A year ago, I get an idea for an app that I believe can help improve parents' life by making it easier for them to connect with old friends and make new ones. I named it Menura and as I started working on it, I wanted to learn about the process of starting a new business and building a network. So I attended some events in Copenhagen, where I live, and I met some great people. One of them is David Helgason, the founder and former CEO of Unity. We talked about best practices when starting and the best resources to learn from. We mentioned reading books, meeting people among some other things, but the one thing he highly recommended was that I go and listen to the "How to start a startup" lectures by Sam Altman, the president of Y-Combinators, and so I did.
The series contain 20 lectures of about 45 min length each and were presented initially at Stanford University in 2014. Sam brought together a great group of experienced and successful people to talk and share lessons from their own experience starting (now some million worth) startups. Speakers include for instance, Peter Thiel, known as the co-founder of PayPal, Reid Hoffman, co-founder of LinkedIn, Aaron Levie, co-founder of Box, Ben Silbermann, co-founder and CEO of Pinterest, and Paul Graham, the co-founder of Y-Combinators.
I listened to the lectures while Menura was in its early stages, and I enjoyed and learned a lot from everyone of them. But now that I'm almost done with the development phase that I need to execute the following steps, I feel like I don't recall many of the details in the lectures. So I decided to listen to them once more but this time, I decided to take notes of the important points to keep them as a reference for the future. I will be sharing my notes so anyone interested can benefit from them. Note however, that these are my personal notes which mean they are subjective and you might end up focusing on other ideas if you listen to the lectures yourself (which I highly recommend). Nevertheless, I think they are interesting and worth sharing.
Without further due, let's get started!
Lecture 1: How to Start a Startup
To start a successful startup, you need to excel in four main areas:
o Execution is harder and 10 times more important
o Bad ideas are still bad (even with great execution)
o Think long term
o Should be difficult to replicate
o Needs critical evaluation that includes
§ Market: size, growth
§ Company: growth strategy
Where success = idea * product * team * execution * (w* luck)
where w is a number in the range [0,10000] and what is nice about it is that it is somehow controllable :).
Starting a startup is really hard:
1. Do not do it to become rich (there are easier ways)
2. Do it if you have a solution to a problem
3. Ideas first and startup second
4. The good idea is the one you think about frequently when not working
You should focus on a mission-oriented startup:
- You are committed = you love what you are doing
- You have a great patience: startups take about 10 years
Good ideas are unpopular but right:
- You can practice identifying them
- They look terrible at the beginning
- Start with a small market to create a monopoly and then expand
- You will sound crazy but be right
- Look for an evolving market (big in 10 years)
- The market is better when it is small and growing rapidly, it means the market is more tolerant and hungry for a solution
- You can change everything but the market
- Answer why now?
- To build something you yourself need is better to understand the problem
- The idea should be explainable in one sentence
- Think about the market (what people want) first
- Be confident
- Stay away from nay-sayers (most people if it is a good idea)
Good Product is something users love:
- Until you build it, nothing else matter
- Spend your time building and talking to customers
- Marketing is easy when you have a great product
- Better to build something a small number of users love than to build something a large number of users like. Easy to expand from there
- Find a small set of users and make them love what you are doing.
- Build a product that is so good that it will grow by the word-of-mouth
- Most companies dies because they didn't make something users love, not because of competition
- Start with something simple (I like what Leonardo Da Vinci said about this "simplicity is the ultimate sophistication" and Steve Jobs' famous quote "Simple can be harder than complex")
- Quality and small details matter
- Be there for your customers (even at midnight)
- Recruit feedback users by hand (this is the stage where I am at with Menura right now and I can't tell you how hard it is, you should literally send personal emails and messages to every single one of you potential interested users and you should keep the conversation going.)
- Do not do ads to get initial users, you don't need many, you need committed ones
- Loop from feedback to product decisions by asking the users:
- What they like/dislike
- would they recommend it to others
- have they recommend it already
- what features would they pay for
- Make the feedback loop as tight as possible for rapid progress
- Do it yourself (that includes everything, from development to marketing to customer support...)
- Startups are build on growth, so monitor it
- If this (your product) is not right, nothing else will matter
Discussion about team and execution is left to the next lecture and we will now move on to answer the most important question (in my opinion): why you should start a startup?
Why you should start a startup?
Probably you thought about it as being Glamorous (you will be the boss, it has attractive flexibility, you will be making impact and $$). In reality, however, it is a lot of hard work and it is pretty stressful. Here is why:
You will be:
1. having a lot of responsibility
2. always on call
3. taking care of fundraising
4. gathering media attention (not always what you like to see)
5. strongly committed
6. managing your own psychology
And here is a more elaborate explanation of what you might think is attractive about it:
1. Being the boss: not really true (you will be listening and executing everyone else needs and feedback)
2. Flexibility: also not true as you will be always on call, you are the role model, you are always working
3. Having more impact and more $$: you might actually make more money joining Facebook or Dropbox, and you get to work with a team so you might end up making more impact
After some thought provoking points, it is now time to find out the real reason you should have to start your own startup. It is actually pretty obvious: you simply
"can't not do it"
1. You are passionate about it
2. You are the right person
3. You gotta make it happen
4. You can't stop working on it
5. You will force yourself into the world to achieve your vision
Pretty nice and thoughtful introduction. Now that was the end of the first lecture and the finishing slide was recommendations for some book.
I have personally started reading Zero to One I'm really enjoying it (the rest are on my reading list, which is growing very fast :)). I will probably share some summaries about in another blog, but that's it for now.
(These are the main points that stick into my mind after listening to the whole lecture)
1. Ideas are important but execution is vital
2. Make something people love
3. A small number of people loving your product is more important than a large number liking it
4. Get your product right and everything else will follow smoothly from there
5. Build your own product-lover small community and rely on the power of WoM
6. If starting a startup is the thing you can't do without, then you are on the right track (good luck, enjoy the journey!). Otherwise, join one of the great companies.
See you in the next lecture :)!