SPEAKER_00: hey everybody i'm in italy in the countryside on my family vacation having a wonderful time but before i left for italy i decided to record some ask jasons where i take questions with my friend zach coleus who's an amazing investor in early stage startups and i also decided to do a founder university segment these founder university segments are part of founder.university where we help founders learn how to start companies grow companies and just have a greater chance at winning so the first segment you're going to hear is part of that founder.university program and i'm going to talk about how to come up with an idea for your startup i get this question all the time we looked at all the different research out there and i took my ideas and we just made a framework for what idea should you do for your startup and then all these sjasons stick with us and i'll see you with live news starting next week when i get back this week in startups is brought

SPEAKER_01: to you by bubble empowers people to design and launch their own apps marketplaces or tools without needing coding skills or pricey engineers the first 500 listeners will get one month free on any of bubbles paid plans from 29 a month up to 529 a month at bubble.io twist vanta compliance and security shouldn't be a deal breaker for startups to win new business vanta makes it easy for companies to get a sock to report fast twist listeners can get one thousand dollars off for a limited time at vanta.com twist and linkedin marketing to redeem a 100 linkedin ad credit and launch your first campaign go to linkedin.com this week in startups how do i come up with an idea for a startup i get asked this every

SPEAKER_05: week of my life how do i come up with a great idea for a startup and there are many different theories about this some people believe you should really do a bunch of user interviews and study customers and then back into an idea other people think you need to have the magical moment where you couldn't get a cab at the web conference and garrick camp says to travis you know there should be an app for this for ordering a cab and all of a sudden you get one or sometimes it happens through a pivot you start with one idea and then you see some need in another area and your first idea is not working and you learn something during that first idea and it informs the pivot and the next idea you come up with so you don't have to come out with something out of thin air i wrote a blog post back in 2015 is inventing is inventing something new necessary for startups and it turns out most of the great startups of our time were evolutionary not revolutionary so let's look at a couple of them now google there

SPEAKER_06: were a dozen search engines before larry page and sergey brin came up with the idea for google and page

SPEAKER_05: rank where the top couple of websites and who they link to would inform how valid or important different websites were and long before that algorithm got going people were doing full text indexes and

SPEAKER_06: people were gaming the system and search results were let's be honest garbage and there was lycos and

