How to Start a Startup - The Diigo Meta page

• 04 Sep 20
  

  lucy park
  • It means someone who takes their work a little too  seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive.
  • Call the person's image to mind and imagine the sentence "so-and-so is an animal." If you laugh, they're not.
• 30 Jan 20
  

  sergiykashchenko

  Startups Strategy

  • you don't need a brilliant  idea to start a startup
  • look at something people are trying to do, and figure out how to do it in a way that doesn't suck.
  • What do I mean by good people?
  • It means someone who takes their work a little too  seriously;
  • Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities,  could we stand to have them around?
    
    
  • Don't force things; just work on stuff you like with people you like.
  • Ideally you want between two and four founders.
  • You don't want mere voting; you need unanimity.
  • business
  • no great mystery. It's not something like physics or medicine that requires extensive study. You just try to get people to pay you for stuff.
    
    
  • People who don't want to get dragged into some kind of work often develop a protective incompetence at it.
  • you'd do better to learn how to  hack than get an MBA.
  • n nearly every failed startup, the real problem was that customers didn't want the product
  • get a version 1 out as soon as you can.
  • It's worth trying very,  very hard to make technology easy to use.
  • How do you figure out what customers want? Watch them. One of the best places to do this was at trade shows. Trade shows didn't pay  as a way of getting new customers, but they were worth it as market research.
  • The only kind of software you can build without studying users is the  sort for which you are the typical user.
  • you can use this as a way to generate ideas for startups: what do people who are not like you want from technology?
  • The best odds are in niche markets.
  • Since startups  make money by offering people something better than they had before, the best opportunities are where things suck most.
  • In technology, the low end always eats the high end.
  • It's easier  to make an inexpensive product more powerful than to make a powerful product cheaper
  • I think it's wise to take money from investors.
  • if you can trade stock for something that improves your odds, it's probably a smart  move.
  • "Business plan"
  • what you plan  to do and how you're going to make money from it
  • When everyone feels they're getting a slightly bad deal, that they're doing more than they should for the amount of stock they have, the stock is optimally apportioned.
  • It can be dangerous to delay turning yourself into a company, because one or more of the founders might decide to split off and start  another company doing the same thing
  • to sign something agreeing that everyone's ideas belong to this company, and that this company is going to be everyone's only job.
  • One of the worst things that can happen to a startup is to run into  intellectual property problems
  • How do you decide what the value of the company should be?
  • You have more leverage negotiating with VCs than you realize. The  reason is other VCs
  • Even now there is too much money chasing too few good deals.
  • What they all have in common is that a dollar from them  is worth one dollar. Most VCs will tell you that they don't just  provide money, but connections and advice. If you're talking to  Vinod Khosla or John Doerr or Mike Moritz, this is true. But such advice and connections can come very expensive.
  • A few steps down from  the top you're basically talking to bankers who've picked up a few new vocabulary words from reading Wired.
  • I'd be inclined to go with whoever offered the most money  the soonest with the least strings attached.
  • get a lot of customers fast
  • overrated
  • Google is again a case in point. When they appeared it seemed as if search was a mature market, dominated by big players
  • Unless you're in a market where products are  as undifferentiated as cigarettes or vodka or laundry detergent, spending a lot on brand advertising is a sign of breakage.
  • here is nothing more valuable, in the early stages of a startup, than smart users. If you listen to them, they'll tell you exactly how to make a winning product.
  • design your product to please users first, and then think about how to make money
  • impudent underdogs
  • that  is exactly the spirit you want
  • hiring people is the worst thing a company can do
  • only reason to hire someone is to do something you'd like to do but can't
  • What drives people to start startups is (or should be) looking at existing technology and thinking, don't  these guys realize they should be doing x, y, and z? And that's  also a sign that one is a good hacker.
  • The other cutoff, 38, has a lot more play in it. One reason I put  it there is that I don't think many people have the physical stamina much past that age. I used to work till 2:00 or 3:00 AM every night, seven days a week. I don't know if I could do that now.
  • By 38 you can't take so many risks-- especially if you have kids.
  • Instead of working at an ordinary rate for 40 years, you work like hell for  four.
  • Working was often fun, because the people I worked with were some of my best friends. Sometimes it was even technically interesting. But only about 10% of the time.

  49 more annotations...

• 11 Sep 19
  

  Quynh Vu Do

  by Paul Graham (2005)

  entrepreneurship startup soft-skills

• 03 Jun 18
  

  Yee Sian Ng

  You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that doe…

  IFTTT Pocket

• 01 Dec 17
  

  Rita Zerrizuela
  • You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.
  • all three are doable. Hard, but doable. And since a startup that succeeds ordinarily makes its founders rich, that implies getting rich is doable too. Hard, but doable.
  • There is no magically difficult step that requires brilliance to solve.
  • The Idea
    
    In particular, you don't need a brilliant  idea to start a startup around. The way a startup makes money is to offer people better technology than they have now. But what people have now is often so bad that it doesn't take brilliance to do better.
  • There are plenty of other areas that are just as backward as search was before Google. I can think of several heuristics for generating ideas for startups, but most reduce to this: look at something people are trying to do, and figure out how to do it in a way that doesn't suck.
  • An idea for a startup, however, is only a beginning. A lot of would-be startup founders think the key to the whole process is the initial idea, and from that point all you have to do is execute. Venture capitalists know better. If you go to VC firms with a brilliant idea that you'll tell them about if they sign a nondisclosure agreement, most will tell you to get lost. That shows how much a  mere idea is worth. The market price is less than the inconvenience  of signing an NDA.
  • Another sign of how little the initial idea is worth is the number of startups that change their plan en route.
  • Ideas for startups are worth something, certainly, but the trouble is, they're not transferrable. They're not something you could hand to someone else to execute. Their value is mainly as starting points: as questions for the people who had them to continue thinking about.
    
  • What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can't save bad people.
  • People
    
    What do I mean by good people? One of the best tricks I learned  during our startup was a rule for deciding  who to hire. Could you describe the person as an animal?
  • It means someone who takes their work a little too  seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive.
  • Almost everyone who worked for us was an animal at what they did.
  • You don't need or perhaps even want this quality in big companies, but you need it in a startup.
  • For programmers we had three additional tests. Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities,  could we stand to have them around?
    
