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  • Yeah?

  • All right.

  • god eftermiddag ochlkomna till den sista klassen i hur man startar en startup

  • So this is

  • a little bit different than every other class.

  • Every other class has been things that you should be

  • thinking about in general at the beginning of a Startup.

  • And today, we're going to talk about things that you

  • don't have to think about for a while.

  • In fact, you shouldn't.

  • But since, I'm not going to get to talk to most of you,

  • again before you get to

  • sort of post-product market fit stage.

  • I wanted to just give you the list of things that

  • you need to think about as your Startup scales, and

  • the list of the things that usually.

  • Founder failed to make the transition on.

  • So these are the topics we're going to talk about but again

  • all of these things are things that are not writing code or

  • talking to users.

  • Which means,

  • with a few exceptions that I'll try to note, you can

  • ignore them until after you have product market fit.

  • Most of these things, for most companies,

  • become important between months 12 and 24.

  • But it's really more about stage than anything else.

  • These are things that usually hit around 25 people and

  • definitely post product-market fit.

  • So just write these down somewhere and

  • look back at them when you get there.

  • So the first area

  • we're going to talk about is Management.

  • At the beginning of a company there is no management, and

  • this actually works really well.

  • Before 20 or 25 employees most companies are structured with

  • everyone reporting to the founder, it's totally flat.

  • And that's really good, and that's what you want, and

  • at that stage that is the optimal way, for product,

  • that's the optimal structure for productivity.

  • But the thing that tricks people is that when,

  • when lack of structure fails, it fails all at once.

  • And so what works totally fine at 20 employees,

  • is from zero to 20 employees?

  • Is disastrous at 30.

  • And so

  • you want to be aware that this transition will happen.

  • And you don't actually need to

  • make the structure complicated.

  • In fact, you shouldn't.

  • All you need is for every employee to know,

  • who their manager is?

  • And every, and there should be exactly one.

  • And, and every manager should know,

  • who their direct reports are?

  • You want to ideally cluster people in

  • teams that make sense of course.

  • But the most important thing

  • is that there's just clear reporting structure.

  • And that everyone knows, what it is.

  • And if you want to make changes to it people sort of

  • understand how to make changes or to hire someone.

  • Clarity and simplicity are the most important things here.

  • But failing to do it is really bad.

  • So, because it works in the early days to have no

  • structure at all,

  • and, because it sort of feels cool to have no structure.

  • Many companies are like,

  • we're going to try this crazy new management theory and

  • have no structure.

  • What you want to do is innovate on your product and

  • your your business model?

  • Management structure is not,

  • where I would recommend trying to innovate.

  • So, don't make the mistake of having-

  • >> >> Nothing but don't make

  • the other mistake of having something super complicated.

  • A lot of people fall into this trap,

  • where they think it's like you know,

  • people feel cool if they're someones manager.

  • And if they're just an employee they don't feel cool.

  • So people come up with these convoluted circular matrices

  • management structures, where you report to this person for

  • this thing, and this person for that thing, and

  • this person for that thing.

  • But you know,

  • actually this person reports to you for this thing.

  • That's a mistake too.

  • So don't, don't try to innovate here.

  • This is the first instance of an important shift,

  • in companies, or in, in, in the founders job.

  • Before product market fit your only job that matters is to

  • build a great product, right,

  • you're number one job is to build a great product.

  • As the company grows and

  • at about this, you know, 25 or so employee size,

  • your main job shifts from building a great product.

  • To building a great company, and it stays there for

  • the rest of your time.

  • And this is probably the biggest shift in being

  • a founder that ever happens.

  • There are four failure cases we see all the time,

  • as founders become managers.

  • So I want to talk about the four most common ones.

  • The first one is being afraid to hire senior people.

  • In the early days of a Startup,

  • hiring senior people is usually a mistake.

  • You just want people that get stuff done.

  • and, and the willingness to work hard and

  • aptitude matters more than experience.

  • As the company starts to scale, and about this time

  • when you have to put in place a basic management structure.

  • It is actually valuable to have senior

  • people on the team.

  • You know, executives that have built companies before.

  • And almost all founders after the first time

  • they hire a really great executive and

  • that executive takes over big pieces of the business and

  • just makes them happen the founder says, wow,

  • I wish I had done that earlier.

  • But everybody makes this mistake and

  • waits to long to do this, so

  • don't, don't be afraid to hire senior executives.

  • The second mistake is hero mode.

  • So, I will use the example of say someone that

  • runs the customer service team.

  • Someone runs the customer service team,

  • they want to lead by example, this starts from a good place,

  • it's, it's the extreme of leading by example.

  • It's saying, you know what,

  • I want my team to work really hard.

  • Rather than tell them to work hard I'm going to

  • set an example and I'm going to work 18 hours a day.

  • And I'm going to show people how to get a lot of

  • tickets done.

  • But then the company starts growing.

  • Also they have the normal discomfort of assigning a lot

  • of work to other people.

  • So the company starts growing and

  • the ticket volume, keeps going up, and

  • now they have to do like 19 hours a day, and

  • then 20 hours a day, and it's just obviously, not working.

  • But they won't stop and hire people, because they're like,

  • if I stop, even for one day,

  • we're going to get behind on tickets.

  • The only way to get out of hero mode in this case is to

  • say, you know, what?

  • we're going to get behind on tickets for two or

  • three weeks, because I'm going to go off.

  • And I'm going to hire three more support team members and

  • I've calculated based off our growth rate that this is

  • going to last this long.

  • And next time,

  • I'm not going to make the same mistake.

  • I'll get ahead of it and hire again.

  • But you actually have to make a tradeoff.

  • You actually, have to say, you know, what?

