42 Quotes from Sam Altman on Later Stage Startup Advice
From How to Start a Startup — Lecture 20
Published in
4 min readDec 5, 2014
From Stanford’s CS183B Course How to Start a Startup — Lecture 20
The quotes below are all 140 characters or less, so please feel free to share as you see fit. In case I’ve missed any quotes or you find any errors, please leave me a comment and I will be sure to update the post.
- “In the beginning of a company, there is no management and this actually works really well.”
- “Before 20 or 25 employees, most companies are structured with everyone reporting to the founder. It’s totally flat.”
- “When lack of structure fails, it fails all at once. What works totally fine from 0–20 employees, is disastrous at 30.”
- “You don’t need to make the structure complicated, in fact you shouldn’t. All you need is for every employee to know who their manager is.”
- “The most important thing is that there is clear reporting structure and everyone knows what it is.”
- “What you want to do is innovate on your product and your business model, management structure is not where I would try and innovate.”
- “Before product/market fit, your only job that matters is to build a great product.”
- “As the company grows and about this 25 or so employee size, your main job shifts from building a great product to building a great company”
- “In the early stage of a startup, hiring senior people is usually a mistake. You just want people that get stuff done.”
- “Most founders have not managed people before, and they certainly haven’t managed managers.”
- 1/“Two other things that we hear again and again from our founders, they wish they had done earlier, and that is…”
- 2/”simply writing down how you do things and why you do things.”
- 1/“In the early days of a startup, people’s compensation is whatever you negotiate with a founder and it’s all over the place.”
- 2/”As you grow, it feels hopelessly corporate but it really is worth putting in place these compensation bands.”
- “Some day everyone will find out everyone else’s comp, if it’s all over the place, it will be a complete meltdown disaster”
- “You should be giving out a lot of equity to your employees.”
- 1/“We’ve seen a lot of data at YC now, and the most successful companies and the ones where the investors do the best…”
- 2/”end up giving a lot of stock out to employees- year after year after year.”
- “You should think about for the next 10 years, you’re going to be giving out 3–5% of the company every year.”
- 1/“You never want to be in a place where an employee has vested 3 out of the 4 years of stock and they start thinking about leaving.”
- 2"So you should always stay on top of people’s vesting schedules.”
- “Just put a little pin in your mind: when you cross 50 employees, there are a new set of HR rules that you have to comply with.”
- “Monitor burnout.”
- “You want to think about what is the path for my first 10 or 15 employees going to be as the company grows.”
- 1/“As you grow, the productivity I think, goes down with the square of the number of employees if you don’t make an effort.”
- 2/”Because it’s one of these sort of connections between nodes- every pair of people adds communication overhead.”
- “The single word that matters most I think to keep the company productive as it grows is alignment.”
- “You want to continue to be run by great products, not process for it’s own sake.”
- 1/“I really believe that the single hardest thing in business is building a company that does repeatable innovation…”
- 2/”and just has this ongoing culture of excellence as it grows.”
- “Because so few people make an actual long term commitment to what they’re building, the ones that do have a huge advantage.”
- “Losing focus is another way that founders get off track.”
- 1/“The most common post YC failure case for the companies we fund, is they’re incredibly focussed during YC on their company…”
- 2/”and after they start doing a lot of other things. They advise companies, they go to conferences, whatever.”
- “M&A negotiations feel really fun. This is one of the biggest killers of companies, is they entertain acquisition conversations.”
- “The thing that kills startups at some level, is the founders giving up.”
- On marketing and PR — “Once your product is working, switch from not caring about this to caring about this a little bit.”
- “Founders need to figure out what the message of the company is going to be.”
- “The biggest PR hack you can do, is not hire a PR firm.”
- “Developing a personal connection with anyone you’re trying to do a big deal with is really important.”
- “The way you get deals done and the way you get good terms, is to have a competitive situation.”
- “If you want something in a deal, just ask for it.”
As well, you can watch the entire lecture for yourself here: http://startupclass.samaltman.com/courses/lec20/
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Image Credit: Screenshot taken from Stanford CS183B Lecture 20 Video
