Video Lectures_How to Start a Startup (Sam Altman, Dustin Moskovitz)
The first speaker was Sam Altman, the president of Y Combinator, who was mainly talking about four areas that people who want to start a start up need to excel in order to succeed. The four areas are the idea, product, team, and execution. But these four factors does not mean successful startup, people may still fail. The successful outcome is a formula which equals to idea x product x team x execution x luck. And as Sam has mentioned, luck can be anything from 0 to 10,000. But if a person does more than his best in other four areas, the chance of being successful is increasing. But before he went into details about the four areas, he gave some reasons why and why not to start a startup (the same was mentioned by Dustin in his part of a speech).
The first and the biggest no for creating a startup in Sam’s point of view is the wish to get rich. Dustin complimented this part with several other points, such as being glamorous, being the boss, having flexibility and etc. Talking about why to start a start up (not just an ordinary company), the advantage is the fact of having equal and an even field, whether it will be about your age, wealth, experience or anything. But the most important thing about starting a startup should be the feeling of being compelled with a problem, and having a passion to find a solution and solve it. That’s when the startup will have a possibility of success.
Discussing the four areas, each of them has its importance. Having a great idea but weak execution will lead nowhere and vice versa. Although execution is 10x more important than the idea, and 100x harder, starting a startup should begin from the idea, not the startup itself. The idea should be long term, so when you think 10 years forward, you are still as passionate about it as now. The other interesting fact is that when having several startup ideas, choose the hardest one, so it will be difficult to replicate, people will be more eager to help, and it will excite and motivate more. But on the other hand, if it takes more than a sentence to explain your idea than it’s too complicated. You have to find the golden mean. The confusing fact about the creation of the ideas is that it will seem both like a bad idea, and (at the same time) a good idea. The other important fact is that you don’t have to think about the monopoly at once, it is better to have a small portion of the market then expand. In addition to this, it is also very important to think about the market long term (growth of the market). It is more beneficial for a startup to be in a small but rapidly growing market, than in a big but slowly growing one. The other essential thing that needs to be taken into consideration is asking you a question WHY NOW? Why hasn’t anyone already started it? Or why shouldn’t I start it after several years? If you have the answers to this questions then you are one step (out of infinite) closer to your successful startup. And don’t forget that you can’t create a market that doesn’t want to exist; that is finding solutions to problems that don’t exist. So it’s better to find solutions that you yourself need.
Talking about the product part, the most important key aspect is to build something that users love. To do so, you need to talk to users, always keep the feedback cycle closed (no Google ads in early days, just you getting the feedback by hand), never put anyone between you and customers, use metrics and etc. So to get the market to love your product, at first you only need to build something that a small number of people love than a big number of people like. So the ones that love your product will “create” organic growth by word of mouth. This way you will gain more and more valuable customers.
Dustin’s part was covering the answers to the question “Why to start a startup?”, which was already discussed in the beginning. He also mentioned some quotes, which were really to the point. The first quote was about having an extremely big amount of responsibility:
People have this vision of being the CEO of a company they started and being on top of the pyramid. Some people are motivated by that, but that’s not at all what it’s like.
What it’s really like: everyone else is your boss — all of your employees, customers, partners, users, media are your boss. I’ve never had more bosses and needed to account for more people today.
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.
The other quote was about the “advantages” of having a flexible time:
If you’re going to be an entrepreneur, you will actually get some flex time to be honest. You’ll be able to work any 24 hours a day you want!
In conclusion, as Dustin finished his speech:
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.