CS183-B


Ideas and Products; Why to Start a Startup

So the four areas: You need a great idea, a great product, a great team, and great execution.

The outcome is something like idea x product x execution x luck, where luck is a random number between 0 and 10,000.

You and inexperienced, you can do this. Old and experienced, you can do this.

Size and growth of the market, the growth strategy for the company, the defensibility strategy, and so on. When you’re evaluating an idea, you need to think through all these things, not just the product.

There is a huge advantage to long-term thinking.

You need to build a business that is difficult to replicate. Founders get it wrong all the time.

The idea should come first and the startup should come second. Wait to start a startup until you come up with an idea that you feel compelled to explore.

The best companies are almost always mission oriented.

A lot of founders, especially students, believe that their startups will only take two or three years and then after that they’ll work on what they’re really passionate about. Good startup ideas usually take 10 years.

If you have a mission oriented company, people outside the company are more willing to help you.

Derivative companies, companies that copy an existing idea with very few new insights, don’t excite people and they don’t compel the teams to work hard enough to be successful.

The best ideas often look terrible (from a business perspective) at the beginning. Google, Facebook, Instagram. If they sounded really good, there would be too many people working on them.

You want an idea that turns into a monopoly. You can’t get a monopoly right away. You have to find a small market in which you can get a monopoly and then quickly expand. “Today, only this small subset of users are going to use my product, but I’m going to get all of them, and in the future, almost everyone is going to use my product.”

You need conviction is your own beliefs and a willingness to ignore other’s naysaying. If you do come up with a great idea, most people are going to think it’s bad. It means they won’t compete with you.

You want to sound crazy, but you want to actually be right. You want an idea that not many other people are working on.

Founders need to think the first version of their product needs to sound really big.

You need a market that is going to be big in 10 years. Most investors don’t think about how the market is going to evolve.

You should care much more about the growth rate of the market you’re in.

Small, rapidly growing market usually have customers who are desperate for a solution.

You cannot create a market that doesn’t exist.

Why now? Why is this the perfect time for this particular idea, and to start this particular company.

It’s best if you’re building something that you yourself need.

Good startup ideas are easy to explain but hard to understand. If it takes more than a sentence to explain, it’s almost always a sign that it’s too complicated.

One of the great things about being a student is that you’ve got a very good perspective on new technology.

Good ideas take a long time, so start working on them right now. We hear all the time people say they wish they did more as a student.

College is great for getting to know potential cofounders.

People (when applying to Y Combinator) have not thought about the market first. It’s the importance of thinking about what customers want, and thking about the demands of the market.

To build a really great company, you first have to turn a great idea into a great product. Until you build a great product, nothing else matters.

One of the most important tasks for a founder is to make sure that the company builds a great product. Step one is to build something people love.

Work on their product, talk to users, exercise, eat and sleep, and very little else.

PR, conferences, recruiting advisers, doing partnerships, you should ignore that and build a product an get it as good as possible by talking to users.

Your job is to build something that users love.

Build something that a small number of users love.

If you get something people love, people will tell their friends about it. Organic growth.

Very few startups die from competition. Most die because they fail to make something users love, they spend their time on other things.

Another reason that simple is good is because it forces you to do one thing extremely well and you have to do that to make something that people love.

FANATICAL — a word that comes up again and again when you listen to successful founders talk about how they think about their product.

You should go recruit users hand by hand. Don’t buy google ads to get initial users. You need users that will give you feedback everyday.

Get users in ways that don’t scale.

The goals is to get a small group of users to love you. Understand that group extremely well, get extremely close to them. Listen to them, and they’ll be willing to give you feedback.

You want to build an engine in the company that transforms feedback from users into product decisions. Ask. Ask. Ask.

If your product gets 10X better once per week, that compounds really quickly.

You have to do sales and customer support yourself. It’s the only way.

If you don’t get the above information right, nothing else in this class matters.

People in any career have a fear of failure. When you’re an entrepreneu, you have a fear of failure on behalf of yourself and all the people who decided to follow you. People are depending on you for their livlihood. They’ve decided to devote the best years of their life following you. You’re always on call. If something comes up, you’re going to deal with it.

Ben Horowitz says the number one role of a CEO is managing your own psychology. Make sure you do it.

Everyone else becomes your boss. Customers, partners, users, media.

You are a role model for the company. If you take your foot off the gas, so will they.

Your always working anyways.

Start a company if you can’t not do it. You’re super passionate about this idea, you’re the right person to do it, you’ve got to make it happen.

You’ll need that passion to get through all of those hard parts.

The other way to interpret this is the world needs you to do it. This is validation that the idea is important, that it is going to make the world better, so the world needs it.

The second way to interpret this is that 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.