*My series of notes on Y Combinator’s Startup Library: *
Takeaway: Get a cofounder, commit, and start making things.
The big mystery to me is: why don’t more people start startups?
(This section talks about why, if people prefer startups to regular jobs, there aren’t more startups. To me, this is analogous to Ramit Sethi’s blog post on students applying to scholarships. Most people self-select themselves out because they think they’re not good enough. However, just by applying, you put yourself ahead of most people.)
There’s nothing wrong with being unsure. In fact, I’d guess the most successful startups are the ones started by uncertain hackers rather than gung-ho business guys.
The way to deal with uncertainty is to analyze it into components.
So I’m going to list all the components of people’s reluctance to start startups, and explain which are real. Then would-be founders can use this as a checklist to examine their own feelings.
1. Too young
Lesson: Age doesn’t matter, maturity does. Don’t flake on your promises and thoughtfully react to challenges.
How do you make the distinction between “kid” and “adult”?
One test adults use is whether you still have the kid flake reflex.
The other way to tell an adult is by how they react to challenges. The adult response to “that’s a stupid idea,” is simply to look the other person in the eye and say, “Really? Why do you think so?”
2. Too inexperienced
Lesson: The only way to get the experience you need to do actually do it. So just do it.
Paradoxically, if you’re too inexperienced to start a startup, what you should do is start one.
Getting a normal job may make you less able to start a startup, by turning you into a tame animal who thinks he needs an office to work in and a product manager to tell him what software to write.
3. Not determined enough
Lesson: The question to ask is: “Do I follow through on my own projects?”
You need a lot of determination to succeed as a startup founder. It’s probably the single best predictor of success.
I’d say the test is whether you’re sufficiently driven to work on your own projects.
4. Not smart enough
Lesson: It’s really effort that counts.
Most companies do mundane stuff where the decisive factor is effort, not brains.
If you don’t think you’re smart enough to start a startup doing something technically difficult, just write enterprise software. Enterprise software companies aren’t technology companies, they’re sales companies, and sales depends mostly on effort.
5. Know nothing about business
Lesson: You don’t need to know anything about business to start a startup. Build something people want – the rest will come.
You don’t need to know anything about business to start a startup. The initial focus should be the product. All you need to know in this phase is how to build things people want. If you succeed, you’ll have to think about how to make money from it.
Acquirers tell me privately that revenue is not what they buy startups for, but their strategic value. Which means, because they made something people want.
I think one reason [people argue this point] is that they hate the idea that a bunch of twenty-year-olds could get rich from building something cool that doesn’t make any money.
The most valuable truths are the ones most people don’t believe. They’re like undervalued stocks. If you start with them, you’ll have the whole field to yourself. So when you find an idea you know is good but most people disagree with, you should not merely ignore their objects, but push aggressively in that direction. In this case, that means you should seek out ideas that would be popular but seem hard to make money from.
6. No cofounder
Lesson: Get one.
Not having a cofounder is a real problem.
If you don’t have a cofounder, what should you do? Get one.
You need to work with someone to know whether you want them as a cofounder.
7. No idea
Lesson: This doesn’t really matter. It’s more important to have a history of shipping things.
It’s not a problem if you don’t have a good idea, because most startups change their idea anyway.
The kind of question on the application for that we really care about is the one where we ask what cool things you’ve made. The main thing we care about is whether you’re good at making things.
So here’s the brief recipe for getting startup ideas. Find something that’s missing in your own life, and supply that need — no matter how specific to you it seems. So even if the problem is simply that you don’t have a date on Saturday night, if you can think of a way to fix that by writing software, you’re onto something, because a lot of other people have the same problem
8. No room for more startups
Lesson: The world is always changing. Things can always be better.
No one claims there is any limit on the number of people who can work for salary at 1000-person companies. Why should there be any limit on the number who can work for equity at 5-person companies?
9. Family to support
Lesson: Start when you’re young
If you have a family and want to start a startup, start a consulting business you can then gradually turn into a product business.
Another way to decrease risk is to join an existing startup instead of starting your own.
The real lesson here is to start startups when you’re young.
10. Independently weathly
Lesson: Successful entrepreneurs want to work on something interesting with people they like.
What makes a good startup founder so dangerous is his willingness to endure infinite schleps.
11. Not ready for commitment
Lesson: This is perfectly legitimate reason not to start a company.
If you start a startup that succeeds, it’s going to consume at least three or four years.
Be aware, though, that if you get a regular job, you’ll probably end up working there for as long as a startup would take, and you’ll find you have much less spare time than you might expect. So if you’re ready to clip on that ID badge and go to that orientation session, you may also be ready to start that startup.
12. Need for structure
Lesson: If you bristle at the suggestion that you aren’t independently-minded enough to start a startup, then you probably are.
If you need to be told what to do, you probably shouldn’t start a startup. In fact, you probably should even go to work for one.
In a good startup, you don’t get told what to do very much. Each person should just do what they need to without anyone telling them.
A reporter once asked David Beckham if there were any language problems at Real Madrid, since the players were from about eight different countries. He said it was never an issue, because everyone was so good they never had to talk. They all just did the right thing.
13. Fear of uncertainty
Lesson: No one will blame you if the startup tanks, so long as you made a serious effort.
If you’re troubled by uncertainty, I can solve that problem for you: if you start a startup, it will probably fail. This is not a bad way to think about the whole experience. Hope for the best, but expect the worst. In the worst case, it will at least be interesting. In the best case you might get rich.
I’m told that there’s a lot of stigma attached to failing in other places — in Europe, for example. Not here. In America, companies, like practically everything else, are disposable.
14. Don’t realize what you’re avoiding
Lesson: Real jobs suck.
Eventually it gets demoralizing to work on dumb stuff, even if it’s easy and you get paid a lot.
15. Parents want you to be a doctor
Lesson: A safe career might not be what your parent really want from you.
The way to deal with your parents’ opinions about what you should do is to treat them like feature requests. Even if your only goal is to please them, the way to do that is not simply to give them what they ask for. Instead, think about why they’re asking for something, and see if there’s a better way to give them what they need.
16. A job is the default
Lesson: Don’t waste your potential for greatness.
It now seems to me fairly likely that we’re seeing the beginning of a change like the one from farming to manufacturing.
I wouldn’t be surprised if one day people look back on what we consider a normal job in the same way [we look back on medieval peasants and wonder how they stood it.]
Startups may represent one of those rare, historic shifts in the way wealth is created.
There have only been a handful of these great economic shifts in human history. It would be an amazing hack to make one happen faster.