Startup Playbook. Ultimate Startup Startup Guide from Y Combinator (Part 3)
In the first and second parts of the guide, we looked at the ideas of Sam Altman about the ideas, the team and the product, meet the third and final part of the guide.
Illustrated by Gregory Koberger
The need to develop an excellent product is obvious, and if you have not yet achieved the desired result, you still have a chance to achieve greatness on your own. The fantasy of hiring an “experienced manager” who will do all this for you is not only extremely common, but is also a fairly frequent cause of the death of a company. You will not be able to outsource work to someone else for quite a long time.
It seems obvious, but you have to earn it. Earned money is great for starting thinking about how a business will work.
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The only universal characteristic of the CEO’s work will be the achievement of the success of the company he leads. You can succeed by being a founder, even if you have a lot of flaws, which, as a rule, dismisses you from the post of director if you hired people who perform your own functions and let them do their work. An experienced specialist with an MBA degree may not have such flaws as you, but he will not understand users like you, will also not instinctively feel the product, and will not be given to work as you are (bright example below).
Growth and momentum are the key to perfect implementation. Growth (until it turns into an absurd sale of the dollar for 90 cents) solves all problems, and the lack of growth is not resolved by anything other than growth. If you grow up, it is felt that success is near, and people are happy. If you grow up, new positions and responsibilities constantly appear, and people feel that their career is going uphill. If there is no growth, everything is bad, you lose users. If there is no growth, employees begin to sort out relationships, degrees of responsibility and guilt.
The founders and employees are gradually becoming exhausted, working for start-ups without movement . It is difficult to overestimate how such a work demoralizes.
The main defining directive of a cool performance is “never lose momentum.” But how to achieve this?
The most important thing is to make momentum your top priority. The company does what the CEO takes to action. It is useful to have a single metric optimized by the company. Definitely, figuring out the growth metric costs time spent on it. If you are concerned about growth, and you set certain levels, the rest of the staff will focus on them.
When doing something, ask yourself: “Is this the best way to optimize growth?” For example, attending a conference is usually not the best way to optimize growth, unless you are going to use this event as a market platform.
Extreme internal transparency of metrics (and finance) is very useful. For some reason, the creators are often quite secretive in this regard. Although for a company focused on growth, transparency is extremely important. There is a direct link between employee productivity and identified metrics. Hiding metrics makes it hard for people to focus on them.
Speaking of metrics, do not be fooled by their vanity. A common mistake is to concentrate on the number of registrations, and to ignore the ability to retain the customer. But the number of retained customers is also important (if not more) than the growth of newly registered users.
To support momentum, the selection of the internal rhythm is also important. A kind of "drum beat" of the company's progress - the implementation of new functions, increasing customer base and staff, stages of profitability, the number of partners and others.
You must set ambitious but achievable monthly goals. Celebrate the victory! Constantly discuss the internal strategy, tell employees about the opinions of customers. The more diverse information that is distributed within the company (both positive and negative), the better.
There are several misconceptions that startupers often commit. One of them is the state in which the company is growing at a crazy pace, but everything seems to be incredibly unsustainable and inefficient, the constant concern that what is happening then will have to unravel for a long time. In practice, this seems to be a rare event (the most striking example is Friendster, an incredible and unpredictable growth, which turned out to be too tough for the service team, which is why the moment and the market were missed). Paradoxically, it turns out that growth is positive only if it is controlled and the infrastructure is optimized. Otherwise, to accelerate growth, the founders should correct this misunderstanding as soon as possible. Most of all I like to invest in fast-growing and poorly optimized companies, as they are usually significantly undervalued.
A related misconception is thinking about problems affecting the very distant future. “What will we do when we are a large-scale company?” In fact, the answer will become clear when this moment comes. Far more startups die discussing this issue than those who do not think about it. Good planning is no more than tenfold. In the early stages of development, most startups generally have to hang in the most prominent place an inscription - “do not scale” , and follow it in everything. Cool startups at the beginning always have a great customer service, and bad startups are worried about the impact on sectors of the economy and scaling problems. Steep support is important to retain first customers, and as development progresses some weakening is possible, compensated for by the enthusiasm of users.
