all-about-startups

Basics

Who should start a startup

Startup investors invest in companies whose creators they think would be good startup founders. More often than not, YC investors will invest in people rather than products.

Here are the core qualities a good startup founder has:

• resilience: getting the first 10-100 users to try out your product is the absolute hardest part of being a startup founder. If you get past this part and never give up, you have the skill of resilience.
• it's ok to be motivated by money: your initial motivations don't matter that much. What it matters is your continued work on a startup.

To build resilience and consistency when working on a startup, you need two things:

1. genuine interest in the problem: the problem you're solving has to be interesting to you
2. love the people you're working with

Here are some questions to ask yourself whether or not you should build a startup:

• "Can I handle the worst-case scenario?": Can you handle the worst-case scenario of leaving your full-time job for a year and solely working on your startup? If you're a college student or freshly graduated, the answer is probably yes, because the worst case scenario is you losing a year of salary despite you living with your parents.

Benefits of starting a startup

• you will learn a lot: You will learn a lot from your msitakes and figure out what you enjoy
• you will get better career opportunities: being a self-starter shows on your resume and helps you get hired better.
• you will meet a lot of good people

How to decide on a startup product

It's better to make a product that a few people really love than one a lot of people are indifferent towards.

Go all in, commit

The three things that make starting a startup less risky are the dead-obvious things:

1. Build your product and launch it
2. Talk to your customers

NOTE

Trying to keep multiple career paths open (like keeping a job at Google while starting a company) is often counterproductive; founders who commit fully are more likely to compete effectively against those splitting their focus.

Why founders fail

1. isolation: they're doing it all alone
2. not enough feedback
3. lost momentum
4. don't know what's next

Paul Graham Essays

Why to Not start a startup

Key takeaways:

Be an adult. Accept constructive criticism

The other way to tell an adult is by how they react to a challenge. Someone who's not yet an adult will tend to respond to a challenge from an adult in a way that acknowledges their dominance. If an adult says "that's a stupid idea," a kid will either crawl away with his tail between his legs, or rebel. But rebelling presumes inferiority as much as submission. 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?"

There are a lot of adults who still react childishly to challenges, of course. What you don't often find are kids who react to challenges like adults. When you do, you've found an adult, whatever their age.

Startup investors want to invest in adults, not children. You are an adult if you can accept constructive criticism and not deflect when someone confronts you.

The best way to gain experience is to jump right in

The best way to gain experience is to start a startup and fail, because that failure will teach you much more than a job at Google ever would.

I once wrote that startup founders should be at least 23, and that people should work for another company for a few years before starting their own. I no longer believe that, and what changed my mind is the example of the startups we've funded.

I still think 23 is a better age than 21. But the best way to get experience if you're 21 is to start a startup. So, paradoxically, if you're too inexperienced to start a startup, what you should do is start one. That's a way more efficient cure for inexperience than a normal job. In fact, getting a normal job may actually 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.

What really convinced me of this was the Kikos. They started a startup right out of college. Their inexperience caused them to make a lot of mistakes. But by the time we funded their second startup, a year later, they had become extremely formidable. They were certainly not tame animals. And there is no way they'd have grown so much if they'd spent that year working at Microsoft, or even Google. They'd still have been diffident junior programmers.

So now I'd advise people to go ahead and start startups right out of college. There's no better time to take risks than when you're young. Sure, you'll probably fail. But even failure will get you to the ultimate goal faster than getting a job.

It worries me a bit to be saying this, because in effect we're advising people to educate themselves by failing at our expense, but it's the truth.

Be determined

Determination is the biggest indicator of success for a stratup founder, where if you're determined to keep working on your idea despite setbacks, you will most likely succeed.

You need a lot of determination to succeed as a startup founder. It's probably the single best predictor of success.

Some people may not be determined enough to make it. It's hard for me to say for sure, because I'm so determined that I can't imagine what's going on in the heads of people who aren't. But I know they exist.

Most hackers probably underestimate their determination. I've seen a lot become visibly more determined as they get used to running a startup. I can think of several we've funded who would have been delighted at first to be bought for $2 million, but are now set on world domination.

How can you tell if you're determined enough, when Larry and Sergey themselves were unsure at first about starting a company? I'm guessing here, but I'd say the test is whether you're sufficiently driven to work on your own projects. Though they may have been unsure whether they wanted to start a company, it doesn't seem as if Larry and Sergey were meek little research assistants, obediently doing their advisors' bidding. They started projects of their own.

you're probably smart enough

You are most likely overestimating how smart you need to be to start a startup. Most rich people are dumb, and your imposter syndrome is a sign you have what it takes to succeed.

You may need to be moderately smart to succeed as a startup founder. But if you're worried about this, you're probably mistaken. If you're smart enough to worry that you might not be smart enough to start a startup, you probably are.

And in any case, starting a startup just doesn't require that much intelligence. Some startups do. You have to be good at math to write Mathematica. But most companies do more mundane stuff where the decisive factor is effort, not brains. Silicon Valley can warp your perspective on this, because there's a cult of smartness here. People who aren't smart at least try to act that way. But if you think it takes a lot of intelligence to get rich, try spending a couple days in some of the fancier bits of New York or LA.

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.

You don't need to know business, just make something people want

Don't worry about making money. The money will come anyway as long as you focus on making something that users love.

Find a solution to a problem, don't start with a solution looking for a problem. Make something that genuinely improves people's lives and users will love you so much that the money will come.

If users don't like what you wnat, no matter how good at marketing you are, nobody will care because they hate the product.

This is another variable whose coefficient should be zero. 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. But this is so easy you can pick it up on the fly.

I get a fair amount of flak for telling founders just to make something great and not worry too much about making money. And yet all the empirical evidence points that way: pretty much 100% of startups that make something popular manage to make money from it. And 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. Acquirers know the rule holds for them too: if users love you, you can always make money from that somehow, and if they don't, the cleverest business model in the world won't save you.

So why do so many people argue with me? I think one reason 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. They just don't want that to be possible. But how possible it is doesn't depend on how much they want it to be.

For a while it annoyed me to hear myself described as some kind of irresponsible pied piper, leading impressionable young hackers down the road to ruin. But now I realize this kind of controversy is a sign of a good idea.

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 objections, 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.

We'll bet a seed round you can't make something popular that we can't figure out how to make money from.

You need a cofounder

It's a red flag if you don't have a cofounder. You should pretty much always have a cofounder going into a startup application for YC.

Not having a cofounder is a real problem. A startup is too much for one person to bear. And though we differ from other investors on a lot of questions, we all agree on this. All investors, without exception, are more likely to fund you with a cofounder than without.

We've funded two single founders, but in both cases we suggested their first priority should be to find a cofounder. Both did. But we'd have preferred them to have cofounders before they applied. It's not super hard to get a cofounder for a project that's just been funded, and we'd rather have cofounders committed enough to sign up for something super hard.

If you don't have a cofounder, what should you do? Get one. It's more important than anything else. If there's no one where you live who wants to start a startup with you, move where there are people who do. If no one wants to work with you on your current idea, switch to an idea people want to work on.

If you're still in school, you're surrounded by potential cofounders. A few years out it gets harder to find them. Not only do you have a smaller pool to draw from, but most already have jobs, and perhaps even families to support. So if you had friends in college you used to scheme about startups with, stay in touch with them as well as you can. That may help keep the dream alive.

It's possible you could meet a cofounder through something like a user's group or a conference. But I wouldn't be too optimistic. You need to work with someone to know whether you want them as a cofounder.

The real lesson to draw from this is not how to find a cofounder, but that you should start startups when you're young and there are lots of them around.

VCs invest in people, not ideas

VC founders don't care about the idea because 70% of people pivot from their initial idea within three months. Rather, they look for potential in founders, and that they have these attributes:

• are good at building: They want to see if you can build things on your own and make something that people want to use. Bonus point if you're the lead developer on an open source project.
• are good at building something people want: You should have a strong signal that you know what problems people have and then you build solutions to solve those problems via software.

In a sense, it's not a problem if you don't have a good idea, because most startups change their idea anyway. In the average Y Combinator startup, I'd guess 70% of the idea is new at the end of the first three months. Sometimes it's 100%.

