Tag: ycombinator

134. How To Start A Startup: Operating Your Business For Growth & Success

11 important lessons from this lecture:

00:00:09 Assuming that you have already:

…now you want to build a company. Building a company is much more difficult than building a product because people tend to be irrational, and you’re trying to take all of these irrational people, put them together in one building, and then live with them up to 12 hours a day while you get them to cooperate.

00:00:52 Building a company is essentially like building an engine.

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It’s extremely complex and complicated with a lot of moving parts, yet once you get it drawn on paper it looks pretty, organized and easy to implement. But as you build your engine, the end product usually doesn’t come together quite so gloriously.

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Eventually you plan on creating a self-sustaining, high-performance machine that won’t require 24/7 upkeep and constant monitoring

00:02:20 Triaging is “the process of determining the priority of patients’ treatments based on the severity of their condition.” Everyday should feel like there is a new problem, otherwise you’re probably too predictable and not as innovative as you could be.

Some problems look like problems, but are actually nothing more than an irritation that will eventually go away or sort itself out, such as employees annoyed about common everyday interpersonal relationships and moods.

Some problems may present themselves as colds, however if not diagosed properly, may become fatal over time.

Is it a cold or a life threating sickness?

00:03:21 There is a difference between editing and writing. The most important tasks of an editor are to:

  1. Simplify, simplify, simplify. People cannot keep track of a complex set of initiatives, so you’ve got to be able to distill them down to 1-3 things and use a framework people can recite to anyone at any time.
  2. Clarify. Find and address the ambiguity. This involves asking a lot of questions.
  3. Allocate resources.
  4. Ensure a consistent voice. Top news publications, regardless of the article, time, or author, maintain a consistent voice throughout it’s issues. Everything from your press release to your website and blog posts, social media, packaging design, etc. should feel like it has come from the same person. At first you’ll feel tempted to be that one person and do all the copyediting yourself, however as your business grows this will become impossible.
  5. Delegate. Writers actually do most of the work in the world. Editors aren’t doing the writing. The problem with delegation is that you’re still ultimately responsable for everything you delegate.
  6. Edit the team. You may never recruit a ‘perfect team,’ and even if you were to, eventually somebody will leave and the team will be thrown off balance. Your goal is to maximize the probability for success when you create a team. Hiring more engineers doesn’t automatically mean you get more engineering work done. More designers doesn’t mean more design output.
  7. Insist on focus. People want to be involved in multiple projects and work on varied tasks, however it is through specialisation that a company is more efficient and productive.
  8. Focus on metrics & transparency. Create an intuitive dashboard for your company and then monitor how many employees use it. An effective dashboard should have as close to 100% of your employees using it as possible.
  9. Pay attention to the details. Don’t worry about building a billion dollar business, this is the by-product of something more important. If you get all of the details right, the business will take care of itself. If the details are user-facing, they obviously need to be monitored. The harder part is paying attention to the details that the user may never see or even know exist.

[EDITOR’S NOTE: For more information on:

00:09:59 Task-relevant maturity refers to the level of competence a person has in performing a task which is delegated to them (specialization). The more times a person has handled a particular task, the more freedom you’re comfortable giving that person to complete the task. Conversely, the more inexperienced a person is at handling a particular task, the more instruction and constraints you’ll want to give them.

00:10:32 You shouldn’t have one management style. In fact, your management style should be dictated by the employee(s) you are managing.

00: 16:04 There are two basic types of employees: ammunition and barrels.

  1. Ammunition – these employees are good at doing things and getting the job done. These employees are important to the success of your business.
  2. Barrels – these employees are good at focusing and shooting the ammunition. These employees are crucial to the success of your business because they can take an idea from inception to production and because no matter how much ammunition you have, you need the barrel for the ammunition to be useful. Barrels are VERY hard to find, and when you find one of these kinds of employees, make them a priority. Find barrels and then stock them with ammunition.

How to identify the ‘barrels;’ the people to promote in your company:

  1. Watch how they handle simple, stupid, mundane tasks such as having cold, fresh smoothies delivered to a group of hard-working engineers at 9:00 PM every night. Expanding the scope of responsiblity of your employees until they break shows you how much responsibility each person is comfortable with and ensures that that person is being used to their full potential.
  2. Watch which person in your office has the most people approaching his or her desk, particular people that aren’t responsible for. In a working environment, people approach people who they believe can help them. If one employee has more and more people approaching him asking for help or guidance, then that person is perhaps a barrel; promote them and give them more responsibilities.

