Y Combinator has distilled its experiences and insights about how to start a startup into a series of lectures for Stanford University. Most of the lectures are delivered by people with an impressive track record of hypergrowth in their companies and huge exits under their belt.
I’ve taken notes of the bits that resonated with me, and am sharing these in case they’re useful. You can find a link to the lecture at the end of this post.
The previous lecture focussed on Idea and Product. The second lecture is about having the right team and the importance of execution.
- A startup should ideally have 2 or 3 cofounders – not more and not less.
- Choose a co-founder as carefully as you would choose an employee. In YC, the number 1 cause of early death in startups is co-founder conflict. Make sure that the person you choose is relentless resourceful, tough and calm. That’s more important than them being an expert in a given domain.
- Decide on an equity split quite early on – don’t let it drag on. Also, have vesting on equity.
- Avoid hiring in the early days. Keep the team as small as possible, even if that means it’s just the co-founders. However, later on, when you’re scaling up, you should learn to hire very quickly.
- Getting an early hire wrong can be very damaging to a startup. Mediocre hires during the early phase can kill startups.
- For early hires, experience may not matter as much as aptitude and belief in what you are doing. Good communication skills tend to correlate with hires that work out.
- Try to hold on to the good hires you’ve made; obviously!
- Be generous with equity especially with the first 10 employees.
- Founders should not keep telling their team that they’re f**king up all the time. The team gets credit when things are going well; and founders should take responsibility when things go wrong.
- Founders need to set the execution bar. A big part of execution is just putting in the effort. You, as a founder, need to be seen as this execution machine that your employees can then model themselves on. Whatever founders do is what ends up as the culture.
- Figure out what to focus on each day. Pick two or three things each day that must get done. The activities that are most important will vary over time but you need to decide what the priorities are for that particular stage of your startup’s cycle.
- You need to focus on the right things, and those things should give you growth and momentum. If you are not focusing on growth and momentum, then something is wrong.
- You need intensity. You need extreme focus and extreme dedication. Working for a startup means that you have time for that and one other thing e.g. a family, but nothing more.
- A small amount of extra work on the right thing is what you need to make all the difference. Don’t waste time working really hard on the wrong things.
- Move fast and break things. Execution speed and a relentless operating system – these are what startups have going for them. The trick is to maintain quality at the same time.
- When you lose momentum, save the visionary speeches; instead, focus on the small wins that allow momentum to pick back up again. When Facebook growth slowed in 2008, Zuckerburg put together a ‘growth group’ that worked on very small things to make Facebook grow faster.
Here’s a link to the video with an annotated transcript: