The 5 Failures of Y Combinator’s Sam Altman and How He Overcame Them — Pressfarm

Samuel H. “Sam” Altman is an American entrepreneur, investor, programmer, and blogger. He is the chairman of Y Combinator and co-chairman of OpenAI

Sam Altman recently decided to step down as president of the Y Combinator to focus on an artificial intelligence project which he co-founded with Elon Musk and Peter Thiel. It marks five incredible years for Altman and a program that is responsible for successful startups including Stripe, Twitch and Airbnb.

In this sense, Y Combinator is now one of the most successful incubators in Silicon Valley and the benchmark for talented and ambitious startups in every industry. However, things were not always so fruitful for Sam Altman and this often-polarizing figure has encountered several failures along the way.

Let’s take a look at those failures and how the entrepreneur managed to overcome them:

1. Sam Altman Was Initially a Stanford Dropout

It’s true, Sam Altman initially dropped out of Stanford University to focus on his first startup. Now, that’s not to say dropping out of college is a bad thing in every instance but it certainly wasn’t ideal for Sam. You see, with an 85% graduation rate, this placed Altman in the minority and quite an uncomfortable position when this startup failed just a short time later.

But how did he overcome this challenging period?

Well, Sam went straight back to Stanford and eventually graduated from the prestigious university. Given how difficult it can be to transition from work back 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 the process full-circle.

Takeaway — It’s never too late to learn more, something further highlighted by the next “failure”.

2. Loopt Failed to Attract Enough Users to Survive

Loopt was the startup in question and this was essentially a social networking app which enabled users to share their location with friends. As part of this service, users could also integrate Loopt with other social platforms like Twitter and Facebook, while every phone carrier in the U.S had partnered with the startup.

Unfortunately, Loopt never quite got the attention it needed to survive and after seven labor intensive years, the service was shut down. In other words, Loopt did not have enough users and was spending more money that could be afforded just to keep the 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 — Every startup can learn from the process and these lessons are invaluable for establishing a reliable foundation on which the company can grow. Besides, you never know what might happen and Sam’s payout was the money which enabled him to start investing in other startups.

3. Contrarian Views and Controversial Blog Posts

Sam Altman came under fire not too long ago for positioning himself as a contrarian. Speaking about censorship in San Francisco, Sam cited Galileo Galilei and condemned the popular opinion in the surrounding area. According to Altman, things were so bad that the Bay Area of San Francisco that it made a repressive China look good. Later on, Sam would also make some highly controversial tweets in opposition to Donald Trump, in spite of the fact that his colleague, Peter Thiel, was a huge supporter.

As a result, a PR disaster ensued and Altman was suddenly consumed by questions and opinion based on what he had to say. On the other hand, he also seems to come away from that period unscathed and if anything, this episode has only heightened his position as an influencer in the wold of business.

Takeaway — PR is incredibly important and quite a fragile process that can work for or against.

4. Mistakes During the Early Days at Y Combinator

One thing I’ve really got good at is saying no” — Sam Altman

As you 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 “distracting influences”. More specifically, Sam said that he would often take on work that was either too much or simply not a good use of his time.

Over time, Altman made a conscious effort to say “no” more often and identify precisely where he needed to focus his time. As a rule, this essentially meant that 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, when choosing the startups for Y Combinator, Altman insisted that only the creme-de-la-crème should make it.

Takeaway — Learn when to say no in order to be more productive.

5. Did Altman Step Down at Y Combinator Due to Failure?

Some sources suggest that Altman may have failed at Y Combinator and stepped down involuntarily as a result of great changes within the business. One of these changes was to potentially move the HQ to San Francisco, while another will see the size of each investment increase to $150,000.

And what does this say about Altman?

Well, not a lot. Besides, there is no real evidence to suggest Altman’s time at Y Combinator was anything but successful. On the other hand, if this was in fact an involuntary move or failure of any kind, Altman has further demonstrated his progressive nature by focusing on a project with one of the greatest entrepreneurs in history — Elon Musk.

Takeaway — Y Combinator has not failed in recent years and this move has certainly not damaged Altmans’ reputation.

Final Thoughts

Under the watchful eye of Sam Altman, Y Combinator has progressed in recent years and with so much importance being placed on artificial intelligence, his venture with OpenAI is certainly an exciting one.

While Altman is clearly a controversial figure at times, it’s clear that he knows how to steer a ship and when it comes to failure, it would also seem that this startup expert always seems to end up in calm seas.

Originally published at on April 27, 2019.



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