Stanford 2014 Course- How to Start a Startup (Part B)

I find this series of lectures excellent in helping a faculty plan the team projects / manage group / and brand the team research.

Title: Stanford 2014 Course shared online: How to Start a Startup (Part B)

• course Web URL

• lecture transcripts URL

• Course page includes slide decks and lecture transcripts.

• Second part (Lecture 11 to Lecture 20)

Index Lecture Speaker	Topic
11 Patrick Collison, Co-Founder, Stripe; John Collison, Co-Founder, Stripe ; Ben Silbermann, Founder & CEO, Pinterest	Hiring and Culture, Part II
12 Aaron Levie, Founder, Box	Building for the Enterprise
13 Reid Hoffman, Partner, Greylock Ventures and Founder, LinkedIn	How To Be A Great Founder
14 Keith Rabois, Partner, Khosla Ventures	How to Operate
15 Ben Horowitz, Founder, Andreessen Horowitz, and Founder, and Opsware	How to Manage
16 Emmett Shear, Founder and CEO, Twitch	How to Run a User Interview
17 Hosain Rahman, Founder, Jawbone	How to Design Hardware Products
18 Kirsty Nathoo, Carolynn Levy, Partners, Y Combinator	Legal and Accounting Basics for Startups
19 Tyler Bosmeny, Founder and CEO, Clever; Michael Seibel, Partner, Y Combinator, Sasar Younis, Dalton Caldwell, Partners, Y Combinator	Sales and Marketing; How to Talk to Investors; Investor Meeting Roleplaying
20 Sam Altman, President, Y Combinator	Later-Stage Advice

11. Patrick Collison, Co-Founder, Stripe; John Collison, Co-Founder, Stripe ; Ben Silbermann, Founder & CEO, Pinterest / Hiring and Culture, Part II

