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Some kind of magic happens in startups, especially at the very beginning, but the only people there to see it are the founders The best way to understand what happens is to ask them, so that s what I did In this book, you ll hear the founders stories in their own words Here, I want to share some of the patterns I noticed When you re interviewing a series of famous startup founders, you can t help trying to see if there is some special quality they all have in common that made them succeed What surprised me most was how unsure the founders seemed to be that they were actually onto something big Some of these companies got started almost by accident The world thinks of startup founders as having some kind of superhuman confidence, but a lot of them were uncertain at first about starting a company.

What they weren t uncertain about was making something good or trying to fix something broken They all were determined to build things that worked In fact, I d say determination is the single most important quality in a startup founder If the founders I spoke with were superhuman in any way, it was in their perseverance That came up over and over in the interviews Perseverance is important because, in a startup, nothing goes according to plan Founders live day to day with a sense of uncertainty, isolation, and sometimes lack of progress Plus, startups, by their nature, are doing new things and when you do new things, people often reject you That was the second most surprising thing I learned from these interviews: how often the founders were rejected early on By investors, journalists, established companies they got the Heisman from everyone.

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People like the idea of innovation in the abstract, but when you present them with any specific innovation, they tend to reject it because it doesn t fit with what they already know Innovations seem inevitable in retrospect, but at the time it s an uphill battle It s curious to think that the technology we take for granted now, like web-based email, was once dismissed as unpromising As Howard Aiken said, Don t worry about people stealing your ideas If your ideas are any good, you ll have to ram them down people s throats..

involve discounting your product sometimes as little as 20 percent, sometimes as much as 80 percent. So when you want to set a price for your product, you have to think about how you re going to reach your customer direct sales Through resellers Through distributors who will sell to other resellers The mix of ways you get your product to the customer, and the discounts you will have to give to resellers, will determine the average selling price in the break-even formula shown earlier. Can I repeat my advice here about being realistic Many businesses fail because of wildly optimistic projections of sales coupled with a fixed cost plan based on those projections. It is said that the downfall of every person in sales is when they begin to believe their own sales pitch. When planning with a colleague, there s a tendency to dream of great success. Nobody wants to rain on the parade. So plan for success. But don t make a plan that is likely to fail.

In addition to having perseverance, founders need to be adaptable Not only because it takes a certain level of mental flexibility to understand what users want, but because the plan will probably change People think startups grow out of some brilliant initial idea like a plant from a seed But almost all the founders I interviewed changed their ideas as they developed them PayPal started out writing encryption software, Excite started as a database search company, and Flickr grew out of an online game Starting a startup is a process of trial and error What guided the founders through this process was their empathy for the users They never lost sight of making things that people would want Successful startup founders typically get rich from the process, but the ones I interviewed weren t in it just for the money They had a lot of pride in craftsmanship.

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