SPEAKER_05: magellan and you know yahoo directory there were tons of different ways to search for stuff but google wound up getting 90 percent of market share across the board in search on a global basis with the exception of maybe four different uh places in the world china south korea russia small number of places taiwan i think also um japan with yahoo so there were very small number of places that actually uh beat google but they were not the first to do a search engine obviously they just built something that was 10 times better than anything that had come before it and they had an incredible business model which was you whatever you typed in a search box they created an auction for those so it really was making a better mousetrap and then also having a better model for selling the mousetrap there was a business model innovation combined with a product innovation or just a dramatically better product then you look at facebook well when facebook came out we had these big debates because myspace and friendster were incredible but myspace and friendster kept crashing and nobody had ever seen virality in the marketplace before virality was a new concept that a website would become instantly massively popular and every user who joined would bring 2.5 users or 1.8 users and the thing would just grow like a wildfire and databases and web tools and servers and caching didn't exist to the way it does today and certainly cloud computing didn't exist so myspace and friendster were constantly crashing under their own weight and they were also myspace wasn't designed very well so you had facebook come along they basically knocked off the idea they had less features but more stability and all they did was focus on growth so facebook built a better mousetrap because it was very simple it stayed up and running it was as simple as that and there was nothing original about facebook in fact almost everything they did they copied those ideas so it was simply executed at a much higher level and they brought an innovation to it which was move fast break things in other words it doesn't matter where the chips fall let them fall where they may we don't care about people's privacy like other services do we're going to allow you to add people to groups we're going to allow you uh to we're going to upload your address book we're going to do all these crazy things that other people might feel it might be a little unethical or a little too aggressive facebook did not have any problem with aggressively pursuing growth even if it meant that people's privacy was compromised in any way and that was a big part of their success was that they were marauding and they were the fastest company to a trillion dollars and to a certain extent we're sitting here in their second decade and they're kind of still doing it aren't they like they're just like we're going to just copy snapchat or clubhouse or uh sub stack and review they'll just copy anything and they'll copy it three or four times until they get it right and they don't care they don't feel bad about stealing your idea nor do they feel bad about people's privacy getting compromised they just want to grow apple they did not invent the mp3 player they did not invent the smartphone they did not invent the tablet nor did they invent wireless headphones all those products were in the market long before apple entered those markets steve jobs was just a complete visionary in terms of product design and simplicity and making things at the right time there's always this famous story they brought him the ipad before the iphone but the large screen and the processing and the battery just wasn't ready for that task uh you know the touch screen was like a big new idea in fact people hated the concept of a touch screen remember your blackberry you couldn't touch the screen you had to use the keyboard and he was like no you're gonna use this keyboard on your touch screen and it was terrible at the start but he knew that he had this vision that would make it so gorgeous so easy to use that it would have mass market appeal and that really was his gift now you look at tesla they were not the first battery power car in fact everybody had given up but elon found a really great idea we're going to sell the first 100 cars for 150k the roadsters and i have number 16 in the driveway not far from here and what an amazing innovation we're going to go after the highest end part of the market first most people say well shouldn't you go for a very accessible car like a prius no because these cars were super expensive to build the first battery packs for 30 or 40 grand from what i read online and they were you know really bespoke in the beginning and then model s and then model 3 and model y and the cyber truck right just relentless innovation but starting at the high end uber as well started on the high end and then worked their way down there was taxi magic and a couple of other services before uber and so those just a couple of examples of companies that really um you know took ideas that maybe other people gave up on like people gave up on electric vehicles uh people gave up on touch screens and tablets obviously microsoft was very much involved in tablets bill gates was all over tablet computing and uh the ipad would just turned out to be a

SPEAKER_06: better product over the past few years everyone has been talking about no code and one of the first

SPEAKER_11: no code web app tools was bubble bubble empowers people to design and launch their own apps marketplaces or tools without meeting coding skills or pricey engineers bubble offers a digital editor and cloud hosted platform for as low as 29 a month users can build pretty much any complex web app from marketplaces to social networks to sas tools and more why is bubble so great for founders because you can spend 10 times less on building out your mvp bubble utilizes drag and drop elements in their visual editor so users can quickly and easily build powerful apps go from idea to launchable product in a matter of days or weeks not months and they handle all the annoying stuff like deployment and hosting so you can focus on your product and customers bubble has over 1 million users worldwide and enables over 1 billion in business volume their founder and ceo emmanuel was on episode 10 21 back in january of 2020 so you can check that out if you want to learn more and bubble is offering one month free on any of their paid plans ranging from their personal plan of 29 a month to their production plan of 529 a month but act fast because they're only offering this deal for the first 500 redemptions head to bubble.io slash twist and snag

SPEAKER_05: one of those 500 coupons so for when you're picking an idea i would ask yourself is there a product that you use or love or you used to love it doesn't exist anymore but that you would like to see be 10 times better there might be an opportunity to take something like hosting video on the web and making it better

SPEAKER_06: which is exactly what youtube did there were many youtubes before youtube what matters is not ideas but the people who have them good people can fix bad ideas but good ideas can't save bad people this is

