Category Archives: How to Start a Startup

Company Culture and Building a Team, Part I

Lecture 10: Company Culture and Building a Team, Part I

Link: How to Start a Startup

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

 

How to Start a StartupAlfred Lin (@Alfred_Lin)

If you don’t have a good culture in the company you can’t pursue your destiny.

Why does it matter?

  • First Principles
  • Alignment
  • Stability
  • Trust
  • Exclusion
  • Retention

If you have good strong culture, and good strong core values, you’ll know who want to retain and who you don’t want to retain.

As the leader ask what values are most important to you.

Company first. Then your department. Then your team. Then yourself.

A lot of teams break down because they don’t have any trust.

If you don’t have conflict and debate then it is the blind leading the blind.

You can have the smartest engineering in the world but if they don’t believe in the mission they aren’t going to pour their heart and soul into it.

Culture needs to be a daily habit.

Brian Chesky (@bchesky)

You want your culture to be awesome.

If you can’t build a great company then your product will not endure.

Culture needs to be designed.

Integrity and honesty are values that everybody should have.

You should have five or six core values that are unique to you.

Write your core values down before you hire anyone.

You want people to be there for the one thing that will never change–your mission.

No one ever tells you that you need great culture.

Things that are hard to measure often get discounted.

The biggest problem with culture is that it doesn’t pay off in the short term.

Missionaries will outlast mercenaries.

Culture and brand are two sides of the same coin.

Culture are the things inside of the company that you want people to be aligned with long term.

Brand is the promise outside the company that everybody identifies with.

If you have a strong culture then the brand will come through.

No matter how successful you are in life travelling will make you feel not special (waiting in line at the TSA, etc.).

If you have the right vision, right strategy, and the right people then you have a good company.

It is better to have a hundred people love you than a million people who just like you.

How to Raise Money

Lecture 9: How to Raise Money

Link: How to Start a Startup

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

 

Marc Andreessen (@pmarca)

Ron Conway (@RonConway)

Parker Conrad (@parkerconrad)

 

How to Start a StartupYou’ve got to be a communicator and a born leader. (Rob Conway)

The venture capital business is 100% a game of outliers. (Marc Andreessen)

There are 4,000 venture fundable companies a year. (Marc Andreessen)

Invest in strength rather than lack of weakness. (Marc Andreessen)

The companies that have really extreme strengths often have serious flaws. (Marc Andreessen)

When you first meet an investor you should be able to say in one compelling sentence what your product does so that the investor you are talking to can immediately picture the product in their own mind. (Ron Conway)

You have to be decisive. The only way to make progress is to make decisions. Procrastination is the devil in startups. (Ron Conway)

You can’t count on there being capital available to you. (Parker Conrad)

Bootstrap as long as you possibly can. (Ron Conway)

Steve Martin said, “The key to success is be so good they can’t ignore you.” (Marc Andreessen)

You’re almost always better off making your business better than making your pitch better. (Marc Andreessen)

Raising venture capital is the easiest thing a startup founder is ever going to do. (Marc Andreessen)

Raising money is not actually a success. It is not a milestone. (Marc Andreessen)

Calibrate the amount of money you raise with the risks. (Marc Andreessen)

Don’t ask people to sign an NDA. (Ron Conway)

The relationship between investors and founders involves a lot of trust. (Ron Conway)

Do the fundraising process as quickly and efficiently as you possibly can. (Ron Conway)

After you leave a meeting (with an investor that agrees to invest) sit in your car and type out an email to the investor. Put everything in writing. (Ron Conway)

SV Angel invests in one company out of every thirty they look at which is about one a week. (Ron Conway)

There is an enormous difference in the quality of an introduction. (Parker Conrad)

At the seed stage the best thing you can do is find the right investors. (Parker Conrad)

There seem to be (valuation) thresholds for seed stage companies. (Parker Conrad)

Get the money you need and don’t raise any more than you need. (Parker Conrad)

In a series A you’re going to sell between twenty and thirty percent of the company. (Parker Conrad)

Venture capitalists are more ownership focused (percentage of company) than price focused (amount of investment). (Parker Conrad)

Half of people grow into a big job and the other half swell into it. (Marc Andreessen)

Airbnb is such a great company because all three founders are as good as the other founders. That is very rare. (Ron Conway)

When you start a company you have to go find somebody as good or better than you to be the cofounder. If you do that your chances of success grow astronomically. (Ron Conway)

