Last update April 28, 2022 at 06:24 AM
The accelerator of startup the most prestigious in the world has published a guide to starting a business called The Startup Playbook.
The world's most prestigious startup accelerator Y Combinator or YC for short has published a guide to starting a business called The Startup Playbook. Here is advice from YC President Sam Altman who is part entrepreneur, blogger and programmer, accompanied by illustrations by Gregory Koberger. Sam Altman has also taught at Standfort University. You can find his courses on “How to start a startup” for free at http://startupclass.samaltman.com/. This article on ”How to Create a Successful Startup” is a translation of one of those courses.
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Before building your startup, it is very important and even critical to build a product that people love. It is easy to increase the number of users of a loved product than to switch from a loved product to a loved one. If you lie to yourself that people are going to like your product, you are going to fail.
To have a successful startup you first need: a good idea for a large market, a good team, a good product and a strong capacity for achievement.
I / The good idea
1 / The characteristics of a good idea
Ideas should be clear and easy to explain. Complex ideas are signs of muddled thoughts or made-up problems. If the idea doesn't turn people on, it probably is wrong.
2 / How to find the target users?
In the best case, you are the target user yourself, in the second best case, you understand the needs of your users extremely well.
3 / How do you know if consumers will love your product?
To find out, you must first do the tests by launching your product or trying to sell it and see what will happen. The second way that works best is to talk to consumers about your ideas and ask them if they will want to use or buy your product. The latter method works very well with businesses. If a business tells you they'd like to buy your product, build it right away.
It's really critical to evolve your ideas as your users send their reviews to you. It is very useful to fully understand their needs
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4 / Some advice on good ideas
The majority of successful businesses start with news ideas or idea said innovative. The acceptable definition of “new” is “10 times better”. It is more profitable to realize a new difficult idea than an existing, derivative or easy idea. People like to help when it's new. They won't do it if it's just a derivative of what already exists.
The best ideas sound bad but are actually good. So you don't need to be very secretive with your ideas. If it's actually a good idea, we won't want to steal it from you. There will be people who will encourage or discourage you. Maybe they will be right and maybe not, in both cases the faster you will develop your self-confidence and avoid being affected by people who hate you, the more pressure you can take. No matter how successful you are, there will always be people who will hate you.
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5 / To create a startup without having any ideas
What if you don't have any ideas but still want to start a startup? Maybe you shouldn't. It is recommended that the idea come first. A startup is the means by which the idea is brought into the world. The problem is, good founders usually have a lot of great ideas, too many ideas more often than not. The problem is that as soon as you create your startup you have to quickly get ideas and because you are already an official company, the idea should not be too crazy. You will end up with ideas that will be derivatives of those that already exist and that is a danger.A #startup is the means by which the # idea is brought into the #world. Click to tweet
6 / How to have good ideas?
Don't actively try to come up with startup ideas, instead try toapprendre different things. Practice noticing the problems , things that seem to be inefficient, and major technological developments. Work on projects that you find interesting. Step out of your comfort zone to hang out with smart and interesting people. By practicing all of these tips, good ideas will emerge.
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II / The right team
A poor team cannot build a great business. What makes the strength of a team is its founder.
1 / What makes a good founder
The most important characteristics are: determination, the impossibility of being stopped, formidability and not lack of resources. Intelligence and passion are also highly prized. These qualities are much more important than experience and certainly “mastery of the X language and the Y framework”.
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The best founders are the people with whom you are the least stressed when working. He gives the feeling “he will accomplish it, whatever happens”. Sometimes you can be successful with the sheer force of will.
Good founders have many traits that seem contradictory. For example rigidity and flexibility. Founders must have both rigidity and flexibility. You must have a strong belief about the core of your company and its missions, but you must also to learn new things in almost all other areas.
Startups that fail focus on their savings that will not change elsewhere. The best founders are exceptionally sensitive. Which is an indicator of decision, focus, intensity, and the ability to get things done right. Founders who are difficult to approach or approach are almost always bad. Communication is an important skill to be a good founder. It is also a factor that is rarely discussed when mentioning the skills of a good founder.
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2 / How to choose a good co-founder
Tech startups need at least one founder who can create the products and services. Then from a co-founder who is (or can become) a good salesperson to speak well to users. A person can also do both.