In fact, we're so sure the founders are more important than the initial idea that we're going to try something new this funding cycle. We're going to let people apply with no idea at all. If you want, you can answer the question on the application form that asks what you're going to do with "We have no idea." If you seem really good we'll accept you anyway. We're confident we can sit down with you and cook up some promising project.

Really this just codifies what we do already. We put little weight on the idea. We ask mainly out of politeness. The kind of question on the application form that we really care about is the one where we ask what cool things you've made. If what you've made is version one of a promising startup, so much the better, but the main thing we care about is whether you're good at making things. Being lead developer of a popular open source project counts almost as much.

That solves the problem if you get funded by Y Combinator. What about in the general case? Because in another sense, it is a problem if you don't have an idea. If you start a startup with no idea, what do you do next?

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. Steve Wozniak built himself a computer; who knew so many other people would want them? A need that's narrow but genuine is a better starting point than one that's broad but hypothetical. 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.

No, the space is not saturated

There will always be new problems to solve, and there will always be people who like your solution over other solutions. Therefore, the space is never saturated, and you can always start a startup.

A lot of people look at the ever-increasing number of startups and think "this can't continue." Implicit in their thinking is a fallacy: that there is some limit on the number of startups there could be. But this is false. No one claims there's 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?

Nearly everyone who works is satisfying some kind of need. Breaking up companies into smaller units doesn't make those needs go away. Existing needs would probably get satisfied more efficiently by a network of startups than by a few giant, hierarchical organizations, but I don't think that would mean less opportunity, because satisfying current needs would lead to more. Certainly this tends to be the case in individuals. Nor is there anything wrong with that. We take for granted things that medieval kings would have considered effeminate luxuries, like whole buildings heated to spring temperatures year round. And if things go well, our descendants will take for granted things we would consider shockingly luxurious. There is no absolute standard for material wealth. Health care is a component of it, and that alone is a black hole. For the foreseeable future, people will want ever more material wealth, so there is no limit to the amount of work available for companies, and for startups in particular.

Usually the limited-room fallacy is not expressed directly. Usually it's implicit in statements like "there are only so many startups Google, Microsoft, and Yahoo can buy." Maybe, though the list of acquirers is a lot longer than that. And whatever you think of other acquirers, Google is not stupid. The reason big companies buy startups is that they've created something valuable. And why should there be any limit to the number of valuable startups companies can acquire, any more than there is a limit to the amount of wealth individual people want? Maybe there would be practical limits on the number of startups any one acquirer could assimilate, but if there is value to be had, in the form of upside that founders are willing to forgo in return for an immediate payment, acquirers will evolve to consume it. Markets are pretty smart that way.

If you're young, just start

If you're young, like 21 or 22 years old, you literally just need to start up because there's no downside to failing. You'll learn a lot, and you still have a nice cushy job to return to.

This one is real. I wouldn't advise anyone with a family to start a startup. I'm not saying it's a bad idea, just that I don't want to take responsibility for advising it. I'm willing to take responsibility for telling 22 year olds to start startups. So what if they fail? They'll learn a lot, and that job at Microsoft will still be waiting for them if they need it. But I'm not prepared to cross moms.

What you can do, if you have a family and want to start a startup, is start a consulting business you can then gradually turn into a product business. Empirically the chances of pulling that off seem very small. You're never going to produce Google this way. But at least you'll never be without an income.

Another way to decrease the risk is to join an existing startup instead of starting your own. Being one of the first employees of a startup is a lot like being a founder, in both the good ways and the bad. You'll be roughly 1/n^2 founder, where n is your employee number.

As with the question of cofounders, the real lesson here is to start startups when you're young.

Startups require commitment, but so do jobs

Having a successful startup requires continued commitment for three or four years, but so does a job. A job is more exhausting than a startup and probably consumes more time. So you might as well just do a startup.

This was my reason for not starting a startup for most of my twenties. Like a lot of people that age, I valued freedom most of all. I was reluctant to do anything that required a commitment of more than a few months. Nor would I have wanted to do anything that completely took over my life the way a startup does. And that's fine. If you want to spend your time travelling around, or playing in a band, or whatever, that's a 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. (If it fails, you'll be done a lot quicker.) So you shouldn't do it if you're not ready for commitments on that scale. 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.

Failure of uncertainty is not an excuse

So what if you fail? Worst case scenario, it makes for an interesting experience.

Perhaps some people are deterred from starting startups because they don't like the uncertainty. If you go to work for Microsoft, you can predict fairly accurately what the next few years will be like—all too accurately, in fact. If you start a startup, anything might happen.

Well, if you're troubled by uncertainty, I can solve that problem for you: if you start a startup, it will probably fail. Seriously, though, 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.

No one will blame you if the startup tanks, so long as you made a serious effort. There may once have been a time when employers would regard that as a mark against you, but they wouldn't now. I asked managers at big companies, and they all said they'd prefer to hire someone who'd tried to start a startup and failed over someone who'd spent the same time working at a big company.

Nor will investors hold it against you, as long as you didn't fail out of laziness or incurable stupidity. I'm told 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.

Startups = freedom

Now we look back on medieval peasants and wonder how they stood it. How grim it must have been to till the same fields your whole life with no hope of anything better, under the thumb of lords and priests you had to give all your surplus to and acknowledge as your masters. I wouldn't be surprised if one day people look back on what we consider a normal job in the same way. How grim it would be to commute every day to a cubicle in some soulless office complex, and be told what to do by someone you had to acknowledge as a boss—someone who could call you into their office and say "take a seat," and you'd sit! Imagine having to ask permission to release software to users. Imagine being sad on Sunday afternoons because the weekend was almost over, and tomorrow you'd have to get up and go to work. How did they stand it?

It's exciting to think we may be on the cusp of another shift like the one from farming to manufacturing. That's why I care about startups. Startups aren't interesting just because they're a way to make a lot of money. I couldn't care less about other ways to do that, like speculating in securities. At most those are interesting the way puzzles are. There's more going on with startups. They may represent one of those rare, historic shifts in the way wealth is created.

That's ultimately what drives us to work on Y Combinator. We want to make money, if only so we don't have to stop doing it, but that's not the main goal. 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.

Before the startup

Key takeaways

1. don't trust your instincts on ideas: Listen to other people about startup ideas and advice they have for you. Startups are unintuitive and the ones who have experience in this space are more likely to be right than you are.
2. trust your gut about people: However, trust your gut about people. Don't work with people who seem off to you or you don't immediately like.
3. you don't need to know about startups, just about users: The best founders are ones who understand their users and build features for them.
4. startups = freedom: In fact, this is one of the reasons startups are possible. If big companies weren't plagued by internal inefficiencies, they'd be proportionately more effective, leaving less room for startups. Companies are so plagued by bureaucracy and gaming the system that they feel fake, while startups are just doing the work and making a product that users earnestly love. If you enjoy freedom, then choose startups.
5. during your free time, learn: Charles Darwin was 22 when he received an invitation to travel aboard the HMS Beagle as a naturalist. It was only because he was otherwise unoccupied, to a degree that alarmed his family, that he could accept it. And yet if he hadn't we probably would not know his name.

Know your users

Don't focus on learning all about business or startups. None of that matters. The only thing that matters is knowing what your users want and how to solve their problem.

The second counterintuitive point is that it's not that important to know a lot about startups. The way to succeed in a startup is not to be an expert on startups, but to be an expert on your users and the problem you're solving for them. Mark Zuckerberg didn't succeed because he was an expert on startups. He succeeded despite being a complete noob at startups, because he understood his users really well.

In fact, I worry it's not merely unnecessary to learn in great detail about the mechanics of startups, but possibly somewhat dangerous. If I met an undergrad who knew all about convertible notes and employee agreements and (God forbid) class FF stock, I wouldn't think "here is someone who is way ahead of their peers." It would set off alarms. Because another of the characteristic mistakes of young founders is to go through the motions of starting a startup. They make up some plausible-sounding idea, raise money at a good valuation, rent a cool office, hire a bunch of people. From the outside that seems like what startups do. But the next step after rent a cool office and hire a bunch of people is: gradually realize how completely fucked they are, because while imitating all the outward forms of a startup they have neglected the one thing that's actually essential: making something people want.

Don't be fake about a startup, don't go through the motions and be facetious about playing like a startup founder.

