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Lecture 1 – How to Start a Startup [video]

520 points by declan 12y ago

ThomPete 12y ago
Don't get me wrong I love Sam Altman I love y-combinator but a small part of me is thinking that a good first step to start a startup is to not watch that video and find your own way. Not because it's probably not great but because a startup is not a formula. Your path is your own.
- PublicEnemy111 12y ago
  I would imagine this class is not a cookie cutter business plan but rather "here's the challenges startups face and how to approach them." So likely a MOOC form of YC
- rdl 12y ago
  Ironically that's what the first 15 minutes is..."don't start a startup unless it's the best way to accomplish something you want". "don't start a startup unless it feels like an important mission" etc.
- mladenkovacevic 12y ago
  I agree. It strikes me as a very inefficient use of an enterpeneur's time who wants to launch a business to first watch a series of 20 lectures about all aspects of starting a business. Just start doing it, and whenever you get stuck or need feedback ask someone whose expertise you trust for advice on a particular issue you're dealing with at that moment.
  - scobar 12y ago
    Perhaps it's not the most efficient use of an entrepreneur's time, and I agree that it definitely doesn't have to be the first step. Working on an idea helps you learn fast, but there was so much I didn't know at first (I still have a lot to learn). I am so grateful that resources like this exist, and I expect this one by YC to have a higher density of quality info in the time spent watching lectures.
    - McDoku 12y ago
      “Principles and rules are intended to provide a thinking man with a frame of reference.” -- Karl von Clausewitz
      - ThomPete 12y ago
        Running a company is not about neither principles nor rules. To the extent it does it's doesn't require a thinking man.
        McDoku 12y ago
        Please elaborate.
        ThomPete 12y ago
        Running a startup is not an intellectual exercise which is the context for that quote. Running a startup is more like improvising in a jazz band. There is some theory behind it but if you think you stink.
        McDoku 12y ago
        ...talent and genius operate outside the rules, and theory conflicts with practice - Carl von Clausewitz I would argue that he agrees. However... The general who wins the battle makes many calculations in his temple before the battle is fought. The general who loses makes but few calculations beforehand. - Sun Tzu Both intellectualism and the ability to improvise are necessary. Arguably, if you have to adapt then a calculation has failed. Hearing the sound of thunder is not the mark of a keen ear, neither is entering battle and winning the mark of a great general. There is no point reinventing the wheel. Many have come before and it seems wise to assimilate their experience with a critical mind. Instinct ultimately rises from your existing body of knowledge. And even in jazz it emerges from a bass line.
  - tim333 12y ago
    Maybe a bit of both is the answer. Just watch lectures and read and nothing gets done. Rush ahead and do stuff without studying and you risk dumb errors that you could have avoided.
- mpg33 12y ago
  I agree, however since he has seen and dealt with so many startups he gets to notice a lot of patterns about what makes startups more likely to be successful than the average person. There was definitely some valuable info in the lecture.
  - ThomPete 12y ago
    I am pretty sure you are right. Whether that value is intellectual or actionable is what I am not so sure about :)
    - mpg33 12y ago
      I found it was more "here's what you should notice" than "here's what you should do".
      - ThomPete 12y ago
        Yes it's all fine. All I want to say is that most ycombinator companies fail even though they have access to this advice.
- TimPC 12y ago
  Disagree strongly. These lectures are about 40 minutes and seem jam packed with good advice. A start-up isn't a formula but it does follow certain trends. Doing it wrong is a disaster and if you're taking on what can be a 10 year commitment without spending less than 20h exploring advice from some of the best data and people in start-ups you probably have misaligned your priorities. I suspect heeding the advice in the first lecture of this course would save most start-ups more time and money than 20h of the "CEO" co-founder.
  - ThomPete 12y ago
    Doing it wrong might actually sometimes mean doing it right. Ycombinator companies have access to this advice yet most of these companies fail. Thats just how it is. You can get structural advice from a laywer the rest is up to you to explore.
    - TimPC 12y ago
      YCombinator companies have a far higher success percentage than the general start-up population. Most fail is hardly a criticism when the default environment is 90% of start-ups fail. Moving 90% to 60% for example means your chance of success quadruples, but it still meets your criticism of "most fail".
      - ThomPete 12y ago
        The reason they don't fail is most likely more to do with the fact that yCombinator is already a powerhouse more than with the advice.
      - TimPC 12y ago
        Can't nest comments any further, but one of my previous companies got rejected at YC before becoming the most recent example of how not to apply to YC, and having a successful exit. I recognize the lines from the application, we're literally the example of what not to do according to YC, had a decent outcome and I'm still convinced this lecture had lots of great advice and if I were to start myself I'd follow more of it. Take what you will from that.
- pbreit 12y ago
  There's still going to plenty of "finding your own way". I suspect most founders and early employees could find a lot of useful information in the material.
  - ThomPete 12y ago
    Not disagreeing. But whether it's actionable is what I would question.
    - TimPC 12y ago
      Not spending on PR or going to conferences pre-product is highly actionable for a large number of start-ups who do the opposite. Balancing the early team to be able to execute a product people love before scaling a marketing organization is highly actionable as well. The advice on doing a start-up for the right reasons is the most actionable of all.
      - ThomPete 12y ago
        And yet the reality is that this worked for some. There is no meta advice, no big secret besides find out how to make it work for you.
      - TimPC 12y ago
        Yes. This works for some. If I ask you to choose between winning a bet where you roll 1,2,3,4,5 on a d6 or winning a bet where you roll 6, I think the fact that sometimes you win with 6 is true but almost useless.
        ThomPete 12y ago
        Problem is that you haven't shown that to be the case. You are just making up your own premises to prove a point you haven't proven.
bobbles 12y ago
Are transcriptions of these videos going to be provided? It's much easier for me to consume lectures as text rather than watching the video.
porter 12y ago
Ycombinator leading the way once again. Looking forward to this!
- porter 12y ago
  I guess all the people downvoting this are from other incubators. Not sure why this is being downvoted.
  - dkural 12y ago
    Because your comment does not add anything to the discussion.
    - tim333 12y ago
      Or adds the wrong thing. Go team A, we're better than team B stuff is not that productive.
smuss77 12y ago
@3:12: "There are much easier ways of getting rich." Could I get some examples? Thank you!
- hawkice 12y ago
  Get a job programming. 10-year average pay gap is about 33%, which is not an insubstantial amount closer to "rich".
- tdicola 12y ago
  Marry into a rich family.
- lukasm 12y ago
  steal, inherit or create value.
- robomartin 12y ago
  Waiting for that very answer here: www.ProjectAmericanDream.com
- blobbers 12y ago
  This could be helpful to you for purposes of comparison: https://www.wealthfront.com/tools/startup-salary-equity-compensation https://www.wealthfront.com/tools/startup-salary-equity-comp...
- foobarqux 12y ago
  Go into finance?
- petersouth 12y ago
  I had a few of those moments where I found something really interesting and wanted to hear more detail, but then the subject just changed.
- TimPC 12y ago
  So here is a simple idea. If you're going to work 80h/week anyway and you're a talented coder: source one contract job billing hourly in London and another in SF. Working out of EST you work 5AM-9PM on a 10-6 in both places -- Billing $80/hr with a good corporate setup and working 4000 hours/year you can get 320,000/year, if you have EU citizenship (potentially from one of the return countries) and US citizenship you can probably setup a decent double irish and keep about 280,000+ of that in offshore money. If you want the money in the US and are clever about it you can keep over 250,000 of that money. I suggest London and SF because the 8h timezone difference and high cost of living in both cities. But to give you an idea this is basically $2.5M after-tax locked in the time it takes to make a 10 year exit. That's 1/4 of the first example and way more than 25% of start-ups fail. Admittedly $2.5M isn't the kind of resources that lets you go after solving the biggest problems in the world, but it's pretty solid by developer standards. 1.8X is a good return for a venture capital fund and they have more favourable stock than employees or founders, so you have to think the average start-up return for founders, even enormously talented ones is far worse than that. Edit corrected typo in time worked.
hanley 12y ago
Very interesting lectures and it's great that they are doing this. Both of the speakers could benefit from a public speaking class though.
steakejjs 12y ago
This seems like a really valuable recruiting tool for YC. Start early at Stanford, groom freshman to have a great mindset and understanding of the fundamentals, fund them and make money. YC is still a for-profit company, after all.
7Figures2Commas 12y ago
"All the advice in this class is geared towards people starting a business where the goal is hyper-growth and eventually building a very large company. Much of it doesn't apply in other cases and I want to warn people up front that if you try to do these things in a lot of big companies or non-startups it won't work."
lukasm 12y ago
I find it artificial when the lecturer reads the presentation - it's not a joy to listen.
- andrewchambers 12y ago
  I thought it was fine.
- dkaplan 12y ago
  I'm definitely looking forward to hearing from the people who have built companies with their presentation abilities
gbachik 12y ago
It was so good I wish It was thursday. I want mooooore!
tucaz 12y ago
I've been watching it for 8 minutes as of now and despite the fact that the content looks good it really bores me to death that he is reading the whole thing like a robot. It does not sound like a natural converstation or presentation. Does anyone else share this feeling?
- deleted 12y ago
  [deleted]
- andrewchambers 12y ago
  Not at all.
- sloanesturz 12y ago
  I was there in person, and I felt the same way. Very surprising.
- bequanna 12y ago
  I disagree. The content is great and communicated well. Some people prefer making presentations having only some general idea of what they are going to say before hand. Other people spend a good deal of time thinking about exactly what they want to say and how they want to say it. Both presentation styles are perfectly valid.
  - peter_mcrae 12y ago
    Agreed that both presentation styles work. That said, regardless of the "strategy", the delivery needs to be clean to be seen as authoritative (unless a tremendous amount of respect as been pre-built). Imagine your CEO delivering an all-hands with 47 ums and reading from a script -- how much confidence would that instill?
