How to Start a Startup
Paul Graham’s essay How to Start a Startup is the foundational text on startup creation. It identifies three essential elements: talented people, something customers want, and minimal spending.
The Idea (Less Important Than You Think)
Contrary to popular belief, brilliant ideas aren’t prerequisites. “The way a startup makes money is to offer people better technology than they have now.” Ideas themselves hold minimal value—execution and the people behind them matter far more.
Microsoft originally planned to sell programming languages. Their current business model emerged years later.
People: The True Asset
Hire individuals who are “animals” at their work—deeply committed professionals who obsess over quality. For technical roles, evaluate genuine intelligence, practical capability, and personality compatibility.
Teams should comprise two to four founders, with technical expertise essential for technology startups.
Understanding Customer Needs
The most critical failure point: misunderstanding what customers actually want. Rather than elaborate planning, use rapid prototyping and user feedback.
Graham’s own company initially targeted web consultants but pivoted toward individual merchants after observing actual usage. Listen to early adopters.
Financial Wisdom
- Secure modest seed funding from angels before approaching VCs
- Don’t spend excessively despite receiving investment
- Growing slowly builds organizational understanding
- Avoid the “get big fast” mentality
Minimal Hiring
Employees represent recurring expenses that slow decision-making and add complexity. Hire only when genuinely needed to accomplish essential tasks.
My Takeaway
Startups are solutions for those seeking to “solve the money problem” definitively. Success requires building something users love while maintaining financial discipline—fundamentally straightforward principles requiring execution rather than mysterious expertise.
What’s your experience starting something? I’d love to hear at persdre@gmail.com.