Stanford dropout returns to teach open-source startup class

Sam Altman, president of Y Combinator, on how to start a startup

Nine years ago, Sam Altman was a Stanford University computer science student. And then he dropped out to start a startup.

This year, he's returned to campus -- not to finish his degree, but to teach a class called "How to Start a Startup."

Altman, whose mobile location startup Loopt eventually sold for a cool $43.4 million, is now 29 years old and the president of Y Combinator, an accelerator that provides seed funding and guidance to fledgling startups. He launched the class to make the wealth of knowledge Y Combinator gives to a select group of startups more publicly available -- not only by giving it to a class of 300 Stanford students but to everyone.

The class is 100 percent open source: All lectures, presenters' slides, readings and assignments are posted online at Video recordings of the lectures are posted the same day they take place on the class' YouTube channel, along with annotated transcripts of the talks. Volunteers are helping to add subtitles to videos in whatever language they choose but that doesn't happen until two or three days after class. Anyone can subscribe to a mailing list to get regular emails recapping class, links to discussion threads and a form for submitting questions for the upcoming lectures.

"I felt like we had all this information that was locked up inside of YC that would be helpful to tens or hundreds of thousands of people," Altman said. "You can't have all of them go through the program, so we thought just by putting this information online, we'd be able to reach a lot of people."

It goes without saying that this is not your typical college course. Altman is slated to lead three out of 20 classes, and the rest have been handed over to Silicon Valley movers and shakers like Facebook co-founder Dustin Moskovitz, PayPal and Palantir founder Peter Thiel, Netscape co-founder Marc Andreessen and Yahoo's Marissa Mayer -- to name a few. They will give talks on business strategy, growth, fundraising, company culture and management.

At the Sept. 30 class, Y Combinator founder Paul Graham took the podium inside a packed basement auditorium inside Stanford's Jen-Hsun Huang Engineering Center, with many students finding seats on the floor in the back.

When asked how many students are enrolled in the course, Altman casually responded, "Whatever the cap is, which I think is 300."

Graham spent about 30 minutes of the 50-minute class leading the crowd through four counterintuitive pieces of advice for those who want to start a startup appropriate, he said, for a world that itself is very counterintuitive.

"Startups are very counterintuitive, and I'm not exactly sure why," he said. "It could be simply because knowledge about them has not permeated our culture yet. But whatever the reason, this is an area where you cannot trust your intuition all the time."

The most counterintuitive piece of advice in this lecture might have been: Do not start a startup in college.

"Starting a successful startup is similar to having kids, and it's like a button you press and it changes your life irrevocably," Graham said.

"Startups take over your entire life," he continued, meaning that startup-hungry college students must make the choice between being a real student and not starting a startup, or starting a real startup and not being a student.

He urged the crowd to enjoy their 20s, an optimal time to travel, plunge into projects on a whim and embrace serendipity.

"Mark Zuckerberg will never get to bum around a foreign country," Graham said. "He can do things you can't do, like charter jets to fly him to foreign countries ... but success has taken a lot of the serendipity out of his life. Facebook is running him as much as he's running Facebook."

This dovetailed with Graham's other main message, which is to work on things that genuinely interest you. And the best way to find out what interests you? Take advantage of your time as a student.

"Strangely enough, the optimal thing to do in college if you want to be a successful startup founder is not some sort of new vocational version of college focused on entrepreneurship. It's the classic version of college as education for its own sake," he said. "If you want to start your own startup, what you should do in college is learn powerful things."

"Everyone thinks that YC is going to colleges and playing this pied-piper tune and trying to get students to start startups, so it's nice when we can go on the record and say that actually, we discourage that," Altman told the Weekly. "It's a little hypocritical -- I dropped out of college to start a company, but I felt compelled by a particular idea. And I certainly would have been a better founder had I waited until I was 22 or 23."

After Graham finished his somewhat unconventional talk -- which was peppered with plenty of tech jokes and some profanity, eliciting regular laughter from the audience -- he took questions. One student asked if Graham saw any value in business school for people interested in entrepreneurship (he doesn't). Another asked what advice he has for female founders as they pursue funding.

"It probably is true that women have a harder time raising money," he said.

The way to get around that problem is to simply make your startup do well, he said. A year or so ago, he tweeted the "stupendous" growth graph for a female-founded startup that was having trouble raising money.

"So I tweeted it, knowing all these VCs would start asking me, 'Who is that?' Growth graphs have no gender so if they see the growth graph first, let them fall in love with that."

At the first class of the quarter, Altman discussed the four areas people need to excel at to start a successful startup: ideas, products, teams and execution. His message, too, was that startups must be developed with passion, rather than dreams of Google-like glory or wealth.

"You should only start a startup if you feel compelled by a particular problem and ... starting the company is the best way to solve it," he said. "This specific passion should come first and the startup second.

"I myself used to believe that ideas didn't matter that much, but I'm very sure that I was wrong now," he said.

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14 people like this
Posted by Regrets
a resident of Stanford
on Oct 3, 2014 at 12:27 pm

Even if your start-up makes you a billionaire, someday you will regret not finishing your education and not doing all the things you could have done at that time but can't do now.

At least consider returning to school once your company can run with less attention from you.

Look at it this way: you may become a billionaire (or not), but you will always be a dropout. You will also be a poor example for
young people who did not just happen to be in the right place at the right time. Worse, you will be a bad example for your own children someday.

2 people like this
Posted by musical
a resident of Palo Verde
on Oct 3, 2014 at 1:57 pm

Since when does getting a degree signify you've finished your education?

And none of us did "all the things you could have done at that time."

The bigger regrets are not taking opportunities when they present themselves.

Must be terrible to get locked in to the expectations of others.

7 people like this
Posted by Glad
a resident of Green Acres
on Oct 5, 2014 at 9:20 am

The relationships you forge in college are like at no other time in life. The downside of becoming a CEO billionaire is not knowing who you can trust. People won't speak the truth to you. And the kind of people who do aren't usually welcomed or easy to spot. College gives at least some practice in honest give and take with peers.

And for the people whose companies don't sell for millions, the degree is easier when you are young.

Like this comment
Posted by neighbor
a resident of Another Palo Alto neighborhood
on Oct 5, 2014 at 9:36 am

Anyone familiar with his app? I haven't heard of it or used it and wonder why it sold for so many millions. Thanks if you can educate me on this.

7 people like this
Posted by Wondering?
a resident of Another Palo Alto neighborhood
on Oct 5, 2014 at 11:27 am

Why is this news of which Palo Altans need be aware?

3 people like this
Posted by wow
a resident of Barron Park
on Oct 6, 2014 at 1:21 pm


Seriously? Sounds to me like sour grapes. Any road travelled has its opportunity costs. There are a lot of drop-outs who make good, do good and lead regretful-free lives -- even without a degree!

I wouldn't trade my best friend from college nor my degree for a billion dollars HOWEVER, if I had gone the route of dropping out and made a billion, I wouldn't trade it for what might have been and a couple of missed panty raids and drunken footbal games.

The secret of success in my view is to take the path that makes the most sense at the time based on the decision you make incorporaing what you know and the input you get, and cherishing all the positives that come with it. Otherwise ANY decision you make is just a regret waiting to ooze out because of EVERYTHING you missed out on by not doing something else. Pretty unhappy life from the get-go with this as your philisophical framework...

2 people like this
Posted by Domad
a resident of Barron Park
on Oct 6, 2014 at 9:35 pm

Bubble goes POP!

Sorry, but further commenting on this topic has been closed.

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