Jeff Bezos’s two pieces of advice for aspiring entrepreneurs “The advice that I would give entrepreneurs is don't chase the hot new thing. It's so hard to catch something that everybody already knows is hot. Instead, position yourself and wait for the wave to come to you.” The best way to position yourself, Jeff argues, is to pursue something that captures your curiosity. When Amazon startup, Jeff always asks himself if the founder is a “missionary” or a “mercenary.” “I don't like mercenaries, and I don't like mercenary cultures. The missionary is building the product, building the service, because they love the customer, because they love the product, because they love the service. The mercenary is building the product or the service so that they can flip the company and make money.” One of the great paradoxes of entrepreneurship is that the missionaries usually end up making more money than the mercenaries anyways. After you’ve picked something you’re passionate about, Jeff’s second piece of advice is: “Start with the customer and work backwards… Those two things will take you an awfully long way.”

Patrick Collison on thinking for yourself: "Nobody is going to teach you to think for yourself. A large fraction of what people around you believe is mistaken. Internalize this and practice coming up with your own worldview. The correlation between it and those around you shouldn't be too strong unless you think you were especially lucky in your initial conditions."

"Advice I'd Give Past Me" by Patrick Collison

Elon Musk explains his 5-step algorithm for running companies “First, make your requirements less dumb. Your requirements are definitely dumb… It’s particularly dangerous if a smart person gave you the requirements because you might not question them enough.” In this interview at Starbase, Elon elaborates on his methodology for shipping everything from electric cars to rockets. Here’s his “algorithm” quoted in full from the Walter Isaacson biography: 1. Question every requirement. Each should come with the name of the person who made it. You should never accept that a requirement came from a department, such as from "the legal department" or "the safety department." You need to know the name of the real person who made that requirement. Then you should question it, no matter how smart that person is. Requirements from smart people are the most dangerous, because people are less likely to question them. Always do so, even if the requirement came from me. Then make the requirements less dumb. 2. Delete any part or process you can. You may have to add them back later. In fact, if you do not end up adding back at least 10% of them, then you didn't delete enough. 3. Simplify and optimize. This should come after step two. A common mistake is to simplify and optimize a part or a process that should not exist. 4. Accelerate cycle time. Every process can be speeded up. But only do this after you have followed the first three steps. In the Tesla factory, I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted. 5. Automate. That comes last. The big mistake in Nevada and at Fremont was that I began by trying to automate every step. We should have waited until all the requirements had been questioned, parts and processes deleted, and the bugs were shaken out. Elon shares a costly example of doing this process in reverse on the Tesla Model 3 production line and optimizing a part that didn’t even need to exist. “It’s possibly the most common error of a smart engineer to optimize a thing that should not exist. Everyone’s been trained in high school and college that you answer the question — convergent logic. You can’t tell the professor your question is dumb or you’ll get a bad grade. You have to answer the question. So everyone, without knowing, basically has this mental straight jacket on and they’ll work on optimizing the thing that should simply not exist.” Video source: @Erdayastronaut (2021)

Y Combinator CEO Garry Tan’s advice for startups: “When you’re small, act small” A lot of founders try to emulate large companies, and will do things like use the same terminology as Microsoft to describe their products. But Garry argues this is a mistake: “When you’re starting something new, the whole advantage is that you’re a real human being. We are so starved for real, authentic connection that if you can talk to people and say ‘Hey, I’m the CEO. What do you need?’ That’s the most powerful thing.” Being small lets you offer fanatical customer support. Not only will this win customer trust, but it’ll help you find product/market fit. If you listen to customers, they will tell you what they want. “The reason why people don’t do this is they think starting a startup is building this incredibly complex machinery… But I encourage you to think about it in a different way. It’s more like throwing a really, really amazing party… You go there, you see a friend, they say ‘Welcome! Let me take your coat. Let me introduce you to your friends.’” For his first startup, Posterous, Garry and his team aimed to reply to every single customer support email within ten minutes. And if there was a bug, they fixed it on the spot. Human connection with your customers is really important. Garry cites a study on Usenet that found retention increased from 16% to 26% if someone received a reply to their post on the forum. As Garry explains: “A 10% difference in retention is actually the difference between a startup that’s flatlining and one that’s working. The compounding of this is really, really massive… Be small. Be human.” Video source: @ECorner (2023)

Peter Thiel: The salary of a startup CEO is “incredibly predictive” In this 2012 interview Thiel explains that one of the best questions an investor can ask is “What is the salary of the CEO?” In his view, the right answer is less than $150k, even post Series A. “If you like the people, you like the business model, you like the technology, you like everything. I’ve found that that single question is incredibly predictive because it ends up setting the culture. Are people doing it for equity or cash? It drives the people who are being hired… And you always want to get to this question of motivation. Do people actually believe in what they’re doing?” He cites Reid Hoffman founding LinkedIn as an example: “Reid was taking a salary of $15,000 a year. It was the minimum wage so you could get health insurance. And maybe he didn’t need more money [after PayPal], but it was setting the right tone for the company.” Video source: @PandoDaily (2012)

