Startup advice, briefly | Hacker News Reader

Startup advice, briefly

blog.samaltman.com

490 pointstaylorwc130 comments

One suggestion I would give Sam is to provide for each of the "bullet points" a couple of relevant stories about YC companies.

Most public advice is devoid of context where it originated and unless stated very precisely is wide open to misinterpretation, forming a cargo-cult, or being ignored as too generic. Only a few people in the world can be that precise (I know just two), but adding a relevant story is available to any diligent thinker and it works nearly as well. The best stories are either those that gave rise to the advice, or those where the advice was applied with a visible outcome.

And to put my money where my mouth is, consider this example:

Advice: In B2B be on the lookout for people, organizations, or events which can force the hand of your prospect customers.

Story: There was a company that made e-commerce vulnerability detection/prevention software, but when they tried selling it, they found that IT departments stonewalled the adoption because they didn't want to admit there was a security problem in the first place. After much frustrating direct sales attempts, our protagonists took their software to a payment processor, which has promptly mandated use of software for all e-commerce portals that were their clients. Problem solved.

Now consider first the advice on its own, and then the advice and the story together. Which one actually drives the point home?

the advice is look for X who can do Y, but provides little means of identifying if any given X can do Y

the story is better in this case because i can draw my own maxims from it which directly apply to my business.

the downside is the story doesn't fit in a tweet.

If that is the downside, perhaps we should stop catering towards the absolute lowest common denominator.

Should is a strong word. Like it or not. lowest common denominator is what get the most eyeballs.

In this example, why would you want the lowest common denominator? It's not always about quantity of eyeballs. It's about quality when you're managing a brand appealing to the best and brightest.

yes sadly this could be one bullet point. "Avoid acting in a meaningful way on advice in any startup advice post" Case in point here:

1) In general, avoid the kind of stuff that might be in a movie about running a startup—meeting with lawyers and accountants, going to lots of conferences, grabbing coffee with people, sitting in lots of meetings, etc.

then 2) "Don’t underestimate the importance of personal connections"

so make sure you're working and nurturing personal connections but don't do that by grabbing coffee with people or going to conferences. Wait what?!

I'm picking on Sam and that's not really fair because every list of startup advice has these seemingly contradictory bullet points throughout. My advice would be understand whether you're an extrovert or introvert and technically gifted or market understanding gifted. Go work for someone who has that same profile and watch what they do. Then go cofound with someone who is the opposite of your profile (an extroverted market understanding individual if you're an introverted developer) where you know you'll mutually respect each others differences and won't murder each other after 6 months. With the two of you (or 3 possibly) covering those 4 bases you'll build the right product for the market and will build a culture where a broad range of employees feel comfortable and will always have someone to work with investors and customers and someone else making sure you're not taking your eyes off the critical internal stuff.

Work out if you're the Edge or you're Bono and then find your other half. The rest is all gut and while you'll screw some things up you have the building blocks to succeed.

I think by grabbing coffee, he was referring the time wasting that can happen when everyone becomes aware of your startup. Would be investors (as they should) want to meet, press, and a slew of others. The vast majority of those meetings will be a huge time suck. Better to focus internally first.

In other words: show, don't tell (a well honed rule of good writing).

I think without the detail some of this type of general advice can also be viewed as harmful. Because like with any advice it totally depends on specifics and circumstances. Maybe it applies may it doesn't. How would someone starting out know?

For example:

"Don’t waste your time on stuff that doesn’t matter (i.e. things other than building your product, talking to your users, growing, etc.). "

So "stuff that doesn't matter" is everything but "building your product, talking to your users, growing, etc.?" (What is "etc" for that matter?)

By that token, if interpreted literally, it would mean "stop reading hacker news" or it could mean "don't worry about hiring anyone until you need to hire someone". Or "don't bother with backing up or security aspects". And so on. And we know that isn't what he means, right? Or is he assuming everyone can figure out exactly where the boundaries are?

The truth is everything is a matter of degree and nuance and quite frankly if you are starting out you really don't have the experience to to know how to navigate things with general guidelines.

As anyone knows who knows a great deal about a particular subject knows you often end up having people who ask you questions and start by telling you something they read online. (Happens to Physicians as well). And what they tell doesn't typically apply to their specific circumstances because you can't have a conversation with a blog post.

That. Learning is a high-p, low n problem even if YC attempts to do the opposite (extract a set of learnings that apply to every company, via observing first hand more than any other fund or entity in history). The richness of a story is a feature.

A nice parallel in finance is Steve Drobny's various books. Their format is anonymous interviews of very successful and well known hedge fund managers, where they explain their thinking through a bunch of events, actions, and analysis of what happened. They are REALLY good.

the "bullets" were a short list (as noted). Want real examples? check out the startup school or Stanford course videos he has done.

DON'T WORK WITH PEOPLE YOU HAVE A BAD FEELING ABOUT: I can not stress how dogmatically this should be adhered to enough.

Maybe it's the optimist in me, but I would change this to be "Work with people you have a good feeling about."

