YC STARTUP SCHOOL
Introduction Hello! My name is Lynn Hoang. I am a founder & CEO of OpenTalk.fm. I believe that that every founder should learn from the the world’s best best incubator! So, I created A Summary Guide to YC Startup School to accelerate my own learning and yours right with it! Here’s what the e-book is all about: I watched all the videos from YC Startup School and I write down what lessons I think they are important. You get to digest the key points of each video in 5 minutes or less. That’s it! Plain and simple. I hope the e-book will help you become smarter, fitter, better better and everything you aspire to be ;) Thank you! Lynn Hoang
About OpenTalk.fm Debaters, Have Fun, and Get Rewarded! We believe for good ideas and true innovation, we need human interaction, conflict, argument, debate. Thus, we created OpenTalk.fm, the home for the world’s serious and fun debaters.
By doing so, we want to foster a culture of open discussion and sharpen the global citizens of today as well as create the intellectual leaders of tomorrow.
We also aim to educate young people about critical thinking, communication, collaboration, creativity, civic awareness and engagement.
About Y Combinator Startup School
We believe the barrier to entry for people to start a startup is still too high. We want to make it easier for people to start a company, regardless of who or where you are, so we're starting by sharing what we've learned, through Startup School.
Throughout the 10 weeks, we aim to accomplish the following: 1. Encourage and inspire people to consider starting a company as a way to positively impact the world 2. Teach people about how to start a startup, and equip them with the resources and tools to help prepare them now and in the future 3. Build a community of entrepreneurs who can encourage and teach each other
Content Week 1:
How and Why to Start A Startup By Sam Altman (YC), Dustin Moskovitz (Asana) Startup Mechanics By Kirsty Nathoo (YC) Week 2:
How to Get Ideas and How to Measure By Stewart Butterfield (Slack) and Adam D’Angelo (Quora) Week 3:
How to Build a Great Gr eat Product I By Emmett Shear (Twitch) Steve Huffman (Reddit), Michael Seibel (YC) How to Build a Great Product II By Aaron Levie (Box) Week 4:
How to Build a Great Product III By Tracy Young (PlanGrid), Jason Lemkin (SaaStr), Harry Zhang (Lob), Solomon Hykes (Docker) How to Build a Great Product IV By Jan Koum (WhatsApp) Week 5:
How to Get Users and Grow By Alex Schultz (Facebook)
Content Week 6:
How to Invent the Future I & II By Alan Kay Week 7:
How to Find Product Market Fit By Peter Reinhardt (Segment) How to Think About PR By Sharon Pope (YC) Week 8:
Diversity + Inclusion at Early Stage Startups By Kat Manalac (YC) Week 9:
How to Build and Manage Teams By Vinod Khosla (Khosla Ventures) Week 10:
How to Raise Money, and How to Succeed Long-Term By Ali Rowghani (YC) Jess Lee (Sequoia), Aaron Harris (YC)
Week 1 How and Why to Start A Startup By Sam Altman (YC), Dustin Moskovitz (Asana)
Why to Start A Startup? Two roots: The first is passion.The second second part of this is that you're the right person to make this happen by starting a company. You are starting a company because it felt like really the only thing that you could do next. That's it. Short and Sweet!
Dustin recommended recommended Ben Horowitz's Horowitz's book: "The Hard Hard Thing About Hard Things"
How to Start A Startup? Idea first, Startup second. The way to get good ideas is to start noticing problems problems in your own life. It's also easier easier to start a hard company than an easy company. Determination is the most important value in a co-founder. Bad co-founder is way worse than no co-founder. Values first, aptitudes second, and specific skills third - Tips for finding a perfect co-founder. It is more important to have a small number of users that love your product, product, than a lot of users that that like your product. Relentless execution; Clear mission. Not neglect your health, your well-being, your life, your personal relationships...while relationships...w hile starting a start-up. This is like a 10 year marathon. The team you build is the company you build. Stay lean until everything is working really well. Sam mentioned Bill Walsh's book: "The Hard Thing About Hard Things" The Score Takes Care of Itself: My Philosophy of Leadership."
