28 ms·

Super successful companies

397 points by dko 13y ago

tyang 13y ago
This is a great essay for any startup person who's actually serious about creating, advising, or investing in the next Waze in Tel Aviv, Oculus Rift in Orange County, California, or Dropbox in the Bay Area. Of course we'd prefer a deep dive, but that requires a lot more thinking, data, reasoning and work. You're talking about a book versus a blog. I really liked this essay. Yes, some of the stuff is redundant, but there's enough modifications and it is compact enough that this is a very useful list. HN folks: If you can do better, do it. I see a lot of whining and complaining on here and no alternative solutions that are better. If you have something better to say, say it. If you've read something better, provide the link. Otherwise, be a little more appreciative that someone who knows a lot more than 99.99% of the folks in startups is sharing his insights concisely for free.
vzhang 13y ago
Number one reason you didn't mention - they are lucky.
- sama 13y ago
  Luck is necessary but not sufficient. But I left it off the list because telling people to "be lucky" is difficult to act on.
  - ronilan 13y ago
    There are things other than luck that are out of the control of the startup. Here is a quote: "In a great market -- a market with lots of real potential customers -- the market pulls product out of the startup."
  - seregine 13y ago
    I've recently seen interesting arguments that optimism creates luck by enabling you to recognize more opportunities. E.g. http://www.damninteresting.com/you-make-your-own-luck/ http://www.damninteresting.com/you-make-your-own-luck/
- argumentum 13y ago
  Everyone is both lucky and unlucky .. the universe is pretty random. IMO, those achieve great things notice quicker and react better to turns of fortune (good or bad).
  - tsunamifury 13y ago
    Random =/= an even distribution of lucky and unlucky. Randomness clumps together and can be decidedly un-random looking at times. Some people do not get a fair shake, and despite their notable efforts, still find themselves on the short end of the stick.
- myzerox 13y ago
  Luck (up to a certain extent) is a function of hard work. You will not find opportunity if you're not searching. You will not profit from opportunity if you're not seizing it.
- brandnewlow 13y ago
  Luck is a function of hard work and preparedness.
  - dylandrop 13y ago
    In some cases, but even in those cases, only to a limited extent. Is winning the lottery is a function of hard work and preparedness?
    - brandnewlow 13y ago
      That's the point of saying "is a function of". No one knows exactly what the function IS, but the function for luck comes from those two qualities. Others, too.
      - mrkurt 13y ago
        In nerd speak, the luck function is not pure. It's subject to global state and has side effects. :)
  - pinaceae 13y ago
    Failure as well. You can't fail if you don't try. Sounds stupid, but not every opportunity is worth it. Risk can and will bite. You don't get an INC cover story by ruining your personal life though. More drastically, use the Omaha Beach landing, as depicted in Saving Private Ryan, as an example: All soldiers were equally equipped, motivated, trained. But then a grenade falls from the sky and hits your landing vessel. Completely outside of your control, but still you're fucked and die. Happens to the best, to this day, SEAL, DEVGRU or not. Bad luck is bad luck. Same in business. Do everything right and still fail. Luck is underrated. There is Risk Management, I wonder if Luck Management is something that will arise in the future. Chance works both ways.
    - myzerox 13y ago
      However, while you can fail multiple times, you only have to strike "super success" once. (As Nassim Taleb is also trending on HN right now) It's an antifragile situation: Facing extreme events, the upside is large whereas the downside is limited. So, yes - (bad) luck as a function of hard work is highly volatile. But as it is antifragile, volatility is a good thing.
- toast76 13y ago
  The pessimist attributes success to external factors and failure to self. The optimist attributes success to self and failure to external factors. The reality is probably a little of both.
exit 13y ago
> - The founders are nice. I'm sure this doesn't always apply, but the most successful founders I know are nicer than average. They're tough, they're very competitive, and they are ruthless, but they are fundamentally nice people. ruth·less, ˈro͞oTHləs/, adjective 1. having or showing no pity or compassion for others. what does "ruthless" mean nowadays in valley newspeak? or did i miss a memo about "nice"..?
- karamazov 13y ago
  "relentless" might be a better word.
- nairteashop 13y ago
  He probably meant ruthless with respect to competition.
- argumentum 13y ago
  I think he means "ruthless" the way a great athlete is "ruthless".
  - exit 13y ago
    ah, so like lance armstrong?
    - argumentum 13y ago
      No, I meant in the course of the game. In tennis, every point Roger Federer wins, his opponent loses. Every game winning jumpshot Michael Jordan made, the other team lost. I can't imagine you'd get very far in any competitive enterprise if you spent all your time feeling bad about that. Lance Armstrong isn't a great athlete .. he's a cheater.
      - markdown 13y ago
        > Lance Armstrong isn't a great athlete .. he's a cheater. Going off on a tangent now but... He's a cheater and a lying scumbag, but you can't say he isn't a great athlete. He is in fact one of the best competitive athletes the world has ever known. Even a guy who rides the Tour de France once and comes in at last place fits in that category.
aashaykumar92 13y ago
Another important trait Ron Conway highlighted at Startup School that really stuck with me was that Founders of 'super successful companies' can careless about other distractions, especially the media. He highlighted the example of Ben Silbermann and how he used to reject several interviews so as not to lose focus on Pinterest. So although it's a hybrid of two traits mentioned in the article ("They are obsessed with the quality of the product/experience" and "They don't get excited about pretending to run a startup"), it is still one that should be there by itself.
normloman 13y ago
SURVIVORSHIP BIAS. SURVIVORSHIP BIAS. SURVIVORSHIP BIAS.
- karamazov 13y ago
