My Notes on How to Start a Startup by YC

https://docs.google.com/document/d/1wkJ6Ruh2IiR-caT-PS3n5Yt5VKcmIsVhuQwjgqK7030/edit

by charleswzx • 7 years ago

380 85 7 years ago

docs.google.com

charleswzx10• 7 years ago

Just sharing the notes I compiled while watching the online sessions @ https://startupclass.samaltman.com/. I've been sitting on this for about half a year, and almost forgot I'd compiled it.

I hope some of you find this useful (:

tomglynch• 7 years ago

Thanks for this. How has it worked for you?

charleswzx10• 7 years ago

I'm still early days with my startup, but some of the stuff on here has come in useful. It's a document that attempts to span the whole lifecycle of a startup, and some parts don't apply right now. Definitely something to refer back to now and again.

_the_inflator• 7 years ago

Awesome, thank you! :)

charleswzx10• 7 years ago

Welcome!

dragonsh• 7 years ago

Probably you should also look at "Disciplined Entrepreneurship" https://medium.com/west-stringfellow/disciplined-entrepreneu...

Many suggestions are practical with case studies.

charleswzx10• 7 years ago

Thank you! This looks like a great resource :)

trampi• 7 years ago

Thanks a lot, I find it very interesting!

charleswzx10• 7 years ago

Very welcome!

mluggy• 7 years ago

wow, great stuff. i was starting to do the same after watching dozens of yc videos. you made it better :)

charleswzx10• 7 years ago

Thanks for the kind words! Hope it helps.

spencerwgreene• 7 years ago

Google Docs is already showing "Some tools might be unavailable due to heavy traffic in this file."

I predict this posts hits 100 points and then it crashes. (Currently at 31.)

sdrothrock• 7 years ago

At 47 and had issues loading it, so I printed to PDF and hosted a copy on Docdroid -- I hope that's ok. If not, I'll delete it.

https://docdro.id/tOVflQx

ignoramous• 7 years ago

Outlined the doc: https://outline.com/ntbkvW

geoah• 7 years ago

Still works at 108 :p

midway4• 7 years ago

Catchy title with strong words ('57-page', 'YC'), no real click-bait but close.

I skimmed the first pages and most of the advice is neither wrong or bad. Still, reading a lenghty 57-note in order to learn is wrong.

You learn by doing. If you want to start something stop procrastinating on HN and execute the first step: found the legal entity for your endeavor. This will keep you busy for the next days, and you learn.

Btw, you don't need to have a good or any idea or co-founder now. This will all come. Just start, make mistakes, stop reading random advice.

Edit: Don't downvote if you disagree, downvote if a comment doesn't add anything to the discussion.

randomsearch• 7 years ago

Don’t set up a legal entity.

Find the nugget of your idea. Do something to get market feedback.

Eg your idea is Uber for pet food - go interview people leaving a big pet food store and ask them if they’re interested. Old school market research.

Or say your idea is a sports news site for minor teams. Set up an MVP that serves for your local team and promote it, see how many many people go to the site. MVP could be a stream of article links from other sites, or perhaps better a newsletter via email. On site have sign up box for other teams.

Market feedback is key. Once you have a good signal, continue building and gather more feedback.

midway4• 7 years ago

While I agree with most what you wrote, I still think that setting up a legal entity is a good first step. Most wannabes struggle with starting. They wait for the perfect idea, the perfect team and so on. They never start. Even if you start with a crappy idea. Ideas will evolve, get pivoted, whatever. My message is about to start and not wasting your time with inactivity like reading random Google Docs by random dudes.

cmogni1• 7 years ago

I haven’t finished reading this, but what strikes me about the advice in the notes is that much of it is either contradictory or there exist counterexamples to the claims. For example, the reader is encouraged to start building, but is told you also need a good idea and that you can pivot but most good companies don’t start with a pivot. Counterexample: Slack was a pivot. We’re also instructed that you should build something that’s hard to replicate, but also that the thing you build first should be simple. What am I supposed to take away from this? If it’s simple, isn’t it almost surely replicable? Also, Netflix is a good counterexample: they just started with a DVD mail service, and were easily replicable by an incumbent, like Blockbuster. And the advice about not creating a market goes against what sometimes occurs through branding. The original Banana Republic sold “safari clothing”. There was no market for this before Banana Republic. Nor was there a market for energy drinks before Red Bull. I’m told that you should have a cofounder, yet is appears that there’s many examples of successful companies without one (eg Amazon, IKEA). I’m not sure if this appears in the document yet, but another piece of conventional wisedom I’ve heard is that you need to work on your startup full time or else (insert bad thing about you not being committed). But what about Nike, whose founder worked for 5 years as an accountant while he developed the business?

