Startup Ideas and Products and Why to Start a Startup

Sam Altman, President of Y Combinator, talks about the first two topics of startups: Idea and Product.

Dustin Moskovitz, Cofounder of Facebook, discusses why and why not to start a startup.

Notes

limit to how much you can figure out before getting product to users
great execution of terrible idea is no good
bad idea is still a bad idea
ideas do matter
idea definition: size and growth of market, growth strategy for co, defensibility
if works out: 10 year commitment
plans are worthless but the exercise of planning, is valuable
don’t need to have everything figured out but nice kernel to start with
someday need to build business that’s difficult to replicate
idea first, startup second
best companies are mission oriented: more buy-in: founders, employees, outsiders
derivative companies don’t excite people
best ideas often look terrible at first (“portal-less search engine”, “myspace for colleges”, “sleeping on couches”)
idea that turns into a monopoly (start with small market, take over, and then expand)
market that is going to be big in 10 years
small rapidly growing market better than big, slow growing market
can’t create a market that doesn’t want to exist
Sequoia Capital’s question: Why now? why couldn’t it have been done 2 years ago and why will 2 years from now be too late?
best if building something you yourself need, or else get close to your customer
idea easy to explain otherwise it’s too complicated
best ideas very different from existing companies in 1 important way or totally new
clones usually fail (x for y, social network for pet owners, etc.)
college good environment for meeting cofounders

product = anything that interacts with customer (including customer service, etc.)
great idea leads to great product leads to great company
top tasks: sitting in front of PC, talking to users. (not: raising money, business dev, getting press)
build something users love; talk to users
easier to expand from product a FEW people love to A LOT of people love than from product that a lot of people LIKE to a lot of people LOVE.
growth by word-of-mouth when people really love your product
over the long run great products win
start with something simple (even if your eventual plans are complex) because it’s hard to build a great product
do one thing extremely well
founder being fanatical; feel physical pain over problems with products
recruit good users by hand in the early days (not Google AdWords)
do things that don’t scale: http://paulgraham.com/ds.html
build feedback engine (user feedback > product > show it > repeat)
gotta do sales and support yourself in early days
metrics: measure right things and those will grow (see Lean Startup book)

much stress
10 year commitment if a success
5 year commitment if a failure
can’t quit as founder
Boss – everyone else is boss
Flexibility – always on call, you’re role model, always working
not same as small business entrepreneur
myth: you’ll make more
employee: dropbox ($10B -> $10M) facebook ($200B -> $200M)
founder: uber pet sitting ($100M -> $10M); über space travel ($2B -> $200M)
myth: you’ll have more impact
can have just as big or bigger at late stage company because of team, distribution, tech
why do it: can’t not do it; right person to do it; got to make it happen
you need to do it; you’ll need passion
the world needs it; the world needs you