Paul Graham - «Billionaires Build»: some citations

What YC looks for, above all, is founders who understand some group of users and can make what they want.

A big company can to some extent force unsuitable products on unwilling customers, but a startup doesn't have the power to do that.

In a market economy, it's hard to make something people want that they don't already have.

If it were certain that the need existed and that you could satisfy it, that certainty would be reflected in large and rapidly growing revenues, and you wouldn't be seeking seed funding.

The YC partners have to guess both whether you've discovered a real need, and whether you'll be able to satisfy it.

The first thing the partners will try to figure out, usually, is whether what you're making will ever be something a lot of people want.
It doesn't have to be something a lot of people want now.
The product and the market will both evolve, and will influence each other's evolution.
But in the end there has to be something with a huge market.
That's what the partners will be trying to figure out: is there a path to a huge market?

Sometimes it's obvious there will be a huge market.
If Boom manages to ship an airliner at all, international airlines will have to buy it.

But usually it's not obvious. Usually the path to a huge market is by growing a small market.

The ideal combination is the group of founders who are "living in the future" in the sense of being at the leading edge of some kind of change, and who are building something they themselves want.

The crucial feature of the initial market is that it exist.
There have to be some people who want what you're building right now, and want it so urgently that they're willing to use it, bugs and all, even though you're a small company they've never heard of.

So this is one thing the YC partners will almost certainly dig into during your interview.
Who are your first users going to be, and how do you know they want this?
If I had to decide whether to fund startups based on a single question, it would be "How do you know people want this?"

The most convincing answer is "Because we and our friends want it."
It's even better when this is followed by the news that you've already built a prototype, and even though it's very crude, your friends are using it, and it's spreading by word of mouth.

The best thing you can do in a YC interview is to teach the partners about your users.

Competitors are rarely what kills startups.

The partners don't expect your idea to be perfect. This is seed investing. At this stage, all they can expect are promising hypotheses.

If the partners are sufficiently convinced that there's a path to a big market, the next question is whether you'll be able to find it.
That in turn depends on three things: the general qualities of the founders, their specific expertise in this domain, and the relationship between them.

What keeps them working is the same thing that keeps anyone else working when they could stop if they wanted to: that there's nothing else they'd rather do.
That, not exploiting people, is the defining quality of people who become billionaires from starting companies.

People's motives for starting startups are usually mixed.
They're usually doing it from some combination of the desire to make money, the desire to seem cool, genuine interest in the problem, and unwillingness to work for someone else.
The last two are more powerful motivators than the first two.

The founders who are doing it for the money will take the first sufficiently large acquisition offer, and the ones who are doing it to seem cool will rapidly discover that there are much less painful ways of seeming cool.

This exploitative type of founder is not going to succeed on a large scale, and in fact probably won't even succeed on a small one, because they're always going to be taking shortcuts.

The most reliable way to become a billionaire is to start a company that grows fast, and the way to grow fast is to make what users want.