  Sam has seen enough companies that have made it, and enough that have failed, to talk about this without survivorship bias.
  - deleted 13y ago
    [deleted]
  - amirmc 13y ago
    That's not really how biases work. For example, I'm sure many of the founders of failed startups were nice people, who got stuff done and moved fast (while responding to emails quickly). I do believe that the people at YC have a lot of experience (and are likely to be quite systematic in their analyses when they do them) but that doesn't mean I'm going to take every post at face value.
    - karamazov 13y ago
      That's exactly how survivorship bias, in particular, works: "Survivorship bias is the logical error of concentrating on the people or things that 'survived' some process and inadvertently overlooking those that did not because of their lack of visibility." [Wiki] Sam's saying that very successful companies tend to hit all of these points, in contrast to less successful or unsuccessful companies, which will miss one or more of them. You don't need to take the post at face value, but if you're claiming this is a result of survivorship bias, then you're arguing that successful companies just happen to have these traits, and they don't actually help the companies succeed. I don't think that's true.
      - hayksaakian 13y ago
        > You don't need to take the post at face value, but if you're claiming this is a result of survivorship bias, then you're arguing that successful companies just happen to have these traits, and they don't actually help the companies succeed. I don't think that's true. I think this is exactly what he's arguing If you're of the opinion that startup successes are mostly luck and timing, then this makes perfect sense. If a team/company had every single positive/beneficial trait on that list, then how much more likely are they to "succeed"?
edw519 13y ago
Funny, seems like I always narrow my list down to this 1 item: "They are obsessed about their customers' success." Everything else is a byproduct.
tdumitrescu 13y ago
I like this one: "They respond to emails quickly." It always amazes me just how many would-be "founders" are unbelievably flaky, miss appointments, drop off the face of the earth for days or weeks at a time...
- jarek 13y ago
  Or skip past inconvenient questions https://news.ycombinator.com/item?id=3684477 https://news.ycombinator.com/item?id=3684477
_sentient 13y ago
Great points. I would also add: They have serious intestinal fortitude. You can possess all of the other traits, and you're still pretty much guaranteed to run into numerous points in the life of a company where you're staring into the abyss of imminent failure. The ability to withstand that kind of pressure is probably a prerequisite for highly successful founders.
- argumentum 13y ago
  You don't think that's covered by: > They are tough and calm. Founders of great companies are always tough and unflappable.
- cordie 13y ago
  If we're going with physical attributes. I would add - Don't mind not sleeping.
dclara 13y ago
Wow, so many traits! I noticed this one is not quite easy to make: "*They grow organically. And they are generally skeptical of inorganic strategies like big partnership deals and to a lesser extent PR. They certainly don't have huge press events to launch their startup. Mediocre founders focus on big PR launches to answer their growth prayers." Most startup companies are looking for big partnership deals with PR support intensively. But they are focusing on building customer base. It's really not easy.
ritchiea 13y ago
This started out with some boilerplate SV platitudes (obsess over your product, obsess over talent), but got quite good by the end. The concrete items, particularly "They make something a small number of users really love" and "They don't get excited about pretending to run a startup" really resonate with my experience and are things I think everyone should keep in mind when running a company.
tomasien 13y ago
"They don't get excited about pretending to run a startup" That's the biggest difference between me now and starting my first company - I was ultra-excited to call myself "CEO of startup" the first time around, this time around we don't even have titles because we don't give a shit. We have a CEO because you need to know at whom the buck stops, but we've even discussed using that interchangeably depending the situation (decided against it) because of how thoroughly we don't care. I don't think the way I felt the first time around was bad or the reason we failed - but it was a pretty good signal, and I even knew it at the time.
- toast76 13y ago
  CEO isn't overly important until you've got a board. It's nice to avoid the job for as long as possible :)
  - caprad 13y ago
    Well, it is good for a few laughs. You get a bit worried if someone walks around calling themselves CEO of a startup with 2 or 3 people in it.
    - tomasien 13y ago
      You NEED someone called CEO because partners of various kinds need to know with whom the buck stops. That's the only reason.
Jormundir 13y ago
Is there any evidence backing up these claims? I can think of exceptions for just about every one of these points.
- ancarda 13y ago
  There's always exceptions to rules, although citations would be nice. Most of it seems like sound advice; ie. Quality over quantity, keep expenses low, offer great customer service etc...
- dasil003 13y ago
  Statistically there is probably not a single founder that does every one of these things.
zephyrnh 13y ago
"They generate revenue very early on in their lives. Often as soon as they get their first user." Is this true? If "super successful" can be understood as "the biggest tech IPOs of the last 15 years", then I think that Google, Facebook, LinkedIn & Twitter would be at the very top of that list. I guess it depends on how we define "very early".
- jusben1369 13y ago
  I wonder if you're confusing revenue with profitability? Maybe Twitter is the only one here that didnt' have an add to click very early on.
  - beat 13y ago
    It's a rule of thumb, not a rule of physics. I'm sure the majority of highly successful startups are generating revenue (and probably even profitable) very early. Relying on viral growth and VC with a promise of revenues later is more likely to fail than succeed.
pbreit 13y ago
"Charging customers early" is actually the opposite. Few of the big internet successes charged early (google, eBay, PayPal, Facebook, yahoo, etc.). And, frugality is good in the beginning but after you prove yourself, you have to step on the gas.