We saw this happen so often that we made up a name for it: playing house. Eventually I realized why it was happening. The reason young founders go through the motions of starting a startup is because that's what they've been trained to do for their whole lives up to that point. Think about what you have to do to get into college, for example. Extracurricular activities, check. Even in college classes most of the work is as artificial as running laps.

I'm not attacking the educational system for being this way. There will always be a certain amount of fakeness in the work you do when you're being taught something, and if you measure their performance it's inevitable that people will exploit the difference to the point where much of what you're measuring is artifacts of the fakeness.

Don't look for tricks

There is no trick to convincing investors to get more money. If there is a trick at all, it's just to make a good product that users want.

It's not surprising that after being trained for their whole lives to play such games, young founders' first impulse on starting a startup is to try to figure out the tricks for winning at this new game. Since fundraising appears to be the measure of success for startups (another classic noob mistake), they always want to know what the tricks are for convincing investors. We tell them the best way to convince investors is to make a startup that's actually doing well, meaning growing fast, and then simply tell investors so. Then they want to know what the tricks are for growing fast. And we have to tell them the best way to do that is simply to make something people want.

So many of the conversations YC partners have with young founders begin with the founder asking "How do we..." and the partner replying "Just..."

Why do the founders always make things so complicated? The reason, I realized, is that they're looking for the trick.

So this is the third counterintuitive thing to remember about startups: starting a startup is where gaming the system stops working. Gaming the system may continue to work if you go to work for a big company. Depending on how broken the company is, you can succeed by sucking up to the right people, giving the impression of productivity, and so on. [2] But that doesn't work with startups. There is no boss to trick, only users, and all users care about is whether your product does what they want. Startups are as impersonal as physics. You have to make something people want, and you prosper only to the extent you do.

Whatever tricks exist to convince investors and raise seed money, the trick is secondary to just building a good product. In the end, building a good product and making a good startup will always matter more.

The dangerous thing is, faking does work to some degree on investors. If you're super good at sounding like you know what you're talking about, you can fool investors for at least one and perhaps even two rounds of funding. But it's not in your interest to. The company is ultimately doomed. All you're doing is wasting your own time riding it down.

So stop looking for the trick. There are tricks in startups, as there are in any domain, but they are an order of magnitude less important than solving the real problem. A founder who knows nothing about fundraising but has made something users love will have an easier time raising money than one who knows every trick in the book but has a flat usage graph. And more importantly, the founder who has made something users love is the one who will go on to succeed after raising the money.

You should be delighted by this. For the first time in your life, you have a way to actually succeed without bullshitting. This is the truth. Startups are the truth.

Though in a sense it's bad news in that you're deprived of one of your most powerful weapons, I think it's exciting that gaming the system stops working when you start a startup. It's exciting that there even exist parts of the world where you win by doing good work. Imagine how depressing the world would be if it were all like school and big companies, where you either have to spend a lot of time on bullshit things or lose to people who do. I would have been delighted if I'd realized in college that there were parts of the real world where gaming the system mattered less than others, and a few where it hardly mattered at all. But there are, and this variation is one of the most important things to consider when you're thinking about your future. How do you win in each type of work, and what would you like to win by doing?

Startups are all consuming

Startups will take over a large chunk of your life. It’s not for the weak.

That brings us to our fourth counterintuitive point: startups are all-consuming. If you start a startup, it will take over your life to a degree you cannot imagine. And if your startup succeeds, it will take over your life for a long time: for several years at the very least, maybe for a decade, maybe for the rest of your working life. So there is a real opportunity cost here.

Larry Page may seem to have an enviable life, but there are aspects of it that are unenviable. Basically at 25 he started running as fast as he could and it must seem to him that he hasn't stopped to catch his breath since. Every day new shit happens in the Google empire that only the CEO can deal with, and he, as CEO, has to deal with it. If he goes on vacation for even a week, a whole week's backlog of shit accumulates. And he has to bear this uncomplainingly, partly because as the company's daddy he can never show fear or weakness, and partly because billionaires get less than zero sympathy if they talk about having difficult lives. Which has the strange side effect that the difficulty of being a successful startup founder is concealed from almost everyone except those who've done it.

Y Combinator has now funded several companies that can be called big successes, and in every single case the founders say the same thing. It never gets any easier. The nature of the problems change. You're worrying about construction delays at your London office instead of the broken air conditioner in your studio apartment. But the total volume of worry never decreases; if anything it increases.

Should you do a startup? It's hard work, but the only way to find out if you're up for it is to try.

Should you do it at any age? I realize I've made startups sound pretty hard. If I haven't, let me try again: starting a startup is really hard. What if it's too hard? How can you tell if you're up to this challenge?

The answer is the fifth counterintuitive point: you can't tell. Your life so far may have given you some idea what your prospects might be if you tried to become a mathematician, or a professional football player. But unless you've had a very strange life you haven't done much that was like being a startup founder. Starting a startup will change you a lot. So what you're trying to estimate is not just what you are, but what you could grow into, and who can do that?

For the past 9 years it was my job to predict whether people would have what it took to start successful startups. It was easy to tell how smart they were, and most people reading this will be over that threshold. The hard part was predicting how tough and ambitious they would become. There may be no one who has more experience at trying to predict that, so I can tell you how much an expert can know about it, and the answer is: not much. I learned to keep a completely open mind about which of the startups in each batch would turn out to be the stars.

The founders sometimes think they know. Some arrive feeling sure they will ace Y Combinator just as they've aced every one of the (few, artificial, easy) tests they've faced in life so far. Others arrive wondering how they got in, and hoping YC doesn't discover whatever mistake caused it to accept them. But there is little correlation between founders' initial attitudes and how well their companies do.

I've read that the same is true in the military — that the swaggering recruits are no more likely to turn out to be really tough than the quiet ones. And probably for the same reason: that the tests involved are so different from the ones in their previous lives.

If you're absolutely terrified of starting a startup, you probably shouldn't do it. But if you're merely unsure whether you're up to it, the only way to find out is to try. Just not now.

What makes for good startup ideas

Good startup ideas arise from doing good work with good people

So if you want to start a startup one day, what should you do in college? There are only two things you need initially: an idea and cofounders. And the m.o. for getting both is the same. Which leads to our sixth and last counterintuitive point: that the way to get startup ideas is not to try to think of startup ideas.

I've written a whole essay on this, so I won't repeat it all here. But the short version is that if you make a conscious effort to think of startup ideas, the ideas you come up with will not merely be bad, but bad and plausible-sounding, meaning you'll waste a lot of time on them before realizing they're bad.

The way to come up with good startup ideas is to take a step back. Instead of making a conscious effort to think of startup ideas, turn your mind into the type that startup ideas form in without any conscious effort. In fact, so unconsciously that you don't even realize at first that they're startup ideas.

This is not only possible, it's how Apple, Yahoo, Google, and Facebook all got started. None of these companies were even meant to be companies at first. They were all just side projects. The best startups almost have to start as side projects, because great ideas tend to be such outliers that your conscious mind would reject them as ideas for companies.

Ok, so how do you turn your mind into the type that startup ideas form in unconsciously? (1) Learn a lot about things that matter, then (2) work on problems that interest you (3) with people you like and respect. The third part, incidentally, is how you get cofounders at the same time as the idea.

What makes for a good startup idea

NOTE

key takeaways

---

A good startup idea always arises from solving a problem you have, because it ensures that other people might have the same problem. So you’re finding solutions to existing problems, not starting with a solution and looking for a problem, which is exactly what bad startup ideas are. So here's how to find good ideas besides that:

1. Competition validates you: If you have competition, it validates your idea, and if you have just one thing that differentiates you from competitors, you're in a good position to succeed.
2. There is no such thing as an easy idea: Every single idea you pursue will always come with its unfavorable and boring parts, so don't have any illusions that a startup is easy and will immediately make you millions. There is always a hard part, so you might as well not shy away from hard ideas because those have a higher barrier of entry and less competition lies there.

"Live in the future and build what seems interesting. Strange as it sounds, that's the real recipe." - Paul Graham

Start with the problem, find the solution

You should always work on startup ideas that are problems you personally experience in life, and then try to find solutions for them. This is because a problem must actually exist for a solution to be viable.

The way to get startup ideas is not to try to think of startup ideas. It's to look for problems, preferably problems you have yourself.

