Y Combinator has distilled its experiences and insights about how to start a startup into a series of lectures for Stanford University. The lectures are delivered by people with an impressive track record of hypergrowth in their companies and huge exits under their belt. If your goal is hyper growth, then the content in these lectures is for you.
I’m working through the lectures and these are notes I made for myself which I’m sharing here in case they’re of use to anyone. You can find a link to the lectures at the end of each set of notes.
This first lecture starts by talking about assessing your idea and building the right product. How do you decide whether the idea for your startup is worth pursuing?
- It’s worth doing if you find that you can’t not do it, and that the world needs you to pursue it.
- Stress test the idea; this should help you assess whether your idea is worth pursuing. Ask yourself about the size and growth potential of your market, the growth strategy for your company, and how easy it would be to replicate your business.
- Think about what the size of your market will be in 10 years; don’t just focus on the size now. Small but rapidly growing markets are better than larger, slowly growing one as these will usually have customers who are desperate for solutions and who will trial a limited but rapidly improving ones.
- Good ideas may often look very bad at the beginning. Ignore the naysayers.
- Have a mission; you’ll need one to get people behind your idea. It’s easier to get support for a hard-startup than an easy, derivative one. People are compelled to work harder to make something difficult come together.
- Ask yourself, why now? Why will it be too late to start two years from now and why didn’t it get started 2 yrs ago?
Once you’ve settled on your idea, think about how to turn it into a great product. It’s easier to solve all the other problems of a startup e.g hiring, investment, PR etc when you have an awesome product.
When you are not eating, sleeping or exercising, all your time should be spent on building your product and talking to users. Don’t waste time on anything else initially.
What should you build? How will you know if it’s a good product?
- You should be building something that a small number of people LOVE, as opposed to something a large number of people LIKE. It’s easier to convert that small number of lovers to a larger number of lovers than it is to convert a large number of people who merely like your product to those who love your product.
- A great product is the secret to long-term growth hacking. People will tell their friends about a product that they love. If they’re not doing that, then you need to keep improving the product until they do. Everything else is a waste of time at this point.
- You need to build an engine to transform user feedback into product decisions. Use feedback from the users that love you to refine your product. You only need a few users; go out and RECRUIT THEM BY HAND. You don’t need to use things like adwords at this stage.
- Don’t worry that this approach is not scalable. Remember, the goal is to get a small number of users to really love you; and for you to really understand them. Once you’ve refined the product, get it back in their hands and get more feedback. Tighten this feedback loop.
- Also, be strict about what you need to measure. Ignore vanity metrics. You tend to build what you measure so make sure you’re focussed on measuring the right things that indicate growth for your company.
Here is a link to the video and the annotated transcript: