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YC’s Essential Startup Advice (ycombinator.com)
825 points by craigcannon 23 days ago | hide | past | web | 231 comments | favorite



> launching a mediocre product as soon as possible, and then talking to customers and iterating, is much better than waiting to build the “perfect” product.

Yes, yes and yes. But this is so easy said but still a struggle and need to be put into perspective. Let's say we do a super simple business, eg a resume writing service on scale (just for the sake of having a simple example). To be ready to reach out to first customers we need to...

- Setup a landing page, takes ten minutes with Squarespace but to get all the copy and visuals right or least good enough for some first testing, min one day, rather three to five

- Setup and prefill all social media channels, should take half a day incl getting the first 25 likes in order to save the name

- Create the first ads and iterate to some ads which actually convert at good CTRs/CPCs take multiple days because you need to let a campaign run at least for one day; so lets assume another five days

So just to test this stupid-simple agency business properly we need already two weeks.

Now imagine, you do something a bit more sophisticated, an actual app/SaaS/game/bot/whatever, you still need minimum two weeks for the 'Marketing' stuff before plus the time for the actual app. And being mediocre doesn't work in highly competitive markets.

So, if you are able to (1) build a first testable thing in 2-4 weeks you are very good. And you are even better if (2) you have the power and positivity to do 12 tests per year because you need more than one shot.


https://onlyusedtesla.com/ I set up a landing page using WP with form and a basic email capture. I got 3 listings from tesla forums. I got a BUNCH of emails. I started using ambush tactics to get customers to list their for sale used tesla with me for free while in beta. Saying stuff like " we have a concentrated buyer exposure , notice buyers not shoppers. I used FB messenger for communications and email. I started running ads on FB for each listing. I started charging customers $150 for each sold vehicle, manually. Now 6 months later, i am building a new web app using VueJS hosted on DO. I tested charging from the get go and made a sale today. $50 to sign up list $50 to boost on FB. Boost on FB cost me like $5/$10. You can target location , interest , behaviors. I am working on new features . I made $150/avg just following up with customers , i was ranking first page organic for "buy a used tesla" kinda got lucky , who knows. I just wanna grab a "slice" from cars,autotrader they can keep the pie. customers started comparing my rinky/dink Wp site to cars, auto trader , they liked the simplicity and speed. I adopted the mentality NOBODY IS GONNA FUND YOU. Its everyman for himself. Good LUCKY!


how many .com sites did you register before this one? i mean is this your first shot or how many previous shots did you have if i may ask? how did they go? did people show interest? how did you get the interest of people to find your web site?


how many .com sites did you register before this one?

I made a list of like say 20 then tested with a bunch of people here in union square NYC.

i mean is this your first shot or how many previous shots did you have if i may ask?

Whenever i have an idea i put up a landing page and start testing, this is another i am testing: http://tryoldster.com/ I got a BUNCH of emails already. I don’t know what todo since i have ADHD and need to narrow my focus to the one thats making money.

how did they go?

So i just asked them i’d list for free, it was unusual if I’m honest and people started asking how I’m different then carsdotcom, whats the benefit if they list with me and what is the fee, whats the traffic amt. Most of the times i had to scramble and think on my fee because i actually didn’t know what i was doing , it kinda just unfolded and i kept it adaptive (“wait and see” i guess a lot of luck, you never know what the heck the customer is gonna want or say or ask. But you better give them an answer which satisfies them.

how did you get the interest of people to find your web site?

I don’t know. I was on all the tesal forums / listening to what customers are saying and what kinda problems they are having then i messaged a few and kept going. Goal was to make $150/day.


thanks alot for the details, for me it looks like the most important thing is that while launching you need to find potential customers and you do that via forums/social/... otherwise they will not locate your website just because I put a web site in the internet, how much do you think that is correct please?


Most important thing is launch THEN find out what is going on / working , converge on what's working "double down" on that. Keep at it. The fact of the matter is you can't predict the future. Luck + persistence. Be relentless.


this is very interesting..


Nice!

I wish I saw the battery size on each listing over by the price and mileage though. One of the first ones I ready even said it was both a 60 and a 90 in the description.


Battery size is on the new design! its gonna be in the main headline.


can you please say which wordpress theme you use and is it a WP plugin to do the listing and filtering? (if not now what was it initially?) thanks..


Custom design WP as cms only.


I struggled with this building Pragma. I was going to a crowded market with established incumbents. Most early talks with customers would always lead to "How is it better than Wordpress, Webflow, Squarespace, etc." So I started to feel we have to tick all the boxes and product never felt shippable.

However, two weeks ago I took a step back and thought what if we can ship a product in 48 hours and get people to pay. The result of it was Page.REST. In reality, it still took 7 days to launch it properly, but it had 10 people paid customers after the first day in business. That was a revelation to me and gave me a different perception of the approach.

I can attest being in the market is the best way you could learn and iterate a product (no matter how simple & rough the early version looks).

PS: I blogged some of my learnings from shipping Page.REST - https://www.laktek.com/what-i-learned-from-building-pagerest...


This is cool! Thank you for the detailed blog post. Very informative. Now to scale Page.REST... !


Really good idea, a much simpler and lighter solution than import.io

Do you use proxies to stop your requests getting blocked or are you just going balls to the wall and making requests from your server's ip(s)?


Who said anything about social media, and facebook likes, and advertising. Just stop. That isn't your product.

If your product is just a squarespace page... then that's the entire part of that step.

Do that, and then go talk to your customers. The rest of that is just procrastination, and frankly a waste of time and money at that stage... because there's no way you have product market fit that early, so why are you buying ads?


> Who said anything about social media

I don't care about Facebook and even if my product hasn't any relation to FB, Twitter, etc. At some point you probably need them anyway, eg for ads and then you must have a FB company page and thus a handle/account.

The best time to get those social media accounts is when you got the product domain name. The wise founder checked if the respective social media handles were free before he registered any domain name. You can also wait of course few months and register a cumbersome handle because somebody else took the the handle then.

My message was: Just setting up the foundation of a product and a company--and by foundation I don't mean the actual product--is already a lot of work.


"go talk to your customers" is much easier said than done.


If you can’t identify and/or talk to customers, that is also a signal.


If you haven't talked to your customers before you started building anything, that is also a signal. A massive one.


Nobody said it would be easy


When we give advice that's too vague to be actionable, we aren't helping


It makes it sound like the customers are some clearly identifiable and reachable group of people all gathering outside just waiting for you to go talk to them.

For some businesses that may to some degree be the case. For many businesses that is not the case, although their customers can be defined they may not be easily or cheaply reachable. They may not all fall under the same category despite all sharing some fundamental problems for which the company is providing a solution.

So casually saying "just go talk to your customers" is about as helpful as saying "just go build your business".


The devils advocate position is that without a social media presence or ads, it can be difficult for some companies to find customers to talk to.


One of the things that I have learned the hard way is that if you don't have a channel to get at least initial customers by some means besides PPC advertising, you're unlikely to succeed.

One of the early competitive advantages you need to have is in "finding customers to talk to".


"finding customers to talk to": The so called seed.


I agree so much! My little company does mental health practice management and communications yet it’s incredible hard to “start small” because your being judged against all the incumbents. Even if you have some clever tech (we do,) nobody wants to use it if you don’t at least compare somewhat to the existing competition. If I were building photo sharing in 2006, maybe that small, sloppy and iterative approach would work great, but when you’re taking on entrenched incumbents, it’s hard, especially in a space related to health. I guess you could build one feature and be really great at it, but users are rarely shopping for that specific feature, especially if it’s novel and they don’t realize they need it yet.


Are you sure you're a startup, then? If you're going to build the kind of thing your future clients are already buying, then it sounds more like a normal new business to me.

Startups are pursuing some sort of radical improvement on the status quo. For that, there should be early adopters, people who care a great deal about your kind of improvement. People who are willing to sacrifice the normal kind of good for your specific kind of great.

There's nothing wrong with being a new business, with wanting to deliver a mousetrap that's 20% better than existing mousetraps. But it's a very different kind of thing than doing a startup, and I think it's dangerous to apply one sort of conventional wisdom to the other.


Google was not the first search engine. A better version of an existing thing can hit big growth. Rate of growth seems to be what people are talking about when they distinguish startups from normal new businesses. It isn't actually necessary for it to be some new fangled thingamajig the likes of which the world has never seen before.


My definition of a startup is the same as Blank's: "an organization formed to search for a repeatable and scalable business model." So I'd call Google a startup because they were radically reinventing the search model.

It's important for briandear to decide which he's going for. The behaviors appropriate for a startup by Blank's definition are different than those needed for a new business. Even fast-growing new businesses are different than startups, because they're not trying to do something particularly innovative.

Take Google as an example. If their goal was to be 20% better than the average search company of the day, then they would have gone for breadth of content first, because you couldn't compete in the search market without good general-audience results. Instead, their first target was Stanford users, and their second was Linux users. Instead of investing in deep ops cost reduction, which became a huge strategic advantage, they would have used commodity hardware and tools. They wouldn't have tried a variety of revenue models, seeing which ones best suited them; they would have aped existing solutions.

Google's approach is exactly the playbook that Blank, et al, recommend for startups: find early adopters and iterate until you can knock something out of the park for them. Then use that feedback loop to build a broader product while extending your market reach. Eventually you find product-market fit; if you're fast you can entirely take over a market before you have real competition.

But that's a terrible strategy to use when you're just looking to be another provider of an existing commodity, even if you want to grow quickly. Look at the top 5 fastest growing restaurants: Raising Cane's Chicken Fingers, Jersey Mike's Subs, Marco's Pizza, Wingstop Chicken, and Chick Fil-A. [1] None of these are particularly innovative companies. They sell known products to known audiences using known methods. I worked at a McDonald's as a teen, and I'm sure I could walk behind the counter at any one of those restaurants and jump into any of the line jobs there.

Both are fine kinds of companies to start. You've just got to use different techniques, so you have to know which you're doing.

[1] from http://www.nrn.com/top-100-restaurants/2017-top-100-top-10-f...


So I'd call Google a startup because they were radically reinventing the search model.

