
Super successful companies - dko
http://blog.samaltman.com/super-successful-companies
======
carsongross
C'mon now, kids.

While there is some laudable-if-extremely-conventional wisdom in here, almost
every point suffers from either survival bias ("Successful companies succeed
by being successful.") or from having obvious counter-examples ("Was Steve
Jobs a nice guy?"), or both.

~~~
danielha
Huh, survival bias? Why would he look at companies that didn't survive when
writing about success?

~~~
sliverstorm
Because if you notice a trend in successful companies ( _Aha! They all have
employees!_ ), you need to cross-check and make sure this is something
_unique_ to successful companies (or at least over-represented), and not
something both successful and unsuccessful companies share in equal parts. (
_Gee, it seems all the failures had employees too..._ )

~~~
timr
To be fair, Sam Altman has seen the early stages of lot more unsuccessful
companies than pretty much anyone has seen companies at all. Plus, he
explicitly says that a lot of unsuccessful startups have some of these traits,
so it's not like he hasn't considered the idea.

I think it's pretty unlikely that he's not taking unsuccessful startups into
account. But it's not a statistical paper, it's an essay. You can't attack the
guy for not including likelihood ratios and p-values in his prose.

~~~
larrys
"Sam Altman has seen the early stages of lot more unsuccessful companies"

Sam Altman has experience with a particular group of companies. A small subset
of companies out of a huge set of people who do business. In a wide variety of
places.

This writeup certainly makes some good points but it is specific to companies
of a certain type and Sam has not qualified that at all in his post.

"than pretty much anyone has seen companies at all."

I've been observing companies (as have many other HN readers) since before Sam
was even born. (I started my first company right out of college and that a
very long time ago.)

~~~
timr
_" I've been observing companies (as have many other HN readers) since before
Sam was even born._"

OK, fine. If you have lots of relevant experience, then write a counter-
argument that's more substantial than "selection bias!"

I'm sure we'd all like to read a comment that outlined some specific, well-
thought-out points of disagreement with Sam's arguments.

~~~
supersystem
"[...] well-thought-out points of disagreement with Sam's arguments."

I see mostly opinions, not arguments. An argument is generally what follows if
you ask someone "why?".

------
exit
_> \- The founders are nice. I'm sure this doesn't always apply, but the most
successful founders I know are nicer than average. They're tough, they're very
competitive, and they are ruthless, but they are fundamentally nice people._

ruth·less, ˈro͞oTHləs/, adjective

1\. having or showing no pity or compassion for others.

what does "ruthless" mean nowadays in valley newspeak? or did i miss a memo
about "nice"..?

~~~
patio11
There exist many football players who are very nice people. They're attentive
dads and loving husbands. They're true and loyal friends. They give generously
of their time and are considered pillars in the community. If you are a
fraction of a second too slow, they will push your face into the dirt, commit
an act of violence upon a good friend of yours, and cause a collective
endeavor you deem very important to end in painful failure.

I generally treat business as more PVE rather than PVP (as you could have
guessed, football is not my game or metaphor of choice), but I sometimes work
with great people who have rather the opposite inclination. They're ruthless
cutthroats, but I mean that in the best possible way.

~~~
gadders
This may not apply to entrepreneurs, but in my experience working in large
corporations there appear to be 2 kinds of people:

1) Those who will cut you some slack if you make an error, on the
understanding that we are all human and we all make mistakes and one day you
may mean forgiveness yourself

2) Those who operate to extremely high standards of perfection and expect
everyone else to do the same.

Type 2 people often achieve great results, until they make an error and all
the people they have "punished" in similar circumstances get their revenge.

------
kevinalexbrown
_Mediocre founders try to hire people for the parts that they don 't like.
Great founders just do whatever they think is in the best interest of the
company, even if they're not "passionate" about that part of the business._

I don't often like to follow people, but when I do, this attribute matters to
me. I'm not sure, but I suspect that it's a signal that someone wants to build
something great more than accumulate accolades. In the latter case, I help
someone get rich and famous (which is fine!). But in the former, I'm a part of
something awesome.

I find it a little difficult to articulate why this affects me so deeply, but
it resonates with me, and talented people I know.

In general, I suspect these attributes are important if for no other reason
than talented people you might be recruiting will be on the lookout for them.

------
aashaykumar92
Another important trait Ron Conway highlighted at Startup School that really
stuck with me was that Founders of 'super successful companies' can careless
about other distractions, especially the media. He highlighted the example of
Ben Silbermann and how he used to reject several interviews so as not to lose
focus on Pinterest.

So although it's a hybrid of two traits mentioned in the article ("They are
obsessed with the quality of the product/experience" and "They don't get
excited about pretending to run a startup"), it is still one that should be
there by itself.

------
tvladeck
To all those people screaming "survivorship bias", isn't that what this whole
post is about? Like, explicitly in the title of the thread?