My point is that a lot of the advice I’ve heard about startups in general is framed (intentionally or unintentionally) as a series of directives that will optimize your chances of success. Moreover, no other additional context is provided to help you frame the advice, such that you can tell whether or not it’s applicable or appropriate advice to follow. The lack of context coupled with the existence of so many blatant counterexamples and contradictions prevents the advice from being useful.

(Note: I edited the last paragraph for clarity)

owens99• 7 years ago

There are counter examples to everything, that doesn’t make it bad advice.

Some people smoke cigarettes their whole life and live until old age without ever getting cancer. Should we conclude smoking does not cause cancer just because there are counter examples?

As you said, the advice is meant to maximize the chance of success. It is still not sufficient or without exceptions.

In the end, advice is only valuable if you put it through your own filter and use your own judgement to make the best decision.

JaumeGreen2• 7 years ago

The problem is that there are so many blatant counterexamples and contradictory narratives that the advice ceases to be helpful.

Because there's no set of instructions that will work for sure.

What one needs to success with a startup is several of these: work hard, work smart, connections, piles of money, idea, marketing, good timing and luck.

You can have most of them and not triumf, you can have only a pair and succeed. With none it's not possible. The ones that seem to matter the most are the ones you come with (money/connections) and the ones that you can't affect much (good timing/luck).

ryanwaggoner4• 7 years ago

This is a great comment.

I’m not sure marketing belongs in the list though. It’s critical but it’s a part of execution and overlaps with several other items on the list. Just stood out to me.

I’d also challenge the last paragraph. I don’t think anything on this list matters as much as working hard. Literally every single successful business owner I’ve ever known has worked their ass off, usually for many years. For me the correlation is 100%. That’s not to say it’s sufficient but it seems necessary and the most equalizing force on your list [1]

1. Although I sometimes think in our fetishization of hard work, we ignore the fact that not everyone can grind away for years on a speculative venture even if they wanted to. I know many wonderful people who just don’t have that personality. Telling them to “outwork their competition” makes as much sense as telling someone to change their favorite color or decide to love a food they hate. It’s just not how they’re wired and that’s OK.

jialutu• 7 years ago

Monopoly is good - except Google.

- Peter Thiel

omeid2• 7 years ago

There is some kind of kind of logic in this, Google, is more than a Search monopoly, or Maps, or Gmail, or Google Play, or Google Ads, or presence on very large number of website through Ads, Analytics, ReCaptcha, and lord knows what. Google is not a monopoly, it is more than that.

drieddust• 7 years ago

Because he own Facebook. Monopoly is not good ever.

thegabriele• 7 years ago

Perhaps here's a meta-lesson to be learned for a right mindset: there are many ways to start (a good news i presume) but less and less ways to grow in a sustainable fashion as your business matures (YC or others can help you with that).

greattypo• 7 years ago

I felt this way going through YC - sometimes different partners gave conflicting advice, and that felt confusing. It took a while for me to look back on the experience and realize it was a feature not a bug.

[edit - disclosure: I was one of the presenters in this series.]

ryanwaggoner4• 7 years ago

I feel like this needs a lot more elaboration :)

What’s the point of having access to a ton of great advisors if they’re constantly all telling you conflicting things? Is the answer just to go with your gut? If so, why do you need the advisors? Is it more to prime your decision making with possibilities? Or is it more for tactical execution advice once you decide on a direction? Or something else?

mbesto• 7 years ago

"Assigning single factor causation to the output of complex adaptive system is a triumph of hope over experience."

This is a quote from Tren Griffin about the stock market but it holds true for startups as well. Successful people who help out entrepreneurs often take their survivorship bias'd situations and assign single factor causation to them. Thus you end up with conflicting advice because "sometimes it works and sometimes it doesn't".

Generic advice is not hurtful, it's just not contextual. It's your job (the founder) to decide whether it can fit your context or not.

aaavl28212• 7 years ago

Starting a company requires a tolerance for ambiguity. If there were a rules based system for how to start a startup, then startups wouldn't exist: they'd be "innovation processes" at big companies, and your advisors would be your bosses

The existence of counterexamples and conflicting advice doesn't mean that advice isn't useful, conflicting advice is just a symptom of startups being uncertain. With a large enough sample size of advice, you can start to make sense of it, understand what's good and bad advice, understand how people's life experience and incentives may color their advice etc. this makes it much easier for you to turn that advice into decisions and actionable steps

If you think about it this way then more advice is better. It's just up to you to synthesize that advice and decide what to do with it

reikonomusha• 7 years ago

Then instead of saying “start simple” and “be difficult to replicate”, why not suggest something more like “your goal might be to build something as quickly as possible, but must be sufficiently non-trivial to build. Time to build isn’t always an indicator of simplicity, [blah blah blah].”

