Michael McGuiness
@mikemcg0 • 17,636 subscribers
writer @a16z | creator of @startuparchive_
Videos
Q: Is it better to target a small market or a large one? In the clip below, Peter Thiel (billionaire venture capitalist and co-founder of PayPal and Palantir) describes his framework for evaluating markets: “It’s always a big mistake going after a giant market on day 1. That’s typically evidence that you haven’t defined the categories correctly, and there’s going to be too much competition.” He continues: “Almost all of the successful companies in Silicon Valley had some model of starting with small markets and expanding.” Amazon started with books eBay started with Pez dispensers and Beanie Babies PayPal started with power-sellers on eBay Facebook started with Harvard “What’s very counterintuitive about many of these companies is that they often start with markets so small that most people don’t think they’re valuable at all.” The opposite of this is companies that start out targeting really big markets, and he uses clean tech companies in 2005-2008 trying to capture a small percentage of a trillion dollar market as an example. “Once you’re a minnow in a vast ocean, that’s not a good place to be. It means you have tons of competitors, and you don’t even know who all of the competitors are.” As Thiel puts it: “You want to be a one-of-a-kind company where it’s the only one in a small ecosystem… large existing markets typically mean you have tons of competition and it’s very hard to differentiate.” You can then expand concentrically from there.
Michael McGuiness1,534,649 次观看 • 2 年前
!["I used to be a bitcoiner. The transition to a new store of value only happens once every 3,000 years. That's the main prize -- just focus on that. But [security] is the criteria that ultimately convinced me to flip from Bitcoin to ETH." "I have a higher degree of certainty that Ethereum will be around longer [than Bitcoin]. The reason for that is because Bitcoin relies on proof-of-work, which is less efficient than proof-of-stake and doesn't scale with the value of the network. And as the block subsidy of Bitcoin halves every four years, it is increasingly becoming more and more reliant on transaction fees to fund the security budget paid to miners." "If you look at [Bitcoin's] security budget right now, about 0.6% of revenue to miners is transaction fees... The problem with that is if Bitcoin becomes 'digital gold', flips gold, and becomes a $30 trillion asset, but it only costs $10-20 billion to attack it, that's too asymmetric." "You want the security budget to scale with the market cap, similar to how countries spend a % of their GDP on defense. The more valuable something is, the more you need to spend to protect it." "Ethereum, with the Merge, migrated to proof-of-stake, which is fundamentally more secure because it's less reliant on transaction fees and it scales with the value of the network. If 1/3rd of ETH is staked and then you need 1/3rd of those ETH to censor the network, you're looking at roughly 10% of the total market cap as the cost to attack the network." "So if Ethereum flips Bitcoin and gold and becomes a $30 trillion asset, it'll cost ~$3 trillion to attack the Ethereum network versus Bitcoin at like $10 billion." "The other aspect here is that as AI hyperscalers invest more and more in AI, proof-of-work becomes increasingly vulnerable because the cost to attack the Bitcoin network is starting to look close to the quarterly CapEx these hyperscalers are spending on their data centers." Full interview on Bankless with Vivek Raman discussing the new Etherealize "Productive Money" report below.](https://image.24vids.com/tw-2046586653750243712/amplify_video_thumb/2046583093507596288/img/sLmiGfDhOzumzy-4.jpg)
"I used to be a bitcoiner. The transition to a new store of value only happens once every 3,000 years. That's the main prize -- just focus on that. But [security] is the criteria that ultimately convinced me to flip from Bitcoin to ETH." "I have a higher degree of certainty that Ethereum will be around longer [than Bitcoin]. The reason for that is because Bitcoin relies on proof-of-work, which is less efficient than proof-of-stake and doesn't scale with the value of the network. And as the block subsidy of Bitcoin halves every four years, it is increasingly becoming more and more reliant on transaction fees to fund the security budget paid to miners." "If you look at [Bitcoin's] security budget right now, about 0.6% of revenue to miners is transaction fees... The problem with that is if Bitcoin becomes 'digital gold', flips gold, and becomes a $30 trillion asset, but it only costs $10-20 billion to attack it, that's too asymmetric." "You want the security budget to scale with the market cap, similar to how countries spend a % of their GDP on defense. The more valuable something is, the more you need to spend to protect it." "Ethereum, with the Merge, migrated to proof-of-stake, which is fundamentally more secure because it's less reliant on transaction fees and it scales with the value of the network. If 1/3rd of ETH is staked and then you need 1/3rd of those ETH to censor the network, you're looking at roughly 10% of the total market cap as the cost to attack the network." "So if Ethereum flips Bitcoin and gold and becomes a $30 trillion asset, it'll cost ~$3 trillion to attack the Ethereum network versus Bitcoin at like $10 billion." "The other aspect here is that as AI hyperscalers invest more and more in AI, proof-of-work becomes increasingly vulnerable because the cost to attack the Bitcoin network is starting to look close to the quarterly CapEx these hyperscalers are spending on their data centers." Full interview on Bankless with Vivek Raman discussing the new Etherealize "Productive Money" report below.