  • I need to hire more people and

  • we're going to get behind on other stuff.

  • That is the right answer.

  • The wrong answer is to stay in hero mode until you burnout,

  • which is what most people do.

  • Third mistake bad delegation.

  • Most founders have not managed people before and

  • they certainly haven't managed managers.

  • And so the way that the bad way you delegate is you

  • say hey, employee, we need to do this big thing.

  • You go off and research it.

  • Come back to me with all the data and

  • the trade-offs, I'll make a decision and tell it to you,

  • and then you'll go off and implement it.

  • That's how most founders delegate, and that does not

  • make people feel good and it certainly doesn't scale.

  • A subtle difference but really important is to say,

  • hey, you're really smart, that's why I hired you.

  • You go off, here are the things to think about,

  • here's what I think, but you make this decision.

  • I totally trust you, and let me know what you decide.

  • That's the delegation that actually works.

  • because, I think, because Steve Jobs was able to get

  • away with the former and make every decision himself, and

  • people just put up with it.

  • And every founder thinks they're the next Steve Jobs.

  • A lot of people try this.

  • But I, for 99.9% of people.

  • The second method here works a lot better.

  • And then the fourth area is just

  • a personal organization one.

  • When you are working on product,

  • you don't actually need to be that organized in terms of

  • how you run a company, and

  • how you talk to people about what they're working on.

  • But if you fail to get your own

  • personal organization system right.

  • where you can keep track in some way of what you need to

  • do, and what everybody else is doing, and

  • what you need to follow up with them on.

  • That will come back to bite you,

  • so developing this early as the company begins to

  • scale is really important.

  • Two other things that we hear again and

  • again from our founders, they wished they had done earlier.

  • And that is simply writing down, how you do things?

  • And why you do things?

  • These two things, the how and the why, are really important.

  • I mean early there is you just tell everyone,

  • employee, when you're, like,

  • sitting around, having lunch or dinner, you know?

  • This is how we think about building products,

  • this is how we push production, you know,

  • this is how we handle customer support, whatever.

  • As you get bigger, you can't keep doing that.

  • And if you don't do it,

  • someone else is just going to say it.

  • But if you write it down, and put it up on a Wiki or

  • whatever, that every employee reads.

  • You as the founder get to basically, write the law.

  • And, and if you write this down it

  • will become law in the company.

  • And if you make everyone read this as the company hires 100

  • and then 1,000 employees people will read this and

  • say, all right, that's how we do things.

  • If you don't do it it will be like random oral tradition of

  • whatever the hiring manager or their best friend that

  • they make at their first week in the company tells them.

  • So writing down how you do things?

  • And the why?

  • The why is the culture of values,

  • Brian Chesky talked about this really well.

  • Every founder I know wishes that they'd written down

  • both of these, the how and the why, earlier.

  • To just establish it as the company grows, and

  • then this becomes what happens.

  • I think it's one of the highest leverage

  • things that you can do that, that people don't.

  • All right. Next area, HR.

  • HR is another thing that most people correctly ignore

  • in the first phase of a Startup because again,

  • it's not writing code.

  • It's not talking to users.

  • But it's a huge mistake to continue to ignore it.

  • And the reason that I think most founders ignore it,

  • is they have in their mind this idea of,

  • like TV sitcom HR, you know, awfulness.

  • But it doesn't have to slow you down.

  • Actually, it speeds you up.

  • Most founders will say, out of one side of their mouth,

  • people are our most important asset.

  • And, the other side, we don't want any HR.

  • So, what they mean is, we don't want HR.

  • We don't want, like, the bad kind of TV HR.

  • What good HR means is, a few things.

  • A clearer structure, which Charlie talked about.

  • You know, a path for

  • people about, how they can evolve their careers?

  • Most important, one

  • of the most important things is Performance Feedback.

  • again, this happens organically early on,

  • people know how they're doing.

  • As the company gets to 25, 30,

  • 45 people, that gets lost and it doesn't have to be complex.

  • It can be super simple but there should be a way that it

  • happens and it shoulder be frequent.

  • You know, people need to hear pretty quickly,

  • how they're doing?

  • And it should tie you know, if they're doing badly to a way

  • you get them out of the company or if they,

  • they doing well it should there should be

  • a clear path to how this ties to compensation.

  • And that's the next thing.

  • In the early days of a Startup.

  • People's compensation is whatever they

  • negotiate with the founder, and it's all over the place.

  • As you grow.

  • It feels hopelessly corporate, but it really is

  • worth putting in place these compensation bands.

  • So a midlevel engineer is in this range.

  • A senior engineer's in this range.

  • Here's how you move from this to this.

  • And it keeps things really fair.

  • Someday everyone will find that everyone else is comp.

  • If it's all over the place it

  • will be a complete meltdown disaster.

  • If you put these bands in place early.

  • It will at least be fair.

  • It will also save you a lot of crazy negotiation.

  • One thing that I think is really important when it comes

  • to HR is equity.

  • Most people get this right now for

  • the early employees, they give them a lot of equity.

  • But I think you should continue to give a lot of

  • equity all the way through.

  • And, this is one place that

  • your investors will always give you bad advice.

  • I think, not YC, but

  • all other investors give bad advice here, most do.

  • You should be giving out a lot of equity to your employees.

  • now, this dilutes everyone, right,

  • this dilutes you as the founder and

  • the investors equally.

  • For some reason,

  • founders usually understand this is good,

  • investors are very shortsighted and

  • don't want to dilute themselves.

  • So they'll like fight you over every equity grant.

  • But we've seen a lot of data at YC now,

  • and the most successful companies, and

  • the ones where the investors do the best,

  • end up giving a lot of stock out to employees,

  • year after year after year.

