Category Archives: How to Start a Startup

Later-stage Advice

Lecture 20: Later-stage Advice

Link: How to Start a Startup

(You can find notes to the other lectures here.)

 

Sam Altman (@sama)

How to Start a StartupIn most companies of under 20 to 25 employees most are structured with everyone reporting to the founder. That is what you want at that stage.

When lack of structure fails it fails all at once.

What works at 20 to 25 employees fails disastrously at 30 employees.

All you need if every employee to know who their manager is, and there should be exactly one, and every manager should know who their direct reports are.

The most important thing is that there is clear reporting structure and that everybody knows what it is.

Clarity and simplicity are the most important things.

Before product/market fit your only job is to build a great product.

The biggest shift is being a founder is moving from building a great product to building a great company.

The wrong answer is to stay in hero mode until you burn out.

Write down how you do things and why you do things.

Codify how you do things.

People need to know how they are doing pretty quickly.

One thing that is important when it comes to H.R. is equity.

Equity is one area where investors always give bad advice.

Always stay in front of people’s vesting schedules.

Get an options management system in place.

When you cross 50 employees there is a new set of HR rules you need to comply with.

Monitor your team for burnout.

Have diversity in hiring early. You’ll be able to ramp up hiring more quickly in the long run.

Small teams are naturally productive most of the time.

It is important to keep reiterating the message about the road map and the goals.

You never want to put a process in place that rewards the process. The focus has to always be on great product.

All-hands meetings should be at least once a month.

The single hardest thing in business is building a company that does repeatable innovation and just has this ongoing culture of excellence as it grows.

Eleven months after launching you should file for provisional patents.

Very few founders thing long term.

Take vacations.

Ignore acquisition interest.

Startups fail when founders quit.

Don’t outsource the key messaging.

The biggest PR hack you can do is to not hire a PR firm.

Pick three or four journalists that you establish close relationships with.

Developing a personal connection with anyone you’re trying to do any sort of deal with is really important.

The way you get deals done and get good terms is to have a competitive situation.

You have to ask for what you want.

You want diversity of background. You don’t want diversity of vision.

Hire people that are complementary and aligned towards the same goal.

If you don’t want to be the long term CEO of a company you probably shouldn’t start one.

Sales and Marketing

Lecture 19: Sales and Marketing

Link: How to Start a Startup

(You can find notes to the other lectures here.)

 

Tyler Bosmeny (@bosmeny)

How to Start a StartupThere is a million ways to do (sales) so you’ll find what works for you.

As a founder you’re the sales people.

Talking to your users is selling.

Passion and industry knowledge trump sales experience.

Prospecting is the process of figuring out who will even take your call.

In the early days go to a lot of conferences.

Get attendee lists in advance and email every single person to try to set up meetings.

A lot of people don’t know how to write cold email. It should be really concise.

When you get (potential customers) on the phone remember to shut up.

Follow up.

You really have to have kind this inhuman and unreasonable willingness to follow up and drive things to closure.

Your goal should be to get people to a yes or no as quickly as you can. Where you die is if you have a thousand maybes.

You gotta remember what your goal is.

Avoid the free trial trap.

At the end of a free trial you’re going to have to sell them all over again.

Michael Seibel (@mwseibel)

The best way you can make your pitch better is to improve your company.

Just talk less.

The thirty second page is three sentences:

  • What does your company do?
  • How big is the market?
  • How much traction do you have?

If in one sentence you cannot tell your mom what you do then rework your sentence.

Use simple language.

It cannot be complicated.

If your team has done something that has made investors money then you should mention that.

Your only way to build credentials is if you have accomplished something.

The more you talk about a bad thing the worse it looks.

Investors like to invest based on traction.

If someone who has passed on your company offers to make introductions pass on that.

Fundraising is a sprint not a marathon.

Schedule all investor meetings in one week.

Qasar Younis (@qasar), Dalton Caldwell (@daltonc)

Make sure the person you’re talking to knows what you do. (Dalton Caldwell)

Actually ask for money. (Dalton Caldwell)

You can tell when people are passionate and know their business very well. (Qasar Younis)

After the meeting follow up. (Qasar Younis)

Anything other than a check or a wire of funds is a no. (Qasar Younis)

Do due diligence on investors. (Qasar Younis)

You’re selling part of your company. You should know who you sell it to. (Qasar Younis)

Fundraising does not equal success. (Dalton Caldwell)

Legal and Accounting Basics for Startups

Lecture 18: Legal and Accounting Basics for Startups

Link: How to Start a Startup

(You can find notes to the other lectures here.)

