Last week we published our Top Three Takeaways from Week 4 of Stanford’s How to Start a Startup course. If you are sitting hear wondering, “what the heck is How to Start a Startup?” see below. Otherwise, scroll down to see our top three takeaways from week 5 of How to Start a Startup. Learn lots and enjoy!
Over the next several weeks, Y Combinator President, Sam Altman, is teaching a Stanford course lecture series designed to be a one-class business course for people who want to start startups. It is “everything [they] know about how to start a startup, for free, from some of the world experts.”
The caliber of founders and startup gurus lined up to talk is impressive. Several of our Maestronauts decided they wanted to follow along and learn from the successes and challenges that are shared. So over the next several weeks we are meeting before work to watch and discuss the lectures.
1. Be remarkable. The venture capital business is a game of outliers.
Yes, being remarkable is much easier said than done, but it’s true. Venture Capital is an extreme “feast or famine business” where you are either in or out. As Marc Andreessen shared that there are about “four thousand venture fundable companies a year that want to raise venture capital. About two hundred of those will get funded by what is considered a top tier VC. About fifteen of those will, someday, get to a hundred million dollars in revenue. And those fifteen, for that year, will generate something on the order of 97% of the returns for the entire category of venture capital in that year.”
So outside of the characteristics that you need to be a successful startup – good founder, good idea, really good products, solid initial customers – you have to have something that makes you and your business remarkable and special. You have to be an extreme outlier.
2. Choose the right core values for your company.
There are two sides to culture: behaviors and principles. Behaviors are things that can change over a company’s life, whereas principles are guiding ideas that endure throughout a company’s life. Many companies’ choose core values like “integrity, honestly, and dedication”. While those are great things to look out for in your new hires, they are not motivating core values of a company.
Your core values should be a handful of things that set you apart from others. Things that match the authenticity and uniqueness tied to the founders.
At Airbnb they have core values such as “Champion in Mission” because they want their employees to be there for the company’s mission above all else and “Cereal Entrepreneur” because they want their employees to maintain the scrappy attitude associated with the company’s early days.
Check out Maestro’s core values, or what we call our Core Beliefs for more examples.
3. Hire for fit.
The early hires of a company set the tone and direction for each of their respective areas as well as the future hires you hope to attract and retain. Hire smart people, but be sure to look past technical skill and hire people that will perpetuate the company’s core values.
Why do you think it took Airbnb six months to hire their first engineer? They recognized how critical that hiring decision was. Co-founder, Brian Chesky, knew that hiring the first engineer meant setting the direction of their entire engineering department for the next 100+ engineers.
When companies make hires for cultural fit the company vision, mission and culture will radiate all the way to the customer. Hire purposefully.
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