Raise as close to the exact amount of money as possible. (Marc Andreessen)

If you’re going to raise debt you need to be very precise in how you run the company. (Marc Andreessen)

If everything goes great it doesn’t matter who your investors are but hardly ever does everything go great. (Marc Andreessen)

Everybody on the team should have the same goals and be pulling the same direction. (Marc Andreessen)

Once an entrepreneur always an entrepreneur. (Ron Conway)

The big constraint on a top tier venture capital firm is opportunity cost (both from conflict policy and time). (Marc Andreessen)

Things almost never come to a board vote. And if they do they’re already broken anyway. (Parker Conrad)

Doing Things That Don’t Scale

Lecture 8: Doing Things That Don’t Scale

Link: How to Start a Startup

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

 

How to Start a StartupStanley Tang (@stanleytang)

It is okay to hack things together at the beginning.

Do things that don’t scale.

Doing things that don’t scale allows you to become an expert in your own business.

At the beginning it is all about getting this thing off the ground and trying to find product/market fit.

Test your hypothesis.

Launch fast.

Doing things that don’t scale is one of your biggest competitive advantages when starting out.

Competition doesn’t really matter when you’re getting started.

 

Walker Williams (@walkerteespring)

Things that don’t scale are things that are fundamentally unsustainable. They are growth strategies that won’t take you to a million users.

There is no silver bullet for user acquisition.

As time goes on users start to add up.

The first users are always going to be the hardest.

As the founder do whatever it takes to bring in your first customers.

Don’t give away your product for free. It is an unsustainable strategy. You need to make sure users value your product.

A champion is a user who talks about and advocates your product.

Delight your users with experiences they will remember.

Talk to your users.

You’re never going to get a better sense of your product than actually listening to real users.

Run customer service as long as possible.

Proactively reach out to current and churned customers.

When a user leaves your service you want to reach out and find out why.

Problems are inevitable, do whatever it takes to make them right.

One detractor is enough to reverse the progress of ten champions.

The customers that are originally the most frustrated tend to turn into the biggest champions.

You need to optimize for speed over scalability/clean code.

Only worry about the next order of magnitude.

When you have ten users you shouldn’t be worrying about how to service a million users. You should be worrying about how to get to a hundred. When you have a hundred you should be worrying about how to get to a thousand.

Necessity is the mother of invention: You’ll find a way to make it work.

Do things that don’t scale as long as you possibly can.

Often times great ideas start out looking like silly ideas.

 

Justin Kan (@justinkan)

Press should have targeted audience and goals (such as investors, customers, and industry).

Types of stories:

  • Product launches
  • Fundraising
  • Milestones / metrics
  • Business overviews
  • Stunts
  • Hiring announcements
  • Contributed articles

Think about your story objectively.

When you start a startup you think everything you are doing is interesting. That is not true for other people.

Journalists and bloggers are looking for things that people actually want to read.

Mechanics of a story:

  1. Think of a story
  2. Get introduced
  3. Set a date (4-7 days in advance)
  4. Reach out (get a commitment to invest time)
  5. Pitch
  6. Follow up
  7. Launch your news!

Ask fellow entrepreneurs for introductions to reporters.

You want to get the reporter to invest time with you. The best thing is to get a face to face meeting. The worst thing to do is to just have an email exchange.

By preparing you can much easier control the conversation.

With PR firms, like most everything in a startup, you want to do it yourself before you hire someone else to do it.

PR Firms:

  • Firms can only help with contacts (maybe) and follow up
  • Firms can’t generate stories
  • Firms are expensive

Getting press is work:

  • Make sure it is worth it
  • Getting press doesn’t mean you are successful
  • Press is not a scalable user acquisition strategy

Getting press is a vanity metric.

If you decide press is worth it:

  • Keep contacts fresh
  • Regular heartbeat of news
  • Golden rule

Make a press schedule on a calendar.

You’re more likely to do something for people you’ve already done something for.

You should help your fellow entrepreneurs get coverage because they will help you get coverage.

Book: The Burned out Blogger’s Guide to PR by Jason Kincaid

Book: Trust Me, I’m Lying: Confessions of a Media Manipulator by Ryan Holiday

How to Build Products Users Love, Part I

Lecture 7: How to Build Products Users Love, Part I

Link: How to Start a Startup

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

 

How to Start a StartupKevin Hale (@ilikevests)

Growth is the gap between conversion and churn.