    That last test filters out surprisingly few people. We could bear any amount of nerdiness if someone was truly smart. What we couldn't stand were people with a lot of attitude. But most of those weren't truly smart, so our third test was largely a restatement of the first.
  • This technique doesn't always work, because people can be influenced by their environment.
  • Like most startups, ours began with a group of friends, and it was through personal contacts that we got most of the people we hired.
  • It's no coincidence that startups start around universities, because that's where smart people meet. It's not what people learn in  classes at MIT and Stanford that has made technology companies spring up around them.
  • If you start a startup, there's a good chance it will be with people you know from college or grad school.
  • What you should do in college is work on your own projects. Hackers should do this even if they don't plan to start startups, because  it's the only real way to learn how to program.
  • just work on stuff you like with people you like.
  • Ideally you want between two and four founders. It would be hard to start with just one. One person would find the moral weight of starting a company hard to bear.
  • you don't want so many founders that the company starts to look like a group photo. Partly because you don't need a lot of people at first, but mainly because the more founders you have, the worse disagreements you'll have.
  • you have to resolve disputes immediately or perish.
  • You don't want mere voting; you need unanimity.
  • what I discovered was that business was no great mystery. It's not something like physics or medicine that requires extensive study. You just try to get people to pay you for stuff.
  • People who don't want to get dragged into some kind of work often develop a protective incompetence at it.
  • most husbands use the same  trick to some degree.
  • I found that business was neither so hard nor so boring as I feared. There are esoteric areas of business that are quite hard, like tax law or the pricing of derivatives, but you don't need to know about  those in a startup. All you need to know about business to run a  startup are commonsense things people knew before there were business schools, or even universities.
  • The rulers of the technology business tend to come from technology, not business. So if you  want to invest two years in something that will help you succeed  in business, the evidence suggests you'd do better to learn how to  hack than get an MBA.
  • If you can't understand users, however, you should either learn how or find a co-founder who can. That is the single most important issue for technology startups, and the rock that sinks more of them than anything else.
  • What Customers Want
    
    It's not just startups that have to worry about this. I think most businesses that fail do it because they don't give customers what they want.
  • You hear all kinds of reasons why startups fail. But can you think of one that had a massively popular product and still failed?
  • In nearly every failed startup, the real problem was that customers didn't want the product. For most, the cause of death is listed  as "ran out of funding," but that's only the immediate cause. Why  couldn't they get more funding? Probably because the product was a dog, or never seemed likely to be done, or both.
  • The only way to make something customers want is to get a prototype in front of them and refine it based on  their reactions.
    
  • I come  from the tradition of rapid prototyping. I would not claim (at least, not here) that this is the right way to write every program, but it's certainly the right way to write software for a startup. In a startup, your initial plans are almost certain to be wrong in some way, and your first priority should be to figure out where.  The only way to do that is to try implementing them.
  • Like most startups, we changed our plan on the fly.
  • most of our users  were small, individual merchants who saw the Web as an opportunity  to build a business. Some had retail stores, but many only existed online. And so we changed direction to focus on these users. Instead of concentrating on the features Web consultants and catalog companies would want, we worked to make the software easy to use.
  • A 10% improvement in ease of use doesn't just increase  your sales 10%. It's more likely to double your sales.
  • How do you figure out what customers want? Watch them.
  • we got to watch as they used our software, and talk to them  about what they needed.
    
  • No matter what kind of startup you start, it will probably be a  stretch for you, the founders, to understand what users want. The only kind of software you can build without studying users is the  sort for which you are the typical user.
  • you can use this as a way to generate ideas for startups: what do people who are not like you want from technology?
  • if you try to start the kind of startup that has to be a big consumer brand, the odds against succeeding are steeper. The best odds are in niche markets. Since startups  make money by offering people something better than they had before, the best opportunities are where things suck most.
  • This imbalance equals opportunity.
  • If you want ideas for startups, one of the most valuable things you could do is find a middle-sized non-technology company and spend a  couple weeks just watching what they do with computers.
  • Start by writing software for smaller companies, because it's easier to sell to them.
  • They're the more strategically valuable part of the market anyway.  In technology, the low end always eats the high end. It's easier  to make an inexpensive product more powerful than to make a powerful product cheaper.
  • If you build the simple, inexpensive option, you'll not only find it easier to sell at first, but you'll also be in the best  position to conquer the rest of the market.
    
    It's very dangerous to let anyone fly under you. If you have the cheapest, easiest product, you'll own the low end. And if you don't, you're in the crosshairs of whoever does.
  • Raising Money
    
    
  • I think it's wise to take money from investors. To be self-funding, you have to start as a consulting company, and it's hard to switch from that to a product company.
  • The way to get rich from a startup is to maximize the company's chances of succeeding, not to maximize the amount of stock you retain. So if you can trade stock for something that improves your odds, it's probably a smart  move.
  • The first thing you'll need is a few tens of thousands of dollars  to pay your expenses while you develop a prototype. This is called seed capital. Because so little money is involved, raising seed capital is comparatively easy-- at least in the sense of getting a quick yes or no.
    
    Usually you get seed money from individual rich people called "angels."
  • At the seed stage, investors don't expect you to have an elaborate business plan. Most know that they're supposed to decide quickly. It's not unusual to get a check within a week based on a half-page agreement.
    
  • Some angels, especially those with technology backgrounds, may be  satisfied with a demo and a verbal description of what you plan to  do. But many will want a copy of your business plan, if only to remind themselves what they invested in.
    
  • At this stage, all most investors expect is a brief description of what you plan  to do and how you're going to make money from it, and the resumes  of the founders.
  • For the angel to have someone to make the check out to, you're going to have to have some kind of company.
  • you have to decide who the founders are, and how much stock they each have.
  • once you've done it, it tends to be set in stone.
    
    I have no tricks for dealing with this problem. All I can say is, try hard to do it right.
  • When everyone feels they're getting a slightly bad deal, that they're doing more than they should for the amount of stock they have, the stock is optimally apportioned.
  • It can be dangerous to delay turning yourself into a company, because one or more of the founders might decide to split off and start  another company doing the same thing. This does happen. So when you set up the company, as well as as apportioning the stock, you should get all the founders to sign something agreeing that everyone's ideas belong to this company, and that this company is going to be everyone's only job.
  • Before you consummate a startup, ask  everyone about their previous IP history.
  • Most rich  people are looking for good investments. If you really think you have a chance of succeeding, you're doing them a favor by letting them invest. Mixed with any annoyance they might feel about being  approached will be the thought: are these guys the next Google?
    