  - pyre 12y ago
    > Both presentation styles are perfectly valid. Where did the parent claim that this was an 'invalid' presentation style?
- peter_mcrae 12y ago
jduhamel 12y ago
The presentation style is a bit rough but the material is gold.
gorkemyurt 12y ago
its really sad that he is reading the presentation..
- mathgenius 12y ago
  Yeah.. And not very well. I'd much prefer incoherent rambling, than this robot presentation. Put the script on a blog somewhere.
mbesto 12y ago
Dustin talks about Financial Reward and Impact of "why to do a startup" for examples like Facebook and Dropbox here: https://www.youtube.com/watch?v=CBYhVcO4WgI#t=2161 https://www.youtube.com/watch?v=CBYhVcO4WgI#t=2161 Are these values correct? If you join Dropbox as employee #100 with 10bp, you're 10bp is going to get massively diluted through subsequent rounds, no? Isn't it more like $1-2mil? And also this is wealth on paper, which means that you don't all of the sudden have $10mil sitting in the bank. I don't think he explains that but that's how it's portrayed, and is probably worth explaining, given the audience.
- rdl 12y ago
  The dilution you'll get from Series B onward is maybe 30% total. That's not "massive" IMO. (Obviously much higher dilution in a down round, if you're a founder who gets kicked out and crammed down, or if the company has a marginal exit, you're not part of the retention, and they choose to put all the acquisition into retention...) Being a senior-ish employee at a Pre-IPO (i.e. Series C/D company, on a great trajectory, and an obvious winner) is probably the optimal outcome for total compensation; for cash, consulting, if you can find the right niche. (Startup founder MAY actually be superior to Seed/Series A startup employee, though, especially due to both tax issues and what happens when the company does anything less than stellar. OTOH, you can jump ship as a Series A employee, even manager, with no real negatives; if you're a founder, you're pretty much committed until the end, or at least until some serious inflection point, especially in a suboptimal outcome.)
- 7Figures2Commas 12y ago
  Based on the holdings disclosed at the time of Facebook's IPO, and even accounting for the rise in the company's stock, I doubt very much that employee #100 at Facebook is sitting on $200 million in gains from his or her options or RSUs. In the case of Dropbox, looking at what the Box founders own according to Box's S-1[1] probably provides a more realistic comp. One thing worth noting is that Dustin's slide apparently fails to take into account the cost of exercising options. You can absolutely make a lot of money at a startup, and you don't even need to be one of the earliest employees to do so, but today's valuation trend works against employees. Startups are raising money at significant valuations earlier and earlier, so even early employees aren't receiving cheap equity. As an example of this, consider that Facebook had sold shares at a $15 billion valuation just three years after the company was founded. Google went public at a valuation under $27 billion (edit: corrected). If you had your choice, you'd almost certainly have received a better equity package as an early rank-and-file employee of Google versus Facebook. [1] http://fortune.com/2014/03/25/aaron-levie-owns-more-of-box-than-you-think/ http://fortune.com/2014/03/25/aaron-levie-owns-more-of-box-t...
bramgg 12y ago
@2:22: "You may still fail. The outcome is something like Idea x Product x Execution x Team x Luck, where Luck is a random number between 0 and 10,000, literally that much." What does that mean? I'm not trying to rip on the video or anything like that, but am genuinely curious as to how much luck Sam Altman thinks is involved in a startup.
- derekchiang 12y ago
  That simply means if you are extremely unlucky (e.g. luck being 0, like being hit by a bus), then all the other factors don't matter. On the other extreme, extreme luck can turn your company around even if you don't do so well on the other parts.
- bayesianhorse 12y ago
  He believes he should recommend to risk a substantial amount of life blood (and money) on the chances of having a big success. Not to anyone, but a lot of highly talented individuals. It depends on his ethics, of course, but I'd say this recommendation alone means he believes there to be a substantial chance...
philipDS 12y ago
I made some notes while watching/listening. Might include minor errors or misinterpretation on my side 4 critical parts: Idea, Team, Product, Execution 1. Idea -> Good startups take about 10 years -> Startup should feel like an important mission -> Hardest part coming up with great ideas: best look terriblea t the beginning (e.g. search engine, social networks limited to college students without money, a way to stay at stranger's couches) -> "Today only a small subset of users want to use my product, but I'm going to get all of them" -> You need to believe and willing to ignore naysayers -> Most people will think your idea is bad: be happy. they won't compete. it's not dangerous to tell people your idea. -> it's okay if it doesn't sound big at first. first version should take over a small specific market and expand from there. unpopular but right -> take the time to think about how the market will evolve. market size in ~10 years. think about growth rate of the market instead of its current size. small, but rapidly growing market! people are desperate for a solution -> you cannot create a market that does not exist -> there are many great ideas, pick and find one you really care about.. "SW is eating the world" -> "Why Now?" - dixit Sequoia - have a great answer to this question -> Build something that you yourself need. You'll understand it a lot better. -> Get close to your customers. Work in their office or talk to them multiple times a day -> If it takes more than a sentence to you know what you're doing, it likely is too complicated -> "Do more when you're a student." Think about new ideas and meet potential co-founders -> Think about the market first and you'll have a big leg up 2. Product -> Great Idea > Great Product > Great Company -> Until you build a great product, almost nothing else matters -> Sit in front of the computer working on product, or talk to your customers -> Biz Dev, Raising Money, Raising Press, Hiring are significantly easier when you have a great product -> Step 1: build something that users love -> YC is all about: Exercise, Eat, Sleep, Work on Product and Talk to Customers -> "It's better to build something that a small number of users love, than a large number of users like" -> Get growth by word of mouth. This works for consumer as well as enterprise products. You'll see organic growth. If you don't have some early organic growth, then your product isn't good enough. It's the secret sauce to growth hacking. -> Breakout companies always have a product that's so good that grows on word of mouth -> Great products win. Make something users love. -> Keep it simple. Look at first versions of Google, Facebook, iPhone -> Founders care about small details. They're fanatical -> One thing that correlates with success is hooking up PagerDuty to their ticketing system. Response time within an hour. -> Go recruit your first users by hand to get feedback every day. -> When everyone tought Pinterest was a joke, Ben Silbermann walked around coffee shops in Palo Alto to convince people to use Pinterest. He set Pinterest to the home page in the Palo Alto public library so people would discover the website. Do things that don't scale. Read Paul Graham's essay. -> Create a tight feedback loop. What do users like? What do they pay for? What would make them recommend it? -> Try to keep your feedback loop going for all of your companies' life -> Do sales and customer support yourself in the early days. This is critical. Do not hire these people right away. -> Keep track of metrics. Look at active users, activity levels, cohort retention, revenue, etc. Be brutally honest if they don't go in the right direction -> If you don't get your product right, nothing else in this class will matter. Why start a startup? -> "It's glamorous", "You'll be the boss", "Flexibility", ... -> Entrepreneurship gets romanticized -> The reality is not so glamorous. It is a lot of hard work. You're sitting at your desk, focused, figuring out hard engineering projects. It is quite stressful. -> Founder depression is a real thing. If you start a company, it's gonna be extremely hard -> You have loads of responsilibity -> You're responsible for the opportunity cost of the people who decide to follow and help you out -> You're more committed. A founder cannot leave a company. For 10 years if it's going well. Probably for 5 years if it's not going well. -> "Number one role of a CEO is managing your own psychology" -> You're always on call, you're a role model. You'll always be working anyway -> If you joined Dropbox or Facebook early on, your financial reward might be a lot better than when starting a startup -> If you join a later stage startup, you have more impact - massive userbase, existing infrastructure, work with an established team. E.g. Brett Taylor was employee #1500 at Google and he invented Google Maps. He got a big financial reward for this. -> What's the best reason? You can't NOT do it. You have to make it happen -> Do it out of passion -> The world needs it (if not, go do something else) and/or the world needs you (you're well-suited to do it). The world needs you somewhere, find where.
petersouth 12y ago
Sam Altman's law of conservation of how much happiness you can put into the world with the first product from a startup -> the total amount of love is the same it's just a question of how it's distributed.
- liantics 12y ago
  That line cracked me up. A great observation in an unexpected wrapper.
cjmb 12y ago
On Sam's part -- am I the only one who got the "heard this before" feeling? Obviously he attributed everything pretty appropriately, but I thought I could've placed 50-75% of his sentences in the "Summary" sections of various PG essays, Peter Thiel writings, and other luminaries of the startup-sphere. I'm not saying it was wrong or that his delivery was bad. But I remember reading the Class Notes from Thiel's class after Blake made them available and thinking "Wow, there's some original thoughts in here I haven't come across before." Maybe it's because PG already put it all to paper, and some of these other figures just added post scripts. Maybe it was a solved problem by the time Sam got a seat at the table. Just some food for thought. Looking forward to the other lectures regardless.
- dkural 12y ago
  I think on Sam Altman's part this is deliberate. He has distilled the core message of Grahamsian thought beautifully into slides. YC has been espousing this specific philosophy for a while, and I think Sam & PG both represent this school of thought. This is part of the reason I believe PG picked Sam, he thought Sam internalized & helped form the YC approach to startups. The two are like Epicurus & Lucretius; Leucippus & Democritus.
- AVTizzle 12y ago
  Surely, but for lecture 1 in a "Startup 101" series, you don't need to reinvent the wheel. We're talking about a very, very well documented path at this point, with established best practices.
smaili 12y ago
Can non-Stanford students drop in or is this for students only?
reelgirl 12y ago
I loved the video and it really encouraged me to keep on trying.
dkural 12y ago