Of the companies that became very successful, what were some common traits?
That's what this post is about.

"Yeah but you only looked at the successful companies." ::smacks head::

~~~
ghaff
There was an extremely popular business book back in the 80s called In Search
of Excellence which chronicled a set of characteristics of large successful
companies. "Stick to your knitting" and the like. The problem was that there
were loads of counterexamples including 1.) Successful companies that DIDN'T
stick to their knitting and 2.) Failed companies that did.

~~~
tvladeck
Right. So the question then is not whether the premise is correct or not, but
whether the information Sam is putting out is accurate, which is a different
thing entirely.

~~~
ghaff
So you really need some sort of statistical study. (Which is
hard/expensive/time-consuming in a context like this.) Otherwise you're
arguing by anecdote. Which isn't necessarily bad. Most arguments of this sort
are. But they're vulnerable to this counterargument.

------
tomasien
"They don't get excited about pretending to run a startup"

That's the biggest difference between me now and starting my first company - I
was ultra-excited to call myself "CEO of startup" the first time around, this
time around we don't even have titles because we don't give a shit. We have a
CEO because you need to know at whom the buck stops, but we've even discussed
using that interchangeably depending the situation (decided against it)
because of how thoroughly we don't care.

I don't think the way I felt the first time around was bad or the reason we
failed - but it was a pretty good signal, and I even knew it at the time.

~~~
toast76
CEO isn't overly important until you've got a board. It's nice to avoid the
job for as long as possible :)

~~~
caprad
Well, it is good for a few laughs. You get a bit worried if someone walks
around calling themselves CEO of a startup with 2 or 3 people in it.

~~~
tomasien
You NEED someone called CEO because partners of various kinds need to know
with whom the buck stops. That's the only reason.

------
argumentum
Great article ... Some of the points might seem obvious in hindsight, but are
rarely followed in practice. Perhaps it is because they are _so obvious_ as to
be somewhat invisible, or they are repeated so often as to be ignored.

I thought one of the less obvious, and especially interesting, insights was
the following:

 _Another way this trait shows itself is "right-sized" first projects. You
can't go from zero to huge; you have to find something not too big and not too
small to build first. They seem to have an innate talent for figuring out
right-sized projects._

I wonder how much of this talent (which I'd call a "knack") can be acquired
from experience.

I noticed in myself an _instinct_ for categorizing projects as "right
time"/"right place". By "instinct" I don't mean I'm particularly good at this,
I may be really bad. I mean that I have a _feeling_ , which I can imagine as
some sort of neural pattern recognition algorithm. I'd guess everyone has this
same feeling .. to what extent can it be tuned into a "knack"?

------
edw519
Funny, seems like I always narrow my list down to this 1 item:

"They are obsessed about their customers' success."

Everything else is a byproduct.

------
vzhang
Number one reason you didn't mention - they are lucky.

~~~
sama
Luck is necessary but not sufficient. But I left it off the list because
telling people to "be lucky" is difficult to act on.

~~~
seregine
I've recently seen interesting arguments that optimism creates luck by
enabling you to recognize more opportunities.

E.g. [http://www.damninteresting.com/you-make-your-own-
luck/](http://www.damninteresting.com/you-make-your-own-luck/)

------
normloman
SURVIVORSHIP BIAS. SURVIVORSHIP BIAS. SURVIVORSHIP BIAS.

~~~
karamazov
Sam has seen enough companies that have made it, and enough that have failed,
to talk about this without survivorship bias.

~~~
amirmc
That's not really how biases work. For example, I'm sure many of the founders
of failed startups were nice people, who got stuff done and moved fast (while
responding to emails quickly).

I do believe that the people at YC have a lot of experience (and are likely to
be quite systematic in their analyses when they do them) but that doesn't mean
I'm going to take every post at face value.

~~~
karamazov
That's exactly how survivorship bias, in particular, works:

"Survivorship bias is the logical error of concentrating on the people or
things that 'survived' some process and inadvertently overlooking those that
did not because of their lack of visibility." [Wiki]

Sam's saying that very successful companies tend to hit all of these points,
in contrast to less successful or unsuccessful companies, which will miss one
or more of them.

You don't need to take the post at face value, but if you're claiming this is
a result of survivorship bias, then you're arguing that successful companies
just happen to have these traits, and they don't actually help the companies
succeed. I don't think that's true.

~~~
hayksaakian
> You don't need to take the post at face value, but if you're claiming this
> is a result of survivorship bias, then you're arguing that successful
> companies just happen to have these traits, and they don't actually help the
> companies succeed. I don't think that's true.

I think this is exactly what he's arguing

If you're of the opinion that startup successes are mostly luck and timing,
then this makes perfect sense.

