Determination is crucial for startup success and founders should focus on building their product, choosing co-founders wisely, and persevering through challenges.

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  00:00

  Determination is key to avoiding the monsters in the middle and achieving success in the startup industry, according to Y Combinator co-founder Jessica Livingston.

  • Jessica Livingston, co-founder of Y Combinator, has funded 467 startups and has observed many patterns in the startup industry.
  • Many startups fail due to the monsters in the middle, but determination is the best weapon to avoid them.
  • Resilience and drive are essential for a startup, as rejection and lack of external validation are common, even for successful companies like Airbnb.
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  03:39

  Pebble raised $10.2 million on Kickstarter, Y Combinator grew from a small group of founders, Ron Conway was initially skeptical but impressed at demo day, and startups require resilience and drive to succeed.

  • Eric struggled to get funding for his hardware company, Pebble, until he put it on Kickstarter and raised $10.2 million in 30 days.
  • Y Combinator started with a small group of founders who took a chance on the organization, despite initial skepticism, and slowly expanded from there.
  • The speaker tried to convince Ron Conway, the number one angel investor in the valley, to come to demo day and invest in individual startups, but initially got brushed off, eventually Ron came to demo day and was impressed with what he saw.
  • To succeed in a startup, you need both resilience and drive to overcome a variety of specific and vague problems that require improvisation and abnormal solutions.
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  08:30

  Founder commitment: Elah Cart founder worked as a waiter to learn about the restaurant industry.

  • Rajat Suri, founder of Elah Cart, demonstrated his commitment to his company by working as a waiter to learn about the restaurant industry.
  • Stripe founders convinced big companies to work with them by starting with a phone call and presenting their arguments without being distracted by their youth.
  • Lockitron founders impressed an investor with their prototype, but couldn't afford the commercial locks they needed, so they bought broken locks for $10 apiece, fixed them themselves, fulfilled the order, and later launched their product on their own Kickstarter, selling close to $2 million worth of Lockitron X's.
  • During a critical situation when the video system went down and the person in charge was unreachable, Justin.tv founder Michael Seibel used a clever tactic of ordering a pizza to get a message to him and fix the site within an hour.
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  12:33

  Choose co-founders wisely and address red flags early on to avoid potential breakups that can crush productivity and morale in startups.

  • Founder relationships are critical to the success of a startup, so it's important to choose co-founders wisely and address red flags early on to avoid potential breakups that can crush productivity and morale.
  • Monster investors have a herd mentality, making it difficult to secure funding without initial investors, but with hard work and finding a few excited investors, the herd mentality can work in your favor.
  • Fundraising is a slow and difficult process, but creating a competitive situation is crucial to convince investors.
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  15:21

  Fundraising can be a distraction for startups, so founders should focus on building and talking to users instead of worrying about valuations and offers.

  • A founder's long-standing relationship with a VC resulted in a term sheet offer after a prestigious VC showed interest, causing the original VC to panic and offer a blank valuation term sheet.
  • Fundraising can be damaging to a startup as it is a distraction, so founders should focus on building and talking to users, and spend as little time as possible on fundraising and avoid talking to corporate development people.
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  18:00

  Meeting with corporate development people can distract startup founders, but success requires refining ideas, executing well, and enduring ups and downs.

  • Meeting with corporate development people for HR acquisitions can be a dangerous distraction for startup founders.
  • Many startups lose momentum and end up taking acquisition offers that deflate their ambitions, but the biggest cause of failure is not making something people want.
  • Startups often have to adjust and refine their ideas multiple times before finding success, as seen in the evolution of Airbnb and Order Ahead, and even successful companies like Dropbox require lots of refinement.
  • Starting a successful startup requires executing well, getting a thousand and one details right, experiencing dramatic ups and downs, and enduring unglamorous schleps.
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  22:23

  The startup team moved to Silicon Valley for a VC deal that fell through, leaving them with nothing.

  • They received a term sheet from a top-tier VC in Silicon Valley, agreed to move their company there, but when the money was not wired on Friday, they still drove from Houston to Silicon Valley to start working on Monday.
  • The startup team's deal with the VC fell through after they had already relocated and signed all the documents, leaving them with nothing.
  • Codecademy launched just three days before demo day and gained over 200,000 users, surprising investors.
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  25:13

  Startups are hard and extreme, but it's important to remember that no extreme lasts and to keep putting one foot in front of the other, while also having a thick skin for trolls and reporters.