Sam Altman's 9 tactics for building a great company

I want to wrap this up before I take a few questions by talking about building a great company. We talked about this earlier. Getting to know your users really well is important. The best founders, they do customer support themselves. They go visit their users, they sit in their office if they can. In the case of Airbnb, they go live with them. You want to get to know your users really, really well. They have a short cycle time. The cycle here is basically like talk to customer, understand pain point, build product to address that, get that in front of a user, ask them, see what they do, and then repeat the cycle. And this cycle is how you iterate and improve. The law of compound growth being what it is. If you can get 2% better every iteration cycle, and you have a chance of having an iteration cycle be every four hours or every four weeks, and you compound that over the course of a few years, you get in very, very different places. So make it one of your top goals to build the fastest iterating company the world has ever seen. You want to make a long term commitment. Most companies don't do this. Most companies, especially if they're trying to start the easy company, think in a two or three year time frame. These things always just take a lot longer. It's always Somehow almost a 10 year project if it's going to work. And if you think about it that way, from the very beginning, you will make very different and much better decisions. I think this is the only arbitrage opportunity left in the market. Almost no one makes a very long term commitment to a new project. And if you do that, you will think in a different way, you will hire different people and that will work really well. Speaking of hiring, stay lean until everything is working really well. I think this is somewhat bimodal in the early days when you're experimenting and zigzagging and you want to be like a fast little speedboat and you want to be able to turn the whole company on a dime. And you can't do that if you have a big company, cash burn aside, which is another problem, the flexibility of a company basically decreases with the square of the number of employees. So you want to stay really small until you're sure things are working. Once things are working, then you can get really big. And in fact, then you need to. And so once you switch into hyperscale mode, you want to just get as big as fast as you can with great people. Because then you don't want to be a speedboat, you want to be an aircraft carrier, you want to be A battleship. And you don't care about the fact that you can't turn as fast. You just want to steamroll everything, but you really want to be in one mode or the other. And you'll know once users are just begging for your product and you'll be convinced you have great product market fit. That is when you can really start to scale up the company. Even when you get there, though, resist the urge to hire mediocre people. Vinod Khosla, who's speaking later in the course, has a saying that I love, which is the team you build is the company you build. And this is really true. I didn't appreciate how true this was for a long time, but if you build a team of great people and you have a product that people love, you have a 90 something percent chance of success. Those are both really hard to do and they're independent variables. But don't ignore the team point. The best CEOs I know spend huge amounts of their time recruiting and retaining their talent. How much of your time would you say you spend on this? 40 to 50%? Like this is Dustin Moskovitz doesn't need to be anything he doesn't want to do, and he chooses to spend half of his time recruiting and retaining employees. So if Dustin can do that, you all probably should really be doing that as well. Every CEO I've met has an excuse for why they only spend 5% of their time on building their team. And it always sounds really good. And then they always try not to fail. Really, really invest in this relentless execution. So this is a theme we'll talk about a lot, but you have to keep going and keep going and keep going, and you have to do things perfectly and you have to get all the details right. You have to care too much about every experience that a customer has with your company. There's this book, the Score Take Care of Itself. The Score Will Take Care of Itself. Something like that. Read it. It's really good, but it's about how important it is to get all the details right and just move forward relentlessly and as quickly as you can. Startups are about not giving up to a degree that most people don't have a good intuitive understanding for. One of the very best companies in the last YC batch, he applied seven times before he got in. Most people, you reject them six times, they're not going to apply again on the seventh. And this is just a version of what happens in startups all of the time, where you get beat down again and again and Again. And it's like that last time when you get pushed down and you don't think you have enough energy to get back up, that's when it finally works. And this is what you sign up for if you're going to start a startup. Remember, if this is like a 10 year marathon, you have a fiduciary duty to your shareholders to take care of yourself. So some people treat a startup as an all nighter. They don't do a good job taking care of their health, they don't sleep, they don't maintain their personal relationships. It is true that startups are a bad choice for work life balance. There are always these posts about how I change the world, my startup only working two hours a day and kite surfing the rest of the time. Some of these people though, are never the ones that actually make a big impact. They just talk a lot. So startups are really hard. But you have a duty to yourself, your team, your investors, to take care of yourself and to not neglect your health, your well being the rest of your life, your personal relationships and then finally a clear mission. You don't have to figure this out on day one, but all of the most successful startups I've been fortunate enough to be a part of pretty quickly, first year, two years at the outside, they figure out a really important mission. And it is this mission that gets people to join them, that drives them, that drives the founders, that gets the media to write about them. And even if you start off building a project that's just interesting to you and solves the problem in your own life, which is how you should start, remember to at some point have a clear mission. You have to become a great evangelist for this mission. One other skill that I didn't make it into this version of the deck is being a great communicator. But you need to clearly communicate and like clearly think, clearly communicate this clear mission and that is what will convince people to come help you and that is how you will build this idea into this giant set of this huge company and all these people that really love your product.