The 5 Failures of YCombinator’s Sam Altman and How He Overcame Them
Samuel H. “Sam” Altman is an American entrepreneur, investor, programmer, and blogger. He is the chairman of Y Combinator and co-chairman of OpenAI
SamAltman recently decided to step down as president of the Y Combinator to focuson an artificial intelligence project which he co-foundedwith Elon Musk and Peter Thiel. It marks five incredible years for Altman and aprogram that is responsible for successful startups including Stripe, Twitchand Airbnb.
Inthis sense, Y Combinator is now one of the most successful incubators inSilicon Valley and the benchmark for talented and ambitious startups in everyindustry. However, things were not always so fruitful for Sam Altman and thisoften-polarizing figure has encountered several failures along the way.
Let’stake a look at those failures and how the entrepreneur managed to overcome them:
1. Sam Altman WasInitially a Stanford Dropout
It’strue, Sam Altman initially dropped out of Stanford University to focus on hisfirst startup. Now, that’s not to say dropping out of college is a bad thing inevery instance but it certainly wasn’t ideal for Sam. You see, with an 85% graduation rate, this placedAltman in the minority and quite an uncomfortable position when this startupfailed just a short time later.
Buthow did he overcome this challenging period?
Well,Sam went straight back to Stanford and eventually graduated from theprestigious university. Given how difficult it can be to transition from workback to unpaid-study, some might say this was one of his greatest achievements.As if that’s not enough, Sam even went back to teach at Stanford to bring theprocess full-circle.
Takeaway – It’s nevertoo late to learn more, something further highlighted by the next “failure”.
2. Loopt Failed to AttractEnough Users to Survive
Looptwas the startup in question and this was essentially a social networking appwhich enabled users to share their location with friends. As part of thisservice, users could also integrate Loopt with other social platforms likeTwitter and Facebook, while every phone carrier in the U.S had partnered withthe startup.
Unfortunately,Loopt never quite got the attention it needed to survive and after seven laborintensive years, the service was shut down. In other words, Loopt did not haveenough users and was spending more money that could be afforded just to keepthe project alive.
However,Altman is always quite to point out how he learnt his trade working at Loopt.What’s more, even thought the project failed, he received an immense payout($45 million) when the Green Dot Corporation decided to buy them out.
Takeaway – Everystartup can learn from the process and these lessons are invaluable forestablishing a reliable foundation on which the company can grow. Besides, younever know what might happen and Sam’s payout was the money which enabled himto start investing in other startups.
3. Contrarian Views and ControversialBlog Posts
SamAltman came under fire not too long ago for positioning himself as acontrarian. Speaking about censorship in San Francisco, Sam cited GalileoGalilei and condemned the popular opinion in the surrounding area. According toAltman, things were so bad that the Bay Area of San Francisco that it made arepressive China look good. Later on, Sam would also make some highlycontroversial tweets in opposition to Donald Trump, in spite of the fact thathis colleague, Peter Thiel, was a huge supporter.
Asa result, a PR disaster ensued and Altman was suddenly consumed by questionsand opinion based on what he had to say. On the other hand, he also seems tocome away from that period unscathed and if anything, this episode has onlyheightened his position as an influencer in the wold of business.
Takeaway – PR isincredibly important and quite a fragile process that can work for or against.
4. Mistakes During the EarlyDays at Y Combinator
“One thing I’vereally got good at is saying no” – Sam Altman
Asyou know, Altman was the president of Y Combinator for no less than five years.In the beginning, he admits that his productivity was severely impacted by ”distractinginfluences”. More specifically, Sam said that he would often take on work thatwas either too much or simply not a good use of his time.
Overtime, Altman made a conscious effort to say “no” more often and identifyprecisely where he needed to focus his time. As a rule, this essentially meantthat he needed to say “yes” to whatever helped him grow Y Combinator and “no”to anything that did not contribute to further success. For instance, whenchoosing the startups for Y Combinator, Altman insisted that only thecreme-de-la-crème should make it.
Takeaway – Learn whento say no in order to be more productive.
5. Did Altman Step Down atY Combinator Due to Failure?
Somesources suggest thatAltman may have failed at Y Combinator and stepped down involuntarily as aresult of great changes within the business. One of these changes was topotentially move the HQ to San Francisco, while another will see the size ofeach investment increase to $150,000.
Andwhat does this say about Altman?
Well,not a lot. Besides, there is no real evidence to suggest Altman’s time at YCombinator was anything but successful. On the other hand, if this was in factan involuntary move or failure of any kind, Altman has further demonstrated hisprogressive nature by focusing on a project with one of the greatestentrepreneurs in history – Elon Musk.
Takeaway – Y Combinatorhas not failed in recent years and this move has certainly not damaged Altmans’reputation.
Underthe watchful eye of Sam Altman, Y Combinator has progressed in recent years andwith so much importance being placed on artificial intelligence, his venturewith OpenAI is certainly an exciting one.
WhileAltman is clearly a controversial figure at times, it’s clear that he knows howto steer a ship and when it comes to failure, it would also seem that thisstartup expert always seems to end up in calm seas.