I disagree that a startup should commonly start with an "idea". Start with an unmet need people are willing to pay for. Or take an existing category with a lot of bad products and make a truly better one that improves every aspect of the experience. Often, you'll see many startups working on the same "idea". Something like Google is truly rare (a genuinely innovative approach to search).
- steve_taylor 12y ago
  Building a product for which people are willing to pay to meet an unmet need is an idea. As is building a good product in an existing category that contains only bad products. Just plug in the unmet need or existing category and you have the kind of ideas that sama talked about in the lecture.
  - dkural 12y ago
    True, it is an idea. I guess I was responding to the order in the slide deck. I'd rather have (1) more specific, "market need". I think going idea -> product might be misunderstood by younger folk. The whole point of doing idea -> product super fast is to validate the market.
hayksaakian 12y ago
Sam kept bringing up the 10 year number But: YC (and therefore every YC company) is < 8 years old What startups succeeded after this long (AND were still actually considered startups)
- bayesianhorse 12y ago
  Some startups "succeed" earlier than the 10 years. Lot's of big exits beforehand, lot's of growth afterwards. Also a lot of founders and employees have plenty of success in between, depending on salary, funding rounds etc
- adamt 12y ago
  A startup can easily take 10 years from funding to the point where it's purchased or no longer needing more investment. My first business was founded in 1995 before being sold (for decent money - e.g a successful outcome) in 2011. Was the business still a startup after 10 years? I would argue yes. There were still many ups and downs, funding challenges, near-death experiences etc, and our culture was still largely that of a startup business. Even if you consider the massive tech IPOs and classic success stories, the timeline between incorporation and IPO is pretty long. Microsoft was founded in 1972 and IPO'd in 1986. Google took 9 years from incorporation to IPO, and it was 8 years from Zuck launching 'thefacebook' until the Facebook IPO. I think this backs up Sam's assertion that a startup is a 10 year commitment for a founder.
deleted 12y ago
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dkaplan 12y ago
Why did we submit questions if the video was just going to cut out at the Q&A
rdlecler1 12y ago
Sam: "Step 1, build something that users love" How does this compare with an MVP approach where you put something out there first and test the market. Then there is the issue of runway. With enough time, you can start with an MVP and iterate in private beta until users love it, but in many cases a founder is not going to have that kind of runway. They have just enough resources to put something together, and they're going to have to go out to the market with that and iterate on the fly. Unfortunately, once you do get out there and need to take on all of the other responsibilities, then that's time taken away from building a great product.
- napoleond 12y ago
  The two concepts are not mutually exclusive. If you target a big enough pain point, your first users will love the product even if it lacks polish. It's also important to remember that MVP != shit. It is the minimum viable product; in the context of the YC motto it's the minimum product that a small, core group of users will love. This is all theoretical on my part, FWIW--I have not successfully built such a thing on my own yet.
- bayesianhorse 12y ago
  The MVP is a philosophy to get to "something that users love" as fast as possible.
deleted 12y ago
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simonebrunozzi 12y ago
Sam, your voice sounds very irritating to me. Sometimes too fast, no "tempo". I think you should change the way you deliver your points to a classroom. (constructive feedback, not rant)
simonebrunozzi 12y ago
I also don't agree that working on a startup should mean no work-life balance. There's a limit to how productive you can be, and working 90 hours/week is not going to make you more productive than working 45 hours/week. If you work too much, you'll do more mistakes. Ryan Carson, founder of TeamTreeHouse, can teach us a lot about it. http://ryancarson.com/ http://ryancarson.com/
pmosh 12y ago
subtitles please!!
graycat 12y ago
Just watched the lecture. The first part of the lecture was on the "Idea", and I want to give an alternative approach. First, do I believe that what Altman describes can work and is what he has seen has worked? Definitely yes. Second, is that all that can work? I don't think so. Third, do I suggest that the alternative approach I describe here will be common and/or always better than what Altman describes? No. Sometimes better? I do believe so. But even if the alternative approach is rare, that should not be a huge obstacle since the success Altman is talking about, the goal, is also rare. That is, for the rare successes, we should expect that some of the means will also be rare and not common. But for the alternative approach, given that it is rare, we should have some solid evidence of its effectiveness, and I believe that we can. I want to propose that it can be possible to have an idea, test it, essentially just on paper, and, if it passes the test, be quite sure the resulting product will be good and fairly sure the resulting company will be successful. Yes, I'm proposing that the alternative approach provides a way to have the idea be by far the most important part of the work and the rest, e.g., the execution, be routine. Or I would say that a good idea is one that makes it through the filters of my alternative approach. Then I am claiming that with a bad idea, yes, execution is everything but with a good idea execution is routine. Yes, to me, the ideas like Altman describes look to me as far too unpromising to be taken seriously and promise that, yes, indeed, execution will be many times more difficult than the idea. Indeed, Altman is admitting that many start ups fail, that building a successful start up is difficult. I would agree that, starting with a bad idea, building a successful start up is difficult. Now, for the alternative approach for finding a good idea for a start up: First, the alternative approach is very selective, that is, rejects a lot of ideas. Some of the ideas the approach rejects will be able to be the basis of successful companies. The alternative approach rejects ideas when it just cannot build a rock solid case that the idea is good. E.g., the alternative does not know how to conclude that the ideas for Facebook or Twitter would lead to success. The alternative wants to accept only good ideas and in doing so will reject a lot of good ideas. The alternative approach asks for a lot from an idea, and many good ideas will not have that much. Second, Altman does emphasize that a need and a corresponding solution one person sees in their own life can be relevant. Okay, I've been there and done that, that is, I've seen needs and solutions. Third, what I'm proposing for an alternative is, at least in broad terms, and compared with what Altman describes, much older, much more thoroughly tested, and with a much better, really excellent, track record. Actually, we all know at least something, maybe a lot, about the alternative and its track record. I learned about the alternative early in my career doing mostly US DoD projects around DC and also some other experiences, but there is much more information about the alternative readily available far from me. So: (1) Need. To make the alternative work, we have to start with a suitable need, i.e., market need, that is, a suitable problem to solve. We want the first good or a much better solution to be, obviously, no doubt, a "must have" and not just a "nice to have". Next, for this need, we want to find the first good or a much better solution, presented just on paper. Then we want to evaluate the solution, also just on paper. Sorry, no, we don't "get out of the building" and talk to other people. Big example of such a need? Okay, we'd like to have a safe, effective, inexpensive one pill taken once to cure any cancer. So, yes, early on, for Facebook, Twitter, Snapchat, a lot of doubt. For such a cancer pill, we have "no doubt"; to know this we don't have to "get out of the building", ask people, throw trial solutions against a wall to see if there is interest, etc. (2) Solution. Given the need from (1), we try to find a solution. If we fail here, and likely we will, we return to (1) and find another need. E.g., clearly so far the one pill cure for any cancer will fail here for at least a long time. We want a solution that we are sure, "no doubt", will be the first good or much better. Here's a way: Start with the real problem and see what about it we can assume. Then convert this problem and its assumptions into a mathematical problem. So, we are limiting ourselves to needs that lead faithfully to mathematical problems. Sorry, no intuitive heuristics need apply. Next find a mathematical solution. Develop the mathematical solution just on paper, as carefully done theorems and proofs, and then severely check the proofs. Then observe that it is totally clear that the mathematical solution will be fully close enough to the first good or much better solution we want for the need. If any of the work here in step (2) fails, then return to step (1) (3) Product. Write software to do the data manipulations specified by the mathematical solution. Severely check the software. That's essentially the product. If fail here, then return to (1). Track record? Okay: (A) GPS. (B) The version of GPS done first by the US Navy for the SSBNs. (C) Beam forming in passive sonar. (D) The A-bomb of WWII -- all three exploded just as planned. (E) The H-bomb of the 1950s -- first test, 15 million tons of TNT. (F) The SR-71, for Mach 3+, 80,000+ feet, 2000+ miles without refueling; proposed by Kelly Johnson just on paper; built and flown just as proposed. (G) Keyhole satellite, essential a Hubble, before Hubble, but aimed at earth instead of space. (H) The F-117 stealth, essentially a modified F-16, flew as planned, through Saddam's anti-aircraft artillery without a scratch. (I) The airplane the Wright brothers took to Kitty Hawk, NC. (J) Phased array radar for Aegis class ships. (K) High bypass turbofan engines. (L) RSA encryption. (M) Hubble. (N) LHC. (O) COBE, WMAP, and Planck. And there are many more. Such projects that failed in execution? Tough to find. Batting average? Near 1000. Right: Projects A-O are all just technical projects. Right. But in each case they provided the intended solution for the need. As we have explained, to have a successful technical solution lead to a successful solution in business, we want such a solution to be a "must have"; else we return to (1). The high bypass turbofan jet engine a commercial "must have"? Darned right: It saves an ocean of expensive jet fuel. How? Simple: Burning jet fuel releases energy. Want to convert that energy to kinetic energy and get the resulting momentum. But for mass m and velocity v, kinetic energy is (1/2) mv^2 and momentum is just mv. So, we pay in energy (1/2) mv^2 and get in the momentum we want mv. So, since in kinetic energy we have v^2 but in momentum have just v, to get more of our desired momentum from our given, available energy, we want m to be large and v to be small. So, mostly we want to use the hot gasses from the combustion to turn a big ducted propeller that moves a huge mass of air at a low velocity. Instead, the military jet engines intended for supersonic speeds, and long used in commercial aviation because they were available, move a smaller mass at high velocity. So, for commercial, subsonic flight, a high bypass turbofan is a "must have". Then have the first good one or a much better one, as we have assumed, and very much should have a successful business.
