Paul Graham Startup Tips - Lazy Version

Original author: Stelios Constantinides
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Paul Graham is a renowned programmer and highly 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 do not have enough time, I have managed to find some important things from my favorite articles about his authorship.

13 startup offers

  1. Choose good co-founders.
  2. Get started 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. Better to please multiple users than provoke conflicting feelings in many
  6. Offer unexpectedly good user support
  7. You do what you measure (measuring something in a strange way leads to improvement)
  8. Spend a little
  9. Make a small profit (enough to feed the founders)
  10. Avoid distractions (especially those paid for as a job; and counseling)
  11. Resist Demoralization
  12. Do not give up
  13. Deals break down

Organic startup ideas

  • The best way to invent an idea is to ask yourself what would you like someone to do for you?
  • In search of an idea, focus more on the idea and less on the startup. Repair what is broken - regardless of whether it seems to you large enough to build a whole company on it. 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. This is even good. Perhaps that is why everyone else passed this idea.
  • There is nothing more valuable than an unmet need, which turns into a feasible one.

Where to get startup ideas

  • Best ideas have three common attributes: what the founders themselves need; what they can do; something that several people commented on as quite valuable.
  • It seems obvious that it is only necessary to work on existing problems. And still, the most common mistake startups make is solving 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 built something that would be useful only to Harvard students, it would not be a very good startup. Facebook was a good idea as it started with a small market from which you could grow quickly. Since all colleges are the same, if you make Harvard-based Facebook, it will work everywhere.
  • It is very good 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 to solve increases if you go to areas other than computer: a) it is unlikely that people who are not connected with computers will solve their problems with the help of programs; b) since you are not aware of the problems of this area, you do not know what they take there for granted.
  • Startups rarely die because of competition. This opportunity can simply be discarded. If you have something that competitors don’t have, and this is really needed by a certain set of users, here’s the bridgehead.
  • A busy market is a good sign. There is demand there, and there are no solutions acceptable enough for all.

Do Unscalable Things

  • The most common of the non-scalable things that a startup needs to do is manually search for users. Almost all startups have to do this. You can’t wait until they come to you.
  • We recommend startups measure their progress by weekly growth. If you have 100 users, then next week, to grow by 10%, you need to dial 10 more. And although 110 doesn’t seem much better than 100, if you grow by 10% weekly, you will be surprised how fast you are 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 growth will someday slow down. But if there is a market, you can usually start by manually searching for users, and then gradually move on to less manual methods.
  • Where to search for users manually? If you came up with a solution for your own problems - look for peers. Otherwise, you will need to make more efforts to find a custom core. Usually they do this by getting the initial set of users using a non-targeted launch, and then analyzing which of them uses the service with the greatest enthusiasm - after which they look for the ones like him.
  • Tim Cook cannot write you a letter by hand after you purchase a laptop. And can you. It is an advantage of a small company to provide a level of service that large companies are not able to do.
  • Often, attracting initially indifferent users is triggered if you use your own product for themselves and on their behalf. We did so in Viaweb. We suggested sellers 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 sold suitcases, pens and T-shirts. But it turned out that this was exactly what was needed - it taught us how the seller feels using our software. Sometimes, making a website for the seller, I realized what was missing in the program, and spent a couple of hours adding this functionality.

Startup = Growth

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

18 mistakes that kill startups

1. One founder.

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

2. Wrong location The

people you want to hire want to live there, the supporting industry is located there, and the people you meet by chance work together.

3. Marginal niche.

Avoiding competition is possible only by avoiding good ideas.

4. Another idea with variations.

Instead of copying Facebook with the addition of features that it ignored, look at ideas from the other side. Instead of going from companies and working on the problems 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. One needs to prepare to notice a better idea when it comes up. But switching to a new idea once a week is also not an option. See if new ideas represent a certain 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 really like it, then everything is going 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, having tested it on users.

9. Launching too early.

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

10. Lack of a clear portrait of the user.

You cannot do something good for users without understanding them.

11. Too small investment

If you get money from investors, you need to get enough funds for the next step. Usually you need to achieve something noticeable: from the idea to move to a working prototype, from the prototype to launch, from launch to noticeable growth.

12. Too much spending

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

13. Too big investments

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

14. Bad advice from investors.

They cannot be ignored; they may have useful ideas. But they should not be allowed to manage the company.

15. User donation for the sake of profit

Since it is more difficult to do something people need than to make money on it, it is better to leave the business model for later.

16. Reluctance

to get your hands dirty In order to attract users you have to tear yourself away from the computer and go look for them

17. Quarrels between the founders We

recommend that the founders develop a procedure for calmly leaving the company. Most disputes do not happen because of situations, but because of people. People are the most important component of a startup, so do not look for compromises there.

18. Work through the sleeves

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

The hardest lessons for startups

1. Release the product earlier

Quickly release the first version, and then improve it based on user feedback . No need to 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 it is followed by a second.

2. Constantly add functionality

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

3. Make users happy

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

4. Fear of what you need to be afraid of.

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

5. Engagement is a self-fulfilling prophecy.

The most important quality is commitment. But in this you must act correctly - you must be decisive, but flexible.

6. There is always room for improvement

We often do not notice the possibilities, because we get used to how things are now and decide for ourselves that this is how it should be

7. Do not expect 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 buy you”, the next thing you should think about is “don't expect”.

8. Speed, not money.

From an economic point of view, a startup is not a means of becoming rich, but a means of quickly securing itself. You need to earn 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 yourself is not to deceive yourself, but to soberly evaluate your startup for value for investing.
  • If it’s not worth it - do not try to find the money. But if it’s worth it, you will tell the truth to investors, and they will feel it. You do not have to be a smart 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-Krueger effect. And this will actually be so.
  • Investors will quickly recognize if you are an expert in this field by answering questions. You need to know your market thoroughly.
  • 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 will be $ (X * Y). Investors do not expect you to collect all this money, but this is definitely 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. It’s often better to start in a small market that can expand, or one from which you can switch to a larger one.

Presentation for investors

1. Explain what you are doing
And it’s better right away in the first sentence

2. Quickly go to the demonstration The
demonstration explains what you have done better than any words

3. The short description is better vague
Your goal is not to explain everything that the system can become, but just to convince investors, that you should continue the dialogue

4. Do not say “behind the wheel”
Let one person say, the second works with the computer. While you are facing the audience, habit and politeness will make them look at you

5. Don’t talk about secondary matters for a long time
If you have a few minutes, spend them explaining what your product does and why it is so cool

6. Do not go deep 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 you are talking too slowly, then you are speaking at the right speed

8. Let one person speaks
Startups often try to show that all the founders in them are equal. This is good, because investors do not like the imbalance in the team. But making a presentation, taking turns, is too much. This is distracting.

9. Behave confidently
Show, not tell. Do not say “we approach work with all passion” or “our product is brilliant.” If you have done something good, you are doing a favor to investors by telling them about it

10. Do not try to seem like something bigger 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 recognize lies better than you lie

11. Don’t 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 even have preliminary data, tell us about them. The numbers get stuck in the heads. If you can argue that the median visitor is doing 12 pageviews, that's cool. But do not give more than 4-5 digits, and give only numbers directly related to you. No need to tell them about market volume

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 user needs is the story of you personally. And after it - the needs of people you personally know, friends or relatives

14. Let the key phrase get stuck in their head
In the world of startups - it's usually the phrase “x from y”.

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