February 2009
One of the things I always tell startups is a principle I learned from Paul Buchheit: it's better to make a few people really happy than to make a lot of people semi-happy.
I was saying recently to a reporter that if I could only tell startups 10 things, this would be one of them.
Then I thought: what would the other 9 be?
When I made the list there turned out to be 13:
A principle from Paul Buchheit: it's better to make a few people really happy than a lot of people semi-happy. Asked for ten such things, the list ran to thirteen.
I always tell startups a principle from Paul Buchheit: better to make a few people really happy than a lot semi-happy. Asked for ten such things, I sat down and the list turned out to be thirteen.
1. Pick good cofounders.
Cofounders are for a startup what location is for real estate.
You can change anything about a house except where it is.
In a startup you can change your idea easily, but changing your cofounders is hard. [1] And the success of a startup is almost always a function of its founders.
2. Launch fast.
The reason to launch fast is not so much that it's critical to get your product to market early, but that you haven't really started working on it till you've launched.
Launching teaches you what you should have been building.
Till you know that you're wasting your time.
So the main value of whatever you launch with is as a pretext for engaging users.
3. Let your idea evolve.
This is the second half of launching fast. Launch fast and iterate.
It's a big mistake to treat a startup as if it were merely a matter of implementing some brilliant initial idea.
As in an essay, most of the ideas appear in the implementing.
Cofounders are for a startup what location is for real estate: you can change your idea easily but not your cofounders, and success is almost always a function of the founders.
Launch fast — not because early market matters, but because you haven't really started working until you've launched, which teaches you what you should have been building.
Then let your idea evolve. As in an essay, most of the ideas appear in the implementing.
Pick good cofounders — the one thing you can't change. Launch fast, because you haven't really started until you've launched. Then let the idea evolve: most of the ideas appear in the implementing.
4. Understand your users.
You can envision the wealth created by a startup as a rectangle, where one side is the number of users and the other is how much you improve their lives. [2] The second dimension is the one you have most control over.
And indeed, the growth in the first will be driven by how well you do in the second.
As in science, the hard part is not answering questions but asking them: the hard part is seeing something new that users lack.
The better you understand them the better the odds of doing that.
That's why so many successful startups make something the founders needed.
5. Better to make a few users love you than a lot ambivalent.
Ideally you want to make large numbers of users love you, but you can't expect to hit that right away.
Initially you have to choose between satisfying all the needs of a subset of potential users, or satisfying a subset of the needs of all potential users.
Take the first. It's easier to expand userwise than satisfactionwise.
And perhaps more importantly, it's harder to lie to yourself.
If you think you're 85% of the way to a great product, how do you know it's not 70%?
Or 10%?
Whereas it's easy to know how many users you have.
Understand your users. Wealth is a rectangle: users times how much you improve their lives. The second dimension is what you control most, and it drives the first. The hard part is seeing what users lack — why startups so often make what founders needed.
Better to make a few users love you than a lot ambivalent: satisfy all the needs of a subset, not a subset of everyone's. It's easier to expand userwise than satisfactionwise.
And it's harder to lie to yourself. If you think you're 85% of the way to a great product, how do you know it's not 70%? Whereas it's easy to know how many users you have.
Wealth is a rectangle: users times how much you improve their lives. The second dimension drives the first, and the hard part is seeing what users lack. Make a subset love you rather than everyone ambivalent — it's harder to lie to yourself about love than progress.
6. Offer surprisingly good customer service.
Customers are used to being maltreated.
Most of the companies they deal with are quasi-monopolies that get away with atrocious customer service.
Your own ideas about what's possible have been unconsciously lowered by such experiences.
Go out of your way to make people happy.
They'll be overwhelmed; you'll see.
In the earliest stages of a startup, it pays to offer customer service on a level that wouldn't scale, because it's a way of learning about your users.
7. You make what you measure.
I learned this one from Joe Kraus. [3] Merely measuring something has an uncanny tendency to improve it.
If you want to make your user numbers go up, put a big piece of paper on your wall and every day plot the number of users.
You'll be delighted when it goes up and disappointed when it goes down.
Pretty soon you'll start noticing what makes the number go up, and you'll start to do more of that.
Corollary: be careful what you measure.
Offer surprisingly good customer service — customers used to quasi-monopolies will be overwhelmed. Early on it pays to offer service that wouldn't scale, a way of learning about users.
You make what you measure: merely measuring something tends to improve it. Plot your user numbers on the wall daily and you'll notice what makes them rise.
Customers expect atrocious service, so make yours surprisingly good — do things that don't scale, since it's a way of learning about your users. And you make what you measure: merely tracking a number tends to improve it.
8. Spend little.
I can't emphasize enough how important it is for a startup to be cheap.
Most startups fail before they make something people want, and the most common form of failure is running out of money.
So being cheap is (almost) interchangeable with iterating rapidly. [4] But it's more than that.
A culture of cheapness keeps companies young in something like the way exercise keeps people young.
