I made some notes while watching/listening. Might include minor errors or misinterpretation on my side
4 critical parts: Idea, Team, Product, Execution
1. Idea
-> Good startups take about 10 years
-> Startup should feel like an important mission
-> Hardest part coming up with great ideas: best look terriblea t the beginning (e.g. search engine, social networks limited to college students without money, a way to stay at stranger's couches)
-> "Today only a small subset of users want to use my product, but I'm going to get all of them"
-> You need to believe and willing to ignore naysayers
-> Most people will think your idea is bad: be happy. they won't compete. it's not dangerous to tell people your idea.
-> it's okay if it doesn't sound big at first. first version should take over a small specific market and expand from there. unpopular but right
-> take the time to think about how the market will evolve. market size in ~10 years. think about growth rate of the market instead of its current size. small, but rapidly growing market! people are desperate for a solution
-> you cannot create a market that does not exist
-> there are many great ideas, pick and find one you really care about.. "SW is eating the world"
-> "Why Now?" - dixit Sequoia - have a great answer to this question
-> Build something that you yourself need. You'll understand it a lot better.
-> Get close to your customers. Work in their office or talk to them multiple times a day
-> If it takes more than a sentence to you know what you're doing, it likely is too complicated
-> "Do more when you're a student." Think about new ideas and meet potential co-founders
-> Think about the market first and you'll have a big leg up
2. Product
-> Great Idea > Great Product > Great Company
-> Until you build a great product, almost nothing else matters
-> Sit in front of the computer working on product, or talk to your customers
-> Biz Dev, Raising Money, Raising Press, Hiring are significantly easier when you have a great product
-> Step 1: build something that users love
-> YC is all about: Exercise, Eat, Sleep, Work on Product and Talk to Customers
-> "It's better to build something that a small number of users love, than a large number of users like"
-> Get growth by word of mouth. This works for consumer as well as enterprise products. You'll see organic growth. If you don't have some early organic growth, then your product isn't good enough. It's the secret sauce to growth hacking.
-> Breakout companies always have a product that's so good that grows on word of mouth
-> Great products win. Make something users love.
-> Keep it simple. Look at first versions of Google, Facebook, iPhone
-> Founders care about small details. They're fanatical
-> One thing that correlates with success is hooking up PagerDuty to their ticketing system. Response time within an
hour.
-> Go recruit your first users by hand to get feedback every day.
-> When everyone tought Pinterest was a joke, Ben Silbermann walked around coffee shops in Palo Alto to convince people to use Pinterest. He set Pinterest to the home page in the Palo Alto public library so people would discover the website. Do things that don't scale. Read Paul Graham's essay.
-> Create a tight feedback loop. What do users like? What do they pay for? What would make them recommend it?
-> Try to keep your feedback loop going for all of your companies' life
-> Do sales and customer support yourself in the early days. This is critical. Do not hire these people right away.
-> Keep track of metrics. Look at active users, activity levels, cohort retention, revenue, etc. Be brutally honest if they don't go in the right direction
-> If you don't get your product right, nothing else in this class will matter.
Why start a startup?
-> "It's glamorous", "You'll be the boss", "Flexibility", ...
-> Entrepreneurship gets romanticized
-> The reality is not so glamorous. It is a lot of hard work. You're sitting at your desk, focused, figuring out hard engineering projects. It is quite stressful.
-> Founder depression is a real thing. If you start a company, it's gonna be extremely hard
-> You have loads of responsilibity
-> You're responsible for the opportunity cost of the people who decide to follow and help you out
-> You're more committed. A founder cannot leave a company. For 10 years if it's going well. Probably for 5 years if it's not going well.
-> "Number one role of a CEO is managing your own psychology"
-> You're always on call, you're a role model. You'll always be working anyway
-> If you joined Dropbox or Facebook early on, your financial reward might be a lot better than when starting a startup
-> If you join a later stage startup, you have more impact - massive userbase, existing infrastructure, work with an established team. E.g. Brett Taylor was employee #1500 at Google and he invented Google Maps. He got a big financial reward for this.
-> What's the best reason? You can't NOT do it. You have to make it happen
-> Do it out of passion
-> The world needs it (if not, go do something else) and/or the world needs you (you're well-suited to do it). The world needs you somewhere, find where.