Everyone seems to think they are radically reinventing something. The rest of the world agrees only if they grow big enough.

I worked at Aflac for over five years. They really are a very big insurance company with a genuinely different business model. But, part of why they grew so big is because of the daring Aflac duck marketing campaign. Having worked there, I am abundantly familiar with what a shocking choice that was.

I also know that, for example, the name Aflac is really an acronym for American Family Life Assurance Company. They originally were called American Family Life Insurance Company. Another company in another state had the same name. The two companies had to decide who got to keep it and who had to go to the enormous legal hassle of changing their name. Aflac lost "a gentleman's coin toss" and changed their name.

Then when they wanted to change their overly long name for marketing reasons, they ended up going with the acronym, because that did not require them to legally change their name in all fifty states. It is sort of like someone going by Bill instead of William.

The acronym would have been Aflic instead of Aflac had the company not lost a gentleman's coin toss years earlier. Aflac sounds like a duck quacking and inspired a marketing company to suggest the duck commercials. Aflic does not.

So, Aflac is as big as it is in part because of the company losing a gentleman's coin toss -- i.e. a twist of fate, beyond their control, not remotely planned -- not simply because their insurance plans are distinct and unusual. Most people don't even understand how their policies are radically different from most insurance policies.

I think the distinction you are trying to make is pretty arbitrary. Some companies manage to grow like they are sucking down ent draught and some don't. That mostly isn't because of setting a goal to be radically different or setting a goal to grow rapidly. Many companies would very much like to do both, but even YC does not know how to guarantee that outcome and even they sometimes pass on companies that turn out to be successful anyway.

If creating the next unicorn weren't akin to mysterious voodoo magic, there likely would not be nearly so much ink spilled on the subject.


I gave you 5 examples of growing companies that are not radically reinventing anything. I could give you a hundred more. Everybody here thinks they are radically reinventing something, because they have to say that. The great majority of new companies don't.

You might think the distinction is arbitrary, but that is because you are not doing the work. I have started both kinds of companies, and had reasonable success at both kind of companies. I have mentored people in both categories. The techniques involved are different.


You might think the distinction is arbitrary, but that is because you are not doing the work

Or perhaps you are just not explaining yourself well. Telling me why I think something is a lousy argument tactic, especially when the framing looks so personally dismissive.


Sorry. Let me rephrase it as a question. Have you started companies of both types? Having read the stuff you post here and elsewhere, I believe that not to be the case, but I'd be happy to be wrong.

Also, I don't get the feeling you're engaging with much of my argument or have much familiarity with the literature I'm referring to. So you're not the only person feeling dismissed here.


Framing it as a question doesn't really change the problem with it.

But, let's try to avoid getting bogged down here. Because there isn't any intent on my part to be dismissive of you.

Your last (previous) remark makes something clear to me that your earlier remarks did not. The personal put down of me was not related to that epiphany. Your remark would have been stronger without it.

As someone kindly said to me elsewhere on HN tonight: Communication is hard.

I was reacting to something in your framing of your first comment. I can't at the moment figure out how to put my finger on it. And it perhaps doesn't actually matter.

Best.


This feels like a no-true-scotsman distinction. What is it about briandear's description that does sound like searching for a repeatable and scalable business model? What is it about that definition that demands a high level of innovation?

Frankly, it's very easy to wax poetic about how innovative and different the biggest startup success stories were. Tech pundits have spilled buckets of ink describing in great nuance what makes AmaGooFace so different and special. But it's much easier to do this in hindsight than it is before you have any feedback, and I doubt very much that any of these company's journeys matches their early vision.

My model of a startup is this: find a way from 10 => 100 => 1000 => 10000 => 100000 => 1000000 customers. Just worry about delighting that next tier of customers, and the things you learn will give you a better shot at propelling yourself to the next phase.


Ok, I accept it feels like that to you. It doesn't to me.

Briandear's description doesn't sound like a search for a repeatable, scalable business model. Which is why I asked him if it was really a startup.

Your model of a startup is not uncommon, but as I explain in detail above, pure scale is a different kind of thing than doing something that hasn't been done before. Different techniques are required. Different success milestones are used. Both involve scaling and continuous incremental improvement, but one requires a great deal of innovation early on.


Okay, but that's not in your quotation from Steve Blank.


FWIW, Google did use commodity hardware and tools when they started. That was actually one of the things that supposedly made them innovative at the time. Instead of spending lots of money on beefy Sun servers, they put together stuff out of corkboards, components you could find in a PC catalog, and Linux. Their programming language was Python; their webserver was based on Medusa; their distributed filesystem was NFS; their logs processing was all UNIX tools.

All of the fancy homegrown ops stuff came afterwards, once they got lots of VC and could hire some really talented experts. GFS, MapReduce, Sawzall, the custom networking & server designs, the proprietary webserver - all of that was in the early 2000s, ~1-2 years after incorporation and 5 years after Larry first started working on it.


Sorry. "Commodity" was the wrong word. "Industry standard" would have been better. My point was, as you explain in detail, that they did stuff radically different than their competitors.

In their lobby, they have (or at least had) one of the original racks. It was all caseless, no-name hardware. That was very different than the industry standard in 1997-2000.


I thought their proprietary Web Server was an Apache for (and maybe still is)?


That's bullshit that got written into Wikipedia and then repeated frequently. I worked on that proprietary webserver; it's absolutely nothing like Apache. (When I left, it was like basically no other program I'd ever seen before - it was a frankenbinary written in C++, Java, and two proprietary programming languages. Oldest continually-pushed binary at Google; it's been gradually evolved since Craig Silverstein first wrote it in 1999, and never completely rewritten.)

BTW, the Medusa-based webserver I mentioned was gone by 1999; it was the prototype that Larry, Sergey, Scott Hassan, and Craig Silverstein did when Google was still a Stanford research project.


Thanks Jonathan. Why did Google chose to build its own proprietary web server? Was there a specific requirement or need that Apache or other alternatives couldn't support? I suspect around that time the first event-based (async I/O /w connection multiplexing) web server was Zeus, which was commercial and likely not worth looking into it and soon thereafter there was Lighting HTTPD or whatever it's called. Did you want to, perhaps, implement your own similar design, optimised for your use cases, without having to say, pay, for Zeus?


> it’s incredible hard to “start small” because your being judged against all the incumbents

Then you're probably addressing the wrong market. I found _The Innovator's Solution_[1] by Clayton Christensen pretty useful to understand that. You want to address a market that is underserved or not served at all by the existing big players. Often, it's by providing a service that is much simpler, much less powerful, but cheaper and/or more accessible than the existing solutions.

[1]: https://www.amazon.com/Innovators-Solution-Creating-Sustaini...


Anything in health care is hard, in part due to HIPAA.

You are welcome to join Health Techies:

https://groups.google.com/forum/?nomobile=true#!forum/health...


how do you get the first 25 likes, do you reach out to people showing the facebook page? paid boost?


Friends and family round!


This article looks a little rushed.

> By the way, it is vital to remember that the money you raise IS NOT your money.

But it isn't the investors money either. It is yours to allocate as you see fit but keep in mind that you should always do it to benefit the company and the shareholders.

Beware of backseat driving shareholders or suppliers of convertible notes and other instruments of lending that then want to tell you how to spend their investment/loan (or even with whom), and never agree to spend all or part of an investment with a company allied with one of your investors. You are in charge, you decide.

And beyond that, keep a good eye on your shareholders agreement which could very well place limits on the kind of things you can do with the money you raise, many of those have clauses which can severely constrain your ability to run your business such as being forbidden to move the company (even just to larger offices), hiring of C-level execs and other bits like that. So make sure you fully realize the consequences of entering into a shareholders agreement and do not fold too easily on 'standard clauses' that you feel will cramp your ability to run the company as you see fit.


There have been enough failed startups with hot tubs that this advice may seem heavy-handed, but necessary in hindsight.


Whatever happened to caveat emptor? Does it only apply to the plebs and not investors?

Investors claiming that founders have some sort of moral obligation to spend money wisely is laughable.

Otherwise a good article, but no idea how that bit of strange perspective ended up in there.


Actually, they literally do have a moral and fiduciary duty to their investors to spend money wisely. The article describes it well.

I'm not a lawyer, but that's what I've been advised. You must adhere to good judgement when spending the company's money or people can and will come after you on a civil or criminal level.

That's a pretty broad scope, and corporate hot tubs are probably not beyond the pale, but you can't take investor's money and put it into your bank account and say "Sorry the company has folded". Embezzlement and fraud are real crimes that you can get real convictions for, and investors can file civil suit for much less than full on embezzlement - witness Benchmark's suit against Kalanick/Uber.


You don't have to spend it wisely, just not deliberately unwisely (e.g. put it in your own account), and I believe the 'deliberate' is much more important there than 'unwisely'.

As long as you can make it sound kind of reasonable that your corporate hot-tub would have attracted the right talent, it doesn't sound nearly unreasonable.


Exactly. The things I've seen as far as blowing investor money is cringe worthy. But almost never have I seen a successful lawsuit by investors except I. The case of outright theft or fraud.


Even without a moral obligation, there's a pragmatic reason to spend money wisely: if you blow the money on frivolous creature comforts, you end up in the same state you were in before the startup (which usually means poor), except that nobody will invest in you again. This seems like an objectively worse position to be in.

The real winners when startups blow all their runway on fancy perks are purveyors of luxury goods. That's where all the money goes, after all.


I've seen start-ups that blew all their money in ridiculous ways - to me - without ever crossing that line. You can burn a lot of $ once you start shopping in SF for hip office space, create an irresponsible marketing budget and hire some expensive VP's of something or other. And VCs will applaud you all - or at least most - of the way when you do that.

I see venture capital in the United States exactly the way I see record companies: for the most part they try to get the noob's signature on the dotted line on a contract they will wish they never signed a few years later on the off chance that they too will end up like a few of the mega stars did.


i think the idea is that it's not your money, but the companies money. Like, it's not meant for you to spend on a new car or something.

The next line, "You have a fiduciary and ethical/moral duty to spend the money only to improve the prospects of your company." seems to agree with this perspective.


