I must create a system or be enslaved by another man’s. I will not reason and compare; my business is to create.
— William Blake

Peter Thiel’s CS183: Startup - Class 6 Notes Essay

blakemasters:

Here is an essay version of my class notes from Class 6 of CS183: Startup. Errors and omissions are my own. Credit for good stuff is Peter’s entirely. This class was kind of a crash course in VC financing. I didn’t include all the examples since you can learn more about VC math elsewhere, e.g. here or here. As usual, though, I’ve tried to include all the key insights from the lecture.

CS183: Startup—Notes Essay—Thiel’s Law

I.  Origins, Rules, Culture

Every company is different. But there are certain rules that you simply must follow when you start a business. A corollary of this is what some friends have (somewhat grandiosely) called Thiel’s law: A startup messed up at its foundation cannot be fixed.  

Beginnings of things are very important. Beginnings are qualitatively different. Consider the origin of the universe. Different things happened then than what we experience in everyday life. Or think about the origin of a country; it necessarily involves a great many elements that you do not see in the normal course of business. Here in the U.S., the Founders generally got a lot of things right. Some things they got quite wrong. But most of the time they can’t really be fixed.  Alaska has 2 senators. So does California. So Alaska, despite having something like 1/50th of California’s population, has equal power in the Senate. Some say that’s a feature, not a bug. Whatever it is, we’re likely to be stuck with it as long as this country exists.

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The insight that foundings are crucial is what is behind the Founders Fund name. Founders and founding moments are very important in determining what comes next for a given business. If you focus on the founding and get it right, you have a chance. If you don’t, you’ll be lucky at best, and probably not even that.

The importance of foundings is embedded in companies. Where there’s a debate or controversial claim at Google, one says, “The Founders have scientifically determined that x is true,” where x is his preferred position. If you think that certain perks should be extended since happy people are the most productive, you say that Larry and Sergey have already settled the matter. The point is that all the science is done at the founding. No new data can interfere with the founding moment.

Foundings are obviously temporal. But how long they last can be a hard question. The typical narrative contemplates a founding, first hires, and a first capital raise. But there’s an argument that the founding lasts a lot longer than that. The idea of going from 0 to 1—the idea of technology—parallels founding moments. The 1 to n of globalization, by contrast, parallels post-founding execution. It may be that the founding lasts so long as a company’s technical innovation continues. Founders should arguably stay in charge as long as the paradigm remains 0 to 1. Once the paradigm shifts to 1 to n, the founding is over. At that point, executives should execute. 

There is, of course, a limit to how much you can do with rules. Things can and will break down even with perfect rules. There is no real chance of setting things up correctly such that the rest unfold easily. But you should still get the early stuff as right as possible.

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Reblogged from Blake Masters

David Sacks’s (Yammer CEO) 4 keys to an angel investment

I watched a very good interview with David Sacks of Yammer at Launch 2013 which covered a range of topics but the section that stood out for me was how David looks to do his Angel investments.
 
He listed 4 key things he looks for when investing in a startup:
  1. Product hook. That simple interaction that keeps users coming back
  2. Solving a market problem that exists. This will often require iterating towards a solution
  3. Distribution model. How does it spread??? David is looking for virility.
  4. Non-copyability. What sets you apart from others -e.g the network effect.

3 out of the 4 will usually get David on board as the 4th can be added.

David is a very impressive CEO and while watching a thought crossed my mind - possible future MSFT CEO - they could do a lot worse.

Tumblr esq exit for a UK founded startup?

I wonder if we will see one in the next 5 years! #notconvinced

Tweet from Sequoia Capital (@Sequoia_Capital)

Sequoia Capital (@Sequoia_Capital) tweeted at 6:12 PM on Mon, May 20, 2013: One of the fatest decisions we’ve ever made, looking back at when we first met @davidkarp http://t.co/mlq6HBE0VE (https://twitter.com/Sequoia_Capital/status/336529792453193728)

Do you have a 1:1?
Do you have a team meeting?
Do you have status reports?
Can you say No to your boss?
Can you explain the strategy of the company to a stranger?
Can you explain the current state of business?
Does the guy/gal in charge regularly stand up in front of everyone and tell you what he/she is thinking? Are you buying it?
Do you know what you want to do next? Does your boss?
Do you have time to be strategic?
Are you actively killing the Grapevine?

Offline Go Lang Documentation

Little trick I’ve discovered so I can read the package docs for Go while offline.

If you have go installed execute:

godoc -http=:6060

and then head to http://127.0.0.1:6060/pkg/ in your browser.

Tags: go
Managing engineers will probably be the hardest job you’ve ever done and will most likely be the hardest job you’ll ever do – it needs all of your focus.