Paul Graham’s Startup Advice for the Lazy

Published in

The Startup

13 min readJul 17, 2015

Paul Graham is a renowned programmer and wildly successful venture capitalist. He also happens to be a talented writer.

I highly recommend you stop reading this and just go read his actual essays, but if you’re short on time, I’ve cropped the most important pieces from my favorite essays below.

Startups in 13 Sentences

Pick good cofounders
Launch fast
Let your idea evolve (most ideas appear in implementation)
Understand your users (many successful startups make something the founders needed)
Better to make a few users love you than a lot ambivalent
Offer surprisingly good customer service
You make what you measure (measuring something has an uncanny tendency to improve it)
Spend little
Get ramen profitable (just enough to pay the founders’ living expenses)
Avoid distractions (the worst type are those that pay money like day jobs and consulting)
Don’t get demoralized
Don’t give up
Deals fall through

Organic Startup Ideas

The best way to come up with startup ideas is to ask yourself the question: what do you wish someone would make for you?
If you want to come up with organic startup ideas, I’d encourage you to focus more on the idea part and less on the startup part. Just fix things that seem broken, regardless of whether it seems like the problem is important enough to build a company on. If you keep pursuing such threads it would be hard not to end up making something of value to a lot of people, and when you do, surprise, you’ve got a company.
Don’t be discouraged if what you produce initially is something other people dismiss as a toy. In fact, that’s a good sign. That’s probably why everyone else has been over- looking the idea.
There’s nothing more valuable than an unmet need that is just becoming fixable.

How to Get Startup Ideas

The very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing.
It sounds obvious to say you should only work on problems that exist. And yet by far the most common mistake startups make is to solve problems no one has.
You can either build something a large number of people want a small amount, or something a small number of people want a large amount. Choose the latter.
If Mark Zuckerberg had built something that could only ever have appealed to Harvard students, it would not have been a good startup idea. Facebook was a good idea because it started with a small market there was a fast path out of. Colleges are similar enough that if you build a Facebook that works at Harvard, it will work at any college.
It’s even better when you’re both a programmer and the target user, because then the cycle of generating new versions and testing them on users can happen inside one head.
You’re doubly likely to find good problems in another domain: (a) the inhabitants of that domain are not as likely as software people to have already solved their problems with software, and (b) since you come into the new domain totally ignorant, you don’t even know what the status quo is to take it for granted.
It’s exceptionally rare for startups to be killed by competitors — so rare that you can almost discount the possibility. If you have something that no competitor does and that some subset of users urgently need, you have a beachhead.
A crowded market is actually a good sign, because it means both that there’s demand and that none of the existing solutions are good enough.

Do Things that Don’t Scale

The most common unscalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them.
We encourage every startup to measure their progress by weekly growth rate. If you have 100 users, you need to get 10 more next week to grow 10% a week. And while 110 may not seem much better than 100, if you keep growing at 10% a week you’ll be surprised how big the numbers get. After a year you’ll have 14,000 users, and after 2 years you’ll have 2 million.
You’ll be doing different things when you’re acquiring users a thousand at a time, and growth has to slow down eventually. But if the market exists you can usually start by recruiting users manually and then gradually switch to less manual methods.
How do you find users to recruit manually? If you build something to solve your own problems, then you only have to find your peers, which is usually straightforward. Otherwise you’ll have to make a more deliberate effort to locate the most promising vein of users. The usual way to do that is to get some initial set of users by doing a comparatively untargeted launch, and then to observe which kind seem most enthusiastic, and seek out more like them.
Tim Cook doesn’t send you a hand-written note after you buy a laptop. He can’t. But you can. That’s one advantage of being small: you can provide a level of service no big company can.
A consulting-like technique for recruiting initially lukewarm users is to use your software yourselves on their behalf. We did that at Viaweb. When we approached merchants asking if they wanted to use our software to make online stores, some said no, but they’d let us make one for them. Since we would do anything to get users, we did. We felt pretty lame at the time. Instead of organizing big strategic e-commerce partnerships, we were trying to sell luggage and pens and men’s shirts. But in retrospect it was exactly the right thing to do, because it taught us how it would feel to merchants to use our software. Sometimes the feedback loop was near instantaneous: in the middle of building some merchant’s site I’d find I needed a feature we didn’t have, so I’d spend a couple hours implementing it and then resume building the site.