The peculiarity of this misconception is that the lack of attention to scaling does not exempt from the need to ultimately make money. Unimportant financial results in the first days of work - this is normal, but you should be well aware of how you will earn later.
Another misconception is demoralization, since growth is poorly estimated in absolute terms, although it is good in percentage terms. People feel very badly about exponential growth patterns. Remind your team of this, and that all giant companies start with small numbers.
Some of the most noticeable misconceptions are that startups believe in something that provides growth, but this, in fact, never works and devours a huge amount of time. Typical examples are “mutually beneficial deals” with other companies and “press conferences”. Beware of them and understand that they are not effective. Instead, great companies develop a product that falls in love with users, manually recruits first users, and then tests various growth strategies (advertising, referral programs, sales and marketing, etc.) and focuses on what works. Ask customers where you can find more people like them.
Remember that sales and marketing are not just dirty words. They will help to significantly accelerate growth, but they will not save if the product is about anything. Do not be afraid of special sales. At least one co-founder will receive user feedback that will bring you money later.
Alex Schultz gave a lecture on the growth in sales of good-looking consumer products. The right approach for B2B products would be to track monthly revenue growth, and remember that the longer the sales cycle, the longer the initial results will look pitiful.
If I had to express my advice on work in a nutshell, I would choose concentration and intensity. These words seem to really apply to the best startups I know.
They are tirelessly focused on their products and growth. They are not trying to do everything (and this is not easy, because such people are doing something that has never happened before).
Most importantly, do not let your company get distracted by the next until the previous one is complete. There was still no such successful company that could manage to do several things at the same time. They start with conviction in their product, and bring it to perfection. In fact, you can do much less than you think. A very common cause of deaths of startups is incorrect prioritization. Proper placement is critically important and time consuming. (Equally important is the prioritization of the company, is to determine their own tactical priorities. For me, the paper works best with a written 3 basic and 30 minor tasks per day, in conjunction with the annual list of common goals)
At the same time, excellent founders are not distracted by many large projects, but what they are doing, they are doing with maximum intensity. Thus, they very quickly achieve the goal. They are decisive, which is very difficult when you work in a startup, too many conflicting tips that affect implementation paths, and simply unfit tips. Successful founders listen to all the advice, and then quickly make their own decisions.
Note that intensity does not mean everything. To do everything intensively is simply impossible. For intensification, you also need to choose the right application point. As Paul Buhate says, look for ways to get 90% performance with 10% of your effort. The market does not care how hard you work, it cares if you even do.
It's hard to be obsessed with product quality and work very quickly, but this is one of the most obvious differences between a good start-up.
I have never, never, seen a successful and slow founder.
You are no different from other startups. You still have to stay focused and fast. Companies that produce missiles and nuclear reactors still manage to do this. All losers cherish explanations for their distinctiveness and slowness.
When you do what works, go ahead. Do not be distracted and, while doing something else, do not "take your foot off the gas pedal."
Do not get stuck at the very beginning - without going to a promising start, attending multiple "networking" events and presentations. Startups who have achieved initial success choose one of two ways: either they continue to do what they are doing, or they start spending more time thinking about the “personal brand” and enjoying the status of the founder of the startup.
It's hard to refuse conferences and meetings with the press, especially when you see how other founders get a lot of attention. But this cannot go on forever, in the end, the press finds out who actually wins, and if the company achieves real success, attention will be more than you ever wanted. In extreme cases, the founders at early levels of development with their own journalists who could be thought of, exist only in television shows, exist in real life, but almost always they fail.
Concentration and intensity always gains in the long run. Charlie Rose (American TV host and journalist) once said that everything in the world is done through a combination of attention and personal connections, and I remember it forever.
Earlier, I mentioned that the only universal characteristic of the CEO’s work is the achievement of success, led by his company. Despite the fact that this is true, I would like to make this statement a bit more specific and talk about what the CEO should spend his time on.