Michael McGuiness120,286 次观看 • 2 个月前
Q: What's the secret to building a great product that grows really fast? Paul Graham explains that the secret to growing really fast is to: "start with a small, intense fire." He uses Apple as an example. They started by selling just 500 Apple I computers. Today Apple is the largest company in the world. It's impossible to make something that a large number of people really want when you're just starting out. So you have to find people who want what you're building A LOT. And that's necessarily going to be a small number at first. But that's ok because that's how almost every giant company gets started. PG continues: "You have to know who those first users are and how you're going to get them. Then you're going to sit down and just have a party with those first few users and focus entirely on them and making them super super happy." Another example he draws upon is a startup in a Y Combinator batch making a new mobile email client. Their beta group had one user: Sam Altman. This startup's goal was to just make Sam happy. Sam uses email a lot on the go, knows all of the other email client options, and is super demanding. So they know that if they build a product that makes Sam happy, odds are it will make lots of other people happy too. "One of the things we tell startups in these extreme cases where they can make just one user happy is to act like a consultant. Act like Sam has hired you to make an email app just for him. All you have to do is make Sam happy--it can say 'Sam Altman' at the top of the screen. That's ok! Just so long as Sam would feel bummed if you stopped working on it. That's the test." Ultimately the secret to building a great product that grows really fast is to build something a small group of people love so much that they'd be really disappointed if you stopped working on it. There's lots of important steps to get right after this, but this is the foundation for growth. It's somewhat counterintuitive, but most of the world's largest companies (e.g. Apple, Facebook, etc.) started by building a product that made a small group of people really happy.
Michael McGuiness890,425 次观看 • 2 年前
Q: Should startups always raise as much money as possible? In the clip below, Marc Andreessen shares a framework that Benchmark co-founder Andy Rachleff taught him called "The Onion Theory of Risk". You can think of a day 1 startup as having every conceivable kind of risk: founding team risk, product risk, technical risk, market acceptance risk, revenue risk, cost of sales risk, viral growth risk, etc. A startup is basically just a long list of risks, and as Marc explains: "The way I think about running a startup is the way I think about raising money. It's a process of peeling away layers of risk as you go." You raise seed money to peel away the first two or three risks (e.g. founding team risk, product risk, initial launch risk). You raise the Series A round to peel away the next layer of risks (e.g. recruiting risk, customer risk, revenue risk, cost of sales risk) And so on. Basically, you're peeling away risk as you're achieving milestones. And as you achieve milestones, you're both: making progress on your business and justifying raising more capital. So in terms of fundraising, you should be calibrating the amount money you're raising to the risks you need to pull out of your business for you to raise your next round. For example, if you're raising your Series A round, the best way to do that is to say to investors: "I raised a seed round then achieved ____ milestones and eliminated ____ risks. Now I'm going to raise $X for the Series A to achieve ____ milestones and eliminate ____ risks. This will get the company to ____ state for the Series B round. " This seems fairly obvious, but as Marc points out, it's a much more systematic way of going about things versus just raising as much money as possible, renting fancy offices, and hiring as many people as you can to grow as fast as you can. The more money you raise, the more you dilute your ownership stake in your business so it pays to be thoughtful. Raise the capital you will need to achieve the milestones and eliminate the risks required for your next financing round. It also probably makes sense to give yourself some margin as safety because things never go exactly as planned in startup land.