 

Kirsty Nathoo, Carolynn Levy (@cjoneslevy)

How to Start a StartupIt is dangerous for founders to get bogged down in the details. (Carolynn Levy)

The primary purpose of forming a separate legal entity is to protect yourself from personal liability. (Carolynn Levy)

The easiest place (to form a company) is Delaware. The law there is very clear and very settled. Investors are very comfortable with Delaware. (Carolynn Levy)

Don’t get fancy (with incorporating). Save yourself some time and money. (Carolynn Levy)

As a founder you always need to be thinking of things in two different ways. You need to ask whether you are doing this as an individual or if you’re doing this on behalf of the company. (Kirsty Nathoo)

Clerky.com (Kirsty Nathoo)

Be organized. (Kirsty Nathoo)

Filing documents is not the glamorous part of doing a startup. (Kirsty Nathoo)

At the times where (the documents are) crucial are at a high stress time in the startup’s life. (Kirsty Nathoo)

Keep the documents in a safe place and keep them organized. (Kirsty Nathoo)

Execution has greater value than the idea. (Carolynn Levy)

Value is created when the whole founder team gets together to execute on an idea. (Carolynn Levy)

Resist the urge to give a disproportionate amount of stock to the founder who is credited with coming up with the idea for the company. (Carolynn Levy)

When ownership is disproportionate the founders might not be in sync with one another. (Carolynn Levy)

It is important to look forward in the startup rather than backward. Are all of the founders in it 100% and in it for the long haul? (Carolynn Levy)

The whole team is necessary for execution. (Carolynn Levy)

You need to assign IP to the company. (Kirsty Nathoo)

The standard vesting schedule is four years with a one year cliff. (Carolynn Levy)

One of the reasons of vesting is having skin in the game. (Carolynn Levy)

Single founders need vesting too. (Carolynn Levy)

Vesting aligns incentives among the founders. (Carolynn Levy)

Generally seed round means that the price has not been set. (Kirsty Nathoo)

Raise your money using standard documents. (Kirsty Nathoo)

You have to be really careful about adding an investor to your board. In most cases you want to say no. (Carolynn Levy)

There are so many people that want to give advice to startups and so few people who give good advice. (Carolynn Levy)

All investors who can help should do so. Asking for additional shares is just an investor looking for a freebie. (Carolynn Levy)

You need to know everything about your financing. (Carolynn Levy)

Spend (the investors’) money wisely. (Kirsty Nathoo)

You can’t work for free for your company. (Carolynn Levy)

Breakups get extra ugly when founders haven’t paid themselves. (Carolynn Levy)

You can’t pay just in stock. (Kirsty Nathoo)

You absolutely must use a payroll service provider. (Kirsty Nathoo)

Firing people is really hard (Carolynn Levy)

Fire quickly. Don’t let a bad employee linger. (Carolynn Levy)

Everybody needs to assign IP to the company. (Kirsty Nathoo)

A lot of running the company is following the rules and taking it seriously. (Kirsty Nathoo)

At some point in the first year a service is going to need to be engaged to (file the tax returns) (Kirsty Nathoo)

Recommendations are the best way (to find a CPA). (Kirsty Nathoo)

How to Design Hardware Products

Lecture 17: How to Design Hardware Products

Link: How to Start a Startup

(You can find notes to the other lectures here.) 

 

Hosain Rahman (@hosain)

How to Start a StartupThe whole point is to help people to a better life with technology.

Think about, “where is the world going?”

Have organizing principles.

Thinking needs to shift from being about actual things to the user.

You need to be great at the full stack.

The exploration phase if very wild.

Don’t do one off things. You have to see a broader vision. Look at where do we think the world is moving and think about how this is going to be a stepping stone to that ultimate end vision.

All of your content and media experiences are now in your phone.

Media is still the killer app in your house.

There are a lot of layers to user research.

Data is great. Understanding is better.

Action is key.

Notifications are a tool for behavior change.

Constraints are really great because they serve as opportunities to resolve, to refine, to simplify, and push you to find the right answer that will solve the user problem in the simplest way.

At a big company you have to force a lot of communications.

We can dream a lot faster than what is possible.

Web software is a lot different than mobile software. Building mobile software is more like building hardware.

How to Run a User Interview

Lecture 16: How to Run a User Interview

Link: How to Start a Startup

(You can find notes to the other lectures here.) 