Though, the underlying difference is that the original phrase implies that everyone is fine to work with until you've eliminated them, whereas I'm saying that I assume no one is good enough until I've cleared them.

Let's add "Don't work with pedantic people for whom anything outside absolute positivity is a trigger."

Many a startup has been killed by this sort of up-with-people go-getter, who, with a (usually dumb) smile undermines this useful advice:

"Don’t deceive yourself about whether or not your users actually love your product."

"Ignore what the press says about you, especially if it’s complimentary."

IT'S NOT ABOUT NEGATIVITY OR POSITIVITY; IT'S A MATTER OF ACCURATE ASSESSMENT.

This is probably the biggest piece of non-advice in the entire article. Feeling is bullshit. If I had followed this advice throughout my career...

I've been introduced to people who I'd instantly hated but a weeks later had become my best mates and I've been introduced to people who I'd loved at first sight (oh, so social, funny and well spoken..) and they turned out to be completely useless.

It often takes time to get to know someone, don't let a first impression be a lasting but judge on the second, third and forth instead. You'd might be missing out.

It's not about first impressions - it's about people you have a bad feeling about but work with anyway because you assume it's going to be worth it. Don't do that. That's not what you're describing.

It's exactly what I'm describing, I've worked with people in the past who I'd initially greatly disliked (i.e. had bad feelings about) who then turned out to become great friends.

I think there is a difference between "liking" someone and "feeling good about them" (i.e. believing they will help advance your cause).

There are a lot of people I "like" who I wouldn't let within 10 miles of any working or financial endeavour. But great to have a beer with.

I've also noticed that when your priorities shift, so do your likes.

I have learned that little things in a start of a relationship will multiply over time. If somebody is just a bit dishonest early on, the relationship might explode in a couple of years due to lack of trust. With the people who have the same core values as me, I have the best long-term relationships that are good for both of us.

And get anything, no matter how small it seems, in writing. Even if the people involved seem like the nicest people you know and you have BBQs at their house every weekend. Just assume that at some point, though matters outside of anyone's control, they turn into agents that only seek your demise. Hopefully you won't need those provisions, but even for a few hundred K, it's surprising what people will do or turn into.

> Hopefully you won't need those provisions, but even for a few hundred K, it's surprising what people will do or turn into.

I've seen it happen for less than $1000.

I always wonder about this: "Obsess about your growth rate, and never stop. The company will build what the CEO measures. If you ever catch yourself saying “we’re not really focused on growth right now”, think very carefully about the possibility you’re focused on the wrong thing." There was a point in my current startup where it wasn't prudent to focus so much on growth, as we were transitioning from MVP to v1 product. Being bootstrapped and with a small team, spending money and time on acquiring users for the MVP would've been a bit of a waste. Maybe that's b/c we don't buy into the vision to grow fast and sell faster.

The best startup ideas are the ones that seem like bad ideas but are good ideas.

I've thought about this one a lot. Obviously we can't apply these one liners to everything, for example Dropbox and Stripe seemed like plainly obvious good ideas (to me).

You can make them seem like bad ideas in retrospect ("Oh, personal file hosting in the cloud? Been done a million times!") but I think even the traction of Dropbox's first HN post showed it was a good idea.

Is there a better way we can phrase this rule to be closer to an absolute truth?

The best startup ideas are noncentral members of a reference class of generally bad ideas. Everyone (including everyone else who could be executing on the idea) notices the reference class and thinks "bad idea", not stopping to notice what makes this particular idea not-so-bad.

I think there's probably something here related to timing. You want to be early enough that most people think what you're tackling isn't feasible (and therefore low competition) but not so early that it's impossible to capitalize a business that can go after the problem. In these cases, the idea being "bad" is more about people thinking you'r overly optimistic rather than people thinking it's not something that's useful.

I think what Peter Thiel says about secrets[0] is much closer to the "truth" than "build something that seems like a bad idea but isn't".

[0]http://blakemasters.com/post/22866240816/peter-thiels-cs183-...

No, this is hindsight bias. Dropbox did seem like a bad idea for exactly the reason you mention. There was barely an idea there because it was wholly unoriginal.

Dropbox's execution was better, and that's why they got traction from the first post.

And the timing was right, because there was a long term user base change starting around then. In 1998 or even 2003, most people only had one computer or internet device. In 2008, most people had multiple devices, so even if you weren't collaborating with anybody, you need something like Dropbox.

Stripe seemed like a bad idea because payments are probably one of the hardest things for a startup to tackle -- it involves a lot of regulation and fighting fraud and hackers (see all the BitCoin startups which have gone down in flames). People assume that Google or Apple would be better at doing payments. Stripe's execution is also way better. Maybe they have some other secret I don't know about.

The blog post sort of hints at it: do things in an hour, not in a week. But it should be obvious that you just have to be a better programmer, designer, and marketer than anybody else. :) And you have to work really hard, which it says at the end of the post. This advice isn't a shortcut: it's on TOP of simply being good and working hard (which are necessary but not sufficient).

Seeing some of Stripe's recent launches reminds me of Google in 2002. The quality is plainly there, and it is head and shoulders above the vast majority of startups. They are tackling a harder problem and doing it better.

