YC Startup School 2014
My rough notes + personal takeaways
Ron Conway
The product idea is usually based on a personal experience. You are so motivated by the ‘aha’ moment, that you stop what you’re doing and go pursue the idea.
So set yourself up for the idea to appear organically. Two examples of this are Youtube founders at a dinner party, discovering how it difficult was to share videos, and Mark Zuckerberg being frustrated by the fact it was near impossible to find someone online. Create an environment in which these ideas can take shape.
In all these cases, the idea was based on the founder’s need. The founder had the resources to hacked it together and then realize that “hey other people might want this.” A lot of this is serendipity to start. After that phase you need to worry about product market fit.
How do you find users who want this product? For unless there’s a market, there’s no need for this product. The more compelling and personal the story behind the product, the more exciting the opportunity.
The inspiration is very important. Founder relationships are also really important. “Most cofounders collaborate then end up coming up with the idea together.” This can be found in Facebook, Twitter, and Google. Yes, one of them was initially the one with the need, but the other cofounder was the one who said I agree with you and I want to work on it.
Pinterest sounded like an obtuse idea at the beginning. Ben Silbermann evangelized the idea. But how do you know if the idea is no good? It’s about being persistent and having conviction about the idea. “All SV Angel invests in is people. We can’t tell the idea. So we invest in the traits of the individual.”
So what traits do you then look for? “For Ben Silbermann, it was his rifle focus on the product. But this applies to every other founder, to the point of being rude to some people.” That focus is what builds great companies.
What kind of founders would fool other investors but not you? Paul Asked. Ron: It’s the focus on the product. If they don’t care too much about the product, that is a sign. That trait became an alarm in the last five years. Ben Silberman was the tipping point. From pattern recognition, I knew this was what all the great entrepreneurs cared about. Focus.
It would be lying to yourself if you’ve built a prototype which is not working, but you keep going. This is not worth it. Paul: What can you do to make this work? Ron: Your product is either getting traction, or it’s not. Young founders are prone to be in denial. When the founders announce this fact to the team it actually increases morale. The truth will set you free.
Danae Ringelmann
Be aware of the problems that you see in life. In the case of Danae, it’s the lack of access of capital for artists and creators. “Here’s when my heart sunk. It was clear that this elderly man with a life time of experiences who was begging me — an entry-level employee at a bank, will never get the funding. I cried.” The truth is about discovering the problem and putting your heart to it.
The problem for Indiegogo was this: “These artists didn’t have the power to make their projects happen. They were dependent on third parties. The system was incredibly broken.”
- Know your why. In the case of Indiegogo, it’s “fund what matters to you.” Your reason of being has to be authentic to your core. For Danae, the ‘why’ was personal. The ‘why’ allowed her to find her cofounders. The original idea will evolve, but your ‘why’ should never change. Indiegogo started as an off-line platform but went online, because it was clearly the right thing to do. The “why” will also help you get through the dark ages. Because it will be difficult. 5 Whys: “Why Indiegogo? Because the current funding process is not democratized. Why do I want to democratize funding? Because the reliance on gatekeepers on creative projects is not good. Why is reliance on gatekeepers no good? Because it is not an equal opportunity. Why is equal opportunity important? Because life should be fair. Why should life be fair?” — Because it should.
- Be intentional with your culture. The values and behaviours that people exhibit everyday is what you need in order to win, so define and revisit your behaviours. “I love coming to work to Indiegogo because?” Draw six pictures with your people. If your drawings show similar reasons, then your culture is strong. If not, then seek to align that.
- Technology is a means. Focus on the problems that bother you at your core. Building things that are truly meaningful. That is the best way to build something really important that the world needs.
Kevin Systrom
You don’t have to be the best, but you have to be good enough to be dangerous. You need to find people who can be drawn to the idea you built. Ask “are people using this or not?” What people tell you and how they act can be very different.
Sometimes it’s not the idea you’re working on, but the skills that you learn along the way that matter. There’s no perfect next move. Have bias towards action — in the marines they say you can spend all the time you want, by the time you’ve figured it out, you’re already dead. Whatever the action is, with the available information, you should take it. The filters idea behind Instagram, was something that Kevin picked up in a photography class. Be a collector of cool life experiences, because you never know how it might be useful. Go to where the good / smart / capable people are. It doesn’t matter what the tradeoffs are in the short term or long term. The people will lead the way. They will inspire you and guide you into something interesting.
“Your friend always takes great photos. It’s the filters. You should add that.” Features will discover themselves. Be keenly aware of the moments when your users give you casual but important feedback. Your users are your great asset. Never do things that are detrimental to that trust. Serve that community first.
Reid Hoffman
Who else is here on this social network? That was the problem Reid wanted to solve. The original solution was to upload the address book and see who else is on there.
One of the memes he sees in the valley is that there is a lot of noise. How do you break through the noise? Look to where other people aren’t. Go solve the one problem that is the root of all other problems. In the example of LinkedIn, the problem was not that there is no use case for the network, it was not that there was no revenue in the business, the root of the problem was that there was not enough users. If everyone in the work force is on LinkedIn, then the first two problems will disappear.
If 100% of the smart people you know say this is a good idea, then it is probably a bad idea that masquerades as a really good one. But it gets interesting if 2/3 of these smart people think it’s a bad idea, but 1/3 think it’s good one, then you might have an idea that might become great.
