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Jessica Livingston is a co-founder of Y Combinator, the first and most successful startup accelerator. Y Combinator has funded over 5,000 companies, 200 of which are now unicorns, including Airbnb, Dropbox, DoorDash, Stripe, Coinbase, and Reddit. Jessica played a crucial role in YC’s early success, when she was nicknamed the “social radar” because of her uncanny ability to quickly evaluate people—an essential skill when investing in early-stage startups. She’s also the host of the popular podcast The Social Radars, where she interviews billion-dollar-startup founders, and the author of the acclaimed book Founders at Work, which captures the origin stories of some of today’s most interesting companies. In our conversation, we discuss:

• How Jessica gained the affectionate title of the “social radar”

• Why defensive founders are a red flag

• How to develop your social radar

• What she looks for in founders during YC interviews

• How YC’s early inexperience in angel investing led to the batch model

• Her favorite stories from interviews with Airbnb, Rippling, and more

• Lessons learned from hosting her own podcast

• Much more

Listen now on Apple, Spotify, and YouTube.

Find the transcript at: https://www.lennysnewsletter.com/p/the-social-radar-jessica-livingston

Some takeaways:

1. When evaluating early-stage investments, you need to assess the founders and their social dynamics, not just the idea. Jessica’s ability to read people in the early days of YC was a crucial element in the accelerator’s success. One reason founders and social dynamics matter is because early-stage ideas are bound to change many times, but the people will remain the same.

2. During short YC interviews, Jessica focused on assessing the founders while her technical co-founders evaluated the product. As the “social radar,” she looks for:

   1. How co-founders interact: Pay close attention to interpersonal dynamics during interviews. Green flags include signs of mutual respect and collaboration. Red flags include one founder dominating conversations or preventing their co-founder from speaking.

   2. Domain expertise: Look for founders who are solving a problem they deeply understand and are passionate about.

   3. Earnestness and authenticity: Earnestness shows up in practice through humility, honesty, and transparency—admitting when you don’t know something, and not trying to reframe or avoid tough questions.

   4. Attitude toward feedback: Founders who are defensive or closed off during discussions may indicate challenges with receiving feedback or collaboration. Look for openness and adaptability in how founders respond to questions and challenges.

   5. Commitment and passion: Founders who convey genuine passion and energy for their ideas can often sway investors, even if the initial concept is met with skepticism. Assess if founders are genuinely passionate about their idea and willing to commit fully (e.g. quitting their job, relocating). Having that “desperation” of needing the startup to succeed because you don’t have a plan B is important for driving commitment.

   6. Relentless resourcefulness: The ability to find creative solutions and make things happen even with limited resources or knowledge. This determination and scrappiness is crucial.

3. Defensiveness is a big red flag in founders. Startups are usually doing something new, which often leads to lots of questions from other people, like “Why is your product better?” Good founders respond to these questions with open-mindedness and they educate people. Defensive founders will not educate people and their attempts will backfire.

4. YC’s lack of experience in investing actually led them to discover their signature “batch” model. None of the founders had prior experience as angel investors, so they decided to invest in a whole group of startups at once during the summer, with the goal of learning how to invest. The lesson here is to not be afraid of your own inexperience. Embrace it as an opportunity to try new things and discover better ways of doing things. Be willing to experiment, learn, and iterate based on what works. You can make important discoveries by approaching things with fresh eyes.

5. Watch out for signals that a company has a “hacker in a cage.” This is when a business founder has clearly convinced someone technical to join the team, only to give them very little equity and very little say in the direction of the product. Technical team members need to have a voice in companies involving tech.

Where to find Jessica Livingston:

• X: https://x.com/jesslivingston

• LinkedIn: https://www.linkedin.com/in/jessicalivingston1/

• Podcast: https://www.thesocialradars.com/

In this episode, we cover:

(00:00) Jessica’s background

(02:42) Thoughts on being under-recognized 

(07:52) Jessica’s superpower: the social radar

(15:11) Evaluating founders: key traits and red flags

(21:00) The Airbnb story: a lesson in hustle and determination

(25:57) A YC success story

(28:26) The importance of earnestness

(32:45) Confidence vs. defensiveness

(34:43) Commitment and co-founder disputes

(37:46) Relentless resourcefulness 

(40:00) Jessica’s social radar: origins and insights

(43:24) Honing her social radar skills

(45:44) Conviction and scams: a Y Combinator story

(46:50) The interview process: challenges and insights

(48:20) Operationalizing founder evaluation

(49:38) Advice for building social radar skills

(52:08) The “Reading the Mind in the Eyes” quiz

(55:19) Jessica’s podcast: The Social Radars

(01:00:34) Lessons from podcasting and interviewing

(01:09:58) Lightning round

Referenced:

• Paul Graham’s post about Jessica: https://paulgraham.com/jessica.html

• Paul Graham on X: https://x.com/paulg

• Robert Tappan Morris: https://en.wikipedia.org/wiki/Robert_Tappan_Morris

• Trevor Blackwell on X: https://x.com/tlbtlbtlb

• Y Combinator: https://www.ycombinator.com/

• “The Founders” examines the rise and legend of PayPal: https://www.economist.com/culture/2022/02/19/the-founders-examines-the-rise-and-legend-of-paypal