So I think "bad ideas that seem like good ideas" is spot on. But there are multiple reasons things can see like bad ideas: 1) already been tried, 2) too hard, 3) big company will crush you, has more money and connections, 4) will take too long (for non-software startups, e.g. Tesla having to build factories and so forth, ... and many more. So it's "meta-advice", but still very accurate.

EDIT: I will also add that Dropbox seems like a bad idea because it seems like anybody can do it. Lots of experienced programmers say: "Oh it's just copying files. I can write that in a weekend".

It doesn't appear that there's room for great execution. Lots of programmers don't think it's worthy of them, since they are used to syncing files with their own tools. Why would you need to be a great programmer to create Dropbox?

But it turns out it's a lot deeper and harder than people think. I think there are lot of things like this. Any old programmer can do a 50% job. But to solve the whole problem takes a world class founder and team.

And of course the difference is you get $0 for the 50% job, but billions of dollars for the 100% job.

I've read comments talking about Joel Spolsky, saying: "Why should we listen to him; he makes bug tracking software?" Because they think bug tracking software is unworthy.

Joel is also super sharp, and that problem is worthy of him and his team. He knows something you don't know. If you do the math, I think it's clear that Fog Creek was pulling in early-Google-level profit per employee, with bug tracking software.

A problem is only as hard as the person who does it. If you are that great, you should be able to solve a problem with 10x or 100x less people, and reap the corresponding profits.

"Have a strategy. Most people don’t. Occasionally take a little bit of time to think about how you’re executing against your strategy. Specifically, remember that someday you need to have a monopoly "

Remember to ask yourself 4 questions: https://blog.ukigumo.eu/content/images/2015/02/governance-qu...

(sorry for the bad image quality btw)

It it contradictory to recommend that a founder a) prefer making something a small number love to making something a large number like but also b) obsess over growth? I took these to be valid for different stages - first a), then b).

Obviously this is all very insightful and has been discussed before as these ideas were developed. Nice to have the 20k ft view in one place.

as you said, it's first a and then b. if you build something a small number of users love, you'll find growing is far, far easier than if you don't do that first.

Growth can be relative. The overall numbers in a niche may be small/medium, but your growth rate within that niche can be big/fast.

"The best startup ideas are the ones that seem like bad ideas but are good ideas."

Great tip. So it's easy then. Find an idea that seems like a bad idea but is good. Also, if an idea seems like a good idea... throw it away. It's shit. Find one that seems bad. But is good.

Great list. I finally watched all of the YC Startup Class lectures this week, and I was hoping that someone would compile something like this.

Great advice for startups. Except I would say start with a problem rather than just an idea - a problem that no one is solving and that you think is important. That would hopefully lead to building something people want.

"Be a relentless execution machine." I wish it was as easy as it sounds. thanks for the one pager on tips .

It's hard to compress so much advice into one blog post and let is sound reasonable if context is missing.

However, I agree with all points except this one:

> In general, avoid the kind of stuff that might be in a movie about running a startup—meeting with lawyers and accountants, going to lots of conferences, grabbing coffee with people, sitting in lots of meetings

In general a successful CEO is 30% of his time networking and 70% working on hiring and leading the team and working on the product the product. Looking out for peers and spending time with them is important because...

- It changes your mindset, from being an employee to a real founder, this takes quite some time and your old employed friends are not the right peers anymore

- You learn a lot, small information exchanged on a conference can help you with fund raising; usually every meeting with a new person has some value, in particular at the beginning of your journey

- Especially lawyers—the good ones—are extremely well connected and sometimes help you with the first introductions

There are some CEOs who are real networking animals and do 100% networking and 0% working on their product, that's for sure not the way and I guess Sam referred to them.

Figure out a way to get users at scale (i.e. bite the bullet and learn how sales and marketing work).

Any pointers for reading material on this?

From Andrew Chen: "There’s only a few ways to scale user growth, and here’s the list" http://andrewchen.co/theres-only-a-few-ways-to-scale-user-gr...

Huh. There's a pop-up that blocks the text, and I couldn't even dismiss it from full screen - I had to zoom out first. And I couldn't leave a comment there.

Thanks, Sam. This is is a nice list. I would only add, don't listen to advice. For example, "make something people want" is fine, since most startups fail because no one wanted what they made. But it's also all too similar to a music industry exec asking for artists to "make what people want to hear." That's a great strategy to get more Top 40 hits but there's a risk of turning a whole generation of musicians into Michael Bubles producing well-received, cheaply-conceived pop music. I think I would say, "Be conceited enough to have a vision and, if money interests you, be humble enough to potentially throw some of it out to meet the market half-way."

>In general, avoid the kind of stuff that might be in a movie about running a startup—meeting with lawyers and accountants

Where is the line that says you move from "project" to needing to have your legal ducks in a row? All business advice I have ever heard says if you are doing business then you need to have a real business, with associated costs of legal, accounting, insurance, and so on.

