“I think it is very hard to win in the long long term without the best product.”
“Most of the founders that I have spent a lot of time with that have gone on to be super successful spent a very long time on their idea when a lot of other people would have given up.”
“One of the things that someone once told me was most impressive about Mark Zuckerberg, is not that he hired pretty well because a lot of founders do that, but that he fired well. And he could fire people quickly that weren’t working out.”
Evan: He’s an American entrepreneur, programmer, venture capitalist, and blogger.
He’s the president of Y Combinator, he’s a personal investor into many companies such as Airbnb, Stripe, and Pinterest.
He’s Sam Altman and here’s my take on his top 10 rules of success.
Rule number one is my personal favorite and I’d love to know which one you guys like the best. And as always guys, as you’re watching the videos, if you hear something that really resonates with you please leave it down the comments below and put quotes around it so other people can be inspired as well. Also as you are writing something down it’s much more likely to stick in your head too, enjoy!
Rule# 1: #Believe In What You’Re Doing
Yeah, I think if you don’t actually believe what you’re doing is really important, if you don’t derive satisfaction from what you’re doing, then you will not be able to sustain all of the bad things that happen in the incredibly long period of time that the bad things happen over.
And so the only motivation that I have seen work for people over a long period of time is enjoyment in what they’re doing and an intense belief that it matters and ideally liking the people that they go to work with every day. But the, I think the reasons that a lot of people, and by the way it’s totally cool when people start off saying “Well, I want to make money or I want to be famous.”
“I think if you don’t actually believe what you’re doing is really important, if you don’t derive satisfaction from what you’re doing, then you will not be able to sustain all of the bad things that happen in the incredibly long period of time that the bad things happen over.” – Sam Altman
I think a lot of people start that way and they don’t like to admit it. But pretty quickly, or at least in the first few years, I think a lot of people find a deeper mission for why they do what they do and then that drives them for the rest of the time they work.
Rule# 2: Make The Best Products
But I think if you’ll look at the companies that endure over decades, the companies that endure over decades, they tend to win on product. they tend to win on product. It is true that it is critical to get sales and marketing right because without that you just don’t get the flywheel going but the most valuable tech company in the world is Apple but the most valuable tech company in the world is Apple and I think they make just the best products across the board.
I don’t know if Google is still number two but I think Google Search dominates everything else and also like Gmail and Google Maps and also like Gmail and Google Maps dominate their respective products. I think Airbnb won on product. I think that Facebook, although they came late to the game had the best product by far and they’ve managed to expand that.
“The companies that endure over decades, they tend to win on product.” – Sam Altman
So I think, I don’t ever try So I think, I don’t ever try to let people off the hook for sales and marketing ’cause if you build the best product in the world and don’t get anyone to use it that still kind of sucks but I think it is very hard to win in the long long term but I think it is very hard to win in the long long term without the best product. I think you can get acquired two years in because you had a really good press or marketing strategy but that does not, that is not how you create enduring value. Eventually, these things converge.
Rule# 3: Ignore The #Littleman
Ignore people telling you your idea is bad. They may be right but the only way to know is to actually build it out. And I think the thing that works about Silicon Valley that’s different in Mexico City or almost anywhere else in the world is the default response.
If someone says, “Hey I’m going to start a startup, here’s my idea.” The default response is to be excited and think like “Oh, why might that work.” And in most of the rest of the world the default response when you tell someone your idea is to say, “Oh that’s not going to work.”
“Ignore people telling you your idea is bad.” – Sam Altman
And this is really toxic for startups ’cause you have to believe in yourself. And the good ideas, because they sound like bad ideas, are so fragile and so killable that you have to be really careful to insulate yourself against this.
Rule# 4: Don’t Give Up Too Early
Knowing when to quit Knowing when to quit and knowing when to give up on something is, there’s no perfect answer to that. But it’s really challenging to even get that approximately correct. I think most people give up on things way too early. So the mistake that most people make is they try something, it does not immediately work. You see this particularly in young entrepreneurs.
It does not immediately work. After seven weeks they say, “You know what I tried this thing, “it’s just not meant to be “and I have too many other projects.” So they immediately give up and you kind of, the satirical version of this is people that are 23 and have started 14 startups because they give up on everyone before they’re ever possibly successful. These things are really hard. They take a very long time.
“Most of the founders that I have spent a lot of time with that have gone on to be super successful spent a very long time on their idea when a lot of other people would have given up.” – Sam Altman
There are a lot of critics. There are a lot of people who say this thing sucks. It’s going to fail. It’s really stupid. And then also there’s what at YC we call the “Trough of Sorrow,” where no one even bothers to say it sucks because no one cares at all. And that is at least as demotivating.
Most of the founders that I have spent a lot of time with that have gone on to be super successful spent a very long time on their idea when a lot of other people would have given up. And either people said it sucks or people said nothing at all. And a framework that I have for when to give up and when to keep working is it should be an internal, not an external decision.
If people aren’t using it or people are saying it’s bad, that alone is not a reason to give up. You want to pay some attention to that. They might be right. But I think the best entrepreneurs I know, But I think the best entrepreneurs I know, they make an internal decision about when to give up or when to keep working on something. It’s basically when you have run out of ideas and something is not working, then it’s a good time to stop.