  • So I tell founders like, you should think about,

  • you know, for the next ten years, you're going to

  • be giving out 3 to 5% of the company every year,

  • because you just get bigger and bigger.

  • So the individual grants get smaller, but in aggregate,

  • it's a lot of stock.

  • And I think this is really important to do,

  • if you value your people, you should be doing this.

  • specifically, you need to do this with refresher grants and

  • you should get a, a plan in place for this early.

  • You know, I think, you never want an employee in a place

  • where they vested three out of their four years of stock and

  • they start thinking about leaving.

  • So you should always stay in front of

  • people's vesting schedules.

  • And you know, how they plan early where you have

  • refresher grants in place.

  • There are a lot of new structures that people have

  • been using here.

  • I personally like six year, big grants, but

  • six years investing.

  • because I think these companies just take

  • a while to build.

  • There's Pyramid Vesting where you back weight

  • someone's grant, so in year four they get a lot more of

  • the vesting than year one.

  • There's a concept, different names for it,

  • but something like continuous forward vesting,

  • where people's grants are automatically reupped

  • every year, at the same number of shares.

  • Whatever you decide, get an option management system

  • in place at about this point.

  • The normal way people do

  • this is just someone keeps an Excel spreadsheet.

  • I have seen mistakes that have cost employees or

  • companies tens of

  • millions of dollars because they didn't get this right.

  • So there's really good option management systems or

  • software and

  • you should get those in place around this point.

  • The other sort of HR stuff to touch on, there are a bunch of

  • rules that change around 50 employees.

  • Common examples are that you have to

  • start sexual harassment training and

  • diversity training there's a bunch of others as well.

  • But just put a little pin in your mind that when you

  • cross 50 employees there's a new set of HR rules that you

  • have to comply with.

  • Monitor your team for burnout.

  • Again, it's up to product market fit it's just to

  • Sprint, now it becomes a marathon.

  • At this point, you actually don't want people to

  • work a hundred hours a week forever.

  • You want them to go on vacation.

  • You want them to have new challenges and do new things.

  • And if you let the whole company get burned out all at

  • once, that, that is often a company-ending thing.

  • This is also a good time to put in place a,

  • a hiring process.

  • Another thing that most founders regret is they

  • don't hire as soon as everything is working,

  • I think you should hire a full-time recruiter.

  • If you do this too early,

  • that's bad because you'll hire too fast, and

  • that usually implodes.

  • But, most founders get behind the ball on this.

  • The other, there are a lot of other,

  • sort of just hiring process tips.

  • For example, I think most companies,

  • even until they get up to say 3 or 400 employees

  • should announce every offer on some internal mailing list or

  • something before they make it,

  • because like half the time you do that,

  • someone in the company will know something good or

  • bad about that employee.

  • And the companies that I

  • know that have instituted this have been really happy.

  • Also a good time to have a program in place to ramp up

  • employees, so when someone starts, you know,

  • what does their first week look like?

  • How do they get, how do they get spun up?

  • How do they learn everything they need to learn?

  • Are they going to have

  • a buddy that's going to think through them?

  • That's going to help them think through kind of

  • everything about the company.

  • Here's one that you actually do need to think about before

  • the 12 to 24 month mark, which is diversity on the team ,.

  • The most common place this comes up honestly is people

  • that hire, you know, all guys on their engineering team for

  • the first 15 or 20 people.

  • And in that point you get a culture in place that sort of

  • takes on a life of it's own, and most founders that I've

  • spoken to that have made this mistake regret it and

  • they wished they had hired some diversity of

  • perspective on the team early on.

  • Engineering teams are not the only place where it comes up,

  • but that's where you see it the most often, and

  • if you get this right early you'll be able to grow

  • the team much more quickly over, over the long-term.

  • The other thing to

  • think about is what happens to your early employees.

  • So, a common situation that happens is,

  • the company evolves fast the early employees

  • you know, the company, so like you hire an engineer who is

  • a really great engineer, but then as the engineering team

  • grows you need a VP of Engineering.

  • The early engineer wants to be the VP of Engineering,

  • you can't do that, and but you don't the early employee to

  • leave, they're an important, important part of the culture,

  • they know a lot, people love them, and so

  • I think you want to be very proactive about this.

  • You know, you want to like think about what's the path

  • for my first 10 or 15 employees going to

  • be as the company grows, and then just talk to them about

  • it very directly, be up front, you know,.

  • I want, like sit them down and

  • say, I want to talk about, sort of where you want to see

  • your career go inside of this company.

  • All right, so

  • company productivity, this is something you don't need to

  • think about in the early days because small teams are just

  • sort of naturally productive most of the time.

  • But as you grow,

  • it the productivity I think goes down with the square of

  • the number of employees if you don't make an effort because

  • it sort of one of these like connections between nodes,

  • every pair of people adds communication overhead.

  • And so if you don't start thinking about the systems

  • that you're going to put in place, when the company is 25

  • to 50 people, to stay productive as you grow

  • things will grind to a halt faster than you can imagine.

  • The single word that matters most, I think,

  • to keep the company productive as it grows is alignment ,.

  • The reason companies become unproductive is

  • people are either not on the same page and you know, don't

  • know what the same priorities are, or they're actively

  • working against each other which is obviously worse.

  • But if you can keep the entire company aligned in

  • the same direction, you'll have one well over half of

  • the battle, and, and the way to

  • start with this is just a very clear roadmap and goals.

  • Everyone in the company should know what the roadmap for

  • the next three or six months, or a year, depending on

  • where the company is in its life cycle, looks like.