The very best startup ideas tend to have three things in common: they're something the founders themselves want, that they themselves can build, and that few others realize are worth doing. Microsoft, Apple, Yahoo, Google, and Facebook all began this way.

Why is it so important to work on a problem you have? Among other things, it ensures the problem really exists. It sounds obvious to say you should only work on problems that exist. And yet by far the most common mistake startups make is to solve problems no one has.

The most common mistake startups make is to solve problems no one has. Do not fall into this. Do not come up with a solution searching for a problem. Always start with a problem and search for a solution.

The secret to a good startup idea

A good startup idea is one that solves a core problem and people really want that solution. It’s not something people are mildly interested in; it’s something that people need.

If you have a solution to a problem that people have, they'll use your solution even if it's crappy. That's the sign of a good idea.

When you have an idea for a startup, ask yourself: who wants this right now? Who wants this so much that they'll use it even when it's a crappy version one made by a two-person startup they've never heard of? If you can't answer that, the idea is probably bad.

Here is how to notice good ideas: keep building stuff that personally interests you.

A good way to trick yourself into noticing ideas is to work on projects that seem like they'd be cool. If you do that, you'll naturally tend to build things that are missing. It wouldn't seem as interesting to build something that already existed.

Don't worry about competitors

Yes. You may have a lot of competition, but the reality is that if you worry that you're too late or a space is too saturated, it's just a signal that your idea has already been validated and that you can become successful in the space.

In fact, a little-known secret is that competitors rarely kill off startups because there's so much possible innovation.

Because a good idea should seem obvious, when you have one you'll tend to feel that you're late. Don't let that deter you. Worrying that you're late is one of the signs of a good idea. Ten minutes of searching the web will usually settle the question. Even if you find someone else working on the same thing, you're probably not too late. It's exceptionally rare for startups to be killed by competitors — so rare that you can almost discount the possibility. So unless you discover a competitor with the sort of lock-in that would prevent users from choosing you, don't discard the idea.

If you're uncertain, ask users. The question of whether you're too late is subsumed by the question of whether anyone urgently needs what you plan to make. If you have something that no competitor does and that some subset of users urgently need, you have a beachhead.

To have a good idea in a crowded space, you need to find one thing that differentiates you that your competitors are not doing, even if you mainly have the same idea. For me, it's having KeyStash be local and have a good user experience, so that it acts primarily as a management dashboard for keys and not just secure sharing.

You don't need to worry about entering a "crowded market" so long as you have a thesis about what everyone else in it is overlooking. In fact that's a very promising starting point. Google was that type of idea. Your thesis has to be more precise than "we're going to make an x that doesn't suck" though. You have to be able to phrase it in terms of something the incumbents are overlooking. Best of all is when you can say that they didn't have the courage of their convictions, and that your plan is what they'd have done if they'd followed through on their own insights. Google was that type of idea too. The search engines that preceded them shied away from the most radical implications of what they were doing — particularly that the better a job they did, the faster users would leave.

A crowded market is actually a good sign, because it means both that there's demand and that none of the existing solutions are good enough. A startup can't hope to enter a market that's obviously big and yet in which they have no competitors. So any startup that succeeds is either going to be entering a market with existing competitors, but armed with some secret weapon that will get them all the users (like Google), or entering a market that looks small but which will turn out to be big (like Microsoft).

The greatest ideas lie in the ones other people are not willing to pursue

The best ideas often lie in the ones that people are not willing to pursue. For example, Stripe dealt with payments because nobody else was doing payments before them, because working with payments was way too painful. But Stripe was up to the challenge. So they did the thing no one else was willing to do, and from that, they became billionaires.

There are two more filters you'll need to turn off if you want to notice startup ideas: the unsexy filter and the schlep filter.

Most programmers wish they could start a startup by just writing some brilliant code, pushing it to a server, and having users pay them lots of money. They'd prefer not to deal with tedious problems or get involved in messy ways with the real world. Which is a reasonable preference, because such things slow you down. But this preference is so widespread that the space of convenient startup ideas has been stripped pretty clean. If you let your mind wander a few blocks down the street to the messy, tedious ideas, you'll find valuable ones just sitting there waiting to be implemented.

The schlep filter is so dangerous that I wrote a separate essay about the condition it induces, which I called schlep blindness. I gave Stripe as an example of a startup that benefited from turning off this filter, and a pretty striking example it is. Thousands of programmers were in a position to see this idea; thousands of programmers knew how painful it was to process payments before Stripe. But when they looked for startup ideas they didn't see this one, because unconsciously they shrank from having to deal with payments. And dealing with payments is a schlep for Stripe, but not an intolerable one. In fact they might have had net less pain; because the fear of dealing with payments kept most people away from this idea, Stripe has had comparatively smooth sailing in other areas that are sometimes painful, like user acquisition. They didn't have to try very hard to make themselves heard by users, because users were desperately waiting for what they were building.

Don't think of a startup as avoiding hard problems or the parts of a company you don't want to deal with. In a startup, you'll have to deal with some amount of bureaucracy. Just deal with it because that's a part of life.

Also, there's no such thing as an easy idea. Every single idea will have its own blocks, and that's just something you have to deal with and not have illusions about.

Even if the product doesn't entail a lot of schleps, you'll still have plenty dealing with investors, hiring and firing people, and so on. So if there's some idea you think would be cool but you're kept away from by fear of the schleps involved, don't worry: any sufficiently good idea will have as many.

The dangers of coming up with startup ideas on purpose

The best startup ideas are not ones you could immediately consider. Rather, they are just problems you encountered and found solutions for.

One of the biggest dangers of not using the organic method is the example of the organic method. Organic ideas feel like inspirations. There are a lot of stories about successful startups that began when the founders had what seemed a crazy idea but "just knew" it was promising. When you feel that about an idea you've had while trying to come up with startup ideas, you're probably mistaken.

But here are three ways to search for ideas:

1. Look for problems in areas for which you have expertise and domain knowledge
2. Ask other people what problems they have and then live like them or try to understand them and their job better to create a solution for it.

method 1 - expertise method

When searching for ideas, look in areas where you have some expertise. If you're a database expert, don't build a chat app for teenagers (unless you're also a teenager). Maybe it's a good idea, but you can't trust your judgment about that, so ignore it. There have to be other ideas that involve databases, and whose quality you can judge. Do you find it hard to come up with good ideas involving databases? That's because your expertise raises your standards. Your ideas about chat apps are just as bad, but you're giving yourself a Dunning-Kruger pass in that domain.

method 2 - solving other people's problems

The next best thing to an unmet need of your own is an unmet need of someone else. Try talking to everyone you can about the gaps they find in the world. What's missing? What would they like to do that they can't? What's tedious or annoying, particularly in their work? Let the conversation get general; don't be trying too hard to find startup ideas. You're just looking for something to spark a thought. Maybe you'll notice a problem they didn't consciously realize they had, because you know how to solve it.

When you find an unmet need that isn't your own, it may be somewhat blurry at first. The person who needs something may not know exactly what they need. In that case I often recommend that founders act like consultants — that they do what they'd do if they'd been retained to solve the problems of this one user. People's problems are similar enough that nearly all the code you write this way will be reusable, and whatever isn't will be a small price to start out certain that you've reached the bottom of the well. 

One way to ensure you do a good job solving other people's problems is to make them your own. When Rajat Suri of E la Carte decided to write software for restaurants, he got a job as a waiter to learn how restaurants worked. That may seem like taking things to extremes, but startups are extreme. We love it when founders do such things.

Maker vs Manager schedule

The only real cognitive work can get done with deep work, like programming, writing, or practicing music. To manage large amounts of deep work and get real things done, switch into maker mode so you context switch less and are able to do important work without getting interrupted.

For less cognitive-draining tasks like checking emails or drafting pull requests, do those tasks in manager mode, which can be interrupted and should not interrupt maker mode.

• maker's schedule: Makers (like developers) require long, uninterrupted blocks of time—ideally 8 hours—to maintain mental context. Interruptions, even for meetings or emails, are highly disruptive to deep work.
• manager's schedule:  Managers often operate in shorter, fragmented increments (e.g., 20-minute blocks). The speakers emphasize that even founders who are not coding need to protect "maker time" for high-impact activities like sales and customer discovery.

