How To Get To A Billion

How to Get to A Billion

Make something people want.

A startup must tailor everything to exactly what the consumer wants. Otherwise it will never get off the ground.

You want to be a part of a team that are “living in the future”. They are on the leading edge of some kind of change, and are building something they themselves want.

Most super-successful startups are of this type. Steve Wozniak wanted a computer.

Mark Zuckerberg wanted to engage online with his college friends.

Larry and Sergey wanted to find things on the web. All these founders were building things they and their peers wanted, and the fact that they were at the leading edge of change meant that more people would want these things in the future.

How do you keep going in spite of all the shit? Easy. You have to be genuinely interested in what you're building. This is what really drives billionaires, or at least the ones who become billionaires from starting companies. The company is their project. What is driving you is not just money. What is driving you is the same thing that keeps anyone else working when they could stop if they wanted to: that there's nothing else you’d rather do.

“People's motives for starting startups are usually mixed. They're usually doing it from some combination of the desire to make money, the desire to seem cool, genuine interest in the problem, and unwillingness to work for someone else. The last two are more powerful motivators than the first two. It's ok for founders to want to make money or to seem cool. Most do. But if the founders seem like they're doing it just to make money or just to seem cool, they're not likely to succeed on a big scale. The founders who are doing it for the money will take the first sufficiently large acquisition offer, and the ones who are doing it to seem cool will rapidly discover that there are much less painful ways of seeming cool.” - YC Combinator

The most reliable way to become a billionaire is to start a company that grows fast, and the way to grow fast is to make what users want. Newly started startups have no choice but to delight users, or they'll never even get rolling.

How much do you care about your clients? Would you do anything to ensure that their experience with your product is a positive one?

Not every newly founded company is a startup. Millions of companies are started every year in the US. Only a tiny fraction are startups. Most are service businesses — restaurants, barbershops, plumbers, and so on. These are not startups, except in a few unusual cases.

Startups do have a different sort of DNA from other businesses. Google is not just a barbershop whose founders were unusually lucky and hard-working. Google was different from the beginning.

To grow rapidly, you need to make something you can sell to a big market. That's the difference between Google and a barbershop. A barbershop doesn't scale.

For a company to grow really big, it must (a) make something lots of people want, and (b) reach and serve all those people.

Usually successful startups happen because the founders are sufficiently different from other people that ideas few others can see seem obvious to them.

Starting a startup company is at first no more than a declaration of one's ambitions. You're committing not just to starting a company, but to starting a fast growing one, and you're thus committing to search for one of the rare ideas of that type. But at first you have no more than commitment.

The growth of a successful startup usually has three phases:

1. There's an initial period of slow or no growth while the startup tries to figure out what it's doing.
   

2. As the startup figures out how to make something lots of people want and how to reach those people, there's a period of rapid growth.
   

3. Eventually a successful startup will grow into a big company. Growth will slow, partly due to internal limits and partly because the company is starting to bump up against the limits of the markets it serves.

How do you measure growth? A good growth rate is 5-7% a week. If you can hit 10% a week you're doing exceptionally well. If you can only manage 1%, it's a sign you haven't yet figured out what you're doing.

The best thing to measure the growth rate of is revenue.

We usually advise startups to pick a growth rate they think they can hit, and then just try to hit it every week. The key word here is "just." If they decide to grow at 7% a week and they hit that number, they're successful for that week. There's nothing more they need to do. But if they don't hit it, they've failed in the only thing that mattered, and should be correspondingly alarmed. You can use that target growth rate to make all your decisions for you - focusing on: marketing marketing marketing.

Small variations in growth rate produce qualitatively different outcomes. That's why there's a separate word for startups, and why startups do things that ordinary companies don't, like raising money and getting acquired. And, strangely enough, it's also why they fail so frequently.

The constraint between good ideas and growth operates in both directions. It's not merely that you need a scalable idea to grow. If you have such an idea and don't grow fast enough, competitors will. Growing too slowly is particularly dangerous in a business with network effects, which the best startups usually have to some degree.

If you want to understand startups, understand growth. Growth drives everything in this world. Growth is why startups usually work on technology — because ideas for fast growing companies are so rare that the best way to find new ones is to discover those recently made viable by change, and technology is the best source of rapid change. Growth is why it's a rational choice economically for so many founders to try starting a startup: growth makes the successful companies so valuable that the expected value is high even though the risk is too.

Understanding growth is what starting a startup consists of. What you're really doing (and to the dismay of some observers, all you're really doing) when you start a startup is committing to solve a harder type of problem than ordinary businesses do. You're committing to search for one of the rare ideas that generates rapid growth.