Graham Strikes Again

by Peter Saint-Andre

2005-03-13

Paul Graham strikes again, this time with a thought-provoking essay on How to Start a Startup. The key advice is in the first paragraph (don't you love it when writers get right to the point?):

You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.

Graham focuses on startups that enable one to get rich. Mostly these are product companies rather than consulting companies. Yet there is something attractive about starting a small consulting company (I've previously likened them to rock bands) whose focus is on solving problems in a more measured way than is possible in a product company, thus enabling all the team members to maximize happiness rather than money. The same considerations apply -- choosing the right people (especially the founders or "original settlers"), offering a service that customers really need (even if they don't know they want it -- thus the challenge of sales), and spending as little money as possible. The good thing about small consulting companies is that they can be self-funding from the beginning. The bad thing about them is that you'll never get filthy rich running one. But that part about maximizing happiness is important, I think. :-)


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