Sam Altman, the chief executive of OpenAI, got his start as an app developer — he co-founded and launched a social network called Loopt in 2005.
Two years after selling Loopt, Altman was handpicked to head up Y Combinator, a venture capital firm focused on funding tech startups. In 2015, he co-founded OpenAI with Elon Musk; now, he runs OpenAI, a company whose interest has skyrocketed over the past year in the wake of the monumental launch of its flagship product: ChatGPT.
Related: Meet Sam Altman, the man behind OpenAI's revolutionary ChatGPT
"The most successful startups are not derivatives. I don't know how many people started a Facebook clone in the year after Facebook; none of those went on to matter," Altman said during a Stanford lecture in 2017. "The next Facebook never looks like Facebook; it looks like something totally different."
During the lecture, Altman shared a series of tips on how to develop a valuable startup and a strong company.
Long-term commitment
"Most companies don't do this," he said. "Most companies think in a two or three-year timeline. These things always take longer."
If a potential founder goes into a startup under the assumption that it will take around a decade of hard and consistent work to get the company off the ground, Altman said, that founder will make much better long-term decisions. This long-term approach will set the company up for real success.
Stay lean for a while
"In the early days, you want to be like a fast little speedboat; the flexibility of the company decreases with the square of the number of employees," Altman said.
Keeping a startup as small as possible until the team is positive that things are working allows for flexibility and transition, he said. A company that's too big can't be as adaptive as a small one; although Altman added that the moment a team knows their system works, the focus is all on hyperscaling. The intention is just to keep things small until that point.
Understand your users
“The best founders do customer support themselves," Altman said. "You want to get to know your users really, really well."
This, Altman said, is the key to understanding how to "iterate and improve" the startup; founders who are keyed into their user experience can understand the pain points in their product, which can speed up how quickly a company can improve, and then expand.
Don't hire mediocre people
"If you build a team of great people and you have a product that people love, you have a 90% chance of success," Altman said. "Don't ignore the team point."
The best CEOs that Altman knows spend close to half their time on recruitment and retention.
Stay relentless and don't give up
"You have to care too much about every experience a customer has with your company," Altman said. "You have to keep going. And you have to do things perfectly. And you have to get all the details right."
The startup world, he said, is one that is rampant with rejection. Success means getting up every time you get knocked down.
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Take care of yourself
"You have a fiduciary duty to your shareholders to take care of yourself," Altman said. "It is true that startups are a bad choice for work-life balance, but you have a duty to take care of yourself."
In thinking about guiding a startup to success as a ten-year journey, Altman noted that the founder staying healthy and fit enough to handle that journey is of vital importance.
Have 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 figure out a really important mission," Altman said.
This is the element that will drive investors and media attention.
"That is what will convince people to come help you," he said, "and that is how you will build this idea into a huge company with a ton of people that really love your product.”
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