Paul Buchheit on Lessons Learned from Investing in 200+ Startups

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Paul Buchheit on Lessons Learned from Investing in 200+ Startups
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Jasper Kuria of Capital & Growth interviewed YC Partner Paul Buchheit about his experience as employee #23 at Google and his key investing insights.
Jasper : You came up with Google’s “Don’t be evil” motto in 2000.
Paul : Some of the things are debatable, but an example would be their entry into China.
People said, “Oh, that’s evil.” But there’s a difficult tradeoff because they eventually got out of that market and now Google simply isn’t available in China.
Jasper : You also created Gmail while at Google.
The idea was that email in the early 2000s hadn’t advanced in a long time.
Jasper : Google made what was then a controversial decision by targeting people with ads in email.
Paul : That came later.
One camp thought we should charge for it but I didn’t like the idea because you are not going to serve a billion people that way—most people have limited budgets.
Jasper : Sam Altman has said that the only criterion Y Combinator uses to evaluate applying companies is, “Can this be a $10 billion plus company?” like Airbnb and Dropbox.
While this model works great for a fund, there is an Early Exits movement that suggests individual entrepreneurs have a much higher likelihood of success when they raise less capital and target exits in the $20 million range.
The reason we have these big and influential companies is the founders believed in a long- term vision.
Paul : I think the biggest counter-intuitive lesson is that investing purely on the quality of the idea is inversely correlated with success.
The really great companies are largely indistinguishable from the terrible ones when judged simply on the idea.
Jasper : What do you think is the most important factor for startup success?
Certainly just having a good team with a made- up idea is not going to work.
Jasper : What are some things that turn you off when an entrepreneur pitches you?
Paul : The biggest one is made-up ideas

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