Course "Blitzscaling" Lecture 2.1 Stages of growth startup "Stage of the family" (John Lilly and Sam Altman)
Lectures by Raidy Hoffman, John Lilly, Chris Ye and Allen Blue CS183C "Blitzscaling"
Lecture 1: Introduction
Lecture 2.1: Stages of growth of a startup, "family stage"
Lecture 2.2: Stages of growth startup, "family stage"
Lecture 3.1. Michael Dearing. A bit of the history of entrepreneurship and management
Lecture 3.2. Michael Dearing. Questions and Answers with Reid Hoffman
Lecture 3.3. Michael Dearing. Questions and Answers with Reid Hoffman
Lecture 4.1. Ann Mura-Ko: The Thunder Lizard Theory. Author value
Lecture 4.2. Ann Mura-Ko: The Thunder Lizard Theory. Product, corporate and categorical value.
Lecture 4.3. Ann Mura-Ko: Questions and Answers with John Lilly
Abstract 2 lectures of the course at Stanford University CS183C "Blitzscaling", which Reid Hoffman, John Lilly, Chris Yeh and Allen Blue read. Mistakes and typos made by me. All this great stuff is wholly owned by Raid, John, Chris Ye and Allen.
')
This lecture was held in the form of an interview with John Lilly with Sam Altman about the first stage of growth - the family stage. Below is a retelling of their conversation. I recall from the last lecture that the stage of the family is the stage at which small teams create a product to fit the market.
John Lilly : What is the YCombinator?
Sam Altman : YCombinator is an organization that finances startups, which is a great way to develop innovation around the world. We are currently investing in 250 companies a year through our main program, and we have launched the YCombinator Fellowship program, which we hope will help us expand our activities and go far beyond the current indicators.
The goal of YCombinator is to create a company that helps start-ups get significant help where they could remain without it. We do this by providing effective advice, through connections, as well as the community of our former charges. Since the founding of YCombinator, we have invested in more than 2,000 companies, and quite close relations based on mutual assistance have been established among our wards.
John Lilly : How did you get into YCombinator?
Sam Altman : I left Stanford University to start my own company, Loopt. I started working on the company the day the first set was announced at YCombinator, and I applied for the day before the apps were released.
At that time (2005), the startup world seemed something unreal. It seemed that in order to attract investment, you should know the right people, know what to say, be a business person and have a business plan.
When I first contacted YCombinator, I knew that they were our people — Paul Graham was an engineer himself. They understood the value of the product and understood what we were doing. It took a couple of years for the guys from YCombinator to understand how special they are, but from the point of view of the first group of startups, we knew from the very beginning that they were special.
John Lilly : An article was written about YCombinator called “ YC - A Business with Network Effect ” (YC Is A Network Effect Business). What do you think of it?
Sam Altman : I was asked this question many times. Today in the world there are about 2500 business accelerators. In all these accelerators - 8 billionaire companies are created by YCombinator and 100% of them came from the same place.
Investment is a business with a network effect, and even more so in the early stages. The value of our founders who came out of YCombinator, to a greater extent lies in the network of our wards, and not only in our councils.
John Lilly : What is the network of YCombinator wards, and what do you think about this network?
Sam Altman : The first thing you need to understand is that we are the first investors for most of the companies we finance. In relation to the first investors who believe in the idea, a strong affection is formed. Over time, such loyalty decreases - strong attachment to the seed investor, good attachment to A series investors, less attachment to B / C series investors, and no attachment to all public investors after the initial public offering. As soon as you help them to place their shares, they will sell your shares in the first quarter.
John Lilly : What is the difference between taking control of YCombinator as a managing partner and creating something from scratch (for example, your experience in Loopt)?
Sam Altman : The main thing to understand is that I helped YCombinator from the very beginning. I was here when YCombinator just arrived, I was there, when they received the first check, I advised the company for my pleasure in my free time, I became a part-time partner in 2011, and in 2012 I bought my company.
At that time, I decided to separate and create my own venture capital fund. For me, this was a turning point, because I realized that I didn’t want to be a traditional venture capital investor - I didn’t enjoy just investing money.
I wanted to create new companies, and was looking for an opportunity to do this. I wanted to manage the company, and chose the one that gave me the opportunity, and YCombinator was great for me.
It was really difficult to take on responsibilities from a man like Paul Graham, but one more thing had to be understood - Ycombinator was still a relatively small company when I took control of my hands. I already knew the organization quite well and the transition was fairly smooth.
John Lilly : Reid Hoffman often says that when Jeff Weiner took over LinkedIn in 2008, this was a second reason for the company. Do you feel something like this in regards to YCombinator?