Rule# 5: Make Something People Want
Startups, to be successful, have to build something that people want. If you get that right, you can get everything else wrong, pretty much. If you get that wrong, you can get everything else perfect and we see this all the time. We see startups that hire the best lawyer in the valley.
They get a beautiful office. They work with really great accountants and a great PR firm. They do everything that a startup needs to do, except build a product that customers or users want and this is so important. This is probably the most important piece of startup advice in the early days. This is the only thing that matters, you have to do this. You can ignore all the other advice.
“Startups, to be successful, have to build something that people want.” – Sam Altman
You can ignore all of the crazy stuff that people do when they’re trying to advise you about how to set up a company. In fact, you should ignore most advice. Most startup advice is terrible. You should feel free to ignore any of this too, except this one thing. If your startup doesn’t make something that users want, the startup will never ever be successful.
Rule# 6: Impact The World
I think, in general, you really should try to live your life without regrets and if you are really set on starting a particular company, even if you know that you could go be employee number 30 at Airbnb and Airbnb is already going like this and you’d have more of an impact but if you’re going to regret for the rest of your life not starting this particular company ’cause you’re so in love with it.
“Most people find that their job satisfaction goes up with the impact they have on their company or the world or whatever.” – Sam Altman
You might decide to do that. However, I think this other thing like making an impact on whatever you do making an impact on whatever you do is the satisfying thing in life, in professional life. And so I think most people find that their job satisfaction goes up with the impact they have on their company or the world or whatever.
And if you start a company that is a mild success And if you start a company that is a mild success or join a company that’s a huge success, you probably have more of an impact in the latter case.
Rule# 7: Take Risks
I think people have terrible risk calculus in general. Even people who try to be really good about this are bad at it. The answer, I think, is almost always A, you’re wrong about what is risky and what is not risky, and B, most people don’t take enough risk. Especially early in your career.
Being young and unknown and poor, Being young and unknown and poor, that is actually a great gift in terms of the amount of risk you can take and I think people don’t capitalize on that enough. I think what risk actually looks like is not doing something that you will then spend the rest of your life regretting. And there’s a quote, “People regret way more the things they didn’t do “than things that they did do.”
So if you really believe in something and there’s an idea that you’re super passionate about and you take a calculated risk to start a company, realizing you may forgo a couple of years of steady income, another job, and whatever else another job, and whatever else and maybe people call you a failure or whatever, that’s a great risk to take. And if you don’t take that risk, I think you have a very high chance that you’ll end up regretting that.
I think the wrong kind of risk to take I think the wrong kind of risk to take is where people don’t actually do things or don’t commit to something because they don’t want to fail and they overrate the risk of failure and the reputation damage or embarrassment or whatever. I think one really important thing to strive for I think one really important thing to strive for in your career is to be a doer, not a talker.
“If you don’t take that risk, I think you have a very high chance that you’ll end up regretting that.” – Sam Altman
And the reason that people don’t do stuff, one, is it’s hard and two, is it’s risky. And so you have these people that want to dabble in a bunch of different projects, but never be all-in on one. And I think it’s this combination of work and risk and it’s, I think that’s really bad. I think history belongs to the doers and I think you should take a risk, actually do something. Don’t just sit around and talk and organize and bring together groups and go to thought-leadership conferences and whatever it is these people spend their time on other than actually building something and just take the risk of committing to what you have conviction on.
Rule# 8: Hire Well
Team problems are the biggest killer of startups inside of YC. Everyone thinks that startups die at the hands of competitors but startups commit suicide much more often than startups get killed by somebody else. If you don’t have a good team, eventually the startup will implode.
And if you do have a great team, the startup will just go on to do better and better things. So there are a number of jobs that a CEO has but hiring I think is the most important. If you don’t hire really well, your company will never be a big success. As your company gets bigger and bigger, the only thing the CEO gets to decide on is the company strategy and who the players are who the people are.
Everything else gets done by other people. So you have to hire incredibly well. You have to spend a third of your time hiring people and recruiting the best people in the world. Even still at YC, this is the biggest part of my job. I can’t advise every startup but I can make sure we got the best partners in the world. And then if you make a mistake hiring you have to fix it incredibly quickly.
“If you don’t have a good team, eventually the startup will implode.” – Sam Altman
Most founders understand that it’s important to hire really well and most founders prioritize that. But it’s also important to fire people quickly that aren’t A members of the team. And most founders don’t understand this. Or they understand it but it’s so painful they don’t want to do it.
One of the things that someone once told me was most impressive about Mark Zuckerberg, is not that he hired pretty well because a lot of founders do that, but that he fired well. And he could fire people quickly that weren’t working out. And this is really hard to learn how to do as a founder.
Rule# 9: Stay Focused
Losing focus is another way that founders get off track. I actually think that this is a symptom of burnout. When you get really burned out on running business you want to do easier things or more gratifying things. You want to go to conferences and have people tell you how great you are.
