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Paul Graham's 10 Rules
Co-founder of the investment company Y Combinator, author of exemplary essays on technology business and startups, Paul Graham said in a recent interview with Inc. Magazine, that he might like to collect all his ideas into a single list of one hundred points - as has now become fashionable in modern media - but he values the magic of long text too much: “A thought that is not disclosed in detail is not a thought.” .
Nevertheless, we took a risk and selected ten of the most interesting thoughts from the entrepreneur’s relatively recent speeches. Graham is modest: even taken out of context, these ideas look quite self-sufficient.
1. Everything born big is unnatural
Implementing a huge idea right away - the way of the samurai , is a task for either very self-confident or very experienced people. A normal, reasonable person should always start small. It's better to start with something smaller, do a good implementation and gradually turn this idea into something more serious. A development model in which you immediately create a giant project and then improve it is ineffective. Anything born big is in most cases unnatural and quite ugly.
2. Are there many competitors? Very good!
A market with many competitors is a good sign. This means that at least there is demand and none of the existing solutions are so well done that they have no competitors.
It is unlikely that a startup can capture a huge market where there are no competitors.
Therefore, any startup that takes off must either enter a market where there are many competitors, with some kind of secret weapon (Google), or a small market that will soon grow (Microsoft).
3. Learn programming, forget about MBA
Take the Forbes 400 list and put a cross next to the names of people who have an MBA, and you'll understand something about the value of this type of education . The first cross will appear only somewhere after the 20th number. But what immediately catches your eye is how many people there are with technical education. The kings of information technology come from among programmers, not businessmen. And if you're wondering how to spend two years profitably for your business, then the reality speaks for itself: learn to program and don't waste your time on an MBA.
4. Big Launch – Big Failure
There is one tactic among founders - the Big Launch - and it usually doesn't work. Sometimes I meet people who seem to think that a startup is a powerful projectile that should immediately blow up everything around them. In reality, the launch doesn't matter that much. All you need to get started is a few first users. And the entire further result depends on how much they like you.
5. Fire!
I believe that employment attitudes are one of the biggest barriers to start-ups in Europe . Barriers to layoffs are most problematic for startups because startups have no redundancy. Everyone must do their job well.
But the point is not even that a startup may have problems firing an incompetent employee.
Across all industries and countries, there is a clear inverse relationship between productivity and job security.
Actors and directors are fired after each film, so they have to give it their all every time. Professors are fired by default after a few years - unless the university grants them Tenure, job security positions from which they cannot be fired. Professional athletes know that they will be benched after a couple of bad games.
6. Underestimate yourself
For example, if you want to raise $500 thousand, then it is better to initially say that you need $250 thousand. In this case, when you raise $150 thousand, you will have done most of the work. This will give investors two useful signals: that you are doing well and that they need to think quickly because the money will soon run out. And if you said that you needed $500 thousand, then if you received $150 thousand, the work would be less than a third completed. And if raising funds would take you a long time, then such a result was regarded as a failure.
7. Hire less
If you want to save money, try not to hire new employees. I may sound like an extremist, but at the very beginning this is the worst thing a young company can do. First, new employees mean recurring expenses every month, which is terrible. In addition, sooner or later you will have to look for a new place to work, because new employees no longer fit in the old, such a wonderful office. You may have to rent space in an office building, thereby reducing the quality of your program.
But that's not all! The more people there are, the slower everything is done.
Where one person asks his colleague from the doorway what he thinks about such and such an issue, eight people will certainly organize a meeting! So at first, the fewer people, the better for the business.
8. Any money for any startup
In fact, investors need startups no less, and sometimes even more, than startups need investors: by developing with their own money, a startup, although it puts itself at risk and slows down its growth, still has a chance to survive. In turn, the investor, without investing in potentially successful startups, simply goes out of business! This fact leads us to the following conclusion: any more or less successful startup can attract large sums from investors on obviously favorable terms.
9. The best ideas are bad ideas
The best startup ideas look like bad ideas at first. I've written about this before: if an idea seems obviously good, someone has already done it before.
The most successful founders try to work on ideas that few others think are successful.
This is close to the concept of “madness” until the moment you achieve a visible result.
10. Three to four years for success
If you create a successful startup, it will take you three or four years. (If you create an unsuccessful one, you will get off much faster.) Therefore, you should not get involved in this if you are not ready for a commitment for such a period. However, keep in mind that if you find a regular job, it may take the same few years, and you will have much less free time than you expected. So if you're ready to wear a name tag to go to a career seminar, you're probably ready to start a company.