Sam Altman : When a new CEO / leader appears, I think this is always the second basis for the company. We are doing what may seem like something completely different from the outside (significantly increased the number of startups in which YC invests; entering scholarships and grants, etc.), but in fact we remained true to our mission. All that we are trying to do is to search for the best founders, and despite the fact that we do it a little differently, the goal remains the same.
John Lilly : Change the subject and talk about what you think about startups - considering that you encounter thousands of startups a year, what do you think about the initial startup team? What qualities must the best founders have?
Som Altman : Several qualities in no particular order:
John Lilly : Let's go back to your first point. How can you have a clear view if your initial product has not yet formed?
Som Altman : I will give you an example. Airbnb was changed several times, but each time they clearly understood what they were trying to achieve. The founders told the story of how their grandparents traveled and stayed overnight with locals on inflatable mattresses, and it was much better than staying at a hotel. All hotels look the same - even first-class, while the locals can give you a unique experience. Despite the fact that the realization of their ideas took a lot of time, the very idea as to why they were working on it and what they needed to do in the near future was always very clear.
John Lilly : How do you rate these qualities in the new founders?
SM Altman : Working with more than 20 thousand applications, we get a lot of data and are able to understand what questions should be asked to check such moments.
John Lilly : In your opinion, how do single founders differ from teams of 2-3 people?
Som Altman : YCombinator prefers founding teams of 2-3 people, but not against singles. There are two main problems with single founders: 1) there is too much work for startups for one person, 2) psychologically coping with a startup alone is very hard. Perhaps, but hard.
On the other hand, finding a bad companion is worse than none. We have seen it more than once when the lone founder does not have a companion and he simply attracts the first person to the team. Nothing good ever comes out of it.
In general, the best companies start with a team of 2-3 partners. If you look at billionaire companies, it’s unlikely that there will be at least one founded by a loner, or at least those who have not attracted at least one partner in the first 6 months since the company was founded.
One more thing that we understood: 3 companions are feasible, 4 companions are hard. In such cases, we have repeatedly observed one of the founders leaving the team at an early stage.
John Lilly : How do you inform the founders that they are not coping?
Smith Altman : All companions at one point reach a conflict, sometimes they tell us about it, sometimes they don’t. We try to help them overcome this period, but sometimes we all collectively announce that the relationship is over, and both sides need to move on.
John Lilly : What do you think about teams of two people? And what do you think about the differences of team members?
Smith Altman : Differences in life experience are good, but differences of opinion are really bad. It's not what product you create, but the type of company you are building - how big your company should be, what style of work it will be used in, what to do with disagreements, what you think about hiring and culture in your company.
The greatest conflict that we have seen is not when people want different things, but when they want the same thing, but each for himself. This includes situations where both want to be CEOs, when both want their face to be on the cover of a magazine, etc.
Complementary teams are a goal when people have the same vision of a company, but bring different skills to it. A classic example is one strong businessman and one strong "techie" (Jobs and Who). However, such a structure is gradually shifting towards two techies, but in this case there is a greater chance that a conflict will arise.
John Lilly : How do you help people hire workers?
Sam Altman : Hiring always carries risks - and it has become even more difficult in modern conditions.
From what we have seen - the best startups are hiring little and slowly. The worst startups say “look, the person is already working for us!” - the lack of such behavior lies in the large monthly costs, greater organizational inertia, the thoughts of employees about the career path, etc. Such moments are important, but only when you are ready to expand - when you are not ready, you do not need them.
for example
The more people you hire, the higher the status of your company, but also the harder it becomes for you to do your job.
John Lilly : What do you think is different about the process of establishing a company in the San Francisco Bay Area and elsewhere?
Sam Altman : The San Francisco Bay Area is the best place in the world to set up a startup. If I wanted to create a new startup, I would do it here.
The only thing that complicates things is expensive living. Startups in the early stages can get considerable benefits, while maintaining a low level of monthly costs, since if you are able to survive every month, you have a better chance of success. The high cost of living all this complicates.
Another thing I noticed was that in the San Francisco Bay Area, over time, there was less variety. We saw a large number of companies outside the region, and they were more diverse than here. We have a large national diversity, but almost no gender. In YCombinator we have 50% female partners, and we are trying to achieve the most diverse set of founders.
Lecture 1: Introduction
Lecture 2.1: Stages of growth of a startup, "family stage"
Lecture 2.2: Stages of growth startup, "family stage"
Lecture 3.1. Michael Dearing. A bit of the history of entrepreneurship and management
Lecture 3.2. Michael Dearing. Questions and Answers with Reid Hoffman
Lecture 3.3. Michael Dearing. Questions and Answers with Reid Hoffman
Lecture 4.1. Ann Mura-Ko: The Thunder Lizard Theory. Author value
Lecture 4.2. Ann Mura-Ko: The Thunder Lizard Theory. Product, corporate and categorical value.
