HN Gopher Feed (2017-09-25) - page 1 of 10 ___________________________________________________________________
YC's Essential Startup Advice
481 points by craigcannon
https://blog.ycombinator.com/ycs-essential-startup-advice/___________________________________________________________________
pascalxus - 2 hours ago
Great post: I especially like the description he gave: "find
customers who have their hair on fire".If anyone wants to solve the
Satiety problem, I'd be willing to bet there's millions if not
billions of people with their hair on fire with that problem!
asah - 6 hours ago
great advice! esp "a small group of customers who love you is
better than a large group who kind of like you"I'd add some
additional qualification: "Valuation is not equal to success or
even probability of success" ==> capital-intensive businesses
require suitable valuationIgnore your competitors, you will more
likely die of suicide than murder ==> yes, and!!! competitors are
good: they help build awareness among customers, investors,
etc."Write code ? talk to users" ==> for enterprise products, also
talk to a few customers / decision-makers. If nothing else, make
sure your fans have access to budget.
alvis - 6 hours ago
Out of curiosity, I am wondering if entrepreneurs really worry
too much on their competitors. Often I find articles saying the
opposite -- they urge people not having a blind eye on their
competition so that they can at least differentiate themselves
from competition, lest that they're making another me-too
product.
moron4hire - 5 hours ago
I am always disappointed at the lack of effort put into discussing
what "launch early" really means. For example, let's say you're
making a Word Processor[0]. Surely, putting up nothing more than a
download page where people can Stripe their $10 for a copy is not
sufficient. There must be a lot more to the story, because there
are a lot of projects that have done just that and have gone
nowhere.It's always made to sound like you can "just launch now".
But there must be some sort of apparatus in place to promote the
product and take advantage of the attention given to the product.
Constructing this apparatus must be a significant undertaking, or
else more people would do it. So one can't "just" launch. There is
still significant work to do up front, it just might not
necessarily be programming of your product.[0] Just for example.
Call it, "consumer-oriented software", rather than any sort of SaaS
or open-source library or any other sort of software offering.
nathan_f77 - 2 hours ago
I agree that it's certainly possible to launch too early,
especially if your product doesn't exist, or it's full of bugs
and unusable.But this is still good advice for me. I'm just about
to launch a service, and I think I've already gone way beyond
"MVP" status. I was even planning on doing a big redesign of the
whole product, but now I've decided not to do that, because it
works fine as it is.I could easily keep working on this product
for another 6 months before I was comfortable launching it, but
now I think I'm going to set a deadline for early next week, and
only work on the most important things.
abalone - 7 hours ago
> 007 ? formidable (need this)What does this mean?
daveguy - 7 hours ago
Second this question. This is the only place "007" or
"formidable" shows up in the article. Also, no reference to James
Bond in the article. Is need this a reference to needing to add
it to the article or a statement that you absolutely must have
it?
jacquesm - 7 hours ago
Quite a few loose ends in that piece.
beat - 4 hours ago
Launch early and iterate!
thinbeige - 5 hours ago
> launching a mediocre product as soon as possible, and then
talking to customers and iterating, is much better than waiting to
build the ?perfect? product.Yes, yes and yes. But this is so easy
said but still a struggle and need to be put into perspective.
Let's say we do a super simple business, eg a resume writing
service on scale (just for the sake of having a simple example). To
be ready to reach out to first customers we need to...- Setup a
landing page, takes ten minutes with Squarespace but to get all the
copy and visuals right or least good enough for some first testing,
min one day, rather three to five- Setup and prefill all social
media channels, should take half a day incl getting the first 25
likes in order to save the name- Create the first ads and iterate
to some ads which actually convert at good CTRs/CPCs take multiple
days because you need to let a campaign run at least for one day;
so lets assume another five daysSo just to test this stupid-simple
agency business properly we need already two weeks.Now imagine, you
do something a bit more sophisticated, an actual
app/SaaS/game/bot/whatever, you still need minimum two weeks for
the 'Marketing' stuff before plus the time for the actual app. And
being mediocre doesn't work in highly competitive markets.So, if
you are able to (1) build a first testable thing in 2-4 weeks you
are very good. And you are even better if (2) you have the power
and positivity to do 12 tests per year because you need more than
one shot.
rgbrenner - 3 hours ago
Who said anything about social media, and facebook likes, and
advertising. Just stop. That isn't your product.If your product
is just a squarespace page... then that's the entire part of that
step.Do that, and then go talk to your customers. The rest of
that is just procrastination, and frankly a waste of time and
money at that stage... because there's no way you have product
market fit that early, so why are you buying ads?
borplk - 2 hours ago
"go talk to your customers" is much easier said than done.
grey-area - 1 hours ago
If you can?t identify and/or talk to customers, that is also
a signal.
marcus_holmes - 1 hours ago
If you haven't talked to your customers before you started
building anything, that is also a signal. A massive one.
thinbeige - 1 hours ago
> Who said anything about social mediaI don't care about
Facebook and even if my product hasn't any relation to FB,
Twitter, etc. At some point you probably need them anyway, eg
for ads and then you must have a FB company page and thus a
handle/account.The best time to get those social media accounts
is when you got the product domain name. The wise founder
checked if the respective social media handles were free before
he registered any domain name. You can also wait of course few
months and register a cumbersome handle because somebody else
took the the handle then.My message was: Just setting up the
foundation of a product and a company--and by foundation I
don't mean the actual product--is already a lot of work.
akelly - 2 hours ago
The devils advocate position is that without a social media
presence or ads, it can be difficult for some companies to find
customers to talk to.
jaggederest - 2 hours ago
One of the things that I have learned the hard way is that if
you don't have a channel to get at least initial customers by
some means besides PPC advertising, you're unlikely to
succeed.One of the early competitive advantages you need to
have is in "finding customers to talk to".
briandear - 5 hours ago
I agree so much! My little company does mental health practice
management and communications yet it?s incredible hard to ?start
small? because your being judged against all the incumbents. Even
if you have some clever tech (we do,) nobody wants to use it if
you don?t at least compare somewhat to the existing competition.
If I were building photo sharing in 2006, maybe that small,
sloppy and iterative approach would work great, but when you?re
taking on entrenched incumbents, it?s hard, especially in a space
related to health. I guess you could build one feature and be
really great at it, but users are rarely shopping for that
specific feature, especially if it?s novel and they don?t realize
they need it yet.
wpietri - 3 hours ago
Are you sure you're a startup, then? If you're going to build
the kind of thing your future clients are already buying, then
it sounds more like a normal new business to me.Startups are
pursuing some sort of radical improvement on the status quo.
For that, there should be early adopters, people who care a
great deal about your kind of improvement. People who are
willing to sacrifice the normal kind of good for your specific
kind of great.There's nothing wrong with being a new business,
with wanting to deliver a mousetrap that's 20% better than
existing mousetraps. But it's a very different kind of thing
than doing a startup, and I think it's dangerous to apply one
sort of conventional wisdom to the other.
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Mz - 4 minutes ago
Google was not the first search engine. A better version of
an existing thing can hit big growth. Rate of growth seems to
be what people are talking about when they distinguish
startups from normal new businesses. It isn't actually
necessary for it to be some new fangled thingamajig the likes
of which the world has never seen before.
erispoe - 5 hours ago
> it?s incredible hard to ?start small? because your being
judged against all the incumbentsThen you're probably
addressing the wrong market. I found _The Innovator's
Solution_[1] by Clayton Christensen pretty useful to understand
that. You want to address a market that is underserved or not
served at all by the existing big players. Often, it's by
providing a service that is much simpler, much less powerful,
but cheaper and/or more accessible than the existing
solutions.[1]: https://www.amazon.com/Innovators-Solution-
Creating-Sustaini...