Facebook wouldn’t be as successful with the real identities if it didn’t start in in colleges. That model of real identity social networking needed the initial safety net of the college campus.
“What’s your secret that no one agrees with you? But the real question should be: Against what audience?” Government provide the platform / environment we all operate in, there’s a set of things about we can do to positively impact the government.
Jim Goetz & Jan Koum
Joining a high growth company can be quite valuable for your own eventual startup. Jan learned a great deal about growing a company and got to know a bunch of great server engineers who eventually joined to helped to scale WhatsApp. Joining a fast growing company builds your personal network.
“We were able to to choose our partners and investors because we were able to monetize the iOS app and generate revenue. We made a bet to expand to Blackberry and Nokia early on, that paid off.”
Jim — “The level of focus that Jan had to the product and the client was absolutely shocking.” Jan — “We just didn’t have time. We were spending hours answering customer support emails.”
“When you’re running at 80 miles an hour, you just don’t have time for the other stuff. You just want to work on the product. The thing about charging (the $0.99) is that slowing the growth gave us time to make the product good, which made the existing users happy, so that when people sign up they can be happy.”
“If people were writing about us, it would be a distraction to our employees. The focus on product was our strategy, and it worked out for us.” The biggest counter intuitive point was using phone numbers instead of username, why add an extra handshake.
Mark (Zuckerberg) and Jan shared a similar vision of the world. The deal came through. Jan was never fazed by the money; he lost his mom and grandmother while at Yahoo — that really shaped his world view. You really need to be a true personal embodiment of your mission. In Jan’s case it was about connecting to the people you really cared.
Eric Migicovsky
“I had a problem of not being to access my phone while biking; I couldn’t get to my emails, and messages that I want to see while biking. Turns out this is a peek into a bigger problem. It was a problem that other people had.”
Being able to prototype and quickly iterate allowed the product to improve substantially in the beginning. ‘Leaking’ mocks lead to market validation. Being resourceful (using the university space) allowed them to quickly get to the Alpha product. The Alpha validated that there is a group of highly engaged of users, though the group was small. Even though there were only 1000 watches out there, after the release of the SDK, people developed more than 100 apps. That’s a ratio of 10/1. Developers weren’t doing this for money, they were building these apps for themselves. This is a sign for something great.
A startup’s product has to do three things really well and then be able to explain those things. The three things for Pebble were:
- Notifications and calls
- Sports and fitness (instantaneous update)
- Customizable (Never been done before)
Office Hours
Know your numbers. Your metrics are the heartbeat of your company. But also get to the right metrics. Facebook was the first to focus on the weekly active users number. Ebay focused on user action (listing / purchasing). Bring the metrics to the office hours.
Ask: What is the rate of growth? Where do users find you? What is your customer acquisition cost? How engaged are your users? What percentage of users is that?
Your users need to understand whether this is for them within milliseconds of seeing your site. Clipart / generic icons don’t add any value, don’t use them. If it takes too long to figure out what you do, who you are, and what your pricing is, people will simply move away. There is no reason for them to stay. Be very clear about who you are and what you offer. Think from the perspective of a layperson — someone who has no idea who you are & no context of what you’re doing.
Andrew Mason
If you want to find out the low times of a startup, I’d ask people who quit the Point, about how intense / difficult / irrational running a startup really is. It takes a special kind of person who isn’t perfectly rational to keep going and power through those times.
On going public: “the incentives to think in short term is too strong to resist for public companies. Put off IPO for as long as possible. It was probably the worst thing for Groupon.”
Lessons taken to the next startup: 90 day goals, post-mortems that make running things easier. The degree of which you maintain to adhere to those principles is the degree in which you’ll be successful.
Michelle Zatlyn & Matthew Prince
“Sharks vs Mosquitos”: Sharks only kill 10 people a year, but mosquitos kill hundreds of thousands of people a year. So sweat the little problems: How to hire great people, how to improve operations, how to maintain a culture. These problems that aren’t sexy, but are incredibly important.
Feedback can come from all sources. Engage with people and find out what their needs are. In Cloudfare’s case, they simply asked the surrounding company for idle servers that they could take and use. In the process they met with a lot of companies, gathered feedback and got real customers.
Cofounders need to have a small overlap in skills, but in general their core competencies should complement each other.
Choose to surround yourself with incredible people, whether it’s investors or cofounders. Maximize first on the alignment of visions, then along the skillset. Forget about the money. Like cofounders, once you choose whom you take the money from, it becomes very difficult to change that. So pick the people who align with your vision.
Hosain Rahman
Stay true to the problem. Make no comprises against hard constraints. The end might not be the end, as long as the problem still exists in the world.
Being an entrepreneur is about celebrating adversity and hardship, then finding a way to get things done. As the company and product scale up, the problems don’t get easier. Learning how to deals with the ups and downs. The bottom line is to focus on doing the right thing and be really careful about not casually making compromises to your product or your customers.
Emmett Shear
Justin.tv had no traction initially, but the technology was interesting. Opening up the service to the public was the turning point. But after that there was a point where the company plateaued indefinitely. That was the moment to deliberately choose a direction for the future: mobile or gaming. Gaming struck through after 8 months of trying and tweaking. In the final step, after five / six years into the building the product, things finally clicked, because the founder’s skill set was finally in place.
It’s really hard to talk to users — identify which users were the most important, in this case it was the game broadcasters. Understand the macro situation of your most important users — not just their feedback on your product, but also their lifestyles and values.
Don’t give up.