The next issue is maintaining the correct ratio between ‘barrels’ and ‘ammunition’ in your company. If you have 50 engineers and you’re the only ‘barrel,’ then you might as well only have 10 engineers because you’ll have 40 other engineers fighting for your time, demanding signatures and approvals, and in the meantime they won’t be getting anything done.

00:31:44 Your office environment and layout are very important to the success of your business. You and your employees are spending +40 hours a week in the office, making decisions, brain storming, hosting clients… An ugly or uninspiring office can do extraordinary damage to your company.

In fact, investors may even decide whether or not they’re going to invest in your company just by the layout of your office because they can extrapolate how hard employees are working, how productive they are, how inspired they are…

[EDITOR’S NOTE: Recall in the talk How To Introduce Your Pitch So Others Want to Invest in Your Brand that the first few seconds of your introduction are the most crucial when convincing investors to put money into your startup. This also applies to your office space.]

Questions & Answers

00:35:32 In Youtube’s humble beginnings, it wasn’t sure whether or not it would be successful. Roelof Botha at Sequoia predicted Youtube’s success because he observed that everytime he would go to one of his portfolio companies, half of the office would be sitting at their desks during lunch watching Youtube videos.

00:36:59 When it comes to promoting internally, if you promote ‘the best’ graphic designer, or engineer, or salesman in the department, people are more ready to respect him or her as  the boss because they can learn from him or her. Management skills can be learned later.

If, however, the general manager is there not because s/he knows how to do the job, but because s/he knows how to manage the people who do the job, this changes the context of the manager’s authority.

00:44:10 Write down your list if priorities: prospection, recruitment, R&D, raising money, etc., short- and long-term, and then look at your business calendar to see if your meetings and where you spend your time match your priorities. Often times, you’ll find that what you’re spending your time on doesn’t line up with your priorities.

126. How To Start A Startup: A Checklist of Skillsets for Great Founders

15 important lessons from this lecture:

00:00:19 How do you think about yourself, and your skillset, as a founder? How do you get ready? How do you know when are you aready?…

Entprepreneurs need skillsets, charisma, and a personality that give him or her a competitive edge, however people incorrectly perceive founders to be Superwoman, or Superman who are capable of doing everything.

[EDITOR’S NOTE: In his talk Managing your professional & private life at The Family, a startup incubator in Paris, France, Oussama Ammar also points out this perception.

Also, in his lecture A Checklist Of Counter-Intuitive Startup Rules, and his interview How Angel Investors Judge Startup Founders, Paul Graham of Y-Combinator makes a list of other personality traits and characteristics of successful entrepreneurs, noting specificially that he looks for entrepreneurs who already have a few successful ventures on their entrepreneural CV.]

So what actually makes a great founder? Here’s a checklist of the most important:

1.) Your founding team is important

00:03:53 It’s usually best to have 2-3 people on a team who compliment and trust each other rather than a solo-founder because each team member can compensate his or her strengths with the other co-founder’s weaknesses. This balance is especially important when pitching to investors:

  • Do they collaborate well?
  • Do they help each other get to the truth; do they reason rather than argue with each other?
  • Do they learn collectively?

[EDITOR’S NOTE: Again, in his interview How angel investors judge startup founders, Paul Graham explains that the founder is more important than the idea. “When people come to me with an idea I always begin by asking about the co-founders. I care MUCH less about the actual idea than I do the idea’s foundings – what kind of people they are. A bad idea might be a bad reflection on the entrepreneur.

There are some people who just get what they want in the world, and if you’re going to try and start a startup you have to be one of those people.”]

2.) Your startup’s location is important

00:05:42 While the Silicon Valley is super strong at aggregating a lot of super-talent from around the world, not ALL of the great software people actually move here.  Great founders are good at finding the location which contains the network which will be essential their obligations and tasks they need and the problem they want to solve. Silicon valley, for all of its strengths, may not be the best place for your startup.

In my (Ried Hoffman’s) opinion, I don’t think Groupon could ever have been founded in Silicon Valley because in its early days it grew because of its massive sales forces. Renting a 25 story building, whereby 24 of the stories would be sales people, would not have gained a ton of interest in Silicon Valley. Therefore, Groupon set up in Chicago, which is more open and adapted to this kind of business model.