Reltair 12y ago
The recommended reading from the final slide: - The Hard Thing About Hard Things - Zero to One (CS 138A) - The Facebook Effect - The 15 Commitments of Conscious Leadership - The Tao of Leadership - Nonviolent Communication
- acrefoot 12y ago
  I cannot find "The 15 Commitments of Conscious Leadership". Is it a book? I don't see it on Amazon. Is it an article? Does someone know the authors (I can't quite make it out on the image), or the link? EDIT: http://consciousleadershipforum.com/wp-content/uploads/2011/05/15-Commitments-of-Conscious-Leaders.final_1.pdf http://consciousleadershipforum.com/wp-content/uploads/2011/... is the answer, I believe.
  - JSeymourATL 12y ago
    Evidently this book is scheduled to be published in November 2014. Nice way to create pre-sales buzz via the Stanford lecture. Here's a link> http://www.businessconjunctions.com/2014/09/05/do-good-leaders-really-have-integrity-guest-post/ http://www.businessconjunctions.com/2014/09/05/do-good-leade...
bayesianhorse 12y ago
There are easier ways to get rich? For Stanford Graduates, maybe. For those who don't have a degree in an ultra-paying job, I'd really like to know an easier way. I'm usually sceptical about start-up chances, I know how much work it means, and I know that a lot of early-stage employees get rich, too. Yet, I don't think you can get rich this fast/easy with a modest degree... Even as early-stage employee often you'll still get a raw deal or you overestimate their chances of success.
- tim333 12y ago
  I think some fairly average people become millionaires along the lines of manage a McDonnald's for a bit, get finance to have your own one, expand to have 2 or 3 at which point you'd likely be worth $1m+
  - bayesianhorse 12y ago
    So I don't know how McDonnalds works exactly, but you would either need the capital to buy (borrow etc) a restaurant or you would have to be chosen to run a restaurant. Meaning you have very high-paying abilities. And in some sense, growing a franchise-taking enterprise could be technically called a start up even if not particularly innovative!
bcjordan 12y ago
To temper some of the nit picks, just wanted to say this lecture felt insightful and fun to watch. I hope YC continues this trend of investing effort in shareable advice content in the spirit of pg's essays. This is the first time a lot of the YC flavor of startup how-to material has been presented in a lecture video format[1]. I suspect much of the long-term audience of these lectures wouldn't have come across pg's essays, Blake Masters' Peter Thiel startup notes or Dustin Moskovitz's excellent Medium posts before. Maybe some lecture watchers were allergic to long-form articles, or maybe some would rather receive a weekly email with videos. Myself, I consume this sort of material on my walk to work, either text-to-speeching essays or listening to lectures. The video lecture format was especially fun, I watched it full screen on the TV while eating an enchilada and poking my fiancee about points she might find relevant to her side project. How often do you get to consume this sort of content like that? Having read pg's essays[2], I still had a number of "aha!" moments from Sam's slides and hearing his presentation. And hearing Dustin describe in his low-key tone why you should be employee 1,000 at an obviously successful startup rather than start your own, and backing it up with charts and photo-jokes about the elephant in the room was just entertaining. Seeing "this is how we'll teach you to do this thing. Here's an expert on why not to do this thing." is not always the type of juxtaposition you get with standalone online essays. Looking forward to the next lecture. I'd say it's well worth the time and opportunity cost of putting this all together, so thanks all involved. [1]: Yes, some Lean Startup™ and Principles of Entrepreneurship™ flavored material has been presented in lecture format before, but not YC™ lensed AFAIK. [2]: Okay, I skipped the early seemingly pure-Lisp-focused ones. Though like Zen and the Art of Motorcycle Maintenance isn't about a long motorcycle trip, and maybe pg's Lisp essays are not really all about writing Lisp?
polskibus 12y ago
Is there a download link for the video to make offline viewing possible?
- Walkman 12y ago
  You can use the yotube-dl script: http://rg3.github.io/youtube-dl/ http://rg3.github.io/youtube-dl/
xavierkelly 12y ago
This is a really good video lesson. I fell inspired to work harder on my dreams of growing my startup.
jtwebman 12y ago
Wow this was good information. It really got me thinking on what my reasons are and how bad they might be. Did anyone else get that from this? I would also love if they cover how you work on a startup if you still have the 40 hours a week programming job as well. And how to avoid getting in trouble or legal issues with your job.
coralreef 12y ago
Sam mentioned that the idea was actually quite important. I recall PG saying that YC would often invest in the team because ideas change and aren't as important as good founders. Anyone have thoughts on this?
- anthony_franco 12y ago
  Like a good startup YC wanted to validate their assumptions and experimented with "no-idea" teams. Considering they don't have that option anymore, I'd venture to guess that they disproved PG's original saying and are now realizing that a good idea correlates with success. That's my guess.
  - coralreef 12y ago
    Having no idea is crazy though, you want someone with at least some idea of what they want to work on. Also I don't think they accepted enough no idea teams to have a good statistical reference.
howradical 12y ago
Here are some timestamped notes synced with the video: https://timelined.com/how-to-start-a-startup/lecture-1-how-to-start-a-startup https://timelined.com/how-to-start-a-startup/lecture-1-how-t...
piotry 12y ago
Funny that I just wrote about how I was considering killing a startup I started: https://medium.com/@piotr/i-failed-82b9469977ac?source=latest& https://medium.com/@piotr/i-failed-82b9469977ac?source=lates... Probably the best way to know how to build a successful one is knowing how to build one that won't fail!
dheer01 12y ago
Disagree completely with the very first opinion expressed - 'Don't do a startup just to do one - do it only if you really want to solve a problem'. India has produced about 3 big ~billion dollar compaines in the recent past - inmobi, flipkart, druvaa. None of the founders really started to 'solve' a problem they were passionate about. What they were really passionate about was just 'starting up' - and based on their personal strengths, industry knowledge and what they thought could be sold, stumbled on these big businesses. This was probably true for HP too. It is absolutely ok to do a startup just for the heck of it. Get in the game and find out the intersection of what you can build and what a customer will buy. If you build a big business - the passion will follow. Do not forget to bullshit though on your big interview on how the so solved problem kept you awake at nights - it makes for some good reading and impressionable pr.
- rdlecler1 12y ago
  That could be more survivor bias. I think what he's saying is that if you're going to start something you better be in love with it because there will be bad times and you're going to need to lean on that passion to keep going. If you happen to get lucky and ride a rocketship then this requirement will be less applicable.
  - sharemywin 12y ago
    but since he came from a rocketship, I think he's pointing no matter what it's hard on you.
AzmD 12y ago
Ideas are important ... but if Ycombinator stresses so much on the idea being really great then they should take these lines off their website (its on the "Apply" page) "Your idea is important too, but mainly as evidence that you can have good ideas. Most successful startups change their idea substantially."
steve_taylor 12y ago
It's refreshing to see such importance placed on the idea and building a product that users love.
gadders 12y ago
Just a quick question - are these a Sam only initiative, rather than YC? Is that why they are on Sam's domain?
lawsohard 12y ago
looks like rap genius is putting up a full transcript http://tech.genius.com/Sam-altman-how-to-start-a-startup-lecture-1-annotated http://tech.genius.com/Sam-altman-how-to-start-a-startup-lec...
agentultra 12y ago
Great presentation and very clear that the rest of the course will be focusing on advice for SV-style hyper-growth startups. There's still some good advice for those of us not interested in that life style. I was particularly taken with the idea of building something that just a handful of people will really love. Having a rapt-audience for your product would be a huge win if you decide to build more, scale up, or sell out. I think it's really good that they're at least trying to convey how difficult building the style of companies they're talking about can be. I can appreciate how challenging that must be. The cultural yard-stick for success these days are valuations and IPOs. There's a ton of pressure to go that route especially from YC. I'm glad they're being conscientious about it even if they don't 100% succeed at removing some of the glimmer from the stars in peoples' eyes. There's nothing wrong with wanting to start a smaller enterprise and aspire to keep just a handful of customers you know by name.
kartikkumar 12y ago
One thing that bothered me about the lecture was reinforcement of the idea that working hard is the same as working long. I can appreciate the fact that at times as a founder you have to work all hours of the day, but surely this is not the optimum scenario for maximum productivity. If I look at my own work situation currently, it's abundantly apparent to me that the law of diminishing returns affects me strongly after working 8-10 hrs straight. I would have expected the message to be that the most successful founders in the long-term are the ones that figure out the right work/life balance, to ensure they don't burn out. In other words, successful founders are able to be focussed and driven for the hours that they work, and in recharge-mode when offline. This is intuitively what I would have expected and I'm curious if the message from the lecture of "work all day, everyday" is really right.
- sharemywin 12y ago
  Let's say you have 10 employees and you decide to work 7 hours/day. All your employees decide well sounds good. Versus, let's say you work 10 hours day and on average your team work 9 hours day. 3 plus 20 = 23 hrs * 350 days = 8000 more hours that year. Your an investor which team do you pick?
  - kartikkumar 12y ago
    I think some part of your comment is missing, as I can't follow the numbers. The whole point of my comment is precisely about the fact that extra hours don't necessarily represent proportionately greater productivity. If investors only look at number of hours you work and not what you produce, then I'd be fearful for their cash. The lecture conveyed the "all day, everyday" message and that goes against my intuition.
ckvamme 12y ago
I posted some casual, but in depth notes on my site for anyone wanting to skip the video: http://chriskvamme.com/ http://chriskvamme.com/
yatoomy 12y ago
I'm interested in Thiel's upcoming lecture. It seems like there has been a hard shift from "move fast/lean/mvp/pivot" to "make a monopoly". Economically speaking, it is accurate. Hopefully it will motivate people to go after problems previously taboo, ie healthcare, education, finance etc, and less about messaging and photo apps. Our world may depend on it.