Mz - 3 hours ago
Anything in health care is hard, in part due to HIPAA.You are
welcome to join Health Techies:https://groups.google.com/forum/
?nomobile=true#!forum/health...
adamqureshi - 1 hours ago
https://onlyusedtesla.com/ I set up a landing page using WP with
form and a basic email capture. I got 3 listings from tesla
forums. I got a BUNCH of emails. I started using ambush tactics
to get customers to list their for sale used tesla with me for
free while in beta. Saying stuff like " we have a concentrated
buyer exposure , notice buyers not shoppers. I used FB messenger
for communications and email. I started running ads on FB for
each listing. I started charging customers $150 for each sold
vehicle, manually. Now 6 months later, i am building a new web
app using VueJS hosted on DO. I tested charging from the get go
and made a sale today. $50 to sign up list $50 to boost on FB.
Boost on FB cost me like $5/$10. You can target location ,
interest , behaviors. I am working on new features . I made
$150/avg just following up with customers , i was ranking first
page organic for "buy a used tesla" kinda got lucky , who knows.
I just wanna grab a "slice" from cars,autotrader they can keep
the pie. customers started comparing my rinky/dink Wp site to
cars, auto trader , they liked the simplicity and speed. I
adopted the mentality NOBODY IS GONNA FUND YOU. Its everyman
for himself. Good LUCKY!
laktek - 1 hours ago
I struggled with this building Pragma. I was going to a crowded
market with established incumbents. Most early talks with
customers would always lead to "How is it better than Wordpress,
Webflow, Squarespace, etc." So I started to feel we have to tick
all the boxes and product never felt shippable.However, two weeks
ago I took a step back and thought what if we can ship a product
in 48 hours and get people to pay. The result of it was
Page.REST. In reality, it still took 7 days to launch it
properly, but it had 10 people paid customers after the first day
in business. That was a revelation to me and gave me a different
perception of the approach.I can attest being in the market is
the best way you could learn and iterate a product (no matter how
simple & rough the early version looks).PS: I blogged some of my
learnings from shipping Page.REST - https://www.laktek.com/what-i
-learned-from-building-pagerest...
alvis - 6 hours ago
"Do things that don?t scale" -- The essential of the essential
IMHO. Intuitively, it sounds nonsense. After all, who what to build
an unscalable business. But having been working on my super early
stage startup for a while, I realise this is the biggest wisdom I
gain during the process.Sometimes I feel stressed on spending too
much time on things like manually solving problems for my potential
customers and even helping my once potential co-founder, who now
formed another startup of his own, with his problems. But now
looking back, the time I spend is not in vain. I gained lots of
hand-on experience on what things do and don't work. Not to
mention, valuable feedbacks and friendship are something I think I
won't get it if I focus on something otherwise.
jefferson123 - 6 hours ago
Does YC have enough time perspective to be truly convinced these
principles actually hold?The only example in article is Airbnb,
which is obviously an outlier.How well has this doctrine been
working?
jacquesm - 6 hours ago
It works well enough if the numbers are large enough from an
investors point of view. It may very well be sub-optimal when
looked at from the position of an individual company.This is un-
avoidable, any kind of start-up advice will always be a
distillate from experience across a portfolio and hence will
maximize the chances for the holders of portfolios, not for the
holders of stock in a single company.
geoff - 5 hours ago
This might be true if this were the sort of advice that argued
that startups should always swing for the fences, or always
take unreasonable risks, in the hopes that a portfolio of such
startups will result in one or more big winners. In fact, this
is not the case. Our advice is intended to increase the chances
that every startup that follows it will be successful. Like any
advice, you can surely find counterexamples where the advice
will not be a good fit, but we would argue those cases are
rare.
jacquesm - 5 hours ago
I think your YC bias is blinding you to the vast arena of
companies different than those that would normally apply to
YC. So it is more along the lines of 'YC essential start-up
advices for the kind of companies that would apply to YC'.
Not for start-ups in general.? Launch nowThis works, if your
product is something that is trivial or extremely easy to
manufacture. Many products are not at all like that.? Build
something people wantWhich you may only find out during the
iterating process.? Do things that don?t scaleThat depends.
Almost all of the examples in the article are from companies
that eventually scaled very well, and the 'do things that
don't scale' advice is only applicable to some specific
examples that held true in extremely narrow domains. For the
most part start-ups are trying to find each and every kink in
the machine to automate it as soon as they can so they can
stay lean while growing. I'd change it to 'do things that
don't scale and then find a way to scale them anyway'. The
first part is just to get a feel for the problem space, the
next is where you will end up making or breaking the
company.? Find the 90 / 10 solutionThe Pareto Principle at
work, can't disagree with that in any way, it is good advice
no matter what the context. Perfection can wait.? Find 10-100
customers who love your productSome very successful companies
have only 3 or 4 customers, you'd never hear of them because
they are not sexy in any way but they are critical and
usually have a lock in on their customers that most start-ups
can only dream of.? All startups are badly broken at some
pointI'd change that to 'Almost all companies are badly
broken in some way'. This is after looking at many of them
over the years. That doesn't mean they can not function,
merely that almost every company that I've ever looked at had
one or more pretty serious defects.? Write code ? talk to
usersNot all start-ups revolve around writing code, in fact
the best of them when it comes to 'changing the world'
probably do not.? ?It?s not your money?See comment elsewhere,
it's not yours either, it is the company's money.? Growth is
the result of a great product not the precursorGrowth by
itself should not be a goal, and in many cases growth would
be a problem. I've written this before, if growth was good
then cancer would be good. So if you grow fine but be in
control and aware of what parameters drive that growth and
don't be afraid to step on the brake if it looks as if your
growth is going to outstrip your capacity to deal with it.?
Don?t scale your team/product until you have built something
people wantSensible advice, regardless of what kind of
company you run. Could be generalized to: "do not fall for
the premature optimization trap".? Valuation is not equal to
success or even probability of successI can't make much sense
of company valuations in general and start-ups in particular,
but I do know that even if the relationship does not hold in
one direction, there does seem to be strong correlation
between success in numbers and valuation.? Avoid long
negotiated deals with big customers if you canThat 'if you
can' is instrumental, anything involving enterprise sales is
going to have that element.? Avoid big company corporate
development queries ? they will only waste timeTrue, but they
are sometimes also ways to bankroll the company without
dilution. I've seen a couple of successes happen this way and
it seems like an elegant way to grow a company.? Avoid
conferences unless they are the best way to get
customersAgreed. Never went to a conference that I liked or
that felt like time spent well.? Pre-product market fit ? do
things that don?t scale: remain small/nimbleRemaining small
and nimble is good advice at any stage. VCs that push you to
increase your headcount should be avoided at all cost.?
Startups can only solve one problem well at any given
timeStrong agreement there, this goes for almost all the
businesses I've looked at. I'd even consider a start-up that
tries to solve more than one thing at the time as being more
at risk than any of their competitors solving only one of
those. You'd have to be very good at everything in order to
change along more than one axis in more than an incremental
fashion.? Founder relationships matter more than you
thinkAgain, strong agree. I've seen more start-ups tank or
lose momentum because of founder issues than for any other
reason or set of reasons combined.? Sometimes you need to
fire your customers (they might be killing you)But don't do
it too early, make sure you drop them when you can afford
to.? Ignore your competitors, you will more likely die of
suicide than murderThat depends, there is one situation where
being unaware of your competitors can be costly: If one of
your competitors has picked up funding and they enter your
market with a price war or giveaway when you are still
selling your product. This makes keeping a cursory eye on
your competitors a good investment as long as it does not
occupy you or one of your colleagues more than an hour or so
in a month. It can also help to keep you 'feature complete'
in the eyes of potential customers if you are going head-to-
head in the same market, as well as to stay informed about
their pricing and models.? Most companies don?t die because
they run out of moneyI disagree with this one, not sure what
your reason behind writing that so definitively was, but in
fact the majority of companies dying are due to bankruptcy.?