I guess what I’m saying is embrace ambiguity in the advice more clearly. Don’t say “Do X” and “Do the opposite of X”, which together give you no ground to “synthesize”.

Another approach is to describe the effect of “Doing X”. Maybe building fast means you can get to market faster. Maybe building something nontrivial means your competition won’t gobble up your market. But you, the founder, are the arbiter of that decision/tradeoff.

ISTM that many startup-advice-givers like to create these short memorable platitudes instead of actually describing tradeoffs and decisions that the founder must make.

charleswzx10• 7 years ago

This is definitely something I was thinking about a lot of as I compiled these notes. To be fair, each lecture was a standalone by a different speaker, with different backgrounds, experiences and skills. I'm not surprised that there are some contradictions. Like other commenters have pointed out, YMMV depending on a gazillion unknown factors.

theli0nheart• 7 years ago

In the end, the best way to learn how to start a startup is to ignore everything and just do it. Other people will tell you the best way to have started their company. No one is going to be able to teach you how to start yours.

To be clear, I'm not saying that there's not good advice floating around. There is. The trick is knowing how to separate the bad from the good, and as someone who's new to the startup world, that's pretty hard (impossible?) to do.

teamsignup• 7 years ago

> Slack was a pivot

Youtube was a hard pivot from a video dating site.

shamino• 7 years ago

My biggest problem with the advice from YC and Startup school notes like this is that they pretend they're the first to ever discover these ideas or principles. They have experience with many start-ups over the last decade, which is true, but the concepts and ideas here are very old. They're rediscovering the Polio vaccine.

Furthermore, they are extremely biased towards start-ups, which is understandable. You could not easily make a worse financial decision, statistically speaking. But they need most of us to do it for them to stay in business.

suzairshah• 7 years ago

This is amazing, thanks for sharing

charleswzx10• 7 years ago

You're very welcome :)

poirier• 7 years ago

Nice job on the formatting. Looks great with an auto-outline.

Appreciate the share.

charleswzx10• 7 years ago

Very welcome!

midway4• 7 years ago

Interesting: The title was changed ('57-Page' was removed) while the comment which classified the prior title as close to click-bait was downvoted.

I didn't know that users could change the title of their submission. How is this possible or is this actually a post by YC?

If latter, a hint would be great that this might be YC promoted content and not actual user content.

paintbox• 7 years ago

It is possible that an admin changed the title.

Folks probably downvoted you because they deemed your tone unwelcome here.

midway4• 7 years ago

It is possible that an admin changed the title

Still strange. Why should an admin change the submission of a random user if it doesn't breach any of HN's rules?

Maybe because it's not a random submission by a random user?

Guess I must be wrong but would love to hear what that admin who did the change has to say.

charleswzx10• 7 years ago

Hi there! I'm the OP. I'm not affiliated to YC, and I didn't even notice the change till you pointed it out. I haven't been contacted by an admin, so I'm just as in the dark as you are.

distant_hat• 7 years ago

There's a huge amount of survivorship bias in all such lists. Startups that succeed get analyzed a lot, those that did pretty much the same things but failed don't. To be rigorous about it, you'd have to define things like what's a startup, what constitutes success, what constitutes failure, far more carefully.

muzani2• 7 years ago

That's the good thing about lists that come from VCs. They analyze both the successes and failures, as well as things like risk level. YC also does a great job of not falling into the trap of copying the last superstar.

ryanwaggoner4• 7 years ago

True but huge caveat: their idea of success and the founder’s idea of success may differ wildly. If a modest exit makes the founder a few million and the VC just gets a single digit multiple, that’s not the kind of success they’re going to gravitate towards in their analysis. They may not label it a failure but they won’t be trying to identify how to replicate more of those, even if it will have changed the founder’s life and family for generations.

TravelAndFood• 7 years ago

"How do you tell which markets are growing fastest? Use instincts as a young student."

Welp, I'm over 22, guess I'm never starting a company.

objektif2• 7 years ago

I am not in the startup scene but why cant one of the best reason to start a company be to make more MONEY. Why is it always about changing the world and the universe needs me type of stuff. This is too SV cartoonish for me.

mathgladiator• 7 years ago

Because most employees assume money is a given, and they align with a mission instead. It is also not socially acceptable to be in something just for the money unless it is wall street.

objektif2• 7 years ago

What type of mission would that be? Selling ads, gathering your private data? Can we get real please? Time to stop villianizing WS, SV is just modern day WS with more greed. ( Sometimes more useful though. )

tudelo• 7 years ago

"It is also not socially acceptable to be in something just for the money unless it is wall street."