520 points by declan 12y ago

Don't get me wrong I love Sam Altman I love y-combinator but a small part of me is thinking that a good first step to start a startup is to not watch that video and find your own way. Not because it's probably not great but because a startup is not a formula. Your path is your own.

PublicEnemy111 12y ago
I would imagine this class is not a cookie cutter business plan but rather "here's the challenges startups face and how to approach them." So likely a MOOC form of YC
rdl 12y ago
Ironically that's what the first 15 minutes is..."don't start a startup unless it's the best way to accomplish something you want". "don't start a startup unless it feels like an important mission" etc.
mladenkovacevic 12y ago
I agree. It strikes me as a very inefficient use of an enterpeneur's time who wants to launch a business to first watch a series of 20 lectures about all aspects of starting a business. Just start doing it, and whenever you get stuck or need feedback ask someone whose expertise you trust for advice on a particular issue you're dealing with at that moment.
- scobar 12y ago
  Perhaps it's not the most efficient use of an entrepreneur's time, and I agree that it definitely doesn't have to be the first step. Working on an idea helps you learn fast, but there was so much I didn't know at first (I still have a lot to learn). I am so grateful that resources like this exist, and I expect this one by YC to have a higher density of quality info in the time spent watching lectures.
  - McDoku 12y ago
    “Principles and rules are intended to provide a thinking man with a frame of reference.” -- Karl von Clausewitz
    - ThomPete 12y ago
      Running a company is not about neither principles nor rules. To the extent it does it's doesn't require a thinking man.
      - McDoku 12y ago
        Please elaborate.
        ThomPete 12y ago
        Running a startup is not an intellectual exercise which is the context for that quote. Running a startup is more like improvising in a jazz band. There is some theory behind it but if you think you stink.
        McDoku 12y ago
        ...talent and genius operate outside the rules, and theory conflicts with practice - Carl von Clausewitz I would argue that he agrees. However... The general who wins the battle makes many calculations in his temple before the battle is fought. The general who loses makes but few calculations beforehand. - Sun Tzu Both intellectualism and the ability to improvise are necessary. Arguably, if you have to adapt then a calculation has failed. Hearing the sound of thunder is not the mark of a keen ear, neither is entering battle and winning the mark of a great general. There is no point reinventing the wheel. Many have come before and it seems wise to assimilate their experience with a critical mind. Instinct ultimately rises from your existing body of knowledge. And even in jazz it emerges from a bass line.
- tim333 12y ago
  Maybe a bit of both is the answer. Just watch lectures and read and nothing gets done. Rush ahead and do stuff without studying and you risk dumb errors that you could have avoided.
mpg33 12y ago
I agree, however since he has seen and dealt with so many startups he gets to notice a lot of patterns about what makes startups more likely to be successful than the average person. There was definitely some valuable info in the lecture.
- ThomPete 12y ago
  I am pretty sure you are right. Whether that value is intellectual or actionable is what I am not so sure about :)
  - mpg33 12y ago
    I found it was more "here's what you should notice" than "here's what you should do".
    - ThomPete 12y ago
      Yes it's all fine. All I want to say is that most ycombinator companies fail even though they have access to this advice.
TimPC 12y ago
Disagree strongly. These lectures are about 40 minutes and seem jam packed with good advice. A start-up isn't a formula but it does follow certain trends. Doing it wrong is a disaster and if you're taking on what can be a 10 year commitment without spending less than 20h exploring advice from some of the best data and people in start-ups you probably have misaligned your priorities. I suspect heeding the advice in the first lecture of this course would save most start-ups more time and money than 20h of the "CEO" co-founder.
- ThomPete 12y ago
  Doing it wrong might actually sometimes mean doing it right. Ycombinator companies have access to this advice yet most of these companies fail. Thats just how it is. You can get structural advice from a laywer the rest is up to you to explore.
  - TimPC 12y ago
    YCombinator companies have a far higher success percentage than the general start-up population. Most fail is hardly a criticism when the default environment is 90% of start-ups fail. Moving 90% to 60% for example means your chance of success quadruples, but it still meets your criticism of "most fail".
    - ThomPete 12y ago
      The reason they don't fail is most likely more to do with the fact that yCombinator is already a powerhouse more than with the advice.
    - TimPC 12y ago
      Can't nest comments any further, but one of my previous companies got rejected at YC before becoming the most recent example of how not to apply to YC, and having a successful exit. I recognize the lines from the application, we're literally the example of what not to do according to YC, had a decent outcome and I'm still convinced this lecture had lots of great advice and if I were to start myself I'd follow more of it. Take what you will from that.
pbreit 12y ago
There's still going to plenty of "finding your own way". I suspect most founders and early employees could find a lot of useful information in the material.
- ThomPete 12y ago
  Not disagreeing. But whether it's actionable is what I would question.
  - TimPC 12y ago
    Not spending on PR or going to conferences pre-product is highly actionable for a large number of start-ups who do the opposite. Balancing the early team to be able to execute a product people love before scaling a marketing organization is highly actionable as well. The advice on doing a start-up for the right reasons is the most actionable of all.
    - ThomPete 12y ago
      And yet the reality is that this worked for some. There is no meta advice, no big secret besides find out how to make it work for you.
    - TimPC 12y ago
      Yes. This works for some. If I ask you to choose between winning a bet where you roll 1,2,3,4,5 on a d6 or winning a bet where you roll 6, I think the fact that sometimes you win with 6 is true but almost useless.
      - ThomPete 12y ago
        Problem is that you haven't shown that to be the case. You are just making up your own premises to prove a point you haven't proven.

bobbles 12y ago

Are transcriptions of these videos going to be provided? It's much easier for me to consume lectures as text rather than watching the video.

porter 12y ago

Ycombinator leading the way once again. Looking forward to this!

porter 12y ago
I guess all the people downvoting this are from other incubators. Not sure why this is being downvoted.
- dkural 12y ago
  Because your comment does not add anything to the discussion.
  - tim333 12y ago
    Or adds the wrong thing. Go team A, we're better than team B stuff is not that productive.

smuss77 12y ago

@3:12: "There are much easier ways of getting rich." Could I get some examples? Thank you!

hawkice 12y ago
Get a job programming. 10-year average pay gap is about 33%, which is not an insubstantial amount closer to "rich".
tdicola 12y ago
Marry into a rich family.
lukasm 12y ago
steal, inherit or create value.
robomartin 12y ago
Waiting for that very answer here: www.ProjectAmericanDream.com
blobbers 12y ago
This could be helpful to you for purposes of comparison: https://www.wealthfront.com/tools/startup-salary-equity-compensation https://www.wealthfront.com/tools/startup-salary-equity-comp...
foobarqux 12y ago
Go into finance?
petersouth 12y ago
I had a few of those moments where I found something really interesting and wanted to hear more detail, but then the subject just changed.
TimPC 12y ago
So here is a simple idea. If you're going to work 80h/week anyway and you're a talented coder: source one contract job billing hourly in London and another in SF. Working out of EST you work 5AM-9PM on a 10-6 in both places -- Billing $80/hr with a good corporate setup and working 4000 hours/year you can get 320,000/year, if you have EU citizenship (potentially from one of the return countries) and US citizenship you can probably setup a decent double irish and keep about 280,000+ of that in offshore money. If you want the money in the US and are clever about it you can keep over 250,000 of that money. I suggest London and SF because the 8h timezone difference and high cost of living in both cities. But to give you an idea this is basically $2.5M after-tax locked in the time it takes to make a 10 year exit. That's 1/4 of the first example and way more than 25% of start-ups fail. Admittedly $2.5M isn't the kind of resources that lets you go after solving the biggest problems in the world, but it's pretty solid by developer standards. 1.8X is a good return for a venture capital fund and they have more favourable stock than employees or founders, so you have to think the average start-up return for founders, even enormously talented ones is far worse than that. Edit corrected typo in time worked.

hanley 12y ago

Very interesting lectures and it's great that they are doing this. Both of the speakers could benefit from a public speaking class though.

steakejjs 12y ago

This seems like a really valuable recruiting tool for YC. Start early at Stanford, groom freshman to have a great mindset and understanding of the fundamentals, fund them and make money. YC is still a for-profit company, after all.