You want to do all these things that are not actually building a business. And the most common post-YC failure case And the most common post-YC failure case for the companies we fund is that they’re incredible focused during YC on their company and then after, they start doing a lot of other things.
“Losing focus is another way that founders get off track.” – Evan Carmichael
They advise companies, they go to conferences, whatever. Focus is what made you successful in the first place. There are a lot of reasons people lose focus. But fight against that really, really hard.
Rule# 10: Start Small
Here is one really important point, which is that people get more ambitious over time. And when the founders of Airbnb first came to us, they were delighted they had three users. And if we told them that someday they were going to be running a 50 billion dollar company, whatever it’s going to be, with more might than any hotel chain in the world, they would have looked at us and said “You’re crazy, we don’t want to work with you ’cause you don’t know what you’re talking about.”
So I think there’s this pressure in the last couple of years to have an immediate vision about how you’re going to have this 10, 100 billion dollar company, and no one honestly has that in their first days. Google almost sold the company for a million dollars. They would have if the offer came through. Zuckerberg very very nearly sold Facebook for a billion dollars. So it’s okay to become more ambitious as you go.
“You have to focus on delivering something great for a small number of users first.” – Sam Altman
So it’s okay to become more ambitious as you go. In fact, that’s what should happen. So what we look for is people that have a kernel of an idea that we believe can develop into something huge. But you can’t focus on that right away. You have to focus on delivering something great for a small number of users first.
The way we talk about this is that you can either create an initial product that a lot of users really like or that a small number of users really love. Obviously you’d like to make something that a lot of users really love but those ideas get taken by big companies and we can’t compete with them.
So you don’t have to have a take over the world plan on day one. In fact, very few of the companies that we’ve been involved with that have gone on to do it felt they were going to initially. They just, the founder had something really passionate about they had a plan, as Scott was saying, about how they had some defensibility, and it just grows and grows and grows from there.
Evan: Thank you guys so much for watching! I made this video because Kevin asked me to. So if there’s a famous entrepreneur that you want me to profile next leave it down the comments below and I’ll see what I can do.
I’d also love to know what did Sam say that had the biggest impact on you and why? What are you going to take from this video and immediately apply it somehow to your life or to your business? Leave it down the comments below and I’m going to join in the discussion.
I also want to give a quick shout out to Amalia’s Design. Thank you so much for picking up a copy of my book, Your One Word, and making that tribute picture to it as well. I really really appreciate your support.
So thank you guys again for watching. I believe in you. I hope you continue to believe in yourself and whatever your one word is, much love. I’ll see you soon.
Ask For What You Want
Yeah, and I think people also seem to have sort of the fear of being told no a lot and not asking for what they want. I’m sure that’s something that you’ve encountered with people.
Yeah, this was one of the other things I learned , Yeah, this was one of the other things I learned that I wish I had gotten advice on early on in my career, is ask for what you want. You will get told no a lot, but sometimes it will work. And I think you see a lot of entrepreneurs shoot themselves in the foot because they don’t ask that person because they don’t ask that person to quit their job and come join them, they don’t ask this big company to do a deal with them and they’re just not aggressive enough.
And I think you being willing to ask for what you want And I think you being willing to ask for what you want and be somewhat aggressive are really important characteristics of being an entrepreneur. People don’t want to fail. They don’t want to be told no. They don’t want to end up in some crisis.
How to keep track productivity systems. So, the one I use which I actually thinks works really well So, the one I use which I actually thinks works really well is I keep one piece of paper with my goals is I keep one piece of paper with my goals for sort of a three to 12 month timeframe. And I look at that every day. And then separately I keep one page for every day of my short-term goals for that day.
And so if I need to do something in like a week I just flip forward seven pages and I write down. And then I also keep a list of every person and what they’re working on and what I need to tell them and what I need to talk to them about. What we talked about last time. So every time I sit down with someone I kind of have the full state and a list of things for that person that works really well.
Build a Great Culture
I think that there are, in addition to the interpersonal pieces, there are two other things that we really think about that make a culture great, one is momentum. So yeah, winning teams tend to keep winning and teams that take their eye off the ball and start losing, tend to keep losing. And so one of the most important jobs as the entrepreneur is to make sure the company never stops winning because it’s very difficult to dig yourself out of a hole and if you keep that going, it’s this sort of, this is ongoing. It’s this ongoing tail end.
The other thing that we see as sort of the missionary and mercenary divide. I think most cultures end up being either a mercenary culture or a missionary culture. And the great companies are always the missionary cultures. If people believe in mission, if you are sufficiently ambitious if you present people, “We’re going to make this big impact “and we’re going to reach these people “and we’re going to do this important thing. “It’s going to be great for the world.” That’s what motivates the best people.
And if you have a culture like that where you do have this ambitious important thing. It’s easy to motivate people. In many ways, it is easier to start a hard company than it is to start an easy company. More people will be excited, will have a better culture if you’re doing something that matters, if you’re doing this big thing. If you have the kind of culture where you’re telling people, “You need to get into your desk at nine and leave at nine “’cause we work 12-hour days.” People might do that for a little while but that is almost never, in fact that’s just, that is not what I have ever seen produce great results.
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