Stanford University, in conjunction with Y Combinator, have launched a course teaching about starting startups. They are using some of the top presenters from previous YC programmes – and are making the videos available to those who cannot attend the lectures. Mashauri have decided to publish these videos on our blog with a brief write-up in case you do not have the time to view them – or would like to get a quick overview of the content.
- Welcome, and Ideas, Products, Teams and Execution Part I
- Why to Start a Startup
Lecture 1 kicks off with Sam Altman (president of YC) discussing the 4 areas in which an entrepreneur needs to excel to build a successful startup company. These are:
In this lecture he discusses the first two only – idea and team. The lectures are fast-paced and content-rich – although admittedly it appears that Sam and Dustin probably dropped out of Stanford before they learned much about lecturing style and slide quality!
In terms of idea, Sam is in disagreement with current thinking that the idea is not so important and that a founder can always “pivot” into a related area. Note that his his concept of “idea” incorporates the problem being solved, market description, market size and growth as well as defensability. A founder will be working on an idea for up to ten years or more (assuming its successful) and so it is worth putting some effort into this. Some of the keypoints are:
- Have an idea that is mission orientated – and which you are passionate about. It makes the rest easier
- Build something that is difficult to replicate
- Often inital ideas sound crazy – but that’s not bad as there will be less competition
- A fast-growing, smaller market is normally preferable to a larger, stagnant market
- Planning is important – or at least the process if not the plan
- Ask yourself: “why now?” (and also “why me?”)
- Build something that you personally need – or if not, get really close to your customers
He ends the section with a quote from 50 Cent about finding a market/audience then make or express yourself to them. Not vice versa – which is a common problem.
In terms of product, this is the key to building a great company (but must follow a great idea). It is critical to be in front of customers and building something that they want. And continually testing and refining with them. The main thrust of this part of the presentation is that it is more important to build something that a small number of customers love, than something that many customers like. This is the way to referral and then later scaling. Also start with something simple and do the important functional elements really well. Its easier to find customers to use (and love) something simple than an over-complicated product.
Do not be shy about going out and recruiting customers by hand and getting them involved in using your product. Also don’t worry if the product is not automated, you can do a lot of things manually (concierge-style) that you can worry about scaling later. Sam gives plenty of examples of this and refers to Paul Grahams article on doing things that do not scale (see link later).
He descibes the process of putting your product in front of a customer and asking what they like, would they pay for it and would they refer it to someone else. Then going back into the product refinement loop and cycling back through to the customer. Finally he talks about ensuring you are measuring the right growth metrics appropriate to where you are in development and what you are trying to achieve.
The last 20 minutes is handled by Dustin Moskovitz talking about why you should start a startup (and importantly what are the wrong reasons). He plays down the Hollywood hype and warns that it is a lot of very hard work, mostly un-glamorous and with huge risks. There are easier ways of making money and/or making a difference.
He ends by saying the only reason you should be launching a new business is if you simply “cannot not do it”.
The video is well worth watching if you can carve out the time. If you are in the process of starting out, at least watch the frst 25 minutes; and if you are still only considering becoming an entrepreneur, then the last 20 minutes may be even more valuable. The good news is that concepts are firmly embedded in the Mashauri accelerator programmes – and so by using our tools you can build your business while you learn these lessons.
We thank Stanford and Y Combinator for publishing this material and helping a lot of startups around the world increase their chances of success. We are proud to be able to extend this a little further via our site.
We will continue to publish, and comment on, the material as it becomes available. Make sure you do not miss these updates by joining the Mashauri community of entrepreneurs.
Please feel free to leave a comment or contact me directly at firstname.lastname@example.org