You should strive for an immediate response to team requests and external circumstances, always clearly present strategies and priorities, identify the most important and work quickly (especially when it comes to making decisions when others are slowing down). You must also execute all decisions made, even unpleasant ones. If the team sees that you are not making any exceptions, it will work in the same mode.
Managing your own psychological state is as difficult as it is important. This is a very fashionable topic now, but emotional ups and downs seriously affect performance, and if you don’t figure out how to stay in good shape, you’ll have to try your best. The general director’s job is loneliness, so it’s necessary to communicate with leaders of other companies who can be called when problems arise (one of the random discoveries of YC, which is the positive interaction of equal founders).
A successful startup takes a lot of time, of course, much more than most founders think. It is impossible to treat him as a night vigil before the test. You need to eat well, get enough sleep and not neglect exercise, make time for family and friends. But the most important, perhaps, will be the interest in the matter, nothing else will support you for decades.
Almost always you will feel disgusting, the variety and magnitude of disasters will surprise you. Your task is to correct deficiencies with a smile on your face and calm the team. Usually, things are not as bad as they seem, but sometimes the sensations do not deceive. In any case, just keep moving and growing.
The CEO is not making excuses. Many bad and unfair things will happen, but don’t let yourself, and even the team, tell you something like: “if we had more money” or “if we had another engineer”. In any case, with a lack of key resources, try to figure out how to get them, otherwise think of how to do without them. Justified startups almost always merge. Allow yourself to be upset by the circumstances for no more than a minute, and then look for a solution. Aim for people to talk about you as if you were able to emerge victorious from any situation.
An experienced founder knows what he is doing. Depending on the understanding and the help requested, you will also get better over time. Training is worth the time investment to acquire skills as a leader and manager. The best way to learn is to search for a mentor, reading profile books is unlikely to help in this situation (Note. Despite the fact that authors and publishers write about the benefits).
The amazing amount of advice we give to YC looks like “just ask them” or “just do it.” Novice founders think there must be some kind of secret. But, again, startups are such a thing where tricks stop working. To succeed, you just need to be purposeful, ready to ask questions, and not be a jerk.
It is important to be able to distort reality for others without doing it for yourself. You have to convince other people that your company is the coolest startup of the decade, but you yourself need to stay tuned in for an instant reaction if something goes wrong.
Be persistent. Most of the founders give up too quickly or even begin to engage in another product. If everything is bad, find out the reason and make sure that you can solve this problem. Most successful CEOs do not give up just like that (although you don’t have to be stubborn beyond measure, this statement is rather contradictory, as in each case there is a problem of assessing the situation).
Be optimistic. It is possible that somewhere in the world there are great CEO pessimists, I have not met one. Conviction in the future and an important role in this future of his company plays an important role for the CEO. It allows you to customize the rest of the staff. Easy in theory and difficult to practice in the short term. Do not lose sight of the long-term perspectives; then everyday problems will eventually be forgotten and replaced by memories of annual progress.
Among the most important tasks are the postulation of the mission and values ​​of the company. It may seem that this is sentimental nonsense, but these are primary tasks. Whatever you "put on these shelves" at the beginning, it usually stays there for many years. Each new employee must first be absorbed to become a full member of the team. So determine the cultural values ​​and mission of the company at the very beginning.
Another pattern is worth repeating: “building a company is like a religion device.” If people do not associate what they do every day with a high goal, they are unlikely to work 100%. I think Airbnb is a role model in this regard, and I highly recommend taking a look at their list of cultural values.
The mistake often made by managers is to introduce innovations on the well-trodden paths of business, missing out on innovative products and solutions. For example, many founders think that they should come up with new ways of hiring, selling and financing, introduce revolutionary marketing techniques and advertising. This approach is frankly bad. Leave the battered funds alone, and focus on the product or service under development.
Recruitment is one of the keys to building a great company.
My first hiring advice is don’t. The most successful companies we worked with at YC waited for quite a while before hiring employees. Employees are expensive, add organizational complexity and increase overhead. Many things that can be discussed with partners cannot be spoken to employees. Employees add inertia that grows exponentially. It is much harder to change direction with more people in the team. Fight the desire to increase your self-esteem due to the number of employees.
