Lecture 1 – How to Start a Startup [video] • Hacker News Board

Re: Lecture 1 – How to Start a Startup [video]

#91

Post by bayesianhorse » Wed, Sep 24, 2014, 4:55 AM UTC

TimPC wrote: post #43

smuss77 wrote: post #7

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

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…

That are some very optimistic assumptions... Startup founders don't generally work 80 hours per week. Not for 10 years, at least.

Re: Lecture 1 – How to Start a Startup [video]

#92

Post by 7Figures2Commas » Wed, Sep 24, 2014, 4:57 AM UTC

prostoalex wrote: post #85

7Figures2Commas wrote: post #33

Earlier quoted context omitted.

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 apparent…

> As an example of this, consider that Facebook had sold shares at a $15 billion valuation just three years after the company was founded. That is not the entire story. Microsoft invested $240 million in exchange for certain number of shares (constituting 1.6% of total Facebook shares issued) at the time plus a 3-year exclusive right to sell banner ads on Facebook through Microsoft AdCenter. The $15 billion valuation…

Companies cannot grant equity to employees at below fair market value without creating adverse tax consequences for those employees. Transactions like the Microsoft investment absolutely factor into the determination of fair market value. Bottom line: just three years after its founding, Facebook had a very significant valuation.

Re: Lecture 1 – How to Start a Startup [video]

#93

Post by bayesianhorse » Wed, Sep 24, 2014, 4:58 AM UTC

rdlecler1 wrote: post #58

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…

The MVP is a philosophy to get to "something that users love" as fast as possible.

Re: Lecture 1 – How to Start a Startup [video]

#94

Post by TimPC » Wed, Sep 24, 2014, 5:00 AM UTC

e12e wrote: post #89

TimPC wrote: post #43

Earlier quoted context omitted.

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…

While I agree with the idea that working like crazy is likely to net more than a failed startup, a couple of comments: > 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 I…

There is a very big difference between actually breaking the law and exploiting the fact that the law is poorly written, and doesn't properly account for a a variety of issues starting to be used by a sizeable portion of all US corporations.

Re: Lecture 1 – How to Start a Startup [video]

#95

Post by bayesianhorse » Wed, Sep 24, 2014, 5:02 AM UTC

bramgg wrote: post #26

@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.

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...

Re: Lecture 1 – How to Start a Startup [video]

#96

Post by TimPC » Wed, Sep 24, 2014, 5:04 AM UTC

e12e wrote: post #89

TimPC wrote: post #43

Earlier quoted context omitted.

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…

While I agree with the idea that working like crazy is likely to net more than a failed startup, a couple of comments: > 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 I…

For a second issue, there is a certain perception that start-up founders can produce far more than 40 hours/week of quality architecture and programming. Founding a company involves believing in that at some level. I agree it's not in the category of most people, but neither is start-up founder. If you have a serious belief in your ability to do so, try working like crazy on 3 month contracts and see if you actually can. Over 3 months you're unlikely to burn out completely, and you can adjust your expectations of the kind of hours you're capable of accordingly.

Re: Lecture 1 – How to Start a Startup [video]

#97

Post by bayesianhorse » Wed, Sep 24, 2014, 5:07 AM UTC

hayksaakian wrote: post #52

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

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

Re: Lecture 1 – How to Start a Startup [video]

#98

Post by 7Figures2Commas » Wed, Sep 24, 2014, 5:11 AM UTC

prostoalex wrote: post #87

7Figures2Commas wrote: post #62

Earlier quoted context omitted.

Yes, you are correct. Your friend didn't necessarily make a bad decision. Facebook traded as low as ~$18/share in 2012 and didn't get back to its IPO closing price until mid-2013. According to a media report[1], at one point, even employees who joined the company as late as the end of 2010 were underwater. So anybody (you, me, your friend) could have purchased FB shares with a cost basis lower than that of many emplo…

> even employees who joined the company as late as the end of 2010 were underwater That is not correct usage of the term. According to external report, Facebook stopped issuing stock options to employees as of 2007. People joining in 2010 would be receiving RSUs, whose "strike price" is $0. While the monetary value of the shares at IPO was different than the value they imagined, they would not be underwater (having a…

I was not privy to when Facebook started granting RSUs instead of options. My use of the term "underwater" was based on what was reported.

Still, this is a red herring. The fundamental point of my comment was that in the past couple of years, every single person here had the ability to purchase Facebook shares on terms just as favorable if not more favorable than many Facebook employees without having to spend a single day working for the company.

In fact, in the past several years, you could have on favorable terms purchased shares in any number of tech companies that have delivered fantastic gains to shareholders. Obviously, timing investments (or trades depending on your persuasion) is easier said than done, but it's probably no more difficult than trying to determine whether the startup you're going to work at for the next four years of your life is the next Facebook or the next MySpace.

Re: Lecture 1 – How to Start a Startup [video]

#99

Post by stevewilhelm » Wed, Sep 24, 2014, 5:26 AM UTC

smuss77 wrote: post #7

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

Get a reasonably paying technical job at large firm and switch jobs every two or three years. Invest most of your disposable income: some in real estate, some in a broad equity fund, and some in a handful of technology stocks in fields you know something about.

For the majority of people who go this route instead of starting their own company, they will be better off economically in ten years time.

Re: Lecture 1 – How to Start a Startup [video]

#100

Post by nl » Wed, Sep 24, 2014, 5:28 AM UTC

graycat wrote: post #75

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. Someti…

This was kind of hard to read, but I think you've missed the point.

You seem to be talking about developing new technologies. Sam is talking about commercialising them. There's a big difference. In almost every of the cases you listed the technology was built in response to customer demand.