SPEAKER_05: paul graham's famous saying paul graham who founded y combinator and he's so right you know ideas do not matter um everybody has ideas all night long when they're sleeping the ability to execute on the idea is the key piece to this if you cannot execute if you do not have skills you're not going to win and a person with skills who is dogged and relentless will eventually pivot and figure things out that's why investors always say we bet the jockey not the horse of the race because the jockey could trade horses or join a different race or you know uh iterate from there now if you want to make something 10 times better or twice as good as something that's kind of hard to do on one vector but if you can make five things 20 better or 10 things 10 better or 20 things 5 better you could actually improve an experience dramatically look at virgin america if you remember the great airline they did a lot of little things to make everything more fun from they had a dancing commercial and singing when they did the boring safety uh speech at the beginning of your flight they had mood lighting that was just easier on the eyes and uh they also sprayed some sort of fragrance in the plane and the uh flight attendants were optimized for being friendly and engaging there was just you know probably 10 or 20 things you could think about they also had gogo wi-fi that they just did five or ten or fifteen percent better and in totality it made a new experience now you might also have something that you are passionate about and you have a moment where you say my god there's got to be a better way and you can pursue that now if you pursue that you could be since you're making it for yourself very knowledgeable about what you want so if i make a podcast about startups and i'm a startup investor and a founder i know what people want to talk about on the startup if you love pizza and you make a pizzeria and you have the thesis about what makes for great pizza and one of those is that you get the pizza on your table out of the oven within a minute and you say that's 800 degrees you know there's a chain called 800 degrees i think in la that we used to love going to because you would make your custom pizza you walk down the line and they put in the oven it comes right out boom totally fresh all great experience and great ingredients as opposed to going to a pizzeria where the who knows how long the piece has been sitting out there right you have some idea some thesis you test it and because you are customer zero well you don't really need to ask any customers what they want because you know better the problem is what if you're not customer zero you're customer one of one or you're one of a hundred so you have to be careful that you don't make something that only appeals to a small number of people but you also don't want to build something for everybody because then it appeals to nobody and that's what tesla did with the roadster it appealed to people who were sports car aficionados technologists and people cared about the environment who had discretionary money to spend and wanted to be part of the green revolution the model s was a similar extension of that but for people who liked you know driving in you know bmws or mercedes and wanted a more refined experience and then the cyber truck and the model y you know all different groups of people who might want something slightly different from a car there's another argument in startup world you know should you go after something that's your passion or not it turns out you know some of the great businesses in the world were passion-based businesses bill gates wanted to put a computer in every home and steve jobs wanted to make computers super easy to use so anybody could just start using them intuitively um and elon wanted to get everybody off of fossil fuels

SPEAKER_06: and save the planet from global warming by basically getting rid of the ice engine the internal combustion

SPEAKER_05: engine all kinds of different motivations for people that give them the drive to go to work every day but then you have somebody like jeff bezos who looked and had like i believe 20 or 30 different ideas and he was like you know the idea of selling books online is such an important idea nobody's done it and there are this many books in the world and it's this market-sized opportunity if we get books then maybe we get cds and we get cds maybe we get dvds you get the idea also you know what is in your skill set so there's what the world needs there's what you're passionate about and then there's what your skills are capable of doing so if you're an engineer like elon is and your passion is um you know getting people off of uh getting humans off of fossil fuels well boy you know being an engineer certainly helps and the world wants that product and you're passionate about it my goodness it makes it a lot easier to go to work every day um sometimes i'll see people who are starting a company and they're doing it just to make money and they have no skills and you know what happens they they quit because most days suck as a founder most days running your company are brutal and hard and then you have sometimes you get escape velocity and everything starts going well and then only every other day is hard

SPEAKER_23: and then eventually you might have four great days for every hard day or you might have a brutal day

SPEAKER_03: every 20 days and you know that's one of the nice things about startups is you could change the world

SPEAKER_05: and things get easier as you go sometimes other times the complexity and the competition are brutal as well so the other way to come up with ideas that some people look at is the question of why now why will this technology work now is what investors will ask founders when they bring them their

SPEAKER_06: startups why will this product work now well the why now for a company like uber was gps and mobile

