The Keys to Starting a Startup

By Sam Altman, Simplified By, Matt Hamlin

Sam Altman wrote an excellent piece on how to start a startup titled the Startup Playbook. In the article he included most of the advice that would be taught to new YC and YC Fellowship members. I decided to take out the core values from each part of this article and make them available as quick reads for someone who wouldn’t want to read the entire post.

Sam breaks down his post into four key areas that founders should focus on in the early days, the first is a killer idea, the second is having a great founding team, the third is having a great product, and the fourth is great execution.

The Killer Idea

Answer the following as clearly as possible:

  • What are you building?
  • Why are you building that?

Find the minimum thing you can build to test the idea; don’t write any code unless you absolutely need to.

Other questions you should be able to answer:

  • How will this idea become a monopoly?
  • How big is the market now, what about in 10 years?

Key Takeaway: Find the idea first, don’t start a startup just to start a startup.

A Great Team

The next important step in starting a great startup is the founding team.

Ideally you want two types of founders (These can be the same person!):

  1. The Technical founder (they should build the first versions of the product)
  2. The Marketing founder (they should be able to sell the product to others or be able to learn to sell the product to others)

Prioritize people you know/work with as potential cofounders over someone you find through a cofounder dating site.

Best to worst case scenarios:

  • Best case: Have a good cofounder
  • Good case: Single founder
  • Worst case: Have a bad cofounder

Key Takeaway: The best cofounders are those people you already know really well.

A Great Product

This is everything, anyone can have a great idea and a great set of founders, but only some make a great product.

This should be your focus every day while working on your startup.

You want to make everyone love the product, not some like the product.

Startups are the point in your life when tricks stop working. — Sam Altman

Build a product improvement engine:

  1. Talk to and watch your users actually use your product
  2. Figure out what is sub-par and fix this
  3. Repeat steps 1 and 2 above many times very quickly

If you are sluggish growing, focus on the product not the sales.

Key Takeaway: The product rules all, build a great product and keep focusing on improving that product in every way possible.

Build (a killer product) and they will come

Great Execution

The final area of distinction is the execution of the startup. This stage is broken down into 7 individual steps.


Prime directive of great execution is Never lose momentum.

Set aggressive but borderline achievable goals.

Don’t only focus on one single KPI (Key Performance Indicator) such as signups, retention is as important as user influx.

Focus and Intensity

Don’t start doing the next thing until you have dominated the first thing.

There is no good excuse for moving too slowly, focus on key tasks, but don’t drain all your time on these tasks.

Jobs of the CEO

What a CEO should be doing:

  1. Set the vision and strategy for the company
  2. Evangelize the company to everyone
  3. Hire and manage the team
  4. Raise money
  5. Set the execution bar

Focus on being super responsive to your team and the outside world.

A startup is a marathon, at the pace of a sprint.

Hiring and Managing

Hiring is the key to building a great company.

Hold off on hiring as long as possible, employees are expensive in both time and money.

The people you want to hire, can be starting their own companies, so be generous.

Value aptitude over experience, those early employees who will be willing to put in the same energy as you will offer more value.

Try hard to have everyone in the same office.

Finally, fire quickly. This is vital, bad employees can kill your startup, you need to be willing to let go of people that might be holding you back.

Culture is defined by who you hire, fire and promote.


Only worry about a competitor that is beating you to market with a better product. Nothing else should garner your attention from them.

Making Money

Make people pay you more money that what it costs you to make and deliver your product or service. Simple to comprehend, difficult to put into action.

Get to Ramen Profitability as soon as you can.


Raise money when you need it or it is available on good terms.

Have fundraising conversations in parallel not in sequence.

Most important key to raising money is to have a good company, conquer the above steps and fundraising will be dramatically easier.

A great board is the next best outside force on a company after users.

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Know of someone who is interested in building a company?, recommend this article to them!

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