- brandnewlow 13y ago
  Facebook was selling ads almost immediately in reality. The movie made a big deal about Zuckerberg wanting to avoid running ads on FB, but from launch, FB had a nifty native ad system in place and even gave equity in the company to an ad agency in return for guaranteed spend over time.
  - prayag 13y ago
    In fact, Facebook would not move on to a new campus unless they have made enough money to buy the new servers that they would need to move there. The worst thing that movie did was misrepresented how scrappy early Facebook was.
argumentum 13y ago
Great article ... Some of the points might seem obvious in hindsight, but are rarely followed in practice. Perhaps it is because they are so obvious as to be somewhat invisible, or they are repeated so often as to be ignored. I thought one of the less obvious, and especially interesting, insights was the following: Another way this trait shows itself is "right-sized" first projects. You can't go from zero to huge; you have to find something not too big and not too small to build first. They seem to have an innate talent for figuring out right-sized projects. I wonder how much of this talent (which I'd call a "knack") can be acquired from experience. I noticed in myself an instinct for categorizing projects as "right time"/"right place". By "instinct" I don't mean I'm particularly good at this, I may be really bad. I mean that I have a feeling, which I can imagine as some sort of neural pattern recognition algorithm. I'd guess everyone has this same feeling .. to what extent can it be tuned into a "knack"?
jusben1369 13y ago
Good stuff. Only nitpick is the "partnership" comment. I actually think too many startups are too insular and not comfortable working with other companies early on. However perhaps here he meant the "hit it out of the ballpark" partnership type. Please add to "They don't get excited about pretending to run a startup" - they're not on Twitter tweeting cliche's around vision/team/culture/design/customer love all day. That's a big red flag to me.
lpolovets 13y ago
"Great founders are execution machines." That's a great summarizing quote.
carsongross 13y ago
C'mon now, kids. While there is some laudable-if-extremely-conventional wisdom in here, almost every point suffers from either survival bias ("Successful companies succeed by being successful.") or from having obvious counter-examples ("Was Steve Jobs a nice guy?"), or both.
- hayksaakian 13y ago
  A counter example might just be an outlier, I don't think he was arguing in absolutes.
  - bsirkia 13y ago
    This is an awesome article explaining carsongross's point on survivorship bias: http://youarenotsosmart.com/2013/05/23/survivorship-bias/ http://youarenotsosmart.com/2013/05/23/survivorship-bias/
    - hayksaakian 13y ago
      thanks, that was a great article. my favorite quote: > After any process that leaves behind survivors, the non-survivors are often destroyed or muted or removed from your view. If failures becomes invisible, then naturally you will pay more attention to successes. another one: > As the psychologist Daniel Kahneman writes in his book Thinking Fast and Slow, “A stupid decision that works out well becomes a brilliant decision in hindsight.”
  - carsongross 13y ago
    Yeah, and the article starts off with some disclaimers, so I'm being a bit unfair. Still, I think most of these points are either obvious or tautologies, and many of them can cause harm when they are focused on obsessively. And, so I'm not just another critic, let me offer two points I'd make about startups that stand, somewhat, in opposition to the points made here: 1) Successful companies ship. This is often in direct opposition to obsessing over quality: you have to accept that your app, which is a piece of shit, needs to get out there, so you can get feedback, before you make it a gleaming cube of perfection. 2) Random chance is going to factor in your startups success far more than you'd like, so building a startup that will not die no matter what (rev/run > 1) is going to give you a better shot at making it over the hump. This often means putting up with uncertainty and not knowing exactly what you should be or will be doing. And it will be hard on you, mentally.
bsirkia 13y ago
I would add they were also a bit lucky (whether with timing or virality or some other factor) at some point in their lifecycle.
sillysaurus2 13y ago
This is an excellent list. Thank you, Sam, for putting it together.
tvladeck 13y ago
To all those people screaming "survivorship bias", isn't that what this whole post is about? Like, explicitly in the title of the thread? Of the companies that became very successful, what were some common traits? That's what this post is about. "Yeah but you only looked at the successful companies." ::smacks head::
- xux 13y ago
  I think people are pointing out "survivor bias" because the qualities listed aren't unique to successful companies.
- MattGrommes 13y ago
  The point is that using traits of successful companies isn't useful without looking at unsuccessful companies. Yes, these are all traits of successful companies. But other companies did these same things and failed.
  - tvladeck 13y ago
    That's true, but not, IMO, a valid criticism of the article. This article emphatically does not say that if you do the stuff on this list that you will become successful. It makes the implicit claim that if you don't do this stuff you won't become successful. Remember that those two statements are very different, and the second one is valuable even though it doesn't prescribe a path to success.
- ghaff 13y ago
  There was an extremely popular business book back in the 80s called In Search of Excellence which chronicled a set of characteristics of large successful companies. "Stick to your knitting" and the like. The problem was that there were loads of counterexamples including 1.) Successful companies that DIDN'T stick to their knitting and 2.) Failed companies that did.
  - tvladeck 13y ago
    Right. So the question then is not whether the premise is correct or not, but whether the information Sam is putting out is accurate, which is a different thing entirely.
wslh 13y ago
He misses one point: live and fund your company in US. There are more successful Internet companies in US than abroad.
mathattack 13y ago
I like the list but what are all the source companies? (And in the spirit of survivor bias, failed comparison companies)