• transcripts
• Ben Silbermann, the founder of Pinterest, and John and Patrick Collison, the founders of Stripe. Founders that have obviously, some of the best thinking about culture and building their teams.
• Ben Silbermann: What are the most important parts? For us, we think on a few dimensions. One is who we hire, what those people value. Two is what we do every day. Why do we do it? Three is what we choose to communicate and I think four is how we choose to celebrate. Then the converse of this is what you choose to punish, but in general I think running a company based on what we celebrate is more exciting than what we punish. I think, the four things I think make up the bulk of it for us.
• John Collison: One thing, I think Stripe has placed a large emphasis on, more so than other companies, is transparency internally. So as we have grown, we started off two people, we’re now a hundred seventy people, we’ve put a lot of thought into the tooling that goes around, transparency.
• ” culture is the invariant that you want to maintain, as you get specifically involved in fewer and fewer decisions over time. When you think about it that way, maybe intended importance becomes self-evident. Again, the fraction of things you can be involved in directly, diminishing, exponentially, assuming your headcount growth is on a curve that looks like one of the great companies. “
• ” For example, in hiring, maybe the reason the first ten people you hire, the decisions are so important that aren’t just hiring those first ten people, you are actually hiring a hundred people because you think each one of those people are going to bring along another ten people with them. “
• “I have read all these books on culture,… so I think one big misconception that someone said once was, people think of culture as architecture when it is a lot more like gardening. “
• “I often looked for three to four things that I really valued in people. I looked for people who worked hard, had high integrity, low ego. I looked for people who were creative, super curious, which meant they had all these interests…. we find, the people that are excited about many disciplines and extraordinary at once, tend to build really great products and are really great at collaborating…. e really want someone who wants to build something great. And they aren’t arrogant about it, they want to take a risk and build something bigger than themselves.”
• Three traits we came up with, genuine, caring a great deal, and completing things.
• “At least for us, it was over a very long time period talking to people we knew … For our first ten people, the things that seemed to be important, they were also very genuine and straight…. There are a lot of people who are really excited about tons of things. Only some of those are excited about completing things…. I think it’s much more interesting to work with someone who took two years to spend time going deeper into an area. And then the third trait that we looked for is that they cared a great deal, it’s offensive to them when something is just a little off. “
• “Everyone was always like, it was borderline insane how much they cared about tiny details like we used to. Every single API request that ever generated an error went to all of our inboxes and phoned all of us. Because it seemed terrible to get an error that didn’t get a resolution from the users standpoint. Or we used to copy everyone else on outgoing email and point out slight grammar or spelling mistakes to each other. Because it would be horrible to ever send an email with a spelling mistake. “
  • “I think the really good people, generally are doing something else so you have to go seek them out instead of expecting that they are going to seek you out.”
• Ben Silbermann: You will never 100% know until you work with folks. So the flip side is, if the person you hired is not a good fit, you owe it to them and to the company to tell them where to improve and if they aren’t working out, then to fire them.
  • Before we talk to anyone, we try to figure out what exactly is world class in that discipline need.
  • So I always made it a habit of mine to talk to people I knew de facto were world class and just asking them, what are the traits you look for? What are the questions you ask? And how to find them? If you are looking for the next person that is as good as you, where is that person working right now and what’s her phone number? I think that learning what’s good and bad during the interview process is extremely expensive. It is an expensive use of your time, expensive use of everyone else’s time. A recalibration of that really matters.
  • Really great people want to do things that are going to be hard. They want to solve tough problems,… you lay out in gory detail why it’s going to be hard. And then the right people select in or they select out of that opportunity.
• Patrick Collison: I think a specific tactical thing to do, again, for the first ten people is to work with them as much as you can before committing to hire them.
• Ben Silbermann: I think referencing people is really important Referencing people is just what it sounds like. Asking people with experience for their honest opinion. We do that really aggressively but we are trying to figure out what this person is like to work with. … To evaluate this person’s dimensions, is this person the top 1% of the people you worked with, the top 5%, and the top 10%? And it forces scarcity that gives them material reference.
  • Now as the company grows, I think that problem has to get a little more formalized. So we spend a lot of time thinking and constantly trying to refine what that person looked like from the day they came in, to their first interview, through 30 days after they joined.
  • Then we also ask their peers and manager, hey is this person up to speed? Do you feel we did a good job at making them productive? If we haven’t then thats a key that a) we should not be hiring any more people because we’re not doing a good job bringing in new people and b) we need to retool that.
  • I think one thing we try to do on the team side is to make the teams feel as autonomous and nimble as possible within the constraints of the organization. That means over time we are trying to make it feel like a startup of many startups.
• John Collison: And so when we have engineers start, we try to get them committing on the first day. When we have people in business roles start, we will have them in real meetings the first day on what they are meant to be working on. Sometimes it’s easy to be tentative and ease people in. We are much more, push people off the cliff. Then second, we try to quickly give people feedback. Expectedly giving people feedback on how to adapt to the culture.
  • So one of the lucky and in hindsight decisions we made was our actual fourteenth or fifteenth person we hired was a professional recruiter. She worked at startups, she worked at big companies like Apple. But she sort of knew where that pipeline breaks down. Knew the early indicators, and taught everyone not just how to screen for talent but to identify the people who are going to be culturally really good for the company.
• Patrick Collison: Startups, … is an organization that is not yet stuck with all these principal agent problems. But because everyone is rolling in the same direction, a startup, you can kind of make all the information transparent. Like I said earlier, Stripe used to bcc us to be on every email unless you opted out of it.
• Ben Silbermann: I think for us the answer is some yes and some no. I think one of the benefits of working at a startup is you can be handed a challenge no one else would be crazy enough to let you take on.
• Patrick Collison: I think the other thing that motivates people a great deal is the prospect of affecting some outcome, is just the personal development angle.

