From: http://www.paulgraham.com/start.html
Start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.
In particular, you don’t need a brilliant idea to start a startup around. The way a startup makes money is to offer people better technology than they have now. But what people have now is often so bad that it doesn’t take brilliance to do better.
What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can’t save bad people.
Rule for deciding who to hire: could you describe the person as an animal? It means someone who takes their work a little too seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive.
In nearly every failed startup, the real problem was that customers didn’t want the product.
Rapid prototyping and getting the product in front of customers/testers fast is essential (The Iceberg Secret Revealed).
It’s worth trying very, very hard to make technology easy to use. Hackers are so used to computers that they have no idea how horrifying software seems to normal people. Stephen Hawking’s editor told him that every equation he included in his book would cut sales in half. When you work on making technology easier to use, you’re riding that curve up instead of down. A 10% improvement in ease of use doesn’t just increase your sales 10%. It’s more likely to double your sales.
When and if you get an infusion of real money from investors, what should you do with it? Not spend it, that’s what. In nearly every startup that fails, the proximate cause is running out of money. Usually there is something deeper wrong. But even a proximate cause of death is worth trying hard to avoid.
So who should start a startup? Someone who is a good hacker (Great Hackers), between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life.