I'm not sure if I can agree with that. In general that may be true, but I would have to say most people do something they don't like 'just for the money' at some point in their life. Something like working as a kid for minimum wage in a store. It's most likely that you are just working there for money.

YazIAm• 7 years ago

The argument against this is that founding a startup, when factoring in the incredibly low success rate, may not be the best strategy to gain money. Joining an early stage startup (with equity) that's clearly on a growth path, or even working for a Google, Facebook, etc. is a much better bet for making money.

Also, startups, where startup means creating a new unproven solution intended to achieve exponential growth, are unfathomably hard. It's hard (in my experience) to stay motivated in the face of startup hardships when one's primary objective is money.

everdev• 7 years ago

Starting a business is one of the best paths to make a lot of money in a short time period though.

And it all depends on your financial goals.

Want low 6-figures a year? Get a career.

Want medium 6-figures a year? Bootstrap a business.

Want 7-figures a year? Take VC money.

And yes, the success rates get progressively worse, but if your goal is to average $500k-$1M+/year over the next 5 years, your chances of making that as an employee are probably far less than your chances of making that owning a startup.

nyrulez3• 7 years ago

I recently started out on this road as a solo founder [0], and out of all the given pieces of advice that YC gives, two things are the most conflicting for me:

- This pressure to have a co-founder. I see that quoted as a major reasons for why startups go bust but also necessary for doing anything meaningful. I can imagine there being truth to both statements. I've seen startups go bust in my own network on both sides of the divide. But I feel there isn't enough advice out there for folks who are doing it Solo - that's still a valid design pattern for many startups in the past or present.

- The whole idea of go big or go home - lot of the advice seems to assume you want to be really big one day. There doesn't seem to be enough advice for someone wanting to be a 10M-100M dollar business as their main milestone, not as a path to hit a billion dollar valuation. That kind of assumption results in very different kinds of design patterns, often borrowed from other billion dollar startups that may not make sense to your own little venture in the beginning.

I wish startup advice wasn't universal as every author or speaker would like you to believe - there could be a system where it was doled out based on the current phase and situation, or at least recognizing the fact that there isn't one size fits all for something as varied as starting your own venture.

[0] https://stockquanta.com

scottlocklin7• 7 years ago

YC advice isn't optimizing to help founders at all. It's optimizing for their business model.

I don't know why people think otherwise. Do you think venture capitalists are your friends? Pretty sure they're not!

nyrulez3• 7 years ago

That's fascinating for me. It certainly comes across like "best for all parties" kind of advice, but only magnifies the need for clear separation of business advice that is fully aligned towards founders.

adventured• 7 years ago

The best VCs optimize for the founder + the business thriving together as the ideal package unit.

Overwhelmingly the greatest outcomes are produced by companies with founders at the helm for long periods of time. The best VCs in the industry know this well, with few exceptions. If you're dealing with VCs that routinely like to replace or marginalize founders, you're dealing with either a subpar firm or one of the couple old bureaucratic dinosaur firms that occasionally are prone to 'IBM thinking.'

Examples: Amazon, Microsoft, Apple, Google, Facebook, Alibaba, Tencent, Baidu, Netflix, Salesforce, Qualcomm, HP, Dell, nVidia, Sony, Intel, Oracle, Airbnb, Twitter. Even IBM, at its most successful it was run by the Watsons.

JMTQp8lwXL3• 7 years ago

Yeah, but without entrepreneurs, VC's have no opportunity to invest in the next Uber, etc.

It's in their interest to be both nice to you, and strike a good deal with you, if they want to do business with you at all.

I wouldn't want to work with a VC who couldn't be nice to me. To be firm or offer pointed criticism is fine.

radmuzom• 7 years ago

The old "Business of Software" forums, part of joelonsoftware.com, had lots of good advice for single founders. The term micro-ISV (independent software vendor) was very popular there. Unfortunately, it got shut down few years back.

thebentarrow• 7 years ago

TY!

Zigurd• 7 years ago

The Airbnb interview question “if u were diagnosed with 1 year left to live, would you work at airbnb?” sounds to me like "I want to date a stalker." No. No I don't. I don't want an insane employee who may go postal, either.

namaljayathunga• 7 years ago

I like to read summaries. This is amazing, thanks for sharing.

My Notes on How to Start a Startup by YC

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