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Many highly successful companies—the aforementioned big G being one—have thrived by taking on areas that everyone thought were done and redoing them right. Also? Get a good, non-generic name. Easier said than done, granted. But the most common mistake in naming is trying to be too descriptive, which leads to lots of hard-to-distinguish names.

One of Google's biggest strengths—and sources of frustration for outsiders—was their willingness to say no to opportunities, easy money, potential employees, and deals.

Better to iterate a hundred times to get the right feature right than to add a hundred more.

Great products almost always come from someone scratching their own itch. Create something you want to exist in the world. Be a user of your own product. Hire people who are users of your product. Make it better based on your own desires. (But don't trick yourself into thinking you are your user, when it comes to usability.)

The TypePad approach—taking the high-end position in the market—makes for a great business model in the right market. Less support. Less scalability concerns. Less abuse. And much higher margins.

Acquisitions are much easier if they're small. And small acquisitions are possible if valuations are kept low from the get go. And keeping valuations low is possible because it doesn't cost much to start something anymore (especially if you keep the scope narrow).

What's so unnatural about working for a big company? The root of
the problem is that humans weren't meant to work in such large
groups.

Another thing you notice when you see animals in the wild is that
each species thrives in groups of a certain size. A herd of impalas
might have 100 adults; baboons maybe 20; lions rarely 10. Humans
also seem designed to work in groups, and what I've read about
hunter-gatherers accords with research on organizations and my own
experience to suggest roughly what the ideal size is: groups of 8
work well; by 20 they're getting hard to manage; and a group of 50
is really unwieldy.

And when you propagate that constraint, the result is that
each person gets freedom of action in inverse proportion to the
size of the entire tree

For example, working for a big company is the default thing to do,
at least for programmers. How bad could it be? Well, food shows
that pretty clearly. If you were dropped at a random point in
America today, nearly all the food around you would be bad for you.
Humans were not designed to eat white flour, refined sugar, high
fructose corn syrup, and hydrogenated vegetable oil. And yet if
you analyzed the contents of the average grocery store you'd probably
find these four ingredients accounted for most of the calories.
"Normal" food is terribly bad for you. The only people who eat
what humans were actually designed to eat are a few Birkenstock-wearing
weirdos in Berkeley.

If "normal" food is so bad for us, why is it so common? There are
two main reasons. One is that it has more immediate appeal. You
may feel lousy an hour after eating that pizza, but eating the first
couple bites feels great. The other is economies of scale.
Producing junk food scales; producing fresh vegetables doesn't.
Which means (a) junk food can be very cheap, and (b) it's worth
spending a lot to market it.

If people have to choose between something that's cheap, heavily
marketed, and appealing in the short term, and something that's
expensive, obscure, and appealing in the long term, which do you
think most will choose?

It's the same with work. The average MIT graduate wants to work
at Google or Microsoft, because it's a recognized brand, it's safe,
and they'll get paid a good salary right away. It's the job
equivalent of the pizza they had for lunch. The drawbacks will
only become apparent later, and then only in a vague sense of
malaise.

And founders and early employees of startups, meanwhile, are like
the Birkenstock-wearing weirdos of Berkeley: though a tiny minority
of the population, they're the ones living as humans are meant to.
In an artificial world, only extremists live naturally.

This seems an inevitable consequence of bigness. It's true even
in the smartest companies. I was talking recently to a founder who
considered starting a startup right out of college, but went to
work for Google instead because he thought he'd learn more there.
He didn't learn as much as he expected. Programmers learn by doing,
and most of the things he wanted to do, he couldn't—sometimes
because the company wouldn't let him, but often because the company's
code wouldn't let him. Between the drag of legacy code, the overhead
of doing development in such a large organization, and the restrictions
imposed by interfaces owned by other groups, he could only try a
fraction of the things he would have liked to. He said he has
learned much more in his own startup, despite the fact that he has
to do all the company's errands as well as programming, because at
least when he's programming he can do whatever he wants.

There is one thing companies can do short of structuring themselves
as sponges: they can stay small. If I'm right, then it really
pays to keep a company as small as it can be at every stage.
Particularly a technology company. Which means it's doubly important
to hire the best people. Mediocre hires hurt you twice: they get
less done, but they also make you big, because you need more of
them to solve a given problem.

In an essay I wrote a couple years ago
I advised graduating seniors
to work for a couple years for another company before starting their
own. I'd modify that now. Work for another company if you want
to, but only for a small one, and if you want to start your own
startup, go ahead.