Paul Graham wrote a masterful thing about the hardest lessons for startups to learn. Below is my summary and notes recorded here so I can take them with me forever. Check out his original article here.

1. Release Early. Get a version 1 out fast, then improve it based on users’ reactions. Not something full of bugs, but something minimal. There are many reasons to do this. Perhaps the most important reason is that it makes you work harder.

“Users hate bugs, but they don’t seem to mind a minimal version 1, if there’s more coming soon.”

2. Keep Pumping Out Features. If you’re going to start with something that doesn’t do much, you better improve it fast. I don’t mean make your application ever more complex. By “feature” I mean one unit of hacking — one quantum of making users’ lives better.

“…people get used to how things are. Once a product gets past the stage where it has glaring flaws, you start to get used to it, and gradually whatever features it happens to have become its identity. […] I think the solution is to assume that anything you’ve made is far short of what it could be.”

3. Make Users Happy. A startup has to sing for its supper. Tell visitors (cater to casual visitors) what your site is about by showing them.

“Users are a fickle wind, but more powerful than any other. If they take you up, no competitor can keep you down.”

4. Fear the Right Things. Disasters are normal in startups — they won’t kill you unless you let them. Don’t fear the established players, fear other startups you don’t know exist yet — they’re cornered animals like you. Compete against what someone else could be doing, not just what you can see people doing.

And in any case, competitors are not the biggest threat. The three biggest are: internal disputes, inertia, and ignoring users.

“You should compete against what someone else could be doing, not just what you can see people doing.”

5. Commitment Is a Self-Fulfilling Prophecy. The most important quality in a startup founder is determination. Not intelligence — determination. Running a startup is like walking on your hands: it’s possible, but it requires extraordinary effort — and it happens against the backdrop of regular disasters. Not stubborn — you have to be determined, but flexible, like a running back.

“Everyone who deals with startups knows how important commitment is, so if they sense you’re ambivalent, they won’t give you much attention. If you lack commitment, you’ll just find that for some mysterious reason good things happen to your competitors but not to you. If you lack commitment, it will seem to you that you’re unlucky.”

6. There Is Always Room. It’s not likely that in a hundred years the only social networking sites will be Facebook and twitter. At every point in history, even the darkest bits of the dark ages, people were discovering things that made everyone say “why didn’t anyone think of that before?” The number of possible startups is limited only by the amount of wealth that can be created.

“Startups make wealth, which means they make things people want, and if there’s a limit on the number of things people want, we are nowhere near it.”

7. Don’t Get Your Hopes Up. Founder optimism is a nuclear reactor: a very dangerous source of power. It’s ok to be optimistic about what you can do, but assume the worst about machines and other people. Just assume it — whatever “it” is, a deal, a partnership, a sale, etc. — isn’t going to work out. Not to save yourself from disappointment, but to prevent yourself from leaning your company against something that’s going to fall over, taking you with it.

“It’s ok to be optimistic about what you can do, but assume the worst about machines and other people.”

“It seems ridiculous to me when people take business too seriously. I regard making money as a boring errand to be got out of the way as soon as possible.”

Before Jim Coudal and team take on any new project, they ask themselves these three questions.

1. Can we make money from it? We’re a going business. We have mortgages to pay. We have tuitions to pay for our kids. We’re not ashamed of making money.
2. Are we gonna be proud of it when we’re done? There’s nothing that will break your heart faster than working three months on a project and then, when it’s all done, you’ve sold your soul and compromised and you don’t even want anybody to see it.
3. Have we learned something new? That allows us to continue to grow in the skills that we have. It allows us to be better filmmakers and writers and coders and art directors. And it keeps things interesting.

Via SVN

I feel buffeted at the moment, rising and falling at the whim of ambition, understanding, a sense of meaning, a sense of meaningless, vanity, ego, a desire to create, a desire to be recognized, a sense of bigness, a sense of smallness…

I have my “industry.” I’m a blogger. I have blogger friends and read blogger books and study blogger businesses and want to build a successful blogger business.

I know, pretty cool, right?

All this blogger business thinking has been spinning up an engine in me that’s ready to power something. I’m thinking big and thinking I’m special and thinking about how to become more special and thinking and thinking…

I have this one friend who had some success with an eBook. He’s a family guy. He thinks blogger thoughts too, but they’re tempered a bit more than mine. He’s one of these classic nerd bloggers, the best kind. The kind that had an audience long before there was a business plan. Love those guys.

He tried not to be too ambitious. I think his reality is such that he can’t; you can only get so far away from home. I resonate with that.

Side Note: this friend doesn’t understand someone having the goal of travelling around with a laptop and running a business teaching people how to travel around with a laptop. “Congratulations, you’re a narcissist,” he says. I kind of want to tattoo that on the back of my hand.

I have this other friend who wrote some books and got super famous in a Christian subculture. They were good books. I have all of them. One of them is signed. Deal with it.

This other friend thinks real big. He’s the kind of guy that get’s asked to lead the intro to the Democratic National Convention. He says I should pay attention to people like Benjamin Franklin and Thomas Jefferson instead of people like Tim Ferriss and Seth Godin.

He’s ambitious and thinks big, but there’s a humanness to it. It’s a weird balance and I’m not quite sure what the deal is with it, but I sense there’s a good path down that way.

This guy wrote a simple post recently. He nailed it. And at the end of the post he lists off, in very simple terms, the rules of business. He says they haven’t changed. I think he’s right.

I think there’s something about these two guys, something in the way they’re looking at their thing, some sort of signpost for me. A way through this ambition/meaning/bigness/smallness. Their stories seem to ask me, “why are you thinking about that?”

Anyways, here’s those rules.

The rules of commerce:

1. Identify something people need or want.
2. Create that thing and create it well.
3. Sell that thing at a competitive price.
4. Clearly communicate what that thing is.
5. Give half the money you make to the government.
6. Give a percentage of your money to causes that need your money.
7. Love your spouse and your children, because in the end little else will matter. They don’t care about your money.