I've seen companies buy a company Mercedes-Benz or BMW just to convince their clients that they have a good product. Some even buy a house with company money, justifying that they use it to pay themselves lower salaries and lower the tax they have to pay.


Both of those would get you in hot water with the IRS. And I wouldn't rule out the possibility that an investor would succeed in a lawsuit alleging breach of fiduciary duty.


There's a catch to it. They register "motivational talks" as one of the things the company does. So the expensive material success is subtracted from tax under advertising costs. A lot of those guys are management consultants who are good at this kind of thing.

It's not illegal or too irresponsible, just extremely cost-ineffective.


My brother and I were talking last night. We talked about mechanics, operations, for a VC fundable startup:

  Delaware C vs LLC
  IP assignment
  83b election
  Xero
  Opening a Silicon Valley Bank account
  Capital One credit card vs SVB
I don’t understand why YC or freaking Haas never walks people through startup best practices, especially in an ‘Essential’ guide.


https://www.clerky.com/ walks through the legal aspects.


Ditto on Clerky


YC's Kirsty Nathoo gave a great summary of startup mechanics here: https://www.startupschool.org/previous


Thanks Geoff. I'm happy to answer questions on this topic. However some things are company and situation specific so can't be generalized. Also IANAL!


Please, please beat 83b into every founder’s head and make sure they’ve internalized it so they get this boring form right for their employees.

You’ve got 30 days or you’re paying income rather than capital gains. If WSGR incorporates the startup they will get this right for the founders. Sign this, sign this, this and this. But will the founders get this right for their employees?


Agreed that 83b elections are crucial - there is very little a company can do if the form does not get filed within the 30 day window. The consequences of not filing the election can be significant for both the company and the employee.

Clerky has the 83b election form (where necessary) as part of their Hiring package so that when the employee is allocated equity and signs the documents, it is automatically completed. However it is up to the employee to mail it in since it has to be sent via mail and can't be sent electronically. The company should make sure they are chasing the employee to do this and to get a copy of the election for the company's records.


Clerky beats 83(b) into the heads of founders who use its service. It's included in the package, with pre-filled forms and detailed instructions for where to mail them, and it sends you nag mail every week until you've uploaded the completed IRS form. It works for employees, too, but they don't get the nag-mail.

The folks who I think really need to teach their employees about 83(b)s are fast-growing big companies. I didn't know about them when I joined Google, for example, and learned about it too late to take advantage of it. That mistake cost me literally hundreds of thousands of dollars.


Yeah, and Google's HR is supposed to rock. They got my business cards on my desk on day one, but really.

I will look Clerky over. I admit I was just thinking of them as a formation forms generator.

I'm more worried about operations after formation. I'm surprised that Xero doesn't get much discussion. Founders are going to be everything early on. They're going to be accountants too.


Second this. Can anyone reference a guide that works through the logistics of actually starting up?


As phonon mentioned, Clerky is a service that can help with incorporation.

Another service that is more comprehensive would be Stripe Atlas, which helps with everything from incorporation to setting up a SVB bank account to helping with tax issues and AWS credits. You also get access to the Atlas Forum and network of founders and advisors. https://stripe.com/atlas

If you're not into the service, they still have a nice guide on the process here - https://stripe.com/atlas/guide

EDIT/UPDATE: Worth mentioning that Clerky offers certain legal services beyond incorporation (e.g., hiring/on-boarding and fundraising). Didn't mean to imply that incorporation is their sole product, but rather was speaking w.r.t. the topic of basic startup mechanics mentioned by the parent. https://www.clerky.com/


I highly recommend services like this. We were pressured to work with a high powered SF law firm at the accelerator I was in.

It was a total waste of a huge amount of money. ($800 an hour)

They added very little value. On more than one occasion I had to request corrections after the "final" documents were out for signature.

Usually having to remove data that was obviously left over from the last company they used the word doc template on.

You can probably fill out templates with a service for a lot less than $800 an hour.

And I don't believe for a minute that it took 5 hours of $800 an hour labor to fill out those templates not do I even believe the actual $800 an hour guy did more than quickly glance at the first page of the doc.

And while I'm ranting, what a stupid and completely broken system legal documents are. They would email us 500 pages of documents and then we would print the last page that was nothing but signatures. Scan it, and send it back where it is then appended to the document they emailed us. OR any freaking document they want.


I've written this, years ago:

https://jacquesmattheij.com/three-roads-to-the-top-of-the-mo...

And just about forever I've had a kind of owners manual in draft for bootstrapping a startup but I lack the time to complete it, way too much on the go :(. That's a nice indication of how much time and effort go into bootstrapping a company.


One of the benefits of being accepted to YC is that their team make sure you get all of this stuff right.


You can shortcut all of that with https://stripe.com/atlas

Also why SVB? All of the major banks would be a better choice. There's no advantage to SVB unless you need some obscure venture-debt deal.


Because those are logistical details, not essentials. As a founder your primary concern should be developing a solid product and having a good product-market fit and getting paying customers. The things on your list don't become important until later.


On the opposite spectrum I was surprised that there wasn't any advice regarding ideation.


I take major issue with this:

> By the way, it is vital to remember that the money you raise IS NOT your money. You have a fiduciary and ethical/moral duty to spend the money only to improve the prospects of your company.

I think this is unethical. YCombinator is taking advantage of a lot of founders by discouraging them from paying themselves a reasonable salary with the money they raise. There is a lot of confusion about this issue, mostly because YCombinator founders are young and naive, and they think because they own most of their company that they should be working for free the entire time, and can spend years trying to make their company work while eating through what little savings they have.

That's not the case. Founders should be doing one of the following:

1) You should pay yourself a reasonable salary with the money you raise.

2) Otherwise you should be diluting the investors over time by the amount you are getting underpaid.


Couple items here: we don’t encourage founders to work for free (that’s literally illegal) and the average age of YC Founders is 29 (I hope this is too old to qualify for young and naive). While I don’t think Founders should pay themselves market rate I do this they should pay themselves enough for their reasonable day to day living expenses to not be a distraction.


investors expect founders to pay themselves. they don't want founders to worry about day-to-day personal expenses so that the founders can concentrate on the business. that's part of the fiduciary and ethical/moral duty to making a startup successful. it's not contradictory.

but investors also expect founders to be frugal and make wise monetary decisions. the more you pay yourself, the less you have for marketing for example (and marketing is crucial to every startup). it's in your best interest as a founder to take enough in salary to not worry, but no more. so the business has the best chance of being successful. if founders are taking more than that, then it's an indication that they don't believe in the business or at the very least are distracted by other matters.


Couldn't disagree more. You should pay yourself the absolute minimum you need to reduce burn and extend your runway. This doesn't mean free, it means living expenses but no more. Keep the burn low and extend your runway.

If those terms are undesirable, that's fine. Better not to raise money then, or to raise from a different profile of investor who is looking for different kinds of returns (i.e. not 'death or unicorn').


If you're not paying yourself your actual value in salary, then you should be diluting the investors because you are investing your missing salary into your company.


Aren't the shares you already have supposed to be payment for that? The other investors had to put a lot of money to get them, often/usually(?) way more than the founders.


So why doesn’t YV encourage companies to set up shop in Nevada or other low tax, low cost of living areas? How many YC companies are paying Bay Area office rents and paying California-level taxes? It’s not ok to not take a market rate salary, but it is ok to have an office in the most expensive zip codes in the country? Does physical proximity to SV make a single bit of difference to a company other than being close to investors? Unless a company is actually making in-person sales calls, why would the Bay Area be relevant? In terms of acquisitions, it matters not if the company is in Mozambique or Cupertino — the balance sheet is really all that matters.

If the goal is to extend runway, why isn’t YC encouraging founders to set up shop in Texas or better yet be fully remote? When a house in SV costs 5 times more than a house in Texas, it’s pretty hard to expect founders to be able to survive on anything less than market rate.


Companies only have to be in silicon valley for the three months of YC. After that, you're welcome to move to an inexpensive area, and many companies do.


Decent salaries come at later stages of funding.


I may be missing a lot of details on how YC works, but it seems pretty straightforward to me: you're still the CEO. YC invests $120k and an additional $30k, or so, of intangibles, but they don't take a board seat nor a controlling stake in your company. That is, as CEO, you could decide that the best thing to do to improve your company's prospects is to pay yourself $120k for 3 months of work. But, more realistically, you'd probably pay yourself a minimal amount to cover 3 months cost of living in SF (probably 10-15k) and then spend the other 75k (after taxes, etc) on things that give your company most bang-for-buck.

So, on day 1, YC assumes that you (a relative unknown) and your initial idea (probably unproven) are worth about $2M (investment of ~150k for a 7% stake). Seems pretty good to me. And, of course, if you believe that you and your idea are worth more than that, you could always self-fund or seek other funding sources.


That all depends on the amount raised and the stage the company is in.

But if after an 'A' round you are still paying yourself subsistence level wages then you are doing something wrong.


I think you just need to be reasonable person. If you raised $250k and you pay yourself a salary of $150k, it is not acceptable.

If you raised a $30million round, then it is.


Well, if you could be earning $150k at any other company, and you are only paying yourself $50k at yours, then you should be earning an additional $100k/year worth of shares over time to dilute the investors. You are investing that missing $100k.

And you're missing the main point that many of these founders simply aren't getting paid at all, because they think it is unethical to do so with someone else's money. The original article is exacerbating this problem.


This is a bit naive. I can sympathize but it's just not how things work. Nobody is forcing you to start a company and the equity you're building and convinced investors buy into should be your main focus. That being said, I do believe in founders paying themselves a liveable salary.


This is a bit of a meta question but I've found that I've almost never learned anything from reading posts like this. I've scanned them over and nodded in agreement, only to make the mistakes I've been warned against and then I finally understand what people were telling me all these years.

Does YC have an approach on how to actually get founders to take advice to heart instead of just understanding at a surface level?


> Does YC have an approach on how to actually get founders to take advice to heart instead of just understanding at a surface level?

