It’s not crazy for Sam Altman’s phone bill to rack up 6,000 talking minutes in a month. He talks a lot, to a lot of people.
If you ask anyone who knows Altman, from former employees to investors to mentors to mentees to friends, they’ll mention his perpetual availability — the way he seems to reach out every day, multiple times per day, on the phone or email or text or instant messenger. Altman estimates he keeps in close touch with “low hundreds” of people on a daily basis.
“It’s remarkable when somebody is both extroverted and smart,” said Paul Graham, who just handed Altman the reins of Y Combinator, the nine-year-old startup development program that is terrifically effective at selling the startup dream, both to its young founders and the investors who flock to put money into their companies.
“Picture a smart person,” said Graham. “You don’t imagine somebody who is really good at talking to people, you picture someone really awkward.”
Y Combinator has turned out 630 companies from its biannual classes, including three that are valued in multiple billions of dollars: Dropbox, Airbnb and Stripe.
Graham, who turns 50 this year, had only one pick as his successor: Altman, who is about to turn 29. Graham will continue to be involved, but as a startup mentor rather than program leader and figurehead. Altman will be president of Y Combinator, a title that didn’t previously exist.
If there is a Y Combinator archetype, Altman is it: A young programmer dude who dropped out of Stanford to launch a mobile app startup called Loopt in the very first Y Combinator batch of companies. It didn’t amount to much, but did eventually get sold in a talent acquisition.
Over the past nine years, Graham has turned his role at Y Combinator into a Silicon Valley pulpit, with his carefully written essays cited like startup-bible verses by adherents, and his occasionally insensitive comments (most recently, about people with accents and women in tech) gleefully picked over by Twitter mobs.
“I’m a sophomore. And I’m coming.”
So, who is this Altman guy, with just one company to his name, who started blogging about startup lessons merely a year ago?
Altman’s resume may not be long, but his peers and mentors view him as a deal-making and strategic-thinking prodigy. He’s a guy who is preternaturally calm, confident and convincing in just about any sort of conversation. A guy who Graham was comparing to Bill Gates as early as 2006. A guy who gained brief notoriety as an Internet douchebag after presenting Loopt at Apple’s WWDC in 2008 ahead of the original App Store launch, wearing not one but two layered neon polo shirts with the collars popped.
Altman’s mother, a dermatologist with four children, likes to tell people that by the time he was about 10 years old, she felt that she would have been comfortable dropping Sam off, alone, in New York City.
Here’s the influential investor Peter Thiel’s endorsement, sent via email: “Silicon Valley is full of smart people, but Sam is in a league of his own. When he speaks I pay close attention, because his insights are usually spot on.”
Altman started Loopt, which was first called Radiate, in 2005, around the idea of location sharing. Basically: Seeing all your participating friends’ locations on a map, because they were sharing their GPS coordinates automatically from their phones.
He found out about Paul Graham and Y Combinator through another Stanford computer-science major in his dorm, Blake Ross, who had worked on Firefox as a teenager and would later join Facebook.
When asked about their impressions of Altman, the first story both Graham and his partner, Jessica Livingston, tell is about his impatience. In 2006, they had scheduled Altman for his in-person Y Combinator interview, for which he would fly to Boston (where the program was originally located) from the San Francisco Bay Area.
Altman was having trouble getting his potential co-founders to commit to coming with him, and he also tried to push the interview back so he could participate in a pitch event the day before.
As Livingston recalled it, “Paul wrote back, kind of trying to blow him off, saying, ‘You’re only a freshman. Just apply next year.'”
Altman replied, “I’m a sophomore. And I’m coming.”
It was an effective email, and an effective meeting. “From the first moment we met him we realized this kid is wise beyond his years,” said Livingston. Altman joined the inaugural Y Combinator class and became a close friend, attending Graham and Livingston’s wedding, becoming a sounding board for Graham’s essays and mentoring later Y Combinator classes.
Over time, Y Combinator became more than just an experimental summer startup bootcamp.
The organization has done more than just about anything — save perhaps for the movie “The Social Network” — to glamorize the role of the young startup founder. Now based in Silicon Valley, it spawns batches of 60 or more startups at a time, most of which quickly raise hundreds of thousands or millions of dollars in funding in the weeks and months after they debut to investors at the end-of-session Demo Day.
And to amplify its message, Y Combinator has built an international audience of readers who share links to writing about issues relevant to startups on an online aggregator called Hacker News. The lively community hasn’t been entirely kind to Altman’s recent startup blog posts, judging them inferior to Graham’s essays.
On Hacker News and among adherents, Y Combinator is now known as YC. The abbreviations are contagious. Online and in conversation, Graham is “PG,” and to some Altman is known as @sama.
“Weird, you’re in my office.”
But back to mid-2006. After Livingston and Graham, Loopt was a harder sell for just about everyone else. Not only was this before Foursquare and its check-ins became a tech phenomenon — this was at a time before the modern smartphone, and before app stores. Getting an app into the hands of users meant getting a carrier deal.
Altman decided to go after Sprint.
“I learned this great lesson of my life,” he said. “The way to get things done is to just be really fucking persistent. … I had this philosophy of going to every door and every window.”
Ultimately, the window was through Sprint’s subsidiary, Boost Mobile. Boost ran on the Nextel network, so it had access to GPS data; internally, it had already decided to pursue some sort of social mobile location app and was looking for a partner.
It was perfect. Except the partner had already been chosen, and it wasn’t Loopt. Nobody had ever heard of Loopt.
“I had one of the many heart-sinking moments in the history of Loopt,” Altman recalled. “Whoever Boost works with, Sprint will work with. And whoever Sprint works with, Verizon and AT&T will as well. So, they told us on the phone — this one thing they really wanted, the partner they were working with was not going to build. To this day, I don’t know who the partner was. So we stayed up all night, and we built that feature. It was status messages.
“I think I went to sleep at four, I slept till six, I got on a flight at seven to Orange County where Boost was. And I just got to that office and sat there, and the guy was like, ‘Weird, you’re in my office.’ I said, ‘Just meet me for 10 minutes, and let me know what you think.’ He said no a few times, but I showed it to him, and I could tell he was really impressed.”
The Boost Mobile business development guy was Lowell Winer. His version of the story: “I remember about 15 to 20 minutes into the meeting, we stepped outside of the room and were like, ‘Okay. Shit. We need to go tell our VP that at the 11th hour, we’re changing direction and we want to bet on a pre-launch startup with a 19-year-old CEO.'”
Said Winer, “I still vividly remember that first meeting with him. He’s still not a very large person physically, and he was smaller then. He was tiny. And he’s sitting in this chair pitching us, this tiny little kid. At the time I was probably 36, my VP was in his 40s, the privacy folks we had to talk to at Sprint were probably in their 50s. So these were people who had been at the table getting pitched and doing deals for years. And Sam, despite being small in stature and sitting like he’d never been in a meeting before, his command of the material and his confidence was so beyond his years — I still haven’t seen anything like that.”
Of course, Loopt wasn’t just the Sam Altman show. The company’s co-founders were talented software developer Nick Sivo, who was also Altman’s long-time boyfriend, and product head Alok Deshpande. Later, there were also a couple of more experienced senior executives brought on by venture capitalists who didn’t end up sticking around, as this was most definitely a founder-CEO show.
But Altman was right: Once Sprint signed with Loopt, so did other carriers. Even so, the company failed to take off. Carrier deals became less important in the mobile app era. But to this day, it’s not like any other location startup came out a real winner.
“A perennial sadness.”
After flailing around a bit looking for new ideas, Loopt was sold to the banking company Green Dot in 2012 for $43.4 million in cash, including retention for the team, which was put to work on a different project. It was a modest return, considering that investors including New Enterprise Associates and Sequoia Capital had put in $17 million.
That deal has gotten a bit of a bad rap in Silicon Valley, with some perceiving that Altman enriched himself by forcing investors to take the Green Dot acquisition offer under the threat that he would leave — which would have negated the prospect of a talent acquisition.
