As an early innovator in mobile location services, Sam joined Apple CEO Steve Jobs on stage at WWDC. 2008, presenting ..
S TA RT U P a d v i c e
“All companies that grow really big do so in only one way: people recommend the product or service to other people. What this means is that if you want to be a great company some day, you have to eventually build something so good that people will recommend it to their friends–in fact, so good that they want to be the first one to recommend it to their friends for the implied good taste. No growth hack, brilliant marketing idea, or sales team can save you long term if you don’t have a sufficiently good product.” – Sam Altman
1. Make something people want.
2. A great team and a great market are both critically important–you have to have both. The debate about which is more important is silly.
3. Write code, talk to users, and build the company (hire the best people you can find, get the culture right, fundraise, close sales, etc.) Most other things that founders do are a waste of time.
4. Set a clear, easy-to-understand vision for your company, and make it be a mission people believe in.
5. Stay focused and don’t try to do too many things at once. Care about execution quality.
6. You have to have an almost crazy level of dedication to your company to succeed.
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7. In general, don’t start a startup you’re not willing to work on for ten years.
8. Be relentlessly resourceful.
9. In the current pivot-happy world, good ideas are underweight. It’s worth the time to think through a good one.
10. Growth solves (nearly) all problems.
11. While growth is critical and you should focus on it, occasionally consider where you’re going–you need both growth and to be growing towards something valuable.
12. Obsess about the quality of the product.
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13. Over communicate with your team. For some reason most founders are really bad at this one. Transparency is your friend.
14. Move fast. Speed is one of your main advantages over large companies.
15. Hire slow; fire fast. Hiring is the most important thing you do; spend at least a third of your time on it.
16. Occasionally think about why the 20th person will join your company.
17. Hire smart and effective people that are committed to what you’re doing. The last five words there are important.
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18. Hire friends and friends of friends. Go after these people like crazy to get them to join. Some other candidate sources are ok, but I always got bad results from technical recruiters.
19. Generally, value aptitude over experience.
20. Hire people that you could describe as animals.
21. Eliminate distractions.
22. Don’t die.
23. Be frugal.
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24. You’ll often hear conflicting advice about everything but “build a great product”. This means you can go either way on much of the rest of it and it doesn’t really matter. Just make a decision and get back to work. Product/market fit is what matters. You can-and will-make a lot of mistakes.
25. You make what you measure.
26. Startups are very hard no matter what you do; you may as well go after a big opportunity.
27. Momentum is critical. Don’t lose it.
28. Keep salaries low and equity high.
29. Keep the organization as flat as you can.
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30. When working on a deal–raising money, trying to get a partnership, etc.–it’s important to create a competitive situation.
31. Schleps are good.
32. Don’t forget to make money.
33. Journalists like hearing directly from founders. If you hire PR people, resist their desire to control all the contact.
34. It’s standard for founders to keep board control in the first round.
35. Listen to everyone. Then make your own decision.
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36. Remember that you are more likely to die because you execute badly than get crushed by a competitor.
37. Get lucky.
38. Have a direct relationship with your customers.
39. Be formidable–do not be easy to push around.
40. Don’t let your company be run by a sales guy. But do learn how to sell your product.
41. Have a culture that rewards output.
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42. Don’t hire professional managers too early.
43. Simple is good. Be suspicious of complexity.
44. Get on planes in marginal situations. In-person is still better than tele-anything.
45. Most things are not as risky as they seem.
46. Be suspect of anyone who says the word process too often.
47. Raise a bit more money than you think you need.
48. Ignore the fact that “the press loves [you]”.
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49. Have great customer service.
50. You can create value with breakthrough innovation, incremental refinement, or complex coordination. Great companies often do two of these. The very best companies do all three.
51. The role of the board is advice and consent. If the CEO does not lay out a clear strategy and tries to get the board to set one, it will usually end in disaster.
52. Board observers are usually a headache.
53. If you pivot, do it fully and with conviction. The worst thing is to try to do a bit of the old and the new–it’s hard to kill your babies.
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54. It’s better to make a decision and be wrong than to equivocate.
55. Set goals for the company and motivate people to get there.
56. Always praise good work.
57. Celebrate your wins as a company. Get t-shirts for big milestones.
58. Have a good operational cadence where projects are short and you’re releasing something new on a regular basis.
59. You can win with the best product, the best price, or the best experience.
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60. Meetups and conferences are generally a waste of time.
61. If the founders of your company seem to care more about being founders than they care about your specific company, go join another company.
62. It’s easier to sell painkillers than vitamins.
63. Be suspicious of any work that is not building product or getting customers. It’s easy to get sucked into an infrastructure rewrite death spiral.
