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.



  • 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:
  • 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)

Why start a startup?


  • 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); ├╝ber 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

Additional Reading



How to Start a Startup Y Combinator Stanford University Online Class

If you are running a business, have ever thought of starting a startup, or are a developer / hacker who would like to be able to work on your side projects full-time, then you owe it to yourself to check out the series of videos posted by Y Combinator and Stanford University.

My relation to Y Combinator / Stanford University is limited to organizing our local community discussion group. My contribution is aggregating resources, creating summaries, notes, and links with their Creative Commons licensed content.

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