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Pay close attention to these criteria when choosing a co-founder. This is one of the most critical decisions for your business and unfortunately it is often taken at random. You have to choose someone you know very well, not someone you chose after a meeting of co-founders. If you have a pre-existing relationship with your co-founders, neither of you will want to let the other down; you will support each other. The division of co-founders is one of the major causes of death for startups.
The best of times is having a good co-founder. The second best case is to be the sole founder. The worst case scenario is having a bad co-founder. If things don't work out, you need to go our separate ways quickly.
A notes quick on equity: conversations about the allocation of capital become difficult over time. It is best to discuss this early on. Roughly equal shares are recommended, but maybe in the case of two founders, it's best to have one person with an extra share to prevent deadlocks when the co-founders fall out.
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III / The right product
A great product is what all great companies have in common. If you don't create a product that people love, you're going to fail. Many founders are always looking for new tips to get around the solution. Startups are the places in your life where all tricks other than building products that people love fail.
Creating a good product is the only key to long-term success for your business. Your company will grow so big that all your growth tricks will fail and only the people who want to use your products will be your only hope. All successful businesses are successful in the same way. There is no other way to grow your startup than to create a product that people love to use.
1- Product optimization machine
You have to create a "product optimization machine" ie optimization processes in your company. Talk to your customers, watch them use your products, and guess which parts are sub parts. Make your product even better from your analysis. Then start the cycle again. The cycle should be the most important and priority task of your business. She must lead all other activities around him.
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To achieve this cycle of optimizations you need to create a product and tell others about it as often as possible. You only need to do that work in your startup other than eating, sleeping, exercising, and spending time with loved ones. Take the time to identify weaknesses and flaws in your products by observing users. Remember their comments.
2- Present your product
Approach users once in a while and from there create the products they request. Many founders hate this part, and just want to advertise their products to the press. But it almost never works. Ben Silbermann has a habit of approaching people in restaurant cafes and asking them to use Pinterest.
You have to start making something very simple, like the thinnest of surfaces possible and start it as soon as possible. Concretely, simplicity is always the best option. You must do everything to keep your product and your startup as simple as possible.
The reason why companies do not progress is often because their products are not good enough in the eyes of customers. For a successful start-up, people must be fans of your products or services. They must even feel devastated the day they learn that your startup is going to disappear.
When you have doubts about improving your product in your startup or business just ask consumers.
Remember that if you don't have the right product, nothing will save you.
A great product is what all big companies have in common. If you don't create a product that people love, you will eventually fail. Click to tweet
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IV / The realization
While creating a product is the most crucial part, the work doesn't end there. You have to turn it into a great business and only you have to do it. It's very common for founders to hire “senior managers” to do this job, but the majority of startups that have done it have failed. You should not delegate your work to another person for a long time.
The universal job of a CEO is to make sure his business wins. You can do this as a founder even if you are full of flaws that disqualify you from being the CEO. You just need to hire people who complement your flaw and whose work you can entrust them with.
You have to be the CEO of your startup yourself because no one else will understand users more than yourself. No one will be able to have the same product instinct as you and no one will be able to stick to it more than you.
1 / Growth
Growth and dynamism are the key to good achievement. Growth “as long as it does not allow to sell tickets of 1000 FCFA to 10 FCFA” solves all the problems. Lack of growth can only be solved by growth. If you grow up you feel like you are winning and everyone is happy. If you don't grow people will feel like you aren't growing and they will let you down.
Founders and unsuccessful employees have worked in their startups almost all the time without dynamism. The major guideline for good achievement is to ” Never lose your energy or your motivation“. How do we do it then?
For starters the most important thing is to make it your priority. The company does what the CEO measures. It is very important to have only one metric to optimize, and it's worth spending your time knowing the right growth metric to optimize. If you pay attention to growth and put an execution bar on it, the rest of the business will focus on it.
Some concrete examples:
The founders of Airnb drew the growth graph they wanted to achieve. They posted the graphs all over their refrigerators, desks and even in front of the bathroom mirror.
Mark Zuckerberg once said that one of the biggest innovations within his Facebook company is to create a growth group when the company's growth is slowing down. The group was (and may still be) one of the company's most prestigious groups. Everyone knew its importance.
List what is blocking your growth. If you know the causes that limit your business, you will naturally seek to solve them. For all things, get in the habit of asking yourself the question ”Is this the right way to optimize growth?”. For example going to a conference is not going to grow your company, unless you hope to make a lot of sales there.