The best way to get to a billion dollars is to focus on the value that gets you to the first dollar.

Human beings are relationship manufacturing creatures.

What is the emotion on somebody’s face when they interact with your product?

Sometimes places where you get errors are opportunities for first moments.

Design the links to your help documents to look like magazine covers.

Customer support is what happens between the steps of the funnel.

Software development: responsibility, accountability, and humility. Support driven development.

Make everyone do customer support.

Support responsibility developers and designers give the best support.

The Four Horsemen:

  • Criticism
  • Contempt
  • Defensiveness
  • Stonewalling

Alert existing users to new features when they log in.

Focus on being best price, best product, or best overall solution.

Best overall solution is the only one that everybody can do at any stage of their company.

Focus on the people that are going to be the most passionate particularly at the early stages.

You have to get functionality right.

Word of mouth growth is the easiest kind of growth.

People love working on things where they make a difference.

Remote working is especially tricky.

Most problems in companies don’t need to be solved real time. Everything outside of the site being down or payments not working.

An office allows you to be a little bit lazier in all the things around productivity.

kevin@ycombinator.com

Growth

Lecture 6: Growth

Link: How to Start a Startup

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

 

How to Start a StartupAlex Schultz (@alexschultz)

Growth hacking is just Internet marketing.

Great product leads to customers.

Retention is the single most important thing for growth.

If you don’t have a great product there is no use spending time growing it because it won’t grow.

Startups should not have growth teams. The whole company should be the growth team.

Every company thinking about growth has a different North star. You need to define that North star.

The first time you get paid is a magic moment.

Get people to connect with the thing that gets them to stick on your site.

When operating for growth everything has to come from the top.

“Build it and they will come” is not true.

Move slow to move fast.

Building to where the world is today is an easy mistake to make.

Book: Viral Loop

Book: Ogilvy on Advertising

Think about virality in terms of payload (how many people you can hit with any given viral blast), frequency, and conversion rate.

Do anything you can to remove friction from the flow.

Do your research first for what (keywords) people are going to (search for).

Research consists of:

  • What people are going to search for that is related to your site?
  • How many people search for it?
  • How many other people rank for it?
  • How valuable is it to you?

Google Adwords keyword planner tool.

The single most important thing is to get links from high-ranking websites.

Email is dead for people under 25.

If you get caught in SPAM then it is very hard to get out.

The most effective email you can do is notifications.

What notification you should be sending is the first thing you should think about for email, sms, and push.

Think about how you can create triggerable email campaigns.

Make sure you have deliverability.

Focus on notification and trigger-based email, sms, and push notifications.

aschultz@fb.com

Work really, really hard.

Business Strategy and Monopoly Theory

Lecture 5: Business Strategy and Monopoly Theory

Link: How to Start a Startup

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

 

How to Start a StartupPeter Thiel (@peterthiel)

If you’re starting a company you always want to aim for a monopoly. You always want to avoid competition.

A business creates X dollars of value and captures Y% of X. X and Y are independent variables.

There are exactly two kinds of businesses in the world. There are businesses that are perfectly competitive and there are businesses that are monopolies.

The people that have monopolies pretend not to.

A monopolist describes their business as the union of two separate markets and a non-monopolist describes their business as the intersection.

The something of somewhere is usually the nothing of nowhere. E.g. the Stanford of North Dakota.

You want to go after small markets if you’re a startup.

How you get to a large share of a market is to start with a really small market and you take over that market.

Every moment happens only once.

Technology is designed to give a massive delta over the next best thing.

The thing about network effects is that they’re very hard to get started.

Software businesses excel at economies of scale.

You want to be the last mover–the last company into a category. Microsoft was the last operating system company. Google is the last search engine.

Most of the value of a company exists in the future.

One of the things overvalued in Silicon Valley is growth rates. Durability is undervalued.

The question of whether or not a business is going to be around a decade from now is what dominated the value equation.

You want something that is an order of magnitude better than what is available today.

Begin by studying the end game.

Even if you have a small market if the adoption rate is too slow you’ll give other people the opportunity to move in.

What is the actual market rather than what is the narrative of the market?

You don’t have enough time to mitigate risk.

Building Product, Talking to Users, and Growing

Lecture 4: Building Product, Talking to Users, and Growing

Link: How to Start a Startup

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

 

How to Start a StartupAdora Cheung (@nolimits)

Take advice as good guidance but every business is different.

