Course Curated By: Dr. G. Danford (London Business School MBA, Helsinki School of Economics PhD)
Before Starting Session
The only proven method for measuring learning is to take a pre-quiz and post-quiz of the content.
Content: Idea, Team & Execution
- Criteria for selecting a co-founder.
- Criteria for selecting early-stage employees.
- The ‘Fire Fast’ rule.
- Successful execution in startups.
- Critical stages of execution.
- Regaining momentum in the startup.
- Choosing a random co-founder or someone you don’t have a long business history with, will result in trouble.
- Ideas are worth very little without the right people to execute them.
- Setting the execution bar high from the beginning is an essential.
- For startups, it is most critical to define the target market segment where the offering has the most value.
- Having a limited number of overarching goals for the startup is essential.
- ‘Keep Growing’ and don’t let the key metrics lag (shipping dates etc.).
- Competitors who are making distracting noise (strong and weak signals) should be ignored…unless.
Sam Altman (President, Y Combinator)
Y Combinator has invested in over 80 companies including; Dropbox, Airbnb, Stripe, Reddit, Zenefits, Instacart and Weebly. The combined market capitalization of YC companies is over $30B.
Choosing a random co-founder or someone you don’t have a long business history with, or someone you are not friendly with, will result in trouble. The track record for founders who don’t know each other is disappointing.The Top-20 most valuable Y Combinator companies have had at least two co-founders. Co-founders must to be very resourceful, tough and calm. For those founders who are not technical, they probably need a technical co-founder. ‘You need a co-founder who behaves likes James Bond’. Teams for the sake of teams is foolish. Therefore, you should be proud of how few employees you have in the beginning. Too many employees at the beginning results in high burn rates, unnecessary complexity, tension and slow decision making.
It’s vital to set the bar high from the beginning, hire slowly and make sure that all your people believe in the mission from the gecko. Getting the product right from the start also helps when you start recruiting because by doing that you can demonstrate that the business idea is viable. Mediocre people is a recipe for killing a startup, especially before achieving success.
There are some essential necessary ingredients for defining the kinds of people you should gather together (the team) in the beginning. It is essential that you have people who are; good communicators, manically determined, pass the animal test (describe any employee as an animal-see video) and who you would even feel comfortable reporting to, if the leadership roles were to be reversed. Quickly fire people who are creating office politic,s and who are always negative. When it’s not working, fire people fast, and don’t look back.
The Team: Sam Altman (3:00)
NOTE: this video will start and stop at the pre-assigned times 5:05-8:19
2. A+ Players
In the end, ideas are worth very little without people to execute them. And we all know a company is only as good as its team, which is why the hiring process is so critical as you start up your venture. Furthermore, anyone who has made a bad hire along the way (as most of us have) knows that hiring the wrong person can cost you far more than time and money. It ultimately makes the difference between market leaders and market laggards – or worse still – failed ventures entirely. Yet, every startup struggles to find the so called “A+ players” to build their business. What is A+ talent and how do you go after that talent?
A+ Players Help Execute (6:00)
Michael Skok, Harvard i-lab Workshop
NOTE: this video will start and stop at the pre-assigned times 4:05-9:58
There are millions of people in the world who have good ideas, many times more people than those who are willing to put in the necessary effort. Ideas on their own are worthless, ‘executing well is all that matters’.
Therefore, setting the execution bar high from the beginning is an essential responsibility of the CEO and founder (founders). Deciding to start a startup and becoming a founder is in fact a commitment to years of grinding work and execution. ‘You can’t outsource that’. Execution can be divided into two critical elements; a) figuring out what to do, and b) are you – the startup – capable of getting that job done. Focus is also essential…a great question to ask yourself frequently is ‘what are you spending your time on, and what are the 2-3 most important things you are doing?’. If you can’t answer that question precisely, you are in trouble. Saying NO 99 times out of 100 is the recipe for successful execution.