[EDITOR’S NOTE: In his lecture Human Resources Management: Local to Global HR Department Models, Armin Trost explains that every organization has a headquarters based somewhere in the world, and there are historical, logisitical, branding, etc. reasons why companies choose to have their companies headquartered in a specific city, and that typically, a company starts out as an idea in a garage somewhere… and then grows: locally, regionally, nationally… Once you have one single, tiny customer in another country, at what point do you identify yourself as ‘international?’]

When starting a business, move to where the network is.

3.) Are you, or are you not contrarian is important

00:10:01 It’s easy to be contrarian. It’s hard to be contrarian and right. So your idea is ‘contrarian,’ how does a smart person disagree with you from a position of intelligence? If they present some serious flaws and holes in your idea, then perhaps your idea isn’t as contrarian and right as you’d like it to be.

Contrarian is also relative to the audience. The general population, that you’ll need to grow, may not like your contrarian idea, so it’s important to ask yourself ‘What do I know that the general population doesn’t know?’

There are many different ways to be contrarian.

4.) Knowing when to do the work and when to delegate is important

5.) Knowing when to be flexible or persistent is important

00:14:12 Entrepreneurs are vigorously told to have a vision, stay on track and stick through the difficult times. Conversely, entrepreneurs are also vigorously told to listen to data and customers, pivot, and be flexible.

As the entrepreneur, you must decide when you should be flexible and when you should be persistent.

[EDITOR’S NOTE: In his talk How to win clients without pitching, Blair Enns warns entrepreneurs that when it comes to pivoting, look at where you and your company are today because it’s almost certain that you can look back and see the series of switches behind you that lead to where you are. Those switches are things that you said “yes” to instead of sitting down, mapping out a vision of what you want your company to look like and the type of expertise you want to build and the kind of clients you want to represent, and then saying “yes” or “no” according to that vision. Essentially, it was the market that shaped your firm, not you.

Also, again in his talk Managing your professional and private life, Oussama Ammar argues that there are plenty of startups that exist, and are successful, that shouldn’t be. For example, many people have found themselves in a romantic relationship where one thing about the person is great, but then many other things are horrible. If you, as an entrepreneur, find yourself running a business that is making ‘enough’ money to keep running it, but you are miserable and not capable of pursuing other, better projects you enjoy, then you’re going to have to make the difficult choice of choosing between the money you’re making or walking away from that business.]

6.) Knowing when to be confident or cautious is important

7.) Knowing when to focus internally or externally is important

00:16:00 Should you ignore the world, or should you draw from the world; this depends on the current problem you’re trying to solve.

[EDITOR’S NOTE: For more information and advice on conducting consumer research and focusing externally, read my interview with Peter Spear. Also check out the books: Buy*ology by Martin Lindstrom and Consumer.ology by Philip Graves.]

8.) Knowing when to work by vision or by data is important

00:17:31 Do customers and people really know what they want? Are they really telling you what they would buy? Data and vision aren’t always opposites, nor are they always hand-in-hand. Data might globally support your vision, but point out a few minor modifications that should be addressed.

9.) Knowing when to take risks and when to minimize risks is important

00:19:18 The only contrarian, disruptive, and potentially lucrative business ideas are the ones that also have risk associated with them. The aim is to distinguish risk-taking from intelligent risk-taking. A lot of this boils down to your critical thinking skills.

[EDITOR’S NOTE: Referring yet again to Oussama Ammar’s talk on managing your private and professional life, he reasons that when it comes to calculating risk, one of the best ways of keeping your storyline realistic, measurable, and positive is to maintain an entrepreneural CV (resume).

With seed funding, for example, many entrepreneurs optimize their company to obtain as much seed funding and Series A investment money as possible, and many entrepreneurs would rather gamble and turn down bad or mediocre offers in the hopes of a better offer. But now consider this from the perspective of the entrepreneural CV: that actually raising the funds and selling their company is an accomplishment that VERY, VERY few entrepreneurs can actually put on their CV; that the great majority of startups fail.

If the entrepreneur were to strategically accept a mediocre investment offer, then that entrepreneur has set himself/herself apart from all those other entrepreneurs, and this accomplishment will be a permanent fixture on his or her CV.