Michael McGuiness735,589 次观看 • 2 年前
Q: Is it worth it to hire exceptionally talented people who don’t always work well with others? Former Google CEO Eric Schmidt argues that companies should “hire the divas”: “If you read any management textbook, it says ‘don’t hire the divas’ because they’re nothing but a pain in the ass. And by the way, they are. But the people who are the divas—who believe—are the ones who will drive the culture and company to excellence. Steve Jobs was a diva. I worked with Bill Joy who was my colleague for many years—he’s an example of a diva. And I mean this in the most flattering way: they expect a lot, they drive people hard, they’re controversial, and they care passionately. If you find those people, you’re probably going to work for one so be nice to them.” However, he does not mean that you should tolerate arrogant jerks at your company. In their book, How Google Works, Eric Schmidt and Jonathan Rosenberg use the terms “divas” and “knaves” to distinguish between who you should tolerate and who you shouldn’t: “Knavish behavior is a product of low integrity; diva-ish behavior is one of high exceptionalism. Knaves prioritize the individual over the team; divas think they are better than the team, but want success equally for both. Knaves need to be dealt with as quickly as possible. But as long as their contributions match their outlandish egos, divas should be tolerated and even protected. Great people are often unusual and difficult, and some of those quirks can be quite off-putting. Since culture is about social norms and divas refuse to be normal, cultural factors can conspire to sweep out the divas along with the knaves. As long as people can figure out any way to work with the divas, and the divas’ achievements outweigh the collateral damage caused by their diva ways, you should fight for them. They will pay off your investment by doing interesting things.”
Michael McGuiness726,779 次观看 • 2 年前
Q: Why are startup ideas worthless? In his essay Ideas for Startups, Paul Graham wrote: “startup ideas are not million dollar ideas, and here's an experiment you can try to prove it: just try to sell one. Nothing evolves faster than markets. The fact that there's no market for startup ideas suggests there's no demand. Which means, in the narrow sense of the word, that startup ideas are worthless.” Steve Jobs expands on this idea further: “There’s a tremendous amount of craftsmanship in between a great idea and a great product” A lot of people think that a really great idea is 90% of the work, but a great product idea will never turn out as originally conceived. You learn a lot from the details of building it and there are always tradeoffs you have to make. In this clip, Jobs tells the story of how a widowed man showed him a rock tumbler when he was little kid. He uses the rock tumbler and process of turning common stones into beautifully polished rocks as a metaphor for a team working really hard on something they're passionate about: "It's through the team--through a group of incredibly talented people--bumping up against each other, having arguments, having fights sometimes, making some noise, and working together... they polish each other and polish the ideas. And what comes out are these really beautiful stones." The key to building a great product is a great team, not a great idea.
Michael McGuiness667,271 次观看 • 3 年前
Q: How do you design an amazing user experience? In the clip below, Airbnb co-founder and CEO Brian Chesky explains that one route to a great UX and word-of-mouth growth is designing the perfect experience for one person: “How do you make something for a million people? I don’t know where to start. But if you pick one person, study them, and take their journey, you can actually build something really personal. You can design something and keep iterating until they love it. Don’t stop improving it until that person loves it, and you’re not allowed to move to the second person until the first person loves it. Then you get the second person and keep iterating until they love it. And so on.” As Brian argues, designing the perfect experience for one person is a much easier place to start than trying to design something for a million people. And when people truly love your service, they become your marketing department. He uses storyboarding and tries to imagine a “10-star experience” for an Airbnb check-in as an example: “A 5-star rating typically means nothing bad happened. But what if there was a 6th star?” He proposes the following ever-improving scenarios: 6 stars: You get to your Airbnb and there’s a bottle of wine and fruit waiting for you with a hand-written note 7 stars: A limo picks you up from the airport, and when you get to the house there’s a surfboard because the host knows you like surfing 8 stars: You ride back from the airport on a giant elephant and there’s a parade in your honor 9 stars: You land at the airport and there’s 5,000 teenagers cheering your name and you do a press conference in the front lawn of your Airbnb (”The Beetles Check-In”) 10 stars: Elon Musk picks you up from the airport and says “we’re going to space” The point here is that while you might not be able to create an 8+ star experience for your customers, the act of thinking through the most perfect experience for one customer and figuring out a way to scale something close to that to all of your users can help you arrive at a user experience that is truly amazing.
