Y Combinator Start-Up School 2018: Week 1

Rula Awad
Rula Awad
Sep 5, 2018 · 4 min read

I am so excited to be part of the YC Startup school. I am sure you are aware it is possibly the best — or most well-known startup incubator on the planet. You only have to look at their alumni to see who has come out of there. I think the next ten weeks on startup school are going to be epic. I have been so excited for this!

In the spirit of YC’s giving, I will document the pearls of wisdom their partners and alumni give, as I go along. After all, the ethos of YC is to disseminate as much knowledge to startups as possible.

I’ll start with Week 1. The weekly update. As a startup founder I found this quite challenging emotionally. Quantifying progress. What if things don’t go to plan?! Geoff Ralston allayed my anxieties. He asserted that progress is not always consistent, stressed the importance of metrics. Sometimes things don’t go to plan, but it is still good to set measurable goals.

How to Succeed with a Startup, Sam Altman

Product. №1 Tip: Build a product that is so good people will tell their friends about it.

  1. Make the product easy to understand and explain. If it isn’t, it’ll be hard to be catchy.
  2. Look in markets growing with an exponential growth rate. Identify a market that will grow every year, as opposed to something big today and has little growth potential.
  3. Differentiate between real and fake trends. Real trends are new tech products that a small subset of people use obsessively. Iphone vs. VR: early iphone adopters did not buy many iphones, but those that did used it obsessively. Conversely, many people bought into VR but didn’t use it much.
  4. An evangelical founder. They have to be able to recruit, sell the startup, talk to the press, raise money... and do everything else. They need to infect enthusiasm!
  5. Ambitious Vision. Grandiosity, puts people off. But presenting ambitious visions makes things fun to work on. Ambitious and difficult startups tend to be attractive. People are driven by mission, and you need to keep attracting talent. It’s best to focus on what matters and missions people want to associate with.
  6. Have a confident and definite view of the future. It doesn’t mean you have to be right, but having clarity, conviction and confident execution correlates with success.
  7. Huge if works. Altman says that the startup ecosystem is geared towards startups with a small chance of success but would be huge if succeeded. Onwards and upwards.

Team. Build a great team. They eventually come to form your company.

  1. Idea generators. Successful companies tend to have an idea generator who can constantly throw out new ideas.
  2. Optimism. You need fire to solve your problem in the face of adversity.
  3. We will figure it out mantra. It keeps you and the team going.
  4. The I’ve got this mentality. You need a culture where people step and get things done.
  5. Action bias. You need to focus on people who do things, willing to act with less than they need and continue to adapt.
  6. The blessings of inexperience. The magic of being able to do things that you are told you are not able to do comes with inexperience and constraint. It also means you can hire high potential inexperienced people and see them grow.

Business

  1. Momentum. You are not able to loose momentum in the first few years. You should keep going to kick start the momentum of the startup. You need to keep the momentum of the startup going, keep winning on a fairly consistent manner.
  2. Competitive Advantage. The better the competitive edge, the better the startup.
  3. Sensible Business Model. This doesn’t need to be figured out to start off with, but it needs to be thought through.
  4. Distribution Strategy. You need a clear plan for how you will grow and get users.
  5. Prevailing characteristics of best founders: Frugality, Focus, Obsession and Love ❤

Startup Legal Mechanics, Carolynn Levy, Jon Levy, & Jason Kwon

I am based in London. So some of the contents of this lecture were not as relevant from a legal perspective. However, there were some interesting common sense tidbits:

  1. Incorporate your startup. Do it sooner rather than later, it allows you to own the IP, get investment, and employ people!
  2. Best to use an online platform to incorporate, they’re easier to use. For UK people, you can do this simply on companies house online. No need to go through third parties. It is fast, cheap and simple enough.
  3. Open a corporate bank account to form good financial habits. Also, this makes life easier in the future.
  4. Allocate the equity amongst founders.
  5. Founders need to buy back their shares and contribute to the company with IP.
  6. Time-based Vesting. You don’t get ownership of your stock, until a certain time period has passed. If you leave before this critical period, the company will buy back your shares.
  7. Cap-Tables — keep track of shares issued by a company.
  8. Founders should really employee themselves, and pay themselves.
  9. Best to employ people and not promise equity.
  10. Employees should sign a ‘confidential information, invention assignment agreement’ to protect company IP.
  11. Be meticulous in tracking expenses, receipts etc.
  12. File taxes, and payroll services.
  13. Store companies legal documents where everyone has access to.

Written by

Rula Awad

Machine Learning, Media, Politics |All things tech and human, human and tech | University College London

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