12. Aaron Levie, Founder, Box : Building for the Enterprise

• transcripts
• “The first is the quick background of Box. Because when we first started out, we did not know we wanted to do enterprise software. “.
  • ” We launched the company in 2005, we got the idea back in college which was 2004. “
  • ” what we noticed in 2004, in college, was for some reason it was really hard to share files. And as simple of an idea as that is now, and you go back ten years. It was either really expensive or really hard to move data around through corporate companies. “
  • ” The first point to remember, always look for the changing technology factors…. there were a lot of factors that changed in the software world. The first was the cost of storage was dropping dramatically. “
  • ” So we had more than what a consumer needed and not enough that an enterprise needed. So we found ourselves at the juncture. “
  • ” Okay consumer looks really fun, enterprise looks really hard and there is a lot of competition. At the same time, in this consumer space you are always fighting this issue of how do you monetize? How do you actually get people to pay for product? In the consumer space there are really only two business models that you can do. You can either have people pay for your application or you could provide advertising on the application… We are going to be fighting to get consumers to pay a few dollars a month. “
  • ” We were really fortunate. We had an investor, early in his career, make a belief on us because there was something changing with the enterprise that we would be able to take advantage of. “
  • “we architected the business model, we architected the software, we architected the solution to work in one specific version of the world, and it turned out that one solution was the one that happened… . The first is that most application companies are moving to the cloud. “
  • “The platforms themselves are becoming more global. Our customers were internationally a couple weeks after starting the company.”
• “Then we are going to talk the major factors that changed in enterprise software that make it possible to do a startup today.”
  • “There are only two times, two moments of opportunity where a technology revolution will happen in an enterprise. The first is where raw materials change. So cost of computing goes down and they centralize and let people use it on demand. The second thing that can change, is the very people that these enterprises have to go after need new experiences at that enterprises product.”
  • “No one is prepared, what does it mean when consumers want to go buy goods anytime from anywhere with better information, better intelligence. So every retailer in the world is going to need a new technology stack to power their retail experiences.”
• ” And finally we are going to look at patterns that are ways to recognize and go build a startup by yourself.”
  • “So the first one is to spot technology disruptions. .. You have to look for new enabling technologies, or major trends, like fundamental trends, that create a wide gap between how things are done and how they can be done. … something that was impossible 5, 10 years ago is now very practical. “
  • “The next thing is, in enterprise, you want to start intentionally small.”
  • “Then next you really want to find asymmetries. You want to do things that incumbents can’t or won’t do because either the economics don’t make sense for them, the economics are so unusual, or because technically they can’t…e.g, thus created a business model that no other software company has been able to think of or attack. “
  • “The next is you want to find the mostly crazy, but still reasonable outliers within the customer ecosystem…..Paul Graham has a great article where he talks about living in the future and building what is missing when you are living in the future…. work with a lot of those early adopters to establish their platform. “
  • “Listen to your customers but don’t always build exactly what they are telling you. This is a really key distinction around building enterprise software. .. It is your job to listen to their problems, and translate those into what is going to build the best and simplest solution for them. “
  • “You want to modularize not customize. So build a platform as opposed to building all the custom technology and customer vertical experiences into the software itself. Make sure you really think about openness and APIs as a way of building experiences. “
  • “read these three books: Crossing the Chasm, the Innovators Dilemma, and Behind the Cloud. These three combined, if you binge and read them all, you will come out ahead.”

13. Reid Hoffman, Partner, Greylock Ventures and Founder, LinkedIn : How To Be A Great Founder

• transcripts
• “how is one a great founder, these are all skills that are super important. “
• “1. Founder team…. To explode the myth of super founder is usually it’s best to have two or three people on a team rather than a solo founder….. Well the reason is, because of what great founders do is seek the networks that will be essential to their task. And they realize it’s not just about, I am superman, I can do this anywhere. I can do this in Antarctica, etc, in order to be successful, I have to go to where the strongest networks are for the particular kind of thing that I am doing. And Silicon Valley, by the way, is super good at some kind of tasks, some places that you essentially try to solve certain types of problems. But it’s not good at all of them…. Silicon Valley for tech startups, for mobile, for marketplaces this is a really good place to do it. For a bunch of other things, you should think about a different location. “
• “2. it’s actually pretty easy to become contrarian. It’s hard to be contrarian and right. … And part of when you think about contrarian is to say, okay what do I know that others don’t know? … in general, as a founder it’s good to be contrarian in the real sense.”
• “3. you’ve got to be both flexible and persistent…. you should have a project you are doing, like a company, an investment, a thesis that essentially says why you think, possibly contrarian, why you think it is potentially a good idea. It should include what you know you think other people don’t know… am I in fact increasing confidence in my investment thesis? Or decreasing value in my investment thesis? .. “ So you are always combining the vision and the data, and data is within the framework of the vision. And sometimes the course of what you learn changes your vision.” - Normally entrepreneur founders are thought about as being the risk takers… how do I take intelligent risks?. Part of having a thesis is you chart it out as a list of bullets. - should I have this long term vision or should I be solving a local near term problem? Again the answer is both these paradoxes. And the question is, you should jump between them. - product distribution is more fundamental than what the actual product is. And the one below it is financing. The reason it’s financing is because if you run out of money and the whole effort goes away, even if you have a really good idea, it doesn’t work. - be able to recognize whether you are on track or not. To have that kind of belief but also paranoid about am I tracking against my investment thesis? - there is not one skill set, there is an ability to learn and adapt. And an ability to constantly have a vision that’s driving you but to be taking input from all sources and then to be creating networks all around you. And that’s essentially what makes a great founder. - I’m a huge believer in references. I only meet with someone when they come to me through a reference. - Because if you don’t have that level of clarity, you are not going to be able to assemble the network behind you. You are not going to be able to get investors, you are not going to be able to get employees, you have to be able to articulate a very clear mission about what you are doing. - All founders– there are differences. For example, in software speed to market, speed to learning is really key. In hardware if you screw it up you are dead. So accuracy really matters. If you build and ship the wrong thing you are hosed.