Startup = Growth

A startup is a company designed to grow fast. A good growth rate during YC is 5–7% a week. If you can hit 10% a week you’re doing exceptionally well. If you can only manage 1%, it’s a sign you haven’t yet figured out what you’re doing.
The best thing to measure the growth rate of is revenue. The next best, for startups that aren’t charging initially, is active users.
We usually advise startups to pick a growth rate they think they can hit, and then just try to hit it every week. The key word here is “just.” If they decide to grow at 7% a week and they hit that number, they’re successful for that week. There’s nothing more they need to do. But if they don’t hit it, they’ve failed in the only thing that mattered, and should be correspondingly alarmed.

The 18 Mistakes that Kill Startups

Single Founder
You need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.
Bad Location
The kind of people you want to hire want to live there, supporting industries are there, and the people you run into in chance meetings are in the same business.
Marginal Niche
You can only avoid competition by avoiding good ideas.
Derivative Idea
Instead of copying Facebook, with some variation that the Facebook rightly ignored, look for ideas from the other direction. Instead of starting from companies and working back to the problems they solved, look for problems and imagine the company that might solve them.
Obstinacy
Most successful startups end up doing something different than they originally intended. You have to be prepared to see the better idea when it arrives. Switching to a new idea every week will be equally fatal. Ask whether the ideas represent some kind of progression. If in each new idea you’re able to re-use most of what you built for the previous ones, then you’re probably in a process that converges. If you’re thinking about turning in some new direction and your users seem excited about it, it’s probably a good bet.
Hiring Bad Programmers
Business guys can’t tell which are the good programmers.
Choosing the Wrong Platform
How do you pick the right platforms? The usual way is to hire good programmers and let them choose. But there is a trick you could use if you’re not a programmer: visit a top computer science department and see what they use in research projects.
Slowness in Launching
It’s only by bouncing your idea off users that you fully understand it.
Launching Too Early
Think about the overall goal, then start by writing the smallest subset of it that does anything useful. If it’s a subset, you’ll have to write it anyway, so in the worst case you won’t be wasting your time. The early adopters you need to impress are fairly tolerant. They don’t expect a newly launched product to do everything; it just has to do something.
Having No Specific User in Mind
You can’t build things users like without understanding them.
Raising Too Little Money
If you take money from investors, you have to take enough to get to the next step. Usually you have to advance to a visibly higher level: if all you have is an idea, a working prototype; if you have a prototype, launching; if you’re launched, significant growth.
Spending Too Much
The classic way to burn through cash is by hiring a lot of people. Don’t do it if you can avoid it, pay people with equity rather than salary, not just to save money, but because you want the kind of people who are committed enough to prefer that, and only hire people who are either going to write code or go out and get users, because those are the only things you need at first.
Raising Too Much Money
Once you take a lot of money it gets harder to change direction. The more people you have, the more you stay pointed in the same direction.
Poor Investor Management
You shouldn’t ignore them, because they may have useful insights. But neither should you let them run the company.
Sacrificing Users to (Supposed) Profit
Because making something people want is so much harder than making money from it, you should leave business models for later.
Not Wanting to Get Your Hands Dirty
If you’re going to attract users, you’ll probably have to get up from your computer and go find some.
Fights Between Founders
We advise founders to vest so there will be an orderly way for people to quit. Most disputes are not due to the situation but the people. The people are the most important ingredient in a startup, so don’t compromise there.
A Half-Hearted Effort
Most founders of failed startups don’t quit their day jobs, and most founders of successful ones do.

