Lecture 1: How to Start a Startup
The goal:
starting a business where the goal is hyper growth and eventually building a very large company.
Your reason to have this goal:
You should only start a startup if you feel compelled by a particular problem and that you think starting a company is the best way to solve it.
The necessary (but not sufficient) conditions for achieving the goal:
You need a great idea, a great product, a great team, and great execution.
On ideas:
And great execution is at least ten times as important and a hundred times harder than a great idea.
… someday you need to build a business that is difficult to replicate
If they sounded really good, there would be too many people working on them.
Another somewhat counterintuitive thing about good startup ideas is that they’re almost always very easy to explain and very easy to understand.
On initial market:
You have to find a small market in which you can get a monopoly and then quickly expand.
A common mistake among founders, especially first time founders, is that they think the first version of their product - the first version of their idea - needs to sound really big. But it doesn’t. It needs to take over a small specific market and expand from there.
I prefer to invest in a company that’s going after a small, but rapidly growing market, than a big, but slow-growing market.
One of the big advantages of these sorts of markets - these smaller, rapidly growing markets - is that customers are usually pretty desperate for a solution, and they’ll put up with an imperfect, but rapidly improving product.
You can basically change everything in a start-up but the market, so you should actually do some thinking to be sure - or be as sure as you can be - that the market you’re going after is going to grow and be there.
On timing:
Sequoia’s famous question: Why now? Why is this the perfect time for this particular idea, and to start this particular company. Why couldn’t it be done two years ago, and why will two years in the future be two late?
Good startups usually take ten years.
On the product:
Most other problems that founders are trying to solve, raising money, getting more press, hiring, business development, et cetera, these are significantly easier when you have a great product.
Making something that people want, but only a medium amount, is a great way to fail, and not understand why you’re failing.
Build something that a small number of users love. It is much easier to expand from something that small number of people love, to something that a lot of people love, then from something that a lot of people like to a lot of people love.
If you get something people love, people will tell their friends about it.
You need some users to help with the feedback cycle, but the way you should get those users is manually—you should go recruit them by hand.
… remember that the goal is to get a small group of them to love you.
On simple initial product:
Another piece of advice to make something that users love: start with something simple. Its much much easier to make a great product if you have something simple.
Its much much easier to make a great product if you have something simple. Even if your eventual plans are super complex, and hopefully they are, you can almost always start with a smaller subset of the problem then you think is the smallest, and its hard to build a great product, so you want to start with as little surface area as possible.
Another reason that simple’s good is because it forces you to do one thing extremely well and you have to do that to make something that people love.
Dustin Moskovitz on being a founder:
Ben Horowitz likes to say the number one role of a CEO is managing your own psychology.
Your team will really signal off of what you’re bringing to the table. So if you take your foot off the gas, so will they.
Phil Libin on running a company:
The life of most CEOs is reporting to everyone else, at least that’s what it feels like to me and most CEOs I know. If you want to exercise power and authority over people, join the military or go into politics. Don’t be an entrepreneur.
Dustin Moskovitz on reasons for starting a company:
One is you’re so passionate about it that you have to do it and you’re going to do it anyways.
The idea is important, that it’s going to make the world better, so the world needs it.
the world needs you to do it. You’re actually well suited for this problem in some way.
We could see the impact it was having at Facebook, we were convinced it was valuable to the world. We were also convinced no one else was going to build it, the problem had been around a long time and we just kept seeing incremental solutions to it and so we believed if we didn’t come out with the solution we thought was best, there would be a lot of value left on the table. We couldn’t stop working on it and literally the idea was beating itself out of our chests and forcing itself out into the world. And I think that’s really the feeling you should be looking for when you start a company, that’s how you know you have the right idea.