Wednesday, September 05, 2007

Graham's Advice to Startups

Paul Graham has some very straight-forward advice for entrepreneurs in startups: Don't Die.

In his words, "The odds of getting from launch to liquidity without some kind of disaster happening are one in a thousand. So don't get demoralized [when the disaster happens]."

He goes on to say that founders seem to succeed when they do cannot fail publicly; "One of the most interesting things we've discovered from working on Y Combinator is that founders are more motivated by the fear of looking bad than by the hope of getting millions of dollars."

His advice: Stay in touch with the investors and with other startup entrepreneurs, and try to make something that at least someone really loves. The number one thing not to do is other things. Distraction is fatal to startups.

Graham points to Octopart and its founders as examples, noting that the publicity they have received makes it nearly impossible to fail now. Welcome to Help, which launched the end of August, may be another example. (They are hosts for the current CotC)

After not dying, entrepreneurs may want to consider this advice from A VC, to "hire someone who knows about cash flow forecasting, gaap accounting, bank lines, collecting revenues, and managing your dwindling cash balances" in order to get through ugly adolescence.

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