February 2009One of the things I always tell startups is a principle I learnedfrom Paul Buchheit: it's better to make a few people really happythan to make a lot of people semi-happy. I was saying recently toa reporter that if I could only tell startups 10 things, this wouldbe one of them. Then I thought: what would the other 9 be?When I made the list there turned out to be 13:1. Pick good cofounders.Cofounders are for a startup what location is for real estate. Youcan change anything about a house except where it is. In a startupyou can change your idea easily, but changing your cofounders ishard. [1]And the success of a startup is almost always a functionof its founders.2. Launch fast.The reason to launch fast is not so much that it's critical to getyour product to market early, but that you haven't really startedworking on it till you've launched. Launching teaches you what youshould have been building. Till you know that you're wasting yourtime. So the main value of whatever you launch with is as a pretextfor engaging users.3. Let your idea evolve.This is the second half of launching fast. Launch fast and iterate.It's a big mistake to treat a startup as if it were merely a matterof implementing some brilliant initial idea. As in an essay, mostof the ideas appear in the implementing.4. Understand your users.You can envision the wealth created by a startup as a rectangle,where one side is the number of users and the other is how much youimprove their lives.[2]The second dimension is the one you havemost control over. And indeed, the growth in the first will bedriven by how well you do in the second. As in science, the hardpart is not answering questions but asking them: the hard part isseeing something new that users lack. The better you understandthem the better the odds of doing that. That's why so many successfulstartups make something the founders needed.5. Better to make a few users love you than a lot ambivalent.Ideally you want to make large numbers of users love you, but youcan't expect to hit that right away. Initially you have to choosebetween satisfying all the needs of a subset of potential users,or satisfying a subset of the needs of all potential users. Takethe first. It's easier to expand userwise than satisfactionwise.And perhaps more importantly, it's harder to lie to yourself. Ifyou think you're 85% of the way to a great product, how do you knowit's not 70%? Or 10%? Whereas it's easy to know how many usersyou have.6. Offer surprisingly good customer service.Customers are used to being maltreated. Most of the companies theydeal with are quasi-monopolies that get away with atrocious customerservice. Your own ideas about what's possible have been unconsciouslylowered by such experiences. Try making your customer service notmerely good, but surprisingly good. Go out of your way to makepeople happy. They'll be overwhelmed; you'll see. In the earlieststages of a startup, it pays to offer customer service on a levelthat wouldn't scale, because it's a way of learning about yourusers.7. You make what you measure.I learned this one from Joe Kraus. [3]Merely measuring somethinghas an uncanny tendency to improve it. If you want to make youruser numbers go up, put a big piece of paper on your wall and everyday plot the number of users. You'll be delighted when it goes upand disappointed when it goes down. Pretty soon you'll startnoticing what makes the number go up, and you'll start to do moreof that. Corollary: be careful what you measure.8. Spend little.I can't emphasize enough how important it is for a startup to be cheap.Most startups fail before they make something people want, and themost common form of failure is running out of money. So being cheapis (almost) interchangeable with iterating rapidly.[4]But it'smore than that. A culture of cheapness keeps companies young insomething like the way exercise keeps people young.9. Get ramen profitable."Ramen profitable" means a startup makes just enough to pay thefounders' living expenses. It's not rapid prototyping for businessmodels (though it can be), but more a way of hacking the investmentprocess. Once you cross over into ramen profitable, it completelychanges your relationship with investors. It's also great formorale.10. Avoid distractions.Nothing kills startups like distractions. The worst type are thosethat pay money: day jobs, consulting, profitable side-projects.The startup may have more long-term potential, but you'll alwaysinterrupt working on it to answer calls from people paying you now.Paradoxically, fundraising is this type of distraction, so try tominimize that too.11. Don't get demoralized.Though the immediate cause of death in a startup tends to be runningout of money, the underlying cause is usually lack of focus. Eitherthe company is run by stupid people (which can't be fixed withadvice) or the people are smart but got demoralized. Starting astartup is a huge moral weight. Understand this and make a consciouseffort not to be ground down by it, just as you'd be careful tobend at the knees when picking up a heavy box.12. Don't give up.Even if you get demoralized, don't give up. You can get surprisinglyfar by just not giving up. This isn't true in all fields. Thereare a lot of people who couldn't become good mathematicians nomatter how long they persisted. But startups aren't like that.Sheer effort is usually enough, so long as you keep morphing youridea.13. Deals fall through.One of the most useful skills we learned from Viaweb was not gettingour hopes up. We probably had 20 deals of various types fallthrough. After the first 10 or so we learned to treat deals asbackground processes that we should ignore till they terminated.It's very dangerous to morale to start to depend on deals closing,not just because they so often don't, but because it makes themless likely to.Having gotten it down to 13 sentences, I asked myself which I'dchoose if I could only keep one.Understand your users. That's the key. The essential task in astartup is to create wealth; the dimension of wealth you have mostcontrol over is how much you improve users' lives; and the hardestpart of that is knowing what to make for them. Once you know whatto make, it's mere effort to make it, and most decent hackers arecapable of that.Understanding your users is part of half the principles in thislist. That's the reason to launch early, to understand your users.Evolving your idea is the embodiment of understanding your users.Understanding your users well will tend to push you toward makingsomething that makes a few people deeply happy. The most importantreason for having surprisingly good customer service is that ithelps you understand your users. And understanding your users willeven ensure your morale, because when everything else is collapsingaround you, having just ten users who love you will keep you going.Notes[1]Strictly speaking it's impossible without a time machine.[2]In practice it's more like a ragged comb.[3]Joe thinks one of the founders of Hewlett Packard said it first,but he doesn't remember which.[4]They'd be interchangeable if markets stood still. Since theydon't, working twice as fast is better than having twice as muchtime.