Be nice! Or at least don?t be a jerkAgreed. In the same line:
don't burn your bridges.? Get sleep and exercise ? take care
of yourselfThat's good advice for everybody including those
people that do not work on start-ups.Thanks for posting all
this by the way.
hyperpallium - 5 hours ago
> It may very well be sub-optimal when looked at from the
position of an individual company.Of course you're right that
the advice is for YC startups, that ultimately benefit YC. And,
I don't see how YC could even get data on how well this advice
works for non-start ups.But I think it is sensible advice for
non-start-ups. Just wish I had some data to back that up...For
example, I think going for a few customers you really help with
an urgent problem works better than many customers that you
somewhat help.
mwseibel - 6 hours ago
Very good question - we have 13 years and about 1600 startups
that we draw this from.
urs2102 - 7 hours ago
The term "launch early" can often get blurred. Dropbox famously had
a landing page, and then a video, and then iterated to a product.Is
Dropbox considered a product that "launched early", despite them
waiting to receive feedback on a video before building
software?Additionally, what tracks better: a good screencast or a
bad useable demo (I imagine a good demo is obviously better than a
good screencast)?Otherwise, great list, and thank you for putting
it together.
nathan_f77 - 2 hours ago
This is really scary to think about when you're days or weeks
away from launching an MVP.I'm building a service for developers.
I really want to polish the design and get the UX perfect, and
have really good documentation and client libraries for various
languages. But I think I can launch without those.I really just
need to record a screencast and get a demo online. But wow, the
struggle is real. I really don't want to launch it yet.
asah - 5 hours ago
"launch early" = MVP = no "gold plating" = the VERY least product
that will get people to use the product __regularly__ (not just
try it once).
CM30 - 5 hours ago
This is especially relevant if you're trying to setup a social
networking site:> Many startup advisors persuade startups to scale
way too early. This will require the building of technology and
processes to support that scaling, which, if premature, will be a
waste of time and effort.I see all these social media services
started up by folks who've spent weeks coding fancy platforms
hosted on cloud services with a whole team of engineers on standby
with all the best graphics design work money can buy...While no
one's actually using the service. Best to focus on the community
and getting people using it than the tech stack. No point trying to
make a super complicated site that scale to Facebook levels when
you've got about a hundred people actually posting on it.
TACIXAT - 1 hours ago
I totally did this. I got my stuff up on AWS with a Cassandra
backend. I launched that site and realized how silly it was. My
mentality has definitely shifted to build something simple and
get users.
ajeet_dhaliwal - 4 hours ago
I have leaned towards scaling too early in the past too and I
think there?s a tendency to do that for professional software
developers turned founders because that?s the expectation we have
when interviewing for a corporate role. It?s hard to unlearn.
gnicholas - 7 hours ago
> We often say that a small group of customers who love you is
better than a large group who kind of like you. In other words,
recruiting 10 customers who have a burning problem is much better
than 1000 customers who have a passing annoyance.How does the
possibility of being pigeon-holed affect this calculus, especially
where stigmas are at play? My startup's technology is life-changing
for many people with dyslexia or ADHD, but is also well-used by
skilled readers (for whom it is augmentive, but not life-
changing).If I focus exclusively on the accessibility community,
many people who come across our website will be turned off by words
like "dyslexia", and will assume that our technology isn't for them
because they read well already.How do you suggest startups navigate
these waters when there is a chance of being pigeon-holed in a way
that evokes stigma?
quaunaut - 7 hours ago
I'm not an expert, grain of salt, etc.But to me, this is the
responsibility of different funnels. Have your most generic
marketing info- your landing page, etc- apply to just about
anyone, but make your resources that reach out to the
accessibility community target them exclusively. They won't be
offended/disturbed when they see that you can be used more
generically, and if it's truly solving a need for them they'll
sign up generally based on your targeted outreach anyway.
gnicholas - 7 hours ago
We are actually in the process of redesigning our website
(currently a single page) to have a generic landing page and
three silos. This allows us to refer to
educational/accessibility benefits when speaking to one
audience and speed-reading benefits when talking to other
audiences. Thanks for reaffirming this change, which we've
poured a lot of time into!
pasharayan - 7 hours ago
Thanks for this write-up mwseibel & Geoff!A question: What's the
best way to keep ourselves accountable to the tasks of "talking to
users", "do things that don't scale" and "writing code" every
week?We write a weekly report, and set milestones to go for each
week - but it doesn't feel like these things focus us our attention
as well as they could be.
quaunaut - 6 hours ago
It's the hardest part. Discipline. It requires creating your own
system and constant reevaluation- every milestone/meeting should
begin and end with how this is related to figuring out
product/market fit.If possible, this is the general way
milestones should be structured:1. Who is this for? Be as
specific as possible. At first this might even be someone's name.
As you start solving their problems, they'll ask for more and
you'll naturally start targeting others through those features.2.
What's the easiest way to solve this problem today? Do it that
way. You shouldn't be saving them 30 seconds a day, and actually
doing what they're doing now will help you realize the difference
between an annoying thing and a real need.3. From here, what your
proposed solution really is. Make sure you really figure out what
they want- don't just do what they say, try to get to the root of
what they're asking for.4. How you're going to go back, show it
to them, and see how much they clamor for it. See how it changes
their plans, schedules, etc.While going through this multiple
times you'll probably even get mistaken customers. In this case,
make sure you meet with them to just figure out what the hell is
going on. They might be using it in a way you didn't realize and
should maybe pivot toward- Segment is a good example of how there
might be a big business right next to the problem you're solving
today.
jacquesm - 7 hours ago
This article looks a little rushed.> By the way, it is vital to
remember that the money you raise IS NOT your money.But it isn't
the investors money either. It is yours to allocate as you see fit
but keep in mind that you should always do it to benefit the
company and the shareholders.Beware of backseat driving
shareholders or suppliers of convertible notes and other
instruments of lending that then want to tell you how to spend
their investment/loan (or even with whom), and never agree to spend
all or part of an investment with a company allied with one of your
investors. You are in charge, you decide.And beyond that, keep a
good eye on your shareholders agreement which could very well place
limits on the kind of things you can do with the money you raise,
many of those have clauses which can severely constrain your
ability to run your business such as being forbidden to move the
company (even just to larger offices), hiring of C-level execs and
other bits like that. So make sure you fully realize the
consequences of entering into a shareholders agreement and do not
fold too easily on 'standard clauses' that you feel will cramp your
ability to run the company as you see fit.
mceoin - 5 hours ago
There have been enough failed startups with hot tubs that this
advice may seem heavy-handed, but necessary in hindsight.
mattmanser - 2 hours ago
Whatever happened to caveat emptor? Does it only apply to the
plebs and not investors?Investors claiming that founders have
some sort of moral obligation to spend money wisely is
laughable.Otherwise a good article, but no idea how that bit of
strange perspective ended up in there.
nostrademons - 1 hours ago
Even without a moral obligation, there's a pragmatic reason
to spend money wisely: if you blow the money on frivolous
creature comforts, you end up in the same state you were in
before the startup (which usually means poor), except that
nobody will invest in you again. This seems like an
objectively worse position to be in.The real winners when
startups blow all their runway on fancy perks are purveyors
of luxury goods. That's where all the money goes, after all.
jacquesm - 43 minutes ago
I've seen start-ups that blew all their money in ridiculous
ways - to me - without ever crossing that line. You can
burn a lot of $ once you start shopping in SF for hip
office space, create an irresponsible marketing budget and
hire some expensive VP's of something or other. And VCs
will applaud you all - or at least most - of the way when
you do that.I see venture capital in the United States
exactly the way I see record companies: for the most part
they try to get the noob's signature on the dotted line on
a contract they will wish they never signed a few years
later on the off chance that they too will end up like a
few of the mega stars did.
jaggederest - 2 hours ago
Actually, they literally do have a moral and fiduciary duty
to their investors to spend money wisely. The article
describes it well.I'm not a lawyer, but that's what I've been
advised. You must adhere to good judgement when spending the
company's money or people can and will come after you on a
civil or criminal level.That's a pretty broad scope, and
corporate hot tubs are probably not beyond the pale, but you
can't take investor's money and put it into your bank account
and say "Sorry the company has folded". Embezzlement and
fraud are real crimes that you can get real convictions for,
and investors can file civil suit for much less than full on
embezzlement - witness Benchmark's suit against
Kalanick/Uber.
starshadowx2 - 6 hours ago
i think the idea is that it's not your money, but the companies
money. Like, it's not meant for you to spend on a new car or
something.The next line, "You have a fiduciary and ethical/moral
duty to spend the money only to improve the prospects of your
company." seems to agree with this perspective.
mwseibel - 7 hours ago
Geoff and I are happy to answer questions in the comment thread.
