How to Succeed with a Startup

Altman says startup success depends heavily on making a product so good that customers tell friends about it. A product should also be simple to explain and meet a meaningful need. He estimates that achieving this kind of product accounts for 80% of the work toward building a successful startup.

Altman advises looking for a market that has started, or is about to start, growing quickly, rather than judging only by its size today. He contrasts the iPhone, whose early users spent hours on it and recommended it, with VR in 2018, which he says many owners rarely used. Intense use by early adopters can signal that a new technology platform is a real trend.

A founder, often the CEO, needs to recruit, sell, speak to the press, and raise money with conviction. Altman says an ambitious vision can help attract talent, especially when the company has a clear view of the future and a problem worth solving. Strong teams also include people who generate ideas, take ownership, act with limited information, and believe they can figure things out.

Altman says founders need to maintain a steady cadence of progress because losing momentum is difficult to reverse. He also recommends planning for a lasting competitive advantage, a sensible business model, and a way to reach users. He summarizes traits he sees in strong founders as frugality, focus, obsession, and love.

Altman says startups can take on ideas that are hard to approve inside large companies, since one investor's yes can be enough while a corporate proposal may need many approvals. Startups can also move faster in changing markets and pivot more quickly during major platform shifts. He points to mobile apps after the iPhone as an example of a platform shift that enabled new companies.