18 docs tagged with "startups"

Startups are a unique beast, full of counterintuitive truths and unexpected challenges. Here are some of the key takeaways from this in-depth exploration of the startup world:

Albert Einstein is often celebrated for his intelligence, but it's his innovative ideas that truly set him apart. Intelligence is undoubtedly a prerequisite for innovation, but it's not the same thing. The distinction may seem minor, but it's significant. There are countless intelligent individuals who never make groundbreaking discoveries.

May 2021

One of the most common types of advice we give at Y Combinator is to do things that don't scale. Many founders believe startups either take off or don't, but in reality, startups take off because the founders make them take off. Founders must recruit users manually at the start, as nearly all startups do. Stripe, a successful startup we funded, is a prime example of aggressive early user acquisition, a technique we refer to as "Collison installation."

The Changing Landscape of Wealth Creation: From Inheritance to Innovation

If the world were static, we could have monotonically increasing confidence in our beliefs. However, this is not the case, especially for things that change, which could include practically everything. When experts are wrong, it's often because they're experts on an earlier version of the world. To avoid obsolete beliefs, one must actively protect against them. As a startup investor, I've learned that most really good startup ideas initially look like bad ideas because some change in the world just made them viable.

The most common mistake inexperienced founders make when trying to convince investors is relying too heavily on their pitch. Instead, they should let their startup do the talking. Investors are looking for startups that have the potential to be hugely successful. This doesn't mean they're looking for a guaranteed success, but rather a startup that presents a good bet.

The best way to generate startup ideas is not by trying to think of them but by identifying problems, particularly those you experience personally. The most successful startups, like Microsoft, Apple, Yahoo, Google, and Facebook, originated from founders solving problems they faced themselves. This approach ensures the problem truly exists and avoids the common trap of creating solutions in search of a problem.

When I sold my startup in 1998, I was suddenly faced with a new challenge: protecting my newfound wealth. I realized that it was just as easy to lose a fortune as it was to make one, but I was much more familiar with the latter path. To avoid the pitfalls, I began to study how fortunes are typically lost.

Life is indeed short, and having children has made this abundantly clear to me. Time is a continuous quantity, yet when you consider that you only have 52 weekends with your 2-year-old or can experience only eight Christmases while they are still enchanted by the magic, it becomes evident that life's moments are finite and precious.

The most effective startup ideas are often born out of your own needs—what do you wish existed for you? Apple and the iPhone are prime examples, stemming from personal desires of their creators. Our venture, Viaweb, contrasted this by targeting a broader user base we weren't part of. However, successful startups tend to align more with the personal-need origin.

In 2006, after their first startup, Kiko, was rendered obsolete by Google, Justin Kan and Emmett Shear sold what remained of their company on eBay for $258,000. Unsure of their next move, they sought advice from Paul Graham, who helped them devise a plan to create Justin.tv. Today, Justin.tv is the web's largest portal for live video, boasting 31 million users per month and backed by $7.2 million in venture capital.

The most detrimental lesson you may have learned in school wasn't from a specific class, but rather the pursuit of good grades. This pursuit often overshadows genuine learning. Tests, in theory, should gauge what you've learned in a class. However, in practice, they often become the main focus of studying, with actual learning taking a backseat.

March 2024

The thoughts that occupy our minds in idle moments, like when showering, can be surprisingly significant. It's often during these times that we inadvertently focus on the problems that matter most to us. This form of "ambient thought" is not just beneficial but necessary for solving complex issues. However, we can only influence it indirectly.

I recently advised Y Combinator applicants that the best advice for getting in was to explain what they've learned from users. This advice tests if they’re paying attention to users, understanding them, and recognizing the necessity of their product. Reflecting on what I've learned from YC's startups, the recurrence of similar problems across different startups stands out. Advising numerous startups reveals common issues, which is a key factor in YC's effectiveness.

Determination is the most crucial trait in startup founders, surpassing intelligence once you're above a certain threshold. It's about persisting through obstacles without getting demoralized. Bill Clerico and Rich Aberman of WePay exemplify this with their relentless pursuit in the face of bureaucratic resistance.

Umair Haque's assertion that startups don't become the next Google because they sell out too soon is flawed. In reality, companies like Google and Facebook were open to selling; they simply demanded more than potential acquirers were willing to pay. Startups that reject acquisition offers often fare better, possibly because founders with the courage to decline such offers tend to drive success. Google and Facebook's independence is largely due to acquirers underestimating them, a common trend in corporate M&A.