I've been building Internet companies non-stop since the mid 1990s. The only means I've seen or personally experienced to accomplish that, is personal suffering (only half joking). That is to say, going through it for yourself. The difference between book knowledge and hands on experience. Taking a punch to the gut (so to speak) provides an intimate, emotional, personal lesson in a way that reading about taking a punch to the gut simply never can. Your brain subconsciously makes a special effort to take note (forms of pain learning mechanisms) and ingrain lessons that it will not (and I would argue, can't) from reading about it alone. It's almost like something getting etched into your DNA, versus just having a surface tattoo. When you actually go through it, you acquire a kind of automated discipline (courtesy of said pain) that you can't have just from reading or being told; children and pets learn the same way from touching hot things.


I imagine that the best thing to extrapolate from this is to learn from your own failures, but make those punches hurt only a little. So that if you mess up, you can still move on.

Advisors could say what things to avoid, but then offer a path of- but if you don't want to listen to me, try this (small) experiment to see what happens.


The kind of advice that you pick up from articles like those routinely linked here on HN, in my opinion, can help you limit mistakes slightly and can help you learn slightly faster; basically, improve the outcomes somewhat. It probably also compounds nicely with actual experience, as reinforcement.

I don't think there's any good substitute for doing, as a means to learn how to do start-ups, and more broadly understanding how companies should operate. That naturally includes working for other successful companies first for a couple of years, which is a tremendous way to learn as much as possible about the fundamentals of how companies run before striking out on your own.


Does YC have an approach on how to actually get founders to take advice to heart instead of just understanding at a surface level?

If you apply to YC and get accepted, the program provides a lot more intensive support than just the articles on the website. So, I think the short answer is "Yes, you can apply to YC."

But, if that route is not going to happen for you, then articles are what they can offer to the general public. They also have video courses, as I understand it. But, those are still essentially instruction. If that doesn't do much for you, you probably need to find something providing greater engagement, like a hackathon or group of some sort where you can connect in a meaty way with other business people. That seems to be the gold standard: mentoring, making connections, etc.


Articles like this will never prevent you from making your own mistakes. They can help you see your own behavior when it matches the rules ("I'm breaking rule X, dang!"), and they can give you a way of talking about it with other people ("Like Paul Graham says, do things that don't scale")


For people just coming out of college, the advice given by YC might seem very "groundbreaking". But honestly, these are not new ideas. I listened to Sam's lectures at Stanford, and listened to Brian Tracy's business books, and they are the same advice. Not to hate on YC, but I just wanted to keep it 100.


Let’s be clear the goal wasn’t to break new ground in fact it’s the opposite. To condense all the accumulated pieces of advice that we give in one place and provide links to dive deeper if needed.


I agree you are trying to do that with this post. But YC startup information sometimes markets itself as knowing what others don't know when it comes to growing a business, and say they know best since they've seen so many startups in their cohorts. It comes across as revolutionary ideas, even if those words aren't exactly used.


For instance, all your reference links are to yourselves. Are there no data points outside your own findings that could be useful ?


Even if it is not groundbreaking, people need to learn it somewhere. I've learned a ton from YC posts. Maybe they are things that people running businesses already know, but that is not me. I may look at an application and say it is not innovative technology, but if they are solving someone's problem and making money it is hard to argue with it. YC is definitely educating people who don't know these things and in that sense, the information is very insightful.


The guys at Basecamp have preaching this stuff for years.


This is especially relevant if you're trying to setup a social networking site:

> Many startup advisors persuade startups to scale way too early. This will require the building of technology and processes to support that scaling, which, if premature, will be a waste of time and effort.

I see all these social media services started up by folks who've spent weeks coding fancy platforms hosted on cloud services with a whole team of engineers on standby with all the best graphics design work money can buy...

While no one's actually using the service. Best to focus on the community and getting people using it than the tech stack. No point trying to make a super complicated site that scale to Facebook levels when you've got about a hundred people actually posting on it.


I have leaned towards scaling too early in the past too and I think there’s a tendency to do that for professional software developers turned founders because that’s the expectation we have when interviewing for a corporate role. It’s hard to unlearn.


I totally did this. I got my stuff up on AWS with a Cassandra backend. I launched that site and realized how silly it was. My mentality has definitely shifted to build something simple and get users.


Geoff and I are happy to answer questions in the comment thread. Our goal was to condense the advice we most often give to early stage founders. (Much of this advice was also given to me when I went through YC)


The first two links are both 'do things that don't scale', is that correct or did you mean to link to something else in the first link?

Also, unexplained reference to 'PB', Phineas Barnum or Paul Buchheit?


I am always disappointed at the lack of effort put into discussing what "launch early" really means. For example, let's say you're making a Word Processor[0]. Surely, putting up nothing more than a download page where people can Stripe their $10 for a copy is not sufficient. There must be a lot more to the story, because there are a lot of projects that have done just that and have gone nowhere.

It's always made to sound like you can "just launch now". But there must be some sort of apparatus in place to promote the product and take advantage of the attention given to the product. Constructing this apparatus must be a significant undertaking, or else more people would do it. So one can't "just" launch. There is still significant work to do up front, it just might not necessarily be programming of your product.

[0] Just for example. Call it, "consumer-oriented software", rather than any sort of SaaS or open-source library or any other sort of software offering.


I agree that it's certainly possible to launch too early, especially if your product doesn't exist, or it's full of bugs and unusable.

But this is still good advice for me. I'm just about to launch a service, and I think I've already gone way beyond "MVP" status. I was even planning on doing a big redesign of the whole product, but now I've decided not to do that, because it works fine as it is.

I could easily keep working on this product for another 6 months before I was comfortable launching it, but now I think I'm going to set a deadline for early next week, and only work on the most important things.


What is the product? You should always link to your product if possible when you're talking about it.

It got me interested even if I just want to take a look.


I am looking for startup advice for founders that don't want to build a billion-dollar company or need VC funding. How to efficiently target a local market? Or perhaps start a niche business that appeals to a small market.

Every time I see a startup advice book, article, Stanford lectures, whatever it may be - it is always shooting for becoming the next Uber or Airbnb - including this article.


The Silicon Valley definition of startup is "company designed to grow fast"[1]. It's perfectly OK to use a different definition, and it's perfectly admirable to start a company with a different goal. If so, you should ignore all the advice about raising VC money because you really don't want to do that if growth is not your central goal.

[1] http://www.paulgraham.com/growth.html

"There's a distinct word, "startup," for companies designed to grow fast. If all companies were essentially similar, but some through luck or the efforts of their founders ended up growing very fast, we wouldn't need a separate word. We could just talk about super-successful companies and less successful ones. But in fact startups do have a different sort of DNA from other businesses. Google is not just a barbershop whose founders were unusually lucky and hard-working. Google was different from the beginning."


> The Silicon Valley definition of startup is "company designed to grow fast"[1].

No, that's the Paul Graham definition.


This is only a useful comment if it includes an alternative (and also widely used) definition, or at least a critique of the definition provided.

In fact, the wikipedia article on startups includes the grow fast component, suggesting to me that that is the most common usage:

> "an entrepreneurial venture which is typically a newly emerged, fast-growing business that aims to meet a marketplace need by developing a viable business model around an innovative product, service, process or a platform. A startup is usually a company designed to effectively develop and validate a scalable business model."



That is definitely not Steve Blank's definition. His is: "an organization formed to search for a repeatable and scalable business model."

You can have a rapidly growing company with an old business model. Look at McDonald's, for example. The business model, selling hamburgers, wasn't particularly different. But they took great advantage of the rise of car culture and TV advertising. Or look at the Android phone market. Selling phones is a pretty well understood business model, but companies there have grown rapidly by continual incremental improvement.


Repeatable and scalable sound like ingredients for fast growth.

To demonstrate that Steve Blanks definition is materially different from Paul Graham's, perhaps you could name a few successful startups which found a scalable/repeatable business model, but that were not designed to grow fast?


Seriously? I already demonstrated that it was materially different by showing that some-fast growing companies were not formed to search for business models.

All successful startups grow fast, because that's how we define business success. Not all fast-growing companies are startups, though.


Ok great, Steve Blank excludes companies that already have a scalable repeatable model? Somehow I doubt that's his intention

EDIT: Most ecommerce startups would fall into your "proven business model" category, and yet they, like McDonalds before them, do extensive experimentation to find the path to rapid growth. Which is why Steve Blank underscores that the search is never finished.


Not quite. His definition is about what the organization was formed to do.

If a company was formed to search for a scalable, repeatable business model, then he's still interested in it when they have found it. Then they're in the growth stage.

But if a company was formed, as most companies are, intending to use a proven business model, then it's not in his definition of a startup. No matter how fast it grows.


> But if a company was formed, as most companies are, intending to use a proven business model, then it's not in his definition of a startup.

This would seem to exclude virtually all delivery service, cleaning service, car service, etc. companies, which are usually considered the prototypical SV startups.


It depends on how they're doing it. Uber and Lyft, for example, are definitely startups under Blank's definition, because they were searching for a new model. Postmates too was new; I don't believe there was a successful delivery company that worked like they do.

If you were to start a Postmates competitor today, though, and were just doing what they did, then it wouldn't be a startup. At $250m ARR, their business model is already proven.


>That is definitely not Steve Blank's definition. His is: "an organization formed to search for a repeatable and scalable business model."

That's what "a company designed to grow fast" is.

>You can have a rapidly growing company with an old business model. Look at McDonald's"

McDonalds was a startup under this definition. If Ray's original plan was to take an old business model, redesign it for cars, and scale it rapidly with TV advertising, that's a startup by Steve and Paul's definition.


> That's what "a company designed to grow fast" is.

No. Most startups are designed to grow fast. But many non-startups are designed to grow fast. There is overlap in the Venn diagram, but they are not the same thing.

> If Ray's original plan

If that was Kroc's plan, you'd be right. Do you have some evidence it was?

As far as I can tell, he spotted an existing restaurant that had already found product-market fit and just scaled the operation using variants on known franchising approaches. I also haven't seen any evidence that at the time he foresaw suburbanization, white flight, and the resulting increase in value of heavy branding, trends that were nascent at the time he joined McDonalds.

I'd say it was more akin to the top-growing restaurants of today, ones I point out elsewhere in this discussion. They are fast growers, but they are scaling mild variations on well-known business models.


