In 1995, Paul Graham co-developed the web-based application, Viaweb, which was subsequently acquired by Yahoo in 1998. Later, in 2002, he conceived a spam filter that inspired most current filters. Paul is currently a partner at Y Combinator, a venture firm that specializes in funding early stage startups.
In a recent article that Graham wrote entitled "The Hardest Lessons for Startups to Learn," Graham offers many insights and lessons that virtually all entrepreneurs can use.
Specifically, Graham discusses 7 key lessons:
1. Release Early. It is easy to improve and improve your product forever before releasing it to the public, However, Graham advises startups to get the first version of their product out quickly and then improve it based on user feedback.
2. Keep Pumping Out Features. The second component of "release early" is to continue to add features to the product based on user feedback.
3. Make Users Happy. Graham makes the key point that "you can't force anyone to do anything." People will only do things that they want to. As a startup, you have to make people want to buy your product, want to partner with you, etc. To do this, you must make these people happy by focusing on their needs.
4. Fear the Right Things. "Startups are right to be paranoid, but they sometimes fear the wrong things." Startups need to understand and address the critical issues. Graham says that issues such as a founder quitting, an insolvable technical problem or a deal falling through are par for the course and startups shouldnít be overly concerned about them. Rather, allowing internal disputes, inertia, and ignoring users will kill a business.
5. Commitment Is a Self-Fulfilling Prophecy. Intelligence in a startup founder is important, but not nearly as important as determination.
6. There Is Always Room. Graham says, "There is always room for new stuff. At every point in history, even the darkest bits of the dark ages, people were discovering things that made everyone say why didn't anyone think of that before?" Clearly, there is no limit to the number of successful startups that can and will be launched in the future.
7. Don't Get Your Hopes Up. While startup founders are naturally optimistic, this optimism is also dangerous. Founders must understand that deals will fall through, technologies will fail and people will quit. As such, the founderís optimism must be grounded in order to allow them to effectively cope with these inevitable challenges.
You can read Graham's full article here.