Week 1 Startup Mechanics By Kirsty Nathoo (YC)
Startup Mechanics Formation: Prefer C-Corp, formed in Delaware, USA Prefer SV lawyers or Clerky.com Equity: When you're you're thinking about allocating equity, equity, think think about everything that's ahead of you, not everything that you've just done. Keep it fair. Vesting - 4 years with 1 year cliff Fundraising: Prefer SAFEs - Simple Agreement for Future Equity More: Payroll provider - Gusto.com Accept payments - Stripe Atlas, Stripe.com Formation, hiring, fundraising platform: Clerky.com YC SAFEs: https://www https://www.ycombinator.com/do .ycombinator.com/documents/ cuments/
Week 2 How to Get Ideas and How to Measure By Stewart Butterfield (Slack) and Adam D’Angelo (Quora)
How to Get Ideas Good entrepreneurs entrepreneurs are resilient. When everyone everyone else thinks it's a bad idea, it's probably a really good idea. I would definitely definitely look at my own experiences experiences as a consumer, generally, because because it's really really easy for me to see things that are frustrating. If you're really good good at execution then the core core of the idea can can make it through all those steps. I absolutely favor execution, but you can execute a lot on a terrible idea and then not get anywhere. So you kind of need need both. both. Stewart mentioned Daniel Kahneman's book: "Thinking, Fast and Slow"
How to Measure You don't have to make a product product that's going to appeal to everyone immediately, but you need to make a product that is going to appeal to some people more than anything else. You want to find some way to differentiate. differentiate. As a startup, you really need to focus, so the core concept I would try to focus focus on is users that that are getting value today. If you have a two-sided market or anything like that, then you want to measure transactions transactions or transaction transaction values. Measuring Measuring transactions is a way to unify them (sellers (sellers and buyers) buyers) and align your work work on things things that are are going to benefit both sides. Pokemon Go is another example, example, got really big, lots of users, but it just kind of faded away. So, you don't want to build a fad. You want to build something that's that's going to last, so you need to make sure the existing users keep using the product. You also need to make sure that you're going to grow. And by far the most most powerful way to grow grow is through through exponential exponential growth.
Week 3 How to Build a Great Product I By Emmett Shear (Twitch) Steve Huffman (Reddit), Michael Seibel (YC) How to Build a Great Product II By Aaron Levie (Box)
How to Build a Great Product I Emotional users, angry users, often will become your your most loyal users if you can flip them around. You don't talk to users to validate your product ideas. You talk to users to have your your product product ideas. ideas. Don't avoid conflict. Talk about about it, argue argue about it, but then, then, you have someone someone who just just gets to make the call, because anything else leads to ... Just decision-making that's far too slow for a startup. If the data's really good, well, check the data. If the data's really bad, check the data. You don't have to talk to your users every week. It's totally unnecessary. You do need to look at your your numbers every every week.
How to Build a Great Product II You're going to be successful successful by nailing one use case that that just happens to to be a use case that everybody everybody has a massive problem with. Spend time, a lot of time, with your futuristic customers, but don't exactly just build what they're asking for. Because when you just build what a customer asks for, essentially you become this sort of amalgamation amalgamation of feature feature request request from every single single one of of your customers. We spend a lot of time thinking about how can we connect the dots between multiple multiple requests or multiple ideas ideas to build build the solution that that people didn't really even even think about previously. Aaron's four favorite books on building B2B stuff are: 1. Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers by Geoffrey A. Moore 2. The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail by Clayton M. Christensen 3. Behind the Cloud: The Untold Story of How Salesforce.com Went from Idea to Billion-Dollar Company-and Revolutionized an Industry by Marc Benioff (Author), Carlye Adler 4. Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant by W. Chan Kim and Renée Mauborgne
Week 4 How to Build a Great Product III By Tracy Young (PlanGrid), Jason Lemkin (SaaStr), Harry Zhang (Lob), Solomon Hykes (Docker) How to Build a Great Product IV By Jan By Koum (WhatsApp)
How to Build a Great Product III If there's a ton of the big customers asking us for the same thing, it's easy to prioritize that, but we have never built a feature out for just one customer. I think the biggest challenge is, once you grow into a fullfledged company, you grow outside outside of you zone of comfort. comfort. If you're you're in the technical technical and product product side, then you have to hire hire business people. If you're on the the business side, you have have to hire more more technical and product leadership. You never stop selling you're butts of about your mission, your vision as a company, and and so being being able to deliver that message of what you're trying to do, and also, showing the traction, showing the growth, when you see that graph, everyone wants to be a part of it. You want people who have already done it once before, because even even though you may trust trust somebody and they're awesome at what they do, it's hard to discount the value of experience. Most of our our new customers customers comes from from just word of mouth, organic growth. growth. We don't don't know what sparks it, but we we know that if we make our clients happy and we build great product for them that that does continue to happen year year after year.
