7 steps to start a start-up

[teacup64]

Hello people,

I was thinking of a crash-course/checklist for someone who has a start up idea, i.e. the fastest way to get the person to understand what the start up world is like. Please give me all the comments that come to mind.

1. Apply to Y combinator, and contact 150 VC/Angel investors in the first month - write down your pipeline. This process will force you to understand the requirements of the "start-up crowd" and also help you focus the idea (you get to learn new concepts e.g. market thickness, pitch deck, your business model). Lastly, if you can't get this done you have no business starting a start-up. People who start start-ups "Get Shit Done" M.S.
2. Set some weekly goals that will push you towards a MVP (For example talking to potential customers, specs, be ambitious and try to get lots of things done). Use the bottom up, or top down method.
3. Find a Cofounder, think of the guy who always did things (I instantly thought of my friend who make the program we were thinking about the day after we talked about it). It's best if you both know how to program, and be ruthless with procrastinators (use a three strike rule).
4. Make sure you understand these concepts: Network effect, defensible moat, fragmented market. Try to understand how your product can be the monopolist (watch a peter Thiel video). It also really helps to read the lean start up (alternatively watch a video by the author).
5. Try to build something that makes the customer want to share it with everyone (in my case, when I learnt of calendly I shared it with my whole team and friends instantly - I always have to zoom people and it saved me so much time). Understand what product market fit means.
6. Don't worry about anything other than: 1. Talking to customers, 2. Writing code, 3. possibly trying to sell - all the fancy other stuff comes later (I wasted so sooo much time on cap tables, etc...).
7. Check if you have done you'r weekly goals, set a monthly one and ALWAYS SET GOALS!!!
   
   Any comments?
   
   It's for my friends daughter (practically a niece who wants to start a pizza selling business "start up"). I also have an early stage start up, but these points came from chatting with other friends who have more successful start ups.
   
   I know 1 month is ambitious, but high standards means effort and creative solutions (hopefully).

 

[deandrade]

@teacup64 I don’t think this is a good pathway in my opinion. The most important thing people need to focus on is identifying the customer need. Especially the “paying” customer needs. Things like ycombinator and stuff is a crapshoot.

The lean startup guide and how to talk to humans and zero to one are great starting places for new entrepreneurs.

 

[ilikemango]

@deandrade Step 1, apply to YC. LOL!
YC’s marketing department thanks you for your service.

 

[anonymous_iran]

@deandrade Yeah, my sentiments exactly. People need to understand that a. Y combinator is predatory unless you're a unicorn and b. VCs only make sense if you need a ton of money to start, you're looking to go wildly big, you're looking to sell, eventually, and you're in a position to even ask for money. Just because you have a good idea with qualified professionals doesn't mean you can easily get funding, especially in this economy. You gotta build and prove excitement for it, first but even then it's a significant uphill battle if you're not a seasoned entrepreneur with success or you're not from an Ivy League school with connections.

People get way too hung up over vc investing, but the reality is that you're so much stronger and more skilled if you can build a successful company from the ground up. Single-handedly the most important skill is knowing how to create value starting with nothing. Vc funding makes you look sexy and gives you a lot of options but you can't know what the best options are for your buck unless you have everything and every opportunity taken from you so that you're forced to be Inventive through nimble but highly effective efforts.

 

[jamesbook]

@anonymous_iran Yikes

 

[jolene576]

@anonymous_iran This response should have more upvotes. There's a VERY limited scope where YC (and Techstars and 500 Global et. al.) are a prudent and prescient goal for a startup. Ironically, the ones most qualified to know that are the ones most qualified to be accepted to the programs.*

*This isn't to say YC et. al. are bad, they aren't. It's just the teams they are "most good" for is way more limited than the teams who actually do YC.

 

[teacup64]

@deandrade How would your list look like? In simple points? I totally agree with the books, I was going to add others but I thought "people don't like to read that much".

 

[deandrade]

@teacup64 Well I’d say:

1. Identify 3 reasons why you think your business is important.
2. Talk to 30 people who you think your product would be useful for. But do not talk about the idea, coax them into talking about the problems they have and see if there’s any alignment with your 3 reasons.
3. If you identify people who have the same problem do a bottom up market sizing (x number of people with the problem, who will pay y amount each). This will give you a realistic estimation of how big your business can get.
4. Now tally up what would be the minimum viable product / service you can provide for these people to take your help and eventually pay you for it. This doesn’t have to be code, remember that Airbnb was a dude with an air mattress and a bunch of Craigslist postings in the beginning.
5. Test what you need to do and tally up the effort vs cost. This tells you what your business would look like in the future.
6. Only raise money if you absolutely need it, remember that if you goto VC’s you’ve got to show them a path to making 10x returns for them at the very least.

