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Lessons Learned

Do you know the domain?

Y Combinator (the world’s most powerful start-up incubator), have invested in companies including; Dropbox, Airbnb, Stripe, Reddit, Zenefits, Instacart and Weebly. Since 2015, Y Combinator have funder over 1,500 startups. The lessons learned from those startup experiences include:

  1. Expertise is not what you need to succeed in a startup. What you should really do is get to know the domain (industry structure, market space, business processes and use cases), within which you are operating, and cultivate expertise on that domain and its users.
  2. If a founder follows their instincts, those instincts will frequently lead you astray. When you are about to make an important decision… or mistake, always remember to stop, take a deep breath and remember this rule.  
  3. Gaming-the-system’ (bending the rules, abusing, cheating, milking, playing, or working the system) does NOT work in a startup. There are only users, and users only care about what they want, and if your offering meets their needs.  
  4. Startups have a 25 hour workday, and will consume everything you have to give. In other words, the startup will take over your life. There is a serious opportunity costs (cost incurred by not enjoying benefit of second best choice), and there is no glory for most startups, it never gets easy, and the nature of problems encountered during the journey change every minute, hour and day…
  5. When making the decision to start, you can only guess as to what the outcome will be. Furthermore, there is no, or very little, correlation between the attitude of the founder, and how things will play-out.
  6. Do not try to simply think of ideas. A better method is to take a step back from the obvious. The very best ideas are often a result of founder side projects (a hobby, a passion…) and frequently those side projects are outlier ideas (disruptive, abstract ideas etc.).
Source: Paul Graham (Y Combinator)

Before Starting (4:30)

Paul Graham

The counter-intuitive parts of startups.

NOTE: video starts & stops at pre-assigned times

Perfect Pitch

Pitch: An improvisational conversation in which attitude and mindset matter more than business fundamentals.

Creating a pitch early on in your idea development can be a good way to refine that idea. Prof. L. Balachandra (Babson College), has spent almost 10 years of research capturing what happens in pitch meetings. Here is a summary of her findings.

Pitch

  1. Conventional wisdom says that ‘passion’ is a positive attribute. However, people (investors), judging a pitch prefer a calm demeanor (they equate calmness with leadership strength).
  2. Interest in a start-up (by pitch judges), was driven less by judgments that the founder was competent, than by perceptions about character and trustworthiness. Because investors often work closely for several years with entrepreneurs, they are seeking evidence that their new partners (founders) will behave in an honest, and straightforward way.
  3. Most angel investors are experienced entrepreneurs who want to be hands-on mentors, so they prefer investments where they can add value (founder must be receptive to feedback, and have the potential to be a good protégé).
  4. Gender alone doesn’t influence success, however people with a high degree of stereotypically female behavior were less likely than others to succeed at pitching (if you’re overly emotional or expressive, you should consider practicing to avoid those behaviors).
Source: L. Balachandra and A. Corbett, Harvard Business Review
Source: Paul Graham (Y Combinator)

Navigating the Journey

  1. You will not, and cannot with 100% certainty, know if you should start a startup!
  2. Take Action, rather than just going through the motions or mechanics of starting a startup (‘Playing House’).

Pitch Example: Y Combinator

Unbabel have raised $15 million since being founded in 2013.
Investors include; Google Ventures, Notion Capital and Caixa Capital.

ACTIVITY

Pitch Beta

This is a good time to create your very first Pitch for your startup idea! Take the time now to write down the script for a 2:00 minute pitch. Below are some ideas on the content of that pitch.

  1. Say what you’re actually doing as soon as possible.
  2. Begin with a description that’s gripping but narrow.
  3. Focus on what your product does and why it’s great.
  4. Discuss the important problem you are solving, and not so much about the business model.
  5. Write a short Pitch script for your startup idea:
  6. You must believe your startup has promise (confident).
  7. You need to convince people that you’re smart and that you’re onto something good.
  8. Specific numbers are good (test results etc….not market size estimates).
  9. Tell stories about users.

Write Your Beta Pitch Now!

Source: P. Graham (Y Combinator)

Course Curated By: Dr. G. Danford

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