NOTE

Prioritize tasks from your to-do list rather than letting your inbox or social media dictate your schedule

This is how you should structure your day:

• Maker mode session 1 for 4 hours
• Manager mode before lunch
• lunch
• Make mode session 2 for 4 hours
• Manager mode

So here are the actionable steps you must do:

1. Block social media: Use website blockers; your willpower isn't enough.
2. schedule your day: Schedule your day in blocks of maker mode and manager mode.
3. time log: Monitor and record where your time is going so you truly can measure your time and thus manage and improve it.

Successful people are abnormally autistic about protecting their time and blocking social media, because if you don't the world will steal your time from you.

Idea valuation

Main principles

• nobody knows who will be successful: Most people don’t know who will actually be successful in the end. That's why investors always try to find talent and make bets.
• the best startup ideas solve problems, not search for them: The best startup idea is a solution you came up with to solve a real problem you or somebody else has.
• Founder market fit is king: If you have good founder‑market fit for an idea, you’re much more likely to succeed because investors want to invest in founders who have good founder‑market fit, meaning they have expertise in the problem they’re trying to solve.
• It’s often hard to know what the best startup idea is: the only way to find if a startup idea is good or not is to build it and find out.

Avoid SISP, fall in love with a problem

Avoid solutions in search of a problem (SISP), for example, thinking of what you can do with AI just because AI is cool and you have to use it.

Solutions and the search for a problem just end up being a plausible, made‑up problem rather than a real problem that people actually care about. And if people don’t care about the problem, they will not care about your solution.

Instead of doing SISP, you should fall in love with a problem and focus on solving that problem.

Avoid tarpit ideas

So maybe you found a problem that you really want to solve instead of finding a solution in search of a problem.

But now you want to avoid tarpit ideas.

Tarpit ideas are widespread problems that lots of potential founders encounter and can't really solve. They seem easy and plausible to solve at first, but are actually deceptively difficult.

For example, something like Stripe might be a tarpit idea. Payments have always been a pain, and they're the only ones who've been able to do it successfully. So you don't really want to go down that route.

To avoid tarpit ideas, follow these steps:

1. google it: Always save yourself the pain by googling your solution to see if other people have tried it before, how difficult it was for them, or if they’re too good in the space and you can’t compete with them.
2. evaluate the idea: Always evaluate the idea with a competition before jumping into it.

Don't wait for the perfect idea

There is no such thing as a perfect startup idea. Just think of it as a good starting point that will morph over time.

10 questions to ask about your startup idea

1. Do you have good founder market fit?: Are you the right person or team to work on this idea? Do you have expertise that lends itself to this topic?
   • founder market fit is the most important predictor of success for your idea.
2. How big is the market?: In order to have a good startup idea that will grow, you need to be in one of these two markets: either a market that is already big or a market that is small but rapidly growing.
3. how acute is this problem?: Is your problem something that people actually care about? It has to be something that people would care about and need.
4. do you have competition?: If you have competition, it means that your idea is validated; you're doing something right. If you have no competition, that should be a red flag.
   • Most startup ideas should have good competition, but if you have really big competition with big players in the field, you need an extra insight to differentiate yourself.
5. do you want this?: If you don't personally want to use your idea, and if it's not software that you would use every day, then it's not a good idea. If nobody else wants to use your idea, then it's probably not a good idea.
   • If the answer to both the questions of “do you want to use this?” and “do other people want to use this?” are no, then it’s not a good idea.
6. Did this only recently become possible or recently become necessary?: If the answer to either of these is yes, then you’re in an emerging market that is small but rapidly growing, and this is the best time to take advantage of it.
   • With the advent of AI, an example would be something like sandboxes where A can act freely, or something like human‑in‑the‑loop APIs, which prevents AIs from acting based on predefined rules.
7. Are there good proxies for this business?: A proxy is a large company similar to your business idea, but it is not a direct competitor. Having proxies is a good sign your idea would work.
8. Is this an idea you’d want to work on for years?: If the answer is yes, then you will likely have high success with it. But ideas can also grow on you if the answer is no.
9. Is this a scalable business?: If you have pure software, then it's very scalable. You want to avoid any idea that needs high-skilled human labor in order to serve customers.
10. Is this a good idea space?: An idea space is one level of abstraction beyond a startup idea. It’s like a class of software startup ideas, like "software for medicine" or "infra monitoring".
    • The main idea is that different idea spaces have different probabilities of your startup being successful.
    • If your idea space is AI, then investors want to invest in it, and you will have a very high probability of the startup getting big. But if the idea space is something investors don't really care about right now, like quantum, then it's a lower probability.
    • A good idea space is something that you can expect to have reasonable growth and also you have good founder market fit.
    • If you're in a good idea space, it's easy to pivot into something people actually want, but if you're in a bad idea space, the probability of finding a good problem to solve is very low.

The three things the best startup ideas have

The best startup ideas have these three attributes.

1. hard to get started: The best ideas are ones that have high barriers to entry and nobody wants to do because they're so hard.
   • case study: Stripe succeeded because it was the only good option in a market that desperately had a problem that needed to be solved, namely automating payments via code. Stripe had to go through all sorts of hurdles, like tax and bank information, and government compliance, which nobody else wanted to deal with.
2. in a boring space: Great ideas are ones that nobody else is willing to do because they're boring, but there's still a market for them.
   • People think that working on a boring idea will be boring, but they fail to realize that working on an interesting idea will also be boring after a while, after the initial excitement wears off and fades away.
   • Because at the end of the day, it's the same from day to day, just working on your idea, constantly executing on it, and talking to customers. It's all the same.
   • So don't have any illusions that a boring idea is somehow a lot more boring than an exciting one. They're both about the same, but boring ideas have more opportunity.
3. existing competitors: Most good startup ideas have existing competitors, counterintuitively. If a startup idea has no competitors, it's because nobody wants the product or it's not a real problem people have.
   • The best opportunity when you have existing competitors is if you have an insight that all of them have missed, or they all just kind of suck.
   • case study (DropBox): When Dropbox first launched in 2007, there were already 20 other file-based cloud storage providers on the market.
     • But Dropbox had the unique insight that the user experience for all of them sucked. So Dropbox wanted to create automatic syncing with the host operating system, which no other competitor had, because they noticed that most people were not really using the other 20 cloud providers. There was a gap in the market that Dropbox could fill.
     • If they had not realized it and were initially discouraged by the 20 other competitors, they would have never been a billion-dollar company.

How to come up with ideas

Seventy percent of all YC startups have their ideas made organically because they started with a problem they wanted to solve with some solution, and that's how they came up with their idea.

So you want to arrive at a solution organically by starting off with the problem first.

WARNING

The main problem people have if they try to inorganically come up with a startup idea It’s that they tend to think of bad ones and get stuck in tar pit ideas.

So instead of trying to artificially generate startup ideas, here’s a playbook to develop them organically. If you follow the steps, you'll have a higher chance of serendipity actually organically coming up with an idea:

1. become an expert on something valuable: If you have expertise on a subject, you'll have unique insight into the field and the problem it has, and be able to come up with an idea that people haven't thought of before, or unique insight that you bring to a market that nobody else has.
2. work at a startup: Working at a startup lets you see what kind of problems exist in this space and how people are trying to solve them.
3. build things that interest you: If you're a programmer, build things that interest you; they'll turn into ideas over time.

7 recipes of startup ideas

1. Ask what your team is especially good at: This pattern of finding ideas is based on founder-market fit, where if you have a good founder-market fit, you’ll probably come up with good ideas. Think of ideas that take advantage of your expertise.
   • benefit: Any ideas you come up with will automatically have good founder-market fit.
   • con: If you're young, you may have not developed the expertise necessary to develop taste in the field.
2. Start with a problem you've personally encountered: This is the classic organic way of coming up with ideas. It's even better if you're uniquely and unusually in a position to see this problem that nobody else has.
3. Think of things you personally wish existed: This is also the classic organic way of coming up with an idea, but it's also prone to falling into tar pit ideas.
   • warning: To avoid falling into a tarpit idea, you have to ask yourself, is there a reason why this doesn’t exist yet? If not, then you found a unicorn. But if there is, then you found a tarpit.
4. Look for things in the world that have changed recently: If there is some global or national event that changes things in the world, that's a great opportunity to make a business. For example, Zoom popped off during Covid as the defacto way for online meetings because they had unique insight into the future of async class and meetings, so they offered group annotation tools and meeting codes to mesh with that idea.
5. Look for new variants of successful companies: Insert yourself into a market with good proxies and good founder market fit and create a variation of those proxies in an untapped market, like another country
6. Talk to people and ask what problems they have.: First, pick a fertile idea space and then start talking to people within that idea space. If you go down this route, you need to talk to customers and founders in this idea space, ask them for advice, and learn why they chose their ideas.
7. Look for big industries that are broken: This one checks all the boxes - big competition and unique insight or gap in the market, which lets you take advantage of it and grow big in the space.