SPEAKER_05: phones and payment services if you didn't have gps on your phone you couldn't see the taxi coming to you and the taxi wouldn't know where you were and uh you couldn't connect each other so there was an sms thing called taxi magic where you could text somebody your address and then they would come get you and it was fraught with problems etc it was gps the smartphone that enabled that product instagram what enabled instagram well obviously uh the cameras on phones became cheaper and cheaper and cheaper and they had internet connectivity before that when you use flicker you had to take pictures with your digital camera take out the memory card and upload them to the internet it was arduous and painful and at the same time the smartphone came out with a better and better camera better and better gpu so you could do filters if you couldn't do filters people probably wouldn't have been as enamored with instagram as they were and you couldn't do the you could do the filters on instagram long before instagram had them you just have to use a 400 piece of software called photoshop and you'd have to learn how to do all these crazy 20 steps it was the advancements of gpus and software and the camera quality on your phone combined with people understanding what social networking was all of those whys led to this incredible reason of why instagram became so

SPEAKER_06: popular let's look at another company why did youtube work well cloud computing emerged uh right as youtube was starting their company and same thing with dropbox and storage was plummeting in cost and

SPEAKER_05: there were places where you could rent storage online uh and data centers where they would manage the storage for you and then youtube realized well instead of charging people to upload their videos what if we made it free what would happen before that you had to buy a server or buy a certain amount of server space to upload your video and if your video got watched by a lot of people then you got a bill for ten thousand dollars because so many people watch your video and in the early days of the internet in the 90s a video would go viral and all of a sudden would say this person has not paid their server bill they reached their cap you can no longer watch this video i kid you not but then through the dotcom era we built so much fiber and so much infrastructure that bandwidth plummeted to a penny or two on the dollar of what it previously cost and storage went down 95 at the same time and the youtube team was the first one of the most important things that they realized they realized that this is getting cheaper and

SPEAKER_06: cheaper to the point at which the views and the cost of those views and the cost of the storage would

SPEAKER_05: be less than the money we'd make from advertising holy cow we could let anybody upload anything and put ads in front of it and never ask them for their credit card mind-blowing so the why now ask yourself what new technologies have come out or what technologies have plummeted in price so if you were to look at things in your smartphone like accelerometers and cameras and processors they're all getting so cheap that you can do something really brilliant like create a camera that has ai storage and a processor in it that's able to do facial recognition in the camera itself right and then that could open the door without ever going up to the server and without you know having an internet connection it could just you program your face into it you walk up to your front door you could open it so ring doorbells could have enough technology in them today to send a video back to you on your mobile phone if it wasn't for a decade and billions of smartphones being made a company like ring could not exist their why now was how cheap the sensors and cameras and internet connectivity and wi-fi chips were in those so um don't give yourself too much credit for the idea there are good ideas but an idea is not a company and what you really want to do is iterate and iterate and iterate on the problem you're trying to solve and just be humble about the fact that nobody invests in ideas or plans today i haven't seen somebody raise money just based on an idea uh or a plan in like well over 10 years what people are looking for is track records from founders and teams world-class products that you were able to build on you know a small amount of money and growing startups that's where funding occurs today you could have a very boring business but if it's growing 30 or 40 percent every month you'll have money thrown at you and if you're begging folks to hear about your idea

SPEAKER_06: you're doing it wrong don't worry about your idea worry about your mvp your minimum viable product your prototype your prototype your mvp the first iteration of your product is more valuable than

SPEAKER_05: a thousand pages of business plan and 500 pages of mock-ups because we now know as investors when you show us that prototype that you care enough to have built it and that you have the credibility to write code do the design and make this a reality and then the next stop is to have but 10 people using the product every day and loving it if you do those two things you make a product that's great looking and solves a real problem for 10 people you're going to get meetings with investors if you try to get

SPEAKER_06: meetings with investors before you do that it's probably not going to happen so that is the test that you're being challenged with right now by investors are you naive and clueless and believe that people should take the meeting with you because of your idea or your business plan that means you're out of sync with reality and that there you don't understand that there's thousands of people who just

