SAM ALTMAN President, Y Combinator

@sama

sam@ycombinator.com

Class 20 Later-Stage Advice

How to Start a Startup

§  Management §  HR §  Company Productivity §  Legal, Finance, Accounting, Tax §  Your Psychology §  Marketing and PR §  Dealmaking

Later-Stage Advice

§  This is for months 12-24 §  After product-market fit

§  A waste of time until you have something working

Warning

Management

•  Need it at about 25 employees •  Every employee should have a manager, every

manager should know their reports •  Know how to change the structure, add new

people – just make it clear

Establish a structure

•  Avoid the temptation to have “coolness” via lack of structure

•  But, keep it lightweight •  Don’t need complex matrices

Management Structure

Building a great

product Building a

great company

1.  Being afraid to hire senior people 2.  Hero Mode – extreme leading by example 3.  Bad Delegation – not giving enough

responsibility 4.  Not developing a personal tracking &

productivity system

Failure Cases

Codify how you do things

Codify why you do things

(cultural values)

HR

§  Have a clear structure §  Performance Feedback – Simple and Frequent §  Compensation Bands tied to performance §  Equity – be generous

§  Your investors will give you bad advice §  Distribute 3-5% per year

It can speed you up

§  Keep up with refresher grants §  Structures – 6 years, Pyramid Vesting,

Continuous Forward Vesting §  Get an option management system early

Stock and Vesting

§  50 employee requirements §  Sexual harassment, diversity training

§  Monitor for burnout §  Hiring process

§  Full-time recruiters §  Internal announcements

§  New employee ramp-up §  Think about diversity early! §  Growth of your early employees

HR cont’d

Company Productivity

§  One word: alignment §  Clear roadmap and goals

§  All employees can say the same top 3 goals §  Figure out values early §  Be run by product, not process

§  Ship every day §  Have transparency and rhythm in communication

§  Weekly Management Meetings §  All-hands meetings §  Quarterly and Annual Planning §  Offsites

Company Productivity

The Goal

Build a company that creates enduring value over a long period of time.

Repeatable innovation and a culture of operational excellence is the hardest thing to do in business

Mechanics

§  Clean books, Accounting Firm, Audits §  Collect your legal documents – easy to fix now if you’re

missing something §  FF stock in the B round §  IP, Trademarks, Patents

§  Month 11, Provisional, International §  Trademarks, US and international §  Domains, misspellings, and all TLDs

§  Financial Planning & Analysis §  Consider hiring a full-time fundraiser §  Tax structuring

Legal, Finance, Accounting, and Tax

Your own Psychology

Your Psychology

It keeps intensifying

Ignore the haters

Your Psychology

Long-term Commitment;

Long-term strategy

Your Psychology

Monitor Burnout

Your Psychology

Your Psychology

Focus

Ignore acquisition interest

Your Psychology

Startups Fail when Founders Quit

Your Psychology

§  Start thinking about this once your product is working – don’t ignore it

§  Don’t outsource the key messaging §  Repeat the key messages again and again §  Get to know key journalists

Marketing & PR

Deals

Deals

Build a great product

Deals

Develop a personal connection

Deals

Have a competitive dynamic

Deals

Be persistent persistent persistent persistent

Deals

Ask for what you want

   

Style guide

Colors

Fonts Body: Geometria Specials: Avenir Next Regular Avenir Next Bold