Lecture 4.3. Ann Mura-Ko: Questions and Answers with John Lilly
Abstract 2 lectures of the course at Stanford University CS183C "Blitzscaling", which Reid Hoffman, John Lilly, Chris Yeh and Allen Blue read. Mistakes and typos made by me. All this great stuff is wholly owned by Raid, John, Chris Ye and Allen.
')
This lecture was held in the form of an interview with John Lilly with Sam Altman about the first stage of growth - the family stage. Below is a retelling of their conversation. I recall from the last lecture that the stage of the family is the stage at which small teams create a product to fit the market.
I. Interview with Sam Altman from YCombinator
John Lilly : What is the YCombinator?
Sam Altman : YCombinator is an organization that finances startups, which is a great way to develop innovation around the world. We are currently investing in 250 companies a year through our main program, and we have launched the YCombinator Fellowship program, which we hope will help us expand our activities and go far beyond the current indicators.
The goal of YCombinator is to create a company that helps start-ups get significant help where they could remain without it. We do this by providing effective advice, through connections, as well as the community of our former charges. Since the founding of YCombinator, we have invested in more than 2,000 companies, and quite close relations based on mutual assistance have been established among our wards.
John Lilly : How did you get into YCombinator?
Sam Altman : I left Stanford University to start my own company, Loopt. I started working on the company the day the first set was announced at YCombinator, and I applied for the day before the apps were released.
At that time (2005), the startup world seemed something unreal. It seemed that in order to attract investment, you should know the right people, know what to say, be a business person and have a business plan.
When I first contacted YCombinator, I knew that they were our people — Paul Graham was an engineer himself. They understood the value of the product and understood what we were doing. It took a couple of years for the guys from YCombinator to understand how special they are, but from the point of view of the first group of startups, we knew from the very beginning that they were special.
John Lilly : An article was written about YCombinator called “ YC - A Business with Network Effect ” (YC Is A Network Effect Business). What do you think of it?
Sam Altman : I was asked this question many times. Today in the world there are about 2500 business accelerators. In all these accelerators - 8 billionaire companies are created by YCombinator and 100% of them came from the same place.
Investment is a business with a network effect, and even more so in the early stages. The value of our founders who came out of YCombinator, to a greater extent lies in the network of our wards, and not only in our councils.
John Lilly : What is the network of YCombinator wards, and what do you think about this network?
Sam Altman : The first thing you need to understand is that we are the first investors for most of the companies we finance. In relation to the first investors who believe in the idea, a strong affection is formed. Over time, such loyalty decreases - strong attachment to the seed investor, good attachment to A series investors, less attachment to B / C series investors, and no attachment to all public investors after the initial public offering. As soon as you help them to place their shares, they will sell your shares in the first quarter.
John Lilly : What is the difference between taking control of YCombinator as a managing partner and creating something from scratch (for example, your experience in Loopt)?
Sam Altman : The main thing to understand is that I helped YCombinator from the very beginning. I was here when YCombinator just arrived, I was there, when they received the first check, I advised the company for my pleasure in my free time, I became a part-time partner in 2011, and in 2012 I bought my company.
At that time, I decided to separate and create my own venture capital fund. For me, this was a turning point, because I realized that I didn’t want to be a traditional venture capital investor - I didn’t enjoy just investing money.
I wanted to create new companies, and was looking for an opportunity to do this. I wanted to manage the company, and chose the one that gave me the opportunity, and YCombinator was great for me.
It was really difficult to take on responsibilities from a man like Paul Graham, but one more thing had to be understood - Ycombinator was still a relatively small company when I took control of my hands. I already knew the organization quite well and the transition was fairly smooth.
John Lilly : Reid Hoffman often says that when Jeff Weiner took over LinkedIn in 2008, this was a second reason for the company. Do you feel something like this in regards to YCombinator?
Sam Altman : When a new CEO / leader appears, I think this is always the second basis for the company. We are doing what may seem like something completely different from the outside (significantly increased the number of startups in which YC invests; entering scholarships and grants, etc.), but in fact we remained true to our mission. All that we are trying to do is to search for the best founders, and despite the fact that we do it a little differently, the goal remains the same.
Ii. Questions about founding teams
John Lilly : Change the subject and talk about what you think about startups - considering that you encounter thousands of startups a year, what do you think about the initial startup team? What qualities must the best founders have?
Som Altman : Several qualities in no particular order:
- Clarity of views - the founder must be able to explain what they do and why they do it. If they cannot clearly explain this to us, it will be very difficult for them to assemble a starting team, to interest the press, and also this means that they are not particularly rational thinking.
- Decisiveness and dedication - we are looking for founders who do not accept rejection and make the world bend under them. When creating a company, a person faces a large number of problems, and if he is unable to solve them, his startup will not work. As for loyalty, the best companies always focus on their mission.
