Before a startup - part one

Original author: Paul Graham
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In one of Stanford’s teaching classes - this time at Sam Altman’s lessons , Paul Graham delivered a lecture that would no doubt enter the annals. Despite the fact that the information is primarily aimed at college students, Paul himself notes that most of the material is applicable to potential founders of all ages.

One of the advantages of children in the family is the constant question “what would I say to my children?” To myself at the moment when you are asked to give advice. My children are still small, but I can easily imagine what I would tell them about startups, if they were already in college. That is why I am going to tell you this.

Startups are counter-intuitive.I myself am not sure why. Perhaps because knowledge of them has not yet been deeply rooted in our culture. Regardless of the reasons, starting your own business is a task in which it is far from always possible to trust your own instincts.

In this sense, the process is similar to skiing: when you first get on them, ride and want to brake before the descent, instincts tell you: "lean back." But if you do this, then fly off the track. Therefore, part of the skiing learning process involves suppressing this impulse. Over time, you have new habits, but the first attempts require a serious concentration of consciousness. That is, there is a list of things that you must remember before going down the road.

Startups are just as unnatural at first as skiing is. And what I am doing now is writing a list of things that you cannot “not learn” in any way before you begin.

Counter intuitiveness

I already mentioned the first fact - startups are so strange, in general, that if you trust your own instincts, you will make a lot of mistakes. If you know nothing but this, it is best to pause before you start.

When I was closely involved with Y Combinator, I often joked that our main function was to tell the founders what they would ignore in any other case. It really is. Set by set, YC partners warned the founders of the mistakes they would make, the founders ignored these words, and then, a year later, came with the words: “ It would be better if we listened .”

Why do founders ignore the words of partners? This happens with all counter-intuitive ideas - they do not match what intuition tells you. They seem wrong. Therefore, of course, the first impulse is simply not to take these words into account. In fact, my humorous explanation of our own activities is by no means the curse of Y Combinator - this is the reason for its existence. If the instincts of the founders did not fail them and always gave the correct answers, we would never need them. Other people are only needed to give advice that surprise you. This is one of the reasons why there are a huge number of skiing trainers and almost none of them running on the ground.

But, oddly enough, you can trust your instincts regarding other people. And one of the typical mistakes of many founders is that they are not strong enough in this: they are involved in common processes with people who seem impressive, but intuitively repulsive. Later, when things go awry, the founders make excuses: “ I know that something was wrong with him, but I ignored it because he impressed me .”

If you are considering entering into a long-term relationship with someone, as a co-founder, employee, investor or buyer, and you have doubts about this, trust them. If someone seems to you a slippery type, a freak, a scammer - do not ignore this feeling.

This is one of the cases when it is not shameful to indulge your own weaknesses. Work only with those people with whom you have no problems and with whom you have long been confident in the absence of communication and other difficulties.


The second counter-intuitive point is that it doesn’t matter what and how much you know about startups. The path to success with your own innovative project is not to be that expert, it is to solve the problem of users at the expert level. Mark Zuckerberg did not succeed because he was a know-it-all. He succeeded even though he had no experience at all, but he very well understood his future users.

If you do not know anything about, for example, angelic investments in the first round, you do not need to feel miserable. This is the type of knowledge that you can acquire when it will be necessary and forget after the need has passed and you have done everything.

In fact, I think that it’s not just unnecessary to know everything about the “mechanics” of startups, it can even be dangerous. If I met a student who knows everything about convertible bonds, agreements with employees and, God forbid, FF class shares, I would not think: “ this is someone who is seriously ahead of his peers". This will disrupt all alarms in my internal system. Because what characterizes the young founders is the need to go through all the events of the foundation of their own company, along with mistakes. First, someone realizes an idea that seems good, rents an office with a cool look and hires several people. From the outside, everyone thinks that this is exactly what startups do. In fact, inside, the next step after office and hiring people will be a simple fact of realizing how much they got into it. Because in the process of simulating startup activities in all external manifestations, one thing that is key is often forgotten - to do something that people want to use.

The game

We have so often watched how this happens that we even came up with a name for this phenomenon: the game house. Over time, I realized why this is happening at all. The reason young founders come to the conclusion that a startup is necessary is because they were trained and taught to follow this path from childhood. A kind of extracurricular activity. Even in colleges, most of the work is as artificial as running a hamster in a wheel.

I don’t attack the educational system because it is like that. A certain percentage of fakeness will always be present in your work, especially when you are taught something. If you try to measure the result of such work, you will find a large number of artifacts associated with such pseudo-activities.

I admit - I myself did this in college. I quickly discovered that in many classes there were 20 or 30 ideas that formed the final exams for the subject. After that, I realized that the best way to prepare for such exams is not cramming the material analyzed in the classroom, but working out exactly the specific questions that form the final test. When I came to the exam, my main feeling was curiosity - which of my questions will go to me in the form of a ticket. It was very much like a game.

It is not surprising that after we train to behave in a similar way, playing similar games, all the founders of startups try to do the same with them - to understand and learn the “tricks” that allow you to play this “game” without losses. Since raising funds has become a measure of the success of startups (although this is a stupid mistake), everyone wants to know tricks to convince investors. At Y Combinator, we say that the best way to convince investors is to realize that everything works out for you, which means that you are growing fast. You can tell them in simple words. After that, everyone wants to learn tricks to grow quickly. And we say again that the best way to do this is simply to do something people need.

A huge number of dialogues between YC partners and the young founders begins with the question: " How do we ..."And the answer to it:" Just ... "

Why are the founders constantly making things so complicated? The reason, as I understand it, is to constantly search for a “trick”.

Therefore, this is the third counter-intuitive fact that you need to remember about startups: the game system based on tricks and hacks does not work here. That would work if you went to work for a large corporation company. Depending on how “broken” the processes are in it, you can succeed simply by “sticking” to the right people, or by imitating activities, and so on. But this does not work with startups. There is no boss to be fooled - only users, each of whom is primarily concerned about whether your product fulfills its task and solves the problem. Startups are also impersonal, like physics. You just have to do something that the user needs, and depending on how well you did it, you will prosper.

The dangerous thing is that imitation can work for investors to some extent. If you are very good at saying what people want to hear and give the impression of a professional, you can fool investors into at least one, and possibly more, rounds of investment. But this is not in your interests, since the company will be doomed, moreover, ultimatum. The only thing you will do is spend your time and other people's money on a very fast downhill.

So stop looking for tricks. In startups, they can sometimes be found, as in any other industry or activity, but this will not help you solve the user's problem. A founder who does not know anything about raising funds, but has several users who love his product, will find the same means with much greater efficiency compared to a person who knows everything about it, but does not have users and their love. And, more importantly, the one who has users will succeed after receiving the necessary funds.

And despite the fact that in a sense this is “bad news” - the inability to “beat” the system of successful startups, I am extremely glad that the game system does not work in them. I am glad that there are still such parts of the world and people who can win by doing a good job. Just imagine how depressed this world would be in a situation if everything was like in a school or corporations, where you would have to spend a huge amount of time doing frank crap or losing to people who do not know anything else. I can’t even imagine who and where I would be today, if in college days I would realize it with the same force that in the world there are places where gaming systems mean less than others, or do not mean anything at all. Today I am convinced of their existence and offer this knowledge to you, especially when you think about the future.

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