- Startups are counterintuitive and it is important to not always trust your instincts
- Y Combinator often gives advice that founders ignore, but later regret not listening to
- Trust your instincts about people, as founders often ignore their misgivings about someone who seems impressive but may not be trustworthy
- Expertise in startups is not necessary for success, understanding your users is more important
- Young founders often go through the motions of starting a startup without actually creating something people want
- Many young founders have been trained to play games and follow certain rules, which can hinder their success in startups.

- Young founders often look for tricks and shortcuts to succeed in startups
- The measure of success for a startup is not just fundraising
- The key to growing fast is to make something users really love and tell them about it
- Faking success may work with investors initially, but it is not sustainable
- Startups require solving real problems and providing value to users
- Starting a startup is all-consuming and takes over one's life
- Successful startup founders face constant challenges and worries
- Universities cannot fully teach about startups, as starting a startup can only be learned by doing it
- Starting a startup in college is not advisable, as it takes over one's life and hinders the college experience
- Starting a startup should be considered as part of the bigger goal of having a good life, and timing is important

- Starting a startup at a young age can limit the opportunities for exploration and serendipity in life.
- Success can take away the serendipity and freedom in one's life.
- It is not necessary to start a startup at a young age, as waiting can increase the chances of success.
- Predicting the success of a startup or the potential of an individual is difficult.
- The best way to prepare for a startup is to focus on learning and working on things that interest you.
- Being at the leading edge of technology can help generate startup ideas unconsciously.
- Living in the future and being aware of emerging technologies can lead to innovative ideas.

- The best way to start a successful startup is to focus on learning powerful things in college and follow your intellectual curiosity.
- Domain expertise is crucial for entrepreneurship, and it is best developed through genuine interest and curiosity.
- Non-technical founders can contribute effectively to a startup by leveraging their expertise in a specific domain or by handling sales and support roles.
- Business school may not be valuable for aspiring entrepreneurs as it is designed to teach management skills, which are only relevant in successful startups.
- The first hires in a startup should be self-motivated and aligned with the founders' vision, and management becomes a problem only when the startup is successful.
- The current high valuations in the startup ecosystem do not necessarily indicate a bubble, but caution should be exercised when raising money.
- The trend of starting labs to spin off startups has potential for success, as demonstrated by Twitter's origin.
- Female co-founders may face challenges in raising funding, but there is empirical evidence that women have a harder time securing investment.

- The speaker suggests that if a startup is not meeting the ideal target from a VC's perspective, the best solution is to make the startup perform well.
- The speaker mentions a female-founded startup with impressive growth that had trouble raising money, emphasizing the importance of focusing on the growth graph rather than gender.
- When asked what he would learn in college, the speaker jokingly mentions literary theory but ultimately expresses an interest in studying physics.
- The speaker discusses his personal work and life systems that make him efficient, including having children and being forced to work during specific deadlines.
- The speaker advises turning a side project into a real startup when it starts taking up a significant amount of one's time and attention.
- When a startup is growing slowly, the speaker suggests reading his essay on doing things that don't scale for guidance.
- The speaker believes that any type of startup can benefit from going through incubation, except those that are destined to fail or have intolerable founders.
- When asked how to figure out what matters in technology, the speaker admits he doesn't have a clear answer but suggests being interested in interesting things and avoiding boring tasks.
- The speaker avoids answering a question about how Snapchat makes money.
- The speaker acknowledges that hiring people one likes can lead to a monoculture but believes the advantages outweigh the disadvantages, citing successful startups that have hired friends.

The text discusses various aspects of startups and entrepreneurship. It emphasizes the importance of not always trusting instincts and provides advice that founders often regret ignoring. It highlights the significance of understanding users and solving real problems. The text also mentions the challenges and sacrifices involved in starting a startup. It suggests that starting a startup at a young age may limit opportunities and that success can take away freedom and serendipity. The importance of domain expertise and learning powerful things in college is emphasized. The text also touches upon topics such as the value of business school for entrepreneurs, the first hires in a startup, high valuations in the startup ecosystem, challenges faced by female co-founders, and the benefits of incubation. The speaker shares personal work and life systems for efficiency and advises on turning a side project into a startup. The importance of focusing on growth and avoiding boring tasks is mentioned. The speaker avoids answering a question about Snapchat's revenue model and discusses the advantages and disadvantages of hiring people one likes.

How to Start a Startup is a series of video lectures, initially given at Stanford in Fall 2014.

Lecture Transcript: http://www.tech.genius.com/Paul-graham-lecture-3-counterintuitive-parts-of-startups-and-how-to-have-ideas-annotated

Paul Graham delivers an informative (and highly amusing) talk, addressing counterintuitive parts of startups, in Lecture 3 of How to Start a Startup.

