Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

21

Transcript of Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Page 1: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.
Page 2: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

Source: “18 Mistakes That Kill Startups” by Paul Graham

Page 3: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

YC Background

Page 4: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

 1. Single Founder?

Colleagues to brainstorm?Colleagues to talk you out of dumb moves?Colleagues to cheer you when things go wrongPower of “I can’t let my friends down”

Page 5: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

 2. Bad location?

Where chance meeting occurWhere the experts areWhere standards are higherWhere the folks to hire areWhere people “understand”Where the money is

Page 6: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

 3. Marginal niche?

• If there’s a business, there’s competition!

• Often an unconscious problem.

• What’s a “good idea for someone elsesomeone else to do as startup?”

Page 7: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

4. Derivative idea?

Few successful startups are imitations.Best problems to solve are those we face ourselvesLook for problems and imagine ventures that solve them

Page 8: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

 5. Obstinacy? Hold true to it no matter what setbacks you encounter?

Most successful startups end up doing something different than they originally intended

Switching to a new idea every week will be equally fatal.

Works where the problem is well-defined….for something like winning an Olympic gold medal,

Startups are more like science, … where you need to follow the trail wherever it

leads.

Page 9: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

6. Hiring Bad Programmers?

Business guys often can’t even recognize a good programmer

Page 10: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

7. Choosing the Wrong Platform?

Difficult decisionWhat do leading university researchers use?

Page 11: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

 8. Slowness in Launching?

Several distinct problems manifest themselves as delays in launching: working too slowly; not truly understanding the problem; fear of having to deal with users; fear of being judged; working on too many different things; excessive perfectionism. Fortunately you can combat all of them by the simple expedient of forcing yourself to launch something fairly quickly.

- Paul Graham, Founder, YC

Fast Launch: Forces you to actually finish some quantum of work Only by bouncing your idea off users that you fully understand it.

Page 12: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

9. Launching Too Early?

Minimum to launch?

Identify a core that's: useful on its own and something that can be incrementally expanded into

the whole project

Page 13: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

10. Having No Specific User in Mind?

Build something for yourself, or be very empirical!

Page 14: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

 11. Raising Too Little Money?

You have to take enough to get to the next stepAdvance to a visibly higher level

Idea >> working prototype >> launch >> growthIdea >> working prototype >> launch >> growth

Page 15: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

12. Spending Too Much?

Lots of $ = Lots of new hiring >> Higher costs / Slower org

Only hire people who are either going to write code or go out and get users, because those are the only things you need at first.

Page 16: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

13. Raising Too Much Money?

Once you take a lot of money it gets harder to change direction. The time required to raise money grows with the amount. Economically, startups are an all-or-nothing game.

Page 17: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

Pissing off investors by ignoring them is probably less dangerous than caving in to them

• How hard you have to work on managing investors usually depends on how much money you've taken

14. Poor Investor Management?

Page 18: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

15. Sacrificing Users to (Supposed) Profit?

It is irresponsible not to think about business models.It's just ten times more irresponsible not to think about the product

Making something people want is much harder than making money from it

Business models can wait

Page 19: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

Extracting money out of a business is messy?Just sell “the idea”?No… OK just “license the technology”?

Nothing like lots of users to convince an acquirer!

16. Not Wanting to Get Your Hands Dirty?

Page 20: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

17. Fights Between Founders

Surprisingly commonOften related to lack of care in selecting co-founders

Page 21: Why Startups Die? Source: “18 Mistakes That Kill Startups” by Paul Graham.

Why Startups Die?

18. A Half-Hearted Effort?

Starting startups is just like everything else. The biggest mistake you can make is not to try hard enough. To the extent there's a secret to success, it's not to be in denial about that.

- Paul Graham, Founder, YC

Most common startup failure doesn’t do much of anything Project couple guys started on the side, while working on their day jobs Never got anywhere …was gradually abandoned Don't invest more time… because they know it's a bad investment?