His insight was that the model was repeatable and scalable. The assembly line kitchen they developed not only made making burgers fast but also made them incredibly consistent. Because of this he could franchise the restaurants and be assured that quality would be consistent among them despite being operated by different people. He never intended to open large numbers of his own restaurants - just enough for experimentation purposes.

To this day this is a major selling point. When travelling you can take your chances on a local place or go with what you know.


Sure. I think we're saying the same thing: The McDonald brothers had found product-market fit. Kroc scaled it. Ergo, Kroc's approach was not what Blank calls a startup.


Do you honestly believe nobody used the term 'start-up' before Steve Blank or Paul Graham used it?

https://www.merriam-webster.com/dictionary/start-up

"A Fledgling Business Enterprise"

That's exactly what it means, no more, no less. Keep in mind that outside of the HN crowd absolutely nobody would know who either Steve Blank of Paul Graham are and neither of them get to redefine the English language.


>Do you honestly believe nobody used the term 'start-up' before Steve Blank or Paul Graham used it?

Did I say that somewhere or are you just straw manning me?

My post and paulsutter's are clearly referring to the Silicon Valley idea of a startup, not the general idea. The difference is one of intent, so it is useful to distinguish between the two.

Someone who opens a diner or a watch repair shop or a Kinko's franchise with the intent of servicing their locale is certainly doing "a fledgling business enterprise" and thus may technically be doing a startup. But SV is specifically interested in greenfield endeavors that can leverage the web or other new tech to find a large customer base and rapidly scale to billion dollar+ valuations.

Given your long history on HN I know you know this so why are we bickering over semantics?


Nobody suggested they originated the term. Paul Graham's definition for "startup" is exactly right for Silicon Valley, and the Merriam Webster definition is incorrect, for Silicon Valley.

It's true that lots of people use the word startup to mean fledgling business, and that's perfectly OK and cool, but if you use the term "startup", in Silicon Valley, to refer to a lifestyle business, people will view it as self-aggrandizement or delusion.

This is also true in any venture capital context anywhere in the world.


One of my friends runs a few small SaaS businesses in parallel. He really likes a conference called MicroConf (http://www.microconf.com/) which focuses on bootstrapped businesses. That might be something to check out if you can make it.

One book that's great, regardless of what scale of company you're trying to build, is Traction by Weinberg and Mares. It talks about how to pick marketing channels for getting traction + includes an introductory section on each of two dozen popular marketing channels. Very useful if you're trying to get traction for your product and not sure where to start.

Finally, a lot of startup advice should apply to companies more broadly: focus on building something people want; it's better to have 100 customers that love you than to have 10k customers that like you; do things that don't scale at the beginning; etc.


Second the "Traction" book. It is a great read, and introduces channels you might not otherwise consider.


Any recommendations on books/reading around enterprise sales, specifically services?


I've heard great things about Predictable Revenue (https://www.amazon.com/dp/B005ERYEGU) and The Sales Acceleration Formula (https://www.amazon.com/Sales-Acceleration-Formula-Technology...) but haven't read either yet. I think they're focused more on selling products than services, but not 100% sure.


Predictable revenue is great; it’s focused on essentially selling SAAS.


Predictable revenue is a great approach to segmenting your enterprise leads, customers, etc. Also, I like Steli's approach from close.io blog


Check out the Indie Hackers podcast (and website). It's made for exactly what you're looking for. Courtland Allen interviews founders who are excited about making $20k a month in MRR, and they don't necessarily need to become a $1 billion company. Most of the people featured are bootstrapped or had only a little bit of funding.


Yeah. Courtland was also on the YC podcast recently - http://blog.ycombinator.com/your-whole-goal-is-to-not-quit-c...



That video list is awesome, good find!


One of the best things I ever heard and I wish this was taught everywhere, is: understand what kind of business you want to build and what the right stage in your life to build it is.

In startup terms, there are cashflow businesses and disruptor businesses (credit to Mike Dillard).

Cashflow businesses are generally sneered at in Silicon Valley ("lifestyle businesses") but in many cases, they are a great place for entrepreneurs to start.

Cashflow businesses can provide you with a level of financial independence on your own terms. Then, if you want more, either start more cashflow businesses or then focus on your disruptor business (Silicon Valley style startup). But if you do you cashflow business first, you are far less at the mercy of fickle VCs, etc.

The other useful thing to come out of this classification is it almost certainly informs your funding strategy.

If you're building a cashflow business, don't ever raise money. If you're building a disruptor business, definitely raise money, as much of it as fast as you can. If you've done your cashflow business beforehand, you'll already be quite well off and can think much more strategically in your disruptor business.


I would check out the writings of 37Signals (now Basecamp)/RoR founder David Heinemeier Hansson, who advocates bootstrapping for not-necessarily small markets.

His talk "How to unlearn your MBA" in particular was fantastic in providing a counterpoint to Silicon-valley style Startups: https://www.youtube.com/watch?v=MlhAkNWC1qo.

He directly comments on the YCombinator model at 53'57" (https://youtu.be/MlhAkNWC1qo?t=53m57s), but the whole thing is worth watching.


@npgatech Here ya go:

- http://justinvincent.com/page/960/how-to-start-a-sucessful-b...

- http://www.startupsfortherestofus.com

- https://www.indiehackers.com

- http://www.startupbook.net - Start Small, Stay Small

- https://blog.nugget.one/upstart/

This is just a quick list to get you started I'm sure there are better lists if you google.

Disclaimer: The Nugget blog and TechZing are some things that I have been involved in putting together.

Edit: On this subject, this podcast here should be essential listening for all entrepreneurs:

https://www.indiehackers.com/podcast/005-bryce-roberts-of-in...


I am looking for startup advice for founders that don't want to build a billion-dollar company or need VC funding.

Check out barnacl.es, an HN like site dedicated exactly that.

https://barnacl.es/


This is amazing, thank you!


I owned a pet store and would say most of this advice applies equally well to such a business. Go live, talk to customers and iterate. Make something people want.


I don't think so. When you are not interesting in scaling to another galaxy it is ok to have relatively few customers and charge them really well.


Yes but "talking to your customers" is universally applicable and valuable advice. One could argue that it's of even greater value if you're targeting a niche with only "a few customers" because you need to ensure you really deliver enough value to get them onside and paying a rate that ensures you generate a profit.


I think most small companies were talking with customers for long time. The challenging part of this advice is talking with your customers at scale and separating signal from noise.


The article even specifically suggests having fewer, better customers.


Check out http://discuss.bootstrapped.fm/

It is low volume, but has some good advice now and then, some of it from people already doing this stuff.


When I opened this thread, I expected to write a post that covered a few things.

The first was to beware of survivorship bias. Some of us have had experiences that were very different from the reality that most people face.

Second, I'd absolutely not listen to anyone who suggested you start a business you're passionate about, at least not as a general rule. If you're really passionate about it, your own biases are almost certainly going to prejudice your business in harmful ways. That doesn't mean not to be passionate about it, it just means don't make your passion your business.

Third, don't do it with the goal of getting out, selling for millions of dollars, and being the next Musk. Those are unrealistic goals. Instead, do it to make enough money to comfortably provide for you and your family. That's a much more realistic goal.

I think that third one applies to your comment, which is why I mention it here.

Then again, go back to the first thing I listed. I'd not take advice from me. In my case, I saw a niche and it fit in with what my research was about. I left academia and was making a comfortable living. The offer to buy my business was unexpected and the price was surprising.

Selling had never been my goal. It was just a fluke. I wasn't passionate about what I was doing, I became passionate about doing it well. I became passionate about working with brilliant people and exceeding goals. It was traffic modeling, that's really not a subject one becomes impassioned over.

Sometimes, you just get lucky. Sometimes, you're in the right place at the right time. You can maximize your chances but, at the end of the day, it's 'good enough' to just be able to provide comfort and opportunity for you and your family.

But, then again, remember the first point.


> If you're really passionate about it, your own biases are almost certainly going to prejudice your business in harmful ways.

I'd really like to hear more about this, because from what I've seen it's really important to "give a shit" about what you're working on.

Without a deep level of giving a shit you are quite likely to give up due to the waining of your interest level.

I mean, I've seen loss of interest as a major killer of side projects countless times in Nugget and also from speaking to lots of other entrepreneurs over the past 10 years.


There's a space between giving a shit and being passionate. I don't imagine one should be apathetic, but it probably shouldn't be your 'save the world, come hell or high water' project.

People passionate about an idea can make great employees. Someone giving direction should be a bit more objective. If you can be both objective and impassioned, you're in a small minority. Lots of people seem to think they can, but wait until they fall head over heels in love and see how objective they really can be.


I agree that passion is a word that should be removed from the startup lexicon


Check out http://www.startupsfortherestofus.com/ and pretty much anything that the two guys behind it do. Beyond the podcast Rob Walling and Mike Taber have books and host conferences on the topic.


There's a book called Start Small, Stay Small that is really good for the purpose of solopreneurship if that's your thing.


That's because the 'other people' in other people's money want billion dollar exits. you can pretty much use all this advice for a local niche market, just use your own money or friends or family's.


Here's a forum for people who are bootstrapping startups, typically with no intention of growing an enormous company:

http://discuss.bootstrapped.fm


You'd be better off looking for general business advice rather than a "start-up". The "start-ups" à la YC looks to raise money, several rounds, IPO, Exit, spend millions to acquire users, etc...

It's much different than building a small business that scales to 10 employees in the next 10 years.

The difference also starts from the foundation. For startups you are looking for Corp C. For your case you are looking for an LLC.


https://groups.google.com/forum/m/#!forum/business-bootstrap...

I mostly post links to seemingly pertinent things from HN, but the intent is along the lines of what you describe.


What do you mean by "startup"? The one I normally use is Steve Blank's, "an organization in search of a repeatable business model".

If that's what you're talking about, then a lot of this advice still applies. Looking at the "Pocket Guide" section, for example, I think that all still applies for a niche startup.

If, on the other hand, you're just talking about a new company, one where you're applying a well-understood business model to, say, a new location, then yes, you need different advice. But I think that advice differs a lot based on what kind of new business. The advice for a first-time Subway franchisee should be pretty different than somebody who wants to launch their own consulting company. There, it seems like people form up into specific communities around the kind of business.