See the readings at http://www.startupclass.samaltman.com/courses/lec03

Discuss this lecture: http://www.startupclass.co/courses/how-to-start-a-startup/lectures/64032

Like, like long introductions are no good.

I'm not going to ask if the mic is working like in every talk so far.

This is like some kind of class tradition.

I wrote out my talk and afterwards, in a couple days, I will like turn it from a talk into an essay and put it online so you don't have to take notes.

All right, so, 1 of the advantages of having kids is that when you have to give advice to people, you can ask yourself, what would I tell my own kids?

And actually you find this really focuses you.

So even though my kids are little, my 2 year old today, when asked what he was going to be after 2, said A bat.

The correct answer was 3, but a bat is so much more interesting.

So even though my kids are little, I already know what I would tell them about startups if they were in college.

And so that is what I'm going to tell you.

So you're literally getting what I would give my own kids.

Since most of you are young enough to be my own kids.

All right, so, startups are very counterintuitive.

It could be simply because knowledge about them has not permeated our culture yet.

But whatever the reason, this is an area where you cannot trust your intuitions all the time.

You know, when you're skiing, when you first try skiing and you wanna slow down, your first impulse is to lean back, just like in everything else.

But, lean back on skis and you fly down the hill out of control.

So part of learning to ski is learning to suppress that impulse.

Eventually you get new habits, but in the beginning, there's this list of things you're trying to remember as you start down the hill.

You know, like alternate feet, make S turns, do not drag the inside foot, all this stuff.

Well, startups are as unnatural as skiing, and there is a similar list of stuff you have to remember for startups.

And what I'm going to give you today is the beginning of the list, the list of the counterintuitive stuff you have to remember to like prevent your existing instincts from leading you astray.

The first thing on it is the fact I just mentioned that startups are so weird that if you follow your instincts, they will lead you astray.

If you remember nothing more than that, when you're about to make a mistake, you may at least pause before making it.

When I was running Y Combinator, we used to joke that our function was to tell founders things they would ignore.

Batch after batch, the YC partners warn founders about mistakes they are about to make and the founders ignore them.

And they come back a year later and say, I wish we'd listened.

But that dude is in their cap table, there's nothing they can do.

Why do founders persistently ignore the partner's advice?

Well, that's the thing about counterintuitive ideas.

So of course your first impulse to ignore them, is to ignore them.

And in fact, that is not just the curse of Y Combinator, but to some extent, our raison d'etre.

You don't need people to give you advice that doesn't surprise you, right?

If founders existing intuitions gave them the right answers, they wouldn't need us.

That's why there are a lot of ski instructors and not many running instructors, right?

Like that, You don't see those 2 words together, running instructor, as much as you see ski instructor.

It's because skiing is counterintuitive, so sort of what what YC is, is like business ski instructors, except for going up slopes instead of down them.

You can, however, trust your instincts about people.

You, your life so far hasn't been much like starting a startup, but all the interactions you've had with people are just like the interactions you have with people in the business world.

So in fact, 1 of the big mistakes that founders make is not to entrust their intuitions about people enough.

They meet someone who seems impressive, but about whom they feel some misgivings.

And then later, when things blow up, they tell them, they say, you know, I knew there was something wrong about that guy, but I ignored it because he seemed so impressive.

And there's a, a specific sub-case in business, especially if you had come from an engineering background, as I believe you all do.

You think business is supposed to be this sort of slightly distasteful thing.

And so when you meet people who seem smart but somehow distasteful, you think well, okay, this must be normal for business.

Just like pick people the way you would pick people if you were picking friends.

This is 1 of those rare cases where it works to be self indulgent.

Work with people you genuinely like and respect and that you have known long enough to be sure.

Because there's a lot of people who are really good at seeming likable for a while.

Just wait till your interests are opposed and then you'll see.

The second counterintuitive point is that and this will, might come as a little bit of a disappointment.

But what you need to succeed in a startup is not expertise in startups.

That makes this class different from most other classes you take.

If you take a French class, at the end of it, you will learn how to speak French, if you do the work.

You may not sound exactly like a French person, but pretty close, right?

This class can teach you about startups, but that is not what you need to know.

What you need to know to succeed in a startup is not expertise in startups.

What you need is expertise in your own users.

Mark Zuckerberg did not succeed in Facebook because he was an expert in startups, he succeeded despite being a complete noob at startups.

I mean, Facebook was first incorporated as a Florida LLC.

He succeeded despite being a complete noob at startups because he understood his users very well.

Most of you don't know the mechanics of raising an angel around, right?

Because I can tell you Mark Zuckerberg probably doesn't know the mechanics of raising an angel around either.

If he was even paying attention When Ron Conway wrote him the big check, he has probably forgotten about it by now.