 

Emmett Shear (@eshear)

How to Start a StartupIf you’re building something that is just for you then you don’t need to talk to anyone else.

Most startups are not just built for the person that is using them.

The first question for any startup is who is my user and where am I going to find them?

You don’t want to talk to just one type of person.

In interviews you want to stay as far away from features as possible.

It is important to talk to many extremes of people.

If you ask a user if a feature is good they will tell you it is great. You cannot ask if a feature is actually good or not.

Get people to give you their credit card and you can guarantee they are interested in the feature.

Data doesn’t tell you where you need to go. It doesn’t tell you what the problems are that you need to address.

When talking to a user you’re going to get negative feedback about your favorite feature a lot of the time.

(When running a user interview) don’t show people your product.

If you just talk to who is easy to talk to you’re not getting the best data.

Record interviews. It stops you taking notes in the middle and you can play them for other people.

You don’t want to do interviews over email if you can avoid it.

The most interesting learnings come from the, “Interesting. Tell me more.”

Ask if you can record it. It is not polite to record people without their consent.

The crucial people to get your project started for the first six months are not who will be using it three years later.

How to Manage

Lecture 15: How to Manage

Link: How to Start a Startup

(You can find notes to the other lectures here.) 

Ben Horowitz (@bhorowitz)

How to Start a StartupWhen you are making a critical decision you have to understand how it will be interpreted from all points of view.

You have to be able to see the decision through the eyes of the company as a whole.

You’ve got to understand what your decision means to everybody not just the person you’re talking to.

When you give out raises when people ask for them you’re going to be giving out a lot of raises.

For raises you have to be formal to save your own culture.

Don’t do (raises) off cycle.

To be an executive you often have to be aggressive in this world.

Your employees know each other more than they know you.

When you hire people you try to hire the very best.

The reason somebody fails on the job is that you didn’t accurately enough match them with the needs of the position.

Sometimes it is necessary to take somebody’s job. It is not necessary to take their dignity.

If you’re married to somebody who is supportive it makes it a thousand times easier.

You’ve got to keep your focus on what you can do and not on what happened to you.

How to Operate

Lecture 14: How to Operate

Link: How to Start a Startup

(You can find notes to the other lectures here.) 

Keith Rabois (@rabois)

How to Start a StartupPeople are irrational.

Building a company is taking all of the irrational people you know and putting them in one building and living with them for twelve hours a day at least.

What you’re doing when you’re building a company is building an engine.

Heroic effort is necessary to keep (the company) together.

Warren Buffett says, “Build a company idiots could run because eventually they will.”

Your job as a manager it to maximize the output of your organization and the organizations around you.

When measuring people focus on the output and not the input.

At first when you start a company everything is going to feel like a mess.

An editor is the best metaphor for your job.

You can change the world in a hundred and forty characters.

Force yourself to simplify everything you do.

Every step you eliminate you can improve performance by 30% to 50%.

The people that work for you should generally be coming up with their own initiatives.

Your goal over time is to use less red ink every day.

The way to get out of doing most of the work is delegating.

Book: High Output Management

Any executive should not have one management style. Your management style should be dedicated by the employee.

When there is low consequences you should absolutely delegate.

What you want to do with every single employee every single day is expand the scope of their responsibilities until it breaks.

Always track the individual slope of an employee and the company’s growth rate.

Most people will solve problems they understand how to solve.

Give people one thing to prioritize.

Build a dashboard.

Create notes for every meeting and send them to the entire company.

You want to look for the anomalies. You don’t want to look for the expected behaviour.

If everybody on the team executes exactly up to the same standard of performance you will have an organization that performs at the best possible level.

What food you serve people matters more than you might guess.

The office environment that people live in and work in everyday dictates your culture, how you make decisions, and how hard people are going to work.

You can’t build a company without a lot of effort. You lead by example.

You want to give people the best possible tools to do the best possible job.

You must have your own office. Don’t do shared office spaces.

Recruits walk into your office and can tell a lot about your culture instantly.

Some things you have to learn by doing.

Treat customer support like a product.

You should have a one-on-one roughly every two weeks (with your employees).

The one-on-one is mostly for the benefit of the employee.

You’re trying to match resources and inputs against priorities.

The key to culture is that it is a framework for making decisions.

How To Be A Great Founder

Lecture 13: How To Be A Great Founder

Link: How to Start a Startup

(You can find notes to the other lectures here.) 