Michael McGuiness635,155 次观看 • 2 年前
Q: What are VCs looking for in the companies they fund? Marc Andreessen, founder of Netscape and venture firm a16z, explains in the clip below that venture capitalist business is a game of outliers: “The conventional statistics are that about 200 of the 4,000 venture-fundable companies per year will be funded by a top-tier VC. About 15 of those will someday get to $100MM of revenue, and those 15 will generate something on the order of 97% of all of the returns for the entire category of venture capital in that year.” He continues: “Venture capital is such an extreme feast or famine business. You’re either in one of the 15 or you’re not.” Most VCs are looking for extreme outliers, and when they’re evaluating your startup, they’re asking themselves if this business is one of the 15 businesses that year that will get to $100MM in revenue. One principle Marc believes helps firms invest in outliers is: invest in strength rather than lack of weakness. “The default way to do venture capital is to check boxes: really good founder, really good idea, really good product, really good initial customers. Check, check, check, check. ‘Ok this is reasonable, I’ll put money into it.’ But what you find with those checkbox deals is that they don’t have something that makes them really remarkable and special. They don’t have an extreme strength that makes them an outlier.” The takeaway for founders here is to make sure they highlight to VCs during the funding process that they have a really extreme strength across an important dimension.
Michael McGuiness587,640 次观看 • 2 年前
Q: How do you build effective teams? Keith Rabois, Founders Fund Partner and former COO of Square, has a great framework for building effective teams that he calls: “Barrels and Ammunition.” When most companies begin scaling, they just hire a lot of people. Naively, they expect that—as they add people—their velocity of shipping will increase. But startups don’t work that way, and in fact you sometimes get less done when you add more people. Keith argues that the reason for this is that most people in your company—even great people—are what he calls “ammunition.” But what you need in your company are “barrels”. He defines barrels as extremely talented people who can take ideas from inception all the way through to fully shipped product. To increase company velocity, you need to add “barrels” and then stock them with “ammunition.” Most companies start with one barrel (the founder) and then double their throughput when they add another one. In the clip below, he explains this framework and some specific tactics for identifying and managing barrels:
Michael McGuiness567,832 次观看 • 2 年前
Q: Should startup founders be able to code? In the clip below, Naval Ravikant gives advice to a startup spending $25k outsourcing product development to external developers: “You guys should be coding from the start. Web and mobile startups are so competitive right now. You have to assume that anything you’re doing, there’s a team of 2-4 dedicated, hardcore hackers working 24/7 on something extremely similar.” He continues: “If you have this iteration loop where you have to submit something to someone else and they have to come back to you. Then you’re like ‘no, it wasn’t quite right’ because a lot of stuff was lost in translation, you’re going to get 1-2 cycles per day at best. Meanwhile, that other team is getting 20 cycles per day. It has gotten so intense now that non-coding founders and startups are having a really difficult time adding value at these early stages.” Of course there are some examples of non-technical founding teams building terrific companies (e.g. Craigslist). But they seem to be the exception rather than the rule. As Sam Altman puts it in a separate interview: “For a very long time, the classic co-founding team was one very strong business person and one very strong tech person… now it has shifted towards two really strong tech people. That works a lot of the time and may be better overall.” And I think the reason for this—as Naval points out—is that when you can build the product yourself, your iteration cycles become so much faster. Another quote from Sam Altman in a previous Startup Archive Answer on the importance of fast iteration cycles: “The cycle here is basically: talk to customer to understand pain point → build product to address that → get product in front of user → see what they do → repeat cycle. This cycle is how you iterate and improve. The law of compound growth being what it is: if you can get 2% better every iteration cycle, your iteration cycle is every four hours rather than every four weeks, and you compound that over the course of a few years, you’ll be in a very very different place. Make it one of your top goals to build one of the fastest iterating companies the world has ever seen.”
