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My Notes on How to Start a Startup by YC

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Re: My Notes on How to Start a Startup by YC

#41

Post by everdev »

YazIAm wrote: post #38
objektif wrote: post #31

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

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

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

And it all depends on your financial goals.

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

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

Want 7-figures a year? Take VC money.

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

Re: My Notes on How to Start a Startup by YC

#42

Post by dahart »

ryanwaggoner wrote: post #35
greattypo wrote: post #30

Earlier quoted context omitted.

I felt this way going through YC - sometimes different partners gave conflicting advice, and that felt confusing. It took a while for me to look back on the experience and realize it was a feature not a bug. [edit - disclosure: I was one of the presenters in this series.]

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

> What’s the point of having access to a ton of great advisors if they’re constantly all telling you conflicting things?

Here’s my conflicting bit of advice. ;)

The point is to get the best head start you can, and to get it by knowing many ways other people succeeded. They will share some common themes on how to succeed, and maybe more importantly, common themes on how to accidentally fail.

You’ll always get conflicting advice no matter what the context is. The same thing happened to me before and after getting my startup funded- advice was all over the map. And it has also happened in academics and at jobs and among my friends and family. Ask 5 people anything, you’ll get 5 answers. People simply have different points of view, and there are usually multiple right answers.

It’s a feature because it’s important to understand that there isn’t a right answer but a continuum of possibilities that you get to influence. It’s important to understand how people construct and use narratives about their successes. It’s important to see clearly that there’s some luck involved, even if nobody admits it.

Customers, by the way, will give even more wildly conflicting information, so being able to sift through conflicting information is a good skill to have.

Going with your gut will only work if your gut knows how to make good business decisions, which a few people have but not everyone. Software engineers, for example, have guts that tell them that writing awesome software is the one thing that will do the trick, the product will sell itself. Advisors will all tell them that marketing is more important, but they will all disagree on how & where to do the marketing.

There are other side benefits to advisors, including: having influential people rooting for you publicly, having help meeting new investors, getting tactical advice on business and management problems, having a support group of people who’ve gone through some of tough things you’re going through because friends and family don’t understand. I think there’s more but you get where I’m going...

Re: My Notes on How to Start a Startup by YC

#43

Post by mbesto »

cmogni1 wrote: post #14

I haven’t finished reading this, but what strikes me about the advice in the notes is that much of it is either contradictory or there exist counterexamples to the claims. For example, the reader is encouraged to start building, but is told you also need a good idea and that you can pivot but most good companies don’t start with a pivot. Counterexample: Slack was a pivot. We’re also instructed that you should build s…

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

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

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

Re: My Notes on How to Start a Startup by YC

#44

Post by avmich »

everdev wrote: post #41
YazIAm wrote: post #38

Earlier quoted context omitted.

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

Starting a business is one of the best paths to make a lot of money in a short time period though. And it all depends on your financial goals. Want low 6-figures a year? Get a career. Want medium 6-figures a year? Bootstrap a business. Want 7-figures a year? Take VC money. And yes, the success rates get progressively worse, but if your goal is to average $500k-$1M+/year over the next 5 years, your chances of making t…

> if your goal is to average $500k-$1M+/year over the next 5 years, your chances of making that as an employee are probably far less than your chances of making that owning a startup

Exactly. Startup is the only way to make money, while being reliably preserved from management errors which you can't prevent or compensate for.

You can join an early Facebook, but that's a luck game, not a systematic approach where you'll actually influence chances.

Re: My Notes on How to Start a Startup by YC

#45

Post by mattmanser »

avmich wrote: post #44
everdev wrote: post #41

Earlier quoted context omitted.

Starting a business is one of the best paths to make a lot of money in a short time period though. And it all depends on your financial goals. Want low 6-figures a year? Get a career. Want medium 6-figures a year? Bootstrap a business. Want 7-figures a year? Take VC money. And yes, the success rates get progressively worse, but if your goal is to average $500k-$1M+/year over the next 5 years, your chances of making t…

> if your goal is to average $500k-$1M+/year over the next 5 years, your chances of making that as an employee are probably far less than your chances of making that owning a startup Exactly. Startup is the only way to make money, while being reliably preserved from management errors which you can't prevent or compensate for. You can join an early Facebook, but that's a luck game, not a systematic approach where you'…

A lot of people wouldn't call a company that is never destined to grow overall a few million $$$ turnover a startup.

