The Next Steps for Twitch.TV | Twitch.TV Founder/Y Combinator Partner Justin Kan

Well, I mean, Emmett was a, you know, as soon as we kind of pivoted the entire Justin.tv company to Twitch, and with that we made Emmett the CEO. He was our CTO before, my co-founder for all the projects, you know, since the calendar. And he was like, really believed in gaming, right? He was like, this is what I wanna watch. And so he actually, you know, it was his product vision. He became the CEO of the company and we made Kent Kevin continued to be the CEO, but mostly focused on Twitch. And at that point, they just grew and grew the company. And it was very— they were really focused on just figuring out how to continue growing. And we reached— I remember when we started off, we were like, if we could only be, I think, 10 million uniques a month, we'd be the biggest gaming video site, bigger than GameTrailers.com.

Mm-hmm.

And that'd be something. But like, we grew far beyond that in the first couple years. It eventually reached 45 million uniques a month. And at that point, people started coming around and saying, hey, this is actually a real thing. A lot of the time when we would talk about Twitch, people who weren't in the gaming community, they would say, no one's ever gonna watch other people play video games. It's like made up.

Right.

Especially around Silicon Valley, it was not a very popular idea. But eventually you get big enough and people have to recognize that it's actually a thing that some people are doing, even if you aren't. So we kind of got to that point, and there was never really like a— no one was ever like, oh, we should sell the company. It was more like, it seemed like we got some fair— there was a fair price for it with a great partner. I was really up to Emmett at the end of the day, and now he's still running the company today, and I think loves it.

Right. So after Twitch, you move on to doing— were you at Y Combinator during Twitch, or was that after Twitch?

Yeah, Emmett and I have been part-time partners at Y Combinator since 2011, and then I've been a full-time partner at YC for about a year. It's kind of come full circle, and now I'm Advising companies and investing in them and helping them hopefully grow to be the next Twitch.

You mentioned in other interviews the 3 buckets that you tend to throw people, or not even, you've been thrown into one of these buckets as well, where it's like, okay, someone's a good entrepreneur, they have a good idea, someone has a bad idea but is a good entrepreneur, and someone just has a bad idea and they are a bad entrepreneur.

Ooh, the second one.

The one with the bad idea but the good entrepreneur. What values do you look for when you see someone in that particular bucket list where the idea is bad but you think that they can be a really great entrepreneur?

If you look at a lot of the top YC companies, they are pivots from— or the way that they were intended to be used are not kind of the way they ended up being used. So I think that like, you know, there's many, many examples of that. Machine Zone, which produces Game of War, a super popular iPhone app, that's a YC company, started off as like a widget for MySpace. Twitch obviously started off as like, well, if you go all the way back, we were making a calendar company, but then eventually made our own live show, and then that turned into Twitch.

Right.

You know, even Airbnb, which is the biggest YC company out there, It was really about renting an air mattress in your living room, but most of the transactions on Airbnb are people traveling normally and want to rent an apartment somewhere. It's kind of different from what the original concept was, and so it's really important to look at the founders and try to figure out who's going to stick with it long enough to build something great.

Mm-hmm.

And I really think that anyone can do it. Especially since things on the internet, the internet is a huge growth space. It's the only sector in the US economy that's growing, right?

Right.

Like tech is. And if you start something in 2005, the number of people who were spending money online was much smaller, and the amount they were spending was much smaller. And so you just started something that some people liked, it would naturally grow to 2015. And I think the same is true of mobile, building internet tech in other countries. Your market's expanding, so all you have to do is stick around and survive as a business. And I think that, so the most important thing is really finding founders who can actually, who will stick it out and will figure out what's working and what's not working and kind of continue improving their product until they get more and more customers. And to identify those people, we really look at, you know, like, do they have a passion for solving this problem? Are they, you know, do they have the skill sets needed to like actually build the thing that they're building? Have they worked together with their co-founders before? You know, are these people likely to like get along and continue working on their product?

Right.

You know, Emmett and I had known each other since we were, you know, kids, and we worked together pretty well. Kind of an example of people who would stick it out together. So those are kind of the things that— some of the things we look for.

You know, I actually wanted to get your perspective on something. And I run into this in the game industry all the time where someone comes up to me and they say, hey, I have this really great idea and I really want you to work on it with me. I want you to do either art or the design or something. I'm like, okay, yeah. Sounds great. So what are you doing? And they're like, well, I'm the ideas guy.

Mm-hmm.

