Party. Do magic things on your computer that make you money. Party some more. If you think that’s what it means to be an entrepreneur, then you’re in for a surprise.
Contrary to what you see in the movie The Social Network, being a startup founder is difficult and tedious work.
That was the theme at Stanford University when Sam Altman (Y Combinator president) and Dustin Moskovitz (co-founder of Facebook and Asana) began the first installment of their How to Start a Startup series, which is aimed at businesses whose goal is hyper-growth and building a very large company.
Even the title sounds counterintuitive. If the hype is to be believed, then a startup is just something you dream and act on.
But there are actual fundamentals you need to know, like your motivations behind starting the company and steps that produce success.
(For more startup advice, check out How to Start a Startup: The Book. It’s the ultimate reference guide to creating a successful tech startup.)
The truth about startups.
As Phil Libin, CEO of Evernote, once said:
“People have this vision of being the CEO of a company they started and being on top of the pyramid. Some people are motivated by that, but that’s not at all what it’s like.
“What it’s really like: Everyone else is your boss–all of your employees, customers, partners, users, media are your boss. I’ve never had more bosses and needed to account for more people today.
“If you want to exercise power and authority over people, join the military or go into politics. Don’t be an entrepreneur.”
Start a startup if …
You feel compelled by a problem and think that building a company will solve it. Altman says the passion comes first and the startup second.
You have to have the passion and the aptitude. Here’s how Moskovitz breaks it down:
Passion = you need to do it.
- You’ll need the passion to endure The Struggle.
- You’ll need passion to effectively recruit.
Aptitude = the world needs you to do it.
- Do something that the world needs.
- The world needs you somewhere, find where.
Roadmap to startup success
Now that you’ve realized that founding a startup is your true calling, you need some guidelines to help you flourish.
According to Altman, you need to only excel in four areas to maximize startup success. And the first two areas are:
- Great idea
- Great product
Finding your great idea
“A bad idea is still bad. Great execution toward a terrible idea will get you nowhere.” – Sam Altman
This is where a lot of founders drop the ball. There’s this pervasive rhetoric in startup culture that you can base your business around a bad idea, but if you pivot enough, it’ll all work out in the end. This is not a good move.
If your startup is doing well, chances are you’ll be working on it for 10 years (if it’s going to fail, the timeline is more like 5 years) so taking time to mull over the idea that your whole life will revolve around is more than helpful, it’s essential.
Unfortunately, many startups are allergic to planning. But investing time into finding the right idea that you believe in provides huge advantages.
- The best companies are always mission oriented. It’s difficult to get an intensely focused and productive group of people without a good mission to drive them.
- If you don’t love it, you’ll eventually give up.
- When there’s a mission, people are more likely to support you.
So repeat after me: Idea first, then the startup.
How do you know if you have a great idea?
- You can answer the question: Why now? Why is this the perfect time for this particular idea instead of two years ago or two years from now?
- You’re building something you yourself need (If not, get really close to your customers.)
Building a great product
After the idea stage, the next step is building an amazing product. Altman says that looking at market growth is key. You need a market that’s going to evolve in 10 years. And it’s better to have a small but rapidly growing market, instead of a large but slowly growing market.
Build something that a small amount of users love, not like. If customers are pretty desperate for a solution, then they’ll put with a first product that’s subpar. You’ll know if your customers love it because your startup will grow by word of mouth.
When it comes to getting feedback, handpick your users. The founder of Pinterest actually went up to people in coffee shops and asked them to test the then unknown social network. He would even go into the Apple Store and put it in the browsers on all the laptops so it was the first thing customers saw. Whatever works.
The product building cycle
- Show it to users.
- User feedback. What do they like? What would they pay for? Would they recommend it? Would they be bummed if you went away?
- Product decision.
Becoming a startup founder is not for everyone
If after reading this you realize that the startup life isn’t for you, one, you’re welcome. We just saved you from a ton of stress and soul-crushing responsibility. And, two, that doesn’t mean it’s the end of the road for you.
It may not seem like it because of the way media romanticizes entrepreneurism, but there are other things you can do with your life if you want to maximize your earning potential, have a flexible schedule, and live a glamorous life.
When you consider that the 100th engineer at Facebook made far more money than 99% of Silicon Valley entrepreneurs, not being the person in charge starts to look pretty good.
Moskovitz recommends adding a late-stage feature to an established company if you want to be innovative, use your talent, and receive a huge financial return (without the stress and responsibility that comes from being the boss).
Because when you’re not a founder, you don’t have to start from scratch. That means you get access to a massive user base, existing infrastructure, and an established team.
The 1,500 Google employee created Google Maps. Facebook’s 250th hire led the project for the like button. Being an entrepreneur is not the only path.
If you enjoyed this post, be sure to check out How to Start a Startup: The Book. It’s the ultimate reference guide to creating a successful tech startup.