Our goal was to condense the advice we most often give to early
stage founders. (Much of this advice was also given to me when I
went through YC)
jacquesm - 7 hours ago
The first two links are both 'do things that don't scale', is
that correct or did you mean to link to something else in the
first link?Also, unexplained reference to 'PB', Phineas Barnum or
Paul Buchheit?
jtmarmon - 4 hours ago
This is a bit of a meta question but I've found that I've almost
never learned anything from reading posts like this. I've scanned
them over and nodded in agreement, only to make the mistakes I've
been warned against and then I finally understand what people were
telling me all these years.Does YC have an approach on how to
actually get founders to take advice to heart instead of just
understanding at a surface level?
adventured - 4 hours ago
> Does YC have an approach on how to actually get founders to
take advice to heart instead of just understanding at a surface
level?I've been building Internet companies non-stop since the
mid 1990s. The only means I've seen or personally experienced to
accomplish that, is personal suffering (only half joking). That
is to say, going through it for yourself. The difference between
book knowledge and hands on experience. Taking a punch to the gut
(so to speak) provides an intimate, emotional, personal lesson in
a way that reading about taking a punch to the gut simply never
can. Your brain subconsciously makes a special effort to take
note (forms of pain learning mechanisms) and ingrain lessons that
it will not (and I would argue, can't) from reading about it
alone. It's almost like something getting etched into your DNA,
versus just having a surface tattoo. When you actually go through
it, you acquire a kind of automated discipline (courtesy of said
pain) that you can't have just from reading or being told;
children and pets learn the same way from touching hot things.
dyarosla - 2 hours ago
I imagine that the best thing to extrapolate from this is to
learn from your own failures, but make those punches hurt only
a little. So that if you mess up, you can still move
on.Advisors could say what things to avoid, but then offer a
path of- but if you don't want to listen to me, try this
(small) experiment to see what happens.
adventured - 2 hours ago
The kind of advice that you pick up from articles like those
routinely linked here on HN, in my opinion, can help you
limit mistakes slightly and can help you learn slightly
faster; basically, improve the outcomes somewhat. It probably
also compounds nicely with actual experience, as
reinforcement.I don't think there's any good substitute for
doing, as a means to learn how to do start-ups, and more
broadly understanding how companies should operate. That
naturally includes working for other successful companies
first for a couple of years, which is a tremendous way to
learn as much as possible about the fundamentals of how
companies run before striking out on your own.
Mz - 1 hours ago
Does YC have an approach on how to actually get founders to take
advice to heart instead of just understanding at a surface
level?If you apply to YC and get accepted, the program provides a
lot more intensive support than just the articles on the website.
So, I think the short answer is "Yes, you can apply to YC."But,
if that route is not going to happen for you, then articles are
what they can offer to the general public. They also have video
courses, as I understand it. But, those are still essentially
instruction. If that doesn't do much for you, you probably need
to find something providing greater engagement, like a hackathon
or group of some sort where you can connect in a meaty way with
other business people. That seems to be the gold standard:
mentoring, making connections, etc.
jaggederest - 2 hours ago
Articles like this will never prevent you from making your own
mistakes. They can help you see your own behavior when it matches
the rules ("I'm breaking rule X, dang!"), and they can give you a
way of talking about it with other people ("Like Paul Graham
says, do things that don't scale")
Bretts89 - 6 hours ago
If anyone is interested I'm building an edtech startup which
streams college classes. We have a a few courses from Stanford done
in partnership with Y Combinator on building startups:
https://www.podiumedu.com
ajeet_dhaliwal - 5 hours ago
One area I?d love to be discussed/expanded further in another post
is about techniques around taking to users. Even getting people who
have signed up or are existing customers to talk to you is
surprisingly difficult. There are probably pearls of wisdom to
share in this area. Taking and listening to customers is so
important but with the noise nowadays I find it?s harder to get
them taking, even as I say they?re already using the product.
neerkumar - 5 hours ago
I never find advice on how to grow when your customers are heavily
competing with each other and, therefore, they are very unlikely to
recommend your product no matter how much they love you. I feel
this is a very common situation and I never heard YC talk about how
to deal with it.
alyhuss - 4 hours ago
On YouTube, "How To Start A Startup" has a list of videos that
talks about various stages a startup will encounter. Here is the
link: https://www.youtube.com/channel/UCxIJaCMEptJjxmmQgGFsnCg
shamino - 5 hours ago
For people just coming out of college, the advice given by YC might
seem very "groundbreaking". But honestly, these are not new ideas.
I listened to Sam's lectures at Stanford, and listened to Brian
Tracy's business books, and they are the same advice. Not to hate
on YC, but I just wanted to keep it 100.
TACIXAT - 1 hours ago
Even if it is not groundbreaking, people need to learn it
somewhere. I've learned a ton from YC posts. Maybe they are
things that people running businesses already know, but that is
not me. I may look at an application and say it is not innovative
technology, but if they are solving someone's problem and making
money it is hard to argue with it. YC is definitely educating
people who don't know these things and in that sense, the
information is very insightful.
mwseibel - 5 hours ago
Let?s be clear the goal wasn?t to break new ground in fact it?s
the opposite. To condense all the accumulated pieces of advice
that we give in one place and provide links to dive deeper if
needed.
shamino - 4 hours ago
I agree you are trying to do that with this post. But YC
startup information sometimes markets itself as knowing what
others don't know when it comes to growing a business, and say
they know best since they've seen so many startups in their
cohorts. It comes across as revolutionary ideas, even if those
words aren't exactly used.
shamino - 4 hours ago
For instance, all your reference links are to yourselves. Are
there no data points outside your own findings that could be
useful ?
dzonga - moments ago
The guys at Basecamp have preaching this stuff for years.
npgatech - 6 hours ago
I am looking for startup advice for founders that don't want to
build a billion-dollar company or need VC funding. How to
efficiently target a local market? Or perhaps start a niche
business that appeals to a small market.Every time I see a startup
advice book, article, Stanford lectures, whatever it may be - it is
always shooting for becoming the next Uber or Airbnb - including
this article.
hyperpallium - 5 hours ago
That's a "lifestyle" business, and it's very appealing. I don't
want billions, I just want to work for someone else.One curious
thing is it's more selfish than a startup - after all, you're
doing it for you, not for the business. You want it to be
sustainable, so the ugliness of competition is relevant sooner.
One pg essay likens a startup to a charity, and some, like
Craigslist retain some of that quality, helping a lot of people
without making as much money as they could.Note: I'm not
criticizing you for wanting this. I'd like it too, I just haven't
found a way of doing it that doesn't become nasty. YMMV.