drelihan 13y ago
Did you have a list of extremely successful companies you were looking at specifically when you wrote this? If so, I'd be interested in seeing that list to compare
desireco42 13y ago
No examples, just slogans.
higherpurpose 13y ago
> *They grow organically. And they are generally skeptical of inorganic strategies like big partnership deals and to a lesser extent PR. They certainly don't have huge press events to launch their startup. Mediocre founders focus on big PR launches to answer their growth prayers. Has Google+ written all over it.
- untilHellbanned 13y ago
  ah yes the obligatory G+ slam
hoboerectus 13y ago
* They can bench press twice their body weight. * They are sublime swordsmen. * They revere the supreme commander.
kimonos 13y ago
Nice! I see some helpful information in here. Thanks for sharing!
tsunamifury 13y ago
These are great foundational traits, which are common among noble-failure and successful startups I've seen. You still need to add in the resources (money, energy, charisma) to fund sustained hard work, market resonance, and luck to reach super success.
kevinalexbrown 13y ago
Mediocre founders try to hire people for the parts that they don't like. Great founders just do whatever they think is in the best interest of the company, even if they're not "passionate" about that part of the business. I don't often like to follow people, but when I do, this attribute matters to me. I'm not sure, but I suspect that it's a signal that someone wants to build something great more than accumulate accolades. In the latter case, I help someone get rich and famous (which is fine!). But in the former, I'm a part of something awesome. I find it a little difficult to articulate why this affects me so deeply, but it resonates with me, and talented people I know. In general, I suspect these attributes are important if for no other reason than talented people you might be recruiting will be on the lookout for them.
oskarth 13y ago
All I can think about reading the comments (and the article, for whatever reason) is pg's advice to sama and how it didn't seem to help at all here: https://news.ycombinator.com/item?id=6843726 https://news.ycombinator.com/item?id=6843726
- supersystem 13y ago
  I'm kind of tired of people in tech who are "misunderstood". Maybe they just aren't very good at expressing themselves or doesn't have the experience they think they have. Sometimes people can of course be be argumentative to the point of hypercriticism, but saying it's because they "misunderstood" is belittling.
  - supersystem 13y ago
    I'm not sure down-voting is good way to handle criticism about not being able to express oneself.
LizVerano 13y ago
Wow
inthewoods 13y ago
I think there are two important areas he doesn't touch on: 1. Timing: The most successful companies are also the ones that are usually at a particular point in time when an opportunity exists. Too early, you fail, too late, you fail as well (for different reasons). 2. A scalable idea: The most successful companies find product or service ideas that scale hugely. These ideas are pretty rare. More often, people find ideas they like and can execute but turn out to be ideas that scale only so far. Sometime it turns out that they've actually founded a services business and didn't know it. More often, they find an idea that can scale to, say, $5m in revenue but then has trouble scaling beyond that. Billion dollar ideas likely represent a very small portion.
calbear81 13y ago
I think a lot of the points are great but when we talk about super successful, I can think of some great startups that grew organically but also a lot of operationally efficient companies that knew how to build businesses at scale with a combination of organic growth, massive marketing, and smart PR. For example, one of Google's largest advertisers in spend is Booking.com (owned by Priceline). They have built an efficient machine that can acquire users/customers in an efficient manner and in the process capture 48% market share of online hotel bookings in Europe and help make Priceline a $60B market cap company.
LeicaLatte 13y ago
We are prone to saying super while talking. That's ok. That many supers in writing? Sorry, but that's bad writing.
drdiablo 13y ago
this is a test of fun
aryastark 13y ago
This article is literally advocating a cargo cult. I've seen sharks jumped, but never this high and this obvious.
quadrangle 13y ago
tl;dr what makes a company great is how it is run greatly
samishamlet 13y ago
It turns out that pattern matching on PG's essay style does not make one's essays as insightful.. All I can say is: the only factor really worth a damn is luck. Unfortunately you can't control luck, the only thing you can do is increase your luck surface. From my experience, nothing on that list actually does that - what increases luck is: hard work, value of idea, connections and personality. Re-order at will.
saumil07 13y ago
Sam Altman is a great writer. He was also Founder/CEO of Loopt. I have to wonder why this post doesn't relate the traits back to his work at Loopt so the lessons learned can be more contextualized. For example, are there areas where he was a mediocre founder by his own definition? Were there times when he was mediocre and then became great? What did it take to go from mediocre to great? I'm surprised that the essay is so general in nature when there's a wealth of specific (and maybe more valuable) cases that could have been shared even after respecting privacy of individuals involved, etc.
semerda 13y ago
I like Sam's blog posts. They are short and punchy. Always leaving me charged with energy. Good stuff. Keep it up Sam! "They have a whatever-it-takes attitude." - This is such a powerful trait that it puts the "big dreamers" to shame and separates the Wannapreneurs from Entrepreneurs. Anyone is capable of dreaming, talking big, generate ideas et al.. but few are capable of executing them by doing whatever it takes to turn that dream into reality. Ha, it reminds me of the "never give up frog poster".
tschellenbach 13y ago
With many of these points I completely agree, I also believe that there's data to back them up. The following however: - the generate revenue very early on in their lives - they keep expenses low Is in direct contrast with many of the most successful startups. As far as I know, Google, Facebook, YouTube, Instagram, Skype don't fit this criteria.