Absolute internal transparency around statistics and finance is a good thing. Founders are always very scared of this, but if you hide the stats, it's hard for people to focus on them. It is important to establish a good internal cadence to maintain the dynamism of the company. You have to "beat the drum" of progress: new features, revenues, hires etc… which you can talk about internally and externally.
You should set aggressive but possibly achievable goals and review your progress monthly. The more you share internal or external information in your company, the more you will be united.
Avoid going too far into thinking about problems in the future by saying to yourself, for example, “How are we going to do this on a large scale? " The answer is : You will know it when you are there. There are a lot more startups that die because they debate issues like this all the time, than when they haven't thought about it enough.
Successful startups develop good customer service. When you set up a good support service for the first passionate users of your product, your products become better over time and you will have less and less support to perform. Since you will master the needs of your customers and you will have developed your products in these areas.
Instead of looking for quick fixes, you need to grow your startup like other big companies by making products people will love. By manually recruiting the first few users and testing different business growth strategies (advertising, referral program, sales and marketing) and emphasizing what works. Ask your users where you can find customers who may be interested in your product.
2 / Concentration and intensity
If I have to say in two words how to operate, I will take “Concentration” and “intensity”. These two words seem to apply well to the best founders I know.
The great founders are relentlessly focused on their product and its growth. They don't try to do everything, concretely they say “No” a lot. It's hard because people who are starting their businesses are the kinds of people who like to do new things.
As a rule of thumb, don't let your business do new things until you've dominated the first one. No large company that I know of has started with more than one thing. They start with a lot of conviction about something and watch it evolve. The common cause of startup death is doing too many things that are not right. Priority is critical.
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Although great founders don't do a lot of great projects, they do what they do very intensely. They get the results very quickly. They are very determined, which is hard when you run a startup. You will get a lot of conflicting advice because there are many ways to do things and there is a lot of good and bad advice. Great founders listen to all advice and quickly make their own decisions.
Note that doing things intensely does not mean that you have to do everything intensely, it is impossible. you just have to choose the right things to do intensely. Paul Buchheit says, find ways to get 90% value with 10% effort. The market doesn't care how hard you work. He only pays attention to what you are doing right.
It's very difficult to be obsessed with product quality and be super fast at the same time. I have never seen, not even once, a founder who is slow in realization become a successful person. You are no different from other startups. You need to stay focused and move really fast. The companies that make rockets and nuclear reactors have been able to do so. All businesses that have failed have a familiar explanation of why they are different and have not been quick.
When you find a few things that work, keep it, don't get distracted by anything.
Concentration and intensity always win in a long race.
3 / Jobs of a CEO
Earlier in the article I said that the main job of a CEO is to make sure his company wins all the time. To be more precise, a CEO must:
- Define your company's vision and strategy
- Tell everyone about the business
- Manage and hire a team, especially in the area where you lack strength
- Raise funds and make sure the business never runs out
- Set the execution quality bar
- Find the part of the business you enjoy the most and stay engaged in that part
Be open to your team and the outside of the world. Always be clear in your strategies and priorities. Show yourself to all that is important and get it done quickly. Especially when it comes to making decisions that others are stuck on. You must have the attitude of ” do whatever it takes ”Because there will be a lot of difficult situations. If the team sees you doing these things, so will they.
Creating a startup takes a long time so during this time, eat well, sleep well, spend time with your loved ones. You also need to do physical exercises and work in the areas that really interest you.
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Role of a CEO
There will be disasters the magnitude of which might surprise. But your job as CEO will be to solve them with a smile on your face and reassure your team that everything will be fine. Sometimes things aren't so bad they seem and sometimes they are in any case you have to keep working, keep growing.
CEOs don't make excuses, tell each other or let your team say “if only we have more money” or “if only we have more engineers”. Rather, make sure you have what it takes or succeed without having what it takes. People have to say to you "always ends up finding a solution".
The first time around, the founders are looking for quick fixes. Either to get some things out of a person or to do new things. The truth is, the world of startups is a world where all such tricks no longer work. Just be direct, ask for whatever you want, and don't be a jerk.
It is important as a CEO to distort the reality of everyone except yourself. You have to convince everyone that your business is the best. For yourself, you must be very paranoid about anything that could go wrong.
Be persistent, the majority of founders abandon their startup very quickly when things are not going well or go straight to developing a new product very early on when the old one is not working. You must seek to understand the causes of failure of your product or startup and seek to resolve them. Do not be obstinate beyond all reason either.