14. Keith Rabois, Partner, Khosla Ventures ; How to Operate

• transcripts
• So basically what you are doing when building a company is building an engine. … Eventually you want to construct a very high performance machine. A machine that almost nobody really has to worry about every hour, every minute. …As Warren Buffett says, build a company that idiots could run because eventually they will.
• Basically eliminating things, the biggest task of an editor is to simplify, simplify, simplify and that usually means omitting things. .. Don’t accept the excuse of complexity… So force yourself to simply every initiative, every product, every marketing, everything you do.
• To ask clarifying questions. We try to narrow down to, what are the one two three four things that matter most to this company? And only focus on those things. So it allows us to be more decisive and we can make decisions rapidly. It allows us not to distract you from your day job which is actually building a company.
• to allocate resources.
• to ensure consistent voice… You want to train people so they can recognize differences in voice.
• The people who work with you, generally, should be coming up with their own initiatives.
• delegating. So just like the other metaphor on editing is writers do most of the work in the world, editors are not writing most of the content in any publication. So that is true of your company, you shouldn’t be doing most of the work. And the way you get out of most of the work, is you delegate.
  • First, and this actually came from High Output Management and Andy Grove, is called task relevant maturity. It’s a fancy phrase for, has this person ever done this before?
  • any executive, any CEO, should not have one management style. …Your management style should be dictated by your employee.
  • how to make decisions. Delegating vs doing it yourself… Two by two matrix.. a: sort your own level of conviction as extremely high or extremely low;… / b: consequence dimension.
  • low consequence + your low confidence in your own opinion ==> you should absolutely delegate. delegate completely.
  • dramatic consequences are + your extremely high conviction that you are right ==> explain your thinking why.
• to edit the team. .. Nobody is going to have a perfect team and you certainly aren’t going to start that way.
  • Most great people actually are ammunition, But what you need in your company are barrels. And you can only shoot through the unique barrels that you have. That’s how the velocity of your company improves is having barrels. Then you stock them with ammunition, then you can do a lot. …virtually irreplaceable because they are also very culturally specific.
  • One of the definition of a barrel is, they can take an idea from conception and take it all the way to shipping and bring people with them. And that’s a very cultural skill set.
  • And that’s actually what you want to do with every since employee, every single day, is expand the scope of responsibilities until it breaks. And it will break
  • every company has their own growth rate, and every individual has their own growth rate…So always track the individual slope of employee and the company growth rate.
  • only give everybody one thing to prioritize….the insight behind this is that most people will solve problems that they understand how to solve. Roughly speaking, they will solve B+ problems instead of A+ problems. A+ problems are high impact problems for your company but they are difficult. You don’t wake up in the morning with a solution, so you tend to procrastinate them.
• to create tools that enable people to make decisions at the same level you would make them yourself.
  • build a dashboard… your dashboard needs to be as intuitive as your product is for users.
  • transparency. .. Metrics are the first step. Other things I like to do, is to take your board decks… review every single slide with every single employee after the board meeting….
  • When you scale, you create notes for every meeting and you send them to the entire company. … Every conference room at Square has glass walls.
  • minimal viable transparency, … the critique of compensation transparency is?
  • To measure outputs, not inputs. And again, you should dictate this yourself. You should draft the dashboard yourself to tie this all together. One important concept is pairing indicators…. So you always want to create the opposite and measure both. And the people responsible for that team need to be measured on both.
  • to look for the anomalies. You don’t actually want to look for the expected behavior.
  • book by Bill Walsh, called The Score Takes Care of Itself. And the basic point of the book is that if you get all the details right, you don’t worry about how to build a billion dollar business, you don’t worry about how to have a billion dollars in revenue, you don’t worry about having a billion users. Thats a byproduct of what you do everyday to get the details excellent.
  • The office environment that people work in everyday dictates the culture that you are going to be in.
• More details:
  • every good startup is a cult. And it’s really hard to create a cult if you are sharing space with people. Because a cult means you think you are better than every other startup, you have a special way of doing things that’s better than anyone else in the world.
  • How to manage people: to have a one on one roughly every two weeks. Some people say every week, but I wouldn’t go longer than two weeks. Every week can be ideal in many companies. The reason why there is another adage, you should only have five to seven direct reports
  • Bill Walsh, in the first chapter of his book, he asks this question, how do you know you are doing the job? And this is the quote that he gave everyone when asked that question. “So if this is how you feel everyday then you’re probably on the right track. If it doesn’t sound appetizing then you shouldn’t start a business truthfully.”
  • The underlying philosophy of getting the details right is pretty important to install in the very very beginning of a company.
  • And the key to culture is it’s a framework for making decisions. And if it’s baked into your culture, people learn how to make decisions across that culture without you ever saying anything. You never have to really do anything except watch and promote and move people around.

