Those of you that subscribe to my startup newsletter are familiar with my habit of summarizing the best long-form startup articles.
PG has arguably the most comprehensive, well-written set of essays for inexperienced entrepreneurs. Many of his lessons will naturally be acquired when you start companies, because in starting companies you will make mistakes and from mistakes you will learn these lessons, but if you want to avoid at least some of those mistakes, or make different ones instead, you should be reading his essays.
Like most of my blog posts, I write it in part to share advice with readers and in part to remind myself of what’s important.
This sums up the essay:
In a sense there’s just one mistake that kills startups: not making something users want. If you make something users want, you’ll probably be fine, whatever else you do or don’t do. […] So really this is a list of 18 things that cause startups not to make something users want. Nearly all failure funnels through that.
Here are the 18 mistakes:
1. Single Founder – all of the great technology companies had 2 founders (Apple, Microsoft, Google). Although I would argue Mark Zuckerberg and Jeff Bezos have come closest to breaking this rule
2. Bad Location – if you’re serious, be in the Valley (this includes SF)
3. Marginal Niche – avoid small markets, and focus on big problems in big markets
4. Derivative Idea – don’t take an existing success and tweak it in a small way. I think a lot of the “Airbnb for X” or “Heroku for Y” have this problem, too
5. Obstinacy – your original business plan is probably wrong, but it’s important not to change too quickly, either
6. Hiring Bad Programmers – self-explanatory; implied: starting a company as a business founder, without a strong technical cofounder
7. Choosing the Wrong Platform – platforms include Windows, Apple’s App Store, and Facebook; choose carefully since they’re your partner, whether you like it or not
8. Slowness in Launching – get your product into users’ hands as soon as you have a “quantum of utility”, then iterate quickly
9. Launching Too Early – less important than #8, but if you launch too early, you risk hurting your reputation
10. Having No Specific User in Mind – can you envision EXACTLY what your ideal user looks like, how she behaves, and what she wears?
11. Raising Too Little Money – raise enough to get to the next step, and then 50-100% more for buffer
12. Spending Too Much – happens when you hire too many people, and/or pay too much salary (give equity instead)
13. Raising Too Much Money – when this happens, you’re expected to spend it quickly, and your company becomes less nimble
14. Poor Investor Management – ignore them, and they’ll be upset; heavily involve them, and they may wind up calling the shots
15. Sacrificing Users to (Supposed) Profit – we were guilty of this: too much emphasis on finding a business model and earning revenue, before we had a product that users wanted
16. Not Wanting to Get Your Hands Dirty – the best founders do whatever’s necessary to grow the company, in particular understanding their users and acquiring more of them
17. Fights Between Founders – most unresolvable disputes are due to differences between people, not due to the particulars of a situation, so choose your cofounder(s) carefully
18. A Half-Hearted Effort – quit your day job, and be obsessed with your startup