Startup Tips by Paul Graham - Version for the Lazy

Paul Graham is a famous programmer and a very successful venture capitalist. And among other things - also a talented writer. I highly recommend reading not this text, but his own essays - but if you don’t have enough time, I’ve gotten some important things from my favorite articles for his authorship.

13 proposals for startups

1. Choose good co-founders.
2. Run fast.
3. Let the idea develop (the idea is born when it is implemented)
4. Understand your users (many successful startups did what their founders needed)
5. It is better to please several users than to cause conflicting feelings in many
6. Offer unexpectedly good user support.
7. You do what you measure (measuring something in a strange way leads to its improvement)
8. Waste a little
9. Get a small profit (enough to feed the founders)
10. Avoid distractions (especially those for which they pay, as for work; and also counseling)
11. Resist demoralization
12. Do not give up
13. Deals are thwarted

Organic Startup Ideas

• The best way to invent an idea is to ask yourself, what would you like someone to do for you?
• When searching for ideas, focus more on the idea and less on the startup. Repair what is broken - regardless of whether it seems large enough to you to build a whole company on this. If you do this, it will be difficult for you not to do something valuable for a large number of people. And after that, you suddenly find that you already have a company.
• Do not despair if people treat your first attempts as a toy. It is even good. Perhaps that's why everyone else has passed by this idea.
• There is nothing more valuable than an unmet need that turns into a doable.

')

Where to get ideas for a startup

• The best ideas have three common characteristics: what the founders themselves need; what they can do; what a few people said was valuable enough.
• It seems obvious that it is only necessary to work on existing problems. Still, the most common mistake of startups is to solve problems that no one is experiencing.
• You can do something, a small amount of which is necessary for a large number of people, or something, a large number of which is necessary for a small number of people. Choose the second option.
• If Zuckerberg had built something that would only be useful to Harvard students, it would not be a very good startup. Facebook was a good idea, since it started from a small market from which it was possible to quickly grow. Since all colleges are the same, then if you make Facebook working at Harvard, it will work everywhere.
• Very well, if you are both a programmer and an end user - then the cycle of producing new versions and testing them on users can occur in one head.
• The likelihood of finding good tasks for a solution increases if you turn to areas other than computer: a) it is unlikely that people who are not connected with computers solved their problems with the help of programs; b) since you are not aware of the problems in this area, you do not know what they take there for granted.
• Startups rarely die because of competition. This opportunity can be simply discarded. If you have something that your competitors don’t have, and that a lot of users really need it, there’s a springboard for you.
• A loaded market is a good sign. There is a demand there, and there are not enough acceptable solutions for all.

Do unscalable stuff

• The most common of unscaled things that need to be addressed in a startup is to manually search for users. Almost all startups have to do this. You can not wait until they come to you.
• We recommend that startups measure their progress by weekly growth. If you have 100 users, then next week, in order to grow by 10%, you need to gain another 10. And although 110 seems not much better than 100, if you grow 10% weekly, you will be surprised how quickly you grow up In a year, you will have 14,000 users, and in 2 years, 2 million.
• You will do other things, increasing the number of users a thousand at a time, and the growth will ever slow down. But if there is a market, you can usually start by manually searching users, and then gradually move to less manual methods.
• Where to search for users manually? If you come up with a solution for your own problems - look for your peers. Otherwise, you will need to make more efforts to find a user core. This is usually done by getting an initial set of users using a non-targeted launch, and then analyzing which of them is using the service with the greatest enthusiasm — after which they are looking for people like him.
• Tim Cook can not write to you by hand a letter after you buy a laptop. And can you. This advantage of a small company is to provide a level of service that big companies cannot do.
• Often, it attracts initially indifferent users if you use your own product for them and on their behalf. We did so in Viaweb. We offered sellers to use our program to create online stores. They refused, but allowed us to do it for them and for them. We felt pretty stupid — instead of planning strategic partnerships, we were selling suitcases, pens, and T-shirts. But it turned out that this was exactly what was needed - it taught us how the seller feels when using our software. Sometimes, when making a website for a seller, I understood what was missing in the program, and spent a couple of hours adding this functionality.

Startup = Growth

• A startup is a company that must grow rapidly. A good growth rate in the first year is 5-7% per week. 10% is exceptionally good. 1% - a sign that you do not understand what you are doing.
• It is best to measure the growth in profits. In second place - by the number of active users.
• We usually advise start-ups to choose the projected growth rate, and then try to achieve it. If they decide to recruit 7% per week, and recruit, then the week is successful and nothing more needs to be done. If they don’t, they don’t succeed in the only really important thing, and they should be very concerned about this fact.

18 mistakes killing startups

1. One founder.

You need colleagues - for brainstorming in order to dissuade you from stupid acts and support in difficult times.

2. Incorrect location

The people you want to hire want to live there, the supporting industry is there, and the people you happen to meet work together.

3. Marginal niche

You can avoid competition only by avoiding good ideas.

4. Someone else's idea with variations

Instead of copying Facebook with the added features ignored by it, look at the ideas from the other side. Instead of going from companies and working on the problems that they solved, look for a problem and imagine a company that can solve it.

5. Stubbornness.

Most startups are not doing what they originally wanted. You need to prepare to notice the idea better when it appears. But switching to a new idea once a week is also not an option. See if new ideas embody some development. If for each new idea you can use most of what has already been done, then you are on the path to progress. If you want to introduce something new, and your users like it very much, then everything goes as it should.

6. Hiring bad programmers

Businessmen do not know how to distinguish good programmers from bad ones.

7. Choosing the wrong platform.

How to choose the right one? Usually hire good programmers to choose. And you can visit the computer department of a cool company and see what they use in research projects.

8. Slow start

You will fully understand the idea by testing it on users.