  • Usually angels are financially equivalent to founders. They get  the same kind of stock and get diluted the same amount in future rounds. How much stock should they get? That depends on how ambitious you feel. When you offer x percent of your company for y dollars, you're implicitly claiming a certain value for the whole company.
  • How do you decide what the value of the company should be? There is no rational way. At this stage the company is just a bet.
  • the valuation wasn't just  the value of the code we'd written so far. It was also the value of our ideas, which turned out to be right, and of all the future work we'd do, which turned out to be a lot.
  • The next round of funding is the one in which you might deal with  actual  venture capital firms.  But don't wait till you've burned  through your last round of funding to start approaching them. VCs are slow to make up their minds. They can take months. You don't want to be  running out of money while you're trying to negotiate with them.
  • The amounts of money involved are larger, millions usually. So the deals take longer, dilute you more, and impose more onerous conditions.
  • We were a company whose whole m.o. was to win through better technology. The strategic decisions were mostly decisions about technology, and we didn't need any help with those.
  • You have more leverage negotiating with VCs than you realize. The  reason is other VCs. I know a number of VCs now, and when you talk to them you realize that it's a seller's market. Even now there is too much money chasing too few good deals.
  • VCs form a pyramid. At the top are famous ones like Sequoia and Kleiner Perkins, but beneath those are a huge number you've never  heard of.
  • Most VCs will tell you that they don't just  provide money, but connections and advice. If you're talking to  Vinod Khosla or John Doerr or Mike Moritz, this is true. But such advice and connections can come very expensive. And as you go down the food chain the VCs get rapidly  <!-- href="http://ricksegal.typepad.com/pmv/2005/03/vcs_suck_shocki.html"--> dumber.
  • I'd advise you to be skeptical about claims of experience and connections. Basically, a VC is a source of money. I'd be inclined to go with whoever offered the most money  the soonest with the least strings attached.
  • You may wonder how much to tell VCs. And you should, because some of them may one day be funding your competitors. I think the best plan is not to be overtly secretive, but not to tell them everything either.
  • they're more interested in the people than the ideas. The main reason they want to talk about your idea is to judge you, not the idea. So as long as you seem like you know what you're doing, you can probably keep a few things back from them.
  • Talk to as many VCs as you can, even if you don't want their money, because a) they may be on the board of someone who will buy you,  and b) if you seem impressive, they'll be discouraged from investing in your competitors.
  • Not Spending It
    
    When and if you get an infusion of real money from investors, what should you do with it? Not spend it, that's what. In nearly every  startup that fails, the proximate cause is running out of money.  Usually there is something deeper wrong. But even a proximate cause of death is worth trying hard to avoid.
    
  • The idea is to get there first and get all the users, leaving none for competitors. But I think in most businesses the advantages of being first to market are not so overwhelmingly great.
  • Unless you're in a market where products are  as undifferentiated as cigarettes or vodka or laundry detergent, spending a lot on brand advertising is a sign of breakage. And few if any Web businesses are so undifferentiated.
  • We were compelled by circumstances to grow slowly, and in retrospect it was a good thing. The founders all learned to do every job in  the company. As well as writing software, I had to do sales and customer support.
  • Customers loved us. And we loved them, because when you're growing slow by word of mouth, your first batch of users are the ones who were smart enough to find you by themselves. There is nothing more valuable, in the early stages of a startup, than smart users. If you listen to them, they'll tell you exactly how to make a winning product.  And not only will they give you this advice for free, they'll pay you.
  • Once you get big (in users or employees) it gets hard to change your product. That year was effectively a laboratory for improving our software. By the end  of it, we were so far ahead of our competitors that they never had  a hope of catching up. And since all the hackers had spent many hours talking to users, we understood online commerce way better than anyone else.
  • That's the key to success as a startup. There is nothing more  important than understanding your business.
  • Google's secret weapon was simply that they understood search.
  • you should put users before advertisers, even though the advertisers are paying and users aren't.
  • "get all the users, and the advertisers will follow." More generally, design your product to please users first, and then think about how to make money from it. If you don't put users first, you leave a  gap for competitors who do.
    
  • To make something users love, you have to understand them. And the bigger you are, the harder that is. So I say "get big slow." The slower you burn through your funding, the more time you have to learn.
  • The other reason to spend money slowly is to encourage a culture  of cheapness.
  • When you get a couple million dollars from a VC firm, you tend to feel rich. It's important to realize you're not. A rich company is one with large revenues. This money isn't revenue. It's money investors have given you in the hope you'll be able to generate  revenues. So despite those millions in the bank, you're still poor.
  • Aim for cool and cheap, not expensive and impressive.
  • Ever notice how much easier it is to hack at home than at work? So why not make work more like home?
  • You want to live at the office in a startup
  • The most important way to not spend money is by not hiring people.  I may be an extremist, but I think hiring people is the worst thing a company can do. To start with, people are a recurring expense,  which is the worst kind. They also tend to cause you to grow out  of your space
  • worst of all, they slow you down: instead of sticking your head in someone's  office and checking out an idea with them, eight people have to have a meeting about it. So the fewer people you can hire, the better.
  • The only reason to hire someone is to do something you'd like to do but can't.
    
  • If two companies have the same revenues, it's the one with fewer employees that's more impressive.
  • Should You?
    
    But should you start a company? Are you the right sort of person to do it? If you are, is it worth it?
    
    More people are the right sort of person to start a startup than realize it.
  • There could be  ten times more startups than there are, and that would probably be a good thing.
  • So who should start a startup? Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life.
    
  • It's hard to tell whether you're a good hacker, especially when you're young. Fortunately the process of starting startups tends to select them automatically. What drives people to start startups is (or should be) looking at existing technology and thinking, don't  these guys realize they should be doing x, y, and z? And that's  also a sign that one is a good hacker.
  • I put the lower bound at 23 not because there's something that doesn't happen to your brain till then, but because you need to see what it's like in an existing business before you try running your own. The business doesn't have to be a startup.
  • The other reason it's hard to start a company before 23 is that  people won't take you seriously.
  • Some people could probably start a company at 18 if they wanted to.
  • if you're thinking, I don't care what he says, I'm going to start a company now, you may be the sort of person who could get away with it.
  • The other cutoff, 38, has a lot more play in it. One reason I put  it there is that I don't think many people have the physical stamina much past that age.
  • Also, startups are a big risk financially. If you try something that blows up and leaves you broke at 26, big deal; a lot of 26 year olds are broke. By 38 you can't take so many risks-- especially if you have kids.
  • My final test may be the most restrictive. Do you actually want to start a startup? What it amounts to, economically, is compressing your working life into the smallest possible space. Instead of working at an ordinary rate for 40 years, you work like hell for  four. And maybe end up with nothing-- though in that case it probably won't take four years.
    
    During this time you'll do little but work, because when you're not working, your competitors will be. My only leisure activities were running, which I needed to do to keep working anyway, and about fifteen minutes of reading a night.
  • I don't think the amount of bullshit you have to deal with in a startup is more than you'd endure in an ordinary working life. It's probably less, in fact; it just seems like a lot because it's  compressed into a short period. So mainly what a startup buys you  is time. That's the way to think about it if you're trying to  decide whether to start one. If you're the sort of person who would like to solve the money problem once and for all instead of working  for a salary for 40 years, then a startup makes sense.
  • For a lot of people the conflict is between startups and graduate school. Grad students are just the age, and just the sort of people, to start software startups. You may worry that if you do you'll  blow your chances of an academic career. But it's possible to be  part of a startup and stay in grad school, especially at first.
  • If you do have to leave grad school, in the worst case it won't be for too long. If a startup fails, it will probably fail quickly enough that you can  return to academic life. And if it succeeds, you may find you no  longer have such a burning desire to be an assistant professor.
  • Build something users love, and spend less than you make. How hard is that?
  • [2] One advantage startups have over established companies is that there are no discrimination laws about starting businesses. For  example, I would be reluctant to start a startup with a woman who had small children, or was likely to have them soon.
  • when you're starting a company, you can discriminate on any basis you want about who you start it with.
  • [4] Corollary: Avoid starting a startup to sell things to the biggest company of all, the government. Yes, there are lots of opportunities to sell them technology. But let someone else start those startups.
    