- Sharp mind
- The ability to do everything quickly is not the same as determination. We know that speed well approaches the success of a startup in the early stages. We met with a large number of founders who are good on paper, but in life they lack this quality.
John Lilly : Let's go back to your first point. How can you have a clear view if your initial product has not yet formed?
Som Altman : I will give you an example. Airbnb was changed several times, but each time they clearly understood what they were trying to achieve. The founders told the story of how their grandparents traveled and stayed overnight with locals on inflatable mattresses, and it was much better than staying at a hotel. All hotels look the same - even first-class, while the locals can give you a unique experience. Despite the fact that the realization of their ideas took a lot of time, the very idea as to why they were working on it and what they needed to do in the near future was always very clear.
John Lilly : How do you rate these qualities in the new founders?
SM Altman : Working with more than 20 thousand applications, we get a lot of data and are able to understand what questions should be asked to check such moments.
John Lilly : In your opinion, how do single founders differ from teams of 2-3 people?
Som Altman : YCombinator prefers founding teams of 2-3 people, but not against singles. There are two main problems with single founders: 1) there is too much work for startups for one person, 2) psychologically coping with a startup alone is very hard. Perhaps, but hard.
On the other hand, finding a bad companion is worse than none. We have seen it more than once when the lone founder does not have a companion and he simply attracts the first person to the team. Nothing good ever comes out of it.
In general, the best companies start with a team of 2-3 partners. If you look at billionaire companies, it’s unlikely that there will be at least one founded by a loner, or at least those who have not attracted at least one partner in the first 6 months since the company was founded.
One more thing that we understood: 3 companions are feasible, 4 companions are hard. In such cases, we have repeatedly observed one of the founders leaving the team at an early stage.
John Lilly : How do you inform the founders that they are not coping?
Smith Altman : All companions at one point reach a conflict, sometimes they tell us about it, sometimes they don’t. We try to help them overcome this period, but sometimes we all collectively announce that the relationship is over, and both sides need to move on.
John Lilly : What do you think about teams of two people? And what do you think about the differences of team members?
Smith Altman : Differences in life experience are good, but differences of opinion are really bad. It's not what product you create, but the type of company you are building - how big your company should be, what style of work it will be used in, what to do with disagreements, what you think about hiring and culture in your company.
The greatest conflict that we have seen is not when people want different things, but when they want the same thing, but each for himself. This includes situations where both want to be CEOs, when both want their face to be on the cover of a magazine, etc.
Complementary teams are a goal when people have the same vision of a company, but bring different skills to it. A classic example is one strong businessman and one strong "techie" (Jobs and Who). However, such a structure is gradually shifting towards two techies, but in this case there is a greater chance that a conflict will arise.
John Lilly : How do you help people hire workers?
Sam Altman : Hiring always carries risks - and it has become even more difficult in modern conditions.
From what we have seen - the best startups are hiring little and slowly. The worst startups say “look, the person is already working for us!” - the lack of such behavior lies in the large monthly costs, greater organizational inertia, the thoughts of employees about the career path, etc. Such moments are important, but only when you are ready to expand - when you are not ready, you do not need them.
for example
- AirBnb hired its first employee after 9 months
- Dropbox hired the first employee after “a lot of time”
- Stripe hired its first employee in 10 months
The more people you hire, the higher the status of your company, but also the harder it becomes for you to do your job.
John Lilly : What do you think is different about the process of establishing a company in the San Francisco Bay Area and elsewhere?
Sam Altman : The San Francisco Bay Area is the best place in the world to set up a startup. If I wanted to create a new startup, I would do it here.
The only thing that complicates things is expensive living. Startups in the early stages can get considerable benefits, while maintaining a low level of monthly costs, since if you are able to survive every month, you have a better chance of success. The high cost of living all this complicates.
Another thing I noticed was that in the San Francisco Bay Area, over time, there was less variety. We saw a large number of companies outside the region, and they were more diverse than here. We have a large national diversity, but almost no gender. In YCombinator we have 50% female partners, and we are trying to achieve the most diverse set of founders.
Paysto payment solutions for Megamind readers:
→ Get paid by credit card right now. Without a site, PI and LLC.
→ Accept payments from companies via the Internet. Without a site, PI and LLC.
→ Acceptance of payments from companies for your site. With document circulation and exchange of originals.
→ Automation of sales and service transactions with legal entities. Without intermediary in the calculations.
→ Accept payments from companies via the Internet. Without a site, PI and LLC.
→ Acceptance of payments from companies for your site. With document circulation and exchange of originals.
→ Automation of sales and service transactions with legal entities. Without intermediary in the calculations.
Source: https://habr.com/ru/post/296922/
All Articles