  • You know, a classic test that I love to give is if

  • I walk into a company getting, beginning to struggle with

  • these scaling issues, I'll ask the founders, like,

  • if I walked around and polled ten random employees and

  • asked them what the top three goals for the company are,

  • right now, would they all say the same thing?

  • And a 100% of the time, the founder says, yes,

  • of course they would, and I'd go do it, and 100%

  • of the time, no two employees even say the same three,

  • top three goals, in order.

  • And founders can never believe it, because they're like well

  • I announced that in all hands like three months ago what our

  • goals were going to be, and how can they not remember?

  • But it's really important to keep reiterating the,

  • the message about the roadmap and

  • the goals, and almost no founder does this enough.

  • And if you do it, you know the company will say, you know,

  • all right, these are our goals, we understand them,

  • we're going to get them done,

  • I know self-organize around that.

  • But if people don't know what the roadmap of

  • their goals are it won't happen.

  • We already talked about figuring out your

  • values early, but

  • I want to reiterate that because that also really help

  • the company make the right decisions.

  • If everyone knows what the framework to decide is.

  • They'll make hopeful the same decisions if

  • they're smart people.

  • You want to continue to be run by great products and

  • not process for its own sake, this is a fine, fine line.

  • Because you do need to put some process in place, but

  • you never want to put process in

  • place that rewards the process.

  • The focus has to always be on great product.

  • One easy way to do this that a lot of companies try is they

  • just say, we're going to ship something every day, and

  • if you do that you know,

  • there's at least a continued focus on delivery.

  • And then transparency and rhythm in how you communicate

  • are really important, most founders wait way too long on

  • these, but having a management meeting every week,

  • of just the people that report directly to the founder or

  • the CEO, critical ,.

  • All hands meetings not quite sure how often is optimal for

  • those, at least once a month where you go through

  • the results and

  • the real map with the entire company really important.

  • And then, you know, doing a plan every quarter of

  • what we're going to get down over the next three months and

  • how that fits into our goals for

  • the year, also becomes really important.

  • I put offsites up there,

  • because I don't think people do these nearly enough.

  • A surprising number of the successful companies we've

  • been involved with do a lot of offsites.

  • Where they'll take their best people for a weekend to

  • a cabin in the woods or somewhere and just talk about.

  • What do we want to be when we grow up?

  • What are our most important things to be doing?

  • What are we not doing that we should be doing?

  • But get people out of the office and

  • out of the day-to-day, everyone I

  • know that does those thinks they're well worth the time.

  • So the goal in all of this productivity planning is that

  • you're trying to build a company that creates a lot of

  • value over a long period of time,

  • and the long period of time is what's important here.

  • You can avoid all of this and

  • just like with the authority of the founder make

  • sure the company ships a great next version.

  • But that won't work for version ten, it won't work for

  • version 11.

  • I, I really believe that this single hardest thing in

  • business is building a company that does repeatable

  • innovation and

  • just has this ongoing culture of excellence as it grows.

  • If you look at the examples of this most companies fail here.

  • Most companies do one great thing where the founder just

  • pushes to get it done and

  • then don't innovate that well on follow on products.

  • And it really takes founders that think about how I'm

  • going to do this second thing.

  • This really hard thing.

  • To get something like an Apple that can churn out great

  • products for 30 or 40 years, or longer.

  • All right, these are super tactical mechanics.

  • This is, this is definitely to just put on a list and

  • remember these things for later.

  • All right in the early days,

  • people basically ignore all accounting and they have,

  • like, maybe if they're lucky, a shoebox full of receipts.

  • They certainly don't have anything that

  • looks like a financial report.

  • This is a good time to get it in place.

  • You know, when things are working, say,

  • month 18 or whatever.

  • You can do this with an outsourced person.

  • Just say, you know what?

  • We want, like to get our books in order.

  • We want to start getting audits every year.

  • We want to

  • start a relationship with an accounting firm.

  • Easy to do.

  • Definitely worth it.

  • This is also a good time to collect your legal documents.

  • Because it's easy to fix things now.

  • So, if you actually assign someone to go through and

  • collect every agreement the company has ever signed.

  • Then when your landlord tries to **** you out of your

  • lease and no-one can find the lease which happens like,

  • half the time somehow someone will be able to find it.

  • Also, you're almost certainly missing something.

  • Some employee didn't sign their PIIA or

  • whatever and you'll find it now.

  • It's easy to fix now.

  • It gets really hard to fix, like,

  • in the middle of your next round of financing.

  • So, again, this is time to bring, like,

  • a little bit of the order to, to chaos.

  • FF stock is a special class of stock for

  • founders that the founders can sell in a later round,

  • without messing up the common-stock valuation.

  • It used to be that most people set this up

  • right when they started the company.

  • Founders fund sort of popularizes.

  • Which is why it's called FF stock.

  • But it became a really bad signal, right?

  • Founders that were obsessed with their own

  • personal liquidity when the company had nothing turned out

  • to like fail most of the time.

  • And so investors learn that if founders pushed on this in

  • the seed round it was a very, very bad sign.

  • Most founders don't actually want to sell stock until

  • the company is worth, like a billion dollars or

  • something like that.

  • So, I think you can actually safely set this up after

  • things start working, in the next financial round, and then

  • you can sell it two, three, four years down the road.

  • But it's a good thing to

  • remember by about the time you get to the B round.

  • IP, trademarks and patents.

  • actually, just IP and trademarks.

  • So, you have 12 months,

  • after you announce something, if you want to patent it.

  • And, if you miss that window, it's very hard to do.

  • so, 11 months after you launch, or

  • first publicly talk about what you're doing.

  • Is a good time to file provisional patents.

  • We recommend people just file provisional patents.