It seems very risky to start making $500/mo while risking my house in the event a patent troll decides to sue me. Am I too paranoid on this front?

"Fuck you pay me" covers this [1].

[1] https://vimeo.com/22053820

Honest question: Who is the intended audience for all these startup/advice articles? Wouldn't the best founders be too busy building stuff instead of reading articles on the web. Wouldn't the majority of the audience of these articles be procrastinators (like me)? If so, wouldn't the best advice for such people be to stop procrastinating on the web, and to build stuff instead?

PS: The advice by Sam is great. I'm questioning the medium.

Honestly, startup advice articles are lead collection tools for ycombinator and other accelerators targeting "fresh" audiences. You may see similar advice articles from VCs too; blogging makes them more visible and help attract entrepreneurs.

You hit the nail on the head. As a top entrepreneur I spend a lot of my time reading VC blog posts. It's the best way to filter the investors I'm going to bless with the opportunity to invest in my next home run.

I'm being downvoted by VCs with crappy blogs

I can't tell if you are being serious or not, but I actually completely agree that "filter the investors I'm going to bless with the opportunity to invest in my next home run" is the right way to think about raising capital.

Probably the main audience is current/future/potential Y Combinator startups and the HN crowd. Just because you're "procrastinating" right now doesn't mean it won't be interesting or useful later, right?

The intended audience depends who's doing it and how:

1) someone like sama, president of YC and successful in his own right, shares his experience and everyone starting up is better off for his advice, including whatever subset end up in YC. This is someone people other than himself would call a "thought leader" and we benefit from their perspective.

2) someone like DigitalOcean, years spent creating a vast archive of content for their customers that is going to lure millions of new people searching google etc to their platform. This is like the longterm, aggregate effect of what YC is doing.

3) established companies trying to reach HN cause tons of developers are here and they're hiring. Best case scenario is they teach us something that touches on our own work.

4) someone who turns to HN and hopes to sell us something or hire us or use us for SEO by way of an unrelated blog post they design for us.

There was a recent example - http://blog.desk.pm/viral/ - that turned 50,000 visitors into $1,000. The developer estimates 50,000 ideal customers would generate $25,000 in sales.

If you had to pay for HN traffic it would not be viable for most startups. If you rank #1 on Google for "email etiquette" and you're not selling an email app or an etiquette course ...

I like the end. "Keep doing this for 10 years". :)

The last point that should be made:

Even if you follow all of the above, there is a 90% probability you will still fail. Startup success is still largely dictated by luck.

I would say "partly" rather than "largely". I think the reason luck seems to be such a significant factor is that everything else that depends on your idea, execution, networking, and so on are all tough, and exceptionally so en masse.

So, to minimise the impact of luck, you'd need to hit home runs in every other aspect which is unlikely. If your idea is great, but the rest so-so, then luck might seem like a stronger factor, and that's the sort of situation most of us would be in.

I beg to differ. Take the best 10 people, which are all the most dedicated, hardest working, most compentent: If these compete on the same idea in the same field, only one of them can succeed.

After all, running a startup means taking risks, and risks are just another word for stuff that you don't have under control, and which is best described by probability.

In which case, luck is still partly a factor rather than largely a factor. It's only accentuated in that case because your hypothetical has every venture pushing each facet to the limit.

More realistic would be 10 ventures where a couple bail, another couple just don't have a professional network, another has a great network but an ugly design or awkward name, and so on.

If these compete on the same idea in the same field, only one of them can succeed

I disagree. Its not a zero-sum game. Many markets (although certainly not all) are large enough for more than one company to be wildly successful.

Luck is random, but not uncontrollable. Successful people manufacture their own luck: live in the place where things happen, go to places where right people hang out, make yourself known and useful to well-connected people, attack the market where chances are tilted in your favor, be approachable, partner with people different from you so as to maximize your "luck surface area", the list goes on and on.

Chance favors the prepared mind.

All the things you described can also increase your bad-luck surface area. You are confusing bad-luck with inaction, which is not the same. You might end-up meeting wrong people, work on wrong ideas, hire wrong people, get wrong publicity, wrong timing etc etc.

I believe running a startup is like playing jazz. It's all about improvization. You are given a rhythm (company laws) and you are given the main theme (industry, markets). The rest is up to you. Think at least a few notes ahead and see if others like what you are doing. No other advice is valid in jazz, neither is it valid in startups.

Well said!

Maybe Ive read too many blogs. Maybe its because I watched the class but Im starting to feel like this is the "generic" advice for startups. It doesn't make it any less true or valuable, but everytime I read it I feel somewhat empty; as if there is something critical missing that everyone but me knows but doesn't write down because it feels like common sense. I'm not sure other people feel this way or how to not feel this way. It seems really obvious, almost too obvious that you should work really hard on ideas that other people want. Maybe thats all there is too it; It just feels hollow.

that really is all there is to it. if you've read enough that all of this strikes you as obvious, then you don't need to read anymore--get to work! :)

i wrote this because i think it's useful for people thinking about startups for the first time to have an outline of the advice all in one place--the startup class i did last fall is good but long.

