The LaunchPad Inside YCombinator

Book Notes: Inside Look into YCombinator

The LaunchPad:Inside YCombinator by Randall Stross seems like a relatively unknown book that hasn’t made its way into discussions in startup circles.

I thought the book was an interesting look into the inner workings of YCombinator (YC), one of the best startup incubator programs. I’ve read almost all of Paul Graham’s essays, but the book still had some good insights for startup founders.

Below are some of my notes on the book.

Overall Main Points:

1. YC is one of the best alternatives to college. It’s an education institution disguised as an incubator. It feels like a great community.

2. Surprised by how much advice and help was provided by Paul Grahma (PG) and other partners at office hours. At the same time, PG says that if the founders choose to not do anything, YC is not going to hover over them. (The best people don’t need much help, they figure it out.)

3. PG critiqued each presentation before demo day. Advice is to carry yourself confidently.

4. PG was well-aware of how to be good at sales and asked the people to show confidence. To speak with confidence and be formidable. He thinks it’s possible to become like that. Be James Bond.

5. The pool of startup founders, hackers, are playing with computers when they are 13 years old. “If you want to fix the problem (of fewer women), that’s what you have to change.”

6. What other countries lacked was not entrepreneurial drive but a concentration of founders who had taken the plunge and showed others it was possible. This had nothing to do with culture or national character. It was a matter of geography.

7. Here’s how to generate new ideas. Three things. One: founders are target users. Two: not many people could build it, but founders are among them. Three: few people realize it is a big deal. What will people say in the future was an unmet need today?

8. The best startups are animals at sales. Become James Bond.

Notes on Startups:

1. Starting a startup is hard. YC does not make it easy for founders. By asking founders to come to the interviews and live in Mountain View for 3 months, it’s testing if people really want to start a startup.

2. “It might be a good form of discipline to force yourself to work on something that someone would actually pay you for. Maybe it’s a grubby business, the Internet equivalent of a body shop. But at least it’s real.” - This is so one can understand the importance of making something people want.

3. If users don’t like your product, don’t give up. Proceed analytically and unemotionally.

4. You make what you measure. Have a target metric to track each week.

5. PG: Obsess about meeting your target growth rate. Treat it like a game. It will cause you to do the right thing. It will focus everything. It will be like a compass.

6. It’s easier than ever to start a business. It’s harder than ever to build a business. It’s more important than ever to think about what you want to build.

Notes on Founders:

1. Test for young founders: they seem older than they are. Young founders still in college have a convenient fallback position if startup failed. Having the backup makes it easy to give up.

2. As a founder, you just have to have the potential to be great. You don’t have to have it from day one. The people who met Dorsey or Zuckerberg in the early days before they became well known did not predict great things ahead for them - greatness is not obvious.

3. Sales hire: You’ll know the person when you see them. You’re looking for someone who is an animal, one of these people that is not going to take no for an answer. Super aggressive. Really scrappy.

4. You need a cofounder: you need someone to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.

5. Founders wish they trusted their gut more.

6. PG: “Startups do to the relationship between the founders what a dog does to a sock; if it can be pulled apart, it will be.”

7. Graham on presenting to investors:

   1. “It’s not so much what you say, it’s more like how you carry yourself.”

   2. As founders, you have to undergo this sort of transition that produces James Bond. Become more confident, more resourceful, more tough. 

   3. The difference is all tone and confidence.

   4. If you look at the audience, you force them to pay attention.

   5. If it doesn’t feel wrong, you’re talking too fast. Talk slow.

   6. One of the sentences should be a genuine insight, something that will surprise.

Notes on YCombinator:

1. PG warns founders that YC partners will not closely supervise startups and save them from screwing up.

2. Having founders gather once a week, in person, prods them to work harder because of the power of shame avoidance, they don’t want to be embarrassed that they’ve made little progress.

3. Having a culture that’s more balanced between male and female may make the atmosphere of YC more thoughtful.

4. Demo Day is a chance to “mass-produce reputation”

5. YC partners update their own rankings of batch’s startups as the session proceeds. It's a training exercise to improve their ability to identify characteristics of applicants most closely associated with success.

   1. All the top rankings - founders were real animals at doing sales.

   2. You have to be good at hacking and be aggressive at sales.

   3. PG: Be sales animals. And if you’re not sales animals, force yourselves to do it, even though it will be uncomfortable.