Evaluating ideas

To evaluate your ideas, you can give them numerical values.

Here are 4 criteria you can use to evaluate your idea on a scale from 1 to 10:

1. scale: How big is the idea on a scale from one to 10? Could this be publicly traded?
   • Should be a 10 if it has Tesla scale opportunity, 9 if any random publicly traded company.
2. founder market fit: How good is your founder market fit on a scale from 1 to 10?
   • 10 if you have expertise in the domain
   • 0 if you have no idea what you're doing
3. ease: How easy is it to get started on the idea and create an MVP for it on a scale from 1 to 10?
   • Ideas that are easy to start and build are highly recommended.
   • Finding ideas that are easy to get started with are just as important as the idea itself.
4. feedback: How good is the early market feedback you're getting from customers on a scale from 1 to 10?
   • 10 if people want this immediately and sales are straightforward.
   • 0 if nobody wants to use it.

Then, average those to get an overall score from 1 to 10.

• If it's a high score above 5, you should go ahead with this idea.
• If it's below 5, you should pivot.

When you should pivot

You should pivot if you have an idea that isn’t working and the opportunity cost of continuing to work on that idea is greater than pivoting.

If you've worked on something for many months and it's not growing, that's a sign it's time to pivot.

In more detail, here are four good reasons to pivot:

1. You hate working on it: No point if you hate on an idea you're working on, then just go back and get back a normal job.
2. It's not growing
3. You don't have founder market fit for this idea
4. You are relying on an external factor outside of your control to make your startup take off: If its success is based on luck, it’s not a good idea. You should definitely pivot.
5. You're out of ideas on what to do differently to make it start working: If you have no creativity left and ideas to try to make your startup work, then you should pivot.

You should pivot as soon as possible if these things happen:

1. You have launched and have been trying to get users for weeks or months, and it feels hopeless.
2. The idea is impossible to get started on because it takes too many years of building capital.
3. You know in your heart it is not going to work.

When you should not pivot

You should not pivot if it's your first time trying to follow through on an idea. If you're the type of guy who changes ideas all the time and gets discouraged, it's actually good for you to try to follow something through.

How to pivot

The first rule behind pivoting is to pivot early and to muster up the courage to pivot.

Here's the main reason why people don't pivot early enough or don't want to pivot.

• sunk cost fallacy or loss aversion: You think that just because you have sunk so much time into your initial startup idea, continuing with it is a big fallacy, and it will cause you to lose a lot more time.
• a little traction: A little traction on your startup is dangerous because you think that your idea works if you have a little traction. But in reality, that's probably the maximum traction you'll ever have.
• they believe in never giving up: They believe in never giving up and that they have to follow through with their idea even though nobody else believes in them. But nobody else believes in your idea; that’s a sign it’s not really a good idea.
  • There are a lot of anecdotes about people who just believed hard enough and got through despite hundreds of rejections. But you're probably not one of those, so stop betting your entire career on one anecdote you heard.

NOTE

Don't think of pivoting as a slight against your creativity or your value as a human being. Instead, you should play with the statistics of the idea game and pick the best idea based on factors like founder-market fit, how acute a problem is, and the market.

Ambitious ideas are better

Counterintuitively, the more ambitious a new idea is, the more excited you’ll be to work on it, and the better pivot it will be.

NOTE

If an idea is not inspiring to you, then you won’t be excited to work on it, and it will end up being a worse product as a result because you aren’t going to want to put the work in.

Founder market fit is king

The only way to have a successful pivot is to pivot into an idea or an idea space where you have great founder market fit.

Should your idea be VC funded

Not all ideas have to have venture capital. Most companies don't really need venture capital. Venture capital is more so just for businesses that investors think can generate billions in net revenue per year or have that chance.

If you don't think your company will ever get to that level, then there's no need to force yourself to try to get VC funding and try to get an idea that should be VC-funded.

TIP

A good rule of thumb to decide if you're worthy of VC funding is to ask yourself, can you imagine this company as a publicly traded company? Would people want stocks in it? If the answer is no, it doesn't need VC.

Cofounders

Why need a cofounder

Being a solo founder is pretty difficult. Co-founders help that process out both in emotional support and making the development process a lot faster.

Here are multiple reasons why cofounders are great:

1. productivity and speed: Two people are 2x the speed than one, 4 people have 4x the velocity of one.
2. emotional support: good company helps you out.
3. empirical evidence: most good companies that are now valued at billions started out with cofounders.

Also, if you're a solo founder you're a lot less likely to get funded by YC because of the top 100 YC companies only 4 were made by solo founders.

The main pattern that underlies all successful solo founders is that they did everything by themselves. They were able to create the MVP and get users on their own and scale the MVP.

WHere to find a cofounder

The most important attribute to tell whether someone would be a good co-founder with you or not is if you would like them as a friend.

• your network: choose people in college or your coworkers to be your cofounder.

How to behave with cofounders

The most important part of being a co-founder is to have trust in other people and to have people trust you. These are three ways to build trust:

1. trust people by default: The alternative is to always mistrust people, and that never ends well.
2. If you say you'll do something then do it: Say that if you're not going to do something, then communicate that early.
3. create space for mistakes
4. spend time together in person

Here are some useful habits and structures in order to create a good bond and relationship with your co-founder.

1. Have regularly scheduled one-on-ones.
2. Have bi-directional feedback, both constructive, which is positive and also negative.
3. Don't delay hard conversations. The thing about problems is that they're easier to solve when they're small.
4. Never commit personal tax against your founder, never comment on who they are as a person Unless it's positive.

All about hiring

You should only start hiring when your post-product market fit, meaning that you know people love your product and now you need to scale up in order to satisfy demand.

Most startups are pre-product market fit, meaning that they haven't found enough customers or demand for the product and supply how paces demand. That's when you should not hire and instead just continue building out the company to be as best as possible with the people you already have.

Who to hire and when to hire them

Hire smart people that are specialists, and hire them after an insurmountable problem becomes apparent and you're currently dealing with it.

Always hire intelligent people. Have high standards.

Every hire should always increase the average IQ of the company.

Customer discovery and how to talk to users

Create a personal connection with users

The best founders talk to their users and potential customers before even creating the product because they want to find out how to best solve a user's problem.

Users will keep you honest. They are the only stakeholders paying you anything.

NOTE

The best opportunity is creating personal connections with your users, so that you create a product for the users, not finding users for your product.

How to run customer discovery interviews

For customer discovery interviews, Your main goal is to just figure out what pain point or problem a customer has and hear them out and listen to them. You’re not trying to sell them the solution or even think about the solution.

IMPORTANT

Just. Understand. The. Problem.

Here are the main steps on how to conduct a customer discovery interview:

1. Call the customer and then build a report with them. Basically, you just want to have a nice conversation, ask them about their problems.
2. Ask them open ended questions to drive the dialogue forward, never just yes/no questions.
3. Take notes during the meeting, record it.
4. Do not talk about your product or try to sell them on it. You don't want to make this appear like a sales pitch. Instead, have a nice conversation with them. Ask about their problems and what they're looking for. Then introduce your product.

During the call, frame the interview around a customer's pain point and ask them questions about it. Here are the 6 questions you should ask in exact order as to gain a complete understanding of the customer's pain point and what your solution could do to fix it.

1. Tell me how you do x today.
2. What is the hardest thing about doing x?
3. Why is it hard?
4. How often do you have to do x?
5. Why is it important for your company to do x?
6. What do you do to solve this problem?

NOTE

Honestly, the best tip is to ask them to screen share and show you what they do for their current problem. This gives you the most context as to actually how to solve the problem.