And I'm like, okay, so what, are you gonna bring PR? You're gonna do marketing? You're gonna bring cash? You're gonna be a programmer? What are you gonna bring to the table? And they're like, no, no, no, you don't understand. I'm the ideas guy. And I don't know if you run into that a lot in Silicon Valley and tech as well, but right away whenever I see that, it's like, I check out. I'm like, this guy is not serious. He doesn't bring anything to the table. And what, what I tend to look for in people like that are that they are also executors. They also bring something that they can help build their idea with. I don't want to just sit there and build someone else's idea while they sit there and have great ideas all day long. You seem to make that transition at Yale. where you had this idea, but you realized you can't just sit there and say, okay, I have this great idea, Emmett, can you go program it for me? You actually had to go and take the next step and say, okay, I need to learn how to program, even if it's copy and pasting stuff off of Google. What advice would you have for people who are stuck in this sort of simple situation where it's like they just want to be the ideas guy, but they need to make— take the next step to being an executor of their ideas? They seem to— some people just seem really hung up on, I can't make that hump over to being an executor.

Yeah, well, you have to be able to— I mean, your likelihood of being able to convince some programmer to like build your dream idea is pretty low right now, right? Unless you have some secret stash of programmers. And so like, you know, you have to be able to bring some skills to the table. It doesn't have to be building the product. There's lots of things that go out into building a company outside of just programming, like figuring out how to market it, figuring out how to design it, what the user interactions are, figuring out how to get it funded. But you have to do something. And I don't know, I mean, the best way to start is just to learn by doing. Even programming, which seems hard, is something that you can start figuring out just by Googling online and teaching yourself. There's all these resources now like Codecademy and—

Udemy.

These boot camps where you can, like, you know, they'll teach you how to kind of the basics of programming in 10 weeks. And I think there's like a lot of opportunity to like learn some basic skills and what you need to get started. And it's actually a lot easier to do that, even though it seems more difficult, than it is to like go and kind of convince some people who have a lot more skills than you to like build your thing for you. Right.

So what pushed you while you were at Yale to finally do that instead of just saying, I have this idea, I have this idea, But actually, okay, I'm gonna actually—

I think it was just like I needed to, 'cause I didn't really know anyone who was gonna do it for me. And even working with Emmett, it was really, we wanted to move fast, right? And he could only do so much at a certain rate. And I was like, well, even if I do things at a much slower rate, I'm still like, our net productivity is up, right? So I might as well be working. Otherwise, I mean, what else? You can only, you can't spend all day thinking of ideas.

Right, right. Well, there's some people who wanna do that.

Yeah.

So you've moved on and you're now, you now have Exec going on.

No, so we, I created this other company a couple years ago called Exec, which is like an online to offline services company. Started doing house cleaning and basically, you know, you can book a cleaning online. Sold that company last year as well to a company called Handy, which is based in New York doing something very similar. Now I'm full-time at Y Combinator just investing in companies. And actually, I also started a music site recently called The Drop, which is kind of like Product Hunt or Reddit for electronic music.

I actually like drum and bass, so yeah, I've checked it out already.

Awesome.

That's actually a passion project of yours, right? That's not necessarily a situation where you're like, can I monetize this? This is more— it feels more like this is something that you're just really into, and you were able to build it up.

Yeah, exactly. I just really like electronic music. So my friend Ranadu and I started the site together. And he was a DJ. He works at Google, or worked at Google. And then we had been talking about doing stuff in music together. And he quit his job recently. We just kind of launched the site and are trying to figure out how to build something that people really like. Yeah. We're not monetizing it right now. Kind of building something that we use ourselves every day.

Yeah. You also wrote recently about selling, when to sell your company, and you mentioned selling your company when it's actually doing very well, when it's pretty hot, I guess, is where you were coming from. And I kind of wanted to get more of your opinion on that, but also, Can that ever be discouraging as well? Because it's like when you start an idea, you want to see it at its peak, and you don't necessarily want to let it go when it's doing well. You know, I mean, you probably do because you'll probably get more money for it, but like deep down it's like, that's your baby, I built that up, now you have to let it go.

Well, I mean, at the time it was, you know, I was on the board of Twitch, but I wasn't actively doing any operating roles. really wasn't my decision in terms of, well, I mean, it was part of my, you know, it wasn't, but I wasn't like, I didn't feel like it would be the end of the world. It was really up to the management team at the time of like, oh, this is a good choice for us. I mean, generally when you're selling your company though, the best way to, lots of people come and say, hey, like, what's, you know, how do I sell a company for $1 billion? And, you know, really you just have to have something that's valuable, right? Like the key to having all these options of like, Like whether to sell your company or like grow it, like you have to build something that people actually want. And a lot of times people wanna put the cart before the horse and think like, oh, how do I like sell a company? Well, it's like first you have to build a company. That's the most important part.

Right. So what if the Drop became something that was really, really valuable and someone came to you and they wanted to buy it? That seems like a very personal project to you. Don't you think you would have like a little bit of, hesitation doing that?

Maybe. Probably depends on who and how much. I like, you know, every man's got his price, right?

Yeah.

We didn't really start it to like max out, make the most money, you know, otherwise I probably would have started a different company, a company that's like, I think music's a very hard space to like make money in. We just started because we like really like the industry or the space and like working on music stuff. So. Right. I don't know. We'll have to see what happens. First, before that happens, first we'll have to create something that lots of people are using.

Right, right. Well, I enjoy it for sure.

Awesome.