  • All that does is just hold your place in line at

  • the patent office and it gives you another year to decide if

  • you want to patent something or not.

  • It only costs about $1000.

  • It takes way less effort than a full patent.

  • And most of the time you'll know whether or

  • not you need full patent a year later.

  • But if you just do this one step,

  • you'll at least have the option.

  • It's also a good time to file trademarks for the U.S. and

  • major international markets.

  • again, if you don't do this at this stage,

  • most people end up regretting it.

  • And while you're at it, a good time to grab all the domains.

  • FP&A, good time also I think to

  • think about someone to start doing FP&A.

  • I think most companies don't end up realizing where

  • the knobs on their financial model are until far too late.

  • And I think it turns out that if you have

  • someone build a really great model of the business.

  • And by really great, apparently Roelof Botha,

  • who was the PayPal CFO and built their FP&A model.

  • The top, the, like,

  • the top sheet of his spreadsheet was 1,500 lines,

  • just as a level of the detail people build these to.

  • But you can really optimize the business and understand it

  • at a level that I think most people totally miss.

  • Most people don't hire someone like

  • this until they're many hundreds of employees.

  • I think it's worth hiring earlier.

  • Another thing that I think is worth hiring earlier

  • that almost no one does is a full time fundraiser.

  • Let's say you hire someone like really, really great and

  • their full time job is to raise money for the company.

  • You hire them after your b round.

  • And you say, you know what,

  • by the time we raise our c round we want the evaluation

  • to be double what it would have been otherwise.

  • You almost certainly get better results than if you

  • hire an investive banker or someone else if it's just

  • someone internal to the company and you end up paying

  • way less money, and take like literally half the dilution.

  • So, I think this is one of these like, slightly none

  • obvious optimizations that people just failed to make.

  • Tax structuring, so, this is another thing.

  • most, once things are working.

  • It would be worth you spending a little bit of time thinking

  • about how you set up the tax structure for the company.

  • I confess, I don't know a lot about the details here

  • because I just find it personally really boring.

  • But like somehow if you assign all the IP to like some

  • corporation in Ireland that licenses it back to the U.S.

  • corporation, you end up paying like no tax, no corporate tax.

  • But I know you can only do that like relatively early on.

  • And this ends up being a huge issue for companies that

  • don't do it that compete with companies that do do it.

  • You know once they're big, public companies.

  • So that's worth doing.

  • A lot of people throughout the class have talked about

  • your own psychology as a founder.

  • Here's what they haven't said.

  • It gets worse, not better.

  • As the company grows, you continue to oscillate.

  • The highs are better but the lows keep getting worse.

  • And, you, you really want to think about this early on and

  • just be aware this is going to happen.

  • And try to try to manage your own psychology through

  • the expanding swings that it's going to go through.

  • Another thing that happens as you begin to be successful.

  • As you go from being someone that most people rooted for,

  • kind of the underdog,

  • to someone that a lot of people start hating on.

  • And you know,

  • you see this first in internet commenters who will be,

  • like, I can't believe this **** company raised money.

  • It **** sucks, like, awful.

  • And it only bothers you a little bit, but then, like,

  • journalists that you kind of care about start writing this,

  • and it just goes on and on.

  • This also will go on and on as you get more and

  • more successful, and

  • you just have to make peace with this early.

  • But if you don't,

  • it will bother you all the way through.

  • This is also a good time to start thinking about

  • how long of a journey this is going to be.

  • Very few founders think long term.

  • Most founders think kind of a year in advance.

  • And they think that you know what

  • in three years I'm going to sell my company and either I'm

  • going to become a VC or sit on the beach or something.

  • Because so

  • few people make an actual long term commitment to what

  • they're building, the ones that do have a huge advantage.

  • They're, they're in a very rarefied class, and so this is

  • a good time to like sit around with your cofounders and

  • decide, you know what, we're going to work on this for

  • a very long time.

  • And we're going to build a strategy that assumes that

  • we're going to be doing this for the next ten years.

  • Just thinking that way alone, I think is probably,

  • a very high leverage thing you can do for success.

  • Take vacation.

  • Another common thing that we see is founders will run their

  • business for three or four years, without ever taking,

  • you know, more than a day of vacation.

  • And that works for like a year, or two years, or

  • something like that.

  • It really leads to nasty burnout if you don't do it.

  • Losing focus is another way that founders get off track.

  • I actually think this is a symptom of burnout.

  • When you get really burned out on running the business,

  • you want to do easier things, or

  • sort of more gratifying things.

  • You want to go to conferences, and

  • have people tell you how great you are.

  • You know, you want to do all these things that are not

  • actually building the business.

  • And the most common post-YC failure case for

  • the companies we fund is that they're incredibly focused,

  • during YC, on their company, and then after,

  • they start doing a lot of other things.

  • You know, they, they advise companies.

  • They go to conferences, whatever.

  • Focus is what made you successful in the first place.

  • There are a lot of reasons people lose focus, but

  • fight against that really, really hard.

  • This is a special case of focus.

  • As you start to do well.

  • You will start to get a bunch of potential acquires

  • sniffing around.

  • And it's very gratifying.

  • And you're like wow, I can be so rich and that'd be so cool.

  • And negotiations feel really fun.

  • This is one the biggest killers of, of companies is

  • that they entertain acquisition conversations.

  • You, you distract yourself.

  • You get demoralized if it doesn't happen.

  • If an offer does come in and it's really low,

  • you've already like mentally thought that you're done, and

  • so you take the offer.

  • As a general rule, don't start any acquisition conversation

  • unless you're willing to sell for a pretty low number.

  • Don't ever just check it hoping that

  • you're going to have the one miracle high offer.

