In this second part of the lecture Sam Altman focuses on Teams and Execution.
Before addressing how to create a team and hire people, he focuses on cofounders and how important is expend time on finding the right persons. It must be somebody you know and you trust and not somebody random that you meet that was willing to start a company as you and you both decided to do it together. That is advocate to doomed to failure.
If you don't know anybody you still can go on yourself but Sam discourages it. Two or three cofounders is the right number but since the first months communication is so important, having a cofounder in a remote location is a bad idea (is even worse than start the company just yourself).
Equity should be split equally between cofounders and vesting. Vesting is decide what happens if one of the cofounders leave. Usually it means if you have 50%, you will have to earn it in 4 years. If you leave after the first year you'll have earned just a 25% of this 50% of the company (12.5% namely).
About hiring: don't. Keep your team small as long as you possibly can. The idea is that with the cofounders you should be able to do the vast majority of the work. Early hires are dangerous because you can do a bad hire and this can kill the company.
Once you need to hire somebody, spend loads of time finding the right person; he or she must me fully committed to the project of the company and must believe in the mission. You need to create a company culture before hiring anybody and make them believe it. The problem about hiring somebody mediocre is that he/she can poison the culture. Try to recruit people you know for years first. Technical background is not as important as aptitude.
What is a good hire? A smart person, that get things done and that you want to spend time with them. The best way of knowing this things is to work in a project together.
Once you have your team you must follow the policy of fire fast. If you have a part of the team that is not working, fire fast. Its painful but you must do it. People that are creating office politics or who are persistently negative are very toxic to the company, the culture and you must get rid of them asap.
Execution means doing the fundrising, hiring, customer adquisition, PR, customer relationship management, etc... Every thing at a startup gets modeled after the founders. Whatever the founders do becomes the culture. Lead by example is the key, and the only way.
Execution gets divided in two questions: what to do and how to get it done. How to get it done splits in focus and intensity. Knowing in what the founders are spending their time and money on you know what they think is important for the company.
Sam points that the trick of a great execution is to say "no" a lot and focus on what is really important and adding value to the company. The goals that must be achieved are repeated by the founders over and over because this keeps focus on the company.
You must focus on growth and keeping momentum. To do that you need to have the right metrics the measure how you are performing. Instead of focusing on big things you should do small things really quickly. To keep momentum you need to focus on small things that make your product way better.
Do not care about competition noise on press. Don't worry about them at all until they're beating you with a real shipped product.
HackerNews comments and opinion
I've found one comment specially interesting in HN. It's about the two lectures that we have seen so far and it summarizes really well a similar feeling that I have. Here is the comment:
as someone geographically & logically outside of the silicon valley bubble, working in the 'real economy' and a bit older than the y combinator target group it hurts me to see those kind of lectures / advice on startups. from my perspective it all seems like one big circle jerk, especially considering the hive-mind mentality here on hackernews where working 80hours+ / week for some fun app startup seems like good guidance for young people and something to strive for. the goal of a startup is to make money, not raising money. the SV scene seems to be concentrating on the latter since its influenced & guided completely by venture capitalists and their interests instead of market opportunities. to be provocative: just throw thousands of teenagers at random things, give them some pocket money and hope something sticks. motivate them by giving them some grand illusion of being an independent entrepreuner. burnout is just something that comes with the game. give them lectures to clone them into perfect worker bees for VCs as traditional education would clone them into perfect big corp employees. my advice to young people with drive is: go travel, see the world first. solve real problems. starting your typical SV startup is mostly an illusion and a bad proposition for you. young age is certainly good for coming up with disrupting ideas, but execution profits heavily from life experience - think of survivorship bias and don't be fooled by the few success stories.
I've had this feeling all the time. Its seems that they are always focusing on companies that have had a big success (Facebook, Twitter, Airbnb, Google). Of course is really difficult to create one of there but as the commenter says, it looks like they are trying make young people burn all their passion for a few bucks and big promises and hopefully a few percentage will become huge and they will make profit out of it.
In another comment in the same thread we can see:
It's not explicitly stated anywhere, but it hardly takes "reading between the lines" to see that the kind of "business" model being pushed is one that is exploitative of youth in some cases, and of the culture that has grown up around software engineering and computer programming in general. A lot of the themes in this lecture related to motivation and employee qualities are what I'd lump in the category of "dog whistles." They're meant to send a certain signal to people. If that's not what they are, then somebody has done a thoroughly unimpressive job of communicating various ideas.
The idea is clarified in an another comment by the same person:
The kinds of workers he suggests to hire basically boil down to, "hire people who are willing to work harder for less compensation with a promise of a big equity cash out (which is about as likely as winning the lottery)." That is to say, hire workers who are exploitable. I am sure some, perhaps even Sam himself, don't view it that way; that they really, honestly believe the rhetoric they're using is not negative or indicative of an exploitative relationship. That's just how dog whistles work, though: in some cases the audience and messenger are merely casual, unwitting participants in a larger, cultural narrative, but in others one or more parties "knows what they mean." So the words about employees having to be passionate and believe in the mission are basically dog whistles indicating "it's culturally acceptable to target would-be employees who are easily exploited." These would-be employees don't have to think they're being exploited, by the way, in order for an exploitative relationship to exist. At least that's how I read it.
Both comments reflect a 'negative side effect' of following this lectures. They advise you on some things thanks to their vast experience but sometimes this leads in situations that you don't probably want to be in, like hiring people that will work 80 hours a week for small money. I think that this is not healthy for a company and the people working on it, but at the same time it summarizes really way the American business model where you fully commit your life to work. The point being that there are probably way better techniques or approaches on getting new stuff and building a company that, yes, probably you wont become the next Facebook but you can still be profitable and grow, and it does not align with the needs of the Angel Investors and VCs.