Michael McGuiness509,926 次观看 • 2 年前
Q: Why is it easier to start a hard company than an easy company? In the clip below, Sam Altman tells the class at Stanford: “It’s easier to start a hard company than an easy company. Most people—especially young people—want to pick something that doesn’t sound too ambitious. They say to themselves: ‘starting a company sounds really hard. I better pick the easiest possible company.’” But as Sam explains: “Starting a company is always hard and it’s about equally hard no matter what you do. If you start a hard company though and you inspire passionate people—for example, if you are working on general AI or supersonic airplanes or nuclear power—you’ll find a lot more people who are excited about that than another derivative idea.” He elaborates on this idea even further in a blog post from four years ago: “The most precious commodity in the startup ecosystem right now is talented people, and for the most part talented people want to work on something they find meaningful… An easy startup is a headwind; a hard startup is a tailwind. If people care about your success because you seem committed to doing something significant, it’s a background force helping you with hiring, advice, partnerships, fundraising, etc.” He continues: “Let yourself become more ambitious—figure out the most interesting version of where what you’re working on could go. Then talk about that big vision and work relentlessly towards it, but always have a reasonable next step. You don’t want step one to be incorporating the company and step two to be going to Mars. Be willing to make a very long-term commitment to what you’re doing. Most people aren’t, which is part of the reason they pick ‘easy’ startups. In a world of compounding advantages where most people are operating on a 3 year timeframe and you’re operating on a 10 year timeframe, you’ll have a very large edge.”
Michael McGuiness504,007 次观看 • 2 年前
Q: How do you build a great company? In the clip below, Sam Altman walks through 9 things he has seen the best founders do: #1 Get to know your users really well “The best founders do customer support themselves. They go visit their users—in the case of Airbnb they go live with them. You want to get to know your users really really well.” #2 Have a short cycle time & understand compound growth “The cycle here is basically: talk to customer to understand pain point → build product to address that → get product in front of user → see what they do → repeat cycle. This cycle is how you iterate and improve. The law of compound growth being what it is: if you can get 2% better every iteration cycle, your iteration cycle is every four hours rather than every four weeks, and you compound that over the course of a few years, you’ll be in a very very different place. Make it one of your top goals to build one of the fastest iterating companies the world has ever seen.” #3 Make a long-term commitment “Most companies have a 2-3 year time horizon. But companies are almost always a 10 year project if they work. If you think about it that way from the very beginning, you will make very different and much better decisions. I think this is the only arbitrage opportunity left in the market. Almost no one makes a fairly long-term commitment to a new project. But if you do that, you will think in a different way, you will hire different people, and it will work very well.” #4 Stay lean until everything is working really well “In the early days, when you’re experimenting and zig zagging, you’re like a fast little speed boat and want to be able to turn the whole company on a dime. You can’t do that if you’re a big company—cash burn aside, which is another problem. The flexibility of the company basically decreases with the square of the number of employees, so you want to stay really small until you’re sure things are working. Once things are working, then you can get really big.” #5 Resist the urge to hire; especially resist the urge to hire mediocre people “Vinod Khosla has a saying that I love: ‘the team you build is the company you build.’ This is really true and I never appreciated how true this was for a long time. If you build a team of great people and you have a product that people love, you’ll have a 90%+ chance of success. Those are both really hard to do, and they’re independent variables. But don’t ignore the team component. The best CEOs I know spend huge amounts of their time recruiting and retaining good talent.” #6 Relentless execution “You have to keep going, and do things perfectly, and get all of the details right. You have to care too much about every experience that a customer has with your company.” #7 Startups are about not giving up “One of the very best companies in the last YC batch applied 7 times before they got in. This is just a version of what happens in startups all of the time: you get beat down, again, and