397 points by dko 13y ago

tyang 13y ago

This is a great essay for any startup person who's actually serious about creating, advising, or investing in the next Waze in Tel Aviv, Oculus Rift in Orange County, California, or Dropbox in the Bay Area. Of course we'd prefer a deep dive, but that requires a lot more thinking, data, reasoning and work. You're talking about a book versus a blog. I really liked this essay. Yes, some of the stuff is redundant, but there's enough modifications and it is compact enough that this is a very useful list. HN folks: If you can do better, do it. I see a lot of whining and complaining on here and no alternative solutions that are better. If you have something better to say, say it. If you've read something better, provide the link. Otherwise, be a little more appreciative that someone who knows a lot more than 99.99% of the folks in startups is sharing his insights concisely for free.

vzhang 13y ago

Number one reason you didn't mention - they are lucky.

sama 13y ago
Luck is necessary but not sufficient. But I left it off the list because telling people to "be lucky" is difficult to act on.
- ronilan 13y ago
  There are things other than luck that are out of the control of the startup. Here is a quote: "In a great market -- a market with lots of real potential customers -- the market pulls product out of the startup."
- seregine 13y ago
  I've recently seen interesting arguments that optimism creates luck by enabling you to recognize more opportunities. E.g. http://www.damninteresting.com/you-make-your-own-luck/ http://www.damninteresting.com/you-make-your-own-luck/
argumentum 13y ago
Everyone is both lucky and unlucky .. the universe is pretty random. IMO, those achieve great things notice quicker and react better to turns of fortune (good or bad).
- tsunamifury 13y ago
  Random =/= an even distribution of lucky and unlucky. Randomness clumps together and can be decidedly un-random looking at times. Some people do not get a fair shake, and despite their notable efforts, still find themselves on the short end of the stick.
myzerox 13y ago
Luck (up to a certain extent) is a function of hard work. You will not find opportunity if you're not searching. You will not profit from opportunity if you're not seizing it.
brandnewlow 13y ago
Luck is a function of hard work and preparedness.
- dylandrop 13y ago
  In some cases, but even in those cases, only to a limited extent. Is winning the lottery is a function of hard work and preparedness?
  - brandnewlow 13y ago
    That's the point of saying "is a function of". No one knows exactly what the function IS, but the function for luck comes from those two qualities. Others, too.
    - mrkurt 13y ago
      In nerd speak, the luck function is not pure. It's subject to global state and has side effects. :)
- pinaceae 13y ago
  Failure as well. You can't fail if you don't try. Sounds stupid, but not every opportunity is worth it. Risk can and will bite. You don't get an INC cover story by ruining your personal life though. More drastically, use the Omaha Beach landing, as depicted in Saving Private Ryan, as an example: All soldiers were equally equipped, motivated, trained. But then a grenade falls from the sky and hits your landing vessel. Completely outside of your control, but still you're fucked and die. Happens to the best, to this day, SEAL, DEVGRU or not. Bad luck is bad luck. Same in business. Do everything right and still fail. Luck is underrated. There is Risk Management, I wonder if Luck Management is something that will arise in the future. Chance works both ways.
  - myzerox 13y ago
    However, while you can fail multiple times, you only have to strike "super success" once. (As Nassim Taleb is also trending on HN right now) It's an antifragile situation: Facing extreme events, the upside is large whereas the downside is limited. So, yes - (bad) luck as a function of hard work is highly volatile. But as it is antifragile, volatility is a good thing.
toast76 13y ago
The pessimist attributes success to external factors and failure to self. The optimist attributes success to self and failure to external factors. The reality is probably a little of both.

exit 13y ago

> - The founders are nice. I'm sure this doesn't always apply, but the most successful founders I know are nicer than average. They're tough, they're very competitive, and they are ruthless, but they are fundamentally nice people. ruth·less, ˈro͞oTHləs/, adjective 1. having or showing no pity or compassion for others. what does "ruthless" mean nowadays in valley newspeak? or did i miss a memo about "nice"..?

karamazov 13y ago
"relentless" might be a better word.
nairteashop 13y ago
He probably meant ruthless with respect to competition.
argumentum 13y ago
I think he means "ruthless" the way a great athlete is "ruthless".
- exit 13y ago
  ah, so like lance armstrong?
  - argumentum 13y ago
    No, I meant in the course of the game. In tennis, every point Roger Federer wins, his opponent loses. Every game winning jumpshot Michael Jordan made, the other team lost. I can't imagine you'd get very far in any competitive enterprise if you spent all your time feeling bad about that. Lance Armstrong isn't a great athlete .. he's a cheater.
    - markdown 13y ago
      > Lance Armstrong isn't a great athlete .. he's a cheater. Going off on a tangent now but... He's a cheater and a lying scumbag, but you can't say he isn't a great athlete. He is in fact one of the best competitive athletes the world has ever known. Even a guy who rides the Tour de France once and comes in at last place fits in that category.

aashaykumar92 13y ago

Another important trait Ron Conway highlighted at Startup School that really stuck with me was that Founders of 'super successful companies' can careless about other distractions, especially the media. He highlighted the example of Ben Silbermann and how he used to reject several interviews so as not to lose focus on Pinterest. So although it's a hybrid of two traits mentioned in the article ("They are obsessed with the quality of the product/experience" and "They don't get excited about pretending to run a startup"), it is still one that should be there by itself.