SPEAKER_05: build things in the world on indie hackers or pioneer labs or uh you know in weekend hackathons people are out there building prototypes all the time and getting 10 customers to play with them and those are the people getting the meetings and you're trying to get a meeting and asking somebody to think about your idea or hear about your idea nobody cares people are too busy there's too much competition in the world for you get focused on building and get focused on delighting customers hey everybody i thought i would

SPEAKER_03: have christina cassioppo on this week in startups to tell you about vanta vanta of course has been

SPEAKER_31: sponsoring the pod and had a great reaction i'm going to talk today just a little bit about what sock 2 compliance is and why it's so important for sas products welcome to the pod christina thank you so

SPEAKER_33: much for having me how long does this typically take and what does it cost yeah so in the uh you

SPEAKER_34: know prior world if you didn't use software like vanta often companies would take about a year on the project to figure out what they needed to do get everything in order work with the auditor get the auditor what they needed to get their report and they probably spent twenty thousand dollars on the low end kind of can go up to hundreds of thousands of dollars depending on how large

SPEAKER_31: you are you figured out a way advanta to do this um quicker better and cheaper so what is the secret and how can people use the product yeah absolutely so secret is sort of like a lot of things you

SPEAKER_34: you turn you turn a lot of this into software so you uh write a standardized set of checks that a company needs to do you base them on good security principles and then you just monitor and alert all that those things so the company gets a dashboard they always know where they are they're not you know mucking around in spreadsheets and the auditor gets just really detailed data so they can be sure that what the company says they're doing is actually happening all right fantastic well thanks

SPEAKER_31: so much for coming on and telling the audience why you should get your sock too when you should get it and how you should do it and you've been very nice to our audience giving them a thousand dollars off which is a really significant and generous offer go to vanta.com twist v-a-n-t-a dot com slash twist to get a thousand dollars off your sock too thanks christina appreciate it thank you so

SPEAKER_05: much here are a couple of questions just to wrap up here that you need to be able to answer are you able to solve this problem that you've identified like do you have the expertise does your team have that expertise do you understand the problem well enough if you don't have the expertise you're going to need to get it if you don't have the knowledge you're going to have to do user interviews so i don't want to dissuade you from day one you don't know how to build a peloton like product or a tonal like product okay you're not an engineer uh you're never built software okay i don't want to dissuade you but you should have to ask yourself like what is your experience have you gone to a bunch of classes for spin classes and used uh bikes and how familiar are you with the existed connected software out there you get the idea and making hardware maybe you should go work at a startup that is doing hardware or you should go work at you know a spin class and teach spin for six months and really understand the customer base so that informs what you build in the product so number one why will you be the person uniquely qualified to solve this problem it doesn't mean you have to have spent 10 years in writing uh you don't have to spend 10 years in the hotel business to create airbnb you don't have to spend 20 years owning a taxi company to create uber in fact some people would argue fresh eyes on the problem are better but you should have some expertise on building the product and really understand the customers why now is the second question you're going to answer why now why should this product exist now is there some technology enabling it three how big is the market always an important question is this for 10 people 100 people a thousand people do that bottoms up bottoms up market sizing okay there's a thousand people who have the title social media manager at major companies and who have 10 people are more working for them we've identified those thousand on linkedin we're going to pursue them and we think those thousand will turn into ten thousand will turn into a hundred thousand will turn into a million people with the job title social media manager social media manager okay great and we actually did how to get your total addressable market on twist episode 12 11 so if you want to go deep dive into total addressable market just type in this week in startups episode 12 11 into your google browser uh and most importantly how are you gonna make money what's the business model the business models tend to be pretty straightforward in our industry you're a marketplace you take a percentage of the commerce done on the marketplace like ebay like coinbase like airbnb or you're selling a software product and you're getting a monthly fee like com sells a software product consumers or slack sells a software product to enterprises finally you're going to want to be able to interview those potential customers and gather feedback listening labs user interviews this is a whole science to this you can look it up online you can learn those best practices it's not really difficult you basically go talk to somebody and you ask them probing questions or ask them to show you how they do things at work and then you you know write that information down in your interview sometimes you record it with a video camera or with audio and then if you've done 10 of them you might find that six people seven people all have the same problem billing you know so you talk to people who are running airbnbs or running bed and breakfast and they say they're all of them have the problem of finding customers acquiring new customers maybe they have billing problems maybe they have insurance problems you know who knows what they're building their website might be a problem so you solve all those problems with an airbnb website and be objective with yourself you want to understand why this might work why it wouldn't work and you want to be just kind of candid with what you're capable of doing and what talent you're going to need to bring to the table so get building that mvp remember startups are not for everybody 90 of them fail but there is no success like failure if you fail you learn keep failing keep learning keep trying if 60 70 80 of startups fail you just do three or four of them you're going to get a win that's my basic math uh in all of this you're going to get a win eventually

