Manage Your Startup

A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.

If you want to start a startup, get yourself into a situation with maximum points of leverage and stretch your mind as far as it will go.

Startups are so hard that you can’t be pointed off to the side and hope to succeed. You have to know that growing fast is what you’re trying to do, and design your company around that knowledge.

Most good hackers have no more idea of the horrors hinted at in this FAQ than a private in the army has of the horrors of war. A few do, but rarities like them are overrepresented in startups because they’re the kinds of people who try starting startups.

It’s worth noticing that most successful startups happen at about the same rate as successful evolutionary mutations: one per month per 100 startups, say, or one per year per 10K startups. That’s an important clue: it means successful startups are not merely rare; they’re very

Startups need to manage themselves. They are at once too big and too small, like Goldilocks’ porridge. They have too much work and not enough people, like Goldilocks’ bed. And they have to grow up just right, like Goldilocks herself.

If you’re a startup doing something cool, you can’t help but be a little scary. If there were no risk of failure, you would probably be growing too slowly. After all, if your startup were so obviously going to succeed, why wasn’t it already big? So in addition to the anxiety that comes from doing something hard, founders get the extra anxiety of knowing that even if they do everything right, their endeavor may still fail.

When faced with that kind of pressure, it is tempting to indulge in paranoia. That seems like an odd thing for a rationalist to say: after all, paranoia is by definition an irrational state of mind–a belief in the existence of an external agency causing a situation when there is none. But maybe we should make an exception for startups. A startup can seem so obviously doomed that only paranoia can explain it; yet strangely enough they sometimes pull through.”

I’ve been a lot of different things over the course of my life, but one thing I’ve never been is a startup founder. That might seem like an odd thing to say, since I do have a startup, and I’m the CEO. But this isn’t how founders are supposed to act.

The first thing founders are supposed to do is “define their mission.” That’s what we were told when we went to visit Y Combinator for the first time. Founders are supposed to be missionaries. And I guess if you want a startup to succeed, you need people who really believe in its mission.

But that’s not me.

I’m not a missionary, and I don’t think most of my fellow founders at YC are either. We’re mercenaries, and that’s fine. For us it just means that instead of defining our mission statement, we have to define our management statement: how are we going to manage our company?

When I was growing up I had two major ambitions: one was to be a writer for The Simpsons and the other was to be a fighting game champion (like Guile from Street Fighter). Both seemed equally unlikely at the time. If someone had asked me if it made sense for me to devote my life to

As you become more successful, you will need to manage other people. You will also need to be managed. This is a guide to working with others as an equal, and a guide to being an equal.

Startups are teams of founders. If you’re the CEO and cofounder, it’s your job to keep the team together and make sure they’re productive. You’ll need to do this by making them happy, which means paying attention to their needs and giving them what they need.

This is not just personal duty; it’s also good economics. The most important thing about management is that it’s the best way to make people work on what you want them to work on. In fact, there’s probably no other way to get them to do that, unless you pay them much more than they’d make elsewhere – which will bankrupt you if successful startups are as scarce as they seem to be.

If your startup succeeds, at some point you’ll start having employees who aren’t founders. At this point you’ll have a choice: either treat them like people or like cogs in a machine. The conventional wisdom says treat them like machines; but I think that would be wrong for two reasons: because it would be wrong in itself, and because it

I guess it’s hard to say exactly what a startup is. Startups are not just technology companies, though in practice most are. The only essential thing is growth. Everything else we associate with startups follows from growth.

A barbershop isn’t designed to grow fast. A barbershop doesn’t split into two smaller barbershops that compete with each other once it reaches a certain size because that would be insane. The whole point of a barbershop, as opposed to a hair salon, is that it’s designed for smallness. It isn’t just small, it’s supposed to stay small, which means the owner can operate it herself and cut all the hair, which makes it cheap.

But if you could come up with a business that was like a barbershop in every way except customers didn’t come to you–you went out and got them–that would be a startup. Such businesses have existed for decades at least; What’sApp, for example, which Facebook bought for $19 billion some years ago, was sold by its founder as “a barbershop that came to you.” But when people talk about startups today they’re usually talking about high tech companies like Facebook or Twitter whose products are free and whose business models depend on

Startups are different from established companies. They’re smaller, for one thing, and younger. But more importantly, the people in them are different. Startups have to be run by people who recognize that startups are different from established companies; who want to do things that haven’t been done before; who take their work seriously but not themselves; who like to solve problems and invent new ways of doing things.

People who want to do those things tend to be young. If you want to make something new, you have to be willing to risk making something that nobody wants. And if you’re going to try that hard anyway, you might as well try to do something big. So that’s what young people do: they make the big ambitious kinds of changes they imagine old people should be too cautious to attempt.

That’s why the way most companies are run is so frustrating for young people: it’s too cautious. It doesn’t aim high enough. And that’s why the best startups often have founders who are still in their 20s: because founding a startup is a big ambitious project, and such projects are best attempted when you still have your youthful indifference to impossible odds.