  • If that's going to happen you'll know.

  • Because they'll just make you

  • a big offer before you can meet them.

  • But this, this is a big company killer.

  • And then just as a reminder to everybody the thing that

  • kills startups at some level is the founders giving up.

  • So sometimes you should quit.

  • But, if you mismanage your own psychology and you quit when,

  • when you shouldn't, that, that is what kills companies.

  • I mean that is, that is the sort of final closet death

  • in most of these start ups.

  • And so if you can manage your own psychology in a way that

  • you don't quit.

  • Dont go to place a where you need to quit, or

  • give up on the startup.

  • You'll be in a far, far better place.

  • So, marketing and PR is something that

  • we tell companies to ignore for a long time.

  • Everyone thinks in the early days that the press is going

  • to be what saves them.

  • We tell them all the time it doesn't work that way.

  • It's definitely true.

  • You know, press is not what's going to save your startup.

  • But as you start to be successful,

  • this is something that the founders themselves need to

  • spend time on.

  • So, once your product is working,

  • switch from not caring about this,

  • to caring about it a little bit.

  • And, the two most important things for

  • the founder to do, the founders to do.

  • Figure out the key messaging yourselves.

  • Never outsource this to your head of marketing or PR firm.

  • You, founders have to figure out what the message of

  • the compay is going to be.

  • And once you set that, it kind of sticks.

  • It's very hard to change this once the press decides how

  • they're going to talk about you.

  • The other thing is getting to know key journalists yourself.

  • PR firms will always try to prevent you from doing this,

  • because they need to have a reason to exist.

  • And so they're like, well, we're going to

  • handle the relationship with the journalist.

  • We'll just bring you in for interviews.

  • No journalist wants to talk to a PR flack, ever.

  • They're so much more happy to just hear from a founder.

  • I think the biggest PR hack you can do,

  • is to not hire a PR firm.

  • Just pick three or four journalists that

  • you develop really close relationships with,

  • that like you, that understand you, that you get.

  • And then you contact them yourself.

  • They will cover every story you ever give them,

  • and they'll actually pay attention, get to know you and

  • care about the company.

  • This is so much better than the normal strategy of having

  • a PR firm blast 200 contacts that never read their e-mails,

  • with every piece of news.

  • so, this is something that I

  • think is important to start doing.

  • This is also the time in

  • a company when business development starts to matter.

  • And so, in the early days you can

  • basically ignore anything that would be like doing deals,

  • except maybe fund raising and sales.

  • You know, this is the time when they're important.

  • And everything, or many things that you do,

  • like even fundraising, falls under the,

  • the category of doing deals.

  • So there are,

  • here's my one-minute crash course on this.

  • There are five points that I

  • think are important to understand here.

  • We've talked about this a lot.

  • Nothing will serve,

  • nothing will matter if you don't build a great product.

  • So assume that you've done this before you go try and

  • get anyone to do anything with you.

  • Developing a personal connection with anyone

  • you're trying to do any sort of big deal with,

  • is really important.

  • For whatever reason, most founders fail to do this, or

  • many founders fail to do this.

  • But no one wants to feel like they're this transactional

  • thing, that you're using them to get distribution for

  • your product, or to raise money, or whatever.

  • And, so figuring out some way to actually care about

  • this person and care about what you're doing with them.

  • And not view them, you have to in your own mind not

  • just view them as a one off transaction.

  • You have to actually care about them and

  • what they're going to get out of this.

  • Competitive dynamics,

  • so this is like basic principle of negotiation.

  • Most funders learn this the first time in fundraising but

  • it actually matters for everything.

  • The way you get deals done, and

  • the way you get good terms,

  • is to have a competitive situation.

  • You know, if you don't do this deal with party A,

  • you're going to do it with party B.

  • It's not always an option, but it usually is, and this is,

  • like, the single thing that makes deals happen and

  • makes deals move.

  • Tyler talked about persistence the last lecture so

  • I won't hit on that again too much, other than to say,

  • you have to go beyond your comfort point here,

  • most of the time as a founder.

  • And then, the fifth point is you have to ask for

  • what you want.

  • This is another thing, I still have trouble with this, and

  • certainly most of the founders we do.

  • Have, you know,

  • if you want something to deal, just ask for it.

  • Most of the time, you know,

  • you won't get laughed out of the room and you might get it.

  • But you have to be like,

  • at some point you actually have to say,

  • you know this is what I'd like you to do.

  • Even if it feels aggressive or an overreach, or whatever.

  • So I'm going to close,

  • this part of the talk with an image.

  • One of the Airbnb founders drew this on

  • like a business card or

  • something for another founder that was starting a company.

  • And then I saw it once and took a picture of it.

  • Because I thought it was such a good summary.

  • And what he had tried to draw here was the Ycombinator

  • process as he remembered it.

  • And I love it because it's like so simple, and

  • it looks so do-able when it's written on a business card.

  • But you're trying to find product market fit.

  • You know, you're trying to build a product, and

  • you're trying to close the gap between those two gears.

  • The only way to do that is to go off and meet the people.

  • You cannot do this without getting really,

  • really close to your users.

  • And then he drew this graph that,

  • sort of on a whiteboard at YC and got in kind of,

  • like, one of the YC he writes a passage, but that's

  • the graph of how adoption goes for a new company.

  • So you launch in the press, you get a huge spike.

  • It falls off to nothing.

  • At some point, at least one point,

  • things look like they're going to completely die and

  • kind of dip below the x-axis.

  • They recover a little bit.

  • You have this long, long,

  • long trough of sorrow before things work.

  • In Airbnb's case,

  • it was 1,000 days before the graph started ticking upward.

