These are the most important tips from Sam Altman, President at Y Combinator talking about “How to Start a Startup” at Stanford University.
1. Outcome = Idea x Product x Team x Execution x Luck. Where luck is a random number between zero and 10,000.
2. Never start a startup just for the sake of it. Everyone who starts a startup always says that they couldn’t have imagined how hard and painful it is.
3. Only start if you feel compelled by a particular problem and an idea to solve it.
4. Great execution is at least 10 times as important and a 100 times more difficult than a good idea. And yet great execution towards a terrible idea will get you nowhere.
5. Plans themselves are worthless, but the exercise of planning is really valuable.
6. The company should feel like an important mission.
7. Start with a small market in which you can get a monopoly and quickly expand.
8. If you do come up with a great idea, most people will think it’s bad. The truly good idea is one that nobody thinks is worth stealing.
9. You need a market which will be big in 10 years.
10. You cannot create a market which doesn’t want to exist.
11. “Why Now?” is a great question to ask.
13. If you don’t need it yourself, you are at a big disadvantage. Try to get very close to the customer in that case.
14. Build something that users love, fundraising etc. can follow. Build a product that a small number of users love vs. a larger number of users like, it’s much each easier to expand this way because you’ll get growth by word-of-mouth. If you try to build a growth machine before you have a product that people love, you are wasting your time.
15. Very few startups die from competition.
16. Start with something simple.
17. Recruit initial users manually and get a small group to love you. Don’t buy Google Ads in the early days. This is an important example of doing things that don’t scale.
18. Build an engine in the company that transforms user feedback into product decisions.
19. Founders must do sales and customer support themselves in the initial days.
20. You must use metrics that focus on growth.
21. Number 1 cause for early startup deaths is co-founder blow-ups.
22. You need a relentlessly resourceful co-founder, besides being tough and calm.
23. Two or three co-founders works best. Decide equity split as soon as possible, everyone should have vesting equity over 4 years.
24. Try not to hire. Keep the team as small as possible in the first phase.
25. When you hire, get the best people. It could take a year to recruit someone.
26. Mediocre engineers do not build great companies.
27. Rough guideline, give 10 percent of the company to the first 10 employees, over 4 years.
28. Be stingy with investor equity and generous with employee equity.
29. Fire fast.
30. Executing well creates value.
31. One of the CEO jobs that some ignore is that they have to set the bar for execution. There are two parts to this – (i) What to do? (ii) Get it done.
32. Growth and momentum are what your startup lives on.
33. A common mistake is to get excited about your own PR.
34. Startups only work at an extremely intense level. A small amount of extra work on the right thing can make all the difference. For e.g.; Viral coefficient being .99 vs 1.01 can make all the difference.
35. You have to be decisive.
36. Sales fix everything.
37. Don’t worry about competitors in the press, unless they have a better shipped product.