 

Reid Hoffman (@reidhoffman)

How to Start a StartupA founder is someone who deals with a ton of different headaches.

A competitive edge is super important.

It is very hard to tell the difference between madness and genius.

What great founders do is seek the networks that will be essential to their problems and tasks.

It is very conventional to say you are contrarian these days.

It is easy to be contrarian. It is hard to be contrarian and right.

Contrarian is relative to an audience.

You have to be both flexible and persistent.

Part of being a great founder is being able to be flexible across lines.

Is your investment thesis increasing or decreasing in confidence?

If you’re not solving the problem immediately in front of you you are hosed.

If your product doesn’t get to customers you are hosed.

It is generally useful in software to be a good product person.

Founders can be very diverse.

The ability to say coherently what you are targeting and to articulate something that isn’t trying to boil the ocean, or Swiss army knife approach, is pretty important.

You have to be able to articulate a very clear mission about what you are doing.

Ignoring the world in general is usually a disaster.

It is super important that you collaborate well.

Building for the Enterprise

Lecture 12: Building for the Enterprise

Link: How to Start a Startup

(You can find notes to the other lectures here.) 

 

How to Start a StartupAaron Levie (@levie)

In the Internet in 2004 there wasn’t a lot going on.

Any market that has a significant change in the underlying raw materials or the enabling factors is about to change in a very significant way.

There is $35 billion spent on global apps today.

Global digital advertising market is $135 billion.

Global enterprise I.T. is $3.7 trillion.

A lot of (enterprise software) companies are around for a few years before their technology is even used in the enterprise.

This is the most magical time to build an enterprise software company just in terms of how much change is going on in organizations.

Most application categories are moving to the cloud.

We’re going from a world of customized software to standardized platforms.

Every single enterprise is changing the way they are getting their products to their customers.

Every industry is going to have a technological component of what they do.

Every company in the world needs better technology to work smarter, faster, more securely.

Spot technology disruptions. Look for new enabling technologies or wide trends that create a wide gap between how things have been done and how they can be done.

With the enterprise you want to start intentionally small. Find the wedge where you can create a product that will slip through the gap of other existing products. Your product can expand over time.

You really want to find asymmetries.

You want to do things incumbents can’t or won’t do because it’s economically or technically infeasible.

You want to build technology that is platform agnostic.

Find the almost-crazy outliers.

Build for what is missing when you’re living in the future.

Listen to your customers but don’t always build exactly what they’re telling you to.

Modularize don’t customize. Build modular components then everything into the technology itself.

Think about openness and APIs.

Focus on the user always.

Bring consumer DNA into the product development process.

Your product should sell itself but you still need sales people.

Book: Crossing the Chasm

Book: The Innovator’s Dilemma

Book: Behind the Cloud

Company Culture and Building a Team, Part II

Lecture 11: Company Culture and Building a Team, Part II

Link: How to Start a Startup

(You can find notes to the other lectures here.) 

 

Patrick Collison (@patrickc)

John Collison (@collision)

Ben Silbermann (@8en)

How to Start a StartupRun a company based on what you celebrate. (Ben Silbermann)

The amount of things you can personally be involved in diminishes exponentially. (Patrick Collison)

When you’re hiring the first ten people you’re actually hiring the first one hundred people because the first ten will bring ten along with them. (Patrick Collison)

Culture isn’t like architecture. It is a lot more like gardening. (Ben Silbermann)

Really great people who are good at many disciplines and extraordinary at one tend to build really great products. (Ben Silbermann)

No batch of ten people will has as much influence on the company as the first ten people. (John Collison)

Hiring is a bit like being a value investor. You’re looking for undervalued human capital. (Patrick Collison)

There is no wrong place to find people. (Ben Silbermann)

Really great people want to do stuff that is hard. They want to solve big problems. (Ben Silbermann)

When recruiting be transparent about why you think it is a great opportunity. (Ben Silbermann)

Work with people as much as you can prior to hiring them. (Patrick Collison)

Quickly give people feedback in particular feedback on how to adapt to the culture. (John Collison)

The more feedback you give them the better they’ll do. (John Collison)

Your company either fails very quickly or all of your problems become about managing growth. (Patrick Collison)

People don’t come out of the womb being good at leadership. (John Collison)

Give as many people a shot as possible. (Ben Silbermann)

The farther along your company is the larger your expectations get. (Ben Silbermann)

If (success) were guaranteed it would be boring. (Patrick Collison)

At the early stage finding people who are passionate about your product can be a great way to find people. (John Collison)