If, however, the entrepreneur holds out for a better offer, and that better offer never comes, then that entrepreneur will have nothing to put on his or her CV other than a failed business.

As an example, Aaron Levie, CEO and Co-founder of Box has only 3% of his own company he created; a very low percentage in terms of the industry. Yet in accepting this he has joined the exclusive club of only a handful of entrepreneurs to create a billion dollar company.]

10.) Knowing whether or not to focus on the short term or the long term

00:22:55 You should always have a long term vision in mind, just in case you accidentally lose your direction, but if you’re not focused on solving the problem that’s immediately in front of you, you’re in trouble.

00:23:30 Product distribution, not product idea, is fundamentally more important idea to deal with because no matter how good your product is, if you can’t get it to consumers, you’re ruined. Even below product distribution is financing for your product, because even if you have a really good idea, if you run out of financing and can’t get your product to consumers, you’re ruined. Therefore your current fundraising projects should also be setting you up for your next fundraising project which should be helping you solve other, different problems.

Q&A Session

00:27:12 Today there are 1,000s of other similar products and services consumers can choose between, so you really have to be able to communicate the unique selling point that you offer that nobody else does/can.

[EDITOR’S NOTE: For a professional branding perspective on identifying your unique selling point, read my interviews with Art Director Julien Hérrison.]

00:29:14 The great majority of the time investors only agree to meet with you if you, as a founder, come through a reference, and this is mainly about time management. An opening sentence like “Sam Altman of Ycombinator, a mutual acquaintance of ours, sent me to you” means more to a potential investor than an entire pitch of useful and convincing evidence, data, and accomplishments.

00:30:15 Since its conception, Linkedin has always been labeled as a second, little tiny one next to the giants friendster, then myspace, then facebook… ultimately, I started Linkedin believing people wanted public, professional profiles, and that the world would be much better off with this, and further, Linkedin is getting closer to this than every other option out there.

Granted, it took Linkedin longer than I hoped it would to get there, and often times Linkedin was only covered by public relations as the “Friendster for professionals,” or the “mysapce for professionals…” but the internet eventually turned in our favor and we succeeded.

00:38:11 With software, speed to market is key. With hardware, accuracy is the most important because if you build and ship the wrong thing, you’re ruined.

00:42:14 Entrepreneurs and founders never have a balanced lifestyle, because having a balanced lifestyle means that he or she probably won’t invest what is needed in turning this idea into a business.

[EDITOR’S NOTE: For the final time in this lecture, I will refer to Oussama Ammar’s talk Managing your private and professional life, where he argues that the beginning of a startup is difficult because the kinetic energy that must be created at the beginning is incredible. This phase tends to be extremely taxing on both your mental and physical health, and leaves you with plenty of obsessive behaviors and social handicaps. This is because during this phase you are obsessively committed to one single goal: getting your startup up and running. During this phase, winning or losing one additional client can mean the difference between failure and success. But once your business is up and running, winning or losing one client probably won’t make that much of a difference.

One of the best ways to avoid burnout during this phase is to understand that this phase is temporary, and to create a contract with yourself, committing yourself to focus on your start for a pre-determined amount of time and where you expect the project to be by that time. Then respect that contract. If you haven’t achieved your results within the amount of time you set aside for it, let it go and move on to another project.

Another way to avoid burnout is to understand that life consists of five fundamental elements:

  1. Work
  2. Family
  3. Friends
  4. Hobbies
  5. Everything else

Now choose only two. If you’re launching a startup, then you must choose only one more and forget the rest. You’re launching a startup and have a family (wife and kids)? Then forget your friends, hobbies and everything else. Once your startup gets moving on its own, then you can replace ‘work’ with another fundamental element, such friends or hobbies.]

119. How To Start A Startup: Choosing Between B2B & B2C Business Models

17 important lessons from this lecture:

00:07:42 When looking for business ideas, and when planning your business’s future, always look for changing technology factors because any market that has a significant change in either the raw underlying materials or the enabling factors is an environment that’s about to change in a very significant way.