9. Get ramen profitable.
"Ramen profitable" means a startup makes just enough to pay the founders' living expenses.
It's not rapid prototyping for business models (though it can be), but more a way of hacking the investment process.
Once you cross over into ramen profitable, it completely changes your relationship with investors.
It's also great for morale.
Spend little. The commonest failure is running out of money, so cheapness is almost interchangeable with iterating rapidly — and it keeps companies young the way exercise keeps people young.
Get ramen profitable — just enough to pay the founders' living expenses. It hacks the investment process: crossing over completely changes your relationship with investors.
Be cheap — most startups die by running out of money, so cheapness is almost interchangeable with iterating fast, and it keeps a company young. And get ramen profitable, just enough to cover the founders' living expenses, which transforms your relationship with investors.
10. Avoid distractions.
Nothing kills startups like distractions.
The worst type are those that pay money: day jobs, consulting, profitable side-projects.
The startup may have more long-term potential, but you'll always interrupt working on it to answer calls from people paying you now.
Paradoxically, fundraising [blocked] is this type of distraction, so try to minimize that too.
11. Don't get demoralized.
Though the immediate cause of death in a startup tends to be running out of money, the underlying cause is usually lack of focus.
Either the company is run by stupid people (which can't be fixed with advice) or the people are smart but got demoralized.
Starting a startup is a huge moral weight.
Understand this and make a conscious effort not to be ground down by it, just as you'd be careful to bend at the knees when picking up a heavy box.
12. Don't give up.
Even if you get demoralized, don't give up [blocked].
You can get surprisingly far by just not giving up.
This isn't true in all fields.
There are a lot of people who couldn't become good mathematicians no matter how long they persisted.
But startups aren't like that.
Sheer effort is usually enough, so long as you keep morphing your idea.
13. Deals fall through.
One of the most useful skills we learned from Viaweb was not getting our hopes up.
We probably had 20 deals of various types fall through.
After the first 10 or so we learned to treat deals as background processes that we should ignore till they terminated.
It's very dangerous to morale to start to depend on deals closing, not just because they so often don't, but because it makes them less likely to.
Avoid distractions, especially the ones that pay: day jobs, consulting, side-projects. Even fundraising [blocked] is this kind of distraction.
Don't get demoralized. Behind running out of money, the real cause is usually lost focus. A startup is a huge moral weight; refuse to be ground down, as you'd bend at the knees lifting a box.
Don't give up — you can get surprisingly far by just not giving up. Some never become good mathematicians however long they persist, but startups aren't like that: sheer effort suffices, so long as you keep morphing your idea.
Expect deals to fall through. The skill we learned from Viaweb was not getting our hopes up — we treated deals as background processes to ignore till they terminated. Depending on them closing makes them less likely to close.
Avoid distractions, especially the ones that pay — even fundraising. Don't get demoralized; starting a startup is a moral weight, so bend at the knees. Don't give up — in startups, unlike math, sheer effort usually suffices if you keep morphing. And expect deals to fall through.
Having gotten it down to 13 sentences, I asked myself which I'd choose if I could only keep one.
Understand your users.
That's the key.
The essential task in a startup is to create wealth; the dimension of wealth you have most control over is how much you improve users' lives; and the hardest part of that is knowing what to make for them.
Once you know what to make, it's mere effort to make it, and most decent hackers are capable of that.
Understanding your users is part of half the principles in this list. That's the reason to launch early, to understand your users.
Evolving your idea is the embodiment of understanding your users.
Understanding your users well will tend to push you toward making something that makes a few people deeply happy.
The most important reason for having surprisingly good customer service is that it helps you understand your users.
And understanding your users will even ensure your morale, because when everything else is collapsing around you, having just ten users who love you will keep you going.
Which would I keep if I could only have one? Understand your users. The essential task is to create wealth; the dimension you control most is improving users' lives; the hardest part is knowing what to make. After that it's mere effort.
Understanding your users underlies half this list: it's why you launch early, what evolving your idea embodies, the point of good customer service. It even guards your morale — ten users who love you keep you going when everything collapses.
Asked which sentence I'd keep, I chose: understand your users. The essential task is creating wealth, the dimension you control most is improving users' lives, and the hardest part is knowing what to make. Understanding your users underlies half this list.
[1] Strictly speaking it's impossible without a time machine.
[2] In practice it's more like a ragged comb.
[3] Joe thinks one of the founders of Hewlett Packard said it first, but he doesn't remember which.
[4] They'd be interchangeable if markets stood still. Since they don't, working twice as fast is better than having twice as much time.
Changing cofounders is impossible without a time machine. The rectangle is really more like a ragged comb. Joe credits an HP founder with "you make what you measure." Cheapness and speed would be interchangeable only if markets stood still — so working twice as fast beats twice the time.
Footnotes: changing cofounders needs a time machine; the rectangle is really a ragged comb; Joe credits an HP founder; cheapness and speed would be interchangeable only if markets stood still.