7Figures2Commas 12y ago

"All the advice in this class is geared towards people starting a business where the goal is hyper-growth and eventually building a very large company. Much of it doesn't apply in other cases and I want to warn people up front that if you try to do these things in a lot of big companies or non-startups it won't work."

lukasm 12y ago

I find it artificial when the lecturer reads the presentation - it's not a joy to listen.

andrewchambers 12y ago
I thought it was fine.
dkaplan 12y ago
I'm definitely looking forward to hearing from the people who have built companies with their presentation abilities

gbachik 12y ago

It was so good I wish It was thursday. I want mooooore!

tucaz 12y ago

I've been watching it for 8 minutes as of now and despite the fact that the content looks good it really bores me to death that he is reading the whole thing like a robot. It does not sound like a natural converstation or presentation. Does anyone else share this feeling?

deleted 12y ago
[deleted]
andrewchambers 12y ago
Not at all.
sloanesturz 12y ago
I was there in person, and I felt the same way. Very surprising.
bequanna 12y ago
I disagree. The content is great and communicated well. Some people prefer making presentations having only some general idea of what they are going to say before hand. Other people spend a good deal of time thinking about exactly what they want to say and how they want to say it. Both presentation styles are perfectly valid.
- peter_mcrae 12y ago
  Agreed that both presentation styles work. That said, regardless of the "strategy", the delivery needs to be clean to be seen as authoritative (unless a tremendous amount of respect as been pre-built). Imagine your CEO delivering an all-hands with 47 ums and reading from a script -- how much confidence would that instill?
- pyre 12y ago
  > Both presentation styles are perfectly valid. Where did the parent claim that this was an 'invalid' presentation style?
peter_mcrae 12y ago

jduhamel 12y ago

The presentation style is a bit rough but the material is gold.

gorkemyurt 12y ago

its really sad that he is reading the presentation..

mathgenius 12y ago
Yeah.. And not very well. I'd much prefer incoherent rambling, than this robot presentation. Put the script on a blog somewhere.

mbesto 12y ago

Dustin talks about Financial Reward and Impact of "why to do a startup" for examples like Facebook and Dropbox here: https://www.youtube.com/watch?v=CBYhVcO4WgI#t=2161 https://www.youtube.com/watch?v=CBYhVcO4WgI#t=2161 Are these values correct? If you join Dropbox as employee #100 with 10bp, you're 10bp is going to get massively diluted through subsequent rounds, no? Isn't it more like $1-2mil? And also this is wealth on paper, which means that you don't all of the sudden have $10mil sitting in the bank. I don't think he explains that but that's how it's portrayed, and is probably worth explaining, given the audience.

rdl 12y ago
The dilution you'll get from Series B onward is maybe 30% total. That's not "massive" IMO. (Obviously much higher dilution in a down round, if you're a founder who gets kicked out and crammed down, or if the company has a marginal exit, you're not part of the retention, and they choose to put all the acquisition into retention...) Being a senior-ish employee at a Pre-IPO (i.e. Series C/D company, on a great trajectory, and an obvious winner) is probably the optimal outcome for total compensation; for cash, consulting, if you can find the right niche. (Startup founder MAY actually be superior to Seed/Series A startup employee, though, especially due to both tax issues and what happens when the company does anything less than stellar. OTOH, you can jump ship as a Series A employee, even manager, with no real negatives; if you're a founder, you're pretty much committed until the end, or at least until some serious inflection point, especially in a suboptimal outcome.)
7Figures2Commas 12y ago
Based on the holdings disclosed at the time of Facebook's IPO, and even accounting for the rise in the company's stock, I doubt very much that employee #100 at Facebook is sitting on $200 million in gains from his or her options or RSUs. In the case of Dropbox, looking at what the Box founders own according to Box's S-1[1] probably provides a more realistic comp. One thing worth noting is that Dustin's slide apparently fails to take into account the cost of exercising options. You can absolutely make a lot of money at a startup, and you don't even need to be one of the earliest employees to do so, but today's valuation trend works against employees. Startups are raising money at significant valuations earlier and earlier, so even early employees aren't receiving cheap equity. As an example of this, consider that Facebook had sold shares at a $15 billion valuation just three years after the company was founded. Google went public at a valuation under $27 billion (edit: corrected). If you had your choice, you'd almost certainly have received a better equity package as an early rank-and-file employee of Google versus Facebook. [1] http://fortune.com/2014/03/25/aaron-levie-owns-more-of-box-than-you-think/ http://fortune.com/2014/03/25/aaron-levie-owns-more-of-box-t...

bramgg 12y ago

@2:22: "You may still fail. The outcome is something like Idea x Product x Execution x Team x Luck, where Luck is a random number between 0 and 10,000, literally that much." What does that mean? I'm not trying to rip on the video or anything like that, but am genuinely curious as to how much luck Sam Altman thinks is involved in a startup.

derekchiang 12y ago
That simply means if you are extremely unlucky (e.g. luck being 0, like being hit by a bus), then all the other factors don't matter. On the other extreme, extreme luck can turn your company around even if you don't do so well on the other parts.
bayesianhorse 12y ago
He believes he should recommend to risk a substantial amount of life blood (and money) on the chances of having a big success. Not to anyone, but a lot of highly talented individuals. It depends on his ethics, of course, but I'd say this recommendation alone means he believes there to be a substantial chance...

philipDS 12y ago

I made some notes while watching/listening. Might include minor errors or misinterpretation on my side 4 critical parts: Idea, Team, Product, Execution 1. Idea -> Good startups take about 10 years -> Startup should feel like an important mission -> Hardest part coming up with great ideas: best look terriblea t the beginning (e.g. search engine, social networks limited to college students without money, a way to stay at stranger's couches) -> "Today only a small subset of users want to use my product, but I'm going to get all of them" -> You need to believe and willing to ignore naysayers -> Most people will think your idea is bad: be happy. they won't compete. it's not dangerous to tell people your idea. -> it's okay if it doesn't sound big at first. first version should take over a small specific market and expand from there. unpopular but right -> take the time to think about how the market will evolve. market size in ~10 years. think about growth rate of the market instead of its current size. small, but rapidly growing market! people are desperate for a solution -> you cannot create a market that does not exist -> there are many great ideas, pick and find one you really care about.. "SW is eating the world" -> "Why Now?" - dixit Sequoia - have a great answer to this question -> Build something that you yourself need. You'll understand it a lot better. -> Get close to your customers. Work in their office or talk to them multiple times a day -> If it takes more than a sentence to you know what you're doing, it likely is too complicated -> "Do more when you're a student." Think about new ideas and meet potential co-founders -> Think about the market first and you'll have a big leg up 2. Product -> Great Idea > Great Product > Great Company -> Until you build a great product, almost nothing else matters -> Sit in front of the computer working on product, or talk to your customers -> Biz Dev, Raising Money, Raising Press, Hiring are significantly easier when you have a great product -> Step 1: build something that users love -> YC is all about: Exercise, Eat, Sleep, Work on Product and Talk to Customers -> "It's better to build something that a small number of users love, than a large number of users like" -> Get growth by word of mouth. This works for consumer as well as enterprise products. You'll see organic growth. If you don't have some early organic growth, then your product isn't good enough. It's the secret sauce to growth hacking. -> Breakout companies always have a product that's so good that grows on word of mouth -> Great products win. Make something users love. -> Keep it simple. Look at first versions of Google, Facebook, iPhone -> Founders care about small details. They're fanatical -> One thing that correlates with success is hooking up PagerDuty to their ticketing system. Response time within an hour. -> Go recruit your first users by hand to get feedback every day. -> When everyone tought Pinterest was a joke, Ben Silbermann walked around coffee shops in Palo Alto to convince people to use Pinterest. He set Pinterest to the home page in the Palo Alto public library so people would discover the website. Do things that don't scale. Read Paul Graham's essay. -> Create a tight feedback loop. What do users like? What do they pay for? What would make them recommend it? -> Try to keep your feedback loop going for all of your companies' life -> Do sales and customer support yourself in the early days. This is critical. Do not hire these people right away. -> Keep track of metrics. Look at active users, activity levels, cohort retention, revenue, etc. Be brutally honest if they don't go in the right direction -> If you don't get your product right, nothing else in this class will matter. Why start a startup? -> "It's glamorous", "You'll be the boss", "Flexibility", ... -> Entrepreneurship gets romanticized -> The reality is not so glamorous. It is a lot of hard work. You're sitting at your desk, focused, figuring out hard engineering projects. It is quite stressful. -> Founder depression is a real thing. If you start a company, it's gonna be extremely hard -> You have loads of responsilibity -> You're responsible for the opportunity cost of the people who decide to follow and help you out -> You're more committed. A founder cannot leave a company. For 10 years if it's going well. Probably for 5 years if it's not going well. -> "Number one role of a CEO is managing your own psychology" -> You're always on call, you're a role model. You'll always be working anyway -> If you joined Dropbox or Facebook early on, your financial reward might be a lot better than when starting a startup -> If you join a later stage startup, you have more impact - massive userbase, existing infrastructure, work with an established team. E.g. Brett Taylor was employee #1500 at Google and he invented Google Maps. He got a big financial reward for this. -> What's the best reason? You can't NOT do it. You have to make it happen -> Do it out of passion -> The world needs it (if not, go do something else) and/or the world needs you (you're well-suited to do it). The world needs you somewhere, find where.

petersouth 12y ago

Sam Altman's law of conservation of how much happiness you can put into the world with the first product from a startup -> the total amount of love is the same it's just a question of how it's distributed.

liantics 12y ago
That line cracked me up. A great observation in an unexpected wrapper.

cjmb 12y ago

On Sam's part -- am I the only one who got the "heard this before" feeling? Obviously he attributed everything pretty appropriately, but I thought I could've placed 50-75% of his sentences in the "Summary" sections of various PG essays, Peter Thiel writings, and other luminaries of the startup-sphere. I'm not saying it was wrong or that his delivery was bad. But I remember reading the Class Notes from Thiel's class after Blake made them available and thinking "Wow, there's some original thoughts in here I haven't come across before." Maybe it's because PG already put it all to paper, and some of these other figures just added post scripts. Maybe it was a solved problem by the time Sam got a seat at the table. Just some food for thought. Looking forward to the other lectures regardless.

dkural 12y ago
I think on Sam Altman's part this is deliberate. He has distilled the core message of Grahamsian thought beautifully into slides. YC has been espousing this specific philosophy for a while, and I think Sam & PG both represent this school of thought. This is part of the reason I believe PG picked Sam, he thought Sam internalized & helped form the YC approach to startups. The two are like Epicurus & Lucretius; Leucippus & Democritus.
AVTizzle 12y ago
Surely, but for lecture 1 in a "Startup 101" series, you don't need to reinvent the wheel. We're talking about a very, very well documented path at this point, with established best practices.

smaili 12y ago

Can non-Stanford students drop in or is this for students only?

reelgirl 12y ago

I loved the video and it really encouraged me to keep on trying.