00:10:15 Look at your products and services you offer. If you find you are over-serving consumers and under-serving businesses, for example offering a plethora of features or memory space that the average consumer isn’t using or doesn’t need, yet not enough memory space or security for the average business, then you should consider several options:

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Make your business consumer-centric:

  • Increase the price of your product for consumers and market yourself as a specialist, in which case competitors may try and undercut you by offering a cheaper price
  • Offer a lesser quality product to consumers than they currently enjoy, thus identifying yourself as a commodity, in which case competitors may undercut you by offering a better product at a similar price
  • With consumer-centric products, competition is fierce; it’s viewed as a commodity product, and you’re constantly struggling with monetizing and making money: How can you get people to actually pay for products?
  • The two major business models are either having people pay for your application or offer it for free and advertise on your app/site.
  • In 2014, benchmarking figures noted that±$35 billion were spent on mobile apps each year, and ±$135 billion spent on digital advertising per year = consumer-centric businesses are fighting for the ± $170 billion dollars of revenue each year.

Make your business enterprise-centric:

  • Focus less on consumers and more on businesses
  • In 2014, benchmarking figures noted±$3.7 trillion dollars spent in global IT industry

00:10:14 Consumer-centric startups have the reputation for fun and partying all the time, while enterprise-centric  startups are more the unsexy idea of battling large incumbents. Consider the arguments:

For consumer-centric businesses:

  • In 2014 (as mentioned above), consumer-centric businesses are fighting for the ± $170 billion dollars of revenue each year.
  • The businesses competing in this industry are trying to get as many people as possible to pay a couple of dollars per month for a product where large companies such as Google and Apple will probably eventually offer your product for free over time, or they are trying to get as many page per visits as possible to maximize exposure to the paid advertising on their website.
  • A lot of love and care are put into design and user experience to make as many people want to use your product as possible.

For enterprise-centric businesses:

  • In 2014, benchmarking figures noted ± $3.7 trillion dollars spent in global IT industry. Enterprise-centric clients are more concerned with increased productivity, efficiency and security, and are willing to pay much more for this.
  • Sales in this industry can be extremely slow, with companies taking years to decide which software they want to invest in, and then another few years installing and adapting their business to the software.
  • Design and user experience often take a back seat to functionality and universal usage by everyone in the company, no matter their job requirements.
  • You must hire sales force intermediaries from all around the country who become the only face for your company and software.
  • Breaking into the enterprise industry is impossible if you don’t have some heavy-hitters with enterprise experience backing you, and larger, already established companies are going to stomp on you.

00:18:17 If you’re going to become an enterprise-centric company, you’re going to have to play by a very different set of rules:

  • What about the sales process can be changed and quickened?
  • What about the design and user experience can be improved?
  • How do you bypass an intermediary sales force and approach prospective clients more directly?

1.) “Spot disruptions. Look for new enabling technologies that create a wide gap between how things have been done and how they can be done.”

00:21:11 Prior to the cloud, software and storage had to be manually installed for every client at every client location. This created a lot of redundant work and time lost doing repetitive tasks. With the cloud, companies could now download and install the software directly from your company site and rent storage space from your company’s vast amount of servers as they need, thus drastically reducing the amount of wasted work, and overhead expenses.

00:27:11 Every industry in the world is undergoing a fundamental business model disruption. Gross international transportation shipping companies need to understand Uber and Lyft’s smaller local person transportation business models, and how those technologies and business models will affect their larger, international shipping industry.

For example:

  • In the retail industry, multi-platform commerce is accelerating. Customers today are going to shop on your site from their laptop, from their phone, at your store, and will expect things to be delivered to them as well.
  • In the healthcare industry, hospitals are looking for ways to enable more personalized, predictive, and understandable healthcare and assistance to their patients.
  • In the media industry, linear processes where a film is made, goes to the movie theatre for a couple of weeks, and then is eventually going to iTunes, Netflix and other platforms to purchase or rent is changing as people expect more experiences immediately. This is going to have an impact on media creation and distribution.

In all these cases this means that these larger companies will need startups to help them work through this.

[EDITOR’S NOTE: For more information on identifying how business models from other industries can impact yours, read the book Best Practices: Building Your Business with Customer-Focused Solutions by Arthur Andersen, Robert Hiebeler, Thomas B. Kelly and Charles Ketteman.]

2.) “Intentionally start small. Start with something simple and small, then expand over time. If people call it a ‘toy’ you’re definitely into something.”

00:36:36 Larger incumbents will always aim for the “full solution” when they create products. You cannot compete with that. Instead, identify one very tiny sliver of a problem in the full solution, create a solution to that problem with a mind-blowing user experience where customers will want to solve the problem with your discrete product or service, break from the ‘standard’ industry business model, and then work to expand to more solutions and larger clients over time.