How to Build a Great Product IV The credit really goes to not necessarily us having some brilliant idea. I think the credit goes to also being in the right time, at the right place, and building a product that people wanted. wanted. How do you determine if an app has a potential or is a good idea? It has to solve a really basic basic problem, and it has to do it in a simple and efficient way. If you can have money money in your bank account, account, you should should have money in your your bank account, account, because because you never know if you need to buy buy a building, or if you need to buy some office space, because when you start growing too quickly, and you don't want to negotiate and raise money when when it's too late. Why did we partner with Sequoia? "We're here to help you financially. We're not here to help you with with management. management. We're not here to help you write code. We're not not here to help you build features. We're We're here just to help you grow and to help your your financial, and if you need any help outside of that, come knock on our door and we'll try to help." - Sequoia How did we scout into different countries? We focused early on localization. We would hire somebody who is perfect in all these languages where our apps were starting to grow so we could could build a really really good, localized localized experience. experience. When you download WhatsApp in Brazil, it's not in English, it's in Portuguese. I think that is what helped us grow in all these countries.
Week 5 How to Get Users and Grow By Alex Schultz (Facebook)
How to Get Users and Grow The single most important thing to growth is retention. retention. I care a lot about using monthly active, not daily active, not weekly active. Network effects effects are really really matter. When When all your friends friends get on Facebook, you're more likely to use Facebook, WhatsApp, Messenger, whichever social service you're talking talking about. about. You need to look for the magic moment moment of your your product by talking to users, and then try and validate that with correlations. The most important thing is pick a goal, your team's product is a goal, focus on that goal, align the company around that goal, and then you are going to operate correctly correctly for growth. growth. First, ask your friends friends first for for your first hundred customers. Second, research research and then reach out to who you'd like to have as your users. users. Third, social social media and and PR. PR is non scalable scalable but it can give you amazing bumps, amazing bumps. And finally, buy ads. Don't just auto-genera auto-generate te emails or you'll you'll definitely get get caught in a spam filter. filter. But send personal emails, emails, get introductions. See which friend you have in common. You need to have product product market fit to drive growth, you need retention to drive growth, otherwise every growth tactic, every acquisition tactic you could possibly run doesn't matter. Think about your channel channel first, your targeting second. If you have creative though, you you should put put it in context, context, you should should personalize it, you should give it a call to action
Week 6 How to Invent the Future I & II By Alan Kay
How to Invent the Future I & II Basically, I think people are here because they're, they want to do start-ups and and make money, I just want to point out that that if you want to make money, don't bother bother with a startup, startup, create an industry. Because Because then you get trillions instead instead of billions. billions. So it's about a factor of a 1000 between doing doing invention over innovation. Forget about about your egos, and I really meant meant it, doesn't doesn't matter who you are, are, how smart you are, how smart you think you are, there's only one that counts here, is making progress. progress. And we make progress through synergy. So instead of innovating out from the present, what you want to do is invent the future future from the future. future. Go out and live in the future and bring the future back. We can sum that up by saying knowledge is silver, context is gold, and IQ is just lead. It's a lead weight on you. If you happen happen to be in a room that had had the 100 smartest smartest people in the world and you were the smartest person in that room, you're still not as smart as the 99 working together. You need to find out that it can be better. better. That is your job. Your job is not to agree agree with me. Your Your job is to wake up, find ways of criticizing the stuff that seems normal.
