|  
  
|  **Want to start a startup?** Get funded by Y Combinator.  
  
---  
Watch how this essay was written.  
  
---  
  
February 2009  
  
One of the things I always tell startups is a principle I learned from Paul
Buchheit: it's better to make a few people really happy than to make a lot of
people semi-happy. I was saying recently to a reporter that if I could only
tell startups 10 things, this would be 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. You can change
anything about a house except where it is. In a startup you can change your
idea easily, but changing your cofounders is hard.  And the success of a
startup is almost always a function of its founders.  
  
**2\. Launch fast.**  
  
The reason to launch fast is not so much that it's critical to get your
product to market early, but that you haven't really started working on it
till you've launched. Launching teaches you what you should have been
building. Till you know that you're wasting your time. So the main value of
whatever you launch with is as a pretext for 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 matter of implementing some
brilliant initial idea. As in an essay, most of 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 you improve their lives.
 The second dimension is the one you have most control over. And indeed,
the growth in the first will be driven by how well you do in the second. As in
science, the hard part is not answering questions but asking them: the hard
part is seeing something new that users lack. The better you understand them
the better the odds of doing that. That's why so many successful startups 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 you can't expect
to hit that right away. Initially you have to choose between satisfying all
the needs of a subset of potential users, or satisfying a subset of the needs
of all potential users. Take the first. It's easier to expand userwise than
satisfactionwise. And perhaps more importantly, it's harder to lie to
yourself. If you think you're 85% of the way to a great product, how do you
know it's not 70%? Or 10%? Whereas it's easy to know how many users you have.  
  
**6\. Offer surprisingly good customer service.**  
  
Customers are used to being maltreated. Most of the companies they deal with
are quasi-monopolies that get away with atrocious customer service. Your own
ideas about what's possible have been unconsciously lowered by such
experiences. Try making your customer service not merely good, but
surprisingly good. Go out of your way to make people happy. They'll be
overwhelmed; you'll see. In the earliest stages of a startup, it pays to offer
customer service on a level that wouldn't scale, because it's a way of
learning about your users.  
  
**7\. You make what you measure.**  
  
I learned this one from Joe Kraus.  Merely measuring something has an
uncanny tendency to improve it. If you want to make your user numbers go up,
put a big piece of paper on your wall and every day plot the number of users.
You'll be delighted when it goes up and disappointed when it goes down. Pretty
soon you'll start noticing what makes the number go up, and you'll start to do
more of 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 the most common form
of failure is running out of money. So being cheap is (almost) interchangeable
with iterating rapidly.  But it's more than that. A culture of cheapness
keeps companies young in something like the way exercise keeps people young.  
  
**9\. Get ramen profitable.**  
  
"Ramen profitable" means a startup makes just enough to pay the founders'
living expenses. It's not rapid prototyping for business models (though it can
be), but more a way of hacking the investment process. Once you cross over
into ramen profitable, it completely changes your relationship with investors.
It's also great for morale.  
  
**10\. Avoid distractions.**  
  
Nothing kills startups like distractions. The worst type are those that pay
money: day jobs, consulting, profitable side-projects. The startup may have
more long-term potential, but you'll always interrupt working on it to answer
calls from people paying you now. Paradoxically, fundraising is this type of
distraction, so try to minimize that too.  
  
**11\. Don't get demoralized.**  
  
Though the immediate cause of death in a startup tends to be running out of
money, the underlying cause is usually lack of focus. Either the company is
run by stupid people (which can't be fixed with advice) or the people are
smart but got demoralized. Starting a startup is a huge moral weight.
Understand this and make a conscious effort not to be ground down by it, just
as you'd be careful to bend 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 surprisingly far by
just not giving up. This isn't true in all fields. There are a lot of people
who couldn't become good mathematicians no matter how long they persisted. But
startups aren't like that. Sheer effort is usually enough, so long as you keep
morphing your idea.  
  
**13\. Deals fall through.**  
  
One of the most useful skills we learned from Viaweb was not getting our hopes
up. We probably had 20 deals of various types fall through. After the first 10
or so we learned to treat deals as background 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 them
less likely to.

Having gotten it down to 13 sentences, I asked myself which I'd choose if I
could only keep one.  
  
Understand your users. That's the key. The essential task in a startup is to
create wealth; the dimension of wealth you have most control over is how much
you improve users' lives; and the hardest part of that is knowing what to make
for them. Once you know what to make, it's mere effort to make it, and most
decent hackers are capable of that.  
  
Understanding your users is part of half the principles in this list. 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 making something that makes a few people deeply happy.
The most important reason for having surprisingly good customer service is
that it helps you understand your users. And understanding your users will
even ensure your morale, because when everything else is collapsing around
you, having just ten users who love you will keep you going.  
  
  
  
  
  
**