Mz - 4 hours ago
"I Love Lucy" was created so Lucille Ball and her husband could
have a family. So, it was a "lifestyle business."* It also was
the Star Wars of its era in terms of being technically cutting
edge and changing an industry.IIRC, Plenty of Fish never took
VC money.There are other examples out there. You have to
research it if you want it, but it does happen.*
http://micheleincalifornia.blogspot.com/2014/03/i-love-lucy-...
[deleted]
icebraining - 4 hours ago
One curious thing is it's more selfish than a startup - after
all, you're doing it for you, not for the business.A business
is not a real person; you're not doing things "for it" anymore
than I'm being charitable by gifting my car new tires.
sp527 - 4 hours ago
Craigslist is a great example of exercising exactly the right
amount of restraint in the cost-benefit equation. Most SV
startups are subsidized (with attendant inflated expectations)
to the point that they can't possibly live up to their
valuations.
GCA10 - 4 hours ago
Could we stop using the term "lifestyle" to describe young
companies that aren't chasing the unicorn dream? A lot of them
are run by very driven founders who work long hours to build
world-class products for smallish niches. They don't have
vacation homes in Tahoe; they don't shut down for a week to go
to Burning Man.Instead, they are obsessed with a definition of
business success that doesn't involve ten-digit numbers.There
is one "lifestyle" business that's rampant throughout Silicon
Valley, in spite of its efforts to deny it. This would be the
bottom quartile of the venture business. It's all about picking
up management fees, taking long weekends, and living large.
rgrieselhuber - 4 hours ago
See my other comment. Cashflow business is a much better and
more accurate term for this.
wolco - 4 hours ago
What about the term small business?
rgrieselhuber - 3 hours ago
Just doesn't have the same ring to it. ;)It's largely
semantics as any small business should ideally be
cashflow positive but I think the nuance here is one that
you can build these businesses to scale, just without VC
funding. The time horizon for growth is much longer as a
result but definitely there.
wolco - 4 hours ago
The word lifestyle usually means someone running a part time
business usually a hobby that expanded.Running a gas station
is not a lifestyle business.
pbreit - 6 hours ago
I owned a pet store and would say most of this advice applies
equally well to such a business. Go live, talk to customers and
iterate. Make something people want.
wslh - 6 hours ago
I don't think so. When you are not interesting in scaling to
another galaxy it is ok to have relatively few customers and
charge them really well.
pbreit - 3 hours ago
The article even specifically suggests having fewer, better
customers.
alexandersingh - 5 hours ago
Yes but "talking to your customers" is universally applicable
and valuable advice. One could argue that it's of even
greater value if you're targeting a niche with only "a few
customers" because you need to ensure you really deliver
enough value to get them onside and paying a rate that
ensures you generate a profit.
mwseibel - 6 hours ago
The reason why is those are the types of business that are able
to raise money to pursue their goals.
rgrieselhuber - 4 hours ago
One of the best things I ever heard and I wish this was taught
everywhere, is: understand what kind of business you want to
build and what the right stage in your life to build it is.In
startup terms, there are cashflow businesses and disruptor
businesses (credit to Mike Dillard).Cashflow businesses are
generally sneered at in Silicon Valley ("lifestyle businesses")
but in many cases, they are a great place for entrepreneurs to
start.Cashflow businesses can provide you with a level of
financial independence on your own terms. Then, if you want more,
either start more cashflow businesses or then focus on your
disruptor business (Silicon Valley style startup). But if you do
you cashflow business first, you are far less at the mercy of
fickle VCs, etc.The other useful thing to come out of this
classification is it almost certainly informs your funding
strategy.If you're building a cashflow business, don't ever raise
money. If you're building a disruptor business, definitely raise
money, as much of it as fast as you can. If you've done your
cashflow business beforehand, you'll already be quite well off
and can think much more strategically in your disruptor business.
soneca - 6 hours ago
Here:http://www.microconf.com/ (edit: not only the conferenece
itself, but I mainly refer to the available videos of pasts
editions: http://www.microconf.com/starter/past-videos/ and
http://www.microconf.com/growth/past-videos/)http://www.startupsf
ortherestofus.com/https://www.indiehackers.com/
jv22222 - 5 hours ago
That video list is awesome, good find!
tlb - 6 hours ago
I think all the same advice applies, except slow down when you
get to the size of company you're happy with.
speby - 4 hours ago
There are tons of literature, books, articles, and more already
out there, written over decades, that talk through starting a new
business. Even material specific to starting a software-based
business if that is what you are after.The chances of hearing
some "new" advice about doing this that isn't just already out
there is not terribly high.
gdilla - 4 hours ago
That's because the 'other people' in other people's money want
billion dollar exits. you can pretty much use all this advice for
a local niche market, just use your own money or friends or
family's.
hashkb - 3 hours ago
You're looking for regular business advice, not "startup advice"
from YC. They advise particular classes of businesses extremely
effectively.
sarabande - 5 hours ago
I would check out the writings of 37Signals (now Basecamp)/RoR
founder David Heinemeier Hansson, who advocates bootstrapping for
not-necessarily small markets.His talk "How to unlearn your MBA"
in particular was fantastic in providing a counterpoint to
Silicon-valley style Startups:
https://www.youtube.com/watch?v=MlhAkNWC1qo.He directly comments
on the YCombinator model at 53'57"
(https://youtu.be/MlhAkNWC1qo?t=53m57s), but the whole thing is
worth watching.
majani - 5 hours ago
There's a book called Start Small, Stay Small that is really good
for the purpose of solopreneurship if that's your thing.
vineet - 6 hours ago
Check out http://www.startupsfortherestofus.com/ and pretty much
anything that the two guys behind it do. Beyond the podcast Rob
Walling and Mike Taber have books and host conferences on the
topic.
[deleted]
sjg007 - 6 hours ago
I think the advice is the same except you just have smaller
numbers of users. But you do want to see traction.
mindcrime - 5 hours ago
I am looking for startup advice for founders that don't want to
build a billion-dollar company or need VC funding. Check out
barnacl.es, an HN like site dedicated exactly
that.https://barnacl.es/
KGIII - 6 hours ago
When I opened this thread, I expected to write a post that
covered a few things.The first was to beware of survivorship
bias. Some of us have had experiences that were very different
from the reality that most people face.Second, I'd absolutely not
listen to anyone who suggested you start a business you're
passionate about, at least not as a general rule. If you're
really passionate about it, your own biases are almost certainly
going to prejudice your business in harmful ways. That doesn't
mean not to be passionate about it, it just means don't make your
passion your business.Third, don't do it with the goal of getting
out, selling for millions of dollars, and being the next Musk.
Those are unrealistic goals. Instead, do it to make enough money
to comfortably provide for you and your family. That's a much
more realistic goal.I think that third one applies to your
comment, which is why I mention it here.Then again, go back to
the first thing I listed. I'd not take advice from me. In my
case, I saw a niche and it fit in with what my research was
about. I left academia and was making a comfortable living. The
offer to buy my business was unexpected and the price was
surprising.Selling had never been my goal. It was just a fluke. I
wasn't passionate about what I was doing, I became passionate
about doing it well. I became passionate about working with
brilliant people and exceeding goals. It was traffic modeling,
that's really not a subject one becomes impassioned
over.Sometimes, you just get lucky. Sometimes, you're in the
right place at the right time. You can maximize your chances but,
at the end of the day, it's 'good enough' to just be able to
provide comfort and opportunity for you and your family.But, then
again, remember the first point.
jv22222 - 3 hours ago
> If you're really passionate about it, your own biases are
almost certainly going to prejudice your business in harmful
ways.I'd really like to hear more about this, because from what
I've seen it's really important to "give a shit" about what
you're working on.Without a deep level of giving a shit you are
quite likely to give up due to the waining of your interest
level.I mean, I've seen loss of interest as a major killer of
side projects countless times in Nugget and also from speaking
to lots of other entrepreneurs over the past 10 years.