In fact, I worry it's not merely unnecessary for people to learn in detail about the mechanics of starting a startup, but possibly somewhat dangerous.

Because another of the characteristic mistakes of young founders starting startups is to go through the motions of starting a startup.

They come up with some plausible sounding idea.

They rent a nice office in Soma, hire a bunch of their friends.

And then the next step, after rent a nice office in Soma and hire a bunch of their friends is gradually realize how completely fucked they are.

Because while imitating all the outward forms of starting a startup, they have neglected the 1 thing that's actually essential, which is to make something people want.

By the way, that's the only use of that swear word except for the initial 1 that was involuntary.

And I did check with Sam whether it would be okay.

No, I mean people going through the motions of starting a startup.

That we made up a name for it, Playing House.

Eventually, I realized why it was happening.

The reason young founders go through the motions of starting a startup is because that is what they have been trained to do for their whole lives up to this point.

Think about what it takes to get into college.

Even in college classes, most of the work you do is as artificial as running laps.

And I am not attacking the educational system for being this way.

Inevitably, the work that you do to learn something is going to have some amount of fakeness to it.

And if you measure people's performance, they will inevitably exploit the difference to the degree that what you're measuring is largely an artifact of the fakeness.

And I confess that I did this myself in college.

In fact, here's a useful tip on getting good grades.

I found that in a lot of classes, there might only be 20 or 30 ideas that actually had the right shape to make good exam questions.

And so the way I studied for exams in these classes was not to master the material in the class, but to try and figure out what the exam questions would be and work out the answers in advance.

And like, for me, the test was not like what my answers would be on the exam.

For me, the test was, which of my exam questions would turn up on the exam, right?

So I would, I would get my grade instantly.

I would walk into the exam and look at the questions and see how many I got right, essentially.

It works in a lot of classes, especially CS classes.

There's only a few things that make sense to ask about automata theory.

So, it's not surprising that after being effectively trained for their whole lives to play such games, young founders' first impulse on starting a startup is to figure out what the tricks are for this new game.

What are the extracurricular activities of startups?

Since, since apparently the measure of success for a startup is fundraising, another noob mistake.

They always want to know, what are the tricks for convincing investors?

And we have to tell them, the best way to convince investors is to start a startup that's actually doing well, meaning growing fast, and then simply tell investors so.

So then they ask, Okay, what are the tricks for growing fast?

And this is exacerbated by the existence of this term, growth hacks, right?

Whenever you hear anybody talk about growth hacks, just mentally translate it in your mind into bullshit.

Because what we tell them is the way to make your startup grow is to make something that users really love, right?

So, So many of the conversations the YC partners have with the founders begin with the founders saying a sentence that begins with how do I and the partners answering with the sentence that begins with just right.

The reason I realized after years of being puzzled by this, is they're looking for the trick.

They've been trained to look for the trick.

So, this is the third thing, the third counter-intuitive thing to remember about startups.

Starting a startup is where gaming the system stops working.

Gaming the system may continue to work if you go to work for a big company.

Depending on how broken the company is, you may be able to succeed by sucking up to the right person.

Giving the impression of productivity by sending emails late at night.

Or if you're smart enough, changing the clock on your computer.

Because who's going to check the headers, right?

But I like an audience that I can tell jokes like that to and they laugh.

All right, from now on we are sticking strictly to the script.

There's no, how can you trick people if there's no 1 to trick?

And all users care about is that, is whether your software does what they want, right?

You can't like wave a red flag at a shark and fool it.

So, you have to have something you people want, and you only prosper to the extent that you do.

The dangerous thing is, particularly for you guys, the dangerous thing is that faking does work to some extent with investors.

You, if you're really good at knowing what you're talking about, you can fool investors for 1, maybe 2 rounds of funding.

But it's not in your interest to, I mean you're all doing this for equity.

You're playing a confidence trick on yourself.

You're wasting your own time because the startup is doomed.

And all you're doing is you're just going to waste your time writing it down.

There are tricks in startups, as there are in any domain, but they are an order of magnitude less important than solving the real problem.

Someone who knows 0 about fundraising, but has made something users really love, will have an easier time raising money than someone who knows every trick in the book but has a flat usage graph.

Though in a sense it's bad news that gaming the startup stops, gaming the system stops working now.

In the sense that you're deprived of 1 of your most powerful weapons, and after all, something you have spent 20 years mastering.

It is something, I find it very exciting that, that, that, that there even exist parts of the world where gaming the system is not how you win.

I would have been really excited in college if I had explicitly realized that there are parts of the world where gaming the system matters less than others, and some where it hardly matters at all.

But there are, and this is 1 of the most important things to think about when you're planning your future.

How do you win at each type of work, and what do you want to win by doing?

So, That brings us to our fourth counterintuitive point.