Would you agree that it's simultaneously simple and horribly challenging to start a company? It's more about consistency and determination, than it is strokes of brilliance. In that way, I think this advice is obvious but it's much easier said than done to run your own business.

Absolutely. A few years ago, someone gave me some great advice about marriage: doing the right thing is always simple but that doesn't mean it's easy. That applies to a lot of things. Simple, but not easy.

My problem with this isn't that the advice is obvious, but rather obvious _only in hindsight_: "The best startup ideas are the ones that seem like bad ideas but are good ideas.", "the fast-growing market is going to be important but others dismiss it as unimportant"

these aren't obvious at all before they happen, not just for first-time startup people but everyone.

Exactly. One could easily come up with a corollary: "The worst startup ideas are the ones that seem like bad ideas and really are." Which is a truism that probably applies to most startup ideas.

IMHO, the worst startup ideas are the ones that seem like GOOD ideas, but turn out to be bad. A horrible idea that's clearly bad will never go anywhere. Ideas that seem good end up getting funded, offices are rented, people are hired...

""The worst startup ideas are the ones that seem like bad ideas and really are."

Based on the original thought "The best startup ideas are the ones that seem like bad ideas but are good ideas."

That one for sure is culled from a list of outsized successes (because they didn't make sense or had a large amount of barriers to success) but doesn't provide balance in the sense that bad ideas are more typically bad ideas. VC's like to hide behind this type of thinking often but they get around it by making bets on many companies whereas the person starting their own company has more of a reason to worry about the downside of a stupid idea.

I don't think for a second that it makes any sense that "best startup ideas are ones that seem like bad ideas but are good ideas".

Facebook wasn't a bad idea

Linkedin wasn't a bad idea

Amazon wasn't a bad idea (selling books to start)

So how do you define "bad idea"?

Is airbnb a bad idea because "who would want to rent out their apartment to strangers"? Or is it a bad idea because "you will never get regulatory clearance" (ditto for Uber).

This is just my opinion but

Facebook was a bad idea because MySpace had already won.

LinkedIn was a mediocre idea b/c it would be very difficult to get enough user adoption to be valuable.

Amazon was a mediocre idea b/c people want to go to a bookstore and look at a book before they buy it (usually). Also, that business has no moat (anyone could sell books online).

You're right though - ideas that seem bad are more typically bad ideas. I still think Twitter is a bad idea. :-P

Really the corollary to this is that all the obviously good ideas are already being executed by huge corporations with massive resources and its very hard to compete when you are severely outgunned.

Also, it seems like it's important to have an understanding of the domain that is somewhat counterintuitive and contradicts the common understanding that people have about it.

Also, be lucky. Your "understanding" might be insanity.

The other thing about "bad" ideas is this:

1) The public, reading about the idea doesn't know the full idea or the future plans.

2) The bad idea can allow a pivot into a good idea, once you have money and resources.

3) Impossible to predict the future and what will happen. Twitter is a good example of this (celebrity mention, mainstream media mention, civil uprisings, etc.)

Thanks for such a concise summary. I've also read this stuff enough times that it's nothing new but having it in one place gives a founder peace of mind. I think we're all resourceful enough to have heard each piece separately & can recognize the applications and misapplications in past startups. What this accomplishes is keeping everything top of mind before making these same mistakes too many times.

P.S. One thing people should note is the gold here regarding the non-technical side of building a product/starting a business.

Seconded. Good reminder for those of us actually in the trenches to skip over the vast majority of fluff written out there in startup land.

Had the same thoughts lately. There is way too much high level generic advice passed around.

Like 'you need to find product market fit'...well how the hell do you do that?

So I started a little blog series where I attempt to go a little deeper: https://medium.com/@matthiaswagner/you-can-t-be-the-muhammad...

Let me know what you think

I think it needs to keep being synthesized and summarized and codified only because there's always a generation of founders that haven't seen it. I feel the same way you do, but it's a good reminder to read it and it's good for new founders to have it freshly in front of them.

Why can't it just be put in a definitive book and handed around?

You're joking, right? If so, sorry for not being sure. If not, the answer is that lots of people do try writing books with startup advice, but there's no one with the power to wave a magic wand and make a book "definitive", have everyone agree that it's definitive, and make everyone new to the field realize that it's definitive and they should grab a copy.

"It just feels hollow."

- I'm probably too blue collar for these airy advice musings... but I really turn my nose up when a business man tells me to "work hard". Never do these manifestos acknowledge the basic truth that all entrepreneurs are escaping professions, trades, and "jobs". Scoff this terse anonymous message away all you like, the entrepreneur redefines work, then audaciously proclaims himself the hardest worker.

Sometimes, inventing something "people want" is the most wildly selfish thing a person can do. The sheepish, holier than thou advice post that admits this will have my ear.

Work: activity involving mental or physical effort done in order to achieve a purpose or result.

I'm not sure what definition you are using or how "the entrepreneur redefines work", but if you think that 'real' work must include lifting heavy things, then you are selling humanity short.

I think he's saying that for some people, entrepreneurship is more about indulgence than discipline, and that discipline is pre-requisite for something to qualify as "actual work".