KGIII - 3 hours ago
There's a space between giving a shit and being passionate. I
don't imagine one should be apathetic, but it probably
shouldn't be your 'save the world, come hell or high water'
project.People passionate about an idea can make great
employees. Someone giving direction should be a bit more
objective. If you can be both objective and impassioned,
you're in a small minority. Lots of people seem to think they
can, but wait until they fall head over heels in love and see
how objective they really can be.
giarc - 6 hours ago
Check out the SPI podcast (Smart Passive Income). Lot's of
founders on there from companies you've never heard
of.https://www.smartpassiveincome.com/podcasts/
fizx - 5 hours ago
Use subscription billing, have patience, find upsells, read
patio11.Source: Bootstrapped a company to substantial
profitability.
csomar - 6 hours ago
You'd be better off looking for general business advice rather
than a "start-up". The "start-ups" ? la YC looks to raise money,
several rounds, IPO, Exit, spend millions to acquire users,
etc...It's much different than building a small business that
scales to 10 employees in the next 10 years.The difference also
starts from the foundation. For startups you are looking for Corp
C. For your case you are looking for an LLC.
stevoski - 6 hours ago
Here's a forum for people who are bootstrapping startups,
typically with no intention of growing an enormous
company:http://discuss.bootstrapped.fm
uncle_d - 6 hours ago
Perhaps look at something B2B rather than consumer-facing, is the
advice I have seen - along the lines of that advice in the YC
piece that it's better to have 10 customers that love you (and
are spending much more) than 1000 that are lukewarm and/or not
spending much.
vram22 - 5 hours ago
Check out http://discuss.bootstrapped.fm/It is low volume, but
has some good advice now and then, some of it from people already
doing this stuff.
jv22222 - 5 hours ago
@npgatech Here ya go:- http://justinvincent.com/page/960/how-to-
start-a-sucessful-b...- http://www.startupsfortherestofus.com-
https://www.indiehackers.com- http://www.startupbook.net - Start
Small, Stay Small- https://blog.nugget.one/upstart/This is just a
quick list to get you started I'm sure there are better lists if
you google.Disclaimer: The Nugget blog and TechZing are some
things that I have been involved in putting together.Edit: On
this subject, this podcast here should be essential listening for
all entrepreneurs:https://www.indiehackers.com/podcast/005-bryce-
roberts-of-in...
Mz - 6 hours ago
https://groups.google.com/forum/m/#!forum/business-bootstrap...I
mostly post links to seemingly pertinent things from HN, but the
intent is along the lines of what you describe.
wpietri - 4 hours ago
What do you mean by "startup"? The one I normally use is Steve
Blank's, "an organization in search of a repeatable business
model".If that's what you're talking about, then a lot of this
advice still applies. Looking at the "Pocket Guide" section, for
example, I think that all still applies for a niche startup.If,
on the other hand, you're just talking about a new company, one
where you're applying a well-understood business model to, say, a
new location, then yes, you need different advice. But I think
that advice differs a lot based on what kind of new business. The
advice for a first-time Subway franchisee should be pretty
different than somebody who wants to launch their own consulting
company. There, it seems like people form up into specific
communities around the kind of business.
paulsutter - 6 hours ago
The Silicon Valley definition of startup is "company designed to
grow fast"[1]. It's perfectly OK to use a different definition,
and it's perfectly admirable to start a company with a different
goal. If so, you should ignore all the advice about raising VC
money because you really don't want to do that if growth is not
your central goal.[1]
http://www.paulgraham.com/growth.html"There's a distinct word,
"startup," for companies designed to grow fast. If all companies
were essentially similar, but some through luck or the efforts of
their founders ended up growing very fast, we wouldn't need a
separate word. We could just talk about super-successful
companies and less successful ones. But in fact startups do have
a different sort of DNA from other businesses. Google is not just
a barbershop whose founders were unusually lucky and hard-
working. Google was different from the beginning."
jacquesm - 5 hours ago
> The Silicon Valley definition of startup is "company designed
to grow fast"[1].No, that's the Paul Graham definition.
SkyMarshal - 4 hours ago
It's also the Steve Blank
definition.https://steveblank.com/2010/01/25/whats-a-startup-
first-prin...
jacquesm - 38 minutes ago
Do you honestly believe nobody used the term 'start-up'
before Steve Blank or Paul Graham used it?https://www
.merriam-webster.com/dictionary/start-up"A Fledgling
Business Enterprise"That's exactly what it means, no more,
no less. Keep in mind that outside of the HN crowd
absolutely nobody would know who either Steve Blank of Paul
Graham are and neither of them get to redefine the English
language.
wpietri - 4 hours ago
That is definitely not Steve Blank's definition. His is:
"an organization formed to search for a repeatable and
scalable business model."You can have a rapidly growing
company with an old business model. Look at McDonald's, for
example. The business model, selling hamburgers, wasn't
particularly different. But they took great advantage of
the rise of car culture and TV advertising. Or look at the
Android phone market. Selling phones is a pretty well
understood business model, but companies there have grown
rapidly by continual incremental improvement.
paulsutter - 3 hours ago
Repeatable and scalable sound like ingredients for fast
growth.To demonstrate that Steve Blanks definition is
materially different from Paul Graham's, perhaps you
could name a few successful startups which found a
scalable/repeatable business model, but that were not
designed to grow fast?
wpietri - 3 hours ago
Seriously? I already demonstrated that it was materially
different by showing that some-fast growing companies
were not formed to search for business models.All
successful startups grow fast, because that's how we
define business success. Not all fast-growing companies
are startups, though.
paulsutter - 3 hours ago
Ok great, Steve Blank excludes companies that already
have a scalable repeatable model? Somehow I doubt that's
his intentionEDIT: Most ecommerce startups would fall
into your "proven business model" category, and yet they,
like McDonalds before them, do extensive experimentation
to find the path to rapid growth. Which is why Steve
Blank underscores that the search is never finished.
wpietri - 3 hours ago
Not quite. His definition is about what the organization
was formed to do.If a company was formed to search for a
scalable, repeatable business model, then he's still
interested in it when they have found it. Then they're in
the growth stage.But if a company was formed, as most
companies are, intending to use a proven business model,
then it's not in his definition of a startup. No matter
how fast it grows.
throwawayknecht - 3 hours ago
> But if a company was formed, as most companies are,
intending to use a proven business model, then it's not
in his definition of a startup.This would seem to exclude
virtually all delivery service, cleaning service, car
service, etc. companies, which are usually considered the
prototypical SV startups.
jmilloy - 4 hours ago
This is only a useful comment if it includes an alternative
(and also widely used) definition, or at least a critique of
the definition provided.In fact, the wikipedia article on
startups includes the grow fast component, suggesting to me
that that is the most common usage:> "an entrepreneurial
venture which is typically a newly emerged, fast-growing
business that aims to meet a marketplace need by developing a
viable business model around an innovative product, service,
process or a platform. A startup is usually a company
designed to effectively develop and validate a scalable
business model."
KZeillmann - 6 hours ago
Check out the Indie Hackers podcast (and website). It's made for
exactly what you're looking for. Courtland Allen interviews
founders who are excited about making $20k a month in MRR, and
they don't necessarily need to become a $1 billion company. Most
of the people featured are bootstrapped or had only a little bit
of funding.
craigcannon - 6 hours ago
Yeah. Courtland was also on the YC podcast recently -
http://blog.ycombinator.com/your-whole-goal-is-to-not-quit-c...
lpolovets - 6 hours ago
One of my friends runs a few small SaaS businesses in parallel.
