This is the talk I gave at the Female Founders Conference 2017.
Last year I spoke about all the problems that can arise in a startup and how to avoid them. And to be honest, I think last year's talk is the best general startup advice I could give you. So if you haven't read it before, please do.
And it would be worth re-reading even if you have, because a lot of these problems are the kind that get you even when you think you're already watching out for them.
Last year, I ended by saying that I wanted there to be more women founders of the big winners, of the so-called unicorns. These are the founders who make the most influential role models, and role models are what we need most if we want to encourage more women to start their own companies.
In recent years there’s been an increase in the number of women starting startups, and in the number who’ve raised significant seed and Series A rounds. This is good.
Now we’ve got to focus on the next target: more women-founded billion dollar companies. So that's what I'm going to talk about today: what it takes to start a startup that's not merely successful, but massively successful.
I'm not saying everyone has to do this. You don't have to start a startup. And if you do start one, you don't have to start a Google. But if you do want to start a Google, or think you might, what does it take? What's the difference between a successful startup, and a super-successful startup?
Fortunately I've seen enough of both types at close hand that I can see patterns of differences. I made a list of the things that I think are different about the unicorns, and there are 9 of them.
1. Be lucky
I want to get this one out of the way right from the start. In addition to everything else they need, the unicorns are lucky. One of the most important kinds of luck is timing. The most successful founders have the right idea at the right time. And you have less control over that than you might think, because the best ideas are not deliberate: they tend to grow organically out of the founders' lives.
However, while all the most successful founders are lucky, none are merely lucky. It is never a matter of having a great idea and then boom, a few years later you're a billionaire. Far, far from it.
2. Have the right motives
One of the most noticeable differences between the founders of super successful and moderately successful startups is their motives. And in particular, the founders of super-successful startups are never in it mainly to get rich or to seem cool. They're always fanatically interested in what the company is doing.
Incidentally, it’s perfectly fine to start a startup mainly for the money. But unless your motives change in the course of it, it probably won't wind up being a really big one.
There are multiple reasons why startups do better when the founders are truly interested in the idea. They work harder, since they love the work, and their enthusiasm is infectious. They think longer term. And they are much harder for another company to capture with an acquisition offer, because they don't actually want to quit.
3. Hit a big need
This one may sound obvious, but huge startups need huge markets. You have to make something a lot of people will pay for, or people will pay a lot for.
And this is one place luck has a big effect, because market sizes are impossible to predict.
For example, the Airbnbs didn't know how many people would want to stay in other people's homes. All they knew was that enough people would to make the idea worth working on. The founders of the most successful startups never realize, in the beginning, how big they're going to get.
So our advice at Y Combinator is not even to try to hit a big market early on. Since you can't predict these things, it's better just to work on something you yourself want, and then hope there will be lots more people like you.
4. Do something basic
When you describe the biggest startups, most all of them are doing something very basic. Google is how you find information. Facebook is where your friends are. Uber drives you places. Airbnb gives you somewhere to sleep. These are all things you could explain in a few words to a five year old.
However don't use this as a test for what to work on, because ideas often start out less general. At first Facebook wasn't where everyone's friends were; it was just where a couple thousand Harvard students were.
5. Be willing to work on a dubious idea
A site for a couple thousand students at one college doesn't sound like a very promising idea, does it? It may seem like a promising idea now, because we know how the story turned out, but it didn't at the time. Almost all the really big startups seem like dubious ideas at first. I know exactly how Airbnb's idea seemed at first, because I was one of the people whose job was to judge it, and I didn't think much of it at the time.
It's not just that these ideas don't seem as big at first as they later turn out to be. They seem to most people like bad ideas.
You need to be a certain kind of person to work on one of these bad ideas that turn out to be good. You need to be independent-minded. You can't care what other people think. It's now part of the conventional picture of a successful founder to be a maverick, and that part of the conventional picture is very accurate. I can't think of one that I'd describe as a conformist.
6. Not be afraid of a big idea
You also have to be ambitious. Because what happens with these initially unpromising ideas is that they blossom into terrifyingly big ones. You start a site for college students, and pretty soon you realize you could expand to sign up the whole world if you wanted to.
At this point most people's reaction is fear. Signing up the whole world sounds like a lot of work. It also sounds like a valuable prize, and you have to fight to win those.
The fear of big ideas prevents most people from even realizing they could expand a site for college students into a site for the whole world. But a few people are more excited than afraid when this happens.
7. Be driven and resilient
Another thing I notice about the founders of the really huge startups is that I would not want to stand between them and something they wanted. All of them, 100%, have exceptional drive.
But, it’s not always straightforward to tell how driven someone is. Drive can be suppressed when someone else has authority over you, like in most schools and jobs. In these situations, people who are really driven may even read as less promising than people who are merely obedient. So not only is it often hard for me to tell how driven someone is, people often can't even tell themselves.
You can tell after they start a startup though. No one has authority over you in a startup. Most people find that authority vacuum uncomfortable. But a few expand into it. A few think, "Ah, this is how life was meant to be."
8. Focus: Life’s Work
Drive by itself isn’t enough though. You have to be driven to work on this particular company. In all the really huge startups, the company is at least one founder's life's work. So they'd never willingly be acquired, for example. If you sell your life's work, then what are you supposed to do?
9. Be able to evolve into a manager
Early on, starting a startup is all about the product. But that changes when a startup gets really big. A founder who wants to keep running the company has to become a manager. You don't need to have management ability initially. There's plenty of empirical evidence to show that you can learn this on the job. But you do have to be able to learn it. You probably even have to like it.
Designing cool products and managing people are very different things. Most people who like building things dislike the idea of being a manager. It's a rare person who can be great at both. But you have to be to create one of the really big startups.
Those 9 things, as far as I can tell, are the differences between startups that are merely successful and the ones that become really big.
But they're not just a list. When you put them all together, they make a story of how a "unicorn" happens. The founders work on something their own experience shows them the world needs. It wouldn't seem like a promising idea to most people, but they work on it anyway, partly because they understand the promise of the idea better, and partly just because they think it's cool. As they work on the idea, they realize it could become even bigger than they thought. Instead of shrinking from that realization, they embrace it eagerly. This, they realize, is what they want to do with their lives. And they are so committed to the company that they're willing to morph themselves into whatever it needs.
There’s a lot of variety in startups, but this is the most common path for the really big ones.
Remember, you don't have to start a startup, and if you do, it doesn't have to be a "unicorn." But if you do, this is probably what it will look like: an unpromising idea that blossoms into a frighteningly big one, and driven founders who see that opportunity and run with it.
I'm hoping that there are some of you in this audience who hear this description and think, "Oh my God, it's like she's describing me!" The people on the path to being huge don't usually realize it, early on. But I'm hoping that if I can encourage just a few of you to keep going, then when you succeed, your example will encourage a wave of new women founders.
Yes, this is a very long-term plan. But, after all, this is my life's work.