again, and again. And that last time when you get pushed down and don’t think you have enough energy to get back up—that’s the time it actually works. This is what you sign up for if you’re going to start a startup.” #8 Fiduciary duty to take care of yourself “This is a 10 year marathon and you have a fiduciary duty to your shareholders to take care of yourself. Some people treat startups like an all-nighter: they don’t take care of their health, they don’t sleep, they don’t maintain their personal relationships. It is true that startups are a bad choice for work-life balance. But you have a duty to yourself, your team, and your investors to take care of yourself.” #9 Clear mission “You don’t have to figure this out on Day 1, but all of the most successful startups I’ve been fortunate enough to be a part of pretty quickly—in the first one to two years—figure out a really important mission. It’s this mission that gets people to join them. It drives the founders. It gets the media to write about them. And even if you start off building a project that’s just interesting to you and solves a problem in your life—which is how you should start—remember that you should have a clear mission at some point… That is what will convince people to come help you, and that is how you will build this idea into a huge company with a ton of people that really love your product.”
Michael McGuiness500,017 次观看 • 2 年前
Q: What's your favorite counterintuitive startup advice? In this interview clip, Mark Zuckerberg shares the best piece of advice Peter Thiel ever gave him: "In a world that's changing so quickly, the biggest risk you can take is not taking any risk." Whenever you're in a position where you have to make a big shift in the direction of the company or product, people will always point to the downside risks of that decision. Mark explains: "they may be right locally... but in aggregate, if you are stagnant and don't make those changes, I think you're guaranteed to fail."
Michael McGuiness505,837 次观看 • 2 年前
Marc Andreessen explains why warm referrals to venture capitalists are important As Marc explains in the clip below: “The way the top-end venture capitalist firms work is they’ll basically take you seriously if you come in introduced by somebody they’ve worked with before, and they won’t take you seriously if you don’t.” While this may seem unfair, Marc explains that securing a warm referral should be viewed as your first test: “It’s the first test of your ability to network your way to the investor… If you can’t figure out a way to network your way to a VC firm—which of course is in the business of meeting founders—then you’re unlikely to be able to network your way into hiring a great team or selling your product to customers.” He concludes: “The role of the warm referral is misinterpreted. I think you just need to view it as the first test, and it’s a test that you just want to pass.”
Michael McGuiness451,245 次观看 • 2 年前
Sam Altman on How to Get Your First 100 Users In the clip below, Sam Altman walks through four common strategies to get your fist 100 users in order of best to worst: 1. Use your network. Email everyone you know and call in favors from anyone you can think of. But if it’s a paid product, make sure you charge them. “People who are inclined to do you favors are going to be too nice in what they tell you. So if it’s a paid product, charge them.” 2. Research people who might use your product and email them asking them to try it. “Conversion rates are low—maybe 2-3%—so you’ll have to reach out to more people. But you can send targeted emails saying ‘Hey, I just made this new product. I’d really appreciate if you would try it out.’ Most people want to be helpful.” 3. Social media outreach, posting to HN, forums, PR, etc. “The important thing to look for here is a traffic source that is sustainable rather than one big pop that then promptly goes away.” Airbnb is an example of a company that made PR work as an ongoing process—they were able to come up with press stunt after press stunt. But it’s hard. 4. Buy ads and point them at your website. “This is the ‘laziest’ and least impressive thing you can do… This is not what I’d recommend. I don’t know of any startup that has gotten big starting this way. I include it because it’s the idea that most people try.” This may sound basic, but I think this advice is important. Getting your first 100 users is mostly hard work. As Sam puts it: “Everyone thinks they’re going to put up this website, tell one person about it, and it’s going to take off like wildfire. But that’s not what usually happens.” For a more detailed guide on customer acquisition, I’d recommend the book Traction by Gabriel Weinberg (founder & CEO of DuckDuckGo). It walks through nineteen channels you can use to build a customer base, and offers a framework to figure out which ones will work best for your business.