SPEAKER_06: and you're going to have a heck of a fun time doing it if you're the right type of person who likes to work hard and create in the world and what are your choices like are you going to go work for some big giant company and work for google now optimizing or facebook ads you know maybe if you need to make

SPEAKER_05: a little money buy your house pay for your kid's school but after that be a little delusional and

SPEAKER_11: start a company okay zach coleus is with us again here we go mohammed asks uh a live question here uh can you share a few insights on what data points you consider the most valuable while iterating on product this is a great question and it obviously varies by the type of product so let's go with the sas product

SPEAKER_48: first and then we'll go to a consumer product yeah so the way i like to think about it is you can kind of break it down into three sort of categories the the first category is very qualitative but it's about

SPEAKER_50: the value that you deliver to your customers and it's about crystallizing the articulation of that value in a way where you can say this is what we do that our customers love and then i can ask your customers and they say this is what we love and those two things are the same thing which sometimes they're not but that's really really the secret is that the customer's like oh this is why i push a button and a car shows up my door that's awesome or you know i can put up my screenshots and i can work with them really easily and it's the best app in the world for doing that um the second sort of category that we have is sort of the metrics of your business and those are really simple straightforward and you can go deep dive into sas metrics and at the end of the day it's how much does it cost to acquire a customer how much do they pay you how much do they use your product how long do they stick around and there once we have those numbers we can understand where the business is going to go relative to you know pretty close like down to to individual decimal points i mean we have people in

SPEAKER_55: the industry who specialize in doing late stage sas funding and they do all kinds of formulas and they

SPEAKER_46: will understand your business and customer base i mean chamath was doing this at social capital uh sax is doing it at craft there were other people who specialize in sas where they started coming up with their own formulas how much money did you spend this year on you know your sales team versus your net new arr you know they're just figuring out all these kind of things i'll i'll talk a little bit

SPEAKER_11: about a ratio that really matters depending on the product which is how many monthly monthly active users you have okay great we now know let's just pick a number you have a million people a month who use your product okay now what percentage of the daily what's the daily active user to monthly active user in other words you know are people coming once a month to check their bill or to use the product to you know watch one tv show or something or are they on snapchat or tiktok every night for four hours how many sessions are they opening up so those ratios in a consumer product become really interesting to understand exactly how sticky is a term people used to use but just the level of engagement a fancy term engagement is a fancy term stickiness is a fancy term for the number of minutes how often people use your product and you can do all kinds of interesting ratios and if people use your product more that generally indicates product market fit they're getting delighted because people are so busy that to get their attention is a big win so if you were calm the meditation app and people were using it three times a month the chances of them churning down the road would be less than if somebody used it three times a year and if they used it three times a week maybe that person churns less so that's where getting users to use your product more helps what's an example of how somebody could increase usage of a product well streaks there's a thing you've done this many days in a row of fasting in your fasting app of working out on your peloton of uh sending a message to another person in snapchat or doing meditations in calm so doing just doing something as simple as that stupid feature you know you're on a five day streak you're on a seven day streak could greatly increase the engagement and that's a sign of strength those are but some of the uh important uh metrics and then you will create metrics inside your company you're going to motivate your team and boy just be careful with incentives because if you motivate your team on daily active users too much then they might do things to goose that number that are unnatural so you don't want to have unnatural next acts like firing off too many notifications because then people will turn off notifications because you're being too annoying so make sure