  • You have these wiggles of false hope, and then finally,

  • finally, finally, things start to grow.

  • Three years later.

  • So starting a startup ends up being this very long process.

  • It is, you know, it can be really rewarding.

  • It's definitely long, but it is do-able.

  • And that's what I love about that drawing.

  • So, with that, I think I have about ten minutes left.

  • I can answer questions on this, or

  • anything else in the course that we've covered.

  • If anyone has some.

  • Yes.

  • >> You have that diversity being important, but

  • an earlier speaker said diversity wasn't important and

  • you should just hire people that are very much like you,

  • and then you can cross.

  • >> So, here is the the question is, how do you you

  • square the device of diversity being important with earlier

  • speakers saying you want people that are very similar.

  • the, the difference what you want is you want diversity of

  • backgrounds, but you don't want diversity of vision.

  • Like where companies get in trouble is

  • when they have people think very differently about what

  • the company should be doing, or don't work well together.

  • You don't want that.

  • You do want to hire people that you know, and

  • that you trust and that you can work with.

  • But if everyone on the team comes from exactly the same

  • background you end, you do end up developing somewhat of

  • a mono-culture which often causes problems down the road.

  • Not always.

  • Some companies have been successful with that.

  • So what, what we tell people is, hire people that you know

  • and that you've worked with before.

  • But try to hi,

  • try to hire people that are complementary and

  • align towards the same goal,

  • not people that are exactly the same.

  • because you just get a, a better skill set.

  • Yeah.

  • >> What are some examples of ways to make a transition back

  • to a more personal level, especially when you're really.

  • >> >> How to keep track,

  • productivity systems.

  • So, the one I use, which actually I think works really

  • well, is I keep one piece of paper with my goals for

  • sort of a three to 12 month time frame.

  • And I look at that every day.

  • And then separately I keep one, one page for

  • every day of my short term goals for that day.

  • And so if I need to do something in like a week,

  • I just flip forward seven pages and write it down, and

  • then I also keep a list of every person and

  • what they're working on, and what I need to tell them, and

  • what I need to talk to them about,

  • what we talked about last time.

  • So every time I sit down with someone,

  • I kind of have the full statement,

  • a list of things for that person that works really well.

  • Yes.

  • >> So we talked about that startup growing.

  • But most startups fail.

  • >> Yeah. >> Any advice for

  • kind of fail gracefully.

  • >> Yeah.

  • >> >> How to fail gracefully.

  • So, most startups fail,and Silicon Valley almost goes

  • too far in how much it loves failure.

  • Failure still sucks.

  • You should still try not to fail.

  • And this whole, like, thing,

  • of like, failure's great, I, I don't agree with.

  • But it will happen to most people most of the time,

  • and it's a very forgiving environment.

  • As long as you are upfront about it, and

  • ethical, and don't let anyone get into a bad situation.

  • So, if you're failing, first of all,

  • you should tell your investors.

  • And, second of all, you should not totally run out of money.

  • What you don't want is a blow-up with a bunch of, you

  • know, debts that the company owe, and everyone, you know,

  • showing up to work, one day, and the door being locked.

  • You'll know when you're failing,

  • you'll know when the company is,

  • things just aren't going to work,

  • and you should just tell your investors.

  • Like, hey, sorry, this isn't going to work.

  • No one will be surprised.

  • Like, I expect to lose my, or I'm willing to lose my money

  • on every investment I ever make.

  • I know that happens most of the time, and

  • the winners pay for it,

  • you know, still with a factor of 100, so it's okay.

  • No one, people will be very understanding and supportive.

  • But you want to tell people early.

  • You don't want to surprise them.

  • And you want, you don't want to like

  • let your employees gets shocked when they learn they

  • don't have a job.

  • you know, you, you,

  • you want to shut the company down in a graceful way.

  • Help them find jobs.

  • Make sure you give them two or four weeks of severance

  • payment, so that they're not suffering a cash flow problem.

  • All that stuff is pretty important.

  • Yes.

  • >> How many immigrant founders have you seen in Y Combinator?

  • >> How many immigrant founders have we seen in Y Combinator?

  • In the last batch, I think it probably went up for

  • this next batch, in the last batch 41% of the founders we

  • funded were born outside the US.

  • From 30 different countries.

  • So it's.

  • Yeah a pretty big percentage.

  • >> What do you think are other good places to

  • start a start up?

  • >> Apart from the Valley where do I

  • think are other good places to start a start up?

  • Well I still think the Valley is

  • the best by a very significant margin.

  • But I think it's finally,

  • maybe beginning to weaken a little bit.

  • Because the costs have just gotten so out of control.

  • To be clear, if I

  • was going to start a company I still wouldn't think about.

  • I would still pick Silicon Valley.

  • And I think if you look at the data of companies over

  • the last few years, Valley still wins by a lot.

  • But Seattle, LA, lots of

  • places outside the U.S., I think all of these make sense.

  • >> Like what places outside?

  • I hesitate to make recommendations there

  • because I haven't spent enough time in

  • this cities to really have an intuitive feel.

  • but, like, I mean, you, you know as well as

  • I do the common ones people talk about, startup hubs,

  • and I just, I can't make a personal recommendation there.

  • >> Hire a professional CEO or like a senior.

  • >> When should the founders think about

  • hiring a professional CEO?

  • Never.

  • you, if you look at the most successful.

  • Companies in tech, they are run by their founders for

  • a very long time, sometimes forever.

  • And sometimes they even hire a professional CEO and then

  • realize that that is not going to like build a great company.

  • And so, like Larry Page came back to CEO again.

  • I think, if you don't want to be the long-term CEO of

  • a company, you probably shouldn't start one.

