Startup & Founders

Just in time for the new year offering us all the opportunity to getting your priorities straight, Sam Altman, CEO of OpenAI, offers a series of insightful principles and advice for success in business with "What I Wish Someone Had Told Me"

Sam’s perspective is so valuable because he is emphasizing a blend of optimism and vision, pragmatism and self-belief, a balance of calmness and urgency, and the importance of human elements and long-term orientation for business success.

From YC Founder to YC President to OpenAI CEO

In his post, Altman emphasizes the importance of long-term orientation in business, suggesting that one should not be overly concerned with short-term perceptions and that this perspective becomes easier to maintain over time. He advocates for audacious ideas, noting that challenging tasks are more motivating for teams than simpler tasks. He also highlights the power of incentives, the need for clear, concise communication, and the importance of fighting against bureaucracy and inefficiency.

Additionally, Altman underscores the significance of recruitment, stressing the importance of taking risks on individuals with high potential and a rapid rate of improvement. He advocates for fast iteration, where quick corrections can compensate for initial errors, and suggests that while plans should be long-term, execution should be swift.

Altman warns against fighting the fundamental laws of business and notes the unpredictable qualities that emerge as a business scales. He also discusses the 'magic' of compounding exponentials, especially in building a business that gains compounded advantages with scale.

Finally, Altman reflects on the value of working with great people, considering it one of the best aspects of life. His post is a result of his experiences and learnings, particularly relevant after a tumultuous year at OpenAI.

Balancing the needs of customers while staying true to the original product vision is a critical and challenging aspect for any founder. This dilemma often leads to the unspoken question "How do I adapt my product based on customer feedback without losing sight of my original vision?"

This is a tough spot indeed. On one hand, customer feedback is invaluable for creating a product that truly meets market needs. On the other hand, there's a risk of straying too far from the initial vision and unique value proposition that made the product special in the first place.

A key part of navigating this is to have a clear, yet flexible, vision. It’s about understanding which parts of your vision are core and non-negotiable, and which parts can be adapted or evolved based on customer input. Regularly revisiting and refining your vision based on real-world insights is crucial. Also, it's important to identify the right customers to listen to. Not all feedback is equal, and focusing on feedback from your target market or ideal customer profile is essential. What's your take on this balance? Are there specific strategies or approaches you've considered or found effective in your experience?

The question "What if I'm not the right person to lead this venture?" is a profound concern for many founders. It touches on self-doubt and the fear of not being adequate for the role. This worry often stems from the immense pressure founders face to succeed, coupled with the high stakes of leading a startup. Founders worry about their leadership skills, industry expertise, or ability to make tough decisions. It's not just about managing the business but also leading a team, pleasing investors, and fulfilling customer expectations. The pressure can be intense, especially in a fast-paced and ever-changing business environment. This kind of self-doubt is common, and it's important for you as a founder to address these feelings. Seeking mentorship, continuously learning, and building a strong support network can help. It's also crucial to recognize that no leader has all the answers and that making mistakes is part of the journey. What are your thoughts on this? Have you experienced similar feelings in your ventures?

There are these tempting startup ideas that you would better leave unpursued or pivoting away from fast.

Dalton Caldwell and Michael Seibel discuss these seemingly irresistible startup ideas that are almost too good to be true—and that's precisely why they likely are—or are they?

They are too good to be true because they might be so called tarpit ideas. Ideas that seem obviously awesome at first, but even appearing to be fantastic opportunities to many, they harbor deep-seated issues that could doom entire venture.

Therefore, you must have compelling reasons to pursue these apparent gold rush opportunities. Tarpit ideas metaphorically represent all projects that ensnare you in situations where you expend significant effort but achieve minimal progress.

I find these ideas fascinating because it often seems not to be the technological advancement that keeps great developments from happening, but rather human factors, as we discuss in the startup idea examples.

Perhaps my interest sometimes appears as default skepticism, but I am genuinely eager to explore these ideas and delve into (yes, I said it…) the crucial question of “Why now?”.

Don’t shy away from the fact that very smart, very well-funded, very determined teams have tried them before. Maybe now is just the right point in time for the idea to find its fitness.

Arguably the best job ad in the world? Comes from Extropic in a very straightforward way.

"Yes, but Bastian, a sexy startup has no shortage of skilled specialists".

It's not a sexy ad either.

Because, curious people want to work on interesting problems - not on boring tasks that a computer could do but you refused to invest in.

And how do you spark curiosity?

By making an engaging video.

A good video has nothing to do with effects, VFX and SFX, or quick cuts that make you and your applicants feel nauseated as if you've just been on a rollercoaster.

A good video needs a compelling theme.

A theme that captivates its target audience AND people who think "Oh, Charlie might be interested in this topic and they probably haven't heard of it yet so I am going to tell them about it…"

"That's an exciting topic!", even I thought to myself, who understands nothing of what the founders are discussing. Even though we were once invited by the researchers at Fraunhofer IAF to find out first-hand how research is being conducted at the bleeding-edge of III-V semiconductors. So yes, I may know a bit more about semiconductors than the average person on the interwebs. But I didn't study physics, computer science nor electrical engineering.