Michael McGuiness401,843 次观看 • 2 年前
Q: Best advice for someone interested in startups who is about to enroll in or graduate from college? Here’s Marc Andreessen’s advice from 2016: “If I’m 22 again, I think what I do is I go try to find the company in the Valley that’s growing the fastest, has a really good culture, and a really good foundation for training. An example of that would be an Airbnb, but there are many others. I would go plant myself at a company where I can really learn. I spend my time working my butt off so that I can establish a good reputation so that when people reference check me, I reference check well. But I also spend that time thinking and I really critically spend that time building my network and finding people I know I want to work with down the road. And then I either come up with an idea or I don’t.” He also gives advice for people just enrolling in college: “If I was 18 and going to college right now, I would do computer science again in a heartbeat. And then I would either focus on: #1 distributed systems and the broad domain of cryptocurrency; #2 AI & machine learning; or #3 intersection of biology and computer science—so genomics and synthetic biology. Personally I would do one of those three areas, and the hard part for me would be picking between them because I think all three of those are going to have transformative work happen in the next 20 years. They’re going to change a lot about how the world works.”
Michael McGuiness332,139 次观看 • 2 年前
Q: Why is company culture important? In the clip below, a16z cofounder Ben Horowitz argues that culture drives how people in your company behave on a daily basis—and particularly, how they behave when you’re not looking. Is that phone call so important I need to return it today or can it wait until tomorrow? Can I ask for a raise before my annual review? Is the quality of this document good enough or should I keep working on it? Do I have to be on time for that meeting? Should I stay at the Four Seasons or the Red Roof Inn? Should I go home at 5 p.m. or 8 p.m.? Should we discuss the color of this new product for five minutes or thirty hours? If I know something is badly broken in the company, should I say something? Whom should I tell? Is winning more important than ethics? None of these things are in your mission statement or OKRs, but they determine many important things for your company, such as how people experience your company, what you’re like to do business with, what your company is like to work at, etc. And as Ben describes, what drives the culture is all of the little behaviors and cues people take on: “this is what I have to do to succeed in this company.” Culture can feel abstract and secondary when you pit it against a concrete result that’s right in front of you, but it’s a strategic investment in the company doing things the right way when you are not looking. It’s the set of assumptions your employees use to resolve the problems they face every day. It’s how they behave when no one is looking. If you don’t methodically set your culture, then two-thirds of it will end up being accidental, and the rest will be a mistake. If you’re looking for a more in-depth guide to culture and how to build a great one, I’d recommend Ben’s book: What You Do Is Who You Are.
Michael McGuiness180,634 次观看 • 2 年前
Q: How do I know if my startup is working on a worthwhile problem? Former Google CEO Larry Page uses a simple framework called "The Toothbrush Test" to decide whether he likes a business. He asks himself if the product is, like a toothbrush, "something you will use once or twice a day." Y Combinator CEO Michael Seibel has a similar framework for assessing whether or not a startup is working on a good problem. As he explains in the clip below, it's extremely important to analyze the frequency and the intensity of the problem you're solving for the customer. He uses a car shopping website as an example. A lot of founders will think that their customer here is the person buying a car. But the problem with that is most people keep a car for 7 years. As he points out: "What happens if I told you I was going to create a startup and if my customer absolutely loves me, they're going to come back 7 years from now?" Probably not a great startup idea. This is why a lot of car buying websites are not built for the person shopping for a car--that person doesn't have the problem very often. They're actually built for the person selling the car, because that person has a problem every day. When you're assessing a startup idea, you want to do a frequency and intensity analysis of the problem. If you have an infrequent and low-intensity problem that you're trying to solve, you're going to have a hard time getting a lot of customers interested in even talking to you. All things equal, it's better for the problem you're solving to be higher-frequency and higher-intensity. Take Uber for example. Usually, when you need to go somewhere (e.g. work, doctor, pick up your kids, etc.), it's a pretty intense problem--so intense that people will spend $20,000 on a car to solve this problem. And then when you think about frequency: how often do you move more than walking distance every day? Probably a lot. Uber is clearly working on a worthwhile problem. If the problem your customer has is high-intensity and happens frequently, there's probably a good business to be built there.