The best specialists have the most favorable chances and strive to join the most promising startups. If you still have nothing, it will be difficult to hire them, and after obvious success, they will want to join you.
It is worth repeating that the cool specialists have many options, and they are necessary to build a wonderful company. Do not skimp on justice, trust and responsible attitude. Be prepared to go for people who do not even expect to get. Remember that such people, if they wish, can easily establish their own companies.
When you are in staffing mode (that is, since you have achieved a high degree in which a product meets high market demand), you should spend about 25% of your time recruiting. , , CEO, . CEO . , , .
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Do not hire pessimists. They are not suitable for starting a business. While everyone around will foreshadow a quick demise of your business, the company must be monolithic in its belief in the opposite.
Abilities almost always prevail over experience in many positions. Evaluate your overall intelligence and GTD records. Look at the people that you like, you will spend a lot of time together and often in the most tense situations. People you don’t know, you should try to use on a third-party joint project before they join the main team for a full day.
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A few words about competitors. Competitors - start-up ghost stories. Novice founders think they will kill 99% of startups. But in fact, 99% of startups die by suicide, not murder. Instead, it would be worthwhile to worry about your internal problems. If all else fails, then most likely the cause will be its own shortcomings. So you just could not create a great product.
99% of the time you must ignore competitors. This is especially true of those situations where they receive huge investments or raise hype in the press. Do not worry about the competitor until you can see the real superiority, at least in the number of products shipped. Writing press releases is easier than writing code that is easier to write than creating a great product. According to Henry Ford: “The most terrible competitor is the one who doesn’t worry about you at all, but is constantly improving his business.”
Each giant company faced a much worse competitor, at an even more tender age than you, and they all survived. For every action there is a reaction.
Oh yes, earnings. You should definitely figure out how to make money.
In short, the ability to make money is the ability to make people pay you more money than simple product delivery costs. For some reason, people always forget to consider product delivery .
If you have a product, in any case do not plan the growth of bribing users. High-quality advertising is not an easy thing for business. It is necessary to achieve a "word of mouth" effect, so that people themselves advertise your product to their friends.
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In any case, try to achieve “profitability of instant noodles” as soon as possible. When you succeed, you will control your own destiny, and you will no longer depend on the whims of investors and financial markets.
Watch your cash flow carefully. Although this sounds unbelievable, we have often observed how startups run out of money ( for more details, see Paul Graham's essay ).
Most startups collect money at some point.
You must raise funds when you need it, or when they are available under good conditions. Be thrifty and do not "put out the fire with bills." The lack of necessary funds is regrettable, but excessively bloated funds are by no means the least evil.
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An important key to a good company presentation is maximally simplifying and shortening the story. Although I repeat that the key is to have a good company. Many articles and even books have been written about what needs to be included in the pitch, but I advise you to report: mission, the nature of the problem being solved, general information about the product, business model, information about the team, market and growth rates of this market, as well as brief financial information.
Remember that the bar for each next round of funding is much higher. If you successfully passed the seed investment round, do not be surprised that the same presentation did not work on Series A ( on the stages of venture financing ).
Good investors will increase the added value, and bad opposite. Most investors fall into the middle about not adding or cutting anything. Investors who invest small amounts, as a rule, do nothing beyond this.
Board members are one of the driving forces of the company, much more than some startups think. Therefore, be prepared to agree to a low estimate in order to attract good board members who wish to take an active part in the life of the company.
I think this is Paul Graham's best essay on fundraising.
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In order for a startup to succeed, we need: a great idea, a great team, a great product and a masterful performance.
PART IV "REALIZATION"
Illustrated by Gregory Koberger
The need to develop an excellent product is obvious, and if you have not yet achieved the desired result, you still have a chance to achieve greatness on your own. The fantasy of hiring an “experienced manager” who will do all this for you is not only extremely common, but is also a fairly frequent cause of the death of a company. You will not be able to outsource work to someone else for quite a long time.
It seems obvious, but you have to earn it. Earned money is great for starting thinking about how a business will work.
