Startup Advice from YCombinator: Build the Team, Build the Momentum


At Stanford University’s lecture on “How to Start a Startup,” entrepreneur and Y Combinator president Sam Altman discussed teams and execution. He emphasized the importance of knowing your startup, the people working with you on this startup, and building momentum to maintain the success and execution of your business.

“A winning team feels good and keeps winning. A team that hasn’t won in a while gets demotivated and keeps losing. So always keep momentum: it’s this prime directive for managing a startup,” he said.

Know your cofounders.

“Cofounder relationships are among the most important in the entire company,” he advised.

According to Altman, many startups die early because of cofounder blowups. He noticed that many students often pick cofounders the way they would pick a date – they meet someone new, discover that both want to start a company, and decide to partner up. This a huge mistake.

He recommends choosing a cofounder from among a batch of friends – someone that you know, like, and with whom you have a history. This is to ensure that in the event of problems, you have this relationship that binds you.

A cofounder should also be someone who is not only smart and gets the work done. According to Altman, he or she should also be calm and tough – traits that most people often don’t prioritize.

“If you aren’t technical,” he said. “You want a technical cofounder.”

But where to find a perfect match?

Altman suggests that students try to meet a potential cofounder in college. For those who are not in college, he suggests working for an interesting company. Both places are rich in potential cofounders. He also noticed that startups with at least 2-3 cofounders do better than startups with less or more.

“This is one of the most important decisions you make in the life of your startup, and you need to treat it as such,” he said.

How to hire.

“Try not to,” said Altman.

Too often, people use the number of employees you have as a metric for determining how successful or how cool your company is. And although people will be impressed if you have many employees, Altman believes having too many while only starting out is a disadvantage.

“Lots of employees – and you end up with things like a high burn rate,” he said. “Meaning, you’re losing a lot of money every month, complexity, slow decision making, the list goes on and it’s nothing good.”

When starting a startup, Altman suggests only hiring if you really need to. Otherwise, try not to hire because the cost of hiring the wrong people is high. He noticed that in companies that he had worked, the ones who had a bad early high, too often never recovered.

“These hires really matter – these people are what go on to define your company,” he said. “And so you need people who believe in it almost as much as you do.”

Get the best people.

When you realize that you do need to hire, Altman says that founders often underestimate how difficult it is to recruit.

“To get the very best people, they have a lot of great options and so it can easily take a year to recruit someone,” he said.

And when you’re in hiring mode, you should really spend only 0-25% of the time hiring. And when you hire, you don’t compromise on someone mediocre. Mediocre people in already huge companies can cause problems. But at a beginner startup? Mediocre people can kill it.

“And you can think about that, for everyone you hire,” Altman said. “Will I bet the future of this company on this single hire?”

Get it done.

“Execution, for most founders, is not the most fun part of running the company,” said Altman. “But it is the most critical.”

What are founders spending their time and money on? he often asks.

“This reveals almost everything about what founders think is important,” he said.

One of the most difficult things about being a founder, according to Altman, is the amount of things competing for the founder’s attention every day. The key is determine the two or three that are the most important and ignoring the rest for later. And the trick for successful execution is by saying “no” to a lot of these things.

For a successful startup, Altman has this piece of advice: “If you build a good product, it will grow. So getting this product right, at the beginning, is the best way not to lose momentum later.”

About the author: Caithlin Pena

Caithlin is a recent graduate of Stony Brook University’s School of Journalism.  At  Stony Brook, she wrote for the Stony Brook Press as well as the Statesman.


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