It's a term without a strict definition.

Re: My Notes on How to Start a Startup by YC

#46

Post by aaavl2821 »

ryanwaggoner wrote: post #35
greattypo wrote: post #30

Earlier quoted context omitted.

I felt this way going through YC - sometimes different partners gave conflicting advice, and that felt confusing. It took a while for me to look back on the experience and realize it was a feature not a bug. [edit - disclosure: I was one of the presenters in this series.]

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

Soliciting advice and feedback from different sources, and then synthesizing and sifting through that sometimes conflicting feedback to make your own conclusions, is a very common and useful "business" skill

It's how investors do technical diligence, it's how executives of large companies make decisions, it's a part of the peer review process in science.

Advisors don't exist to tell you how to do your job. If that was the case they'd be your boss, not your advisor. They are there to help you see the full picture, and assess different perspectives, and challenge your thinking. But ultimately you make the call

Re: My Notes on How to Start a Startup by YC

#47

Post by aaavl2821 »

cmogni1 wrote: post #14

I haven’t finished reading this, but what strikes me about the advice in the notes is that much of it is either contradictory or there exist counterexamples to the claims. For example, the reader is encouraged to start building, but is told you also need a good idea and that you can pivot but most good companies don’t start with a pivot. Counterexample: Slack was a pivot. We’re also instructed that you should build s…

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

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

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

Re: My Notes on How to Start a Startup by YC

#48

Post by reikonomusha »

aaavl2821 wrote: post #47
cmogni1 wrote: post #14

I haven’t finished reading this, but what strikes me about the advice in the notes is that much of it is either contradictory or there exist counterexamples to the claims. For example, the reader is encouraged to start building, but is told you also need a good idea and that you can pivot but most good companies don’t start with a pivot. Counterexample: Slack was a pivot. We’re also instructed that you should build s…

Starting a company requires a tolerance for ambiguity. If there were a rules based system for how to start a startup, then startups wouldn't exist: they'd be "innovation processes" at big companies, and your advisors would be your bosses The existence of counterexamples and conflicting advice doesn't mean that advice isn't useful, conflicting advice is just a symptom of startups being uncertain. With a large enough s…

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

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

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

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

Re: My Notes on How to Start a Startup by YC

#49

Post by fernandopj »

everdev wrote: post #41
YazIAm wrote: post #38

Earlier quoted context omitted.

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

Starting a business is one of the best paths to make a lot of money in a short time period though. And it all depends on your financial goals. Want low 6-figures a year? Get a career. Want medium 6-figures a year? Bootstrap a business. Want 7-figures a year? Take VC money. And yes, the success rates get progressively worse, but if your goal is to average $500k-$1M+/year over the next 5 years, your chances of making t…

"You’re not going to get rich renting out your time. You must own equity - a piece of a business - to gain your financial freedom." - Naval[1]

[1] https://twitter.com/naval/status/1002103670400417792

Re: My Notes on How to Start a Startup by YC

#50

Post by ummonk »

muzani wrote: post #40
ryanwaggoner wrote: post #37

Earlier quoted context omitted.

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

Yes, that is true. But so far this one has done a good job at that. The first thing they do is even try to convince you that entrepreneurship isn't the most profitable path. The statistically best path is to work at an early stage company. But if you have a certain kind of insane resolve, then they'll guide you down it. I think 'partial' success does get celebrated though, sort of like Reddit. Again, this is somethin…

> The first thing they do is even try to convince you that entrepreneurship isn't the most profitable path. The statistically best path is to work at an early stage company.

That's just them, being self-interested since they need employees for their founders' startups more than they need new founders.

Realistically, the most profitable path statistically is to work at a FLNG or decacorn.

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