Use subscription billing, have patience, find upsells, read patio11.

Source: Bootstrapped a company to substantial profitability.


The reason why is those are the types of business that are able to raise money to pursue their goals.


There are tons of literature, books, articles, and more already out there, written over decades, that talk through starting a new business. Even material specific to starting a software-based business if that is what you are after.

The chances of hearing some "new" advice about doing this that isn't just already out there is not terribly high.


Perhaps look at something B2B rather than consumer-facing, is the advice I have seen - along the lines of that advice in the YC piece that it's better to have 10 customers that love you (and are spending much more) than 1000 that are lukewarm and/or not spending much.


You're looking for regular business advice, not "startup advice" from YC. They advise particular classes of businesses extremely effectively.


I think all the same advice applies, except slow down when you get to the size of company you're happy with.


Check out the SPI podcast (Smart Passive Income). Lot's of founders on there from companies you've never heard of.

https://www.smartpassiveincome.com/podcasts/


I think the advice is the same except you just have smaller numbers of users. But you do want to see traction.


That's a "lifestyle" business, and it's very appealing. I don't want billions, I just want to work for someone else.

One curious thing is it's more selfish than a startup - after all, you're doing it for you, not for the business. You want it to be sustainable, so the ugliness of competition is relevant sooner. One pg essay likens a startup to a charity, and some, like Craigslist retain some of that quality, helping a lot of people without making as much money as they could.

Note: I'm not criticizing you for wanting this. I'd like it too, I just haven't found a way of doing it that doesn't become nasty. YMMV.


Could we stop using the term "lifestyle" to describe young companies that aren't chasing the unicorn dream? A lot of them are run by very driven founders who work long hours to build world-class products for smallish niches. They don't have vacation homes in Tahoe; they don't shut down for a week to go to Burning Man.

Instead, they are obsessed with a definition of business success that doesn't involve ten-digit numbers.

There is one "lifestyle" business that's rampant throughout Silicon Valley, in spite of its efforts to deny it. This would be the bottom quartile of the venture business. It's all about picking up management fees, taking long weekends, and living large.


See my other comment. Cashflow business is a much better and more accurate term for this.


What about the term small business?


Just doesn't have the same ring to it. ;)

It's largely semantics as any small business should ideally be cashflow positive but I think the nuance here is one that you can build these businesses to scale, just without VC funding. The time horizon for growth is much longer as a result but definitely there.


The word lifestyle usually means someone running a part time business usually a hobby that expanded.

Running a gas station is not a lifestyle business.


"I Love Lucy" was created so Lucille Ball and her husband could have a family. So, it was a "lifestyle business."* It also was the Star Wars of its era in terms of being technically cutting edge and changing an industry.

IIRC, Plenty of Fish never took VC money.

There are other examples out there. You have to research it if you want it, but it does happen.

* http://micheleincalifornia.blogspot.com/2014/03/i-love-lucy-...


One curious thing is it's more selfish than a startup - after all, you're doing it for you, not for the business.

A business is not a real person; you're not doing things "for it" anymore than I'm being charitable by gifting my car new tires.


Craigslist is a great example of exercising exactly the right amount of restraint in the cost-benefit equation. Most SV startups are subsidized (with attendant inflated expectations) to the point that they can't possibly live up to their valuations.


The term "launch early" can often get blurred. Dropbox famously had a landing page, and then a video, and then iterated to a product.

Is Dropbox considered a product that "launched early", despite them waiting to receive feedback on a video before building software?

Additionally, what tracks better: a good screencast or a bad useable demo (I imagine a good demo is obviously better than a good screencast)?

Otherwise, great list, and thank you for putting it together.


This is really scary to think about when you're days or weeks away from launching an MVP.

I'm building a service for developers. I really want to polish the design and get the UX perfect, and have really good documentation and client libraries for various languages. But I think I can launch without those.

I really just need to record a screencast and get a demo online. But wow, the struggle is real. I really don't want to launch it yet.


I was just curious on how other people think this through.

It's a question I love hearing feedback on from other hackers who are building things to solve problems. A useful way I like to think about the MVP is : "if I removed everything, what's the last thing I could possibly remove without the solution no longer addressing the problem?"

I try to stop just before that line. That being said, it's always easier said than done.

DM me on Twitter/I just followed you! I'd love to try out your product when you're ready!


"launch early" = MVP = no "gold plating" = the VERY least product that will get people to use the product __regularly__ (not just try it once).


I never find advice on how to grow when your customers are heavily competing with each other and, therefore, they are very unlikely to recommend your product no matter how much they love you. I feel this is a very common situation and I never heard YC talk about how to deal with it.


We have a similar situation where our customers actively prevent us even mentioning that they use our products. It is a grind.


What is your position on attacking regulated industries that require significant up-front capital (e.g. banking)? Domains like these face significant chicken-or-egg problems - you need financing in order to legally attack the problem, but without actually being in the market it's difficult to raise financing. YC seems invested in encouraging companies like these, but their domain necessitates a different approach than a traditional technology company.


Does YC have enough time perspective to be truly convinced these principles actually hold?

The only example in article is Airbnb, which is obviously an outlier.

How well has this doctrine been working?


Very good question - we have 13 years and about 1600 startups that we draw this from.


It works well enough if the numbers are large enough from an investors point of view. It may very well be sub-optimal when looked at from the position of an individual company.

This is un-avoidable, any kind of start-up advice will always be a distillate from experience across a portfolio and hence will maximize the chances for the holders of portfolios, not for the holders of stock in a single company.


This might be true if this were the sort of advice that argued that startups should always swing for the fences, or always take unreasonable risks, in the hopes that a portfolio of such startups will result in one or more big winners. In fact, this is not the case. Our advice is intended to increase the chances that every startup that follows it will be successful. Like any advice, you can surely find counterexamples where the advice will not be a good fit, but we would argue those cases are rare.


I think your YC bias is blinding you to the vast arena of companies different than those that would normally apply to YC. So it is more along the lines of 'YC essential start-up advices for the kind of companies that would apply to YC'. Not for start-ups in general.

• Launch now

This works, if your product is something that is trivial or extremely easy to manufacture. Many products are not at all like that.

• Build something people want

Which you may only find out during the iterating process.

• Do things that don’t scale

That depends. Almost all of the examples in the article are from companies that eventually scaled very well, and the 'do things that don't scale' advice is only applicable to some specific examples that held true in extremely narrow domains. For the most part start-ups are trying to find each and every kink in the machine to automate it as soon as they can so they can stay lean while growing. I'd change it to 'do things that don't scale and then find a way to scale them anyway'. The first part is just to get a feel for the problem space, the next is where you will end up making or breaking the company.

• Find the 90 / 10 solution

The Pareto Principle at work, can't disagree with that in any way, it is good advice no matter what the context. Perfection can wait.

• Find 10-100 customers who love your product

Some very successful companies have only 3 or 4 customers, you'd never hear of them because they are not sexy in any way but they are critical and usually have a lock in on their customers that most start-ups can only dream of.

• All startups are badly broken at some point

I'd change that to 'Almost all companies are badly broken in some way'. This is after looking at many of them over the years. That doesn't mean they can not function, merely that almost every company that I've ever looked at had one or more pretty serious defects.

• Write code – talk to users

Not all start-ups revolve around writing code, in fact the best of them when it comes to 'changing the world' probably do not.

• “It’s not your money”

See comment elsewhere, it's not yours either, it is the company's money.

• Growth is the result of a great product not the precursor

Growth by itself should not be a goal, and in many cases growth would be a problem. I've written this before, if growth was good then cancer would be good. So if you grow fine but be in control and aware of what parameters drive that growth and don't be afraid to step on the brake if it looks as if your growth is going to outstrip your capacity to deal with it.

• Don’t scale your team/product until you have built something people want

Sensible advice, regardless of what kind of company you run. Could be generalized to: "do not fall for the premature optimization trap".

• Valuation is not equal to success or even probability of success

I can't make much sense of company valuations in general and start-ups in particular, but I do know that even if the relationship does not hold in one direction, there does seem to be strong correlation between success in numbers and valuation.

• Avoid long negotiated deals with big customers if you can

That 'if you can' is instrumental, anything involving enterprise sales is going to have that element.

• Avoid big company corporate development queries – they will only waste time

True, but they are sometimes also ways to bankroll the company without dilution. I've seen a couple of successes happen this way and it seems like an elegant way to grow a company.

• Avoid conferences unless they are the best way to get customers

Agreed. Never went to a conference that I liked or that felt like time spent well.

• Pre-product market fit – do things that don’t scale: remain small/nimble

Remaining small and nimble is good advice at any stage. VCs that push you to increase your headcount should be avoided at all cost.

• Startups can only solve one problem well at any given time

Strong agreement there, this goes for almost all the businesses I've looked at. I'd even consider a start-up that tries to solve more than one thing at the time as being more at risk than any of their competitors solving only one of those. You'd have to be very good at everything in order to change along more than one axis in more than an incremental fashion.

• Founder relationships matter more than you think

Again, strong agree. I've seen more start-ups tank or lose momentum because of founder issues than for any other reason or set of reasons combined.

• Sometimes you need to fire your customers (they might be killing you)

But don't do it too early, make sure you drop them when you can afford to.

• Ignore your competitors, you will more likely die of suicide than murder

That depends, there is one situation where being unaware of your competitors can be costly: If one of your competitors has picked up funding and they enter your market with a price war or giveaway when you are still selling your product. This makes keeping a cursory eye on your competitors a good investment as long as it does not occupy you or one of your colleagues more than an hour or so in a month. It can also help to keep you 'feature complete' in the eyes of potential customers if you are going head-to-head in the same market, as well as to stay informed about their pricing and models.

• Most companies don’t die because they run out of money

I disagree with this one, not sure what your reason behind writing that so definitively was, but in fact the majority of companies dying are due to bankruptcy.

• Be nice! Or at least don’t be a jerk

Agreed. In the same line: don't burn your bridges.

• Get sleep and exercise – take care of yourself

That's good advice for everybody including those people that do not work on start-ups.

Thanks for posting all this by the way.