9. Startup too early

Set a common goal, and then write the smallest part of it, which has some value. The earliest users whom you need to impress are quite tolerant. They do not need a new product to be able to do everything - it should be able to at least something.

10. The lack of a clear portrait of the user

You can not do something good for users without understanding them.

11. Too small investment

If you get money from investors, you need to get enough money for the next step. Usually you need to achieve something noticeable: from the idea of ​​moving to a working prototype, from a prototype to launching, from launching to a noticeable growth.

12. Too much spending

A classic example of burning money is hiring too many employees. Do not hire too many. Pay people with shares without fixed dividends - not only for saving, but also for finding dedicated people. And hire only those who will either write the code, or search for users - only such people you need in the first place.

13. Too much investment

With a large amount of money is more difficult to change direction. The more people you have, the more often you remain directed in one direction.

14. Bad advice from investors.

They can not be ignored, they may have useful ideas. But you can not let them manage the company.

15. User donation for profit

Since doing something that people need is more difficult than making money with it, it’s better to leave the business model for later.

16. Reluctance to get dirty hands

To attract users, you will have to break away from the computer and go to look for them

17. Quarrels between the founders

We recommend the founders to develop a procedure for quiet withdrawal from the company. Most disputes happen not because of situations, but because of people. People - the most important component of a startup, so do not look for compromises there.

18. Late work

Most of the founders of failed startups did not quit their permanent jobs, and most of the founders of successful ones quit.

The hardest lessons for startups

1. Release the product earlier

Quickly release the first version, and then improve it based on user reaction. Do not release something full of errors - you need to release something minimally working. Users hate errors, but the first minimum version will not cause them to be rejected if the second version follows.

2. Constantly add functionality.

Every day or two, you need to gradually improve your system. Users like a constantly improving site. And they will like it even more if you make improvements based on their feedback - because everyone is used to the fact that companies ignore them.

3. Make the users happy

The most important thing to clearly explain why you need your site. And one more thing that I like to repeat is that you need to give people everything you can give them at once. If you have something unique - place it on the first page. Most users will see only her.

4. Fear of what you need to fear.

Most startups choke themselves, and do not die at the hands of competitors. The most frequent reasons are: internal differences, inertia, ignoring users.

5. Involvement is a self-fulfilling prophecy.

The most important quality is dedication. But in this you need to act correctly - you need to be decisive, but flexible.

6. There is always room for improvement.

We often overlook opportunities, because we are getting used to how things are now, and decide for ourselves that this is how it should be

7. Do not hope too much

It's good to be optimistic about your capabilities, but always assume the worst. When someone says “we want to invest in you” or “we want to acquire you”, then the next thing you should think is “do not hope”.

8. Speed, not money

From an economic point of view, a startup is not a means to become rich, but a means to quickly provide for oneself. You need to make a living, and a startup allows you to do it faster.

How to convince investors

• Convince yourself - and when you explain this to investors, they will believe you. To convince oneself is not to deceive oneself, but to soberly evaluate your startup for its value for investment.
• If it's not worth it, don't try to find the money. But if it does, you will tell the truth to investors, and they will feel it. You do not need to be a clever seller, if you understand something well and speak truthfully about it.
• To assess the value of a startup you need to be an expert in this field. If you are not an expert, then your presentation to investors will be just another example of the Dunning-Kruger effect. And this is actually what will happen.
• Investors will quickly recognize whether you are an expert in this field, by answering questions. You need to thoroughly know your market.
• Founders regard startups as ideas, and investors as markets. If there are X customers who pay $ Y per year for your startup, then the total market size will be $ (X * Y). Investors do not expect that you will collect all this money, but this is exactly the upper limit.
• Your market should be large and affordable. But it doesn’t have to be big right now, and you don’t have to be on it today. Often it is better to start in a small market that can expand, or one that you can switch to a larger one.

Investor Presentation

1. Explain what you do.
And better immediately in the first sentence

2. Quickly proceed to the demonstration.
The demonstration explains what you did, better than any words.

3. Short description is better than vague
Your goal is not to explain everything the system can become, but simply to convince investors that you should continue the dialogue with you.

4. Do not say "driving"
Let one person speak, the second works with the computer. While you are facing the audience, habit and politeness will make them look at you.

5. Do not rant for a long time about minor things.
If you have a few minutes, spend them explaining what your product is doing and why it’s so cool.

6. Don't go into business models.
Smart investors do not expect this from a brief presentation. In any case, your business models are most likely incorrect.

7. Speak slowly and clearly.
If you think that you are talking too slowly, then you are speaking at the right speed.

8. Let one man speak
Startups often try to show that all the founders are equal in them. This is good, because investors do not like the imbalance in the team. But making a presentation, speaking in turn, is too much. It is distracting.

9. Behave with confidence
Show, not tell. Do not say "we approach work with all passion" or "our product is brilliant." If you did something good, you do a favor to investors by telling them about it.

10. Do not try to seem more than you really are.
You just need to convince them that you are smart and stumbled upon something good. Trying to hide the fact that you are new to the business, you can hide your talent. They better recognize lies than you lie

11. Do not clutter up slides with words.
If there are too many words, people will miss them. Do not read from slides

12. Exact numbers are good.
If you have even preliminary data, tell us about them. The numbers get stuck in their heads. If you can argue that the median visitor is doing 12 page views - awesome. But do not give more than 4-5 digits, and let's only numbers that relate directly to you. No need to tell them about the volume of the market

13. Tell stories about users.
Well, if you can talk about specific problems with users, and about your solutions for them. The best story about the needs of the user - the story of you personally. And after it - the needs of people you personally know, friends or relatives.

14. Let their key phrase get stuck in their heads
In the startup world, this is usually the phrase “x of y”.