Accidentally stumbled upon Y Combinator’s YouTube channel and found their course for startup founders. Took the opportunity over the holiday to watch it all. Despite working in startups for years, I learned a lot, and some insights even challenged my previous beliefs.
Startup School
Each video is kept between 15 to 35 minutes, covering everything from finding startup ideas, finding co-founders, getting the first customers, to building the product, fundraising, and post-launch considerations. It’s truly a roadmap for early-stage startups. The content of the videos is solid, with clear outlines, examples, and key takeaways, no fluff. Given Y Combinator’s extensive investment in startups and their statistical analysis of which business models are more likely to succeed, the insights are invaluable.
The Best Price is the One Customers Complain About but Still Pay
The initial instinct for promoting a new product is often to go for a low price to grab market share. Many founders hesitate to charge, fearing it might drive away customers. But it’s essential to charge; otherwise, it’s not a profitable business. If your product’s only differentiation from a larger company’s product is the price, it’s unlikely to succeed because big companies benefit from economies of scale and can afford lower costs. If customers aren’t willing to pay, it indicates the product is headed in the wrong direction, and efforts should be focused on increasing its value to customers.
The only times not to charge initially or to charge a lower price is when the customer can bring higher value elsewhere, such as when the product has network effects, becomes more valuable as more people use it, or when there’s high switching cost once customers start using it.
Customers
Understanding and communicating with customers are recurring themes throughout the videos, underscoring their importance for startups. Startups should target the simplest customers initially, refine the product based on real feedback once they make a purchase. Most people won’t accept paying for an immature product, so don’t target them at the beginning.
Doing Unscalable Things
This might seem counterintuitive, especially for software engineers whose biggest advantage lies in writing code that can be used by many. But doing unscalable things is a unique advantage for startups.
To quickly launch a product, startups may need to do unscalable tasks initially. Stripe, for example, a company offering simple API payment services, started by manually filling out the paperwork required by banks when customers used the API to request payments.
The level of unscalability at the beginning can be quite staggering.
Ongoing Updates to the Course
The first video was published in November 2022, and the latest one was released on January 7th this year. It’s incredible how they continue to update the course. This brief article can’t fully capture how amazing this course is! The videos are quite engaging; besides listing key points, each one includes examples from companies Y Combinator has invested in, making the stories quite interesting. I strongly recommend watching all the videos for anyone interested in entrepreneurship or working in startups.