# One order of operations for starting a startup

**Author:** Michael Seibel
**Type:** Video
**URL:** https://www.ycombinator.com/library/CP-one-order-of-operations-for-starting-a-startup
**YouTube ID:** 5fmDKGV0TnQ

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## Transcript

one order of operations for starting a startup more often than not when I talk to a talented technical person who's thinking about becoming a Founder their number one blockers that they don't have an idea at some point during their formative years they learned that every great startup started with a great idea and if the idea isn't amazing usually as judged by peers parents or other people with little startup experience the startup will fail all right why'd you write I wrot that I think I think you did WR now I think I've read that before I wrote this because this is the

number one excuse I hear from people who um want to start a startup right and and it's so interesting to me I think that like there are all of these old entrepreneurial rules and business best practices that that I think that people just want to apply hand and glove to a new industry M and um I think Tech startups might be a little different um and so interestingly

enough like I don't even think people are really taught how to find ideas so like I feel as though people are sitting there saying I don't have an idea and they don't even really understand a process by which to get one yeah they think they think that it's supposed to like happen organically like it's like almost like out of the cartoons where like a light bulb goes off the top of your head and like that's not really how it works and so what I wanted to do with this essay was give people a framework that they could try to use to come up with an idea so instead of this being a passive process can be active process I

think one of the things that like might be hard for people to see is like now being in this world for so long I have a lot of friends who wanted to do a startup and didn't know what they wanted to do and then came up with an idea and were very successful and so like I've seen this happen with a lot of people and so that's kind of where I've come up with this thought MH so you break it out into one two three four uh several steps so this is I'm going to outline and then we can explain so the order of operations here's where I'd start is

there any particular problem that you're passionate about the next step once you decide on a problem find some friends and brainstorm potential solutions to the problem the next step at this point the most important thing uh to make that spark turn into a fire is to work together and build and launch an MVP yes and that's basically it yeah yeah it's not that complex no it's hard but it's not that complex no it's not so so let's start at the beginning uh particular

passion problem your passion about um so I think often times I'll give you the conversation that I had with um with a Founder I was at a conference over the weekend called afrotech and there a bunch of young people who wanted to start companies there and this woman walked up to me and she said I have an idea um I'm doing a startup that helps other startups and um I call this like a meta startup and and this is startups that I kind of don't like because it's

like in some ways I think it's like a cop out it's like hey I'm giving I want to help give other startups advice and guidance but I haven't really done a startup myself and like it's I don't know it's just it's it's it's not great and so I dug in I was like okay so what's a problem that you have and um it was interesting so the woman was the mother and she said one of the problems I had have is that um I there are a lot of places when I go somewhere new there are a lot of places where I don't know if I can use my

stroller with my baby because it's like hard to get around or if I'm walking on a street does it have you know the proper sidewalks and so and so forth so I'd love like some type of product that would like tell me um what path I should take that's like stroller friendly and I said to her okay that's but we're getting somewhere right now we're not we're not in like this meta idea now we're actually solving problem directly great but I I I asked her hey can you judge this by two um things first one how frequent is this

problem MH and she said well actually when I'm in an area that I know then I know where to walk I know how to do it it's not that fre and how intense is this problem it's like well you know if I have to go over a curb or something you know it's like it's a it's pain but it's not like you know so then I was like okay what if you could start a problem that was addressing one of the top three problems in your life what would it be and you know what she said she said affordable child care I like you know what a lot of people have that problem that's a big problem and like I

felt my like douchebag investor like light go off it's like yes you should do that like that is a problem like even if you have solved that problem you're going to be wildly successful like there are gajillions people have that problem it's ridiculously intense it's like and it was like interesting because in such a weird way I feel like she had somehow condensed all of the startup advice that she'd been given and everything she read to go to this like wrong place when I just asked her what's the problem in

your life and she almost immediately got to like a place that could create real value now like how should she solve that problem okay yes that's another question but damn like it's a personal problem she has and she sure as hell knows that if she makes a product is it helping her yeah and at least if it's helping her she knows it's like halfway decent so like that I got to a really exciting place by just digging into like what sucks for you I think everyone can do that exercise and I think that like that

exercise can be informed by your work life or your personal life so many startups I see were created because they were doing something at work and they were like this sucks why do I have to keep on doing this yeah I'm going to make this thing and then sell it to my job so that no one has to do this ever again right um so it can apply either way right and this is a very easy way to get people to pay you whereas doing things like strapping a webcam to your head not as obvious not as obvious of a problem pretty pretty non obvious so all right so so you go there yeah so once you find a problem find some friends and brainstorm potential

solutions to the problem so here's the trick um you don't need to skip to a solution too early MH and your thought process should be whatever solution I come up with is probably going to be wrong so my solution really is is a first hypothesis and basically it's like imagine I'm trying to um I don't know like redo some famous science experiment like I'm trying to figure out the speed of gravity or something right um I first have to start

with hypothesis then test and then repeat repeat repeat and play to my answer okay so um I don't need to know the answer up front like that's not the goal if you have a big enough problem like trust that like if you come up with anything resembling an answer in a reasonable period of time years yeah you have a big business so instead of thinking okay let me come with my idea how to solve it I think the more important thing is to start talking to other people about it because I think