normloman 13y ago

SURVIVORSHIP BIAS. SURVIVORSHIP BIAS. SURVIVORSHIP BIAS.

karamazov 13y ago
Sam has seen enough companies that have made it, and enough that have failed, to talk about this without survivorship bias.
- deleted 13y ago
  [deleted]
- amirmc 13y ago
  That's not really how biases work. For example, I'm sure many of the founders of failed startups were nice people, who got stuff done and moved fast (while responding to emails quickly). I do believe that the people at YC have a lot of experience (and are likely to be quite systematic in their analyses when they do them) but that doesn't mean I'm going to take every post at face value.
  - karamazov 13y ago
    That's exactly how survivorship bias, in particular, works: "Survivorship bias is the logical error of concentrating on the people or things that 'survived' some process and inadvertently overlooking those that did not because of their lack of visibility." [Wiki] Sam's saying that very successful companies tend to hit all of these points, in contrast to less successful or unsuccessful companies, which will miss one or more of them. You don't need to take the post at face value, but if you're claiming this is a result of survivorship bias, then you're arguing that successful companies just happen to have these traits, and they don't actually help the companies succeed. I don't think that's true.
    - hayksaakian 13y ago
      > You don't need to take the post at face value, but if you're claiming this is a result of survivorship bias, then you're arguing that successful companies just happen to have these traits, and they don't actually help the companies succeed. I don't think that's true. I think this is exactly what he's arguing If you're of the opinion that startup successes are mostly luck and timing, then this makes perfect sense. If a team/company had every single positive/beneficial trait on that list, then how much more likely are they to "succeed"?

edw519 13y ago

Funny, seems like I always narrow my list down to this 1 item: "They are obsessed about their customers' success." Everything else is a byproduct.

tdumitrescu 13y ago

I like this one: "They respond to emails quickly." It always amazes me just how many would-be "founders" are unbelievably flaky, miss appointments, drop off the face of the earth for days or weeks at a time...

jarek 13y ago
Or skip past inconvenient questions https://news.ycombinator.com/item?id=3684477 https://news.ycombinator.com/item?id=3684477

_sentient 13y ago

Great points. I would also add: They have serious intestinal fortitude. You can possess all of the other traits, and you're still pretty much guaranteed to run into numerous points in the life of a company where you're staring into the abyss of imminent failure. The ability to withstand that kind of pressure is probably a prerequisite for highly successful founders.

argumentum 13y ago
You don't think that's covered by: > They are tough and calm. Founders of great companies are always tough and unflappable.
cordie 13y ago
If we're going with physical attributes. I would add - Don't mind not sleeping.

dclara 13y ago

Wow, so many traits! I noticed this one is not quite easy to make: "*They grow organically. And they are generally skeptical of inorganic strategies like big partnership deals and to a lesser extent PR. They certainly don't have huge press events to launch their startup. Mediocre founders focus on big PR launches to answer their growth prayers." Most startup companies are looking for big partnership deals with PR support intensively. But they are focusing on building customer base. It's really not easy.

ritchiea 13y ago

This started out with some boilerplate SV platitudes (obsess over your product, obsess over talent), but got quite good by the end. The concrete items, particularly "They make something a small number of users really love" and "They don't get excited about pretending to run a startup" really resonate with my experience and are things I think everyone should keep in mind when running a company.

tomasien 13y ago

"They don't get excited about pretending to run a startup" That's the biggest difference between me now and starting my first company - I was ultra-excited to call myself "CEO of startup" the first time around, this time around we don't even have titles because we don't give a shit. We have a CEO because you need to know at whom the buck stops, but we've even discussed using that interchangeably depending the situation (decided against it) because of how thoroughly we don't care. I don't think the way I felt the first time around was bad or the reason we failed - but it was a pretty good signal, and I even knew it at the time.

toast76 13y ago
CEO isn't overly important until you've got a board. It's nice to avoid the job for as long as possible :)
- caprad 13y ago
  Well, it is good for a few laughs. You get a bit worried if someone walks around calling themselves CEO of a startup with 2 or 3 people in it.
  - tomasien 13y ago
    You NEED someone called CEO because partners of various kinds need to know with whom the buck stops. That's the only reason.

Jormundir 13y ago

Is there any evidence backing up these claims? I can think of exceptions for just about every one of these points.

ancarda 13y ago
There's always exceptions to rules, although citations would be nice. Most of it seems like sound advice; ie. Quality over quantity, keep expenses low, offer great customer service etc...
dasil003 13y ago
Statistically there is probably not a single founder that does every one of these things.

zephyrnh 13y ago

"They generate revenue very early on in their lives. Often as soon as they get their first user." Is this true? If "super successful" can be understood as "the biggest tech IPOs of the last 15 years", then I think that Google, Facebook, LinkedIn & Twitter would be at the very top of that list. I guess it depends on how we define "very early".

jusben1369 13y ago
I wonder if you're confusing revenue with profitability? Maybe Twitter is the only one here that didnt' have an add to click very early on.
- beat 13y ago
  It's a rule of thumb, not a rule of physics. I'm sure the majority of highly successful startups are generating revenue (and probably even profitable) very early. Relying on viral growth and VC with a promise of revenues later is more likely to fail than succeed.