> It may very well be sub-optimal when looked at from the position of an individual company.

Of course you're right that the advice is for YC startups, that ultimately benefit YC. And, I don't see how YC could even get data on how well this advice works for non-start ups.

But I think it is sensible advice for non-start-ups. Just wish I had some data to back that up...

For example, I think going for a few customers you really help with an urgent problem works better than many customers that you somewhat help.


> 007 – formidable (need this)

What does this mean?


Second this question. This is the only place "007" or "formidable" shows up in the article. Also, no reference to James Bond in the article. Is need this a reference to needing to add it to the article or a statement that you absolutely must have it?


Quite a few loose ends in that piece.


Launch early and iterate!


We should edit the blog post to make this clear - thank you for pointing it out.

But for the record, it refers to a piece of advice we sometimes give, to "become the 007 version of yourself". James Bond is always competent, cool, collected; even in the face of everything blowing up. Since as a founder, things are constantly going wrong, it can be helpful to think about remaining as calm as James Bond would be.


> Get sleep and exercise – take care of yourself

This should be the first advice, how are you going to take care of something if you don't take care of yourself first?


> We often say that a small group of customers who love you is better than a large group who kind of like you. In other words, recruiting 10 customers who have a burning problem is much better than 1000 customers who have a passing annoyance.

How does the possibility of being pigeon-holed affect this calculus, especially where stigmas are at play? My startup's technology is life-changing for many people with dyslexia or ADHD, but is also well-used by skilled readers (for whom it is augmentive, but not life-changing).

If I focus exclusively on the accessibility community, many people who come across our website will be turned off by words like "dyslexia", and will assume that our technology isn't for them because they read well already.

How do you suggest startups navigate these waters when there is a chance of being pigeon-holed in a way that evokes stigma?


I'm not an expert, grain of salt, etc.

But to me, this is the responsibility of different funnels. Have your most generic marketing info- your landing page, etc- apply to just about anyone, but make your resources that reach out to the accessibility community target them exclusively. They won't be offended/disturbed when they see that you can be used more generically, and if it's truly solving a need for them they'll sign up generally based on your targeted outreach anyway.


We are actually in the process of redesigning our website (currently a single page) to have a generic landing page and three silos. This allows us to refer to educational/accessibility benefits when speaking to one audience and speed-reading benefits when talking to other audiences. Thanks for reaffirming this change, which we've poured a lot of time into!


I think this advice is great, but the wording they use causes people to miss the point. Specifically the word "launch". You don't need to have a big marketing launch, you don't need to do ads, you just need to get it in front of customers and validate your business by whatever means you can (whether checking whether consumers come back or asking people to pay, or whatever).

The struggle is that people think "oh, this needs Slack-level design" or 'just another feature', but if they thought of it not as "launch" but instead "put this in front of customers now and get feedback", it would be more obvious that this was a good thing.


Here's my Essential Startup Advice:

Whenever someone gives you free advice (i.e. you don't directly pay them cash) try to understand the motivation to give you free advice. That should give you an idea of whether the advice is valuable or not.


This is actually reasonable advice. For clarity: our motivation is because we want to see more successful startups in the world. We also believe and hope that some of those startups will be funded by YC.


Would you agree or disagree that YC looks for high value potential more than just a successful start up? I'm thinking of the top post here and that's prompting my question.


"Do things that don’t scale" -- The essential of the essential IMHO. Intuitively, it sounds nonsense. After all, who what to build an unscalable business. But having been working on my super early stage startup for a while, I realise this is the biggest wisdom I gain during the process.

Sometimes I feel stressed on spending too much time on things like manually solving problems for my potential customers and even helping my once potential co-founder, who now formed another startup of his own, with his problems. But now looking back, the time I spend is not in vain. I gained lots of hand-on experience on what things do and don't work. Not to mention, valuable feedbacks and friendship are something I think I won't get it if I focus on something otherwise.


Any advice for people who would like to found their own company, but aren't sure what it should do?


Solve a problem that you or people around you have.

I know It's frustrating to hear that over and over again, but you have to actively keep your eyes open to the inefficiencies around you ("live in the future") and eventually you'll discover a problem that needs solving.

PG's essay on this is a good one that helped me choose what to work on: http://www.paulgraham.com/startupideas.html


My problem is that the people around me have no money to pay for the solution. How do you get around that?


That probably isn't literally true. If you come up with a solution that is worth more to them than the cost to them, people will find the money.

And if it is literally true, then you look at uncoupling monetization from the end point user. There are a number of ways to do that. Historically, TV was supported by ads. Viewers bought TVs, but broadcast stations did not directly charge viewers for watching TV. Instead, they broadcast for free, but included ads.

It is another layer of complication, but it isn't outright a charity model. Plenty of for profit businesses have a less direct monetization strategy than simply charging the end user for their use of it.


If you come up with a solution that is worth more to them than the cost to them, people will find the money.

Yes, that is true. Unfortunately, that essentially means competing with the things that cost them currently, and that's mostly rent and basic utilities, which are heavily regulated markets dominated by state-supported companies. You could sell to them, but then it's no longer "solve the problems of people around you" but solve the problems of huge corporations, which is quite different.

You're still right, it's just a discouraging prospect.

Plenty of for profit businesses have a less direct monetization strategy than simply charging the end user for their use of it.

That's also very true. I have a bit of a love-hate relationship with ads, since I dislike the concept, but recognize that I and many others who couldn't afford online services have greatly benefited from the redistributive effects of ads. Still, I wouldn't use them as my revenue source.

Unfortunately, except for ads and a fremium model, I don't see many ways to do this decoupling.


It is a problem space I am abundantly familiar with. I certainly feel your pain. The fact that I want to offer solutions for people with serious problems that keep them trapped in poverty helps contribute to my own lack of funds.

I do have ads on my websites. I also have a tip jar and Patreon. I don't make much money, but I make more than I used to.

So, I get that you probably feel like your problem is being dismissed. It isn't. I am right there in the trenches with you and telling you what I know from long, hard firsthand experience.

You haven't given any details, so I can't try to give specifics. I can only speak in generalities, because you are only speaking in generalities.

I may not be the best person to talk to about how to make money. I don't seem especially talented at that. But I may know a lot more than most people on HN about trying to solve problems that seem impossible to monetize, and I am making headway on monetizing them anyway, against long odds.


No, no, I don't think you're being dismissive! I appreciate that you've taken the time to reply seriously to my whiny rant.

I haven't given details because I don't really have any, it's just a general feeling of foreignness I've had since I started reading HN and about startups. Even now that I technically could, I'd frankly feel ashamed of spending money on most of the tech trinkets that get advertised here, let alone dedicated my life to building them. And yet, I also know this is just relative - my $250 laptop is an extravagant expense for actually poor people - so I don't judge those founders. I just wish there were more startups for working-class people from where to draw inspiration.

Anyway, thanks for your patience and support :)


What you are describing is an error in your internal mental models, not objective reality. It is a thing I also wrestled with.

Until earlier this month, I was homeless. I spent nearly six years on the street. I still am quite poor.

Like a lot of homeless people, I had income, just not enough to purchase a middle class lifestyle. I made choices about how to spend my money. I bought cheap tablets because I make my money online. I don't make much, but a cheap tablet could readily pay for itself in short order.

I also blog. Among other things, I try to provide health information for people with CF. There is a drug for CF that costs around $300k annually, so there are people providing high priced solutions for this same problem space. My difficulties in making money aren't actually the fact that people with CF have no money. This is not stopping drug companies from putting out very expensive medications for the condition.

So, there are reasons why I, personally, cannot up and charge people with CF big bucks for my help. But those reasons are not actually because they simply don't have the money, even though it is true that people with CF tend to be dirt poor.

While homeless, I shopped sometimes at second hand stores that had a lot of homeless clientele and I got payday loans. That was an eye opening growth experience for me.

If you provide real value and the right price point, even poor people can buy your product. If you think this is not true, you are dealing with some kind of emotional baggage, not actual market reality.

Best.


You've given me some food for thought. Thank you.


great advice! esp "a small group of customers who love you is better than a large group who kind of like you"

I'd add some additional qualification: "Valuation is not equal to success or even probability of success" ==> capital-intensive businesses require suitable valuation

Ignore your competitors, you will more likely die of suicide than murder ==> yes, and!!! competitors are good: they help build awareness among customers, investors, etc.

"Write code – talk to users" ==> for enterprise products, also talk to a few customers / decision-makers. If nothing else, make sure your fans have access to budget.


Out of curiosity, I am wondering if entrepreneurs really worry too much on their competitors. Often I find articles saying the opposite -- they urge people not having a blind eye on their competition so that they can at least differentiate themselves from competition, lest that they're making another me-too product.


When is it ok to outsource/offshore some/all of the software development?


When the software is not that important to the success of your startup. So, not most of the time.


It’s often not good to do this


Thanks. Any recommended reading on this?


"outsource/offshore" or hire remotely?


One area I’d love to be discussed/expanded further in another post is about techniques around taking to users. Even getting people who have signed up or are existing customers to talk to you is surprisingly difficult. There are probably pearls of wisdom to share in this area. Taking and listening to customers is so important but with the noise nowadays I find it’s harder to get them taking, even as I say they’re already using the product.


Thanks for this write-up mwseibel & Geoff!

A question: What's the best way to keep ourselves accountable to the tasks of "talking to users", "do things that don't scale" and "writing code" every week?

We write a weekly report, and set milestones to go for each week - but it doesn't feel like these things focus us our attention as well as they could be.


It's the hardest part. Discipline. It requires creating your own system and constant reevaluation- every milestone/meeting should begin and end with how this is related to figuring out product/market fit.

If possible, this is the general way milestones should be structured:

1. Who is this for? Be as specific as possible. At first this might even be someone's name. As you start solving their problems, they'll ask for more and you'll naturally start targeting others through those features.

2. What's the easiest way to solve this problem today? Do it that way. You shouldn't be saving them 30 seconds a day, and actually doing what they're doing now will help you realize the difference between an annoying thing and a real need.

3. From here, what your proposed solution really is. Make sure you really figure out what they want- don't just do what they say, try to get to the root of what they're asking for.