  • [6] At the seed stage our valuation was in principle $100,000, because Julian got 10% of the company. But this is a very misleading number, because the money was the least important of the things Julian gave us.
    
  • [7] The same goes for companies that seem to want to acquire you. There will be a few that are only pretending to in order to pick your brains. But you can never tell for sure which these are, so the best approach is to seem entirely open, but to fail to mention a few critical technical secrets.

  113 more annotations...

• 19 Jul 17
  

  startup

• 06 May 17
  

  pick_known

  面试

  • They're not something you could hand to someone else to execute. Their value is mainly as starting points: as questions for the people who had them to continue thinking about.
  • What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can't save bad people.
  • the animal test
  • If you laugh, they're not.
  • For programmers we had three additional tests. Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities,  could we stand to have them around?
    
  • So as a rule you can recognize genuinely smart people by their ability to say things like "I don't know,"  "Maybe you're right," and "I don't understand x well enough
  • just work on stuff you like with people you like.
    
  • you'd do better to learn how to  hack than get an MBA
  • n nearly every failed startup, the real problem was that customers didn't want the product.
  • The only way to make something customers want is to get a prototype in front of them and refine it based on  their reactions.
  • As a Lisp hacker, I come  from the tradition of rapid prototyping. I would not claim (at least, not here) that this is the right way to write every program, but it's certainly the right way to write software for a startup.
  • what do people who are not like you want from technology?
  • Start by writing software for smaller companies, because it's easier to sell to them.
  • In technology, the low end always eats the high end.
  • If you build the simple, inexpensive option, you'll not only find it easier to sell at first, but you'll also be in the best  position to conquer the rest of the market.
    
  • "if the people lead, the  leaders will follow." Paraphrased for the Web, this becomes "get all the users, and the advertisers will follow."
  • Besides being cheaper and better to work in, apartments tend to be in better locations than office buildings.
  • The most important way to not spend money is by not hiring people.
  • So the fewer people you can hire, the better.
  • So who should start a startup? Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life.
  • What drives people to start startups is (or should be) looking at existing technology and thinking, don't  these guys realize they should be doing x, y, and z? And that's  also a sign that one is a good hacker.
    
  • In this case they were mostly negative lessons: don't have a lot of meetings; don't have chunks of code that multiple people own; don't have a sales guy running the company; don't make a high-end product; don't let your code get too big; don't leave finding bugs to QA people; don't go too long between releases; don't isolate developers from users; don't move from Cambridge to Route 128; and so on.
  • During this time you'll do little but work, because when you're not working, your competitors will be. My only leisure activities were running, which I needed to do to keep working anyway, and about fifteen minutes of reading a night. I had a girlfriend for a total of two months during that three year period. Every couple weeks I would take a few hours off to visit a used bookshop or go to a  friend's house for dinner. I went to visit my family twice. Otherwise I just worked.
  • If you're the sort of person who would like to solve the money problem once and for all instead of working  for a salary for 40 years, then a startup makes sense.
  • Build something users love, and spend less than you make. How hard is that?
    
    

  23 more annotations...

• 01 Sep 15
  

  kittengeorge
• 16 May 15
  

  Pablo Stafforini

  startup paul_graham

• 06 May 15
  

  Allan Locke

  startup howto startups management entrepreneurship

• 21 Apr 15
  

  Betsy Bennett
• 14 Mar 15
  

  bedgaro

  entrepreneurship startup

• 10 Feb 15
  

  mhagh66
  • All you need to know about business to run a  startup are commonsense things people knew before there were business schools, or even universities.
  • So if you  want to invest two years in something that will help you succeed  in business, the evidence suggests you'd do better to learn how to  hack than get an MBA.
• 06 Dec 14
  

  Jordan Goldman

  You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that d...

  start-up tips

• 30 Nov 14
  

  diig sam

  selecting programmers job interview selection good_one must_read

  • A rich company is one with large revenues.
• 13 Nov 14
  

  Joious ...

  article startups howto entrepreneurship starting a company

• 28 Oct 14
  

  Stephen A

  startup entrepreneur

• 27 Jul 14
  

  ranieribt

  Startups

  • look at something people are trying to do, and figure out how to do it in a way that doesn't suck
  • person as an animal
  • It means someone who takes their work a little too  seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive

  1 more annotation...

• 03 Jul 14
  

  Lei Tang
  • look at something people are trying to do, and figure out how to do it in a way that doesn't suck.
    
  • You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible.
  • What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can't save bad people.  <!-- So let's talk about people. -->
    
  • Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life.
    
  • What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can't save bad people.  <!-- So let's talk about people. -->
    
  • offer people better technology than they have now
  • what people have now is often so bad that it doesn't take brilliance to do better.
  • look at something people are trying to do, and figure out how to do it in a way that doesn't suck.
  • how little the initial idea is worth is the number of startups that change their plan en route.
  • Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities,  could we stand to have them around?
  • If you start a startup, there's a good chance it will be with people you know from college or grad school. So in theory you ought to  try to make friends with as many smart people as you can in school, right? Well, no. Don't make a conscious effort to schmooze; that doesn't work well with hackers.
  • work on your own projects.
  • Business people are bad at deciding what to do with  technology, because they don't know what the options are, or which kinds of problems are hard and which are easy.
  • You just try to get people to pay you for stuff.
  • The rulers of the technology business tend to come from technology, not business.
  • So if you  want to invest two years in something that will help you succeed  in business, the evidence suggests you'd do better to learn how to  hack than get an MBA.
  • In nearly every failed startup, the real problem was that customers didn't want the product.
  • your initial plans are almost certain to be wrong in some way, and your first priority should be to figure out where
  • The only way to do that is to try implementing them.
  • Stephen Hawking's editor told him that every equation he included in his book would cut sales in half.
  • The only kind of software you can build without studying users is the  sort for which you are the typical user.
  • what do people who are not like you want from technology?
  • The best odds are in niche markets
  • If you want ideas for startups, one of the most valuable things you could do is find a middle-sized non-technology company and spend a  couple weeks just watching what they do with computers.
  • It's easier  to make an inexpensive product more powerful than to make a powerful product cheaper.
  • The way to get rich from a startup is to maximize the company's chances of succeeding, not to maximize the amount of stock you retain
  • try hard to do it right.
  • When everyone feels they're getting a slightly bad deal, that they're doing more than they should for the amount of stock they have, the stock is optimally apportioned.
  • If you really think you have a chance of succeeding, you're doing them a favor by letting them invest.
  • What I didn't grasp at the time was that the valuation wasn't just  the value of the code we'd written so far. It was also the value of our ideas, which turned out to be right, and of all the future work we'd do, which turned out to be a lot.
  • We used to call these guys "newscasters," because they had neat hair and spoke in deep, confident voices, and generally didn't know much more than they read on the teleprompter.
  • The main reason they want to talk about your idea is to judge you, not the idea. So as long as you seem like you know what you're doing, you can probably keep a few things back from them
  • because when you're growing slow by word of mouth, your first batch of users are the ones who were smart enough to find you by themselves.
  • encourage a culture  of cheapness
  • the main reason is that people like the idea of having a lot of people working for them
  • If you're the sort of person who would like to solve the money problem once and for all instead of working  for a salary for 40 years, then a startup makes sense.