The surprising thing was that Sam's advice about working on a big mission and something "important" seems directly contradicting what pg has been writing for years.
Just as trying to think up startup ideas tends to produce bad ones, working on things that could be dismissed as "toys" often produces good ones. When something is described as a toy, that means it has everything an idea needs except being important. It's cool; users love it; it just doesn't matter. But if you're living in the future and you build something cool that users love, it may matter more than outsiders think. Microcomputers seemed like toys when Apple and Microsoft started working on them. I'm old enough to remember that era; the usual term for people with their own microcomputers was "hobbyists." BackRub seemed like an inconsequential science project. The Facebook was just a way for undergrads to stalk one another.
I'm not too keen on Dustin Moskovitz's whole spiel about telling people not to start startups. In a course about how to start startups, it seems really misplaced.
They addressed these points directly in the lecture.
Sam's message here is to try and shift the balance back to where it should be. PG says that they seemed like toys. Not that they were toys. I think what they've said is very well aligned. Many people in the past few years have totally dismissed having a good idea as being important.
Similarly, Dustin Moskovitz is just trying to counterbalance the way over-romanticized view of startups in our culture. Many people get into startups for the wrong reasons, and anyone convinced not to by what he has said is probably much better off.
Of course, eventually you want to do something important. But since we are talking about starting a startup, I just can't see how sama's advice aligns with this, for example:
I think the way to use these big ideas is not to try to identify a precise point in the future and then ask yourself how to get from here to there, like the popular image of a visionary. You'll be better off if you operate like Columbus and just head in a general westerly direction. Don't try to construct the future like a building, because your current blueprint is almost certainly mistaken. Start with something you know works, and when you expand, expand westward.
The popular image of the visionary is someone with a clear view of the future, but empirically it may be better to have a blurry one.
I read Thiel's book and class notes, in which again he talks about having a vision and big idea. Sounds great until you stop to think about how Thiel's own startup Paypal came about.
Quoting Max Levchin from Founders at work:
I think we didn't know what we were doing. I think the hallmark of a really good entrepreneur is that you're not really going to build one specific company. The goal—at least the way I think about entrepreneurship—is you realize one day that you can't really work for anyone else. You have to start your own thing. It almost doesn't matter what that thing is. We had six different business plan changes, and then the last one was PayPal.
If that one didn't work out, if we still had the money and the people, obviously we would not have given up. We would have iterated on the business model and done something else. I don't think there was ever any clarity as to who we were until we knew it was working. By then, we'd figured out our PR pitch and told everyone what we do and who we are. But between the founding and the actual PayPal, it was just this tug-of-war where it was like, "We're trying this, this week." Every week you go to investors and say, "We're doing this, exactly this. We're really focused. We're going to be huge." The next week you're like, "That was a lie."
Paypal didn't follow any of Thiel's recipe for a great startup:
They didn't start out with a very clear plan or big idea. They pivoted lots. They had intense competition.
I'm not sure the two view points really contradict. While early microcomputers, BackRub and early Facebook may have seemed like toys I sure some of those folks were aware they could become "important." I think Gates and the Apple guys were aware microcomputers would become widespread and the Google guys were aware better search could be a big deal. I think from interviews Zuckerberg was a bit surprised by how theFacebook took off though. Although subsequently he's got the "For us, it is this vision of connecting the world," thing going on.
It's easy to write grand vision statements in retrospect. At the time though, Page and Brin said looking at Sean Parker, "We'll never be as famous as him", as per a story Ron Conway once told at Startup school.
I believe that in the early days Mark Zuckerberg wanted to build some kind of Dropbox, and that Facebook was some kind of interim thing. It was exposed in a chat that came out with litigation with Winklevoss brothers. He ended up sticking with building Facebook.
As there is a high failure rate in startups it is very important to know though whether you are made for that kind of world. True, you'll learn a lot with every failure but not all of us want to spend years and years on miscarriages.
I believe you can explain the difference by understanding Sam to mean "important to the founders". As he explains, this is the source of the motivation to persist, despite the risk and downsides discussed by Dustin.