He really likes a conference called MicroConf
(http://www.microconf.com/) which focuses on bootstrapped
businesses. That might be something to check out if you can make
it.One book that's great, regardless of what scale of company
you're trying to build, is Traction by Weinberg and Mares. It
talks about how to pick marketing channels for getting traction +
includes an introductory section on each of two dozen popular
marketing channels. Very useful if you're trying to get traction
for your product and not sure where to start.Finally, a lot of
startup advice should apply to companies more broadly: focus on
building something people want; it's better to have 100 customers
that love you than to have 10k customers that like you; do things
that don't scale at the beginning; etc.
czbond - 4 hours ago
Second the "Traction" book. It is a great read, and introduces
channels you might not otherwise consider.
ismail - 4 hours ago
Any recommendations on books/reading around enterprise sales,
specifically services?
lpolovets - 3 hours ago
I've heard great things about Predictable Revenue
(https://www.amazon.com/dp/B005ERYEGU) and The Sales
Acceleration Formula (https://www.amazon.com/Sales-
Acceleration-Formula-Technology...) but haven't read either
yet. I think they're focused more on selling products than
services, but not 100% sure.
briandear - 1 hours ago
Predictable revenue is great; it?s focused on essentially
selling SAAS.
jorgemf - 5 hours ago
> Get sleep and exercise ? take care of yourselfThis should be the
first advice, how are you going to take care of something if you
don't take care of yourself first?
uncle_d - 6 hours ago
Any advice for people who would like to found their own company,
but aren't sure what it should do?
ladybro - 6 hours ago
Solve a problem that you or people around you have.I know It's
frustrating to hear that over and over again, but you have to
actively keep your eyes open to the inefficiencies around you
("live in the future") and eventually you'll discover a problem
that needs solving.PG's essay on this is a good one that helped
me choose what to work on:
http://www.paulgraham.com/startupideas.html
icebraining - 4 hours ago
My problem is that the people around me have no money to pay
for the solution. How do you get around that?
Mz - 4 hours ago
That probably isn't literally true. If you come up with a
solution that is worth more to them than the cost to them,
people will find the money.And if it is literally true, then
you look at uncoupling monetization from the end point user.
There are a number of ways to do that. Historically, TV was
supported by ads. Viewers bought TVs, but broadcast stations
did not directly charge viewers for watching TV. Instead,
they broadcast for free, but included ads.It is another layer
of complication, but it isn't outright a charity model.
Plenty of for profit businesses have a less direct
monetization strategy than simply charging the end user for
their use of it.
icebraining - 3 hours ago
If you come up with a solution that is worth more to them
than the cost to them, people will find the money.Yes, that
is true. Unfortunately, that essentially means competing
with the things that cost them currently, and that's mostly
rent and basic utilities, which are heavily regulated
markets dominated by state-supported companies. You could
sell to them, but then it's no longer "solve the problems
of people around you" but solve the problems of huge
corporations, which is quite different.You're still right,
it's just a discouraging prospect.Plenty of for profit
businesses have a less direct monetization strategy than
simply charging the end user for their use of it.That's
also very true. I have a bit of a love-hate relationship
with ads, since I dislike the concept, but recognize that I
and many others who couldn't afford online services have
greatly benefited from the redistributive effects of ads.
Still, I wouldn't use them as my revenue
source.Unfortunately, except for ads and a fremium model, I
don't see many ways to do this decoupling.
Mz - 2 hours ago
It is a problem space I am abundantly familiar with. I
certainly feel your pain. The fact that I want to offer
solutions for people with serious problems that keep them
trapped in poverty helps contribute to my own lack of
funds.I do have ads on my websites. I also have a tip jar
and Patreon. I don't make much money, but I make more
than I used to.So, I get that you probably feel like your
problem is being dismissed. It isn't. I am right there in
the trenches with you and telling you what I know from
long, hard firsthand experience.You haven't given any
details, so I can't try to give specifics. I can only
speak in generalities, because you are only speaking in
generalities.I may not be the best person to talk to
about how to make money. I don't seem especially talented
at that. But I may know a lot more than most people on HN
about trying to solve problems that seem impossible to
monetize, and I am making headway on monetizing them
anyway, against long odds.
icebraining - 55 minutes ago
No, no, I don't think you're being dismissive! I
appreciate that you've taken the time to reply seriously
to my whiny rant.I haven't given details because I don't
really have any, it's just a general feeling of
foreignness I've had since I started reading HN and about
startups. Even now that I technically could, I'd frankly
feel ashamed of spending money on most of the tech
trinkets that get advertised here, let alone dedicated my
life to building them. And yet, I also know this is just
relative - my $250 laptop is an extravagant expense for
actually poor people - so I don't judge those founders. I
just wish there were more startups for working-class
people from where to draw inspiration.Anyway, thanks for
your patience and support :)
Mz - 37 minutes ago
What you are describing is an error in your internal
mental models, not objective reality. It is a thing I
also wrestled with.Until earlier this month, I was
homeless. I spent nearly six years on the street. I still
am quite poor.Like a lot of homeless people, I had
income, just not enough to purchase a middle class
lifestyle. I made choices about how to spend my money. I
bought cheap tablets because I make my money online. I
don't make much, but a cheap tablet could readily pay for
itself in short order.I also blog. Among other things, I
try to provide health information for people with CF.
There is a drug for CF that costs around $300k annually,
so there are people providing high priced solutions for
this same problem space. My difficulties in making money
aren't actually the fact that people with CF have no
money. This is not stopping drug companies from putting
out very expensive medications for the condition.So,
there are reasons why I, personally, cannot up and charge
people with CF big bucks for my help. But those reasons
are not actually because they simply don't have the
money, even though it is true that people with CF tend to
be dirt poor.While homeless, I shopped sometimes at
second hand stores that had a lot of homeless clientele
and I got payday loans. That was an eye opening growth
experience for me.If you provide real value and the right
price point, even poor people can buy your product. If
you think this is not true, you are dealing with some
kind of emotional baggage, not actual market
reality.Best.
icebraining - 28 minutes ago
You've given me some food for thought. Thank you.
fragsworth - 6 hours ago
I take major issue with this:> By the way, it is vital to remember
that the money you raise IS NOT your money. You have a fiduciary
and ethical/moral duty to spend the money only to improve the
prospects of your company.I think this is unethical. YCombinator is
taking advantage of a lot of founders by discouraging them from
paying themselves a reasonable salary with the money they raise.
There is a lot of confusion about this issue, mostly because
YCombinator founders are young and naive, and they think because
they own most of their company that they should be working for free
the entire time, and can spend years trying to make their company
work while eating through what little savings they have.That's not
the case. Founders should be doing one of the following:1) You
should pay yourself a reasonable salary with the money you raise.2)
Otherwise you should be diluting the investors over time by the
amount you are getting underpaid.
mceoin - 5 hours ago
Couldn't disagree more. You should pay yourself the absolute
minimum you need to reduce burn and extend your runway. This
doesn't mean free, it means living expenses but no more. Keep the
burn low and extend your runway.If those terms are undesirable,
that's fine. Better not to raise money then, or to raise from a
different profile of investor who is looking for different kinds
of returns (i.e. not 'death or unicorn').
mceoin - 5 hours ago
Decent salaries come at later stages of funding.
fragsworth - 5 hours ago
If you're not paying yourself your actual value in salary, then
you should be diluting the investors because you are investing
your missing salary into your company.
icebraining - 4 hours ago
Aren't the shares you already have supposed to be payment for
that? The other investors had to put a lot of money to get
them, often/usually(?) way more than the founders.
