How to Start a Startup – Week 1

Y Combinator and Stanford University collaborated to pull together a free program called ‘How to Start a Startup’. As I finish up the final books in my SDMBA I will be working on this program in parallel. For the purposes of this blog, I will write up some brief summaries compiled by week. The series is a group of readings, videos, and projects that I will summarize an document here.

Reading 1: Advice for ambitious 19 year olds – Sam Altman

3 main areas people decide to go into after high school:

  1. College
  2. Joining a company
  3. Starting their own startup

Any of these can be the right thing for you. The key here is doing the thing that will get you on the path for something great. The major qualifier here should be to ‘Build stuff and be around smart people’. The best people always seem to be building stuff and hanging around smart people – use this as your filter when considering your options.

“Working on something good will pull you along a path where good things keep happening to you”

If you do join a company, make sure it is one with a breakout trajectory. It is better to work with very good people, learn what success looks like, and get a W on your record.

  • Don’t let salary be a factor – make sure you are building stuff around smart people – this should be your criteria!
  • If you do start a company – only use an idea you are in love with, or else it won’t be sustainable. If you fail at an idea you were in love with you are unlikely to regret it and people will not hold it against you. Failing at a me-too copycat startup is worse.
  • “Startups are a 6-10 year commitment- wait for the right one”
  • “keep your burn rate low and minimize your commitments. Don’t miss opportunities because these three things:
    • You can’t afford a reduction in salary
    • You cannot move
    • You don’t have the time
  • “You only have to be right once!”

Reading 2: Good and Bad Reasons to Become an Entrepreneur – Dustin Moskovitz

This reading is meant to discuss the real reasons people want to become an entrepreneur. It is a reality check for a would-be entrepreneur. He says this is specifically directed at Silicon Valley startups, but I think there is some practical advice here that would be worth holding onto.

Good reasons be an entrepreneur 

    • “You are extremely passionate about an idea and believe that starting a new company is the best way to bring it to the world.”
      • Entrepreneurship is hard, you will need it to endure the struggle
      • You need the passion to convince other people to help you
      • You are trying to maximize your impact through the idea
    • If you want total freedom of how you make your living, regardless of whether it brings a lot of value to other people
  • Bad reasons to become an entrepreneur
    • You want to ‘be your own boss’ in a big company, being at the ‘top of the pyramid’
      • The reality is that when you are the CEO, everyone else is your boss: employees, customers, partners, users, media, etc.
    • You think it’s glamorous – the reality is that it takes years of hard work
    • You believe you are extremely talented and this is the best way to maximize your earning potential
      • There is a high risk of failure at a startup
      • You could make more at as the 100th employee of Facebook (or other large successful company)
    • You don’t think there is another option. There is an option: good companies. Work for one of those, or work for yourself, but don’t work anywhere you can describe as “soul sucking”
      • “If you’re going to devote the best years of your life to your work,
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