4 critical parts: Idea, Team, Product, Execution
1. Idea
-> Good startups take about 10 years
-> Startup should feel like an important mission
-> Hardest part coming up with great ideas: best look terriblea t the beginning (e.g. search engine, social networks limited to college students without money, a way to stay at stranger's couches)
-> "Today only a small subset of users want to use my product, but I'm going to get all of them"
-> You need to believe and willing to ignore naysayers
-> Most people will think your idea is bad: be happy. they won't compete. it's not dangerous to tell people your idea.
-> it's okay if it doesn't sound big at first. first version should take over a small specific market and expand from there. unpopular but right
-> take the time to think about how the market will evolve. market size in ~10 years. think about growth rate of the market instead of its current size. small, but rapidly growing market! people are desperate for a solution
-> you cannot create a market that does not exist
-> there are many great ideas, pick and find one you really care about.. "SW is eating the world"
-> "Why Now?" - dixit Sequoia - have a great answer to this question
-> Build something that you yourself need. You'll understand it a lot better.
-> Get close to your customers. Work in their office or talk to them multiple times a day
-> If it takes more than a sentence to you know what you're doing, it likely is too complicated
-> "Do more when you're a student." Think about new ideas and meet potential co-founders
-> Think about the market first and you'll have a big leg up
2. Product
-> Great Idea > Great Product > Great Company
-> Until you build a great product, almost nothing else matters
-> Sit in front of the computer working on product, or talk to your customers
-> Biz Dev, Raising Money, Raising Press, Hiring are significantly easier when you have a great product
-> Step 1: build something that users love
-> YC is all about: Exercise, Eat, Sleep, Work on Product and Talk to Customers
-> "It's better to build something that a small number of users love, than a large number of users like"
-> Get growth by word of mouth. This works for consumer as well as enterprise products. You'll see organic growth. If you don't have some early organic growth, then your product isn't good enough. It's the secret sauce to growth hacking.
-> Breakout companies always have a product that's so good that grows on word of mouth
-> Great products win. Make something users love.
-> Keep it simple. Look at first versions of Google, Facebook, iPhone
-> Founders care about small details. They're fanatical
-> One thing that correlates with success is hooking up PagerDuty to their ticketing system. Response time within an hour.
-> Go recruit your first users by hand to get feedback every day.
-> When everyone tought Pinterest was a joke, Ben Silbermann walked around coffee shops in Palo Alto to convince people to use Pinterest. He set Pinterest to the home page in the Palo Alto public library so people would discover the website. Do things that don't scale. Read Paul Graham's essay.
-> Create a tight feedback loop. What do users like? What do they pay for? What would make them recommend it?
-> Try to keep your feedback loop going for all of your companies' life
-> Do sales and customer support yourself in the early days. This is critical. Do not hire these people right away.
-> Keep track of metrics. Look at active users, activity levels, cohort retention, revenue, etc. Be brutally honest if they don't go in the right direction
-> If you don't get your product right, nothing else in this class will matter.
Why start a startup?
-> "It's glamorous", "You'll be the boss", "Flexibility", ...
-> Entrepreneurship gets romanticized
-> The reality is not so glamorous. It is a lot of hard work. You're sitting at your desk, focused, figuring out hard engineering projects. It is quite stressful.
-> Founder depression is a real thing. If you start a company, it's gonna be extremely hard
-> You have loads of responsilibity
-> You're responsible for the opportunity cost of the people who decide to follow and help you out
-> You're more committed. A founder cannot leave a company. For 10 years if it's going well. Probably for 5 years if it's not going well.
-> "Number one role of a CEO is managing your own psychology"
-> You're always on call, you're a role model. You'll always be working anyway
-> If you joined Dropbox or Facebook early on, your financial reward might be a lot better than when starting a startup
-> If you join a later stage startup, you have more impact - massive userbase, existing infrastructure, work with an established team. E.g. Brett Taylor was employee #1500 at Google and he invented Google Maps. He got a big financial reward for this.
-> What's the best reason? You can't NOT do it. You have to make it happen
-> Do it out of passion
-> The world needs it (if not, go do something else) and/or the world needs you (you're well-suited to do it). The world needs you somewhere, find where.