When starting a marketplace, focus on getting more of whichever side is rarest, which is almost always buyers rather than sellers. (If it's sellers, you've discovered a gold mine.)
"It is more blessed to give than to receive"
This applies to founders as well. When you operate your business with a 'Give First' mentality, profits become an abundant byproduct.
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Brex sold to Capital One for $5.15B earlier this year.
In 2018 they raised $57M without a dollar of revenue history.
Let's take a look back at their pitch deck:
As a founder, your number one job is to eat shit.
You're on the call with the upset customer. You need to fire people by telling them directly. You're listening to the engineer who wants to quit due to burnout. You have to read the 40-page vendor contract, which is a nightmare to go through.
Every hard, uncomfortable thing lands on your desk. That's the whole job. You're here to absorb the bad stuff so everyone else can keep moving.
Elon Musk literally sat down for a 45-minute talk with Y Combinator that explains how to build world-changing companies better than any business school on earth. This is the advice he gave a room full of young founders:
1. Don't try to build something great. Try to build something useful.
Everyone obsesses over greatness. Musk says that's the wrong target. "I didn't originally think I would build something great. I wanted to try to build something useful. I didn't think I would build anything particularly great. Seemed unlikely, but I wanted to at least try." Aim for useful first. Greatness, if it comes, is a byproduct.
2. When you can't get in the front door, build your own door.
Before Musk started his first company, he tried to get a job at Netscape. "I sent my resume into Netscape and nobody responded. I tried hanging out in the lobby to see if I could bump into someone, but I was too shy to talk to anyone. So I'm like, this is ridiculous, I'll just write software myself." He didn't set out to be a founder. He became one because no one would hire him.
3. He slept in the office and showered at the YMCA.
The origin of his first company was not glamorous. "We couldn't even afford a place to stay. The office was 500 bucks a month, so we just slept in the office and showered at the YMCA." He couldn't afford proper internet either, so he drilled a hole through the office floor and ran a cable to the internet provider downstairs. That was the founder of the future richest man on earth.
4. Keep the chips on the table.
When Musk sold his first company, he received a $20 million cheque. His bank balance went from $10,000 to $20 million overnight. Most people would have stopped. He put almost all of it straight back into his next company. "I kept the chips on the table." He did the same thing decades later, over and over. He hates money sitting idle. Money is fuel for the next mission.
5. Start with the mission, then work backwards to make it a business.
Musk didn't start SpaceX to make money. He went on the NASA website to find out when humans were going to Mars, and there was no plan. So he decided to build one. "There had been no prior example of a rocket startup succeeding. A small chance of success is better than no chance of success." The mission came first. The business model came later.
6. He started SpaceX expecting to fail.
He is brutally honest about the odds. "SpaceX started in mid-2002 expecting to fail. Probably 90% chance of failing. When recruiting people, I said, we're probably going to die, but small chance we might not die." The first three launches failed. The fourth one worked with no money left. "If the fourth launch hadn't worked, it would have been curtains. We made it by the skin of our teeth."
7. Break every problem down to physics.
This is the core of how Musk thinks. "First principles means break things down to the fundamental elements that are most likely to be true, then reason up from there, as opposed to reasoning by analogy." His example is rockets. Everyone priced them based on what old rockets cost. Musk asked what a rocket is actually made of, priced the raw metals, and found the materials were only 1-2% of the historical price. The rest was inefficiency he could attack.
8. When told something takes 24 months, break it down and do it in six.
Last year xAI needed a giant computer to train its AI. Suppliers said it would take 18 to 24 months. "It's like, well, we need to get that done in six months or we won't be competitive." So he broke it into parts. Needed a building, so he found an old factory. Needed power, so he rented generators. Needed cooling, so he rented a quarter of America's mobile cooling capacity. He slept in the data centre and ran cabling himself. It got done.
9. Watch your ego-to-ability ratio.
Musk's single sharpest piece of advice for young founders is about staying honest with yourself. "A major failure mode is when your ego-to-ability ratio gets too high. Then you break the feedback loop to reality." Keep the ego small, internalise responsibility for everything, and stay ruthlessly connected to what's actually true. "You want to close the loop on reality hard. That's a super big deal."
10. Chase work, not glory.
His closing philosophy ties it all together. "It's so hard to be useful. The area under the curve of total utility is how useful you've been to your fellow human beings times how many people. If you aspire to do true work, your probability of success is much higher. Don't aspire to glory, aspire to work."
He was ridiculed for years. The press called him "internet guy attempting to build a rocket company." He agreed it sounded absurd. He did it anyway, because a small chance of doing something useful beat no chance at all.
Here's the thing though....
Musk became the most followed founder alive because everything he does happens in public. The launches, the failures, the talks like this one. The companies made him powerful. The personal brand made his every word travel around the world before he finishes saying it.
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https://t.co/UoXuYlkBQq
Dropbox founder Drew Houston on why distribution is more important than product
LinkedIn founder Reid Hoffman wrote in his book Blitzscaling:
"Many people in Silicon Valley like to focus on building products that are, in the famous words of the late Steve Jobs, "insanely great." Great products are certainly a positive, but the cold and unromantic fact is that a good product with great distribution will almost always beat a great product with poor distribution."
Dropbox is a great example of this.
As Dropbox founder & CEO Drew Houston explains, great distribution is ultimately how they beat out dozens of competitors with similar product offerings.
Drew believes that too many startups overlook the importance of great distribution.
Dropbox had a great product, but it succeeded because of its great distribution.
They used a combination of organic virality (users shared files with nonusers) and incentivized virality (Basic account holders get 500 MB of extra storage per user they refer; Pro account holders get 1 GB) to grow.
Virality helped Dropbox double its 100,000 users at launch to 200,000 users just ten days later, then skyrocket to one million users just seven months after that.
An important caveat though: if your distribution strategy focuses on virality, you have to make sure you solve retention first.
Bringing new users in through the front door doesn't help you grow if they immediately turn around and leave. According to Drew, Dropbox discovered this truth the hard way, when activation rates revealed that only 40% of the people signing up were actually putting files in their Dropbox and linking them to their computers.
As Drew partially explains in the clip, the early Dropbox team went on Craigslist and offered $40 to anyone who'd come in for a 30-minute usability test. They asked these people to go from a Dropbox e-mail invitation to sharing a file with another email address. Zero of the five people tested succeeded--they didn't even come close.
This stunned the team. So they made a list of 80+ things in an Excel spreadsheet and sanded down all of the rough edges in the experience.
They soon watched their activation rate climb and left the competition in the dust as they marched on to a $9+ billion market cap.
Source: @ycombinator (Feb 2017)
If you are building ANY app, website, SaaS, AI tool or digital product used by people in Nigeria OR Europe, this can save you from massive fines in 2026.
Exact compliance checklist for NDPA + GDPR: documents you MUST have, where they apply to your build, plus clear Do’s and Don’ts.
Extremely practical for founders.
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AI won't build the business for you.
It just eliminates every excuse you had about being one person.
No team. No budget. No degree.
The only thing left in the way is whether you actually start.
If you're a former founder who made investors money, you'll raise again (product optional)
If you're a former founder who failed but raised, you'll raise again (just need a story)
If you're a founder with Ivy League + big tech pedigree, you'll get a small single-digit investment in millions (no product needed)
If you're a founder with a strong network through family or connections, you have a significant advantage (most people won't admit)
If you're none of the above, you need a working product + real users + a great story (you'll still get a lower valuation though)
Self-awareness about which tier you're in is the most underrated fundraising skill.