[EDITOR’S NOTE: In his lecture The Importance Of Finding Your Idea & Product, Sam Altman of Y Combinator argues that:

  • You want an idea that will turn into a monopoly, but you can’t get a monopoly in a big market right away: too much competition for that. Instead, you have to find a small market in which you can get a monopoly, and then quickly expand. This is why some great startup ideas look really bad at the beginning. The first version of your product doesn’t need to sound big, it needs to take over a small niche of your market and expand from there.
  • You need to build a business that is difficult to replicate.
  • You need towalk the line between right and crazy, and if you do come up with a great idea, most people are going to think it’s bad. This means that they won’t compete with you:
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The ideas that often look terrible at the beginning.]

3.) “Find asymmetries. Do things that incumbents can’t or won’t do because it’s economically or technically infeasible.”

00:40:17 Find out where in an incumbent’s business model and financials that they absolutely cannot afford to compete on price (or time, or quality), and then undercut them, or find unusual or unique ways of monetizing customers, and thus not really practial for anyone else to do.

For example, Zenefits gives it’s software for free to startups, and then monetizes the startup’s heath insurance carriers and other benefits providers. Something nobody else had ever thought of, and are not in a position to integrate or compete with.

4.) “Find the almost-crazy outliers. Go after the customers that are working in the future, but that haven’t totally lost their minds.”

[EDITOR’S NOTE: In the documentary Transcendent Man: When Humans Merge With Technology & Transcend Biology, Ray Kurzweil argues that information technology follows relatively predictable trajectories, and you can use this as a planning tool. Meaning you can’t just take projections for just 2, 3, 4, or 6 years, but 10, 20, 50 years from now and invent with the technologies of the future.]

5.) “Listen to customers, but don’t always build exactly what they want. Build what they need.”

00:43:28 Your customers will have tons of requests. Your job is to distill the essence of those request down into the ultimate product.

[EDITOR’S NOTE: Read my interview with Peter Spear, Brand Listener for a list of techniques to effectively listen to customers.]

6.) “Modularize, don’t customize. Every customer will want something a little bit different. Don’t make the product suffer for this.”

7.) “Focus on the user. Keep ‘consuer’ DNA at the core of your enterprise product. This will always pay dividends.”

8.) “Your product should sell itself. Sales should be used to navigate customers and close deals, not be a a substitute for great product. But that doesn’t mean you don’t need sales people.”

113. How To Start A Startup: Create A Successful, Long-Term Company Culture

15 important lessons from this lecture:

00:00:20 So you’ve built your product, launched your business and assembled your team. Your business has monopoly powers and is off the ground and growing, and people love it. Now it’s time to build your company culture, because company culture is going to be what helps you scale and build your company into a chain.

Culture is “the beliefs, customs, arts, etc., of a particular society, group, place, or time… A way of thinking, behaving, or working that exists in a place or organization (such as a business).

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This is important because:

“Your beliefs become your thoughts. Your thoughts become your words. Your words become your actions. Your actions become your habits. Your habits become your values. Your values become your destiny.”

– Mahatma Ghandi

00:03:02 Your company culture matters because:

  • It becomes the foundational first principles you fall back on as you make future decisions.
  • It helps you attract and select the right employees, defines how you recruit and align your employees on the values that matter to your company.
  • It creates stability within your company and trust amongst your colleagues that everyone is working together towards the same mission.
  • By defining who you are and what you do, you are also defining who you aren’t and what not to do. What not to do is very important to know.
  • It shows you how to keep the right employees.

[EDITOR’S NOTE: In Armin Trost’s lecture Human Resources Management: Mega-Trends of Competitive Advantage, Mr. Trost points out that high-quality employees want  work with high-quality organizations by the employee giving the company his or her health, time, performance, talents and skills in exchange for priviledges, money, etc.

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It’s always about the relation. If you are strong, the organization wants to retain you/doesn’t want to lose you.]

 

00:04:40 Create your core value worksheet by asking yourself the following questions:

 

  1. As the leader, what personal values are most important for you?
  2. What are the most important values for business success?
  3. What values will you look for in employees?
  4. What could never be tolerated? (Consider the opposite as values)
  5. Remember to incorporate your mission into your core value.