')
The only universal characteristic of the CEO’s work will be the achievement of the success of the company he leads. You can succeed by being a founder, even if you have a lot of flaws, which, as a rule, dismisses you from the post of director if you hired people who perform your own functions and let them do their work. An experienced specialist with an MBA degree may not have such flaws as you, but he will not understand users like you, will also not instinctively feel the product, and will not be given to work as you are (bright example below).
Growth
Growth and momentum are the key to perfect implementation. Growth (until it turns into an absurd sale of the dollar for 90 cents) solves all problems, and the lack of growth is not resolved by anything other than growth. If you grow up, it is felt that success is near, and people are happy. If you grow up, new positions and responsibilities constantly appear, and people feel that their career is going uphill. If there is no growth, everything is bad, you lose users. If there is no growth, employees begin to sort out relationships, degrees of responsibility and guilt.
The founders and employees are gradually becoming exhausted, working for start-ups without movement . It is difficult to overestimate how such a work demoralizes.
The main defining directive of a cool performance is “never lose momentum.” But how to achieve this?
The most important thing is to make momentum your top priority. The company does what the CEO takes to action. It is useful to have a single metric optimized by the company. Definitely, figuring out the growth metric costs time spent on it. If you are concerned about growth, and you set certain levels, the rest of the staff will focus on them.
Here are some examples.Keep a list of what hinders growth. Talk to your company about how to accelerate growth. If you know what's stopping you, think about ways to resolve the situation.
The founders of Airbnb drew a promising growth chart. They placed him everywhere and if he was respected - everything was wonderful, if not, that was the only thing they talked about.
Mark Zuckerberg once said that one of the most important innovations on Facebook was the allocation of the group responsible for growth when growth slowed. This group was (and perhaps still is) one of the most prestigious groups in the company - no one doubted the importance of growth.
When doing something, ask yourself: “Is this the best way to optimize growth?” For example, attending a conference is usually not the best way to optimize growth, unless you are going to use this event as a market platform.
Extreme internal transparency of metrics (and finance) is very useful. For some reason, the creators are often quite secretive in this regard. Although for a company focused on growth, transparency is extremely important. There is a direct link between employee productivity and identified metrics. Hiding metrics makes it hard for people to focus on them.
Speaking of metrics, do not be fooled by their vanity. A common mistake is to concentrate on the number of registrations, and to ignore the ability to retain the customer. But the number of retained customers is also important (if not more) than the growth of newly registered users.
To support momentum, the selection of the internal rhythm is also important. A kind of "drum beat" of the company's progress - the implementation of new functions, increasing customer base and staff, stages of profitability, the number of partners and others.
You must set ambitious but achievable monthly goals. Celebrate the victory! Constantly discuss the internal strategy, tell employees about the opinions of customers. The more diverse information that is distributed within the company (both positive and negative), the better.
There are several misconceptions that startupers often commit. One of them is the state in which the company is growing at a crazy pace, but everything seems to be incredibly unsustainable and inefficient, the constant concern that what is happening then will have to unravel for a long time. In practice, this seems to be a rare event (the most striking example is Friendster, an incredible and unpredictable growth, which turned out to be too tough for the service team, which is why the moment and the market were missed). Paradoxically, it turns out that growth is positive only if it is controlled and the infrastructure is optimized. Otherwise, to accelerate growth, the founders should correct this misunderstanding as soon as possible. Most of all I like to invest in fast-growing and poorly optimized companies, as they are usually significantly undervalued.
A related misconception is thinking about problems affecting the very distant future. “What will we do when we are a large-scale company?” In fact, the answer will become clear when this moment comes. Far more startups die discussing this issue than those who do not think about it. Good planning is no more than tenfold. In the early stages of development, most startups generally have to hang in the most prominent place an inscription - “do not scale” , and follow it in everything. Cool startups at the beginning always have a great customer service, and bad startups are worried about the impact on sectors of the economy and scaling problems. Steep support is important to retain first customers, and as development progresses some weakening is possible, compensated for by the enthusiasm of users.
