Startup Playbook by Sam Altman

Notes

Here are my key takeaways of the work written by Sam Altman, current chairman of Y Combinator, on how to start startups. Recommend you to read/hear the original! Have fun:

The Idea:

• What are we doing and why?
• How the company is going to be a monopoly one day? (Better when bigger and difficult to copy).
• For something to be new, it has to be 10x better. Build new stuff.

The Team:

• Mediocre teams will not build great companies.
• 1 founder great at building product. 1 founder good at sales.

A Great Product:

• Build a product improvement engine

Constantly ask yourself:

• Are your users using your product more than once?
• Are your users fanatical about your product?
• Will your users be truly bummed if your company went away?
• Are your users recommending your product without you telling them to do it?
• If you are a B2B company, do you have at least 10 paying customers?
• Disagreement? Talk to your users

Product: All interactions a user has with your company.

Great Execution:

CEO’s universal job: To make sure the company wins. Hire people that complement your skills and let them do their job.

Growth & momentum are the keys to great execution. If you are growing, it feels like you are winning, and people are happy. If you are growing, there are new roles and responsibilities all the time, and people feel like their careers are advancing. If you are not growing, people are not happy. They fight over responsibilities and blame.

The company does what the ceo measures. It’s valuable to have a single metric that the company optimizes. If you care about growth and if you set the execution bar, the rest of the company will focus on it.

Always optimize for growth.

2 Key metrics:

• Retention
• New customer acquisition

Review progress every month.

Trap: Thinking about problems too far in the future. i.e. How are we going to do this at massive scale? The answer is to figure it out when you get there.

Rule of thumb: Plan for 10x your current size.

Don’t get demoralized from bad growth on total numbers. Instead, think in terms of percentage growth. Remember how exponential growth works and that giant companies started with small numbers.

How to operate? Focus and intensity. Don’t do the next thing until you dominate the first one.

Startup debt: Doing too many of the wrong things.

Jobs of the ceo:

1. Set the vision and strategy for the company
2. Evangelize the company to everyone
3. Hire and manage the team specially in areas where you have gaps
4. Raise money and make sure the company doesn’t run out of money
5. Set the execution quality bar
6. Find whatever parts of the business you love the most and stay engaged there.
7. Do whatever it takes. Lead by example.

Advise:

1. Define early the mission and the values.
2. Be generous with equity, trust and responsibilities.
3. Be willing to go after people you don’t think you will be able to get. Don’t compromise on the quality of the people you hire.
4. Good and bad people are both infectious. Trust your gut on people. If you have doubt, the the answer is no. The company needs to be united internally.
5. Value aptitude over experience for almost all roles. Look for raw intelligence and a track record of getting things done. For people you don’t already know, try to work on a project together before they join full time.
6. Get good at recruiting
7. Get good at sales.
8. Invest in being a good manager. Avoid Hero mode and delegate. Be willing to be late on projects, to have a well functioning team.
9. Everyone should be in the same office.
10. Fire quickly. Culture is defined by who you hire, fire and promote.
11. Try to get your CAC (Cost of acquisition) ROI (Return on investment) in 3 months.
12. Try to make enough money to pay salaries for founders. That way you stop being at the mercy of investor’s money.

Remember that at least a thousand people have every great idea. One of them actually becomes successful. The difference comes down to execution. It’s a grind, and everyone wishes there were some other way to transform “idea” into “success”, but no one has figured it out yet.

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Source: https://playbook.samaltman.com/