SPEAKER_05: you're not uh you you don't motivate your team too much and put them on tilt

SPEAKER_61: to do something unnatural i think is important yeah right on we miss anything there with metrics i mean there's a whole world right like yeah we talked about consumer we talked about sas did i

SPEAKER_50: miss any is there anything missing there i mean growth i mean i think one of the things that you always have to come back to the sort of third category in my book is growth and understanding growth across your cohorts of users and across your channels and down to the down as incremental as you can

SPEAKER_65: possibly get is a critical critical part of any business because if you ain't growing you'd be dead

SPEAKER_11: basically our industry is about growth if you can't grow vcs might take a meeting with you because a friend begged them to or you know whatever but if you are growing conversely you email any vc any angel any seed fund and you're growing 20 or more for three months or more you're getting a meeting let me say that one more time if you're growing 20 or more for three or more months that means you doubled your business in but three to four months right

SPEAKER_46: the rule of 72 divide a time period divide a growth rate into the number 72 that's the time period if you're growing 25 a week that means every three weeks you're doubling if you're going 25 a year every three years to doubling if you're going 25 a month every three months you're doubling

SPEAKER_11: if you can show you're doubling every three to six months you're going to get a meeting and

David Friedberg: it really is that simple it doesn't matter how ugly your deck are it is how ugly you are how ugly your clothes are you got a big pasta sink i mean if you showed up with a pasta stain and spaghetti down your white press shirt and you look like a hobo and you got 30 month over month ground for three or four months in this town you're getting the meeting and you're probably getting the check here's the check here's the check

SPEAKER_46: don't knock over their grandmother to get you the check before another vc

SPEAKER_11: right now linkedin is going to give you a hundred dollar credit towards your first ad campaign i'm telling you the call to action up front it's so good linkedin.com slash this week in startups to get that hundred dollar credit towards your first ad campaign if you want to get a group of people who are receptive and who are doing business they're doing business on linkedin right when you market on linkedin your message reaches people who are ready to engage with your business this means your ad campaign will work as hard as it can as soon as you launch it need more evidence to use linkedin marketing well over 78 of b2b marketers rate linkedin as the most effective social media platform for reaching objectives because there are over 62 million decision makers on linkedin you know that and they mean business linkedin equals business business equals linkedin it's that simple folks and here's how linkedin marketing stands out they have the tools for brand building or lead generation you can pick you can target professionals down to their job title company name and location and you can engage folks you already know based on previous site visits or outreach right so you can do that retargeting thing so do business where business is done get a hundy get a hundred dollar ad credit right now go to linkedin.com slash this week in startups once again for a hundy linkedin.com slash this week in startups no spaces no dashes linkedin.com slash this week in startups terms and conditions apply because they're giving you a hundy uh okay let's take another question this one is from sp what are the most important skills to learn develop to become a success to become successful in vc what a great question now that you're looking back on it with almost a decade of experience and certainly multi decades being on both sides of the table what do you think are the skills to become successful in

SPEAKER_48: vc i mean to go back to what we started the conversation on the most important thing in this

SPEAKER_50: business is deal flow if you have access to the deal flow you're going to be in a good spot and if you don't it's going to be really challenging and deal flow comes back to the value that you've delivered to the community if people think you're useful they send you deals and so you really the most important skill you have to learn is how do you actually deliver scalable leverage value into the community in a way that people appreciate and they want more of so like i want more of that how do i get that guy involved in my business um and that's it's a non-trivial thing to pull off but it's the