The common mistake CEOs make is innovating in well-beaten areas of the business instead of innovating in new products and solutions. For example, a lot of founders think they should be spending their time finding new ways to do human resources, marketing, sales, fundraising etc… it's almost always bad. Do what works in established areas, and focus your creative energy on the product or service you are building.
4 / Hire and manage
Hiring is a very important business and the key to building a great business as opposed to a great product.
My first hiring tip is: Don't do it. The best companies have taken a very long time to start getting employees. Employees are expensive and add organizational and communication complexity. The more people there are in the team, the more difficult it will be to change direction.
The best people have a lot of opportunities, they want to join the shock teams. If you have nothing, it will be difficult to hire them. As soon as you start earning they will come to you.
Remember that the great people who will make your business successful are also able to start their own business if they want to. So be generously fair, responsible and trusting to these people.
Value aptitude rather than experience in almost any role.
Find the people you love, who you can spend a lot of time with and often in intense situations. For people you don't know yet, try working on a project together before they join the company for a full-time job.
Invest in becoming a good manager.
This is very important because if you are not you will very quickly lose employees even if you are the best recruiter in the world. One of the principles of a good manager is to never go into “hero mode”. Many managers become victims of this by trying to do everything by themselves and become inaccessible by their staff. Also do everything to make everyone work in the same office, for some reason big startups always end up applying it.
Finally, tack quickly. Everyone knows this principle but no one applies it. Fire people who are addicted to your business culture regardless of their level, even if they are very good at their job. Culture is defined by those you hire, fire or promote.
5 / Competitors
Competitors when founding a startup are part of ghost stories. The founders believe that competitors are the ones who kill 99% of startups. In fact 99% of startups die from suicide, not assassination. Instead, worry about all the internal problems. If you fail, it will be because you failed in building a good product or an big business.
Spend 99% of your time ignoring your competition. Ignore them even more when they make a lot of noise in the press. Ignore them until they fight you with some real quality products. Press reviews are easier to write than codes, which are even easier than creating a great product. In the words of Henry Ford: “ the competitor to fear is the one who doesn't pay attention to you, but continues to be successful in his business all the time".
All the big companies have faced tougher competitions than what you face now when they were small, and they all passed the tests. There is always a way out.the #competitor to fear is the one who doesn't pay attention to you, but continues to be successful all the time - #HenryFord Click to tweet
6 / earn money
Oh yes, make money. You need to find a way to have it. The short version of this is that you have to have people paying you more than the cost that is necessary for you to provide the service or product. For some reason, people always forget to take into consideration the price it takes to deliver.
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If you are creating a free product, don't think about evolving by buying users. it is very difficult for companies which remunerate via advertisements. You need to create the product that people would share with their friends.
If you have a paid product, try different means of user acquisition such as search optimization (SEO / SEM), advertising, email, etc. Try selling your product yourself to learn the techniques that work.
In any case try to have “the spaguetti yield”, ie try to earn enough money to allow your founders to live on spaguetti or dough as quickly as possible. If you succeed, you are in control of your own destiny and you are no longer in the whims of investors and the financial markets.
Obsessively observe your cash flow. It sounds incredible but many founders have found themselves several times without a penny without understanding what had happened to them.
7 / Fundraising
The majority of startups do fundraising at some point. You have to do it when you need it and when it's available for a good term. Not having enough money can be bad, having too much is almost always bad.
The secret to having a successful long distance call is having a good business. Investors look for companies that will actually succeed with or without their investment but which can quickly prosper with external investment. The important condition for success is to have a business that is absolutely going to be successful because if an investor believes that you have a 100% chance of creating a business at 10 Billion CFA but which has almost no chance of building one. larger business, he / she will not invest in it even if the value of your current business is the lowest.
It's a bad idea to try and fundraise when your business isn't good enough to attract capital. You will burn your reputation and waste time.
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The most important key to being good at pitching is to make your story clearer and easier to understand. Of course the most important key is to have a good business. There are a lot of ideas on what to include in a pitch, but at a minimum you need to have: the mission, the problem, the product / service, business model, the team, the market and the market growth rate then finances.
Remember that at least 2000 people each have very good ideas in the world. One in 2000 people succeed. The difference comes in the realization. It's a chore and everyone wants to find other ways to turn the idea into success, but no one thinks about it.
So all you need is: the right idea, a great team, a great product, and a great achievement. So easy.