Michael McGuiness162,983 次观看 • 3 年前
Q: How do you decide which customers to listen to? As Superhuman founder & CEO Rahul Vohra puts it: “In a world where you’re drowning in feedback—and most startups are drowning in feedback—you have to filter it down to only the stuff that’s going to increase the number of people who fall in love with your product.” Most startups will listen to all feedback from on-the-fence customers, but this isn’t targeted enough and will often lead to a muddled, incoherent product. As Rahul argues in the clip below, you need to identify the main benefit of your product—for Superhuman this was speed. And then focus on the feedback of on-the-fence users who also view this as the main benefit—there’s often something small holding them back. Users for whom your main benefit does not resonate (e.g. Superhuman users who value offline capabilities rather than speed), are unlikely to ever fall in love with your product. When Superhuman ran this analysis in 2015, they found that the main thing holding back users who viewed speed as the main benefit was their lack of a mobile app. Probing further, they found some less obvious and more interesting requests, such as integrations, attachment handling, calendering, unified inbox and read receipts. With a clear understanding of their main benefit and missing features, they were able to move this cohort of users from on-the-fence into the territory of enthusiastic advocates. As Rahul puts it in his Product Market Fit Engine article: “To increase your product/market fit score, spend half your time doubling down on what users already love and the other half on addressing what’s holding others back.” But make sure you’re focusing on users who love the main benefit of your product. Users who don’t are unlikely to ever fall in love with your product.
Michael McGuiness89,872 次观看 • 2 年前
Q: Does my startup need a business plan? In this clip from the Acquired podcast, NVIDIA founder & CEO Jensen Huang shares that he had no idea how to write a business plan when he first started the company. However, he believes business plans can be useful for teasing out important ideas before making the leap: “I think that the art of writing a business plan ought to be much, much shorter. It should force you to concisely answer: What is the problem you’re trying to solve? What is the unmet need you believe will emerge? And what is it that you’re going to do that is sufficiently hard that when everybody else finds out it’s a good idea, they’re not going to swarm it and make you obsolete?” Marc Andreessen echoes similar points in a separate interview: “The process of planning is very valuable for forcing you to think hard about what you’re doing, but the actual plan that results from it is probably useless. In particular, now that we’re VCs, we’re evaluating pitches and when people come in, we want to hear their plan and we want to hear it in some detail because we want to see that they can think about the entire thing end-to-end. And if their initial plan doesn’t make sense, then obviously there’s an issue because they’re not quite capable of fully thinking this through. But when you get somebody who comes in and they present you the perfect plan and everything is fully integrated and makes sense, all you know from that is that they can come up with a good plan—which is good! But the odds that will be the plan they succeed on is still very small.” In a Twitter thread last year, Paul Graham wrote: “I have never read a business plan or a balance sheet… The reason I don’t care about business plans is that I can learn more from 5 minutes of interrogating the founders than from 10 pages of fluff they’ve written.” The takeaway here is that plans are valuable but you probably shouldn’t spend six months writing some long document with extensive financial forecasts before getting started. Instead, concisely define the problem you’re trying to solve—ideally this is a problem you’ve experienced personally or have some connection to. Talk to potential customers to validate your core assumptions—is this problem even real or worth solving? And think hard about what makes you uniquely qualified to work on this problem and what your competitive advantage might be versus other entrepreneurs in your space. This is your business plan. Write it down if you need to—writing can be a good forcing function for clear thinking—but you don’t need an extensive, formal document with forecasts. The plan will probably change before the ink is dry. Your time will be better spent shipping a quick MVP to see if you can actually solve this problem for just one person. Once you have your first customers of any kind, you have a startup.
Michael McGuiness83,436 次观看 • 2 年前