  34 more annotations...

• 22 Mar 14
  

  wmandrell
  • What it means specifically depends on the job: a salesperson who just won't take no for an answer; a hacker who will stay up till  4:00 AM rather than go to bed leaving code with a bug in it; a PR  person who will cold-call New York Times reporters on their cell phones; a graphic designer who feels physical pain when something  is two millimeters out of place.
• 12 Mar 14
  

  imikushin

  startup entrepreneurship startups management howto entrepreneur paul graham hackers essay programming productivity geek article

• 06 Mar 14
  

  mattheoparker

  startup howto entrepreneur

• 02 Mar 14
  

  kangyao
  • You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.
  • What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can't save bad people.
  • For programmers we had three additional tests. Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities,  could we stand to have them around?
  • How do you figure out what customers want? Watch them. One of the best places to do this was at trade shows. Trade shows didn't pay  as a way of getting new customers, but they were worth it as market research. We didn't just give canned presentations at trade shows. We used to show people how to build real, working stores. Which  meant we got to watch as they used our software, and talk to them  about what they needed.
  • In technology, the low end always eats the high end. It's easier  to make an inexpensive product more powerful than to make a powerful product cheaper. So the products that start as cheap, simple options tend to gradually grow more powerful till, like water rising in a  room, they squash the "high-end" products against the ceiling.
  • It can be dangerous to delay turning yourself into a company, because one or more of the founders might decide to split off and start  another company doing the same thing. This does happen. So when you set up the company, as well as as apportioning the stock, you should get all the founders to sign something agreeing that everyone's ideas belong to this company, and that this company is going to be everyone's only job.
  • So I'd advise you to be skeptical about claims of experience and connections. Basically, a VC is a source of money. I'd be inclined to go with whoever offered the most money  the soonest with the least strings attached.
  • There is nothing more valuable, in the early stages of a startup, than smart users. If you listen to them, they'll tell you exactly how to make a winning product.  And not only will they give you this advice for free, they'll pay you.
  • If I were going to start a startup today, there are only three  places I'd consider doing it: on the Red Line near Central, Harvard, or Davis Squares (Kendall is too sterile); in Palo Alto on University or California Aves; and in Berkeley immediately north or south of  campus. These are the only places I know that have the right kind of vibe.

  7 more annotations...

• 10 Feb 14
  

  Slava Katiukha
• 21 Jan 14
  

  waysways

  Bookmarks bar +phycho

• 27 Sep 13
  

  Ryan Muller

  You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible.
  

  startup

• 12 Aug 13
  

  Asaf b

  startup Paul Graham start

• 01 Aug 13
  

  hp_yana
  • arch 200
  • This essay is derived from a talk at the Harvard Computer Society
  • This essay i
  • One of the best tricks I learned  during our startup was a rule for deciding  who to hire. Could you describe the person as an animal? It might be hard to translate  that into another language, but I think everyone in the US knows  what it means. It means someone who takes their work a little too  seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive.
    
    What it means specifically depends on the job: a salesperson who just won't take no for an answer; a hacker who will stay up till  4:00 AM rather than go to bed leaving code with a bug in it; a PR  person who will cold-call New York Times reporters on their cell phones; a graphic designer who feels physical pain when something  is two millimeters out of place.
    
  • Being friends with someone for even a couple days will tell you  more than companies could ever learn in interviews. [2
  • y collaborate with other students, and this is the best way to get to know g
  • deally you want between two and four founders. It would be hard to start with just one. One person would find the moral weight of starting a company hard to bear. Even Bill Gates, who seems to be  able to bear a good deal of moral weight, had to have a co-founder.  But you don't want so many founders that the company starts to look like a group photo. Partly because you don't need a lot of people at first, but mainly because the more founders you have, the worse disagreements you'll have. When there are just two or three founders, you know you have to resolve disputes immediately or perish. If there are seven or eight, disagreements can linger and harden into factions. You don't want mere voting; you need unanimity.
  • In a technology startup, which most startups are, the founders should include technical people.
  • Do the founders of a startup have to include business people? That depends.
  • There is one reason you might want to include business people in a startup, though: because you have to have at least one person willing and able to focus on what customers want.
  • t's worth trying very,  very hard to make technology easy to use. Hackers are so used to computers that they have no idea how horrifying software seems to normal people. Stephen Hawking's editor told him that every equation he included in his book would cut sales in half. When you work on making technology easier to use, you're riding that curve up instead  of down. A 10% improvement in ease of use doesn't just increase  your sales 10%. It's more likely to double your sales.
    
  • f you want ideas for startups, one of the most valuable things you could do is find a middle-sized non-technology company and spend a  couple weeks just watching what they do with computers. Most good hackers have no more idea of the horrors perpetrated in these places than rich Americans do of what goes on in Brazilian slums.
    
    Start by writing software for smaller companies, because it's easier to sell to them.
  • The first thing you'll need is a few tens of thousands of dollars  to pay your expenses while you develop a prototype. This is called seed capital. Because so little money is involved, raising seed capital is comparatively easy-- at least in the sense of getting a quick yes or no.
    
    Usually you get seed money from individual rich people called "angels." Often they're people who themselves got rich from technology. At the seed stage, investors don't expect you to have an elaborate business plan. Most know that they're supposed to decide quickly. It's not unusual to get a check within a week based on a half-page agreement.
  • Some angels, especially those with technology backgrounds, may be  satisfied with a demo and a verbal description of what you plan to  do. But many will want a copy of your business plan, if only to remind themselves what they invested in.
    
