Sam Altman, the head of the super successful and prominent Silicon Valley startup accelerator Y Combinator — where Airbnb, Dropbox, and others got their start — has an unconventional take on whether the tech industry is experiencing a bubble.
"What about this mega bubble that we're definitely in and that won't last forever?" Altman said.
According to Altman, speaking Thursday at Airbnb's Open Air 2015 conference, so much risk-free, low-interest capital is being lent by the US government that vast overinflation is present across the board, all over the country, and in every market — so we should stop worrying about the relatively small tech sector.
"It boggles my mind that we have all indulged in this collective delusion," Altman said.
Altman, with the prompting of Mike Curtis, Airbnb's vice president of engineering, in an onstage interview was on fire. He had thoughts on everything from how the world is going to end to why people would rather live next to a coal plant than a nuclear power plant.
Here are some of his thoughts:
On the growing artificial-intelligence market: "AI will probably most likely lead to the end of the world, but in the meantime, there'll be great companies."
On what Altman would do if he were President Obama: "If I were Barack Obama, I would commit maybe $100 billion to R&D of AI safety initiatives." Altman shared that he recently invested in a company doing "AI safety research" to investigate the potential risks of artificial intelligence.
On why Y Combinator is successful: "This secret to our success is that we invest with this kind of infinite time horizon." As an example given by Altman, Y Combinator has "four or five" nuclear-power investments at the moment. And since the program invests only small seed rounds, it can afford to hold its position over the two or three decades it will take for the clean-power market to mature, versus a traditional venture-capital firm that looks for a quick return.
On why people would rather live next to a coal plant than a nuclear power plant: "The fundamental problem is, like, people are more sensitive to theatrical extreme risk than they are to boring, slow, plodding risk." Living next to a coal plant, with the attendant high risk of lung disease and other maladies, is more dangerous than living next to a nuclear reactor, with a very small chance of a meltdown, Altman said. But "it doesn't feel as dramatic as dying in a nuclear meltdown," he said.
Why startups should ignore the haters: "People always make the mistake of calling an idea small or stupid, because they don't understand how it's going to evolve." In fact, Altman said, "people used to make fun of us for funding Airbnb all the time."
On why finding founders to invest in can be hard: "Intelligence is usually easy to tell in a 10-minute conversation. Determination is harder."
On the biggest red flags in a Y Combinator applicant: "If the cofounders are fighting in the room, as they're more likely than you'd think to do, that's a bad sign."
Thursday was the 10th anniversary of Y Combinator's investment in Altman's first company, Loopt. Some of his ideas may sound a little bit out there, but Y Combinator has a history of success. Maybe hindsight will be on his side here.