If you start a startup, it will take over your life to a degree that you cannot imagine.

And if it succeeds, it will take over your life for a long time.

For several years at the very least, maybe a decade, maybe the rest of your working life.

It may seem to you that Larry Page has an enviable life, but there are parts of it that are definitely unenviable.

The way the world looks to him is that he started running as fast as he could at age 25 and he has not stopped to catch his breath since.

Every day shit happens within the Google empire that only the emperor can deal with and he as the emperor has to deal with it.

If he goes on vacation for even a week, a whole backlog of shit accumulates.

And he has to bear this uncomplainingly, because number 1, as the company's daddy, he can never show fear or weakness.

And number 2, if you're a billionaire, you get 0, actually less than 0 sympathy if you complain about having a difficult life.

Which has this strange side effect that the difficulty of being a successful startup founder is concealed from almost everyone who's done it.

People who win the 100 meters in the Olympics, like they walk up to them and they're going like, ha, ha, ha, ha, right?

And like Larry Page is doing that too, but you never get to see it.

Y Combinator has now funded several companies that could be called big successes.

And in every single case, the founders say the same thing.

So you may be worrying about more glamorous problems like construction delays in your new London offices rather than the broken air conditioner in your studio apartment.

But the total volume of worry never decreases.

Starting a successful startup is similar to having kids, and that it's like a button you press that changes your life irrevocably.

And while it is like, honestly, the best thing in the world having kids.

If you take away 1 thing from this lecture, remember that.

There are a lot of things that are easier to do after you, before you have kids than after.

Many of which will make you a better parent when you do have kids and so in rich countries, most people delay pushing the button for a while.

And I'm sure you are all intimately familiar with that procedure.

Yet, when it comes to starting startups, a lot of people seem to think they're supposed to start them in college.

They go out of their way to ensure that their students are well supplied with contraceptives, and yet they're starting up entrepreneurship programs and startup incubators left and right.

To be fair, the Universities have their hand forced here.

A lot of incoming students are interested in startups.

Universities are at least de facto supposed to prepare you for your career.

And so if you're interested in startups, it seems like universities are supposed to teach you about startups.

And if they don't, Maybe they lose applicants to universities who do claim to do that.

So, can universities teach you about startups?

As I explained, they can teach you about startups, but this is not what you need to know.

Essentially, what universe, if you want to learn French, universities can teach you linguistics.

We're teaching you about how to learn languages, and what you need to know is like, how to learn a particular language.

What you need to know are the needs of your own users.

You can't learn those until you actually start the company.

And starting a company, which means that starting a startup is something you can intrinsically only learn by doing it.

And you can't do that in college for the reason I just explained that startups take over your entire life.

If you start a startup in college, if you start up a startup as a student, you can't start a startup as a student because if you start a startup, you're not a student anymore.

You may be nominally a student, but you won't even be that for much longer.

So, given this dichotomy, which of the 2 paths should you take?

Be a real student and not start a startup, or start a real startup and not be a student?

Starting a startup could be a component of a good life for a lot of ambitious people.

But this is just part of a much bigger problem that you're trying to solve.

And though starting a startup could be a good thing to do at some point, 20 is not the optimal time to do it.

There are things that that you can't, there are things you can do in your early 20s that you cannot do as well before or after.

Like plunge deeply into projects on a whim that seem like they'll have no payoff.

Or travel super cheaply with no sense of a deadline.

In fact, those are really just isomorphic shapes in different domains.

For unambitious people, this sort of thing can be the dreaded failure to launch.

But for the ambitious ones, it's a really valuable sort of exploration.

And if you start a startup at 20, and you're sufficiently successful, you will never get to do it.

Mark Zuckerberg will never get to bum around a foreign country.

He can, if he goes to a foreign country, it's either as a de facto state visit, or like he's hiding out incognito at the George, the George Sank in Paris, right?

But he's never gonna get to just like, backpack around Thailand if that's still what people do.

Do people still backpack around Thailand?

Well, that's the first real sign of enthusiasm I've seen from this audience.

He can do things that you can't do, like charter jets to fly him to foreign countries, really big jets.

But success has taken a lot of the serendipity out of his life.

He, Facebook is running him as much as he's running Facebook.

And while it can be really cool to be in the grip of some project you consider your life's work, there are advantages to serendipity.

And among other things, it gives you more options to choose your life's work from.

You're not sacrificing anything if you forego starting a startup at 20 because you'll be more likely to succeed if you wait.

In the unlikely case that you're 20, like, astronomically unlikely case that you're 20 and you have some side project that takes, takes off like Facebook did, then you face a choice of either running with it or not, and maybe it's reasonable to run with it.

See all Y Combinator transcripts on Youtube

Before the Startup with Paul Graham (How to Start a Startup 2014: Lecture 3)