In the terms of your definition, he's referring to entrepreneurs that are not directing their effort to "achieve a purpose or result" in a disciplined, effective manner. On paper, of course, they all have a purpose or result, but that doesn't mean the entrepreneur is actually working toward it, at least not very hard.

He seems to be expressing the sentiment that many entrepreneurs are of this slacker variety and use entrepreneurship to escape the demands placed on other, "normal" people for their maintenance, not to drive new results or purposes.

With the risk of sounding ignorant I'm going to go out on a limb and say one of the biggest missing pieces for most people is financial security - or at least the availability of a safety net.

Based on my experience there are four scenarios where someone could start a company:

- You have financial support from someone (whether you're in college or have a spouse that makes a good income - probably the most common)

- You have money yourself (perhaps from a previous company you started, etc. - fairly common)

- You relied on outside financial support while you saved up enough money to start your startup (this is most likely a scenario where a parent paid for ones college so they were able to save right after graduating - fairly common)

- You built a company that can sustain you and your employees from day one (very uncommon)

There are probably other obvious scenarios out there but these are based on my experience reading articles and speaking with founders.

Once you have that financial security it becomes much easier to put those actions into motion, and they become less hollow. You see them as tasks now because you actually have the time and resources to execute on them.

i'd thought about adding something about this but decided it's worth a full post.

i don't think you need very much of a cushion--i.e., 6 months of living expenses saved up is more than most founders have. but saving up a bit of money before starting a startup is definitely a great thing to do, and if you're an engineer willing to live cheaply, shouldn't take very long.

that said, startups are not the way to optimize for financial stability and not the right choice for everyone. if i had little money saved up and a family that depended on me, i'd choose being an engineer at a big company instead of starting a company until i felt i had some safety net in place.

Please write a post about financial security as a pre-req to doing a startup. I advise having at least a year's worth of living expenses saved. Because you don't want to be worried at all in the beginning about how you're going to pay your bills. You're going to start worrying when that money is half gone, and it sometimes takes more than 3 months to get traction.

I think many founders pursue funding too soon (and thus give up too much equity to VCs much too soon) because they didn't have enough savings at the start. I would expect VCs to disagree with me about that because it's in their interest to do so. :)

"VC here. We have always been at war with Eurasia."

Adding to your list: - Bootstrapping from a consulting/contracting gig into product company.

I think this approach is underrated and can highly recommend it.

If you are an engineer and you keep your living expenses low, you can most likely survive doing consulting/contracting for 1 day per week, leaving you the rest of the week to work on your startup. This minimizes your financial risk and leaves your savings intact, leaving you only with the opportunity costs (but if you are worried about those, you probably shouldn't be doing a startup in the first place).

Additionally this lowers the pressure to find investors quickly (or at all) and gives you the time to build something great.

Another one that I didnt included that I've actually written about is selling a business on your product or service before building anything. http://ryansrich.com/blog/step-one-acquire-customer.html

Remember that a startup isn't a small business. Your venture backers want you to be hungry -- financial stability for you lowers the probability of a 50x exit!

VCs actually select against financially stable founders?

From what I have seen, yes. Stable = complacent and comfortable in their mind.

On the brink = Will work 100 hrs a week and must succeed to survive.

Makes sense from that narrow perspective, but I think that only works in cases where hustle is the majority of the work. Come to think of it, the majority of investors are only interested in problems which are fairly low tech but require a lot of marketing/hustle.

This is the biggest mistake that I see startups make. Startups ARE small businesses, they are just supposed to be growing faster than "normal" small businesses. But many people make the mistake of not being a "small" business as a startup, and then they realize that they have no idea what to do when they have a medium size business on their hands (or never create any business at all in spite of products).

Avoid venture backers until you can't - entrepreneurs existed before venture capital, and exist outside of it as well. Venture should fund growth, but not inception.

The thing about startup advices is that even if you read it a hundred of time, it seems like you need to fuck it up at least once to really understand it.

I agree: Understanding something cognitively doesn't mean you've internalized it and can apply it. Even if you get ex ante insight from others, this can only partially help you because sometimes, you inevitably have to make mistakes yourself and learn only from breaking through your own sticking points.

This is YC advice boiled down to its essential and most generalizable terms. Because it's general (applies to almost all their founders) it's also generic - the patterns matched across hundreds of humans. It leaves out the human toil, mistakes and doubt - but most importantly the emotions. It doesn't tell you why you should follow this advice. It doesn't show you what happened to the folks that did. It takes for granted its assumptions about what's valuable. Same for success.

It's the Cliff's notes for the YC ideology. So it could be the Cliff's notes part you find hollow, or it could be the YC ideology part you find hollow.

A lot of YC's advice was not considered obvious when they started out (nearly ten years ago!).

If some of it seems generic and obvious now, that's because they've succeeded - more than anyone else - in discovering and sharing some actually repeatable strategies for building startups.