When you start a startup you should have a lot of time to immerse yourself in the problem developing solutions to the problem you’re trying to solve.

If you really want to disrupt an industry you should not be a player in it.

Get in the shoes of your customers from all angles of what you’re trying to build.

You should be obsessed with knowing what all of the other people in the space are doing.

Become an expert in the industry. There should be no doubt you are an expert so that people trust you and your product.

Cordon off some a certain portion of the customer base and optimize for them.

Storyboard out the ideal user experience.

Make sure there is a way for people to contact you.

If retention goes up over time that means you’re doing a good job. If it goes down that means you’re doing a good job.

You get more feedback if you make someone pay for (your product).

There is no point in building features for when you have a million users.

You don’t need to try to automate everything.

Imitation is cheaper than innovation in terms of time, money, and capital.

To get people to tell others about you you have to deliver a good experience.

clv > cac

There are different acquisition costs for different types of ads.

A lot of times something becomes a bad business when you start spending beyond your means.

Have a growth plan when you start out, What is an optimistic  but realistic method to grow this business?

Before the Startup

Lecture 3: Before the Startup

Link: How to Start a Startup

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

How to Start a StartupPaul Graham (@paulg)

Startups are very counterintuitive.

You can’t trust your intuition all of the time.

You don’t need people to give you advice that doesn’t surprise you.

Work with people you genuinely like and respect and that you have know long enough to be sure.

There are a lot of people that seem likable for a while.

What you need to succeed in a startup is not expertise in startups. What you need to succeed in a startup is expertise in your own users.

The one thing that is essential is making something people want.

In college classes most of the work you do is as artificial as running labs.

The best way to convince investors is to start a startup that is actually doing well and then tell investors so.

The way to make your startup grow is to make something that the users really love.

All users care about is whether your software does what they want.

You have to have something people want and you only prosper to the extent that you do.

It is not in your interest to fool investors.

The difficulty of being a successful startup founder is concealed from almost everyone who has done it.

Do not start a startup in college.

The bigger problem you’re trying to solve is how to have a good life.

Usually the way for startups to take off is for founders to make them take off.

Starting a startup is really hard.

Starting a startup will change you a lot if it works out.

If you’re terrified of starting a startup you probably shouldn’t do it.

If you want a startup in college the only two things you need initially are an idea and co-founders.

The way to find startup ideas is to not try to find startup ideas.

The way to come up with good startup ideas is to take a step back.

The very best ideas almost have to start a side projects because they are such outliers that your conscious mind would reject them as ideas for companies.

Learn a lot about things that matter. Work on problems that interest you…with people you like and respect.

If you want to do a startup what you should do in college is learn powerful things.

Business school is to teach people management and management is only a problem with a startup if you are sufficiently successful.

The best way to learn how to start a startup is to just try it.

Ideally you’re successful before you hire two or three people.

The first hires in a startup are almost like founders. They can’t be people you “manage”. They have to be your peers.

As a general rule you want people who are self-motivated early on.

There is a difference between prices being high and a bubble.

Valuations being high does not mean a bubble.

Having kids causes you to focus because you have no other choice.

You will know when it is a good time to turn a side-project into a startup.

You will know it will become a startup when it takes over an alarming percentage of your life.

Do things that don’t scale.

When starting a startup many things will be going wrong. You can’t expect everybody to be perfect.

The advantage of hiring people you like far outweighs the disadvantage of having a small monoculture.

Ideas, Products, Teams and Execution Part II

Lecture 2: Ideas, Products, Teams and Execution Part II

Link: How to Start a Startup

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

 

How to Start a StartupSam Altman (@sama)

As a student trust your instincts to identify if a market is going to be big.

One of the hard parts about running a startup is that it is real life.

Just keep going.

Cofounder dating is crazy.

The track record for founders who don’t already know each other is really bad.

It is better to have no cofounder than a bad co-founder.

You need somebody who behaves like James Bond rather than somebody who is an expert in a given domain.

Take advantage of school.

You want a tough and a calm co-founder.

It sucks to have a lot of employees. Be proud of how few employees you have.

At the beginning you should only hire when you have a desperate need to.

The cost of getting an early hire wrong is very high.

Hires really matter. These people go on to define your company.

When you are in hiring mode it should be your number one job to get the best people.

The best people know you should join a rocketship.