“A good video is all about an interesting topic told well and without cliches,” as Niko likes to say.

How do you make a great video?

IMHO: The easiest way is to simply explain it.

Explain it to an interested layperson.

Just like Guillaume Verdon and Trevor McCourt explain it to Garry Tan. Garry is asking these questions that we’d like to ask Guillaume and Trevor ourselves. And questions that the right applicant might be able to ask them very soon themselves.

The entire video leads with “what ground-breaking thing is going on here?”

Not the fact that they're going from stealth startup to launch.

Not the fact that Verdon’s anonymous X account had been "doxed" by the New York Times.

But the fact that they were able to keep my attention for 10 minutes, despite it quickly became clear that it was a recruitment video, makes it... arguably the best job ad in the world.

Last week I talked about the best product demo in the world.

This week I talked about the best job ad in the world.

If you don't want to miss anything "best in the world", subscribe now and click the like button.

Deep Inside the Minds of YC Leadership

Listening to the new YC Partner Podcast feels like being a fly on the wall within the pulsating heart of Silicon Valley.

It's as if you're privy to the very essence of the moment, tuning into conversations that resonate with the immediacy of the now.

The discussions unfurl topics that have likely been thoroughly explored in similar circles, hinting at a familiarity and depth only insiders possess.

Yes, the dialogue is moderated, and to the participants, it might tread over well-worn paths.

Yet, what captivates us are the underlying principles they navigate, principles that echo Paul Graham's essays and the inevitable intersection of business minds and administrative forces—highlighting a path to success that doesn't always necessitate their early involvement. Success, they imply, can be as simple as creating something remarkable.

YC has a long standing history shared their knowledge not just in essays and YC Startupschool and Garry Tan becoming a YouTuber.

But this time is different. It feels much more like in the present, they are talking about the now and the principles are the underlying truths, not the stars of the show. It seems they have become a media company not just a school where they as the professors graduate their students with a multi-million dollar evaluation on Demo Day.

This essence of being that proverbial fly, listening in on conversations that flow as naturally to them as breathing, offers a unique perspective.

It's exhilarating to be part of a dialogue that embodies the optimism of a generational shift, the dawn of the AI Age.

This confidence, this shared optimism, provides a comforting reassurance that my own aspirations aren't misplaced, even if they seem to be navigating the future with a six-month lead.

Reid Hoffman's lecture at Stanford's CS 183 provides a valuable introduction into the concept of “Blitzscaling”, particularly in the context of Silicon Valley's startup culture.

The Premise of Blitzscaling

To understand the Blitzscaling concept and decide whether it is applicable to your business we should understand the premise and philosophy this framework is built on.

The Abundance of Startups and Globalization of Venture Capital

The accessibility of venture capital and entrepreneurial knowledge has globalized, making it possible to start ventures in various parts of the world. However, Silicon Valley remains unique in its ecosystem's ability to support rapid scaling.

• The Unique Position of Silicon Valley:
  Hoffman emphasizes that Silicon Valley's strength lies not just in starting businesses but in rapidly scaling them. This ability to scale, more than just the abundance of startups, sets Silicon Valley apart.
• The Necessity of Capital for Blitzscaling:
  Significant capital is required for blitzscaling, either from revenue reinvestment or external financing sources like venture capital or public markets.

The following are the 7 key takeaways to remember. They provide us with a foundational understanding of blitzscaling and its critical components.

Before we dive deeper to into Hoffman's and Yeh’s book Blitzscaling, these concepts from their lectures offer an understanding of the strategies and decisions necessary for successful rapid scaling in a startup environment.

1. Blitzscaling as a Key Differentiator

The core of blitzscaling lies in the capacity to grow a company quickly and significantly. This involves scaling the business model, customer base, and organizational structure at a pace much faster than traditional business growth strategies.

2. Importance of Networks in Blitzscaling

Networks, including those of talent, capital, and know-how, play a crucial role in the blitzscaling process. Silicon Valley's success is partly attributed to its rich and intertwined networks.

3. The Role of Speed and Risk Management

Hoffman discusses the importance of moving faster than the competition, even if it means accepting higher risks and potentially higher error rates in the short term.

4. The Evolution from Generalist to Specialist Roles

As a company grows through blitzscaling, its workforce evolves from generalists to specialists. This evolution is necessary to manage the increasing complexity of the business.

5. Continuous Innovation During Scaling

Innovation doesn't stop with initial success; it needs to be an ongoing process even as the company scales. This includes innovation in product development, market strategies, and operational processes.

6. Adaptability and Operational Excellence

There's a balance to be struck between maintaining adaptability and striving for operational excellence. Sometimes, rapid scaling requires prioritizing adaptability, even at the cost of efficiency.

7. Product-Market Fit and Customer Focus

Understanding and achieving product-market fit is essential in the early stages of a startup. This involves not only developing a valuable product but also understanding and catering to the needs of the customers.