Week 7 How to Find Product Market Fit By Peter Reinhardt (Segment) How to Think About PR By Sharon Pope (YC)
How to Find Product Market Fit It's not about how you wish the world was but it's actually about what customers want. Most start ups actually build something that looks vaguely futuristic but is not in fact fact a real problem that people people have today. today. It'll kill the company every time. The market always wins. It's very important, pre product market fit to save as much cash as possible, spend as little as possible and extend your runways as long as possible. What it comes down to is building a platform where it's not just a product that you're selling but where the data inside of your product is actually useful for other business to build their their business on top of yours. I actually think that the bigger problem is not necessarily having the ideas. I think everyone has has lots of interesting ideas. ideas. I think the bigger problem is not not killing the bad ideas fast enough. enough. You don't know how much value you're delivering until you start asking for money. money. I think if I had to do it over again, again, I'd start asking for money earlier and I'd be a lot more comfortable comfortable with it like if you're you're solving a real business problem, people people are going going to be happy to pay for it.
How to Think About PR Your number one one job as a founder founder is to focus focus on your product. product. You're not going to escape that. So even if PR is interesting, without product product innovation, innovation, PR is not going going to be an option for you. Being able to define your business business in a clear clear and concise concise way is going to pay back in every aspect of your business. I'll tell you no credible credible reporter reporter would ever write a story because because they went to drinks with with someone. They'll They'll write a story because because it's a good good story, right, right, so a story always trumps a relationship. Being able to describe your customer, so how does your product live through your customer, customer, through the the lens of of their customer. customer. People like stories about people, people, so this is a great one for for PR. What problem are you solving, and how are you measuring how you're growing, and how are you growing? Who are your competitors, and and why are you better than than your competitors? competitors? What are your your plans for next next year? And I think one of the more important ones ones for PR as well well is why you? Why Why did you start this company? Why are you uniquely qualified to bring this product to the world? And that can range from stories of something something you overcame that that caused you to explore this field and and to conquer conquer this technology technology and this innovation, innovation, or it could could be that you came from a company that has done this kind of, and you broke off and are doing it better.
How to Think About PR These are two tools that are used in the PR world to brief a reporter in advance advance of a news news date, so that that they can have have a full story ready to go on the day of the news. You can't use them both together. I'm going to talk about them individually. An exclusive is I'm going to talk to you, you, you one reporter, just just me and you, you're getting getting the full full story and that's that's it. You're the only one I'm talking talking to about about this until until after you post your story. story. And then if someone someone calls me, me, I can talk to them, them, but they're not going to have the story ready to go, it's yours. That's an exclusive. An embargo is if you have bigger news news that you think multiple reporters might cover, which is common, especially for a midsized startup that has people who are kind of following their news. You can reach reach out and say to each of the reporters, reporters, "I have some news. I'd like to pre-brief you on it. The news is going out on June 15th at 8:00 AM Pacific. Would you like the news? Will you you agree to the embargo?" embargo?" And they say say yes, they're basically saying, "Give me the news. news. If I write a story, I will not publish it until until that specific time that that you told me." me." * Sharon also referred the site: https://www.helpareporter.com/ https://www.helpareporter.com/
Week 8 Diversity + Inclusion at Early Stage Startups By Kat Manalac (YC)
Diversity + Inclusion at Early Stage Startups You end up creating an ecosystem with its own own rules, its own structure, and its own culture. We want to talk about how to build a culture that embraces embraces hard conversations. Diversity and inclusion even for me as a woman and as a person person of color can feel like really scary and awkward topics. Diversity as being being invited to the party party whereas inclusion is being asked to dance. Diversity in this context I think will relate to finding and hiring people from a range range of backgrounds. backgrounds. What What diversity is not is a code word for gender gender or race. Diversity I think can mean a lot of things. It can mean different different academic backgrounds. It can mean different ages, national origins, religions, work experiences, perspectives. You can do the work work to recruit recruit talent but but if your culture is garbage they're probably not going to stay for very long. Inclusion is really really about building a culture culture where everyone everyone can feel safe and where people don't have to shy away from having these like really tough and awkward sometimes conversations. We'll talk about about some of of those ways ways that companies companies are tackling tackling that challenge challenge on the the panel, but first, let's let's talk really briefly briefly about why you might even even want to start thinking about about this right now. now. The more diverse backgrounds you have represented, the more associations you get, the more ways that you can, you have more pathways to solving problems.