• Patrick Collison on X: https://x.com/patrickc

• John Collison on X: https://x.com/collision

• Brian Chesky on LinkedIn: https://www.linkedin.com/in/brianchesky/

• Nate Blecharczyk on LinkedIn: https://www.linkedin.com/in/blecharczyk/

• Joe Gebbia on LinkedIn: https://www.linkedin.com/in/jgebbia/

• Airbnb’s CEO says a $40 cereal box changed the course of the multibillion-dollar company: https://fortune.com/2023/04/19/airbnb-ceo-cereal-box-investors-changed-everything-billion-dollar-company/

• Parker Conrad on LinkedIn: https://www.linkedin.com/in/parkerconrad/

• Zenefits: https://connect.trinet.com/hr-platform

• Goat: https://www.goat.com/

• Eddy Lu on LinkedIn: https://www.linkedin.com/in/eddylu/

• Drew Houston on LinkedIn: https://www.linkedin.com/in/drewhouston/

• Arash Ferdowsi on LinkedIn: https://www.linkedin.com/in/arashferdowsi/

• Lessons from 1,000+ YC startups: Resilience, tar pit ideas, pivoting, more | Dalton Caldwell (Y Combinator, Managing Director): https://www.lennysnewsletter.com/p/lessons-from-1000-yc-startups

•Bitcoin launderer pleads guilty, admits to massive Bitfinex hack: https://www.cnbc.com/2023/08/03/new-york-man-admits-being-original-bitfinex-hacker-during-guilty-plea-in-dc-to-bitcoin-money-laundering.html

• Paul Graham’s tweet with the facial recognition test: https://x.com/paulg/status/1782875262855663691

• SmartLess podcast: https://www.smartless.com

• Jason Bateman on X: https://x.com/batemanjason

• Will Arnett on X: https://x.com/arnettwill

• Sean Hayes on X: https://x.com/seanhayes

• The Social Radars with Tony Xu, Co-Founder & CEO of DoorDash: https://www.ycombinator.com/library/Ja-tony-xu-co-founder-ceo-of-doordash

• The Social Radars with Brian Chesky: https://www.ycombinator.com/library/JW-brian-chesky-co-founder-ceo-of-airbnb

• The Social Radars with Patrick and John Collison: https://www.ycombinator.com/library/Kx-patrick-john-collison-co-founders-of-stripe

• The Social Radars with Brian Armstrong: https://www.ycombinator.com/library/K3-brian-armstrong-co-founder-and-ceo-of-coinbase

• The Social Radars with Emmett Shear: https://www.ycombinator.com/library/KM-emmett-shear-co-founder-of-twitch

• The Social Radars with Paul Graham: https://www.ycombinator.com/library/JV-paul-graham-co-founder-of-y-combinator-and-viaweb

• The Social Radars with Adora Cheung: https://www.ycombinator.com/library/L0-adora-cheung-co-founder-of-homejoy-instalab

• Founders at Work: Stories of Startups’ Early Days: https://www.amazon.com/Founders-Work-Stories-Startups-Early/dp/1430210788

• Startup School: https://www.startupschool.org/

• The Social Radars with Parker Conrad: https://www.ycombinator.com/library/Ky-parker-conrad-founder-of-zenefits-rippling

• Rippling: https://www.rippling.com/

• Carry on, Jeeves: https://www.amazon.com/Carry-Jeeves-Dover-Thrift-Editions/dp/0486848957

• Very Good, Jeeves: https://www.amazon.com/Very-Good-Jeeves-Wooster-Book-ebook/dp/B0051GST06

• Right Ho, Jeeves: https://www.amazon.com/Right-Ho-Jeeves-P-Wodehouse-ebook/dp/B083FFDNHN/

• Life: https://www.amazon.com/Life-Keith-Richards-ebook/dp/B003UBTX72/

• My Name Is Barbra: https://www.amazon.com/My-Name-Barbra-Streisand/dp/0525429522

• Clarkson’s Farm on Prime: https://www.amazon.com/Clarksons-Farm-Season-1/dp/B095RHJ52R

• Schitt’s Creek on Hulu: https://www.hulu.com/series/schitts-creek-a2e7a946-9652-48a8-884b-3ea7ea4de273

• Yellowstone on Peacock: https://www.peacocktv.com/stream-tv/yellowstone

• Sam Altman on X: https://x.com/sama

• Justin Kan on LinkedIn: https://www.linkedin.com/in/justinkan/

• Alexis Ohanian on X: https://x.com/alexisohanian

• Steve Huffman on LinkedIn: https://www.linkedin.com/in/shuffman56/

• Breaking News: Condé Nast/Wired Acquires Reddit: https://techcrunch.com/2006/10/31/breaking-news-conde-nastwired-acquires-reddit/

• Charles River Venture: https://www.crv.com/

Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

Lenny may be an investor in the companies discussed.