pbreit 13y ago

"Charging customers early" is actually the opposite. Few of the big internet successes charged early (google, eBay, PayPal, Facebook, yahoo, etc.). And, frugality is good in the beginning but after you prove yourself, you have to step on the gas.

brandnewlow 13y ago
Facebook was selling ads almost immediately in reality. The movie made a big deal about Zuckerberg wanting to avoid running ads on FB, but from launch, FB had a nifty native ad system in place and even gave equity in the company to an ad agency in return for guaranteed spend over time.
- prayag 13y ago
  In fact, Facebook would not move on to a new campus unless they have made enough money to buy the new servers that they would need to move there. The worst thing that movie did was misrepresented how scrappy early Facebook was.

argumentum 13y ago

Great article ... Some of the points might seem obvious in hindsight, but are rarely followed in practice. Perhaps it is because they are so obvious as to be somewhat invisible, or they are repeated so often as to be ignored. I thought one of the less obvious, and especially interesting, insights was the following: Another way this trait shows itself is "right-sized" first projects. You can't go from zero to huge; you have to find something not too big and not too small to build first. They seem to have an innate talent for figuring out right-sized projects. I wonder how much of this talent (which I'd call a "knack") can be acquired from experience. I noticed in myself an instinct for categorizing projects as "right time"/"right place". By "instinct" I don't mean I'm particularly good at this, I may be really bad. I mean that I have a feeling, which I can imagine as some sort of neural pattern recognition algorithm. I'd guess everyone has this same feeling .. to what extent can it be tuned into a "knack"?

jusben1369 13y ago

Good stuff. Only nitpick is the "partnership" comment. I actually think too many startups are too insular and not comfortable working with other companies early on. However perhaps here he meant the "hit it out of the ballpark" partnership type. Please add to "They don't get excited about pretending to run a startup" - they're not on Twitter tweeting cliche's around vision/team/culture/design/customer love all day. That's a big red flag to me.

lpolovets 13y ago

"Great founders are execution machines." That's a great summarizing quote.

carsongross 13y ago

C'mon now, kids. While there is some laudable-if-extremely-conventional wisdom in here, almost every point suffers from either survival bias ("Successful companies succeed by being successful.") or from having obvious counter-examples ("Was Steve Jobs a nice guy?"), or both.

hayksaakian 13y ago
A counter example might just be an outlier, I don't think he was arguing in absolutes.
- bsirkia 13y ago
  This is an awesome article explaining carsongross's point on survivorship bias: http://youarenotsosmart.com/2013/05/23/survivorship-bias/ http://youarenotsosmart.com/2013/05/23/survivorship-bias/
  - hayksaakian 13y ago
    thanks, that was a great article. my favorite quote: > After any process that leaves behind survivors, the non-survivors are often destroyed or muted or removed from your view. If failures becomes invisible, then naturally you will pay more attention to successes. another one: > As the psychologist Daniel Kahneman writes in his book Thinking Fast and Slow, “A stupid decision that works out well becomes a brilliant decision in hindsight.”
- carsongross 13y ago
  Yeah, and the article starts off with some disclaimers, so I'm being a bit unfair. Still, I think most of these points are either obvious or tautologies, and many of them can cause harm when they are focused on obsessively. And, so I'm not just another critic, let me offer two points I'd make about startups that stand, somewhat, in opposition to the points made here: 1) Successful companies ship. This is often in direct opposition to obsessing over quality: you have to accept that your app, which is a piece of shit, needs to get out there, so you can get feedback, before you make it a gleaming cube of perfection. 2) Random chance is going to factor in your startups success far more than you'd like, so building a startup that will not die no matter what (rev/run > 1) is going to give you a better shot at making it over the hump. This often means putting up with uncertainty and not knowing exactly what you should be or will be doing. And it will be hard on you, mentally.

bsirkia 13y ago

I would add they were also a bit lucky (whether with timing or virality or some other factor) at some point in their lifecycle.

sillysaurus2 13y ago

This is an excellent list. Thank you, Sam, for putting it together.

tvladeck 13y ago

To all those people screaming "survivorship bias", isn't that what this whole post is about? Like, explicitly in the title of the thread? Of the companies that became very successful, what were some common traits? That's what this post is about. "Yeah but you only looked at the successful companies." ::smacks head::

xux 13y ago
I think people are pointing out "survivor bias" because the qualities listed aren't unique to successful companies.
MattGrommes 13y ago
The point is that using traits of successful companies isn't useful without looking at unsuccessful companies. Yes, these are all traits of successful companies. But other companies did these same things and failed.
- tvladeck 13y ago
  That's true, but not, IMO, a valid criticism of the article. This article emphatically does not say that if you do the stuff on this list that you will become successful. It makes the implicit claim that if you don't do this stuff you won't become successful. Remember that those two statements are very different, and the second one is valuable even though it doesn't prescribe a path to success.
ghaff 13y ago
There was an extremely popular business book back in the 80s called In Search of Excellence which chronicled a set of characteristics of large successful companies. "Stick to your knitting" and the like. The problem was that there were loads of counterexamples including 1.) Successful companies that DIDN'T stick to their knitting and 2.) Failed companies that did.
- tvladeck 13y ago
  Right. So the question then is not whether the premise is correct or not, but whether the information Sam is putting out is accurate, which is a different thing entirely.

wslh 13y ago

He misses one point: live and fund your company in US. There are more successful Internet companies in US than abroad.