The answers to the 5 questions above should leave you a list of anywhere from 3-20 generic core values

you want your company to be known for such as: honestly, integrity, service, teamwork…

Next, you must then work to very precisly define what your company means by each of those core values, and how you can define them to stand apart from your competitors.

If you could only tell somebody 3-5 things about you, what would you want them to know about you?

 

[EDITOR’S NOTE: In Armin Trost’s lecture Human Resources Management: Attracting And Selecting The Best Candidates, Mr. Trost notes that each company must create its own unique employee value proposition.

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To identify your unique selling proposition as well as your unique employee value proposition and find the one single argument why you are a great employer:

  1. Identify your company’s strengths and what makes you authentic
  2. Identify and understand what is most important to and relevant to your ideal candidate
  3. Identify your competitors unique selling points and how they are pitching their employer branding
  4. Market your employee value proposition with the strengths competitors have not claimed.]

00:08:46 With trust established in your company, you can then have the necessary and healthy conflicts and debates within your company that lead to progress and high-performing teams. Without healthy conflict and debate, how can you possibly know whether you’ve gotten to the best possible solution to commit on?

00:09:21 After the company or team has committed to a solution, if they are not then held accountable to their commitment, the company won’t see the results.

00:10:03 When recruting employees, interview for culture fit, not only for technical or skill fit. A competent employee who doesn’t believe in the company mission and core values, or fit into the company culture, will not provide the results you hired him or her for.

[EDITOR’S NOTE: In Armin Trost’s lecture Human Resoures Management: How To Keep Quality Employees (Part 2), Mr. Trost points out that

the boss and employees are a very important facter with regards to whether an employee stays with your company. You could have the best company reputation which attracts all the best job candidates, but if the boss or the peers aren’t compatible, then your employees will leave; employees join companies, but leave bosses and peers.]

00:14:02 Build a team that is so competent and skilled that you are almost uncomfortable and have to raise your game to be with them.

00:15:03 Once you start getting product-market fit, at some point you must go from phase 1: building the product, to phase 2: building the company that builds the product. No matter how incredible your product is, if you can’t build a great company that builds the product, then your product will not endure.

00:23:30 All the founding stories you tell at the beginning become the stories that people repeat and talk about when you’re a huge company; kind of like your childhood stories.

00:25:20 Constraints bring out creativity. In 2008 at the very beginning of Airbnb they were in huge debt, and their website was only getting about 100 visitors a day which resulted in roughly 3 reservations, they created 2 boxes of cereals for the Democratic and Republican parties: “Obama O’s: Hope in every bowl” and “Captain McCain’s: A maverick in every bite.”

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This clever campaign got Airbnb national coverage, and they made +$40,000 selling these breakfast cereals. To put that in perspective, that year Airbnb made only $5,000 from actual website sales.

00:28:04 No one every really talks about culture and tells you that you need to have a strong culture. Also, company culture is hard to measure, and things that are hard to measure often get discounted. But the biggest problem with company culture is that it doesn’t pay off in the short term.

Culture makes you hire really slowly. If your objective is to build a company that gets acquired very quickly, don’t invest your time creating company culture; instead build a product and hire people really quickly in preparation for  being acquired.

00:31:36 Internet clones are get-rich-quick companies that copy up-and-coming companies and threaten to either you acquire them and pay them good money for it, or you risk losing your momentum and success to them. They can be a true threat to your company.

00:35:50 In the beginning Airbnb communicated as a utility. Our original motto was “Airbnb is a cheap, affordable alternative to hotels,” and our tagline was “Forget hotels, save money with Airbnb.”

Overtime our tagline evolved to “Travel like a human.” Currently it is “Welcome home.”

00:38:20 With companies where your hosts and users provide the products/services and are extensions of your core values and mission, like with Airbnb, having users who don’t also believe in your core values but are only using you to make money can cause your company a lot of problems. One of the ways we addressed this problem was by creating the super-host badge to push those users into priority customer support and exposure.

00:41:28 It’s better to have 100 people that love you than to have a 1 million people that just kind of, sort of like you.

[EDITOR’S NOTE: For more interesing tips on finding customers that love you, check out these lectures:

108. How To Start A Startup: Raising Seed & Series Investments For Your Startup

16 important takeaways from this panel discussion: Continue reading “108. How To Start A Startup: Raising Seed & Series Investments For Your Startup” →