Sam Altman is the just-turned-30 president of Y Combinator, the world’s most prestigious accelerator and the booster behind $30 billion worth of startups, including Airbnb, Dropbox, Zenefits and Stripe. He started his first company, social media app Loopt, at age 19, later selling it for $44 million. Since then he’s invested in a slew of other software startups, dabbled in nuclear energy and taught a Stanford class called How to Start a Startup. His thoughts from the Y Combinator Startup Playbook:
Two things: If I had to distill my advice about how to operate down to only two words, I’d pick focus and intensity. These words seem to really apply to the best founders I know.
Patience required: A successful startup takes a very long time – certainly much longer than most founders think at the outset. You cannot treat it as an all-nighter.
What comes first: What if you don’t have an idea but want to start a startup? Maybe you shouldn’t. It’s so much better if the idea comes first and the startup is the way to get the idea out into the world. Go out of your way to hang around smart, interesting people. At some point, ideas will emerge.
Here is the secret to success: Have a great product. This is the only thing all great companies have in common. If you do not build a product users love you will eventually fail. Yet founders always look for some other trick. Startups are the point in your life when tricks stop working.
Chop, chop: It’s very hard to be both obsessed with product quality and move very quickly. But it’s one of the most obvious tells of a great founder. I have never, not once, seen a slow-moving founder be really successful.
The making of a great founder: The most important characteristics are ones like unstoppability, determination, formidability and resourcefulness. Intelligence and passion also rank very highly.
Somebody’s gotta sell: Don’t be afraid of sales especially. At least one founder has to get good at asking people to use your product and give you money.
A cliché worth repeating: Building a company is somewhat like building a religion. If people don’t connect what they’re doing day-to-day with a higher purpose they care about, they will not do a great job.
Building staff: My first piece of advice about hiring is don’t do it. Employees are expensive. Employees add organizational complexity and communication overhead. Employees also add inertia—it gets exponentially harder to change direction with more people on the team. Resist the urge to derive your self-worth from your number of employees.
But when you do: The best people have a lot of opportunities. They want to join rocketships. If you have nothing, it’s hard to hire them. Once you’re obviously winning, they’ll want to come join you.
A quick word about competitors: Competitors are a startup ghost story. First-time founders think they are what kill 99 percent of startups. But 99 percent of startups die from suicide, not murder. Worry instead about all of your internal problems. If you fail, it will very likely be because you failed to make a great product and/or failed to make a great company. Ninety-nine percent of the time, you should ignore competitors.
Making money: You need to figure out how to do that. The short version of this is that you have to get people to pay you more money than it costs you to deliver your good/service. For some reason, people always forget to take into account the part about how much it costs to deliver it.
Ideas are many: Remember that at least a thousand people have every great idea. One of them actually becomes successful. The difference comes down to execution. It’s a grind, and everyone wishes there were some other way to transform “idea” into “success,” but no one has figured it out yet.
In closing: So all you need is a great idea, a great team, a great product, and great execution. So easy!