Be Good
April 2008
(This essay is derived from a talk at the 2008 Startup School.)
About a month after we started Y Combinator we came up with the
phrase that became our motto: Make something people want. We've
learned a lot since then, but if I were choosing now that's still
the one I'd pick.
Another thing we tell founders is not to worry too much about the
business model, at least at first. Not because making money is
unimportant, but because it's so much easier than building something
great.
A couple weeks ago I realized that if you put those two ideas
together, you get something surprising. Make something people want.
Don't worry too much about making money. What you've got is a
description of a charity.
When you get an unexpected result like this, it could either be a
bug or a new discovery. Either businesses aren't supposed to be
like charities, and we've proven by reductio ad absurdum that one
or both of the principles we began with is false. Or we have a new
idea.
I suspect it's the latter, because as soon as this thought occurred
to me, a whole bunch of other things fell into place.
Examples
For example, Craigslist. It's not a charity, but they run it like
one. And they're astoundingly successful. When you scan down the
list of most popular web sites, the number of employees at Craigslist
looks like a misprint. Their revenues aren't as high as they could
be, but most startups would be happy to trade places with them.
In Patrick O'Brian's novels, his captains always try to get upwind
of their opponents. If you're upwind, you decide when and if to
engage the other ship. Craigslist is effectively upwind of enormous
revenues. They'd face some challenges if they wanted to make more,
but not the sort you face when you're tacking upwind, trying to
force a crappy product on ambivalent users by spending ten times
as much on sales as on development. [