Hey, Nick here! In this newsletter, I curate insights and timeless principles on how to build great products. You’ll improve your product skills with every issue.

Here’s an interview for you today…

Sam Altman on Y Combinator and What Makes The Best Founders

Sam Altman dropped out of Stanford at age 19 in 2005 to start his first company, Loopt. In 2011, he was named the President of Y Combinator. He remained in leadership roles for YC for nearly a decade before becoming the CEO of OpenAI. OpenAI is a for-profit research company that has the goal to advance digital intelligence that is most likely to benefit humanity as a whole.

Here are 4 insights from Sam Altman’s conversation in the Blitzscaling series. 

Five consistent qualities in the best founders:

Clarity of vision: A founder needs to explain their vision and their actions to achieve the vision. They need to do this for their employees, customers, investors, etc.

Determination and passion: The best founders don’t take no for an answer and they work until they find a solution that fits their problem. The passion for their startup feeds the determination to produce the best product for their clients 

Belief in what you are doing is important: This is closely associated with the founder's passion. It’s hard to be passionate about your startup if you don’t believe what you are trying to solve is important. 

Raw intelligence: Creating a startup is a difficult task and having extra brain horsepower helps! Some people are born with it and others can be hyper-focused on a topic to create expertise.  

Getting things done quickly: Great founders are quick and decisive. They keep things moving, especially early in the startup's life. The trick is “your ability to be presented with a problem you've never seen before and solve it very quickly."

Solo founders vs teams

At some point, most solo founders find someone else to join their team. There are two main issues with being a solo founder. First, starting a company is a lot of work and you need to share the work. Second, the psychological toll is harder than expected. Having a team allows the work, stress, and pressure to be spread evenly. 

Teams do bring complexity because all cofounders get into fights. Most conflicts happen in two ways:

• People have different ideas of where the company wants to go

• People want to have the same thing (e.g., the title of CEO, face on the magazine, etc.)

Great ideas that look bad 

Having a great idea that looks bad is where outsized returns are made. Think of some of the most notable startups over the last decade such as Airbnb and Uber. Who would want to stay in a stranger's home or get into a stranger's car? It turns out a fair amount of people are ok with this!

What you don’t want is to be a founder or investor in a derivative of the previous big thing. Airbnb and Uber blew up in the 2010’s and many copycats were made. You need to understand where the world is going and build for that, not where we’ve been. 

The most common mistake of great founders

Taking too long to fire people is the most common mistake. Firing is not an easy process for either party, but Sam offered some advice on making it easier. He said to treat the person as a human and make it look like a win for them. When he has let people go in the past, he has helped the person find a new job and was very generous with severance. 

You must be clear and firm when you let the person know. He has let them know in private that he’s made this decision, but when an announcement is made to the rest of the organization, he has always had the lens of a new opportunity opening up for the person to take. 

Link to the full video.

End Note

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Have a great day,

Nick