Common mistakes

Whatever you do, do not ask these questions:

• "Will you use our product?"
• "What features could I add to make my product better?"
• "How would a better product look like to you"

The reason you should not ask these questions is because you'll get a biased answer. Most importantly, your job is to figure out the customer's pain point, not pitch them something.

You're not supposed to build features around what people think would be good. Rather, you build features around the pain point and solve the customer's pain point.

This is because even though users know what pain they have, they often do not have good solutions they can come up with. You should not ask them what solution they would like to see. Instead, find out what the problem is, and then make the solution afterward.

Users generally have good problems (real, marketable) but they often come up with bad solutions. Here are the reasons why:

• users don't say no to features: Users don't really have an incentive to say no to features because it doesn't cost them anything to add features. But it costs you, the founder, to add features. So you have to be more selective with what features you put in the app, but users don't.
• users aren't product managers or founders: Users don't often know how a product works, so how would they know what a good solution looks like?

NOTE

The main goal of a customer discovery interview is to think about the problems, not to try to come up with solutions. It's all about understanding the problem rather than coming up with a solution, because users are good at conveying their problem, but not good at coming up with solutions.

• customer job: convey the problem
• your job: understand the problem

After customer discovery interviews

After you have done 5 to 10 customer discovery interviews, now you can start to think about the solution. But until then, don't think of the solution.

Here is what you want to do now to think of the solution:

1. synthesize your learnings: synthesize your learnings from the notes you took during the meeting.
2. brainstorm a solution/hypothesis: Now is the time to start thinking about the solution based on the problem.
3. Create an MVP

Figuring out if the problem is valuable

A problem is valuable if people would pay for solutions. To figure out if a problem is valuable, ask these three questions:

1. Are people paying money for solutions in this space today?
2. Have you tried to solve this problem on your own?
   • Is it better than someone using a google spreadsheet? They're not going to pay hundreds of dollars per month for something they could almost easily do in a spreadsheet.
   • If you have a card app, it can easily be replaced by an Excel spreadsheet. So you need to make the user experience of your app far better than just a spreadsheet.
3. How easy is it to sell to your audience or ICP?
   • Some people will be easier to sell to than others.
   • For example, old school programmers and linux heads are stingy and want everything to be free, and finance bros will drop thousands every night on ten shots of vodka so you know they don't care about dropping hundreds of months on your product.

Creating an MVP

How to create an MVP

Here’s a four‑step cycle for creating an MVP. The main principle is to create quickly and then iterate. The fast response and feedback cycle is what you’re looking for.

1. launch quickly: create an MVP
2. get initial customers
3. talk to customers and get feedback
4. iterate (improve the product)

Follow this cycle to improve your product over time.

Common mistakes

The most common mistake founders have is being drawn by the fear of customers not liking your product. So you either never ask customers to try out your MVP, or you never iterate. Or you iterate too much, basically building your MVP without any customers asking you, or you delay by constantly asking customers what they think of your product.

The most important thing is not be drawn in by the fear. Even Steve Jobs had to iterate.

What makes for a good MVP

A good MVP is very fast to build; you can build it in weeks, has very limited functionality, and appeals to a small set of users.

NOTE

The most successful businesses are ones that a few users love rather than a lot of people just liking it, so it's better to target a core audience you want to satisfy and focus on pleasing them instead of trying to please everybody else in the world.

It's far better to have 100 people love your product than a thousand people just kind of liking it.

How to build an MVP quickly

1. time box your spec: it's always easier to work with a deadline and the work gets done more quickly
2. write your spec: Consolidate the five or ten features that you want to add into your MVP and settle on that.
3. cut your spec: Ruthlessly cut out features that are not part of the minimum in the MVP. You only want to add the minimum so you can iterate quickly.
4. don't fall in love with your MVP: It's going to change and iterate, so don't get attached to it.

NOTE

Don't fall in love with your MVP. Instead, fall in love with your users. Your MVP is crappy and will change. Your users will tell you how to constantly make your product better.

Who should try out your MVP?

NOTE

The best users to look for as your testflight customers are early adopters of technology because they will always want to try new products and they'll always give good feedback.

You want to look for users who have their hair on fire. That way, even if you're selling them a brick, they would buy the brick from you just to smash it against their head to put out the fire.

Basically, you want to look for users who have a major pain point and are willing to try out your crappy startup product just to satisfy that pain point.

• who you should pick: You want to find users who are willing to use your non-perfect product to solve their problem, and they're desperate to do so
• Who you should not pick: You do not want to pick just normal old users who expect perfection because even if they have good insight on what their problems are, they don't know how to solve them. That's your job as a founder.

Having users try the MVP

Now how shoild you conduct the MVP testflight trial?

1. UX research: What you should do is just tell them a goal for them to do in your app and then watch them click around and do it. This is to gauge the user experience and how new customers use something for the first time.
2. maintain communication: maintain direct communication with your testflight users

Surveys vs testflight trial

Customer surveys might help you understand the pain customers have, but they will never help you figure out how to solve that pain.

The only way to understand pain and figure out how to solve it is by having users try the MVP, as learning from customers is easier with an MVP.

How to launch

You should always launch quickly, as soon as possible, because if you launch you get customer feedback and can iterate quickly.

The worst thing possible that could happen after you launch is that nobody cares. But that’s okay. The founders of Airbnb launched three times before their product actually took off, so you can launch more than once.

"If you launch and no one notices, launch again. We launched 3 times."

Keep launching and iterating over and over again until you have a core of users that really love you.

Misconceptions about launching

• you can only launch once: Big lie. Nobody cares about your launches. You can do it as many times as you'd like.

I should mention one sort of initial tactic that usually doesn't work: the Big Launch. I occasionally meet founders who seem to believe startups are projectiles rather than powered aircraft, and that they'll make it big if and only if they're launched with sufficient initial velocity. They want to launch simultaneously in 8 different publications, with embargoes. And on a tuesday, of course, since they read somewhere that's the optimum day to launch something.

It's easy to see how little launches matter. Think of some successful startups. How many of their launches do you remember? All you need from a launch is some initial core of users. How well you're doing a few months later will depend more on how happy you made those users than how many there were of them.

So why do founders think launches matter? A combination of solipsism and laziness. They think what they're building is so great that everyone who hears about it will immediately sign up. Plus it would be so much less work if you could get users merely by broadcasting your existence, rather than recruiting them one at a time. But even if what you're building really is great, getting users will always be a gradual process — partly because great things are usually also novel, but mainly because users have other things to think about.

Partnerships too usually don't work. They don't work for startups in general, but they especially don't work as a way to get growth started. It's a common mistake among inexperienced founders to believe that a partnership with a big company will be their big break. Six months later they're all saying the same thing: that was way more work than we expected, and we ended up getting practically nothing out of it.

It's not enough just to do something extraordinary initially. You have to make an extraordinary effort initially. Any strategy that omits the effort — whether it's expecting a big launch to get you users, or a big partner — is ipso facto suspect.

How to get users

Do things that don't scale

The manual work matters

To get a startup to grow, you must manually do a lot of work to get users. There is no magic sauce that will make customers fly towards you to try out your product. You have to put in the manual effort at first.

Actually startups take off because the founders make them take off. There may be a handful that just grew by themselves, but usually it takes some sort of push to get them going. A good metaphor would be the cranks that car engines had before they got electric starters. Once the engine was going, it would keep going, but there was a separate and laborious process to get it going.

The most common unscalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can't wait for users to come to you. You have to go out and get them.

Don't be afraid of customer discovery and searching for users.

There are two reasons founders resist going out and recruiting users individually. One is a combination of shyness and laziness. They'd rather sit at home writing code than go out and talk to a bunch of strangers and probably be rejected by most of them. But for a startup to succeed, at least one founder (usually the CEO) will have to spend a lot of time on sales and marketing.

Always talk to enough customers to shoot for a 10% weekly growth rate, and measure success by your weekly growth rate.

The other reason founders ignore this path is that the absolute numbers seem so small at first. This can't be how the big, famous startups got started, they think. The mistake they make is to underestimate the power of compound growth. We encourage every startup to measure their progress by weekly growth rate. If you have 100 users, you need to get 10 more next week to grow 10% a week. And while 110 may not seem much better than 100, if you keep growing at 10% a week you'll be surprised how big the numbers get. After a year you'll have 14,000 users, and after 2 years you'll have 2 million.

