
In this interview, Y Combinator President and CEO Garry Tan outlines the new paradigms of software development driven by vibe coding and AI agents. Tan shares lessons from his early career regrets, recounts Peter Thiel's attempt to recruit him for Palantir, and discusses how Y Combinator democratizes access to Silicon Valley. He also details the transition from traditional SaaS to agentic workflows, the role of security tools like Crab Trap, and San Francisco civic reforms.
Garry Tan is the President and CEO of Y Combinator, the world's leading startup accelerator founded in 2005. Tan co-founded Posterous and Initialized Capital before taking the helm at YC in 2023. A Stanford engineering graduate, he is a prominent advocate for builder culture, vibe coding, open-source AI agents, and local civic reform in San Francisco, helping turn outsiders into startup industry insiders.
August 17, 2026

It was a very bleak moment right after the NASDAQ crashed and the first web boom ended. People genuinely believed it might be the end of technology. There were almost no startup jobs available in the Bay Area, and I was choosing between offers from Microsoft Windows Mobile and Expedia to pay off my student loans.

I chased what was hot instead of focusing on my core expertise in web programming. I left web programming exactly when Mark Zuckerberg was building early versions of Facebook. I learned that you should not follow the crowd; when everyone says a sector is dead, that is often the perfect time to build in it.

Earnestness is often misunderstood as naivety, but it is actually a result of maturity and courage. It means having the conviction to trust your own direct experiences and observations, even when blogs or social media platforms contradict you. It is about staying true to your unique knowledge instead of role-playing a founder.

Working from a map means letting the opinions of traditional investors or tech trends dictate your career. Looking at the territory means examining the ground truth directly. It means co-founding companies with the smartest people you personally know and solving real, physical bottlenecks that you observe firsthand in your environment.

Peter flew me down from Seattle to join Palantir as a co-founder and offered to match my seventy thousand dollars salary at Microsoft. I declined because I was obsessed with corporate status and expected a promotion at Microsoft. It was a multi-billion dollar mistake driven by working from a map instead of my instincts.

Historically, you had to attend specific schools or navigate elite social circles to get funding. Y Combinator replaced that gatekeeping with a simple online application. We give builders a fair shake based on their ideas and execution, welcoming thousands of new founders to the Silicon Valley ecosystem every year.

Building a startup is incredibly solitary and stressful. You face days when your co-founder loses hope, your best engineer quits, or you lose a major client. You need a trusted community of peers with whom you can be completely honest and vulnerable without having to act like you are constantly succeeding.

SaaS was historically treated as the ultimate business model, but pure seat-based SaaS is unlikely to survive the next decade. If AI agents can write code and handle business processes instantly, seat-based pricing loses its meaning. Startups must leverage SaaS as a wedge to build data moats and network effects.

I built Gary's List as an agentic newsroom using open-source tools to automate research. I realized that using agentic retrieval-augmented generation allows an AI to maintain a massive context of one million tokens in its head. This enables founders to delegate entire business processes to markdown files that execute perfectly.

Previously, shipping software was an incredibly complex process requiring project managers, developers, and QA teams. Today, code generation is cheap and immediate. The bottlenecks of the past are gone, and a founder's taste, product design instincts, and high agency have become the most valuable attributes.

We are seeing a major trend of experienced founders in their late thirties and forties building highly successful startups. These founders know exactly what to build and how to navigate enterprise systems. By using AI agents, a small team of two or three people can scale to fifteen million dollars in annual recurring revenue.

Pedro Franceschi from Brex created Crab Trap to monitor the network traffic and actions of AI agents. Since agents can execute code autonomously, Crab Trap serves as a security proxy to manage their permissions and ensure they do not perform unauthorized actions or compromise sensitive financial systems.

AI agents can analyze meeting transcripts across an entire organization to identify compliance issues and operational roadblocks. This allows executives to understand ground-truth data two levels down without attending every meeting. It eliminates internal bureaucracy and aligns team coordination programmatically.

I got involved because local ideologies began directly hurting families and kids. The school board banned algebra in middle schools, which structurally blocks public school kids from studying engineering. I realized that if builders and citizens do not speak up and organize, local institutions and media will fail the community.
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