If a team/company had every single positive/beneficial trait on that list,
then how much more likely are they to "succeed"?

------
tdumitrescu
I like this one: "They respond to emails quickly." It always amazes me just
how many would-be "founders" are unbelievably flaky, miss appointments, drop
off the face of the earth for days or weeks at a time...

~~~
jarek
Or skip past inconvenient questions
[https://news.ycombinator.com/item?id=3684477](https://news.ycombinator.com/item?id=3684477)

------
ritchiea
This started out with some boilerplate SV platitudes (obsess over your
product, obsess over talent), but got quite good by the end. The concrete
items, particularly "They make something a small number of users really love"
and "They don't get excited about pretending to run a startup" really resonate
with my experience and are things I think everyone should keep in mind when
running a company.

------
calbear81
I think a lot of the points are great but when we talk about super successful,
I can think of some great startups that grew organically but also a lot of
operationally efficient companies that knew how to build businesses at scale
with a combination of organic growth, massive marketing, and smart PR. For
example, one of Google's largest advertisers in spend is Booking.com (owned by
Priceline). They have built an efficient machine that can acquire
users/customers in an efficient manner and in the process capture 48% market
share of online hotel bookings in Europe and help make Priceline a $60B market
cap company.

------
_sentient
Great points. I would also add: They have serious intestinal fortitude.

You can possess all of the other traits, and you're still pretty much
guaranteed to run into numerous points in the life of a company where you're
staring into the abyss of imminent failure. The ability to withstand that kind
of pressure is probably a prerequisite for highly successful founders.

~~~
argumentum
You don't think that's covered by:

> _They are tough and calm. Founders of great companies are always tough and
> unflappable._

------
inthewoods
I think there are two important areas he doesn't touch on: 1\. Timing: The
most successful companies are also the ones that are usually at a particular
point in time when an opportunity exists. Too early, you fail, too late, you
fail as well (for different reasons). 2\. A scalable idea: The most successful
companies find product or service ideas that scale hugely. These ideas are
pretty rare. More often, people find ideas they like and can execute but turn
out to be ideas that scale only so far. Sometime it turns out that they've
actually founded a services business and didn't know it. More often, they find
an idea that can scale to, say, $5m in revenue but then has trouble scaling
beyond that. Billion dollar ideas likely represent a very small portion.

------
semerda
I like Sam's blog posts. They are short and punchy. Always leaving me charged
with energy. Good stuff. Keep it up Sam!

"They have a whatever-it-takes attitude." \- This is such a powerful trait
that it puts the "big dreamers" to shame and separates the Wannapreneurs from
Entrepreneurs. Anyone is capable of dreaming, talking big, generate ideas et
al.. but few are capable of executing them by doing whatever it takes to turn
that dream into reality. Ha, it reminds me of the "never give up frog poster".

------
jusben1369
Good stuff. Only nitpick is the "partnership" comment. I actually think too
many startups are too insular and not comfortable working with other companies
early on. However perhaps here he meant the "hit it out of the ballpark"
partnership type.

Please add to "They don't get excited about pretending to run a startup" \-
they're not on Twitter tweeting cliche's around
vision/team/culture/design/customer love all day. That's a big red flag to me.

------
dclara
Wow, so many traits!

I noticed this one is not quite easy to make:

"*They grow organically. And they are generally skeptical of inorganic
strategies like big partnership deals and to a lesser extent PR. They
certainly don't have huge press events to launch their startup. Mediocre
founders focus on big PR launches to answer their growth prayers."

Most startup companies are looking for big partnership deals with PR support
intensively. But they are focusing on building customer base. It's really not
easy.

------
aryastark
This article is literally advocating a cargo cult. I've seen sharks jumped,
but never this high and this obvious.

------
Jormundir
Is there any evidence backing up these claims? I can think of exceptions for
just about every one of these points.

~~~
ancarda
There's always exceptions to rules, although citations would be nice. Most of
it seems like sound advice; ie. Quality over quantity, keep expenses low,
offer great customer service etc...

------
oskarth
All I can think about reading the comments (and the article, for whatever
reason) is pg's advice to sama and how it didn't seem to help at all here:
[https://news.ycombinator.com/item?id=6843726](https://news.ycombinator.com/item?id=6843726)