mathattack 13y ago

I like the list but what are all the source companies? (And in the spirit of survivor bias, failed comparison companies)

drelihan 13y ago

Did you have a list of extremely successful companies you were looking at specifically when you wrote this? If so, I'd be interested in seeing that list to compare

desireco42 13y ago

No examples, just slogans.

higherpurpose 13y ago

> *They grow organically. And they are generally skeptical of inorganic strategies like big partnership deals and to a lesser extent PR. They certainly don't have huge press events to launch their startup. Mediocre founders focus on big PR launches to answer their growth prayers. Has Google+ written all over it.

untilHellbanned 13y ago
ah yes the obligatory G+ slam

hoboerectus 13y ago

* They can bench press twice their body weight. * They are sublime swordsmen. * They revere the supreme commander.

kimonos 13y ago

Nice! I see some helpful information in here. Thanks for sharing!

tsunamifury 13y ago

These are great foundational traits, which are common among noble-failure and successful startups I've seen. You still need to add in the resources (money, energy, charisma) to fund sustained hard work, market resonance, and luck to reach super success.

kevinalexbrown 13y ago

Mediocre founders try to hire people for the parts that they don't like. Great founders just do whatever they think is in the best interest of the company, even if they're not "passionate" about that part of the business. I don't often like to follow people, but when I do, this attribute matters to me. I'm not sure, but I suspect that it's a signal that someone wants to build something great more than accumulate accolades. In the latter case, I help someone get rich and famous (which is fine!). But in the former, I'm a part of something awesome. I find it a little difficult to articulate why this affects me so deeply, but it resonates with me, and talented people I know. In general, I suspect these attributes are important if for no other reason than talented people you might be recruiting will be on the lookout for them.

oskarth 13y ago

All I can think about reading the comments (and the article, for whatever reason) is pg's advice to sama and how it didn't seem to help at all here: https://news.ycombinator.com/item?id=6843726 https://news.ycombinator.com/item?id=6843726

supersystem 13y ago
I'm kind of tired of people in tech who are "misunderstood". Maybe they just aren't very good at expressing themselves or doesn't have the experience they think they have. Sometimes people can of course be be argumentative to the point of hypercriticism, but saying it's because they "misunderstood" is belittling.
- supersystem 13y ago
  I'm not sure down-voting is good way to handle criticism about not being able to express oneself.

LizVerano 13y ago

Wow

inthewoods 13y ago

I think there are two important areas he doesn't touch on: 1. Timing: The most successful companies are also the ones that are usually at a particular point in time when an opportunity exists. Too early, you fail, too late, you fail as well (for different reasons). 2. A scalable idea: The most successful companies find product or service ideas that scale hugely. These ideas are pretty rare. More often, people find ideas they like and can execute but turn out to be ideas that scale only so far. Sometime it turns out that they've actually founded a services business and didn't know it. More often, they find an idea that can scale to, say, $5m in revenue but then has trouble scaling beyond that. Billion dollar ideas likely represent a very small portion.

calbear81 13y ago

I think a lot of the points are great but when we talk about super successful, I can think of some great startups that grew organically but also a lot of operationally efficient companies that knew how to build businesses at scale with a combination of organic growth, massive marketing, and smart PR. For example, one of Google's largest advertisers in spend is Booking.com (owned by Priceline). They have built an efficient machine that can acquire users/customers in an efficient manner and in the process capture 48% market share of online hotel bookings in Europe and help make Priceline a $60B market cap company.

LeicaLatte 13y ago

We are prone to saying super while talking. That's ok. That many supers in writing? Sorry, but that's bad writing.

drdiablo 13y ago

this is a test of fun

aryastark 13y ago

This article is literally advocating a cargo cult. I've seen sharks jumped, but never this high and this obvious.

quadrangle 13y ago

tl;dr what makes a company great is how it is run greatly

samishamlet 13y ago

It turns out that pattern matching on PG's essay style does not make one's essays as insightful.. All I can say is: the only factor really worth a damn is luck. Unfortunately you can't control luck, the only thing you can do is increase your luck surface. From my experience, nothing on that list actually does that - what increases luck is: hard work, value of idea, connections and personality. Re-order at will.

saumil07 13y ago

Sam Altman is a great writer. He was also Founder/CEO of Loopt. I have to wonder why this post doesn't relate the traits back to his work at Loopt so the lessons learned can be more contextualized. For example, are there areas where he was a mediocre founder by his own definition? Were there times when he was mediocre and then became great? What did it take to go from mediocre to great? I'm surprised that the essay is so general in nature when there's a wealth of specific (and maybe more valuable) cases that could have been shared even after respecting privacy of individuals involved, etc.

semerda 13y ago

I like Sam's blog posts. They are short and punchy. Always leaving me charged with energy. Good stuff. Keep it up Sam! "They have a whatever-it-takes attitude." - This is such a powerful trait that it puts the "big dreamers" to shame and separates the Wannapreneurs from Entrepreneurs. Anyone is capable of dreaming, talking big, generate ideas et al.. but few are capable of executing them by doing whatever it takes to turn that dream into reality. Ha, it reminds me of the "never give up frog poster".

tschellenbach 13y ago

With many of these points I completely agree, I also believe that there's data to back them up. The following however: - the generate revenue very early on in their lives - they keep expenses low Is in direct contrast with many of the most successful startups. As far as I know, Google, Facebook, YouTube, Instagram, Skype don't fit this criteria.