Airbnb is a classic example of this technique. Marketplaces are so hard to get rolling that you should expect to take heroic measures at first. In Airbnb's case, these consisted of going door to door in New York, recruiting new users and helping existing ones improve their listings. When I remember the Airbnbs during YC, I picture them with rolly bags, because when they showed up for tuesday dinners they'd always just flown back from somewhere.

All startups are fragile at first

All startups are fragile at first and seem like it's not possible for them to grow at all and that they'll never make it, but that's how everybody is at first.

Most important thing is for you to never give up if you believe in your idea.

Airbnb now seems like an unstoppable juggernaut, but early on it was so fragile that about 30 days of going out and engaging in person with users made the difference between success and failure.

That initial fragility was not a unique feature of Airbnb. Almost all startups are fragile initially. And that's one of the biggest things inexperienced founders and investors (and reporters and know-it-alls on forums) get wrong about them. They unconsciously judge larval startups by the standards of established ones. They're like someone looking at a newborn baby and concluding "there's no way this tiny creature could ever accomplish anything."

It's harmless if reporters and know-it-alls dismiss your startup. They always get things wrong. It's even ok if investors dismiss your startup; they'll change their minds when they see growth. The big danger is that you'll dismiss your startup yourself. I've seen it happen.

I often have to encourage founders who don't see the full potential of what they're building. Even Bill Gates made that mistake. He returned to Harvard for the fall semester after starting Microsoft. He didn't stay long, but he wouldn't have returned at all if he'd realized Microsoft was going to be even a fraction of the size it turned out to be.

Make your users happy (even if it doesn't scale)

You should take extraordinary measures not just to acquire users, but also to make them happy. For as long as they could (which turned out to be surprisingly long), Wufoo sent each new user a hand-written thank you note. Your first users should feel that signing up with you was one of the best choices they ever made. And you in turn should be racking your brains to think of new ways to delight them.

Why do we have to teach startups this? Why is it counterintuitive for founders? Three reasons, I think.

One is that a lot of startup founders are trained as engineers, and customer service is not part of the training of engineers. You're supposed to build things that are robust and elegant, not be slavishly attentive to individual users like some kind of salesperson. Ironically, part of the reason engineering is traditionally averse to handholding is that its traditions date from a time when engineers were less powerful — when they were only in charge of their narrow domain of building things, rather than running the whole show. You can be ornery when you're Scotty, but not when you're Kirk.

Another reason founders don't focus enough on individual customers is that they worry it won't scale. But when founders of larval startups worry about this, I point out that in their current state they have nothing to lose. Maybe if they go out of their way to make existing users super happy, they'll one day have too many to do so much for. That would be a great problem to have. See if you can make it happen. And incidentally, when it does, you'll find that delighting customers scales better than you expected. Partly because you can usually find ways to make anything scale more than you would have predicted, and partly because delighting customers will by then have permeated your culture.

I have never once seen a startup lured down a blind alley by trying too hard to make their initial users happy.

But perhaps the biggest thing preventing founders from realizing how attentive they could be to their users is that they've never experienced such attention themselves. Their standards for customer service have been set by the companies they've been customers of, which are mostly big ones. Tim Cook doesn't send you a hand-written note after you buy a laptop. He can't. But you can. That's one advantage of being small: you can provide a level of service no big company can.

COnsulting

Sometimes we advise founders of B2B startups to take over-engagement to an extreme, and to pick a single user and act as if they were consultants building something just for that one user. The initial user serves as the form for your mold; keep tweaking till you fit their needs perfectly, and you'll usually find you've made something other users want too. Even if there aren't many of them, there are probably adjacent territories that have more. As long as you can find just one user who really needs something and can act on that need, you've got a toehold in making something people want, and that's as much as any startup needs initially.

What is marketing

You could have the best company in the world, but it won't matter if no one hears or cares about it. It's only worth it if people know about it.

"best selling author, not best writing"

The secret behind marketing is to figure out what makes your product special and how do you get people to care about it.

• If people do not care abotu yoru product, then it doesn't matter how much publicity you get, they will never buy it.

Copywriting

1. Headline: grab someone's attention immediately
2. Body: how do you create a body of text or content that makes someone enticed to stay until the end
3. CTA: give a call to action to convert them into a customer

Channels

Only choose one channel for your marketing. Like linkedln, video, or X. Only pick one channel.

Pick one channel and then be consiustent in it. Pick one channel, and then ask yourself, "How much volume can I put into this channel such that after a while it will be unreasonable that I don't succeed?"

• Linkedln: 3 posts a week for 6 months will grow your company
  • first month: create a company, announce it
  • 2nd month: get case studies form people who have used your product, get social proof
• AEO (aritifical inteliggence engine optimization): Figure out how to rank #1 on chatgpt searches when it links to a business.

NOTE

Figure out what works the first time and then just do it over and over again to maximize your success, then scale it horizontally (more accounts) or vertically (more content, better content)

Linkedln

NOTE

Your best option is Linkedln. Just keep posting.

Create a post on anything as long as it's barely newsworthy or interesting.

NOTE

Don't be anxious about posting on Linkedln or appearing cringe. You will no longer be uncomfortable about posting if you stick to it, because after a while you will get better at it, you will no longer feel uncomfortable, and you will see results.

Validate your product

Stop building. Your problem is not building. Your problem is you're too scared to get out of your house and talk to people.

Marketing is just a conversation. Here are the three steps to marketing:

1. Talk to people
2. Genuinely understand their problems
3. offer a solution to their problem

Phases

Creating an idea

A good startup idea is either one of two:

1. Solves a problem you've personally experienced
2. Solves a problem or pain point other people have experienced

If you're not doing either of those, then you're not solving a real problem

Phase 1 (0-10) users

When pitching your idea to your ideal customers, don't pitch them the idea. Instead, ask them about their pain points. Then model your product to solve those pain points.

If you're in this phase, instead of thinking of distribution, just think of making an app that 20 people really care about. The rest will come.

Actionable tips

• Apply to alif with VibeResume, DM omar directly, he invests very early and gives 300,000 to 500,000
• Apply to YC with EnvKeep and VibeResume, use AI to create your applications

Phase 3 (300 - 1000 users)

All you need to do to reach $1 million in revenue while in phase three is to just keep doubling down on the same marketing channel and scaling it until you hit that number.

Common mistakes

1. Pitching instead of asking pain points: Instead ask them about their pain points and what their day to day looks like

KPIs and how to prioritize your time

What are KPIs

• KPIs: are key performance indicators, aka a measurable metric that you track.
• prioritization: prioritizing the most important work first and getting that done'

Time is finite, so you must choose the most important work to do each day that actually move the needle forward.

NOTE

For example, you should base your prioritization off of tasks that move you towards your KPIs faster.

What to NOT prioritize

You should not prioritize or do work on anything that does not move the needle forward. Here are four examples:

1. unnecessary perfectionism: stop at good enough
2. premature optimization: do not build for performance at the start just wait until you actually have a problem to start optimizing
3. not building what your users want: a big mistake you can make is building some random feature that users don't want or don't really care about and instead doing something that you're excited about. No. always service the users

How to set KPIs and move towards them

Here is a multi-step process to move towards your KPIs by setting goals for them:

1. write down ideas that may help: and then rank them in order of what moves the needle the most.
2. do the highest priority task: From the list that you just wrote down, choose the few highest priority tests that would actually move that KPI and do them.
3. reflect: After a while, if the tests that you used and worked on to move your KPI did not work out and moving them, then reflect upon it and be super honest why it didn't work.

NOTE

The most important part of this process is this reflection. The definition of insanity is doing the same thing over and over again and expecting different results. You always have to reflect and change something and make small adjustments to get to where you want to be and learning from your mistakes.

How to prioritize

1. identify top KPIs: If you've launched, then your primary KPI should be revenue growth, something vague and abstract.
2. identify top KPIs for this week: Identify what your top KPIs for this week are. For example, getting 10 new paying customers by next week. Ideally, weekly top KPIs should be connected to long-term KPIs, like revenue growth.
   • why weekly KPIS: Weekly KPIs are a concrete goal to achieve top KPIs for your business. And they help with velocity and acceleration by always having a weekly goal to shoot for.
3. identify biggest bottleneck in top KPIs: Identify any stalling in the top KPIs and create goals around fixing those.