Maybe it's just about who it's obvious to. YC is run by technical people, and most VC firms aren't. When PG got into the game and started making good picks because he actually knew what he was talking about and had direct experience, unlike the finance guys dicking around with macro-scale projections pulled out of thin air, he wrote down the obvious from his perspective and was immediately copied (poorly, in general) by the people that saw the success knowing what you're talking about can bring.

The issue is that you need to find an idea for a product, wherein 1) the product has the potential to generate tens of millions of dollars of value 2) the first, valuable, version of the product can be built in a couple man years. That is really, really hard to do. There are tens of thousands of smart, competent people searching for such ideas, working on such ideas.

If you want to make millions of dollars, if you want to make much more money than the average smart engineer, you need some secret. You need some idea or skill that happens to be the right thing at the right time. Nobody can tell you what that secret is. If Sam could tell you, it would not be a secret.

So you are right. There is something critical missing. What is missing is the actual secret, the actual idea that you have a unique insight into. But nobody can tell you what that will be.

I agree with this. Unfortunately it is against the common notions that ideas don't matter, and execution is all.

My own take is that truly great ideas are as rare as hen's teeth, i.e.those that fulfill your description.

I don't think the secret is usually the idea. The secret is usually a method of execution that lets you get to the finish line, where everyone else was too slow and ran out of runway.

Which is to say, if you're the right person at the right time, you don't know the secret; you are the secret. Your skillset (or your team's skillset) is the secret.

The tech that just became possible to leverage that nobody else has noticed yet but you're familiar with from its prototype days is the secret. Being able to bring your experience solving problems with 40-year-old systems to analogous problems in modern spaces is the secret. The pitch is not the secret.

As you say, the secret likely is not often the idea per se, as truly original ideas (i.e. potential Nobel prize-worthy ideas) are truly rare, and often difficult to recognize as such. They are much more rare than successful startups.

So, banking on an idea alone as the route to money is not usually as smart move, unless... the idea is really innovative.

Making a startup is both an art and a science. The part which is purely "art", the bigger part, you will have to learn through actual doing, but the "science" part, the small part which yields repeatable results in isolated areas of the craft, is something you can also learn from others. Sam did a good job summarizing all of that which is known to YC to be repeatable.

If all of the article rings true and obvious, you're done reading, it's only doing from now on.

If it reads unclear, you should watch and read the supporting material.

If it all rings hollow and devoid of substance, you will, too, have to start doing. Eventually you will come to similar conclusions under your own power (which is why I called it "repeatable" - it repeats quite often), and then your reading history will make it easier for you to come to terms with your own experience.

It seems that way until you find yourself in a situation where none of this advice is being followed. The opposite of doing these things doesn't look terribly sinister, just has poor results. A founder/CEO that pressures the engineers to cut corners on the product to get a few more customers before the next fund-raising round is an easy trap to fall in to. The investors will often be providing this pressure directly. (E.g. "I'd invest if you were showing a little more growth.") It all seems very reasonable when you're in the middle of it.

why would you feel that this is un-reasonable. If getting a less than perfect MVP out can help the company meet certain important deadlines, what's wrong with that?

I started to get the same sense, and remembering a couple of the following things have helped me keep my bearings:

-Startup advice, especially from this corner of the world, applies to a very specific way of creating a software company through venture capital, and subsequently, aggressive growth. It is also built to take advantage of a highly optimistic financial environment that, to me, seems to be temporary (look at VC's performance as an asset class).

-The main purveyors of "startup canon", if you will, just so happen to directly benefit from more people taking their advice and entering the startup pool. In the most jaded view, Graham and the like's advice/essays/mantras are propaganda that, if more people listen to, directly improves their portfolio. I don't go quite that far as a lot of the advice is sensible and experience based, but it's really important to remember that their advice isn't philanthropic.

-Finally, startups are just businesses. The entrance of venture capital into the equation suspends the normal rules of business for a while, but eventually they do return. And while the way software allows people/companies with little to no capital attack large markets is unique, I feel like a lot of founders would do well to broaden their perspective beyond the relatively brief history of silicon valley when looking for insight on guiding their businesses.

I'd love a list of tried-and-tested-to-the-point-of-being-cloying bootstrapping advice.

- control your costs

- spread your risk (no single customer > 20% of your business)

- save for the next crisis when the money is good

- focus

- cashflow beats cash

- find your peers and establish relationships

- know your strengths, more importantly, know where you're weak

- working overtime is no substitute for bad planning

- every deal should make money

- better 10 small deals in the pocket than one huge one that you're chasing for the next 6 months

- make a cashflow projection and keep it updated for at least 6 months out

- if you have less than 6 months of running costs in your bank you're in a crisis

Those are pretty reasonable rules for "startups" too.

Except that financed companies seeking high growth may for a while abide by "cash creates cash flow", "deals that don't make money can still make you grow", and "spend on growth fast, so you'll be bigger than the next crisis".

Extremely risky, but those seem to be the norm on companies that get huge.

> - working overtime is no substitute for bad planning

I feel like I know what you mean, but this one feels off to me. I think you mean, "working overtime is no substitute for good planning." As in, working overtime is a consequence of bad planning (not always, but an indicator at least).

