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The Pmarca Guide to Startups

  • A startup puts you on an emotional rollercoaster unlike anything you have ever experienced
  • To describe the dimensions that you should consider as you contemplate retooling your plan, let me introduce the onion theory of risk.
  • I had never met a venture capitalist, no venture capitalist had ever talked to me, and I wouldn’t have recognized one if I’d stumbled over his checkbook on the sidewalk.
  • What correlates the most to success—team, product, or market? Or, more bluntly, what causes success? And, for those of us who are students of startup failure—what’s most dangerous: a bad team, a weak product, or a poor market?
  • The most important thing you need to know going into any discussion or interaction with a big company is that you’re Captain Ahab, and the big company is Moby Dick.
  • Before Product/Market Fit, a startup should ideally raise at least enough money to get to Product/Market Fit.
  • By definition you will be doing something new, in a world that is a very uncertain place. You are simply probably not going to know whether your initial idea will work as a product and a business, or not. And you will probably have to rapidly evolve your plan—possibly every aspect of it—as you go.
  • The whole point of having an executive is to have someone who can figure out how to build and run an organization so that you don’t have to. Manage her, understand what she is doing, be very clear on the results you expect, but let her do the job.
  • If you don’t have anyone on your founding team who is capable of being CEO, then sell your company—now.

Other Startup Essentials

  • The most important thing to understand about venture capitalists is that they are in business to do a very specific thing.
  • Remember, professional venture capital has only existed in its modern form for about the last 40 years. In that time the world has seen its most amazing flowering of technological and medical progress, ever. That is not a coincidence.
  • Somehow we’ve ended up in a paradox: venture capital returns, on average, have been terrible, but contrary to historical precedent, the money keeps flooding in, venture firms keep going, and you have more money chasing deals than you
  • If a candidate has just followed the rules their whole lives, showed up for the right classes and the right tests and the right career opportunities without achieving something distinct and notable, relative to their starting point—then they probably aren’t driven.
  • In a nutshell, Gary’s question to me was: what makes serial entrepreneurs tick? Why do people like Max keep going and start new companies when they could just park it on a beach and suck down mai tais?
  • Human response to incentives is indeed a huge behavioral motivator, and I think Mr. Munger is right that once you think you realize how big it is, you need to assume it’s even bigger.
  • Quality of output does not vary by age... which means, of course, that attempting to improve your batting average of hits versus misses is a waste of time as you progress through a creative career. Instead you should just focus on more at-bats—more output. Think about that one.
  • Luck is something that every successful entrepreneur will tell you plays a huge role in the difference between success and failure. Many of those successful entrepreneurs will only admit this under duress, though, because if luck does indeed play such a huge role, then that seriously dents the image of the successful entrepreneur as an omniscient business genius.

Additional Pmarca Guides

Assorted Goodness

  • I believe the reality is this: what we have seen over the last several years is the Web itself coming into its own.
  • We are blessed so far this decade with an amazing crop of new science fiction novelists.
  • I think the definition of what it means to be a social network is going to expand rapidly from here—to incorporate many kinds of behavior and many features that people would be surprised by today, ranging from real-time communication to ecommerce to mobile uploading and downloading to games and beyond.
  • A lot of entrepreneurs come up with an idea and run with it; Steve, on the other hand, takes a comprehensive approach at analyzing and specifying exactly what a company is going to do to get started and become successful.
  • A “platform” is a system that can be programmed and therefore customized by outside developers—users—and in that way, adapted to countless needs and niches that the platform’s original developers could not have possibly contemplated, much less had time to accommodate.
  • My three favorite jazz-based blues albums, all timeless
  • writing a blog is way easier than writing a magazine article, a published paper, or a book—but provides many of the same benefits.
  • OK. You’re right. It’s a bubble. A huge, massive, inflating bubble. We’re all doomed. Doomed, I say! DOOMED! It can’t last. It won’t last. It can’t won’t not last.
  • Everyone knows that the hyper-controlling manager with the severe personality disorder who micromanages every crummy decision is no fun to work for. However, it is wrong to condemn the practice of micromanagement on that basis.
  • In light of the extraordinary events playing out around us right now in the runup to the presidential election, I would like to share with you a personal experience that I was lucky enough to have early last year.