dkural 12y ago

I disagree that a startup should commonly start with an "idea". Start with an unmet need people are willing to pay for. Or take an existing category with a lot of bad products and make a truly better one that improves every aspect of the experience. Often, you'll see many startups working on the same "idea". Something like Google is truly rare (a genuinely innovative approach to search).

steve_taylor 12y ago
Building a product for which people are willing to pay to meet an unmet need is an idea. As is building a good product in an existing category that contains only bad products. Just plug in the unmet need or existing category and you have the kind of ideas that sama talked about in the lecture.
- dkural 12y ago
  True, it is an idea. I guess I was responding to the order in the slide deck. I'd rather have (1) more specific, "market need". I think going idea -> product might be misunderstood by younger folk. The whole point of doing idea -> product super fast is to validate the market.

hayksaakian 12y ago

Sam kept bringing up the 10 year number But: YC (and therefore every YC company) is < 8 years old What startups succeeded after this long (AND were still actually considered startups)

bayesianhorse 12y ago
Some startups "succeed" earlier than the 10 years. Lot's of big exits beforehand, lot's of growth afterwards. Also a lot of founders and employees have plenty of success in between, depending on salary, funding rounds etc
adamt 12y ago
A startup can easily take 10 years from funding to the point where it's purchased or no longer needing more investment. My first business was founded in 1995 before being sold (for decent money - e.g a successful outcome) in 2011. Was the business still a startup after 10 years? I would argue yes. There were still many ups and downs, funding challenges, near-death experiences etc, and our culture was still largely that of a startup business. Even if you consider the massive tech IPOs and classic success stories, the timeline between incorporation and IPO is pretty long. Microsoft was founded in 1972 and IPO'd in 1986. Google took 9 years from incorporation to IPO, and it was 8 years from Zuck launching 'thefacebook' until the Facebook IPO. I think this backs up Sam's assertion that a startup is a 10 year commitment for a founder.

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dkaplan 12y ago

Why did we submit questions if the video was just going to cut out at the Q&A

rdlecler1 12y ago

Sam: "Step 1, build something that users love" How does this compare with an MVP approach where you put something out there first and test the market. Then there is the issue of runway. With enough time, you can start with an MVP and iterate in private beta until users love it, but in many cases a founder is not going to have that kind of runway. They have just enough resources to put something together, and they're going to have to go out to the market with that and iterate on the fly. Unfortunately, once you do get out there and need to take on all of the other responsibilities, then that's time taken away from building a great product.

napoleond 12y ago
The two concepts are not mutually exclusive. If you target a big enough pain point, your first users will love the product even if it lacks polish. It's also important to remember that MVP != shit. It is the minimum viable product; in the context of the YC motto it's the minimum product that a small, core group of users will love. This is all theoretical on my part, FWIW--I have not successfully built such a thing on my own yet.
bayesianhorse 12y ago
The MVP is a philosophy to get to "something that users love" as fast as possible.

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simonebrunozzi 12y ago

Sam, your voice sounds very irritating to me. Sometimes too fast, no "tempo". I think you should change the way you deliver your points to a classroom. (constructive feedback, not rant)

simonebrunozzi 12y ago

I also don't agree that working on a startup should mean no work-life balance. There's a limit to how productive you can be, and working 90 hours/week is not going to make you more productive than working 45 hours/week. If you work too much, you'll do more mistakes. Ryan Carson, founder of TeamTreeHouse, can teach us a lot about it. http://ryancarson.com/ http://ryancarson.com/

pmosh 12y ago

subtitles please!!

graycat 12y ago

Just watched the lecture. The first part of the lecture was on the "Idea", and I want to give an alternative approach. First, do I believe that what Altman describes can work and is what he has seen has worked? Definitely yes. Second, is that all that can work? I don't think so. Third, do I suggest that the alternative approach I describe here will be common and/or always better than what Altman describes? No. Sometimes better? I do believe so. But even if the alternative approach is rare, that should not be a huge obstacle since the success Altman is talking about, the goal, is also rare. That is, for the rare successes, we should expect that some of the means will also be rare and not common. But for the alternative approach, given that it is rare, we should have some solid evidence of its effectiveness, and I believe that we can. I want to propose that it can be possible to have an idea, test it, essentially just on paper, and, if it passes the test, be quite sure the resulting product will be good and fairly sure the resulting company will be successful. Yes, I'm proposing that the alternative approach provides a way to have the idea be by far the most important part of the work and the rest, e.g., the execution, be routine. Or I would say that a good idea is one that makes it through the filters of my alternative approach. Then I am claiming that with a bad idea, yes, execution is everything but with a good idea execution is routine. Yes, to me, the ideas like Altman describes look to me as far too unpromising to be taken seriously and promise that, yes, indeed, execution will be many times more difficult than the idea. Indeed, Altman is admitting that many start ups fail, that building a successful start up is difficult. I would agree that, starting with a bad idea, building a successful start up is difficult. Now, for the alternative approach for finding a good idea for a start up: First, the alternative approach is very selective, that is, rejects a lot of ideas. Some of the ideas the approach rejects will be able to be the basis of successful companies. The alternative approach rejects ideas when it just cannot build a rock solid case that the idea is good. E.g., the alternative does not know how to conclude that the ideas for Facebook or Twitter would lead to success. The alternative wants to accept only good ideas and in doing so will reject a lot of good ideas. The alternative approach asks for a lot from an idea, and many good ideas will not have that much. Second, Altman does emphasize that a need and a corresponding solution one person sees in their own life can be relevant. Okay, I've been there and done that, that is, I've seen needs and solutions. Third, what I'm proposing for an alternative is, at least in broad terms, and compared with what Altman describes, much older, much more thoroughly tested, and with a much better, really excellent, track record. Actually, we all know at least something, maybe a lot, about the alternative and its track record. I learned about the alternative early in my career doing mostly US DoD projects around DC and also some other experiences, but there is much more information about the alternative readily available far from me. So: (1) Need. To make the alternative work, we have to start with a suitable need, i.e., market need, that is, a suitable problem to solve. We want the first good or a much better solution to be, obviously, no doubt, a "must have" and not just a "nice to have". Next, for this need, we want to find the first good or a much better solution, presented just on paper. Then we want to evaluate the solution, also just on paper. Sorry, no, we don't "get out of the building" and talk to other people. Big example of such a need? Okay, we'd like to have a safe, effective, inexpensive one pill taken once to cure any cancer. So, yes, early on, for Facebook, Twitter, Snapchat, a lot of doubt. For such a cancer pill, we have "no doubt"; to know this we don't have to "get out of the building", ask people, throw trial solutions against a wall to see if there is interest, etc. (2) Solution. Given the need from (1), we try to find a solution. If we fail here, and likely we will, we return to (1) and find another need. E.g., clearly so far the one pill cure for any cancer will fail here for at least a long time. We want a solution that we are sure, "no doubt", will be the first good or much better. Here's a way: Start with the real problem and see what about it we can assume. Then convert this problem and its assumptions into a mathematical problem. So, we are limiting ourselves to needs that lead faithfully to mathematical problems. Sorry, no intuitive heuristics need apply. Next find a mathematical solution. Develop the mathematical solution just on paper, as carefully done theorems and proofs, and then severely check the proofs. Then observe that it is totally clear that the mathematical solution will be fully close enough to the first good or much better solution we want for the need. If any of the work here in step (2) fails, then return to step (1) (3) Product. Write software to do the data manipulations specified by the mathematical solution. Severely check the software. That's essentially the product. If fail here, then return to (1). Track record? Okay: (A) GPS. (B) The version of GPS done first by the US Navy for the SSBNs. (C) Beam forming in passive sonar. (D) The A-bomb of WWII -- all three exploded just as planned. (E) The H-bomb of the 1950s -- first test, 15 million tons of TNT. (F) The SR-71, for Mach 3+, 80,000+ feet, 2000+ miles without refueling; proposed by Kelly Johnson just on paper; built and flown just as proposed. (G) Keyhole satellite, essential a Hubble, before Hubble, but aimed at earth instead of space. (H) The F-117 stealth, essentially a modified F-16, flew as planned, through Saddam's anti-aircraft artillery without a scratch. (I) The airplane the Wright brothers took to Kitty Hawk, NC. (J) Phased array radar for Aegis class ships. (K) High bypass turbofan engines. (L) RSA encryption. (M) Hubble. (N) LHC. (O) COBE, WMAP, and Planck. And there are many more. Such projects that failed in execution? Tough to find. Batting average? Near 1000. Right: Projects A-O are all just technical projects. Right. But in each case they provided the intended solution for the need. As we have explained, to have a successful technical solution lead to a successful solution in business, we want such a solution to be a "must have"; else we return to (1). The high bypass turbofan jet engine a commercial "must have"? Darned right: It saves an ocean of expensive jet fuel. How? Simple: Burning jet fuel releases energy. Want to convert that energy to kinetic energy and get the resulting momentum. But for mass m and velocity v, kinetic energy is (1/2) mv^2 and momentum is just mv. So, we pay in energy (1/2) mv^2 and get in the momentum we want mv. So, since in kinetic energy we have v^2 but in momentum have just v, to get more of our desired momentum from our given, available energy, we want m to be large and v to be small. So, mostly we want to use the hot gasses from the combustion to turn a big ducted propeller that moves a huge mass of air at a low velocity. Instead, the military jet engines intended for supersonic speeds, and long used in commercial aviation because they were available, move a smaller mass at high velocity. So, for commercial, subsonic flight, a high bypass turbofan is a "must have". Then have the first good one or a much better one, as we have assumed, and very much should have a successful business.