  • Our angels asked for one, and looking back, I'm amazed how much worry it caused me. "Business plan" has that word "business" in it, so I figured it had to be something I'd have to read a book about business plans to write. Well, it doesn't. At this stage, all most investors expect is a brief description of what you plan  to do and how you're going to make money from it, and the resumes  of the founders. If you just sit down and write out what you've been saying to one another, that should be fine. It shouldn't take more than a couple hours, and you'll probably find that writing it all down gives you more ideas about what to do.
  • If there are two founders with the same qualifications who are both equally committed to the business, that's easy. But if you have a number of people who are expected to contribute in varying degrees, arranging the proportions of stock can be hard. And once you've done it, it tends to be set in stone.
  • When everyone feels they're getting a slightly bad deal, that they're doing more than they should for the amount of stock they have, the stock is optimally apportioned.
  • insurance, business license, unemployment compensation,  various things with the IRS
  • It turns out that no one comes and arrests you if you don't do everything you're supposed to when starting a company. And a good thing too, or a lot of startups would never get started. [5]
  • one or more of the founders might decide to split off and start  another company doing the same thing. This does happen. So when you set up the company, as well as as apportioning the stock, you should get all the founders to sign something agreeing that everyone's ideas belong to this company, and that this company is going to be everyone's only jo
  • One of the worst things that can happen to a startup is to run into  intellectual property problems.
  • Before you consummate a startup, ask  everyone about their previous IP history.
  • The next round of funding is the one in which you might deal with  actual  venture capital firms.  But don't wait till you've burned  through your last round of funding to start approaching them. VCs are slow to make up their minds. They can take months.
  • Basically, a VC is a source of money. I'd be inclined to go with whoever offered the most money  the soonest with the least strings attached.
  • ou may wonder how much to tell VCs. And you should, because some of them may one day be funding your competitors. I think the best plan is not to be overtly secretive, but not to tell them everything either. After all, as most VCs say, they're more interested in the people than the ideas. The main reason they want to talk about your idea is to judge you, not the idea. So as long as you seem like you know what you're doing, you can probably keep a few things back from them. [7]
    
    Talk to as many VCs as you can, even if you don't want their money, because a) they may be on the board of someone who will buy you,  and b) if you seem impressive, they'll be discouraged from investing in your competitors.
  • The slower you burn through your funding, the more time you have to learn.
  • An apartment is also the right kind of place for developing software. Cube farms suck for that, as you've probably discovered if you've tried it. Ever notice how much easier it is to hack at home than at work? So why not make work more like home?
    
    When you're looking for space for a startup, don't feel that it has to look professional. Professional means doing good work, not elevators and glass walls. I'd advise most startups to avoid corporate space at first and just rent an apartment. You want to live at the office in a startup, so why not have a place designed to be lived in as your office?
  • Besides being cheaper and better to work in, apartments tend to be in better locations than office buildings. And for a startup location is very important. The key to productivity is for people to come back to work after dinner.
  • So you want to be in a place where there are a lot of restaurants around, not some dreary office park that's a wasteland after 6:00 PM
  • The most important way to not spend money is by not hiring people.  I may be an extremist, but I think hiring people is the worst thing a company can do. To start with, people are a recurring expense,  which is the worst kind. They also tend to cause you to grow out  of your space, and perhaps even move to the sort of uncool office building that will make your software worse. But worst of all, they slow you down: instead of sticking your head in someone's  office and checking out an idea with them, eight people have to have a meeting about it. So the fewer people you can hire, the better
  • Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life.
  • I put the lower bound at 23 not because there's something that doesn't happen to your brain till then, but because you need to see what it's like in an existing business before you try running your own.
  • The other reason it's hard to start a company before 23 is that  people won't take you seriously.
  • you'll find it awkward to be the boss of someone much  older than you, and if you're 21, hiring only people younger rather  limits your options.
  • ne reason I put  it there is that I don't think many people have the physical stamina much past that age.
  • Also, startups are a big risk financially. If you try something that blows up and leaves you broke at 26, big deal; a lot of 26 year olds are broke. By 38 you can't take so many risks-- especially if you have kids
  • Do you actually want to start a startup? What it amounts to, economically, is compressing your working life into the smallest possible space. Instead of working at an ordinary rate for 40 years, you work like hell for  four. And maybe end up with nothing-- though in that case it probably won't take four years.
  • So mainly what a startup buys you  is time. That's the way to think about it if you're trying to  decide whether to start one. If you're the sort of person who would like to solve the money problem once and for all instead of working  for a salary for 40 years, then a startup makes sense
  • One advantage startups have over established companies is that there are no discrimination laws about starting businesses. For  example, I would be reluctant to start a startup with a woman who had small children, or was likely to have them soon. But you're not allowed to ask prospective employees if they plan to have kids  soon. Believe it or not, under current US law, you're not even  allowed to discriminate on the basis of intelligence. Whereas when you're starting a company, you can discriminate on any basis you want about who you start it with

  37 more annotations...

• 20 Jul 13
  

  J Leung

  startup entrepreneurship howto entrepreneur toread management startups article

• 13 Jul 13
  

  Ilya B

  startup полгрэм

• 28 May 13
  

  Ethan Brown

  software business startup

• 05 May 13
  

  mikaeg

  Startup

• 11 Jan 13
  

  Andrei Stoica

  "half"

• 28 Dec 12
  

  Adam Bro

  startup entrepreneur article management career paulgraham

• 11 Nov 12
  

  Vin M

  business startups management entrepreneur toread howto

• 07 Oct 12
  

  Geoff Daily

  om

• 03 Oct 12
  

  yuliasvyripa
• 02 Oct 12
  

  maximandreyev
  • You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible
  • Another sign of how little the initial idea is worth is the number of startups that change their plan en route
  • Ideas for startups are worth something, certainly, but the trouble is, they're not transferrable
  • For programmers we had three additional tests. Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities,  could we stand to have them around
  • In a technology startup, which most startups are, the founders should include technical people
  • During the Internet Bubble there  were a number of startups founded by business people who then went looking for hackers to create their product for them. This doesn't  work well. Business people are bad at deciding what to do with  technology, because they don't know what the options are, or which kinds of problems are hard and which are easy. And when business people try to hire hackers, they can't tell which ones are  good. Even other hackers have a hard time doing that.  For business people it's roulette.
  • The rulers of the technology business tend to come from technology, not business. So if you  want to invest two years in something that will help you succeed  in business, the evidence suggests you'd do better to learn how to  hack than get an MBA
  • If you can't understand users, however, you should either learn how or find a co-founder who can. That is the single most important issue for technology startups, and the rock that sinks more of them than anything else
  • Probably because the product was a dog
  • The only way to make something customers want is to get a prototype in front of them and refine it based on  their reactions
  • This was not uncommon during the Bubble, especially in companies run by business types,  who thought of software development as something terrifying that therefore had to be carefully planned
  • I learned something valuable from that. It's worth trying very,  very hard to make technology easy to use. Hackers are so used to computers that they have no idea how horrifying software seems to normal people
  • And while you can outhack Oracle with one frontal lobe tied behind your back, you can't outsell an Oracle salesman
  • When everyone feels they're getting a slightly bad deal, that they're doing more than they should for the amount of stock they have, the stock is optimally apportioned
  • Don't do what we did. Before you consummate a startup, ask  everyone about their previous IP history
  • Usually angels are financially equivalent to founders
  • At this stage the company is just a bet
  • In those days you could go public as a dogfood portal
  • because some of them may one day be funding your competitors. I think the best plan is not to be overtly secretive, but not to tell them everything either
  • The main reason they want to talk about your idea is to judge you, not the idea
  • first batch of users are the ones who were smart enough to find you by themselves
  • Once you get big (in users or employees) it gets hard to change your product. That year was effectively a laboratory for improving our software
  • And since all the hackers had spent many hours talking to users, we understood online commerce way better than anyone else
  • "if the people lead, the  leaders will follow." Paraphrased for the Web, this becomes "get all the users, and the advertisers will follow
  • To make something users love, you have to understand them. And the bigger you are, the harder that is. So I say "get big slow." The slower you burn through your funding, the more time you have to learn.
  • For most startups the model should be grad student, not law firm
  • underdogs instead of corporate stuffed shirts
  • And for a startup location is very important. The key to productivity is for people to come back to work after dinner
  • So the fewer people you can hire, the better
  • it's hard to repeat a brilliant performance, but it's straightforward to avoid errors
  • If you try something that blows up and leaves you broke at 26, big deal
  • companies that seem to want to acquire you. There will be a few that are only pretending to in order to pick your brains. But you can never tell for sure which these are, so the best approach is to seem entirely open, but to fail to mention a few critical technical secrets

