Paul Buchheit: What traits do startups need to succeed?

TL;DR

Focus is a startup's most powerful weapon because large companies are spread across many things, allowing a startup to concentrate all resources on one point and become the world's best at it. Frugality is equally essential, measured by an input-to-output ratio where successful startups do more with less, while most fail by burning money with no results.

Key insights

• A startup's only advantage over large companies is the ability to be 100% focused on one thing; this is how Google won at search by ignoring portal ambitions.
• The best indicator of doing startup right is a high input-to-output ratio—producing many outputs with minimal time and money.
• The common failure mode is "less with more": given money, most startups burn it without producing results.