Reltair 12y ago

The recommended reading from the final slide: - The Hard Thing About Hard Things - Zero to One (CS 138A) - The Facebook Effect - The 15 Commitments of Conscious Leadership - The Tao of Leadership - Nonviolent Communication

acrefoot 12y ago
I cannot find "The 15 Commitments of Conscious Leadership". Is it a book? I don't see it on Amazon. Is it an article? Does someone know the authors (I can't quite make it out on the image), or the link? EDIT: http://consciousleadershipforum.com/wp-content/uploads/2011/05/15-Commitments-of-Conscious-Leaders.final_1.pdf http://consciousleadershipforum.com/wp-content/uploads/2011/... is the answer, I believe.
- JSeymourATL 12y ago
  Evidently this book is scheduled to be published in November 2014. Nice way to create pre-sales buzz via the Stanford lecture. Here's a link> http://www.businessconjunctions.com/2014/09/05/do-good-leaders-really-have-integrity-guest-post/ http://www.businessconjunctions.com/2014/09/05/do-good-leade...

bayesianhorse 12y ago

There are easier ways to get rich? For Stanford Graduates, maybe. For those who don't have a degree in an ultra-paying job, I'd really like to know an easier way. I'm usually sceptical about start-up chances, I know how much work it means, and I know that a lot of early-stage employees get rich, too. Yet, I don't think you can get rich this fast/easy with a modest degree... Even as early-stage employee often you'll still get a raw deal or you overestimate their chances of success.

tim333 12y ago
I think some fairly average people become millionaires along the lines of manage a McDonnald's for a bit, get finance to have your own one, expand to have 2 or 3 at which point you'd likely be worth $1m+
- bayesianhorse 12y ago
  So I don't know how McDonnalds works exactly, but you would either need the capital to buy (borrow etc) a restaurant or you would have to be chosen to run a restaurant. Meaning you have very high-paying abilities. And in some sense, growing a franchise-taking enterprise could be technically called a start up even if not particularly innovative!

bcjordan 12y ago

To temper some of the nit picks, just wanted to say this lecture felt insightful and fun to watch. I hope YC continues this trend of investing effort in shareable advice content in the spirit of pg's essays. This is the first time a lot of the YC flavor of startup how-to material has been presented in a lecture video format[1]. I suspect much of the long-term audience of these lectures wouldn't have come across pg's essays, Blake Masters' Peter Thiel startup notes or Dustin Moskovitz's excellent Medium posts before. Maybe some lecture watchers were allergic to long-form articles, or maybe some would rather receive a weekly email with videos. Myself, I consume this sort of material on my walk to work, either text-to-speeching essays or listening to lectures. The video lecture format was especially fun, I watched it full screen on the TV while eating an enchilada and poking my fiancee about points she might find relevant to her side project. How often do you get to consume this sort of content like that? Having read pg's essays[2], I still had a number of "aha!" moments from Sam's slides and hearing his presentation. And hearing Dustin describe in his low-key tone why you should be employee 1,000 at an obviously successful startup rather than start your own, and backing it up with charts and photo-jokes about the elephant in the room was just entertaining. Seeing "this is how we'll teach you to do this thing. Here's an expert on why not to do this thing." is not always the type of juxtaposition you get with standalone online essays. Looking forward to the next lecture. I'd say it's well worth the time and opportunity cost of putting this all together, so thanks all involved. [1]: Yes, some Lean Startup™ and Principles of Entrepreneurship™ flavored material has been presented in lecture format before, but not YC™ lensed AFAIK. [2]: Okay, I skipped the early seemingly pure-Lisp-focused ones. Though like Zen and the Art of Motorcycle Maintenance isn't about a long motorcycle trip, and maybe pg's Lisp essays are not really all about writing Lisp?

polskibus 12y ago

Is there a download link for the video to make offline viewing possible?

Walkman 12y ago
You can use the yotube-dl script: http://rg3.github.io/youtube-dl/ http://rg3.github.io/youtube-dl/

xavierkelly 12y ago

This is a really good video lesson. I fell inspired to work harder on my dreams of growing my startup.

jtwebman 12y ago

Wow this was good information. It really got me thinking on what my reasons are and how bad they might be. Did anyone else get that from this? I would also love if they cover how you work on a startup if you still have the 40 hours a week programming job as well. And how to avoid getting in trouble or legal issues with your job.

coralreef 12y ago

Sam mentioned that the idea was actually quite important. I recall PG saying that YC would often invest in the team because ideas change and aren't as important as good founders. Anyone have thoughts on this?

anthony_franco 12y ago
Like a good startup YC wanted to validate their assumptions and experimented with "no-idea" teams. Considering they don't have that option anymore, I'd venture to guess that they disproved PG's original saying and are now realizing that a good idea correlates with success. That's my guess.
- coralreef 12y ago
  Having no idea is crazy though, you want someone with at least some idea of what they want to work on. Also I don't think they accepted enough no idea teams to have a good statistical reference.

howradical 12y ago

Here are some timestamped notes synced with the video: https://timelined.com/how-to-start-a-startup/lecture-1-how-to-start-a-startup https://timelined.com/how-to-start-a-startup/lecture-1-how-t...

piotry 12y ago

Funny that I just wrote about how I was considering killing a startup I started: https://medium.com/@piotr/i-failed-82b9469977ac?source=latest& https://medium.com/@piotr/i-failed-82b9469977ac?source=lates... Probably the best way to know how to build a successful one is knowing how to build one that won't fail!

dheer01 12y ago

Disagree completely with the very first opinion expressed - 'Don't do a startup just to do one - do it only if you really want to solve a problem'. India has produced about 3 big ~billion dollar compaines in the recent past - inmobi, flipkart, druvaa. None of the founders really started to 'solve' a problem they were passionate about. What they were really passionate about was just 'starting up' - and based on their personal strengths, industry knowledge and what they thought could be sold, stumbled on these big businesses. This was probably true for HP too. It is absolutely ok to do a startup just for the heck of it. Get in the game and find out the intersection of what you can build and what a customer will buy. If you build a big business - the passion will follow. Do not forget to bullshit though on your big interview on how the so solved problem kept you awake at nights - it makes for some good reading and impressionable pr.

rdlecler1 12y ago
That could be more survivor bias. I think what he's saying is that if you're going to start something you better be in love with it because there will be bad times and you're going to need to lean on that passion to keep going. If you happen to get lucky and ride a rocketship then this requirement will be less applicable.
- sharemywin 12y ago
  but since he came from a rocketship, I think he's pointing no matter what it's hard on you.

AzmD 12y ago

Ideas are important ... but if Ycombinator stresses so much on the idea being really great then they should take these lines off their website (its on the "Apply" page) "Your idea is important too, but mainly as evidence that you can have good ideas. Most successful startups change their idea substantially."

steve_taylor 12y ago

It's refreshing to see such importance placed on the idea and building a product that users love.

gadders 12y ago

Just a quick question - are these a Sam only initiative, rather than YC? Is that why they are on Sam's domain?

lawsohard 12y ago

looks like rap genius is putting up a full transcript http://tech.genius.com/Sam-altman-how-to-start-a-startup-lecture-1-annotated http://tech.genius.com/Sam-altman-how-to-start-a-startup-lec...

agentultra 12y ago

Great presentation and very clear that the rest of the course will be focusing on advice for SV-style hyper-growth startups. There's still some good advice for those of us not interested in that life style. I was particularly taken with the idea of building something that just a handful of people will really love. Having a rapt-audience for your product would be a huge win if you decide to build more, scale up, or sell out. I think it's really good that they're at least trying to convey how difficult building the style of companies they're talking about can be. I can appreciate how challenging that must be. The cultural yard-stick for success these days are valuations and IPOs. There's a ton of pressure to go that route especially from YC. I'm glad they're being conscientious about it even if they don't 100% succeed at removing some of the glimmer from the stars in peoples' eyes. There's nothing wrong with wanting to start a smaller enterprise and aspire to keep just a handful of customers you know by name.

kartikkumar 12y ago

One thing that bothered me about the lecture was reinforcement of the idea that working hard is the same as working long. I can appreciate the fact that at times as a founder you have to work all hours of the day, but surely this is not the optimum scenario for maximum productivity. If I look at my own work situation currently, it's abundantly apparent to me that the law of diminishing returns affects me strongly after working 8-10 hrs straight. I would have expected the message to be that the most successful founders in the long-term are the ones that figure out the right work/life balance, to ensure they don't burn out. In other words, successful founders are able to be focussed and driven for the hours that they work, and in recharge-mode when offline. This is intuitively what I would have expected and I'm curious if the message from the lecture of "work all day, everyday" is really right.

sharemywin 12y ago
Let's say you have 10 employees and you decide to work 7 hours/day. All your employees decide well sounds good. Versus, let's say you work 10 hours day and on average your team work 9 hours day. 3 plus 20 = 23 hrs * 350 days = 8000 more hours that year. Your an investor which team do you pick?
- kartikkumar 12y ago
  I think some part of your comment is missing, as I can't follow the numbers. The whole point of my comment is precisely about the fact that extra hours don't necessarily represent proportionately greater productivity. If investors only look at number of hours you work and not what you produce, then I'd be fearful for their cash. The lecture conveyed the "all day, everyday" message and that goes against my intuition.

ckvamme 12y ago

I posted some casual, but in depth notes on my site for anyone wanting to skip the video: http://chriskvamme.com/ http://chriskvamme.com/

yatoomy 12y ago

I'm interested in Thiel's upcoming lecture. It seems like there has been a hard shift from "move fast/lean/mvp/pivot" to "make a monopoly". Economically speaking, it is accurate. Hopefully it will motivate people to go after problems previously taboo, ie healthcare, education, finance etc, and less about messaging and photo apps. Our world may depend on it.