience, and make your own assessment.

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