The best advice for making a startup. A summary of a lecture by Sam Altman from Y Combinator. Some things covered: What's the best reason to start a startup? What is execution? The chicken and egg problem. The Stanford dilemma. Evaluating an idea. Defensibility strategy. The difference between a great idea. Mistakes of founders.

1. Lecture 2: How to
Start a Startup
Summary of Sam Altman's Class on "How to Start a
Startup", the full version can be viewed here:
http://startupclass.samaltman.com/courses/lec01/
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Twitter: @GHackLabsWebsite: www.ghacklabs.com Email: luke@ghacklabs.com
By: Luke Fitzpatrick

2. You need a great idea, a great
product, a great team , and
great execution.2

3. Startups are young and
inexperienced.
You should only start a
startup if you feel compelled
by a particular problem and
that you think starting a
company is the best way to
solve it.
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4. There's a limit to how much you can do, before
getting the product in the hands of a user.
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5. Great execution
is at least 10x as
important and
100x harder than
a great idea.
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6. Hold on a Sec, What's
Execution?
In its simplest form, it's a way to get your first loyal
users, make them love your service. Tackle the
egg before you go for chicken.6

7. Evaluating an Idea:
• Size and growth of the market.
• The growth strategy of the company.
• The defensibility strategy.
• And so on...
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8. What's MISSING in
Startups?
• Plans themselves are
worthless.
• The exercise of planning is
really valuable and totally
missing in most startups
today.
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9. Long-term Thinking is so
Rare, Especially in Startups.
• There is an advantage if
you can do it.
• Remember the idea will
expand and become
more ambitious as you
go.
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10. Defensibility
Build something that is difficult to replicate.
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11. The Best
Companies are
Mission
Orientated.
• This requires dedication &
love.
• A lot of founders,
especially students,
believe that their startups
will only take 2-3 years.
• Good startups usually
take 10 years.
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12. The Advantage of a Mission
Orientated Startup
• You'll get more support.
• Derivative companies, copy
an existing idea with very few
insights. This does not excite
people, nor is it compelling.
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13. – Peter Thiel
“You want an idea
that turns into a
monopoly.”
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14. GREAT IDEA
CRAZY
There's a Fine Line Between a Great Idea & Crazy.
The truly good
ideas don't
sound like they're
worth stealing.
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15. A Common
Mistake of
Founders
• First time founders, think the
first version of their product -
NEEDS to sound really BIG.
• It doesn't, it needs to take
over a specific market and
expand from there.
• This is unpopular, but should
be what you are going for.
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16. Sequoia's Famous Question
WHY NOW?
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17. Market Size
Evolving
• Small rapidly growing
market.
• Seems small today, but
will grow rapidly fast.
Advantages of
a Small Market
• Customers are pretty
desperate for a solution,
and they'll put up with an
imperfect, but rapidly
improving product.
What Investors Want? What
You Should Be Looking For:
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18. Commonalities to Build a
Great Product
• Sitting in front of the computer
and building it.
• Talking to customers.
• Think of what customers want.
• Think of the demands of the
market.
• Constantly get user feedback.
If you want to learn how to test your ideas by getting user feedback, read it.
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19. Other Problems Founders
Face
• Raising money.
• Getting more press.
• Hiring.
• Business development.
• Etc.
This is all significantly easier when you have a great product!
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20. Think about it, products
you love, are really
simple to use. There's
no coincidence.
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21. Be Fanatical About Your
Product
• It's all about small
details.
• The right copy to
explain it right.
• Founders feel pain
when the product
sucks.
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22. Don't Buy Google Adwords
in the Early Days
• You should go recruit users by hand.
• Get feedback daily.
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23. The Stanford Dilemma
These students often try to hire sales & customer service support
right away. You've got to do this by yourself, it's the only way!
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24. The Reality of Being a CEO
Magical Fairy Land The Actual Reality
People have this vision
of being a CEO of a
company that just
started - and being on
top of that pyramid.
Everyone else is your
boss - all of your
employees, cusy
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25. – Phil Libin
“If you're going to be an entrepreneur, you will
actually get some flex time to be honest. You'll
be able to work any 24 hours a day you want!”
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26. What's the
Best Reason to
Start a
Startup?
• One is you're so
passionate about it that
you have to do it, and
you're going to do it
anyways.
• The other way to interpret
it, the world needs you to
do it.
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27. Maniac Determination
"We couldn't stop working on it literally. The idea was beating
itself out of our chests and forcing itself out into the world."
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28. Some People Thought Pinterest Was
a Joke! Who's the Joke on Now?
Ben Silbermann, when everyone
thought Pinterest was a joke, recruited
the initial Pinterest users by chatting up
users in coffee shops. He really did, he
just walked around Palto Alto, and said
"Will you please use my product?"
He also used to run around the Apple
store, and he would like set all the
browsers to the Pinterest homepage
real quick, before people kicked him
out, (laughter) and so when people
walked in they were like "Oh what's
this?" This is an important example of
doing things that don't scale. If you
haven't read Paul Graham's essay, you
should: http://paulgraham.com/ds.html
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