Exactly. It seems to bump against the warning against eating up your buffer. Whether that's physical space, time, or money. We all need some wiggle room to deal with the unexpected, don't run to the edge with everything or one small mistake will ruin everything.

Yes, you're right that was a mistake.

My sister has a saying she picked up from somewhere that runs along similar lines: Luck is a poor substitute for strategy.

I definitely believe there are more cynical motives in SV than many wish to believe. There's a reason VCs and incubators overwhelmingly target naive college kids. Most of their programs are structured such that any participation by less-naive persons is impractical.

The VC line on this is simply that "college kids are just super innovative, pure, unadultered". Ignoring the fact that this is basically an optimistic list of synonyms for "naive", if you believe that line of horse hockey you are likely one of the naive college kids being taken advantage of (or wish you were).

It's a real shame because startups could benefit greatly from the mature leadership available out in big bad "corporate America". Not talking multi-million dollar CEOs here, just regular experienced folks who have mortgages and families to support because they're older than 20 and would like at least a market-competitive salary.

Instead, VC firms hoard this maturity and experience for themselves, and leave their founders locked in apartments, surviving off a stipend that has room only for ramen to the exclusion of both fair treatment and personal dignity.

There is undoubtedly an insidious element in this. There's no way experienced investors are looking at these companies and sincerely saying "Oh yeah, those two 23-year-olds definitely have a handle on this."

The simple truth is that for many investors, it's an entertaining, [relatively] cheap, and profitable lottery. And they want to keep it cheap.

It's encouraging that others also see this. I don't know what workable solutions to this problem would look like, but recognizing it's a problem is a good first step.

You'd be surprised how often people don't follow what seems like obvious advice.

Lots of startup advice seems obvious once you have heard or read it a few times. But you only understand the value of such advice when you fail to follow it.. For example, I read the fantastic list "57 startup lessons" by Slava Akhmechet when it was published. But only after I personally failed in many of these, I really understood how hard it is to follow even simple, obvious advice. When I read this same list after my startup failure, the deep wisdom of this list really stung hard.

As a startup founder, you should go through this kind of list regularly to keep yourself in check.

http://www.defmacro.org/2013/07/23/startup-lessons.html

I wish more founders had experience working in annoying corporate environments with a variety of managers (on the "good" "bad" scale) before starting a startup. I believe that would result in picking better management. And that management would more closely align with the culture.

My general advice to anyone reading the article:

1. Ensure the list of tips are easily accessible. (The advice will do nothing for you if you can't find it when you are making critical decisions.)

Once you have solved the distribution problem, now comes the real opportunity:

2. Follow through with the list. :-)

Just do it for 10 years, and comment after that. I can guess that 2 from 10 will be still negative about this "generic advice", but other will reach success. Another strange thing - definition of success in general.

"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man." --George Bernard Shaw

From the same work, Maxims for Revolutionists:

"Civilization is a disease produced by the practice of building societies with rotten material.

Those who admire modern civilization usually identify it with the steam engine and the electric telegraph.

Those who understand the steam engine and the electric telegraph spend their lives in trying to replace them with something better."

http://www.gutenberg.org/cache/epub/26107/pg26107.txt (Thanks to the Gutenberg project)

I feel like this post boils down the hundreds of posts that I've seen on YC into one small digestible reference. It's pretty nice.

Would be great if someone could say how they got their personal connections to work for their startup in a meaningful way.

I wonder if there are counter-examples of successful companies that ignored some of these rules?

Startup advice - make sure what you do is not something someone else does!

Or do it better to the point that someone else doing it doesn't matter? Google wasn't the first search engine after all....

Not taking any advice is the best advice.

> The best way to start a company is to build interesting projects.

The best way? Lots of successful entrepreneurs would disagree, and did set out to build a business to make money. And outside of the SV bubble people don't imply that is The Wrong Way.

what if you have an mvp, you are gettin feedbacks from paying users, and you are trying to make them happy. what is this processed called formally and where would it be on the startup map?

   Don’t waste your time on stuff that doesn’t matter (i.e. 
   things other than building your product, talking to your 
   users, growing, etc.).  In general, avoid the kind of 
   stuff that might be in a movie about running a startup
   —meeting with lawyers and accountants, going to lots of 
   conferences, grabbing coffee with people, sitting in 
   lots of meetings, etc.  Become a Delaware C Corp (use 
   Clerky or any well-known Silicon Valley law firm) and 
   then get back to work on your product.

First you tell me not to waste a lot of time with lawyers and accountants, then you tell me to start a subchapter-C corp. Okaaaay.

I think there was an underlying theme that this post was about a progression in time. At the beginning, its all about ideas, no companies (you shouldn't need lawyers and accountants for a small project). Later on its a Sub-chapter C corp, with all of the associated lawyers and accountants.

But the text that I quoted has absolutely no hint of that.

It's ridiculous advice, unless you just enjoy paying your taxes twice. Start with a cheap, simple LLC, then sell the business to a newly-formed sub-S or -C corp when you need to seek outside funding.

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