The Co-Founder Test
Naval says the most important decision is your co-founder. You can start a company alone. Like you can raise a child alone. But you probably shouldn't.
Three things to look for. High intelligence — they should make you feel dumb. High energy — a founder never has to be motivated. And high integrity. Get the first two without the third and you've got a smart, hardworking crook.
"If you get intelligence and energy but not integrity, you've got a smart, hardworking crook who's going to cheat you. That's the worst kind of person to be paired with."
Ideas Are Worthless
Naval doesn't talk about ideas. He talks about markets. Pick a large space you're knowledgeable and passionate about. Then figure out what to build inside that space.
Don't walk around saying "I have a great idea, give me money." That never works. Instead: here's a huge market, here's why I care about it, here's the person I'm building it with, and here's the minimum thing we've already built to test it.
"Ideas are almost irrelevant. There are lots of smart people who sit around having ideas all day. Ideas are worthless."
Build Before You Raise
Thanks to modern tools, you can build and deploy something before asking anyone for money. Especially if you have good coders on the team.
Iterate until you hit product-market fit — where what you've built matches what the market actually needs. Then raise money from people you trust. Use it to scale. That's the whole formula.
"Build something. Iterate until you get product-market fit. Then raise money from people you trust and use that money to scale. That's basically it."