I had the good fortune of attending Y Combinator‘s Startup School last week. Startup School is an afternoon event where notable founders, investors and entrepreneurs share practical advice from their own experience. Learn how they got started, what went wrong, what surprised them, and what happened as their companies grew”. Really a tremendous event all around. Thought this would be a good place to share my notes from the event.
[Note: you will see that my note taking declined towards the end of the talks. This is certainly not indicative of a less compelling talk, more so just tired fingers”
- “I don’t like when people are raising money for raising. I like when they are raising to get it done by any means”
- “it’s really important to not duplicate skills and some people are better to be single founders and you should structure the company around your own skills”
- “4 years ago I would have said launch quickly. Today I would say take as much time as you can to build a perfect product and then launch”
- “when you are talking to investors remember it’s very personal. It may be that your idea is so new that nobody can evaluate it and that’s where really amazing stuff happens”
- “Patterns can trap you into wanting to see the and thing you’ve seen before.
- “Most people who start startups don’t know how to manage people.”
- checkout the Scarf method, which is a neurological approach to managing people
- “Equinox is the time between when it’s acceptable to not make money and when you do. If you control the money you control your destiny”
- “When you are starting a company you are focused on one thing and generally know it better than the investor”
- “X for Y can be a great way to describe what you are doing but it can also trivialize what you are doing”
- “Seed investors are really good at connecting to the potential of the team and the potential of the idea”
- Building a business is like climbing a set of stairs. First step is building product. Series A is for expanding the product and team.
- “Too little money will kill you. Too much money will kill you. The right amount of money will focus you and optimize the things you need to do”
- “Maybe seed and series A have been underpriced for 20 years”
- The entrepreneur is somewhat paying for the companies in the rest of the portfolio that will fail . So if startup failures are going down thanks to things like y combinator it makes it better for everyone
- “Nobody on the internet knows you are 13 and in your parents house”
- “It’s much easier to build for yourself”
- “Optimize everything you do for learning”
- “Nobody knows what they’re doing but you don’t know until you try”
- “It pays to be a cockroach to not quit. To stay alive and not die”
- “There is this problem of looking at people 2-3 years ahead of where you are”
- “Startups are an evolution from suck to suck-less”
- “Ask for word of mouth and make it insanely easy”
- seek out like-minded groups
- content = your new BFF
- become your own PR machine
- Final thoughts
- honor your word , not just your contracts
- Done is better than perfect
- Be insanely persistent and insanely polite too
- Find people who share your values , ignoring this rule can ruin your life
- Build an amazing tram and go to bat for them whenever possible
- Do not believe the hype
- Raised over 55M and doing 100s of thousands of dollars per day
- The reason to start a company should never be to start a company. It should be to solve a problem you really care about
- “YC encourages founders to do things at the start of the company that don’t scale”
- Instacart had to buy one of every single product at Trader Joes to add a store to their platform
- What Ron and SV angel look for in a company
- “The single most important trait a founder can have is the ability to express his or her vision”
- Good listeners – strong willed but flexible
- “Value add is the most important thing to focus on when evaluating investors”
- “If you focus on what the investor’s value add is then the equity and control conversation just flows from there”
- “Never forget your reputation is your biggest asset”
- Over communicate with all food chain. Team and investors and customers
- Building a startup feels like you are standing on a house of cards.
“Anyone who I tell my specific idea to has to sign an NDA”
I have heard this phrase a few times over the past few weeks and it is ALWAYS concerning. Those who know me know that my modus operandi is to de-risk everything. NDAs are an extension of risk averse behavior but in my (humble) opinion they are almost always a step too far.
I see two outcomes of most NDA requests:
1) You lose partners:
NDAs are often broadly written and preclude the signor from working in an adjacent area. Let’s use my favorite fake startup: Facebook for cats. I am wild about my facebook for cats idea and I want to get it built. I head to a development shop and ask them to sign an NDA. The problem is by signing this NDA the firm is probably barred from working on anything related to facebook or cats even if they are not competitive. So by signing my NDA (before I have even paid a dollar) the development firm is leaving money on the table.
The same is true of investors. At any one point an investor can be looking at a variety of opportunities. Signing an NDA could put these investment opportunities in jeopardy.
2) You look stupid:
By asking for a non-disclosure agreement you are in no uncertain terms saying “I don’t trust you with my idea so much so that I need to able to sue you”. This is just a horrible way to start a relationship with a partner, investor or even a friend.
NDAs are also a terrible way to spend your time. If execution is everything than an NDA is precisely nothing. It is exactly the thing that distracts you from building. Walking in with an idea and an NDA to a meeting makes you look terrible.
Solution: The FrieNDA. Its a pretty straightforward principle: talk to people you trust. You will get great advice (probably for free) without a mountain of legal garbage. These people will in turn connect you with people they trust and your “proprietary info” will be safe.
What are your thoughts on NDAs? Let me know in the comments.
Came across this info graphic in an Inc.com article and noticed a few things:
- Industrial / Energy saw the biggest decline of the “big 10”
- Software continues its meteoric rise with an addition of nearly $2.4B
- Networking & equipment doubled in size in one year
What does this graphic say to you?