  30 more annotations...

• 23 Sep 12
  

  Rania Nabil
• 03 Sep 12
  

  keliabanks
  • a graphic designer who feels physical pain when something  is two millimeters out of place.
• 01 Sep 12
  

  startup

• 18 Jun 12
  

  nicholas scott
• 13 Jun 12
  

  Mehrdad Nayeb

  پيشنهاد میکنم هر از گاهی اینو بخونيد:
  How to Start a Startup http://t.co/HQOPElQC

  twitter

• 09 Jun 12
  

  Ed Fry

  employable

• 06 Jun 12
  

  Mudasser Arshed
  • Should You?
    
    But should you start a company? Are you the right sort of person to do it? If you are, is it worth it?
  • Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life
  • What drives people to start startups is (or should be) looking at existing technology and thinking, don't  these guys realize they should be doing x, y, and z? And that's  also a sign that one is a good hacker.
  • I used to work till 2:00 or 3:00 AM every night, seven days a week. I don't know if I could do that now.

  2 more annotations...

• 01 Jun 12
  

  pradheap

  startup paulgraham essay entrepreneurship

• 26 May 12
  

  Sequoia Taylor
• 16 May 12
  

  Guit Mas

  entrepreneurship howto

• 03 May 12
  

  Dino Magri

  startup howto

• 24 Mar 12
  

  pykarim

  business startup

• 14 Mar 12
  

  xylander234

  WebSuccess+ WebSuccess

• 03 Mar 12
  

  Tim Lombardo
  • to start with good people, to make something customers actually want, and to spend as little money as possible
• 25 Feb 12
  

  Sangwon Kim

  People
  

• 20 Feb 12
  

  Stanislav Bender

  startup cool

• 02 Feb 12
  

  Sola Soyombo
• 21 Jan 12
  

  shanerasnak

  funding VC paul graham startup

• 14 Dec 11
  

  gingenhagen

  startup

• 04 Dec 11
  

  business

• 11 Oct 11
  

  zatoichi

  How to be a startup

  startup entrepreneurship howto

  • What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can't save bad people.
• 06 Oct 11
  

  dharmagada

  entrepreneur

• 27 Sep 11
  

  Martin Hahn

  Business

• 

  florentin s

  startup

• 23 Sep 11
  

  Danielle McKelvie

  startup entrepreneurship startups entrepreneur Paul Graham How-To

  • If you're the sort of person who would like to solve the money problem once and for all instead of working  for a salary for 40 years, then a startup makes sense.
  • If you want to do it, do it. Starting a startup is not the great mystery it seems from outside. It's not something you have to know about "business" to do. Build something users love, and spend less than you make. How hard is that?
• 16 Sep 11
  

  Jay Shark

  career careers jobs job business

• 12 Sep 11
  

  Jonathan Camery-Hoggatt

  START: (This essay is derived from a talk at the Harvard Computer Society.) You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.

  startups entrepreneur paulgraham investing Y-Combinator Startupschool

• 05 Sep 11
  

  Charles Oakley

  business startup entrepreneurial

• 06 Aug 11
  

  juanete

  business

• 01 Aug 11
  

  jrockads

  toread business reference finance advice

• 27 Jul 11
  

  Matt Ruby
  • For example, dating sites currently suck far worse than search did before Google. They all use the same simple-minded model. They seem to have approached the problem by thinking about how to do database matches instead of how dating works in the real world. An undergrad could build something better as a class project. And yet there's a lot of money at stake. Online dating is a valuable business now, and it might be worth a hundred times as much if it worked.
• 22 Jul 11
  

  Ryan Swanstrom

  startup howto

• 13 Jul 11
  

  xiangsiyuan
  • You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.
• 07 Jul 11
  

  Johannes Kuhs

  startup

• 04 Jul 11
  

  Adam Li

  how to start business

• 28 Jun 11
  

  Vitaliy Podoba

  startup

• 09 Jun 11
  

  Nolboo Kim

  In particular, you don't need a brilliant idea to start a startup around. The way a startup makes money is to offer people better technology than they have now. But what people have now is often so bad that it doesn't take brilliance to do better.