~~~
supersystem
I'm kind of tired of people in tech who are "misunderstood". Maybe they just
aren't very good at expressing themselves or doesn't have the experience they
think they have. Sometimes people can of course be be argumentative to the
point of hypercriticism, but saying it's because they "misunderstood" is
belittling.

~~~
supersystem
I'm not sure down-voting is good way to handle criticism about not being able
to express oneself.

------
tyang
This is a great essay for any startup person who's actually serious about
creating, advising, or investing in the next Waze in Tel Aviv, Oculus Rift in
Orange County, California, or Dropbox in the Bay Area.

Of course we'd prefer a deep dive, but that requires a lot more thinking,
data, reasoning and work.

You're talking about a book versus a blog.

I really liked this essay.

Yes, some of the stuff is redundant, but there's enough modifications and it
is compact enough that this is a very useful list.

HN folks:

If you can do better, do it.

I see a lot of whining and complaining on here and no alternative solutions
that are better. If you have something better to say, say it. If you've read
something better, provide the link.

Otherwise, be a little more appreciative that someone who knows a lot more
than 99.99% of the folks in startups is sharing his insights concisely for
free.

------
lpolovets
"Great founders are execution machines." That's a great summarizing quote.

------
saumil07
Sam Altman is a great writer. He was also Founder/CEO of Loopt. I have to
wonder why this post doesn't relate the traits back to his work at Loopt so
the lessons learned can be more contextualized.

For example, are there areas where he was a mediocre founder by his own
definition? Were there times when he was mediocre and then became great? What
did it take to go from mediocre to great?

I'm surprised that the essay is so general in nature when there's a wealth of
specific (and maybe more valuable) cases that could have been shared even
after respecting privacy of individuals involved, etc.

------
hoboerectus
* They can bench press twice their body weight.

* They are sublime swordsmen.

* They revere the supreme commander.

------
samishamlet
It turns out that pattern matching on PG's essay style does not make one's
essays as insightful..

All I can say is: the only factor really worth a damn is luck. Unfortunately
you can't control luck, the only thing you can do is increase your luck
surface. From my experience, nothing on that list actually does that - what
increases luck is: hard work, value of idea, connections and personality. Re-
order at will.

------
zephyrnh
"They generate revenue very early on in their lives. Often as soon as they get
their first user."

Is this true? If "super successful" can be understood as "the biggest tech
IPOs of the last 15 years", then I think that Google, Facebook, LinkedIn &
Twitter would be at the very top of that list. I guess it depends on how we
define "very early".

~~~
jusben1369
I wonder if you're confusing revenue with profitability? Maybe Twitter is the
only one here that didnt' have an add to click very early on.

~~~
beat
It's a rule of thumb, not a rule of physics. I'm sure the majority of highly
successful startups are generating revenue (and probably even profitable) very
early. Relying on viral growth and VC with a promise of revenues later is more
likely to fail than succeed.

------
tschellenbach
With many of these points I completely agree, I also believe that there's data
to back them up. The following however:

\- the generate revenue very early on in their lives \- they keep expenses low

Is in direct contrast with many of the most successful startups. As far as I
know, Google, Facebook, YouTube, Instagram, Skype don't fit this criteria.

------
wslh
He misses one point: live and fund your company in US. There are more
successful Internet companies in US than abroad.

------
higherpurpose
> *They grow organically. And they are generally skeptical of inorganic
> strategies like big partnership deals and to a lesser extent PR. They
> certainly don't have huge press events to launch their startup. Mediocre
> founders focus on big PR launches to answer their growth prayers.

Has Google+ written all over it.

~~~
untilHellbanned
ah yes the obligatory G+ slam

------
tsunamifury
These are great foundational traits, which are common among noble-failure and
successful startups I've seen.

You still need to add in the resources (money, energy, charisma) to fund
sustained hard work, market resonance, and luck to reach super success.

------
pbreit
"Charging customers early" is actually the opposite. Few of the big internet
successes charged early (google, eBay, PayPal, Facebook, yahoo, etc.).

And, frugality is good in the beginning but after you prove yourself, you have
to step on the gas.

~~~
brandnewlow
Facebook was selling ads almost immediately in reality. The movie made a big
deal about Zuckerberg wanting to avoid running ads on FB, but from launch, FB
had a nifty native ad system in place and even gave equity in the company to
an ad agency in return for guaranteed spend over time.

~~~
prayag
In fact, Facebook would not move on to a new campus unless they have made
enough money to buy the new servers that they would need to move there. The
worst thing that movie did was misrepresented how scrappy early Facebook was.

------
sillysaurus2
This is an excellent list. Thank you, Sam, for putting it together.

------
drelihan
Did you have a list of extremely successful companies you were looking at
specifically when you wrote this? If so, I'd be interested in seeing that list
to compare

------
bsirkia
I would add they were also a bit lucky (whether with timing or virality or
some other factor) at some point in their lifecycle.

------
mathattack
I like the list but what are all the source companies? (And in the spirit of
survivor bias, failed comparison companies)

------
LeicaLatte
We are prone to saying super while talking. That's ok.

That many supers in writing? Sorry, but that's bad writing.

------
desireco42
No examples, just slogans.

------
quadrangle
tl;dr what makes a company great is how it is run greatly

------
drdiablo
this is a test of fun

------
kimonos
Nice! I see some helpful information in here. Thanks for sharing!