If you’re going to join a startup make sure it is a rocketship.

The amount of time you should spend hiring is either zero or twenty-five percent.

If you compromise and hire somebody mediocre you will always regret it.

Every person in a startup sets the tone.

The best source for hiring is people you already know or other people in the company already know.

Personal referrals are the trick to hiring.

Experience matters for some roles and not others.

For most of the early hires experience doesn’t matter much and you should go for aptitude.

Most first-time founders are terrible interviewers but good at evaluating somebody after they have worked together.

Call references.

Good communication skills tend to correlate with hires that work out.

For early employees you tend to want somebody with a real risk-taking attitude.

Look for somebody who is maniacally determined.

You need unstoppable people.

You should aim to give ten percent of the company to the first ten employees.

Your employees are the ones that build the company over years and years.

Be as generous as you possibly can to employees.

One things that founders forget is that after hiring employees you have to retain them.

As a founder you have to give your team all of the credit for the good things that happen and you have to take responsibility for the bad stuff.

Fire fast when it is not working out.

The co-founder equity split discussion does not get easier with time.

if you’re not willing to give a co-founder an equal share of the equity that should make you think hard about whether you want them as a co-founder.

Every founder, including yourself, has to have vesting.

With vesting you’re pre-having the conversation if one of you leave.

Co-founders should work in the same location.

Execution, for most founders, is not the most fun part of starting a company but it is the most critical.

The way to have a company that executes well is to execute well yourself.

Whatever the founders do becomes the culture.

Focus is critical.

Most startups are not nearly focused enough.

One thing about starting a startup is that you get no credit for trying. You only get credit if you make something the market wants.

If you work really hard on the wrong things no one will care.

You can’t be focused without really great communication.

Growth and momentum are something you can never lose focus on.

You should always know how you’re doing on your metrics.

The secret to startup success is extreme focus and extreme dedication.

Startups are not the best choice for work-life balance.

You generally need to be willing to outwork your competitors.

Set a quality buy that runs through the whole company.

Be decisive.

You can do huge things in incremental pieces.

Momentum and growth are the lifeblood of startups.

Always keep momentum.

Always keep growing.

Set an operating rhythm.

Don’t let the company get down because of competitors in the press.

Welcome, and Ideas, Products, Teams and Execution Part I

Lecture 1: Welcome, and Ideas, Products, Teams and Execution Part I

Link: How to Start a Startup

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

 

How to Start a StartupSam Altman (@sama)

30% (of startup knowledge) is pretty generally applicable.

You need a great idea, a great product, a great team, and great execution.

If you do really well in the areas you can control you have a good chance of having some amount of success.

You should only start a startup if you feel compelled by a particular problem and you feel a startup is the best way to solve it.

Specific passion should come first and the startup should come second.

Great execution towards a terrible idea will get you nowhere.

Great companies start with a great idea not a pivot.

Some day you need to build a business that is hard to replicate.

The best companies are almost always are mission oriented.

The company should feel like an important mission.

With mission oriented companies people outside the company are more willing to help you.

You need conviction in your own beliefs.

The truly good ideas don’t sound like they are worth stealing.

You need a market that is going to be big in ten years.

You can’t create a market that doesn’t want to exist.

Good startup ideas are almost always easy to explain and understand.

Get to know a lot of potential co-founders.

One of the most important tasks for a founder is to make sure you build a great product. Until you’ve built a great product nothing else matters.

Build something users love.

It is better to build something a small number of users love than something a large number of users like.

If you don’t have some early, organic growth then your product is probably not good enough yet.

Over the long run great products win. Don’t worry about your competitors raising a lot of money and what they may do in the future.

Very few startups die from competition.

Start with something simple.

It is hard to build a really great product so you want to start with as little surface area as possible.

Get users manually.

The company will build whatever the CEO decides to measure.

Growth is the indicator of a great product.

 

Dustin Moskovitz (@moskov)

Be focused and keep working.

Number one role of being a CEO is managing your own psychology.

You spend most of your time as a CEO on the problems that other people bring to you.

An an entrepreneur you’re always on call. You’re a role model. You’re always working anyway.

After you have two people you need to step it up and be full-time committed.

It is important to keep in mind the context of the type of company you’re trying to start and the best place to start it.

The best reason to do a startup is if you can’t not do it.

Your subconscious can tell if you don’t have passion.

If it is not something the world needs don’t do it. Do something the world needs.