Altman doesn’t agree with that characterization. “I was really proud of that deal,” he said. “Given the market dynamics, and where we were, I went off and got a good deal for the investors. To this day, it hurts me that one of them does not feel that way. It’s a perennial sadness for me.”
He explained further, “I was not going to abandon my team. I had plenty of other job offers. If I was going to leave, I would have done that. I made sure everyone on the team did well, and I think people are really thankful for that.”
After Loopt, Altman helped Green Dot launch a mobile banking product, then split time between helping out at Y Combinator and some explorations into energy startups.
And Altman didn’t stop talking — not at all.
“Universities do fine under the 17th president.”
Former Loopt employee Sam Yam, who is now co-founder of the promising subscription crowdfunding site Patreon, remembers tooling around on startup ideas and getting regular calls from Altman that started with the joking opener, “How is your life as a failure today?” The jab was all in good motivational fun, Yam said.
“He’s perpetually available and an unfailingly helpful source of advice on anything at all,” said Stripe co-founder and CEO Patrick Collison. Stripe was Altman’s first-ever angel investment, and he remains closely involved in the company. “He’s happy to quickly answer questions via text message, take the call, or chat on IM.”
Collison, Yam, Livingston and others told Re/code that Altman is the guy you want on your side in a negotiation. “He tends to be fast and specific,” Collison said. “Some folks will say, ‘Well, between major competing theories …’ Sam will have a framework and recommend what he would do. Usually we end up agreeing with him, but even when we don’t, it’s useful to have something specific.”
Before Altman got too committed to a new project, Graham saw his opportunity for a successor and swooped in.
“The main thing I want for Y Combinator is for it to persist as long as it can,” Graham said.
Plus, being YC’s spokesperson and manager came with its downsides as the organization became more influential. “I was inadvertently influential,” said Graham, “and I was always blindsided when people would pay such specific attention to the wording of specific sentences I said.”
But the problem was, the idea of a hiring a CEO is something both Graham and Altman are diametrically opposed to. They think founders are best suited to run the companies they start.
“PG and I spent probably 20 hours discussing this,” Altman said. “We are not a product company. We’re more like a university. And universities do fine under the 17th president, because what we are is a nexus of smart people who help each other and are a common community. And that is a totally different thing than a singular product vision. But still — that was my biggest hesitation.”
Just to be sure, Altman and Graham agreed to create a Y Combinator board of nine overseers that will meet once a year to decide whether to hire or fire the president. It includes Livingston, Altman, and the founders of some of the most successful Y Combinator companies to date.
So, what exactly does Altman plan to do? After a few weeks on the job, he showed Re/code a draft of a multi-point plan he will announce this week, in advance of the ongoing program’s debut to investors at YC Demo Day on March 25.
Altman said he wants to focus on recruiting, to increase the diversity and quality of incoming founders and plant the seed for future applicants that may be years out.
That’s not purely reactive, he said, while pushing back on criticism of Y Combinator’s lack of diversity. According to Altman, Y Combinator funds a higher percentage of women founders than any other venture capital firm he knows. Founders in the current batch hail from 22 different countries.
Altman said he hopes to go on a college recruiting tour, and speak not just to computer science people but also students in other areas like biotech and mechanical engineering.
After all, his favorite thing ever is talking to people about startups.
Going forward, Altman also wants to offer more focused services to participating startups — for example, an enterprise sales boot camp, or a public relations training day. He wants to better organize Y Combinator’s relationship with frequent startup partners like Apple, Google and Facebook. And he wants to formalize the YC alumni organization, with events and mentorship.
“I don’t want to change the model we have,” Altman said. “My No. 1 task is to not mess this up.”
As for Graham, “I feel like I’m sort of unleashing Sam on the world,” he said.
“You know how when you hit a tennis ball, it bounces back up and then simultaneously you swing the racket? YC is just getting to this point,” he added. “If you think [my role] is an influential position now, just wait a couple years and see what Sam does.”
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