that the number one thing you have to do to create a company or one of the top three is to have some co-founders and it's really helpful to figure out who who are the types of people who you can talk to about something and you riff well you you iterate each other's ideas there's sometime people you brainstorm with and like they say like I say Craig wouldn't it be cool if the sky is red and Craig says no and that's the end of the brainstorm right it's like well we might out have a best found relationship right

as opposed to like well wouldn't it be cool if the sky was red and Craig says you know we can't make the sky R but what happens if we like tint all the windows in the house red so you can make it look like this guy's red it's like oh yeah right you know like we're moving right so you want to start having those conversations with people that you like um people if you're not technical people who are technical um people who you dis respect their intelligence and ideally together you start coming up with an idea and what's cool about that is that if you come up with that idea

together um everyone you've been talking to feel some ownership of the idea yeah and that helps kind of light that flame yeah yeah it's dangerous to be married to a solution yeah yes that a real problem all right so at this point the most important thing is to turn that spark into a fire and work together to build an MVP boom so biggest mistake that people make at this point is to think that the things they need to do is like now I feel like some like weird

Phantom MBA starts whispering in their ear and it's like you need to incorporate you need to raise money you need to and it's like kick that person out that person like that's not it's not what you need to do can you just build a simple V1 of the product can you build the simplest V1 even if it's just an Excel spreadsheet something powered by an Excel spreadsheet give it a try like the way to get that team even more excited is to try something yeah and like often times I see people kind of get lost in that legal or that

fundraising world and never even got to give their thing a try you don't need U you don't need like bank accounts to give something a try you don't need an incorporation to give something a try for the most part there's some ideas you do but like for the most part you don't um and a way that you can really get that team solidified is just to get some kind of MVP and get like one customer two customers um this is one the final test on like hey can we work together well right and two man it amps up the excitement a lot and so that when you

have to go through some of the [ __ ] of incorporation and stuff yeah or fundraising right the excitement level is high yeah um also third it gives you leverage like if you actually have something with a couple customers then like investors are far more interested to like to talk to you than if you just have an idea especially people who are on the fence about working with you yes I mean these are all of these things that you're saying these are all excuses you create because it's easier than working on the actual problem well yes for some people but I also think it's for some people it's

what they think is the right path it's like it's like I actually think that some people some people are being I don't want to say lazy but some people are being I don't know um not some people are kind of being disingenuous in this process but I think other people actually think oh no the right thing to do is actually to come up with an idea fund raise Outsource an MVP and then hire a team like I think that like some people think that's the right thing to do and it's like harder that's a harder path okay

like you don't have to do that well my failure mode is different then um all right so so then uh you WRA this essay up with a couple things the two failed orders of operations well these are two of many I suppose yes um so one come up with an idea and then pitch to investors yes two I have an idea but can't write code and none of my co-founders can either yeah so um we're in a time where there are a lot of startups and there's um unfortunately

you're people that you're pitching if they're good they're getting pitched by a lot of people so you need to bring some real fire to that meeting yeah and uh a good deck is no longer good enough um I would argue that back in the day like in the 90s it was so expensive to get sophomore made and hosted and online and get users that like a good deck or actually back then it was like a 100 page business plan like that's all you could get that's all you could do without money um we're not there now and

so um you're not bringing the fire if you're just bringing an idea now some people can raise on just an idea right and if you're one of those lucky people that's great but like I don't know like I rather be good than lucky um in terms of you know no technical co-founders like this is a constant issue and I'm surprised by this like I talked to a friend the other day who is thinking about starting something and doesn't have a technical co-founder yet and even she was a little concerned

about getting one even though she has kind of been in the tech startup world and and you know I had to encourage her I had to tell her no you can like you can do this like it's not it's it's it's not not only is it's not going to be that hard it's that like it's probably going to be easier than Outsourcing it um the one favor Moe that I see a lot is that I see people who can raise a little bit of money go down the Outsourcing route and believe that they are progressing they

believe that the thing is moving forward and what they don't realize is that for the most part they're going to need to iterate anything that's created by those outsourcers over and over and over and over again and it gets pretty expensive pretty fast and so the fa remote that I see so constantly is outsourcing iterating with that outsourcers you run out of money yeah you haven't figured things out yet and so you have to go to an investor and say well I don't have anything I need more

money and like that's death and like what's so sad about that death is that like you've been kind of walking that path the whole time but often you don't realize it to the very end and after you spent money and like sometimes it's people's own money like they do their savings they hand their savings to these people and like I don't think the Outsourcing folks are are bad or morally morally wrong um I just think that like people should take the hustle that they have and apply it to the number one problem which is like it just turns out that getting a

technical co-founder tends to be cheaper than paying an outsourcer yeah yeah I mean I guess you know to push back if you had someone Outsource something and then that got you a couple customers then you found a co-founder that's a great outcome well it's interesting because I think that a lot of people go into the Outsourcing um route with that yeah um intention but the thing that they don't realize is that like they didn't feel comfortable going and find technical co-founder now when they don't have any

traction and they don't have a product right most likely the outcome is the outsourcer will give them a shitty product a shitty V1 totally y they won't have any users then and now they'll go after Technic co-founder with a shitty product and no users and less money like and they want to give the co-founder 10% yeah like they're not actually in a better position so it's like like yes I think that they're like one and I and I I mentioned the essay there are counter examples like there are people who do go from a contractor to big company but

it's just I would argue it's a harder path and it's a um path that's much more likely to lose you a lot of money your own money your own money take