  • I'm not totally sure about that.

  • I think there are exceptions.

  • But generally, that,

  • the transition I talked about today, if you go

  • from building a great product to building a great company.

  • Being a founder, you know, for nine of the ten years is going

  • to be about building that great company.

  • And if you're, if you're not excited about doing that I

  • think you should think hard about, about it.

  • Yes?

  • >> What are some of the most common and

  • most alarming warning signs you should be looking for.

  • When you're trying to make this shift from

  • building great products to building great companies.

  • What are the, the most common mistakes to make when

  • you're shifting towards building your own company?

  • I think I went through most of them here.

  • I tried to put everything in here that I

  • see people mess up most of the time.

  • Yes?

  • >> Is there a way to get involved in the Y com,

  • community before getting accepted?

  • Is there a way to get involved with YC before getting funded?

  • No, and intentionally not.

  • Actually I'll say the one thing you can do is if you

  • work at a YC company.

  • And then later apply I think that probably like,

  • well not probably.

  • That definitely if you get a good recommendation from

  • those founders will help with YC.

  • So you know, working at a YC company helps.

  • But there's not much you can do to help and

  • that's intentional.

  • Like there is no pre start up in a way that there's pre-med.

  • You should just focus on whatever you're doing.

  • And when you start a start up, there's things like YC and

  • others that are structured to help you.

  • Most of the founders we fund,

  • we don't know at all before we do it.

  • You know, you don't,

  • you really don't need to get to know us or get involved.

  • We're, we're all good that way.

  • Yes?

  • >> There's a statistic of saying,

  • now harder to get into Y company then getting,

  • getting into Harvard.

  • So I'm curious, the criteria that are used,

  • think of start-up, does it change over time, or?

  • >> The question is what,

  • what criteria do we use to pick start-ups and

  • has it gotten harder?

  • Has it changed?

  • You know, we, the two things that we need to see are,

  • are good founders and a good idea.

  • And without both of those, we, we won't fund a company.

  • But that hasn't changed.

  • That has, that has always been the case.

  • The applicant pool to YC has grown quite a bit.

  • But most of, or a lot of the growth is, you know,

  • people that shouldn't be starting start-ups anyway.

  • Probably, that are just doing it

  • because it's sort of the cool thing now.

  • So you know, if you're really passionate about an idea.

  • And the idea is good.

  • And you're you know, smart and

  • get things done that you're executing.

  • I still think you have a, a very reasonable shot at YC,

  • even though the headline number is bigger.

  • Yes.

  • >> The certain, certain market that you're really excited

  • about but don't necessarily know a lot about yet.

  • Is there a certain or ways to ,.

  • >> Sure. If there's

  • a market that you're excited about but

  • don't know a lot about yet, what should you do?

  • Two schools of thought on this.

  • One is to just jump right in.

  • Learn it as you go.

  • That's worked a lot of times.

  • The other is to go work at a company in the space or

  • do something in, in the market for,

  • you know, a year or two years.

  • I lean slightly towards the second.

  • But as long as you're willing to really learn and

  • really study and really get uncomfortably close to your

  • users, either case will work.

  • And I don't think it's that much of a disadvantage.

  • I, I think, all things being equal,

  • I would go spend a couple years learning about it

  • in detail, but I don't think you have to.

  • Yes?

  • >> I have question related to YC to.

  • >> Sure. >> Yeah so,

  • I think that YC does fantastic job in promoting partnership,

  • instead of combating.

  • In fact, as an institutional investor I actually I

  • messed with a suite up at YC.

  • In past periods, the hardware has things like you know, you

  • guys has 180 companies every year jumping into the market.

  • And it looks like it's hard to follow each of the YC

  • companies any more.

  • Do you think that this will create some you know,

  • if some people will walk away from YC.

  • Because they cannot follow such a companies.

  • The company has to be very polished and

  • the founder has to be thinking over and over about ideas.

  • Easy to access the capital-

  • >> All right, so I think the question is do I think

  • investors are going to fund less YC companies as we grow?

  • no.

  • Definitely not.

  • Like certainly the trend in this is the other way.

  • We have more and more investors saying that,

  • you know, half their portfolio's now YC companies.

  • And they're looking forward to

  • the day where it's three-quarters.

  • No I don't think that's a problem at all.

  • I think that is like so not on my top 100 problem list.

  • The opposite of that maybe.

  • All right, one more question.

  • Yes.

  • >> When should a group of founders raise a seed fund or

  • the first fund?

  • >> When should a group of

  • founders raise some seed money?

  • This is a great question.

  • I think that, I think that in general.

  • It's nice to wait until you have the idea figured out and

  • initial signs of promise before you raise money.

  • Raising money puts some pressure on the company.

  • Some time pressure.

  • And once you've raised money you can't be in

  • this exploratory phase indefinitely.

  • you, and you end up having to rush.

  • And so, like, if you haven't raised money, and your idea's

  • not working, you can, you know, like flail around and

  • pivot until you really hit on the thing that's working.

  • But if you raise money and your idea doesn't work,

  • you're in this like oh **** moment, and you have to pivot.

  • And you pivot to

  • whatever the first vaguely plausible idea is.

  • And that's bad.

  • So I think.

  • If you can wait to raise any outside capital more than say,

  • like $100 or

  • $200,000 if you're necessary, but ideally not even that.

  • Until things are working or, or at least pointing in

  • the direction of working you're way better off.

  • All right, thank you all very much, this was fun.

Yeah?

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A2 初級

第20講--後期建議(山姆-奧特曼 (Lecture 20 - Later-stage Advice (Sam Altman))

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    Zhen Mia 發佈於 2021 年 01 月 14 日
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