WHAT STARTUP SHOULD I START?

I will summarize several great sources for this, all of which are from?Y Combinator, the famed accelerator from Silicon Valley in California.?Y Combinator is known for being the launchpad of AirBNB, Stripe, Doordash, Reddit, Dropbox, Coinbase, Instacart, Brex, Gusto, Twitch, Webflow, Sribd and about 3,000 others.?According to Wikipedia, “Y Combinator was founded in 2005 by?Paul Graham,?Jessica Livingston,?Robert Tappan Morris, and?Trevor Blackwell.”?Their personal contacts list and influence reaches from?Reid Hoffman?of LinkedIn fame to?Mark Zuckerberg?of Meta, essentially a who’s who list of the tech and startup world.?If you have not already, I recommend reading?Paul Graham’s essays.???

How to Evaluate Startup Ideas

How to Evaluate Startup Ideas, by?Kevin Hale

Startup = fast growth?

Regular growth means you’re just starting a small business.

?The bets that win are non-obvious. You must present your hypothesis clearly to a potential investor. Three areas:

1. Problem
2. Solution
3. Insight

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Problem

You need 1 or more of the below:

• A lot of people have it.
• Growing at 20% annually or more.
• It’s urgent.
• It’s expensive to fix.
• It’s mandatory.
• Frequently need to fix.

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Behavior = motivation + ability + trigger (B=M+A+ T)

Your solution should provide the ability

Trigger -there’s an event that occurs or…

Your ability to maintain top of mind awareness

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SISP – Solution In Search of Problem

GROKKET: Know this term!?It’s a Y Combinator favorite and for good reason.?People who have a solution for a problem they think exists rather than creating a solution for a problem they KNOW exists because they have collected the data to know for sure.

Unfair advantage

Must have at least one and it must be related to growth:

1. Founder – Super expert
2. Market – already exploding
3. Product – 10x better
4. Acquisition- 0$
5. Monopoly- network effects and marketplace where the winner takes all

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Here he outlines “beliefs” as

• Threshold – can they build it
• Miracle

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Sales

Kevin Hale looks at how well you can do sales as the most important thing.

Lecture 1 – How to Start a Startup

Lecture 1 of?Y Combinator’s Stanford lecture series titled?How to Start a Startup?by?Sam Altman?and?Dustin Moskovitz.?You can see a transcript of the entire lecture here on?Genius.com.

Niche Down to Go Big

“As Peter Thiel is going to discuss in?the fifth class, you want an idea that turns into a monopoly. But you can’t get a monopoly right away. You have to find a small market in which you can get a monopoly and then quickly expand.

?It’s good if you can say something like,?‘Today, only this small subset of users are going to use my product, but I’m going to get all of them, and in the future, almost everyone is going to use my product.’”

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Be Contrarian…and Right

“You want to sound crazy,?but you want to actually be right. And you want an idea that not many other people are working on. And it’s okay if it doesn’t sound big at first.”

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Market Growth

“I care much more about the growth rate of the market than its current size, and I also care if there’s any reason it’s going to top out.”?

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Timing

“Sequoia’s famous question: Why now? Why is this the perfect time for this particular idea, and to start this particular company. Why couldn’t it be done two years ago, and why will two years in the future be too late?”

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Make Something People Want

“Your job is to build something that users love.??If you get right, you can get a lot of other things wrong. If you don’t get this right, you can get everything else right, and you’ll probably still fail… always start with a smaller subset of the problem then you think is the smallest, and its hard to build a great product, so you want to?start with as little surface area as possible.”

Founders are Fanatical

“The word fanatical comes up again and again when you listen to successful founders talk about how they think about their product. Founders talk about being fanatical in how they care about the quality of the small details.”

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?Early Adopters

“You need some users to help with the feedback cycle, but the way you should get those users is manually—you should go recruit them by hand.

?So get users manually and remember that the goal is to get a small group of them to love you.”

A Feedback Engine

“You want to build an engine in the company that transforms feedback from users into product decisions. Then get it back in from of the users and repeat. Ask them what the like and don’t like, and watch them use it… You should make this feedback loop as tight as possible.”?

Lecture 3 – Counterintuitive Parts of Startups, and How to Have Ideas

Lecture 3 of?Y Combinator’s Stanford lecture series titled?Before the Startup?by?Paul Graham.??You can see a transcript of the entire lecture here on?Genius.com.

Your Instincts and Startups

“The first thing on it is the fact I just mentioned: startups are so weird that if you follow your instincts they will lead you astray. If you remember nothing more than that, when you’re about to make a mistake, you can pause before making it.”

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Your Instincts and People

“You can, however, trust your instincts about people.?So when you meet people who seem smart, but somehow distasteful, you think, ‘Okay this must be normal for business,’ but it’s not.?Just pick people the way you would pick people if you were picking friends. This is one of those rare cases where it works to be self-indulgent.”

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