The peculiarity of this misconception is that the lack of attention to scaling does not exempt from the need to ultimately make money. Unimportant financial results in the first days of work - this is normal, but you should be well aware of how you will earn later.
Another misconception is demoralization, since growth is poorly estimated in absolute terms, although it is good in percentage terms. People feel very badly about exponential growth patterns. Remind your team of this, and that all giant companies start with small numbers.
Some of the most noticeable misconceptions are that startups believe in something that provides growth, but this, in fact, never works and devours a huge amount of time. Typical examples are “mutually beneficial deals” with other companies and “press conferences”. Beware of them and understand that they are not effective. Instead, great companies develop a product that falls in love with users, manually recruits first users, and then tests various growth strategies (advertising, referral programs, sales and marketing, etc.) and focuses on what works. Ask customers where you can find more people like them.
Remember that sales and marketing are not just dirty words. They will help to significantly accelerate growth, but they will not save if the product is about anything. Do not be afraid of special sales. At least one co-founder will receive user feedback that will bring you money later.
Alex Schultz gave a lecture on the growth in sales of good-looking consumer products. The right approach for B2B products would be to track monthly revenue growth, and remember that the longer the sales cycle, the longer the initial results will look pitiful.
Concentration and intensity
If I had to express my advice on work in a nutshell, I would choose concentration and intensity. These words seem to really apply to the best startups I know.
They are tirelessly focused on their products and growth. They are not trying to do everything (and this is not easy, because such people are doing something that has never happened before).
Most importantly, do not let your company get distracted by the next until the previous one is complete. There was still no such successful company that could manage to do several things at the same time. They start with conviction in their product, and bring it to perfection. In fact, you can do much less than you think. A very common cause of deaths of startups is incorrect prioritization. Proper placement is critically important and time consuming. (Equally important is the prioritization of the company, is to determine their own tactical priorities. For me, the paper works best with a written 3 basic and 30 minor tasks per day, in conjunction with the annual list of common goals)
At the same time, excellent founders are not distracted by many large projects, but what they are doing, they are doing with maximum intensity. Thus, they very quickly achieve the goal. They are decisive, which is very difficult when you work in a startup, too many conflicting tips that affect implementation paths, and simply unfit tips. Successful founders listen to all the advice, and then quickly make their own decisions.
Note that intensity does not mean everything. To do everything intensively is simply impossible. For intensification, you also need to choose the right application point. As Paul Buhate says, look for ways to get 90% performance with 10% of your effort. The market does not care how hard you work, it cares if you even do.
It's hard to be obsessed with product quality and work very quickly, but this is one of the most obvious differences between a good start-up.
I have never, never, seen a successful and slow founder.
You are no different from other startups. You still have to stay focused and fast. Companies that produce missiles and nuclear reactors still manage to do this. All losers cherish explanations for their distinctiveness and slowness.
When you do what works, go ahead. Do not be distracted and, while doing something else, do not "take your foot off the gas pedal."
Do not get stuck at the very beginning - without going to a promising start, attending multiple "networking" events and presentations. Startups who have achieved initial success choose one of two ways: either they continue to do what they are doing, or they start spending more time thinking about the “personal brand” and enjoying the status of the founder of the startup.
It's hard to refuse conferences and meetings with the press, especially when you see how other founders get a lot of attention. But this cannot go on forever, in the end, the press finds out who actually wins, and if the company achieves real success, attention will be more than you ever wanted. In extreme cases, the founders at early levels of development with their own journalists who could be thought of, exist only in television shows, exist in real life, but almost always they fail.
Concentration and intensity always gains in the long run. Charlie Rose (American TV host and journalist) once said that everything in the world is done through a combination of attention and personal connections, and I remember it forever.
Work as CEO
Earlier, I mentioned that the only universal characteristic of the CEO’s work is the achievement of success, led by his company. Despite the fact that this is true, I would like to make this statement a bit more specific and talk about what the CEO should spend his time on.
CEO:In addition to this list, select all the parts of the business that you like the most, and take care of them. As I wrote at the beginning, this is hard work. In case of your success, the company will always be on your mind. Extreme attention and intensity do not promise the perfect balance of work and personal life. In addition to work, you may have a family and, perhaps, a triathlon class, but no more. You should always be in touch, as only you can do a lot, no matter how well you delegate authority.