Ben Horowitz on how startup founders should run board meetings As Ben explains, the most valuable thing that comes out of a board meeting is that it’s a forcing function to take a step back and make sure the game plan is right. So the first thing you want to make sure to do is come prepared with data that provides a good overview of where the company is at: “If you do that and present that at a board meeting and then have time to discuss interesting issues, then you’re doing pretty good. Like you’re in the 95th percentile.” Ben also advises founders to make sure you’re getting the right kind of strategy from your board: “One of the things you’ll notice when you’re running a company is the knowledge gap between the people in the company and the people on the board starts out small and then gets big over time. So when you start your company, your VC will have all these really interesting insights.” But after a year, you’ll know every bit of customer feedback and product decision cold. So your VC’s advice on product strategy won’t be that valuable. Where they can be useful though is asking: What are you not doing? “One of the problems in running a company is you spend all your time and energy optimizing, tuning, refining, A/B testing, and getting really good at what you’re doing. But then there’s this whole world of stuff you’re not doing and one of those things may be something you should do.” If you give a good board the right context, they can help you identify things you should be doing but haven’t yet considered (e.g. entering an adjacent market, buying a company, etc.) “That’s a lot easier to see from the outside than from the inside. You want the right kind of strategy from the board, not the wrong kind of strategy.” Video source: @kevinrose (2012)

David Sacks on what made the PayPal Mafia so successful The employees of PayPal went on to build many of the companies that defined Silicon Valley in the 2000s, such as Tesla, SpaceX, LinkedIn, YouTube, Palantir, Yelp, Yammer, and more. David Sacks—founding COO and product leader at PayPal—reflects on some of the factors that he believed contributed to their success: “I think one of the key things was that PayPal innovated not just on product, but on distribution as well.” He gives three examples of distribution strategies the PayPal Mafia brought with them to their next companies: 1. Virality. PayPal paid users $20 to refer their friends, which led to explosive growth. Virality was a huge factor in LinkedIn’s success. 2. Building on an existing network/platform. PayPal leveraged eBay’s power seller network, while LinkedIn leveraged their users’ network of email contacts. You want to “go where the users already are,” Sacks argues. 3. Embeds. PayPal let customers embed the logo on their websites and eBay auctions. YouTube employed this same strategy by making their videos easy to embed on Myspace and other websites. Sacks continues: “All of these techniques today are commonplace, but in the early 2000s, we were one of the first companies to do them… We were innovating not just on product but on distribution as well, and that is something that all of the PayPal Mafia companies have done.” He contrasts the ~220 employees pre-IPO PayPal employees producing 7+ unicorns versus only a handful from Google even though Google had 100x the number of employees. “It’s a really interesting question: Why?… I think this sort of scrappiness around distribution is a big part of the explanation… If you’re an entrepreneur working in a small team, you’ve got to figure out from zero: How do I get my first user? How do I get the second user? How does that go to one hundred, one thousand, one million?… [Google] never has to think about that. They’ve got guaranteed distribution of half a billion users. And so, I think that scrappiness around distribution is one of the key reasons that there’s been so many PayPal mafia companies. I think it’s an interesting thing to think about as you create your own startups.” Video source: @draper_u (2014)

Sam Altman: “Most founders get delegation wrong” “People get delegation wrong one way or the other. Every founder knows that as you scale the company, you need to delegate. But they either do way too much or way too little. And it’s actually quite difficult to do it the right balance.” Most founders Sam saw at Y Combinator would delegate too little because they got burned once early on and it took them a long time to trust that delegation can work again. But, as Sam explains, founders can also delegate too much: “Their board member tells them, ‘Hey, you’ve got to delegate. You need these five VPs for these five areas.’ And probably whatever is the area that you think is most important to the business and you enjoy the most, you shouldn’t hire the VP in that area. You should just do it yourself. If you’re a product person and you really love product, don’t hire a VP of product. Keep doing that. Because if you hire a VP of product, you will have never-ending conflict because you both want the same thing. You won’t like the way they do it. They won’t like you’re interfering with them.” Sam continues: “Whatever you think the critical piece of the business is - the one or maybe two most critical pieces - hold on to those yourself. That will also make you better about delegating everything else so that you can focus on what you really want to focus on.” Video source: @khoslaventures (2021)

Jack Dorsey’s advice to startup founders: edit the team and really focus on analytics Jack shares that one of his biggest mistakes at Twitter was not editing the team: “I think for all startups it’s really easy to consider any hire as [part of the team for] the length of the entire company… [But] I think leaders of companies have to consider themselves editors, and you have to edit the team. You constantly have to make sure that you have the best people in, and if there’s any negative attribute within the team, you have to part ways.” Jack’s other piece of advice for entrepreneurs or anyone starting a project is to really focus on analytics: “Really focus on how people are using the system… You need to have an understanding of the momentum of what you’re doing and where you’re going. And you can only do that with data.” Data should inform everything from product decisions to communication with your customers to hiring and editing the team. Video source: @kevinrose (2010)