15. Ben Horowitz, Founder, Andreessen Horowitz, and Founder, and Opsware; How to Manage

• transcripts
• you have to be able, when making critical decisions, to see the decision through the eyes of the company as a whole. You have to add up every employee’s view and then incorporate that into your own view. Otherwise your management decisions are going to have weird side effects and potentially dangerous consequences. - the process actually protects the culture because what it does it says, look we’re going to look at all inputs. We are going to have a formal way of saying, and deciding ; I’m not going to do things when asked. There is one process and that’s it. - one have to keep in mind, you have to think about the people who are staying and you want to reward the people who are staying. The perspective of the Employee who leaves, and this is really critical because this is your reputation,… losing all your stock is a very big incentive to stay.
• In conclusion, the most important thing that you can learn, and one of the hardest things to do, is you have to discipline yourself to see your company through the eyes of the employees, through the eyes of your partners, through the eyes of the people you are not talking to and who are not in the room… even the people you hate.

16. Emmett Shear, Founder and CEO, Twitch ; How to Run a User Interview

• transcripts
• Emmett is the CEO of Twitch, which was acquired by Amazon, where he now works. Emmett is going to talk about how to do great user interviews;
• We ran a very large number of user interviews. We talked to a lot of people and that data formed the core of all the decision making for the next three years of product features on Twitch. We continued to talk to users and in fact built an entire part of the company whose job it is to talk to our users.
• You need the answer to the question: who is my user and where am I going to find them?
• The main thing you’re trying to do when running this first set of interviews is not necessarily ask questions about optimizing user flow. Or questions about the specifics of any of that stuff. That can be distracting because users think they know what they want.
• When you talk to detailed users of your product, they come back to you with very detailed things about features because they get mired in the features. You have to sort of read between the lines. .. actually a very common request … This stuff was really consistent.
• The other important thing is We talked to all the people who weren’t using us or our competitors. In many ways, those were the most important people… eople who have never used your service before and what they say is actually the most important. What they say is the thing that blocks you from expanding the size of the market with your features.
• You combine that feedback and what it tells you is not features to build, because … What was important were the issues, the goals they were trying to accomplish.

