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One Order of Operations for Starting a Startup

blog.ycombinator.com

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Re: One Order of Operations for Starting a Startup

#21

Post by mwseibel »

dfabulich wrote: post #20

This post doesn't mention when to sign an operating agreement with your co-founders and legally form a company. IMO, the answer is: you should have a signed equity agreement before you start working on the MVP, and and you must have one by the time you finish working on the MVP. In practice, you'll probably need to incorporate a business to build your MVP. If you're accepting money from customers, the company should…

We have a number of companies who apply to YC with an MVP before incorporation. While I agree getting this done is a good idea - its not an absolute requirement for YC.

Re: One Order of Operations for Starting a Startup

#22

Post by dfabulich »

cvaidya1986 wrote: post #14
jameshk wrote: post #13

Earlier quoted context omitted.

In my experience, the answer is almost always “just apply” - there’s no harm in it and answering the questions can be helpful to consider various aspects of your idea in more detail.

True. It’s just going to physically hurt if the hurried demo doesn’t do the idea justice. Won’t be fair to the scope and scale of the idea. I guess just apply is the answer regardless. Thanks!

If you get rejected, you can apply again for the next batch when you'll have a working demo and maybe some users.

Re: One Order of Operations for Starting a Startup

#24

Post by dfabulich »

mwseibel wrote: post #21
dfabulich wrote: post #20

This post doesn't mention when to sign an operating agreement with your co-founders and legally form a company. IMO, the answer is: you should have a signed equity agreement before you start working on the MVP, and and you must have one by the time you finish working on the MVP. In practice, you'll probably need to incorporate a business to build your MVP. If you're accepting money from customers, the company should…

We have a number of companies who apply to YC with an MVP before incorporation. While I agree getting this done is a good idea - its not an absolute requirement for YC.

Incorporation isn't required, but delaying equity agreement is a recipe for a painful co-founder breakup later when it emerges that I thought we were going in 50/50 and you thought it was 70/30.

Re: One Order of Operations for Starting a Startup

#27

Post by nostrademons »

dfabulich wrote: post #24
mwseibel wrote: post #21

Earlier quoted context omitted.

We have a number of companies who apply to YC with an MVP before incorporation. While I agree getting this done is a good idea - its not an absolute requirement for YC.

Incorporation isn't required, but delaying equity agreement is a recipe for a painful co-founder breakup later when it emerges that I thought we were going in 50/50 and you thought it was 70/30.

You should at least have talked about all the points that go into an incorporation document and some that don't (equity shares, vesting, time & work commitments, decision-making, roles, etc.) and have a verbal agreement that everyone's on-board with. You don't have to actually file the paperwork, which is expensive and creates ongoing administrative work. You should file the paperwork ASAP, but if a founder starts working on the project and then decides that his true desires lie elsewhere or he's not happy with the working arrangement, that's often easier to fix before there's a real company than afterwards.

Re: One Order of Operations for Starting a Startup

#28

Post by mwseibel »

nostrademons wrote: post #27
dfabulich wrote: post #24

Earlier quoted context omitted.

Incorporation isn't required, but delaying equity agreement is a recipe for a painful co-founder breakup later when it emerges that I thought we were going in 50/50 and you thought it was 70/30.

You should at least have talked about all the points that go into an incorporation document and some that don't (equity shares, vesting, time & work commitments, decision-making, roles, etc.) and have a verbal agreement that everyone's on-board with. You don't have to actually file the paperwork, which is expensive and creates ongoing administrative work. You should file the paperwork ASAP, but if a founder starts wo…

totally agree

Re: One Order of Operations for Starting a Startup

#29

Post by Invictus0 »

mwseibel wrote: post #19
Invictus0 wrote: post #8

Using Airbnb as a reason why your idea doesn't matter is like using Bill Gates as an argument for dropping out of college. The idea is super important; in Twitch's case, the process of getting to that idea was putzing around with something terrible for a while. Ideas do matter and you're not doing anyone any favors with this quixotic reductionism.

Clearly the idea (or the solution) is important - my argument is that knowing the right solution day one isn't very important. Airbnb and Twitch are great examples of this.

You're extrapolating from the winners and applying that to the masses. Read up on their history; Airbnb and Twitch almost died multiple times and that's not a good model for any startup. Even startups that actually start with a good idea fail frequently.

Re: One Order of Operations for Starting a Startup

#30

Post by stanleydrew »

This is good advice. It is sometimes preferable to start with the right people though, and together explore various problem spaces.

In reality this isn't much different from the reverse order, since usually you find out what kinds of problem spaces are interesting to you from talking to friends.

Great people that you work well with come around way less often than reasonable ideas in my experience. So I think it makes sense to prioritize finding the people rather than finding the problem space.

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