briandear - 51 minutes ago
So why doesn?t YV encourage companies to set up shop in Nevada
or other low tax, low cost of living areas? How many YC
companies are paying Bay Area office rents and paying
California-level taxes? It?s not ok to not take a market rate
salary, but it is ok to have an office in the most expensive
zip codes in the country? Does physical proximity to SV make a
single bit of difference to a company other than being close to
investors? Unless a company is actually making in-person sales
calls, why would the Bay Area be relevant? In terms of
acquisitions, it matters not if the company is in Mozambique or
Cupertino ? the balance sheet is really all that matters.If the
goal is to extend runway, why isn?t YC encouraging founders to
set up shop in Texas or better yet be fully remote? When a
house in SV costs 5 times more than a house in Texas, it?s
pretty hard to expect founders to be able to survive on
anything less than market rate.
clairity - 5 hours ago
investors expect founders to pay themselves. they don't want
founders to worry about day-to-day personal expenses so that the
founders can concentrate on the business. that's part of the
fiduciary and ethical/moral duty to making a startup successful.
it's not contradictory.but investors also expect founders to be
frugal and make wise monetary decisions. the more you pay
yourself, the less you have for marketing for example (and
marketing is crucial to every startup). it's in your best
interest as a founder to take enough in salary to not worry, but
no more. so the business has the best chance of being successful.
if founders are taking more than that, then it's an indication
that they don't believe in the business or at the very least are
distracted by other matters.
jacquesm - 5 hours ago
That all depends on the amount raised and the stage the company
is in.But if after an 'A' round you are still paying yourself
subsistence level wages then you are doing something wrong.
mwseibel - 5 hours ago
Couple items here: we don?t encourage founders to work for free
(that?s literally illegal) and the average age of YC Founders is
29 (I hope this is too old to qualify for young and naive).
While I don?t think Founders should pay themselves market rate I
do this they should pay themselves enough for their reasonable
day to day living expenses to not be a distraction.
csomar - 6 hours ago
I think you just need to be reasonable person. If you raised
$250k and you pay yourself a salary of $150k, it is not
acceptable.If you raised a $30million round, then it is.
fragsworth - 5 hours ago
Well, if you could be earning $150k at any other company, and
you are only paying yourself $50k at yours, then you should be
earning an additional $100k/year worth of shares over time to
dilute the investors. You are investing that missing $100k.And
you're missing the main point that many of these founders
simply aren't getting paid at all, because they think it is
unethical to do so with someone else's money. The original
article is exacerbating this problem.
rgrieselhuber - 3 hours ago
This is a bit naive. I can sympathize but it's just not how
things work. Nobody is forcing you to start a company and the
equity you're building and convinced investors buy into
should be your main focus. That being said, I do believe in
founders paying themselves a liveable salary.
mbesto - 6 hours ago
Here's my Essential Startup Advice:Whenever someone gives you free
advice (i.e. you don't directly pay them cash) try to understand
the motivation to give you free advice. That should give you an
idea of whether the advice is valuable or not.
geoff - 6 hours ago
This is actually reasonable advice. For clarity: our motivation
is because we want to see more successful startups in the world.
We also believe and hope that some of those startups will be
funded by YC.
Macsenour - 5 hours ago
Would you agree or disagree that YC looks for high value
potential more than just a successful start up? I'm thinking of
the top post here and that's prompting my question.
CalChris - 6 hours ago
My brother and I were talking last night. We talked about
mechanics, operations, for a VC fundable startup: Delaware C vs
LLC IP assignment 83b election Xero Opening a Silicon
Valley Bank account Capital One credit card vs SVB I don?t
understand why YC or freaking Haas never walks people through
startup best practices, especially in an ?Essential? guide.
adpirz - 6 hours ago
Second this. Can anyone reference a guide that works through the
logistics of actually starting up?
jacquesm - 6 hours ago
I've written this, years ago:https://jacquesmattheij.com/three-
roads-to-the-top-of-the-mo...And just about forever I've had a
kind of owners manual in draft for bootstrapping a startup but
I lack the time to complete it, way too much on the go :(.
That's a nice indication of how much time and effort go into
bootstrapping a company.
wpennington - 6 hours ago
As phonon mentioned, Clerky is a service that can help with
incorporation.Another service that is more comprehensive would
be Stripe Atlas, which helps with everything from incorporation
to setting up a SVB bank account to helping with tax issues and
AWS credits. You also get access to the Atlas Forum and network
of founders and advisors. https://stripe.com/atlasIf you're not
into the service, they still have a nice guide on the process
here - https://stripe.com/atlas/guideEDIT/UPDATE: Worth
mentioning that Clerky offers certain legal services beyond
incorporation (e.g., hiring/on-boarding and fundraising).
Didn't mean to imply that incorporation is their sole product,
but rather was speaking w.r.t. the topic of basic startup
mechanics mentioned by the parent. https://www.clerky.com/
enraged_camel - 5 hours ago
Because those are logistical details, not essentials. As a
founder your primary concern should be developing a solid product
and having a good product-market fit and getting paying
customers. The things on your list don't become important until
later.
40acres - 6 hours ago
On the opposite spectrum I was surprised that there wasn't any
advice regarding ideation.
simonw - 3 hours ago
One of the benefits of being accepted to YC is that their team
make sure you get all of this stuff right.
geoff - 5 hours ago
YC's Kirsty Nathoo gave a great summary of startup mechanics
here: https://www.startupschool.org/previous
[deleted]
kirsty - 4 hours ago
Thanks Geoff. I'm happy to answer questions on this topic.
However some things are company and situation specific so can't
be generalized. Also IANAL!
CalChris - 4 hours ago
Please, please beat 83b into every founder?s head and make
sure they?ve internalized it so they get this boring form
right for their employees.You?ve got 30 days or you?re paying
income rather than capital gains. If WSGR incorporates the
startup they will get this right for the founders. Sign this,
sign this, this and this. But will the founders get this
right for their employees?
kirsty - 4 hours ago
Agreed that 83b elections are crucial - there is very
little a company can do if the form does not get filed
within the 30 day window. The consequences of not filing
the election can be significant for both the company and
the employee.Clerky has the 83b election form (where
necessary) as part of their Hiring package so that when the
employee is allocated equity and signs the documents, it is
automatically completed. However it is up to the employee
to mail it in since it has to be sent via mail and can't be
sent electronically. The company should make sure they are
chasing the employee to do this and to get a copy of the
election for the company's records.
nostrademons - 1 hours ago
Clerky beats 83(b) into the heads of founders who use its
service. It's included in the package, with pre-filled
forms and detailed instructions for where to mail them, and
it sends you nag mail every week until you've uploaded the
completed IRS form. It works for employees, too, but they
don't get the nag-mail.The folks who I think really need to
teach their employees about 83(b)s are fast-growing big
companies. I didn't know about them when I joined Google,
for example, and learned about it too late to take
advantage of it. That mistake cost me literally hundreds
of thousands of dollars.
phonon - 6 hours ago
https://www.clerky.com/ walks through the legal aspects.
mwseibel - 6 hours ago
Ditto on Clerky
manigandham - 4 hours ago
You can shortcut all of that with https://stripe.com/atlasAlso
why SVB? All of the major banks would be a better choice. There's
no advantage to SVB unless you need some obscure venture-debt
deal.
venantius - 6 hours ago
What is your position on attacking regulated industries that
require significant up-front capital (e.g. banking)? Domains like
these face significant chicken-or-egg problems - you need financing
in order to legally attack the problem, but without actually being
in the market it's difficult to raise financing. YC seems invested
in encouraging companies like these, but their domain necessitates
a different approach than a traditional technology company.
ballenf - 6 hours ago
When is it ok to outsource/offshore some/all of the software
development?
jpm_sd - 5 hours ago
When the software is not that important to the success of your
startup. So, not most of the time.
mwseibel - 6 hours ago
It?s often not good to do this
ballenf - 5 hours ago
Thanks. Any recommended reading on this?
phonon - 2 hours ago
"outsource/offshore" or hire remotely?