17. Hosain Rahman, Founder, Jawbone ; How to Design Hardware Products

• transcripts
• talk today about the hardware journey of building products
• I always like to start with the broadest thinking. The way we look at the world is we think of ourselves at this intersection of really crafted innovation in engineering that’s almost invisible to the user in terms of its functionality, even beyond design. We have been designing products for well over a decade now. We think that the conversation has shifted even beyond design into beauty.
• We started on this journey really, really early. Right out of engineering school here, we were developing core technology. We decided to build consumer products around that.
• the core of when we start to think about how we build and opportunities to create products. We think about where the world is going.
• everything for us is a system. We don’t think about it discretely as a piece of hardware or discretely as an application or discretely as a platform. We think across the whole thing.
• we map where we are much unbridled in our imagination in the exploration phase. We start to validate some of our concepts, bring those ideas tighter, and tighten them. And then we actually start to build a product. Launch it and then iterate.
• We have leadership meetings with the broader cross functional team. I have to show results. I have to go through a scientific process to outline why this works. Why is it going to happen?” This is when we start formulating an important tool in the company
• framework: “What is the user problem that we solve through this experiment?” Whether it’s in hardware, software, data, platform, whatever it is, once we solve it, people can’t live without it. They may have an absolutely burring need to solve this problem and they can’t. Either they are looking for a solution or you never thought you needed it but now you can’t live without it.
• We think of ourselves as an experiences company. It’s not just about this physical device or that feature. It’s about the system.

18. Kirsty Nathoo, Carolynn Levy, Partners, Y Combinator; Legal and Accounting Basics for Startups

• transcripts
• if you know the basics, you can get yourself set up in the right way, avoid pain, stop worrying about it, and then concentrate on what you actually want to do, which is make your company a success.
• a “startup” has to be a separate legal entity, will have assets, IP, inventions, other things, and that the company needs to protect those;
• the primary purpose for forming a separate legal entity is to protect yourselves from personal liability. If your company ever gets sued, it’s not your money in your bank account that the person can take. It’s the corporation’s.
• where: the easiest place is Delaware. Delaware is in the business of forming corporations. The law there is very clear and very settled. It’s the standard.
• Clerky. all standard basic documents set up
• The first thing that you need to know is that execution has greater value than the idea. … You need to resist the urge to give a disproportionate amount of stock to the Founder who is credited with coming up with the idea for the company.
• The next thing you want to think about is if the stock should be allocated equally among the founders.
• Thirdly, it’s really important to look forward in the startup. Said another way, all the founders have to be in it one hundred percent.
• vesting means that you get full ownership of your stock over a specific period of time. .. When your hear restricted stock, it means that the stock is subject to vesting. The IRS speak for this is, “Shares that are subject to forfeiture.”
• standard vesting period is four years with a one year cliff.
• Investors want to see all founders, even solo founders, incentivized to stay with at the company for a long time.
• investors want something in return for putting in money at the earliest, riskiest stage of the company’s life. This is where the concept of a valuation cap comes in,
• The other thing to keep in mind is that investors should be sophisticated. They have enough money to be able to invest. They understand that investing in startups is a risky business.
• The other things is advisers. They are so many people who want to give advice to startups. Few people actually give good advice.
• Pro-rata rights are a very common request from investors. They are not necessarily a bad thing, but as a founder you absolutely need to know how pro-rata rights work. Especially because the corollary to an investor having pro-rata rights to avoid dilution is that founders typically suffer greater dilution.
• The final thing is information rights. Investors almost always want contractual information rights to get certain information about your company. .. Any investor saying they want a monthly budget or weekly update, that’s not ok.
• The concept of business expenses can get a little bit blurry, especially in the early days.. you don’t have to necessarily think about the book keeping and accounting at that point. However, it’s crucial to keep the receipts
• “Founder Employment.” Why. Working for free is against the law and founders should not let their company take on this liability…. The founders need to be paid. So do employees. It isn’t enough to just say, “Well, I am paying them in stock. That can be their compensation.” They need to be paid at least minimum wage.
• At YC we have seen a ton of founder break ups and we know that the break ups get extra ugly when the founders haven’t paid themselves. Why? Unpaid wages become leverage for the fired founder to get something that he or she wants from the company. Typically that is vesting acceleration.
• Services like Zen Payroll are focused on startups. They help you get this set up in the easiest way possible so you can go back and concentrate on what you do best… That’s the key thing. Use a payroll service provider and make sure that you understand the basics of employment.
• Best practices for how to fire someone: number one, fire quickly. Don’t let a bad employee linger…. Don’t apologize. Fire the employee face to face and ideally with a third party present… Number five, if the terminated employee has any invested shares, the company should repurchase them right away.