4. How you're going to go back, show it to them, and see how much they clamor for it. See how it changes their plans, schedules, etc.

While going through this multiple times you'll probably even get mistaken customers. In this case, make sure you meet with them to just figure out what the hell is going on. They might be using it in a way you didn't realize and should maybe pivot toward- Segment is a good example of how there might be a big business right next to the problem you're solving today.


On YouTube, "How To Start A Startup" has a list of videos that talks about various stages a startup will encounter. Here is the link: https://www.youtube.com/channel/UCxIJaCMEptJjxmmQgGFsnCg


If anyone is interested I'm building an edtech startup which streams college classes. We have a a few courses from Stanford done in partnership with Y Combinator on building startups: https://www.podiumedu.com


Great post: I especially like the description he gave: "find customers who have their hair on fire".

If anyone wants to solve the Satiety problem, I'd be willing to bet there's millions if not billions of people with their hair on fire with that problem!


Matches with a lot of practical thoughts shared by dhh and jason in "Re-work"


I really, really loved that book. It resonates so well with how I think and view the world.


I found a typo: "copy written" should be "copyrighted".


That seems like a lot of excellent advice except in cases where "it depends" and the advice is not good or some other advice would be better.

> If we invest in you, your group is expected to move to the Bay Area for January--March 2018. You can of course leave afterward if you want, but it's a good place for a startup to be.

IMHO it's a horrible place to be, way too expensive, and anyone not really wealthy should get the heck out ASAP.

It's the state of Governor Moonbeam and the district of Nasty Nancy, "The San Francisco Treat".

> we expect you to work out of wherever you find to live.

I agree with that.

IIRC, some places there can be zoning and insurance issues operating a business out of residential housing.

> At each dinner we'll invite an expert in some aspect of startups to speak.

Biggie problem: For the startups that are really wanted, eventually worth $10+ billion, there are not many experts from the past and many fewer for the next dozen such in the future.

Indeed, for the next $10+ billion startups, a guess is that they will be different from last $10+ billion startups, mostly need to be something quite new in some of problems solved, technology used, market, and customers served. Then the new stuff might be from field crossing and not from what is in Silicon Valley or computer science now.

> Most successful startups change their idea substantially.

Not very good news.

> The ideal company would have two or three founders. We'll consider those with four or five. We're reluctant to accept one-person companies, though we have funded many of them now.

But notice the advice

> It turns out most companies fail fast because founders fall out.

Right. And the obvious solution is to be a sole, solo founder where

> We're reluctant to accept one-person companies,

For

> Make something people want.

Yes, but at first, nearly no one knew they wanted a telephone, a Ford Model-T, a PC, Google, or Facebook.

> the guidance below will help most startups find their path to success

But "most startups" will be at most a minor success. So far we get another Google only about once each ten years. So, the advice that works for "most startups" doesn't have to work for the next Google or even the next 10 startups worth $10+ billion.

> The first thing we always tell founders is to launch their product right away;

That is good advice for some startups, but for other startups there is the issue of "You only get one chance to make a good first impression."

> ... for the simple reason that this is the only way to fully understand customers’ problems and whether the product meets their needs.

Again, that's good advice for some startups, but we would hope that the situation was:

(A) The startup has picked a problem currently solved at best poorly where it is totally, 100%, completely utterly clear that the first good, a much better, or an excellent solution will just thrill enough users/customers with enough revenue per each to make a really successful business. The great example would be a cheap, safe, effective one pill taken once to cure any cancer.

Believe me, once someone has such a cancer pill, no way will they then be out talking to customers for feedback about, say, the color (white or yellow) or shape (round, oval) of the pill. Instead, as soon as that pill is known to exist, desperate customers will literally be banging on the doors to get one.

(B) The challenge is not at all having the first good solution thrill the users/customers but just being able actually to construct that solution. That is, as for that cancer pill, the reason there is no solution now is that so far no one has been able to find one. So, the solution will need something new, some secret sauce in some important respects too difficult for others to discover. Then hide the secret sauce, say, in a server farm, with good security.

> Surprisingly, launching a mediocre product as soon as possible, and then talking to customers and iterating, is much better than waiting to build the “perfect” product.

Sure. And "The perfect can be the enemy of the very good."

But the

> talking to customers and iterating

is not very good for all startups.

> Once launched, we suggest founders do things that don’t scale (Do Things That Don’t Scale by Paul Graham1).

Okay, but how did that little photography experiment lead to "a vibrant marketplace"?

Maybe you are saying that the photography experiment said that pictures are important. Then the scalable, production version was to tell the AirBnB associates that they needed to hire an okay or better photographer to take pictures, e.g., much as in the experiment.

> Talking to users usually yields a long, complicated list of features to build.

Maybe. But Google has hardly changed their home page in years.

> a 100% solution that takes ages to build.

Creating unique, powerful, valuable, crucial core "secret sauce" is, say, some applied math research, and that by the right person commonly can be done in hours, days, or weeks. Then write the darned code, dirt simple code, and go for it.

E.g., I worked out the main parts of my Ph.D. dissertation research in my head in an airplane ride. The resulting dissertation had some nice improvements but was always well within what I first worked out.

This "ages to build" stuff suggests finding another problem to solve.

> As companies begin to grow there are often tons of potential distractions.

By far the worst I found was contacting VCs. I'll never do that again. It'd be better to start a grass mowing service than trying to get equity funding.

Besides, now, for an information technology startup based on software, the computing hardware, software infrastructure, and Internet data rates are so cheap that a solo founder, with a good startup selection, can bring his work to the traction equity funders want that will put him into nice profitability and ability to grow just from retained earnings. The equity funders are asking for too much: By the time a solo founder has what the equity funders want, that founder will no longer need, want, or accept an equity check.

> chasing after press coverage

That can be one of the most important sources of publicity and users/customers. Remember: You want your story told, and the press desperately wants a story to tell.

> the most important tasks for an early stage company are to write code and talk to users.

That's true for some startups, but such a startup is usually going to be in a sad situation.

Instead, the founders should already have a good problem to solve. By the time the customers see the good alpha test, the company should be in quite good shape with very little more code to write until, say, much bigger scale is needed.

> For any company, software or otherwise, this means that in order to make something people want: You must launch something, talk to your users to see if it serves their needs, and then take their feedback and iterate.

This advice can hold for some companies, but not all. Instead, some startups have already selected a good problem and found a good solution.

> These tasks should occupy almost all of your time/focus. For great companies this cycle never ends.

Again, Google has hardly changed their home page in years.

> Similarly, as your company evolves there will be many times where founders are forced to choose between multiple directions for their company.

Again, Google has hardly changed their home page in years.

> When it comes to customers most founders don’t realize that they get to choose customers as much as customers get to choose them. We often say that a small group of customers who love you is better than a large group who kind of like you.

Sometimes, yes. E.g., does an auto company go for the Rolls Royce, Mercedes, BMW, Chevy SUV, Ford F-150, etc. market?

> YC is sometimes criticized for pushing companies to grow at all costs, but in fact we push companies to talk to their users, build what they want, and iterate quickly.

That talking and iterating stuff only works for some startups.

> It is very difficult as a new startup founder not to obsess about competition, actual and potential. It turns out that spending any time worrying about your competitors is nearly always a very bad idea. We like to say that startup companies always die of suicide not murder. There will come a time when competitive dynamics are intensely important to the success or failure of your company, but it is highly unlikely to be true in the first year or two.

Again, that doesn't apply to all startups, but it's good news, and I can believe it often applies.

> A few words on fund raising (A Guide to Seed Fund raising by Geoff Ralston9). The first, best bit of advice is to raise money as quickly as possible and then get back to work.

Better advice: (A) Pick a problem and solution so that you, as a solo founder, won't need equity funding. (B) If you contact 20 VC firms and don't get a check, then give up on VC at least for a while. (C) Do "get back to work".

> It turns out most companies fail fast because founders fall out.

So, as above, be a solo founder. So, pick a pair of a problem and good solution that you as a solo founder can bring to nice profitability alone without equity funding.


All great advice, but realize that you cannot just do one or two of them, or incorrectly execute some of them, and expect to be successful.

For example, you cannot take the 'imperfect MVP' and 'iterate quickly' advice as an excuse for poor testing and ignore the part about a narrow focus or listening to customers. I will admit that I have worked on several projects where something like this was the case.

It may just be that some of the projects I have worked on have not been so great (because it is much easier to get those contracts), or maybe this is common -- but what I have seen is startups or dev teams that are iterating quickly on programs that fundamentally do not work or cause their users great frustration. Part of the problem is that people often underestimate the technical difficulty (or perhaps almost infeasibility in some cases) of certain features or impracticality of some UX, etc.

The user frustration one was a government contract so the users couldn't switch to another program. What happened was we built a program for utility workers that required a ton of data entry in the field. Due to slow loading screens or just a ton of extraneous fields or an issue of keeping laptops clean or something else, it was impractical, so they switched to doing data entry in the office on based on paper forms. And then someone decided to give all of those forms to one poor lady in the office. One day I was permitted to visit, and found that due to some bugs we had not been told about and the sheer volume of work, the lady was literally going insane. They were still iterating quickly and adding tons of features on that project when I left.

Here is an example where a project manager may have been using something like the idea of an imperfect MVP as an incorrect rationale for perhaps not evaluating core functionality carefully enough. The product was a home server device. A core feature that was supposedly complete when I came onto the project was a relay/proxy system that would allow multiple connections to come into this device through one port while it was behind NAT. Or something close to that -- it was a few years ago so I don't remember perfectly. But I was initially given the task of working on some lighting animation and only coincidentally discovered that this proxying system and other core networking was not even close to working. I did eventually get a multiplexing thing working for it but they never delivered the system to the initial customer so it was never fully tested.

On another project, it started out as another case of an 'MVP' that actually didn't do the thing it was supposed to do. It mostly did it most of the time, but due to the nature of the project, without an automatic way to detect and correct the 5% of cases where it didn't work, it could not possibly make any significant amount of money. So when I came on, I wasted quite a bit of time trying to make this supposedly already working MVP work, but it had been 'iterated on quickly' and had unmaintainable code and no tests, so I ended up rewriting it.




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