64. It’s better to have a few users love your product than for a lot of users to sort of like it.
65. Learn how to stay extremely optimistic when your world is melting down.
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66. Startups should require as few miracles as possible, but at least one.
67. You have to have great execution–far more people have good ideas than are willing to roll up their sleeves and get shit done.
68. Don’t have a diverse culture in the early days.
69. Keep a to-do list every day. At the top of it, put the one or two big things you want to work on.
70. Being the CEO is miserable more often than it’s good. But when it’s good, it’s really good.
71. On the really bad days, remember that tomorrow will be better–it’s hard to see it being much worse!
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72. Sleep and exercise.
73. Success in a startup is usually pass/fail. Worry more about making sure you pass than an extra point of dilution.
74. Good investors are worth a reasonable premium.
75. Give your investors something to do.
76. Go for a few highly involved investors over a lot of lightly engaged ones.
77. Raise money on promise. Raise money on clean terms.
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78. Do reference checks on your potential investors. Ask other founders how they are when everything goes wrong.
79. Investors love companies other investors love.
80. A lot of the best ideas seem silly or bad initially–you want an idea at the intersection of “seems like bad idea” and “is good idea”. (It’s important to note you need to be contrarian and right, not simply contrarian.)
81. Surf someone else’s wave.
82. Sometimes you can succeed through sheer force of will.
83. All startups are fucked in at least one major way. Keep going.
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84. Keep an eye on cash in the bank and don’t run out of it.
85. Pay a lot of attention to the relationship between cofounders, especially if both/all of you want to be CEO.
86. Stay small and nimble.
87. Have a staff meeting at least once a week.
88. Find a mentor that will teach you how to manage.
89. Keep burn low until you’re sure everything is working.
90. Be suspect about buying users.
eTalks | www.etalks.me
91. Lead by example.
92. Have the right kind of office. The proper office for a very small company is an apartment or house.
93. Share results (financial and key metrics) with the company every month.
94. Have a table in your offer letters that shows how much the stock you’re granting a new hire could be worth in various scenarios.
95. The best startups are defined by exceptions; all of these rules are probably breakable, but probably not all at the same time.
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“The mistake most founders make, is that they fail to act. You don’t have to rush into, but if a startup is what you want to do, don’t let your entire working life pass you by. Don’t be afraid to take that leap. The thing that is risky is not starting your own company.” – Sam Altman
ABOUT THE AUTHOR Sam Altman is an entrepreneur, programmer, venture capitalist and blogger. He is the president of Y Combinator and was the cofounder of Loopt, a location-based social networking app, which was part of YC’s first batch in 2005 and acquired by Green Dot in 2012. Prior to taking over as Y Combinator’s president, Sam was a part-time partner at Y Combinator since 2011. You can read Sam’s essays on startups and technology at his blog. He has consistently been recognized for his entrepreneurship. He was featured in Inc. Magazine’s Top 30 Entrepreneurs Under 30 and BusinessWeek’s Tech’s Best Entrepreneurs. As an early innovator in mobile location services, Sam joined Apple CEO Steve Jobs on stage at WWDC 2008, presenting Loopt as one of the first applications in the iPhone App Store. He has been a valuable source for many media outlets including Charlie Rose, CNN, The Economist, New York Times, Wall Street Journal and numerous others.
A B O U T eTA L K S eTalks is a multi-disciplinary community of entrepreneurs, artists, innovators, technologists, research scientists and leaders who share a common denominator to create a better world. At eTalks, we believe revolutionary ideas need freedom, come from passion, consist of conviction, shape by knowledge, inspired by need, bring change and make authentic differences. In this connected economy, entrepreneurial ideas are the raw materials for building economy, enhancing global relations and setting people financially free to involve and contribute in the mission of changing the world and making it a better place to live in. We’re building here a clearinghouse that offers free knowledge and inspiration from the world’s most inspired thinkers, and also a community of curious souls to engage with entrepreneurial ideas and interact with each other. To learn more, visit: eTalks.me. Join us on Facebook and Twitter.
ABOUT THIS eBOOK This eBook is a part of our series of eBooks to inspire the next generation of entrepreneurs. The content of this eBook was originally published by Sam Altman on his blog. The copyright of this work solely belongs to the author. This eBook is designed by Niaz Uddin. Niaz is an entrepreneur, a programmer, a designer and a maniac photographer. He is the founder and curator of eTalks. To learn more about his works, visit his official website. You are given the unlimited right to print this ebook and to distribute it via social media, email, your website, or any other means. You can print out pages and put them in your favorite coffee shop’s windows or your doctor’s waiting room. You can transcribe the author’s words onto the sidewalk, or you can hand out copies to everyone you meet. You may not alter this eBook in any way, though, and you may not charge for it.