Week 9 How to Build and Manage Teams By Vinod Khosla (Khosla Ventures)
How to Build and Manage Teams A company becomes the people it hires not the plan it makes. The team you build ends up making all day to day decisions about where you're going to end up. When you're younger when you can afford to take the risks. You can fire the original team, and it's gene DNA stays in the company. That's why it's so important, and why the people you hire determine the company becomes. There's a huge difference between a zero million dollar company, and a zero billion dollar company. The difference is attitude and ambition and mostly the kind of team you build, which will reinforce certain certain directions directions for you especially especially who else else you end up hiring. Every time you hire somebody increase your your burn, you're taking on financial risk, but you're reducing some other risk, maybe it's product risk, or developme development nt risk, or feature risk. Big names and titles in big companies are really, really dangerous and misleadin misleading g for start-ups. In start-ups you need people with good iteration and good adaptation. Those are very, very, different different skills because because in start-ups start-ups you invent 90% 90% of stuff. In big companies, 90% of what you do this year will be what was done done last year. There's There's very little little innovation. innovation.
How to Build and Manage Teams It depends on the domain. You don't always need the gurus. You want experience, but you don't want experience to guide you into doing what others have already done in that same business and not innovate. That is the result of too much experience. Mixing the right experience experience where you you can identify identify the problems problems with first principles thinking thinking from fresh new ideas, people who've never worked in the domain, or people who actually are just fresh graduates, and and have no idea, idea, but can ask fundamental questions, those are the best kind of founders. If you can hire the people, you should generally be able to hire the people who can do any given job better than you can. Elon with no car experience by asking a lot of questions, and adapting rapidly as he screwed up, he got to a place where Tesla is a much more interestin interesting g company than GM today. If you want four people on your team, hire six. Even make up a title you don't need. Hiring is a long process. If you can can increase the probability probability of success by hiring hiring great people, by asking a lot of questions, by finding your risks early, by having people surface problems, problems, you're going to increase your probability of success. * Vinod recommended the book Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek
Week 10 How to Raise Money, and How to Succeed Long-Term By Ali Rowghani (YC) Jess Lee (Sequoia), Aaron Harris (YC)
How to Raise Money, and How to Succeed Long-Term You need to have a lot of grit. You are really understanding of the problem you're trying to solve. You're working in a really, really big market where where there's line of sight to like billions billions of dollars of market caps. So So those are some some of the things things that we look for. Seeds are now now being done done at prices that that are significantly significantly higher higher than A's A's were done even even three years ago. It's a two way street, like your interview, you're evaluating your investors just as much as they're evaluating you. What we've found what we've seen again and again is the best founders can communicate clearly, and can adjust their explanation explanatio n for whoever whoever they're talking to to such that that it is meaningful. If it's a space that they won't won't understand, understand, you really have to take more time to explain the problem you're solving, the customer you're solving for, and then from there you can explain explain your solution. There's no single personality personality type type for great leaders. leaders. There's really no single model. You have to be authentic. You can't try to be someone else or copy someone else's personality or style and hope to be a great leader
How to Raise Money, and How to Succeed Long-Term The first is that great leaders think and communicate clearly. As a leader, you have to paint a compelling vision for the future that other people can understand and follow. Example from Jeff Bezos of Amazon. He once said that in Amazon's retail business, business, only three things mattered. mattered. First, low low prices. Second, Second, broad selection, and third, third, fast delivery. delivery. You should force yourself to take as little little as an hour a day, day, or an hour every other day at the beginning, beginning, and try to grow that amount of time on your calendar that you're devoted just to thinking. Second thing all great leaders do is they show great judgment about people. people. When you grow your startup, startup, you have to have great judgment, not only about the people you hire into sort of individual contributor roles, but even more so, the people to whom you decide decide to give give authority and power. Last insight, insight, great leaders have exceptional exceptional personal personal integrity integrity and commitment. Integrity means having a mission to accomplish that is much greater than your own personal wealth wealth or fame. Commitment means making your work, making your startup into a life mission mission in a way way that inspires other other people. I think the most important important success metric metric for a leader leader is trustThe job of every leader is to building trust trust in employees, employees, in investors, investors, in customers, in users, and building trust is both an art and a science.
WE WOULD LIKE TO SAY THANK YOU TO SAM, STEVEN, SPEAKERS, ADVISORS, AND EVERYONE THAT PUT TIME AND EFFORT INTO MAKING STARTUP SCHOOL. THE COURSE IS AMAZING AND WE HAVE LEARNT SO MUCH!
From OpenTalk.fm, Group 16
YC STARTUP SCHOOL CLASS 2017