The Hardest Lessons for Startups to Learn

Release Early
Get a version 1 out fast, then improve it based on users’ reactions. I don’t mean you should release something full of bugs, but that you should release something minimal. Users hate bugs, but they don’t seem to mind a minimal version 1, if there’s more coming soon.
Keep Pumping Out Features
You should make your system better at least in some small way every day or two. Users love a site that’s constantly improving. They’ll like you even better when you improve in response to their comments, because customers are used to companies ignoring them.
Make Users Happy
The most important is to explain, as concisely as possible, what the hell your site is about. The other thing I repeat is to give people everything you’ve got, right away. If you have something impressive, try to put it on the front page, because that’s the only one most visitors will see.
Fear the Right Things
Way more startups hose themselves than get crushed by competitors. There are a lot of ways to do it, but the three main ones are internal disputes, inertia, and ignoring users.
Commitment Is a Self-Fulfilling Prophecy
The most important quality in a startup founder is determination. You have to be the right kind of determined, though. You have to be determined, but flexible.
There Is Always Room
The reason we don’t see the opportunities all around us is that we adjust to however things are, and assume that’s how things have to be.
Don’t Get Your Hopes Up
It’s ok to be optimistic about what you can do, but assume the worst about machines and other people. When you hear someone say the words “we want to invest in you” or “we want to acquire you,” I want the following phrase to appear automatically in your head: don’t get your hopes up.
Speed, not Money
Economically, a startup is best seen not as a way to get rich, but as a way to work faster. You have to make a living, and a startup is a way to get that done quickly, instead of letting it drag on through your whole life.

How to Convince Investors

Convince yourself that your startup is worth investing in, and then when you explain this to investors they’ll believe you. And by convince yourself, I don’t mean play mind games with yourself to boost your confidence. I mean truly evaluate whether your startup is worth investing in.
If it isn’t, don’t try to raise money. But if it is, you’ll be telling the truth when you tell investors it’s worth investing in, and they’ll sense that. You don’t have to be a smooth presenter if you understand something well and tell the truth about it.
To evaluate whether your startup is worth investing in, you have to be a domain ex- pert. If you’re not a domain expert, you can be as convinced as you like about your idea, and it will seem to investors no more than an instance of the Dunning-Kruger effect. Which in fact it will usually be.
And investors can tell fairly quickly whether you’re a domain expert by how well you answer their questions. Know everything about your market.
Founders think of startups as ideas, but investors think of them as markets. If there are X number of customers who’d pay an average of $Y per year for what you’re making, then the total addressable market, or TAM, of your company is $XY. Investors don’t expect you to collect all that money, but it’s an upper bound on how big you can get.
Your target market has to be big, and it also has to be capturable by you. But the market doesn’t have to be big yet, nor do you necessarily have to be in it yet. Indeed, it’s often better to start in a small market that will either turn into a big one or from which you can move into a big one.

How to Present to Investors

Explain what you’re doing
Say what you’re doing as soon as possible, preferably in the first sentence.
Get rapidly to demo
A demo explains what you’ve made more effectively than any verbal description.
Better a narrow description than a vague one
Your primary goal is not to describe everything your system might one day become, but simply to convince investors you’re worth talking to further.
Don’t talk and drive
Have one person talk while another uses the computer. As long as you’re standing near the audience and looking at them, politeness (and habit) compel them to pay attention to you.
Don’t talk about secondary matters at length
If you only have a few minutes, spend them explaining what your product does and why it’s great.
Don’t get too deeply in to business models
That’s not what smart investors care about in a brief presentation and any business model you have at this point is probably wrong anyway.
Talk slowly and clearly at the audience
If you feel you’re speaking too slowly, you’re speaking at about the right speed.
Have one person talk
Startups often want to show that all the founders are equal partners. This is a good instinct; investors dislike unbalanced teams. But trying to show it by partitioning the presentation is going too far. It’s distracting.
Seem confident
I mean show, not tell. Never say “we’re passionate” or “our product is great.” If you’ve truly made something good, you’re doing investors a favor by telling them about it.
Don’t try to seem more than you are
All you need to convince them of is that you’re smart and that you’re onto something good. If you try too hard to conceal your rawness — by trying to seem corporate, or pretending to know about stuff you don’t — you may just conceal your talent. They’re probably better at detecting bullshit than you are at producing it.
Don’t put too many words on slides
When there are a lot of words on a slide, people just skip reading it. Don’t read your slides.
Specific numbers are good
If you have any kind of data, however preliminary, tell the audience. Numbers stick in people’s heads. If you can claim that the median visitor generates 12 page views, that’s great. But don’t give them more than four or five numbers, and only give them numbers specific to you. You don’t need to tell them the size of the market you’re in.
Tell stories about users
It’s good if you can talk about problems specific users have and how you solve them. The best stories about user needs are about your own. The next best thing is to talk about the needs of people you know personally, like your friends or siblings.
Make a soundbite stick in their heads
In the startup world, they’re usually “the x of y.”