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Sam Altman on the Three Tasks of a Startup CEO

950Points

4 years ago

Y Combinator’s president Sam Altman was undoubtedly one of the most prominent speakers at PlatziConf Mexico 2015. The focus of his talk was starting a startup, which also called to mind the class he gave on Platzi earlier this month (which you can still watch here).

According to Altman, Y Combinator has seen so many startups that it is starting to identify what differentiates the best ones and their CEOs from the rest of the pack.

Perhaps more importantly, we can all learn from these leaders and how they do their job as startup founders. Altman’s advice was addressed to anyone who has started a startup or is thinking about doing so. He started by listing what he described as the 3 essential tasks of a startup CEO, before sharing some tips on how to perform them successfully. Here’s a summary of his talk:

Task #1: Build a product that users love

One of the most important lessons that Y Combinator tries to teach is that it’s better to build something a few people love that something lots of people like (and yes, you have to choose between both). As an early-stage startup, you want to have a product users will miss if it goes away, Altman explained.

Task #2: Figure out how you are going to grow

There are lots of things that could work for growth… but the best way to grow takes us back to Task #1: build something people love. If you do that, you don’t really need growth hacks, because your users are going to recommend your product to their friends, and referral is a great growth strategy.

Task #3: Make sure you going to stay a winner if you win

Think about this when you first pick an idea to work on. Why? Because it takes so much work to win in the first place, that you want to have some competitive advantage or network effect or monopoly that means your position won’t be constantly challenged once you win.

On that point, Altman made a reference to PayPal founder and now YC partner Peter Thiel, who **recommends to ““always build a monopoly.””**

Check out his full talk for more lessons and tips:

###How to prevent your startup from dying

Having ‘only’ three things to do may sound simple, but it actually takes a lot of focus. The best predictor of startup success can be summed up in 2 words: ““Focus and intensity.”” The best startups operate at a different speed, and talk about the things they will do ‘in the next 4 hours,’ not ‘months,’ Altman pointed out.

Altman has also learned over time that startups seldom die at the end of a competitor. Instead, most of them ‘commit suicide.’ Their biggest killer? Team problems, which is why it is so important to hire and fire well (with emphasis on the latter, because it is so hard.)

In the words of Altman, the second biggest startup killer is overspending, which can also mess up your culture. Be frugal, and you won’t put yourself at the mercy of investors.

###How to find your startup idea

One of the key differences between the best and the rest is the very idea winners are based on — but perhaps not for the reason you think. As a matter of fact, Altman believes the best startup ideas are counterintuitive, and you should contemplate this if you are about to start your own venture.

Altman used Airbnb as an example of ideas that didn’t necessarily spell success; ““stay on a stranger’s couch”” wasn’t an obvious sell, but it worked! Here’s a diagram that sums up his point of view:
Venn Diagram on how to find a great startup idea

The ‘magic zone’ lies in the middle, with ideas that sound bad enough for big companies not to pursue them, and which are actually good.

###Beyond Silicon Valley

At Platzi, we also want to highlight some of Altman’s advice that will be particularly useful to you if you are not in Silicon Valley:

  • Remember that all startups are broken on the inside. All startups have problems, so don’t feel like an impostor because yours does too.

  • Ignore people who say your idea is bad, which will happen more often outside of Silicon Valley. They may be right… but the only way to know is to build it.

  • Work on a problem you know very well (or have); that’s what the best founders do — which takes us to Altman’s last point:

  • Don’t constraint yourselves with thinking you have to build a version of a startup that worked in the US. A startup can be born anywhere and still succeed; so why build a ““Uber for Latin America”” when you can start something new that solves a problem in your market and take over the world?

  • If the above sounds like your startup, don’t hesitate to apply to Y Combinator!

*Keep in mind that Sam Altman’s advice is based on what Y Combinator has learned from backing startups such as Airbnb, Dropbox and Reddit when they were still in their early days."

Anna
Anna
@annaheim

950Points

4 years ago

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