Hey guys, today we're going to talk about Katamari Damacy. 

I'm going to teach you how this obscure 2004 PlayStation 2 game will teach you how to create a billion dollar company. 

The game

This game has a really simple premise. You start off as a tiny alien pushing around a small ball. The rules are simple. If you're big enough, you pick up the item and if you're too small, you bounce off and you get smaller. At the beginning, you start off with tiny things. Thumbtacks, coins, chess pieces, that kind of thing. In the middle, you're picking up cars and eventually entire buildings. By the end, you're picking up huge things, entire cloud systems, continents. 

What does this have to do with starting a startup?

That's kind of like starting a startup actually. You start small and when it's successful, it has global reach. For your startup, there are actually three kinds of things you're constantly trying to gather: 

• Customers
• Colleagues and 
• Capital

The whole thing revolves around the customer. We start there for a big reason. Without a customer and the problem they want to pay you for, there's no reason to start a startup in the first place. What do customers want and how do we give it to them? Well, we've got to make a product.

But that product requires people to create it. Your colleagues, your team, your co-founders. You wouldn't believe how much time successful founders spend just building that team. And the better your team, the better your product, and the better you can get that product in the hands of those customers. 

Yes, that's where capital comes in to play. That's where investors come in. There's a lot out there for the right teams and right problems being solved for those customers. 

Avoid playing the game wrong

There are lots of ways in this game to play the game wrong. 

First off being not rolling the ball in the right place. One of the things you'll notice in this game is that you have to be on the lookout for the best areas. The best founders are actually doing this constantly. 

One great exercise I encourage every founder to do is is: Go into your calendar right now and ask yourself. For every hour that you spend, is it in the search for customers, colleagues or capital? And are you spending too much time on one or the other? Are you pushing on something that just isn't providing value? It's just not working. Well if you are, try pushing on one of the other things. 

What you will find is that when you get progress on one thing, it will open doors elsewhere. If a customer comes in and signs on the dotted line, you'll immediately find that you're more compelling to investors who might want to give you a check. And that capital will let you get that co-founder. It's a fantastic virtuous cycle. 

Now the next thing you have to really be focused on is bouncing off things that are too big. And that's a key part of how this game is played. Remember the core dynamic of startups. Build small and take down things that you can take down, but then build up. 

What does it look like for a startup to bounce off? Well, there are couple ways that I can think of. 

• Too much capital. You might try to make a Katamari ball that is country sized on day one. These are companies that raise too much money and you can't pack it in. It doesn't stay together. It disintegrates before you can even get the ball rolling. Rhymes with tragic beep. 
• Trying to take on customers that are too big. This is actually a common failure point for enterprise startups. Sometimes you can never land that first customer. It's a big problem. Try a smaller one first. 
• Too many co-founders. Sometimes, you start a company and there are just too many people around the table. You ever worked on a group project? Too many cooks! Having one too many team members invites just too many free riders— it's too hard to make a decision, and nobody can agree on who does what. 

What success looks like in startups and this game: The Snowball Effect

Finally, let's cover the snowball effect. And this is the best thing about startups. The best billion dollar startups we've ever worked with all work in this way. 

This is what product market fit looks like. Initially, you're this tiny little alien pushing a ball around, recruiting co-founders, getting your first customers, finding your first outside capital. And then with each passing month, quarter, year, you get bigger. You're recruiting better people, you're taking down bigger customers who pay you more. Yes, sometimes you're raising more money. 

This obscure 2004 game teaches you a lot. It's how incredible startups like Coinbase or Instacart get started from founders sitting in front of a computer and building their first version. 

All you have to do is get the ball rolling. Thanks for watching.