- defines the vision and strategy of the company,
- engaged in the promotion of the company
- hires a team and manages it, especially in areas where he himself is not strong,
- collects money and provides the company with their constant inflow,
- sets the bar for quality performance.
You should strive for an immediate response to team requests and external circumstances, always clearly present strategies and priorities, identify the most important and work quickly (especially when it comes to making decisions when others are slowing down). You must also execute all decisions made, even unpleasant ones. If the team sees that you are not making any exceptions, it will work in the same mode.
Managing your own psychological state is as difficult as it is important. This is a very fashionable topic now, but emotional ups and downs seriously affect performance, and if you don’t figure out how to stay in good shape, you’ll have to try your best. The general director’s job is loneliness, so it’s necessary to communicate with leaders of other companies who can be called when problems arise (one of the random discoveries of YC, which is the positive interaction of equal founders).
A successful startup takes a lot of time, of course, much more than most founders think. It is impossible to treat him as a night vigil before the test. You need to eat well, get enough sleep and not neglect exercise, make time for family and friends. But the most important, perhaps, will be the interest in the matter, nothing else will support you for decades.
Almost always you will feel disgusting, the variety and magnitude of disasters will surprise you. Your task is to correct deficiencies with a smile on your face and calm the team. Usually, things are not as bad as they seem, but sometimes the sensations do not deceive. In any case, just keep moving and growing.
The CEO is not making excuses. Many bad and unfair things will happen, but don’t let yourself, and even the team, tell you something like: “if we had more money” or “if we had another engineer”. In any case, with a lack of key resources, try to figure out how to get them, otherwise think of how to do without them. Justified startups almost always merge. Allow yourself to be upset by the circumstances for no more than a minute, and then look for a solution. Aim for people to talk about you as if you were able to emerge victorious from any situation.
An experienced founder knows what he is doing. Depending on the understanding and the help requested, you will also get better over time. Training is worth the time investment to acquire skills as a leader and manager. The best way to learn is to search for a mentor, reading profile books is unlikely to help in this situation (Note. Despite the fact that authors and publishers write about the benefits).
The amazing amount of advice we give to YC looks like “just ask them” or “just do it.” Novice founders think there must be some kind of secret. But, again, startups are such a thing where tricks stop working. To succeed, you just need to be purposeful, ready to ask questions, and not be a jerk.
It is important to be able to distort reality for others without doing it for yourself. You have to convince other people that your company is the coolest startup of the decade, but you yourself need to stay tuned in for an instant reaction if something goes wrong.
Be persistent. Most of the founders give up too quickly or even begin to engage in another product. If everything is bad, find out the reason and make sure that you can solve this problem. Most successful CEOs do not give up just like that (although you don’t have to be stubborn beyond measure, this statement is rather contradictory, as in each case there is a problem of assessing the situation).
Be optimistic. It is possible that somewhere in the world there are great CEO pessimists, I have not met one. Conviction in the future and an important role in this future of his company plays an important role for the CEO. It allows you to customize the rest of the staff. Easy in theory and difficult to practice in the short term. Do not lose sight of the long-term perspectives; then everyday problems will eventually be forgotten and replaced by memories of annual progress.
Among the most important tasks are the postulation of the mission and values ​​of the company. It may seem that this is sentimental nonsense, but these are primary tasks. Whatever you "put on these shelves" at the beginning, it usually stays there for many years. Each new employee must first be absorbed to become a full member of the team. So determine the cultural values ​​and mission of the company at the very beginning.
Another pattern is worth repeating: “building a company is like a religion device.” If people do not associate what they do every day with a high goal, they are unlikely to work 100%. I think Airbnb is a role model in this regard, and I highly recommend taking a look at their list of cultural values.
The mistake often made by managers is to introduce innovations on the well-trodden paths of business, missing out on innovative products and solutions. For example, many founders think that they should come up with new ways of hiring, selling and financing, introduce revolutionary marketing techniques and advertising. This approach is frankly bad. Leave the battered funds alone, and focus on the product or service under development.
