From Y Combinator to Public Service: The Unfiltered Journey of a Tech Veteran

For over a decade, Dalton Caldwell and Michael Seibel were pivotal figures at Y Combinator, guiding countless startups to success. In a candid conversation, they reveal the profound personal reflections that led them to leave their established roles, start new ventures, and embark on missions to contribute to their community in entirely new ways.

The Catalysts for Change

The decision to leave a prestigious and comfortable position is never easy. For Dalton, the founder of a new VC firm, Standard Capital, the impetus came from a combination of factors: a significant personal milestone and a long-held philosophical belief in continuous growth.

"I did 25 batches at YC, which is a good round number," he notes. The birth of his daughter also prompted deep life reflection. Furthermore, the departure of his longtime colleague, Michael Seibel, served as a psychological trigger, making the idea of change more tangible.

Michael’s path was shaped by a different set of conversations. He recounts that nearly every founder he worked with at Y Combinator would invariably ask him, "When are you going to do your own company again?" This constant questioning, coupled with a desire for complete agency over his time and work, pushed him toward a new chapter.

The Power of External Perspective

Both emphasize that they didn't make these decisions in a vacuum. Candid conversations with trusted confidants provided the crucial reframing needed to take the leap.

For Michael, a conversation with his old co-founder, Justin, was pivotal. Justin challenged the predictability of his future, asking if he wanted a life where he could "literally write everything that will happen between now and retirement." This resonated deeply with someone who thrives on chaos and new challenges.

His wife, Sarah, offered another perspective, noting that he had spent his entire adult life in San Francisco and a decade giving back to YC. She then posed a powerful question: "So, are you going to do anything for San Francisco?" This framed his next steps not just as a career move, but as a civic obligation.

A comment from Steve Huffman, CEO of Reddit, also stuck with him: "I fully expect most of the capable people we know will end up doing something in public service before they fully retire." This statement carried a sense of inevitability that was hard to ignore.

Confronting the "Founder" Identity

A central tension for both was the identity of being a "founder" while working within a large, established organization like Y Combinator. Dalton expresses a sense of liberation in starting his own firm, Standard Capital, from scratch.

"It always felt a little weird to be like 'founders are great' and all that, and well I'm not a founder, you know, I'm just an employee here," he admits. There's a palpable pride in executing the very advice they had given to countless startups—signing documents, setting up payroll, and building something new.

This aligns with a key insight from the tech industry: when a disruptive new technology like AI emerges, it is often best embraced by starting fresh rather than trying to graft it onto an existing business, a classic example of the innovator's dilemma.

The Humbling Reality of Public Service

Michael’s foray into trying to "fix San Francisco" has been a lesson in humility. He quickly discovered that the reality of government and public service is far more complex than the "tech bro" narrative suggests.

His key learnings include:

• Most government employees are mission-driven: Contrary to popular belief, most people working in government are capable, conscientious individuals who have actively chosen lower salaries to contribute to the public good.
• There are no simple solutions: The expectation of "smoky rooms" and backdoor deals was replaced by the realization that many problems stem from the government doing exactly what citizens publicly demanded, even when those demands were flawed.
• Citizens drive bureaucracy: He argues that citizens themselves are often the architects of government inefficiency, demanding new rules and layers of red tape after every minor scandal or mistake, creating a system that is incredibly hard to operate within.
• The missing "build" muscle: He took for granted the software industry's ability to build its own internal tools. Most other organizations, including government, lack this capability and are entirely dependent on external vendors, making agility and innovation extremely difficult.

"This is objectively the hardest thing I've ever done," Michael concludes, gaining a newfound respect for those in public service who tackle immensely complex problems with limited resources and public scrutiny.

Frameworks for Making Big Decisions

Both Dalton and Michael share the mental models they use for navigating life's crossroads.

Dalton employs a technique inspired by the era of LLMs: crafting prompts for himself. "The prompt that I keep giving myself is: if I were doing office hours with myself, what would I say?" This activates the advisor part of his brain, allowing him to bypass personal biases and give clearer, more objective advice to himself.

Michael’s approach is rooted in a life plan he drafted at 21: "20s money, 30s family, 40s government, retire and teach." While not overly detailed, this one-word-per-decade roadmap has provided a surprising amount of direction. Now in his 40s, the plan naturally guided him toward public service. He acknowledges that the path is never safe or straight, but having a directional plan creates a framework for action.

Underpinning both of their philosophies is a shared belief in high agency and continuous challenge. Michael summarizes it as: "I think I've always lived by the philosophy that if I just pushed myself really hard and I tried to do really good work with interesting people, interesting things would happen." The goal is to constantly operate at the limits of one's skill set, embracing the discomfort that leads to a compounding and interesting life.