Execution: Sam Altman (3:30)
NOTE: this video will start and stop at the pre-assigned times 29:05-32:29
Take a Pomodoro Break for a few minutes (reflect & relax)
See Video: Pomodoro Time Management Technique
Market segmentation is a marketing strategy which involves dividing a broad target market into subsets that have, or are perceived to have, common needs, interests, and priorities, selecting the most appropriate segment for your business and then designing and implementing strategies to target them. Market segmentation strategies are generally used to identify and further define the target customers, and provide supporting data for marketing plan elements such as positioning to achieve certain marketing plan objectives. Businesses may develop product differentiation strategies, or an undifferentiated approach, involving specific products or product lines depending on the specific demand and attributes of the target segment. For startups it is most critical to define the segment where the offering has the most value to as narrow a segment as possible (but viable as a business). source: wikipedia
Targeted Segmentation (5:00)
Michael Skok, Harvard i-lab
NOTE: this video will start and stop at the pre-assigned times 1:10:23-1:15:51
5. Myoptic Thinking
Having a limited number of overarching goals for the startup is essential. Every single person in the startup should internalize and understand those goals (ship a product by this date or momentum or maintaining growth rate etc.), and the team must execute based on those precise goals. Startup sustainability is very dependent on growth and momentum, and these are the lifeblood and breath of every startup.
Startups must focus on those few critical metrics which are driving the business forward.
The real secret to the success of any startup is built upon extreme focus, and extreme dedication. However, focus without effective communication is frugal. Great communication prevents every startup team from getting distracted by unnecessary activities.
Focus: Sam Altman (3:00)
NOTE: this video will start and stop at the pre-assigned times 33:14-36:37
Founders want the startup to be on a winning trajectory all the time. The biggest piece of advice is to ‘Keep Growing’ and don’t let the key metrics lag (shipping dates etc.). Startups can make great progress through incremental steps, and if you have built a great product, the business will advance. However, at times things will slow down. At those slack moments, staff can become disenchanted and unhappy. Therefore, regaining momentum during these troughs ‘momentum slag’ is critical, and can only be achieved by sustaining small wins (big recoveries from troughs is much more difficult).
If there is any difference of opinion among the team about what to do during a ‘momentum slag’…ask the users because they often know what’s in their best interest.
An excellent way to recover during a ‘momentum slag’ is to create an operating rhythm. An operating rhythm can be defined as; pre-defined processes of communication (including KPI’s), and interactions between different units, which ensure that operational flows are not interrupted and are controlled. Operating rhythm establishes a structured way of communication between project teams/operations (roles, milestones, outcomes, targets etc.), and that those are aligned to the vision of the company. One false distraction that often disrupts momentum is competitor action (and it shouldn’t). Competitors who are making distracting noise (strong and weak signals) should be ignored, unless those signals are reflected in real shipped product (they are out-selling you).
Momentum: Sam Altman (3:00)
NOTE: this video will start and stop at the pre-assigned times 41:27-44:30
- For those founders who are not technical, they probably need a technical co-founder.
- Hiring the wrong people can cost you far more than time and money.
- Deciding to start a startup and becoming a founder is in fact a commitment to years of grinding work and execution.
- A differentiated or undifferentiated approach can be taken, depending on the specific demand and attributes of the target segment.
- The real secret to the success of any startup is built upon extreme focus, and extreme dedication.
- An excellent way to recover during a ‘momentum slag’ is to create an operating rhythm ( pre-defined processes of communication (including KPI’s), and interactions).
Presentation Slide Deck:
NEXT Session 3/20: MAXIMIZE SUCCESS
CONTENT: Advice before starting (Dustin Moskovitz, co-founder Facebook), product decisions, the ‘UGLY’ side of startups, Just Doing It!, making luck happen (Darren Rowse, founder ProBlogger), and more. SEE LINK TO 3/20 BELOW
Presenter: Dustin Moskovitz (Co-founder Facebook) and Sam Altman (PresidentYCombinator)