Hiring and management
Recruitment is one of the keys to building a great company.
My first hiring advice is don’t. The most successful companies we worked with at YC waited for quite a while before hiring employees. Employees are expensive, add organizational complexity and increase overhead. Many things that can be discussed with partners cannot be spoken to employees. Employees add inertia that grows exponentially. It is much harder to change direction with more people in the team. Fight the desire to increase your self-esteem due to the number of employees.
The best specialists have the most favorable chances and strive to join the most promising startups. If you still have nothing, it will be difficult to hire them, and after obvious success, they will want to join you.
It is worth repeating that the cool specialists have many options, and they are necessary to build a wonderful company. Do not skimp on justice, trust and responsible attitude. Be prepared to go for people who do not even expect to get. Remember that such people, if they wish, can easily establish their own companies.
When you are in staffing mode (that is, since you have achieved a high degree in which a product meets high market demand), you should spend about 25% of your time recruiting. , , CEO, . CEO . , , .
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Do not hire pessimists. They are not suitable for starting a business. While everyone around will foreshadow a quick demise of your business, the company must be monolithic in its belief in the opposite.
Abilities almost always prevail over experience in many positions. Evaluate your overall intelligence and GTD records. Look at the people that you like, you will spend a lot of time together and often in the most tense situations. People you don’t know, you should try to use on a third-party joint project before they join the main team for a full day.
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Competitors
A few words about competitors. Competitors - start-up ghost stories. Novice founders think they will kill 99% of startups. But in fact, 99% of startups die by suicide, not murder. Instead, it would be worthwhile to worry about your internal problems. If all else fails, then most likely the cause will be its own shortcomings. So you just could not create a great product.
99% of the time you must ignore competitors. This is especially true of those situations where they receive huge investments or raise hype in the press. Do not worry about the competitor until you can see the real superiority, at least in the number of products shipped. Writing press releases is easier than writing code that is easier to write than creating a great product. According to Henry Ford: “The most terrible competitor is the one who doesn’t worry about you at all, but is constantly improving his business.”
Each giant company faced a much worse competitor, at an even more tender age than you, and they all survived. For every action there is a reaction.
Earnings
Oh yes, earnings. You should definitely figure out how to make money.
In short, the ability to make money is the ability to make people pay you more money than simple product delivery costs. For some reason, people always forget to consider product delivery .
If you have a product, in any case do not plan the growth of bribing users. High-quality advertising is not an easy thing for business. It is necessary to achieve a "word of mouth" effect, so that people themselves advertise your product to their friends.
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In any case, try to achieve “profitability of instant noodles” as soon as possible. When you succeed, you will control your own destiny, and you will no longer depend on the whims of investors and financial markets.
Watch your cash flow carefully. Although this sounds unbelievable, we have often observed how startups run out of money ( for more details, see Paul Graham's essay ).
Fundraising
Most startups collect money at some point.
You must raise funds when you need it, or when they are available under good conditions. Be thrifty and do not "put out the fire with bills." The lack of necessary funds is regrettable, but excessively bloated funds are by no means the least evil.
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An important key to a good company presentation is maximally simplifying and shortening the story. Although I repeat that the key is to have a good company. Many articles and even books have been written about what needs to be included in the pitch, but I advise you to report: mission, the nature of the problem being solved, general information about the product, business model, information about the team, market and growth rates of this market, as well as brief financial information.
Remember that the bar for each next round of funding is much higher. If you successfully passed the seed investment round, do not be surprised that the same presentation did not work on Series A ( on the stages of venture financing ).
Good investors will increase the added value, and bad opposite. Most investors fall into the middle about not adding or cutting anything. Investors who invest small amounts, as a rule, do nothing beyond this.
Board members are one of the driving forces of the company, much more than some startups think. Therefore, be prepared to agree to a low estimate in order to attract good board members who wish to take an active part in the life of the company.
I think this is Paul Graham's best essay on fundraising.
Epilogue
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Source: https://habr.com/ru/post/296486/
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