  startup entrepreneurship howto entrepreneur startups management

• 01 Jun 11
  

  Alex Vazhatharayil
• 30 May 11
  

  Mark Rutledge
• 11 May 11
  

  Luis Chacon

  startup entrepreneurship howto entrepreneur company business freelance article

• 13 Apr 11
  

  revengervn
  • You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible
  • In particular, you don't need a brilliant  idea to start a startup around. The way a startup makes money is to offer people better technology than they have now. But what people have now is often so bad that it doesn't take brilliance to do better.
  • For programmers we had three additional tests. Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities,  could we stand to have them around?
  • The project may even grow into a startup. But once again, I wouldn't aim too directly at either target. Don't force things; just work on stuff you like with people you like.
  • I think most businesses that fail do it because they don't give customers what they want
  • In nearly every failed startup, the real problem was that customers didn't want the produc
  • Like most startups, we changed our plan on the fly. At first we expected our customers to be Web consultants. But it turned out they didn't like us
  • I learned something valuable from that. It's worth trying very,  very hard to make technology easy to use. Hackers are so used to computers that they have no idea how horrifying software seems to normal people. Stephen Hawking's editor told him that every equation he included in his book would cut sales in half
  • How do you figure out what customers want? Watch them
  • So if you're developing technology for money, you're probably not going to be developing it for people like you. I
  • If you build the simple, inexpensive option, you'll not only find it easier to sell at first, but you'll also be in the best  position to conquer the rest of the market.
  • The first thing you'll need is a few tens of thousands of dollars  to pay your expenses while you develop a prototype. This is called seed capital. Because so little money is involved, raising seed capital is comparatively easy-- at least in the sense of getting a quick yes or no.
  • Usually you get seed money from individual rich people called "angels." Often they're people who themselves got rich from technology. At the seed stage, investors don't expect you to have an elaborate business plan. Most know that they're supposed to decide quickly. It's not unusual to get a check within a week based on a half-page agreement.
  • Some angels, especially those with technology backgrounds, may be  satisfied with a demo and a verbal description of what you plan to  do. But many will want a copy of your business plan, if only to remind themselves what they invested in
  • Business plan" has that word "business" in it, so I figured it had to be something I'd have to read a book about business plans to write. Well, it doesn't. At this stage, all most investors expect is a brief description of what you plan  to do and how you're going to make money from it, and the resumes  of the founders. If you just sit down and write out what you've been saying to one another, that should be fine. It shouldn't take more than a couple hours, and you'll probably find that writing it all down gives you more ideas about what to do.
  • You may wonder how much to tell VCs. And you should, because some of them may one day be funding your competitors. I think the best plan is not to be overtly secretive, but not to tell them everything either. After all, as most VCs say, they're more interested in the people than the ideas. The main reason they want to talk about your idea is to judge you, not the idea. So as long as you seem like you know what you're doing, you can probably keep a few things back from them. [7]
  • And we loved them, because when you're growing slow by word of mouth, your first batch of users are the ones who were smart enough to find you by themselves. There is nothing more valuable, in the early stages of a startup, than smart users. If you listen to them, they'll tell you exactly how to make a winning product
  • If I were going to start a startup today, there are only three  places I'd consider doing it: on the Red Line near Central, Harvard, or Davis Squares (Kendall is too sterile); in Palo Alto on University or California Aves; and in Berkeley immediately north or south of  campus. These are the only places I know that have the right kind of vibe.
  • The most important way to not spend money is by not hiring people.  I may be an extremist, but I think hiring people is the worst thing a company can do. To start with, people are a recurring expense,  which is the worst kind.
  • So who should start a startup? Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life.
  • I don't think the amount of bullshit you have to deal with in a startup is more than you'd endure in an ordinary working life. It's probably less, in fact; it just seems like a lot because it's  compressed into a short period. So mainly what a startup buys you  is time. That's the way to think about it if you're trying to  decide whether to start one. If you're the sort of person who would like to solve the money problem once and for all instead of working  for a salary for 40 years, then a startup makes sense.

  19 more annotations...

• 23 Mar 11
  

  Morgan THOMAS

  business startup

• 

  tej466

  founder

• 

  Satya Padmanabham Devarakonda

  founder

• 20 Mar 11
  

  Alexis D

  founder-institute

• 16 Mar 11
  

  sahiba sandhu

  ycombinator startup

• 15 Mar 11
  

  luis sison

  entrepreneurship

  • For programmers we had three additional tests. Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities,  could we stand to have them around?
  • Business people are bad at deciding what to do with  technology, because they don't know what the options are, or which kinds of problems are hard and which are easy. And when business people try to hire hackers, they can't tell which ones are  good. Even other hackers have a hard time doing that.  For business people it's roulette.
  • If you work your way down the Forbes 400 making an x next to the  name of each person with an MBA, you'll learn something important about business school. After Warren Buffett, you don't hit another  MBA till number 22, Phil Knight, the CEO of Nike. There are only 5 MBAs in the top 50. What you notice in the Forbes 400 are a lot of people with  technical backgrounds. Bill Gates, Steve Jobs, Larry Ellison, Michael Dell, Jeff Bezos, Gordon Moore. The rulers of the technology business tend to come from technology, not business. So if you  want to invest two years in something that will help you succeed  in business, the evidence suggests you'd do better to learn how to  hack than get an MBA.
  • There is one reason you might want to include business people in a startup, though: because you have to have at least one person willing and able to focus on what customers want. Some believe only business people can do this-- that hackers can implement software, but not  design it. That's nonsense. There's nothing about knowing how to program that prevents hackers from understanding users, or about not knowing how to program that magically enables business people  to understand them.
    
    If you can't understand users, however, you should either learn how or find a co-founder who can. That is the single most important issue for technology startups, and the rock that sinks more of them than anything else.
  • How do you figure out what customers want? Watch them. One of the best places to do this was at trade shows. Trade shows didn't pay  as a way of getting new customers, but they were worth it as market research. We didn't just give canned presentations at trade shows. We used to show people how to build real, working stores. Which  meant we got to watch as they used our software, and talk to them  about what they needed.
  • One of my favorite bumper stickers reads "if the people lead, the  leaders will follow."
  • There are few sources of energy so powerful as a procrastinating grad student.
  • If you want to do it, do it. Starting a startup is not the great mystery it seems from outside. It's not something you have to know about "business" to do. Build something users love, and spend less than you make. How hard is that?

  6 more annotations...

• 

  Chris Jones
• 12 Mar 11
  

  Dennis Demori

  startup

• 07 Mar 11
  

  McNeal Maddox

  business idea inspiration entrepreneurship

• 28 Feb 11
  

  rameshvel

  startup business entrepreneurship technology startups

• 16 Feb 11
  

  Geore Paul

  startup howto business

• 14 Feb 11
  

  Avinash Meetoo

  You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all

  startup business entrepreneurship howto entrepreneur start people employment employee animal experience

• 26 Jan 11
  

  Bill Nelson

  startup economics libertarianism

• 20 Jan 11
  

  Rober Morales-Chaparro

  startup entrepreneurship entrepreneur howto startups toread management article y combinator paul graham

• 30 Dec 10
  

  Shubha Chakravarthy

  "to "

• 30 Nov 10
  

  gstathis

  startup graham startups entrepreneur entrepreneurship essay paulgraham inspiration toread vc

• 27 Nov 10
  

  agujas1207
• 14 Nov 10
  

  Nicolas Bottarini

  business entrepreneurship tips technology

• 09 Nov 10
  

  Paw Yam

  business startup

• 03 Nov 10
  

  miss puffy

  startup for:cpj

• 17 Oct 10
  

  paisano

  startups

Page Comments

• 
  dolphin278 on 2006-04-28
  Удачная статья по тому, как начинать новый бизнес
• 
  Kelley Perry on 2006-07-25
  Excellent articles for hackers and start-up wannabees.
• 
  Kevin Wen on 2006-07-31
  good article on the points to keep in mind when you are starting a new business. It is simple and to the point.

Would you like to comment?

Join Diigo for a free account, or sign in if you are already a member.