19. Tyler Bosmeny, Founder and CEO, Clever ; Michael Seibel, Partner, Y Combinator ; Qasar Younis, Dalton Caldwell, Partners, Y Combinator :

• Sales and Marketing
• How to Talk to Investors
• Investor Meeting Roleplaying
• transcripts
• Paul Graham likes to talk about how there’s two things you should be doing at any point in time when you’re starting your company. You should be either talking to your users or building your product.
• What I’ve learned is that when it comes to “hiring the sales people,” as a founder, the reality is that it’s you. - One of those is your passion for the product and what you’re building. - The second is your knowledge of the industry and the problem that you’re solving. Those two things actually totally trump sales experience from what I’ve seen.
• The process of figuring out who will even take your call.
  • Everett Rogers : technology life cycle adoption curve.
  • a bell curve where you have innovators who will try new things, early adopters, mid-stage adopters, late adopters, and laggers.
  • only 2.5 percent of companies will even consider using your product ==> To get some early sales, have to talk to a lot of people.
• The second thing : cold email. …. It’s actually easy and the key is not to write a lot. Your email should be concise. ..
• The best sales people, the top one percent, .. the most surprising thing is how little talking they do… They would ask a lot of questions.
• The other part of this stage that surprises a lot of people is you have to follow up. Here’s a lot of different steps that you go through: emailing somebody, not getting a response and emailing them back. Calling them, leaving a voice mail. …
• YC has agreed to open source their deal documents. The documents that YC founders use are going to be available to everybody….The other place where so many smart people go wrong is they don’t remember what their goal is. Your goal is to sign some deals, get some reference customers, get some validation, and get some revenue. If you don’t do that, your startup is toast.
• On new features: Once you have a lot of customers requesting it, then you should build it. … The other trap I would highly recommend you try to avoid is the free trial trap…. , “How do I have to price my product to be a viable business?”
• Christoph Janz wrote this really great blog post online about the five ways to build a hundred million dollar company..

19b. Four things on how to raise money. Michael Seibel

• The first is your 30 second pitch.. three sentences. .. (1) what you do (2) The second is in a multi-billion dollar market, it’s pretty simple to do this.; (3) Third sentence, how much traction do you have?.
• Then is your two minute pitch. .. to add four additional components. (1) The first is unique insight…- you’re only going to get two sentences to get that out there. So it can’t be complicated.
  (2) Next - how do you make money? You know your business model. (3) Then next one is team. I think that this answer is actually really clear. I think you’re trying to do two things. If your team has done something particularly impressive- you need to call that out. (4) So the last one is the big ask. When it comes to this, you have to figure out whether this is a conversation involves fundraising or not.
• When to fundraise? (1) Investors like to invest based on traction. It is literally always better to raise money when you have more traction than less. (2) The second this is, have you created a plan so that you can launch and grow without needing to raise a bunch of money? (3) Finally how to set up investor meetings. This is really, really simple.. ==> a mock pitch

20. Sam Altman, President, Y Combinator : Later-Stage Advice

• transcripts
• The first area we’re going to talk about is management. In the beginning of a company, there is no management. This actually works really well. Before 20 and 25 employees, most companies are structured with everyone reporting to founder. It’s totally flat. That’s really good. That’s what you want because at that stage, it’s the optimal structure for productivity.
• What works totally fine at 20 employees is disastrous at 30. You want to be aware that this transition will happen. .. You ideally want to cluster people in teams that make sense but the most important thing is that there is a clear reporting structure and that everyone knows what it is. Clarity and simplicity are the most important things here.
• “I personally like six year big grants - but six years of vesting. ‘Cause I think these companies take a while to build. There’s pyramid vesting where you back weight someone’s grant. In year four they get a lot more of the vesting than year one”.
• ” As the company grows you continue to osculate. The highs are better but the lows keep getting worse. And you really want to think about this early on and just be aware that this is going to happen. And try to, try to manage your own psychology through the expanding swing that it’s going through.”
• "”Competitive dynamics” - this is a basic principal of negotiation. Most founders learn this the first time in fundraising. But it actually matters for everything. The way you get deals done and the ways you get good terms is to have a competitive situation. “
• you’re trying to find product market fit. You’re trying to build a product and you’re trying to close the gap between those two gears. The only way to do that is to go off and meet the people. You can’t do this without getting really, really close to your users