 

[anonymous_iran]

@teacup64 I'd also add in:

1. if you're young and don't have skills or experience, instead of exploring a company you can form, go out and master a skill you really love and are passionate about like filmmaking or engineering. That's really how you identify problems within industries that you really care about, which will make you more likely to beat the competition because you're more obsessed and will work 70 hours a week to pull it off. Furthermore you'll understand the industry better than some silicon valley tech CEO whose just good at running companies. Those people won't provide the kind of service that your customers want or they'll create something that's okay, at best.
2. Identify a problem in the industry and then invent a hypothesis for solving that. Then create a cheap mock up, share it with hypothetical customers and gauge their thoughts on the solution. If the results are positive, then distill that idea down to its one singular feature that's gonna get people to constantly use it and then build that without any fancy additions or anything. Then market the fuck out of that to maximize revenue streams and users, which will give you more leverage to expand.
3. Understand what reciprocal altruism is so that you can make a solid deal with anyone. Super, super important and often overlooked.
4. Read a shit ton about behavioral psychology and how to inspire and influence people through storytelling.
5. If you're not technical, find someone to fill that role. Understand that a tech Co founder is a serious decision to make, so don't just find someone and go. Take your time with that and if it's taking too long, hire a freelancer from India that can work with your budget and learn how to communicate and manage the development process.
6. No matter what, start building. It's easy to beat around the bush but unless you start, nothing will happen.

 

[cujones]

@teacup64 As someone who has just bootstrapped their own startup,

step 1. have idea and create a powerpoint to potential customers of bare minimum idea, aggreagate their feedback in the process

step 2. build the most bare mvp you possibly can. Create a landing page, learn basics of copywriting to collect leads and have an email as you build so when you launch you can email your customers.

step 3. launch your mvp to your leads list and get feedback, make a lil money in the meantime

this is where im at ^^^, hoping our word of mouth strategy will pay off.

 

[jolene576]

@teacup64 I want to say upfront that I've read your other comments and posts, and you seem to be enthusiastic and sincere in your questions and comments, so the below response is not meant as a troll to you. I've been outright declined at the application stage twice with YC, I've interviewed once remotely, interviewed once in person (and was rejected) and interviewed once in person (and was extended an offer I declined). Identical numbers with Techstars, with identical results. (Although weirdly, across different programs, and my TS offer was not same company that was my YC offer.)

#1 is wildly off base to the extent that I thought this might be a troll post. Understanding the "requirements of the start-up crowd" in the way you describe/define it is so far down the list of important things that it ought to not even be included. The "start-up crowd", the investors and accelerators who will ACTUALLY cut you a check (And this includes YC, Techstars, 500 Global, TinySeed, Antler, gener8r, and all of the regional versions of these.) care about team and traction or traction and team. There's a couple exceptions around hardtech, but even then they're going to want some version of physical prototype and traction and team.

#6 on YOUR list that YOU defined doesn't even include your own criteria for #1.

#3, "It's best if you both know how to program." No, it isn't. It's best if your team complements each other and you aren't giving away large chunks of equity to someone who isn't a cofounder. It's rare that three code monkeys can pull off success on their own, and any examples you can think of are exceptions that prove the rule.

#5 is your best advice in your list. Build things potential customers are excited about. Build a team YOU are excited about, solve a problem your TEAM is excited about, and build a product your CUSTOMER is excited about. Anything else is so out of alignment so as to be comical.

If someone really wants a crash course in validating their business, just do Y Combinator Startup School instead. It has good resources, it covers the basics, and it will bear out the fruit, if there is any to be born, from you, your team, your problem, and your solution. (And ironically, it might also teach you that when you find all those pieces working well together, then you DON'T need Y Combinator.)

 

[ahunbleservant]

@teacup64

5 is the key towards success!​

 

[youthleaderjames]

@teacup64 Hello @teacup64

A pizza sales business isn’t a startup.
Is your business creation project VC-compatible?
There are other forms of financing more suitable for a pizzeria than fundraising with an exit strategy.
Your second point is a priority for me, before meeting with investors.
I recommend giving them Rob Fitzpatrick’s book ‘The Mom Test.’ It will be helpful.

 

[teacup64]

@youthleaderjames That's a great example! I was hoping that they would discover it themselves while filling out the VC forms. More than anything I though it was a great idea to put to test someone's will with a 150 list pipeline.

 

[aangel]

@teacup64 Is that you, ChatGPT?

 

[alex1971]

@aangel This doesn’t read like ChatGPT at all???

 

[yetibigfoot]

@teacup64 Did you do all of those?

 

[teacup64]

@yetibigfoot Yeah, but I'm having some serious problems with getting PMF, we're on our 4th iteration. I guess it's always the hardest part.

 

[davis_steff]

@teacup64 I think bootstrap your idea and research the market fit would be the first step rather going with a knock at VCs.

 

[housecat71]

@teacup64 We can assist startups with needed funding