Startups in 13 Sentences

Key highlight

The essential task in a startup is to create wealth; the dimension of wealth you have most control over is how much you improve users' lives; and the hardest part of that is knowing what to make for them. Once you know what to make, it's mere effort to make it, and most decent hackers are capable of that.

Highlights (8)

The reason to launch fast is not so much that it's critical to get your product to market early, but that you haven't really started working on it till you've launched. Launching teaches you what you should have been building. Till you know that you're wasting your time.

Initially you have to choose between satisfying all the needs of a subset of potential users, or satisfying a subset of the needs of all potential users. Take the first. It's easier to expand userwise than satisfactionwise. And it's harder to lie to yourself — if you think you're 85% of the way to a great product, how do you know it's not 70%? Or 10%?

Cofounders are for a startup what location is for real estate. You can change anything about a house except where it is. In a startup you can change your idea easily, but changing your cofounders is hard.

Merely measuring something has an uncanny tendency to improve it. If you want user numbers to go up, plot them on your wall every day. Pretty soon you'll start noticing what makes the number go up, and you'll do more of that. Corollary: be careful what you measure.

A culture of cheapness keeps companies young in something like the way exercise keeps people young. Being cheap is almost interchangeable with iterating rapidly — and running out of money is the most common form of startup death.

Ramen profitable — making just enough to pay founders' living expenses — isn't really about the business model; it's a way of hacking the investment process. Once you cross over, it completely changes your relationship with investors.

The worst distractions are the ones that pay money: day jobs, consulting, profitable side projects. The startup may have more long-term potential, but you'll always interrupt working on it to answer calls from people paying you now. Paradoxically, fundraising is this type of distraction too.

Treat deals as background processes that you ignore until they terminate. It's dangerous to morale to depend on deals closing — not just because they so often don't, but because depending on them makes them less likely to.