SPEAKER_05: most important thing is to get access to deal flow and if you look at the precursors to deal flow reputation is one and there are ways to get additional deal flow like if you email other vcs and you build a good relationship with them and other investors you say hey here's a company i'm investing in uh would you like to meet them there's still room in the round that simple act people will reciprocate over time and they will include you in rounds because of the reciprocity effect you can look up the reciprocity effect it is a very simple concept see some you do something you do if somebody does something for you you are more likely to do something for them if you do if somebody asks you to do something for free to them you're going to feel much more connected to them so uh don't be afraid to help other people out or ask for help and be of service

SPEAKER_82: great question the only other thing i can think there um is to be a level-headed um calming stabilizing

SPEAKER_11: force in our industry because our industry is so chaotic already that when you know you're going to have crazy moments come up and be acting hysterical or getting freaked out or adding gasoline to a fire is not the job of the vc the vc's job is to come in and be a fixer and you want to be calm and fix problems

SPEAKER_46: not cause problems and we've both been in situations zach where our peers are causing chaos and now you're trying to solve a business problem and solve a bad vc problem and that's brutal that's not gonna i mean i've had people on boards just causing all kinds of problems i i i much prefer

SPEAKER_11: a neutral investor who doesn't provide any downside and you know maybe there's light upside but the check cashed that is wonderful uh to just have somebody who put money in and was not a distraction and was just patient capital if you're just patient capital you're beating out like a third of the market which is the annoying capital i'd say a full one-third of the market is annoying capital at

SPEAKER_46: least you see at least maybe it's half yeah so it's probably like 25 of vcs are actually really helpful 25 are kind of neutral they don't harm the business they might not be super helpful but they're certainly not hurting and then there's half that are just causing chaos with bad advice or like what is the advice that we give now zach that we learned 10 or 20 years ago that's valid how much of it is valid you know like half and who knows like i think sometimes people would be better off asking questions than giving advice i've i've found myself i just ask questions so what's the problem great what's your plan to solve the problem how confident are you in that plan are there things that you're worried about with your plan okay is there anything i can help with that plan and did you think about these three things because i just read your plan i mean that's literally the approach i've been taking now that's not the approach i take when i'm running my company when i have to be the leader but when i'm i'm the investor of the board i just want to ask probing questions and have a positive dialogue and that's taking me a real change in my personality you know

SPEAKER_31: from being a leader to being an inquisitive person who is a coach did that you have to adjust from being a ceo to being like an investor and asking questions versus like being a you know a general

SPEAKER_50: uh yeah absolutely i mean you're as soon as you become an investor you are no longer in charge of anything the only thing you're in charge of is whether or not you write the check but before that you're in charge of nothing like your ability to write the check you're not in charge of that and you make the decision and then you hope you actually get to write it and then after you've written it you're in charge of nothing um so true it's so true i mean you literally are a

SPEAKER_29: passenger you know or you're maybe you're down in the tower like an air traffic controller but you're

SPEAKER_46: not in the cockpit unless you're invited into the cockpit and you may be invited into the cockpit for five minutes but they don't want you there for the whole ride yeah even then like if they invite

SPEAKER_62: me into the cockpit that the pilot is flying the plane and the last thing they need is somebody

SPEAKER_50: talking into their ear the only thing i'm going to do is the pilot turns around and asks me a question and they're like hey what about this i'll be like well here's what i think but you're the pilot and um you're the one who can feel the controls you can feel the engines you can you you can yeah you're you're you're you got your hands on the metal and i'm just back here you know and they might say hey

SPEAKER_46: zach you've landed in this airport before i've never landed in telluride oh yeah what's coming up here yeah sure and you're like yeah you know this is a sloped runway and there's crosswinds and it's a short runway and here's how i approached it i'm hoping that helps you please don't flip the

SPEAKER_50: plane because i'm on it yeah or let me help you get talk to some people who've done it before who are real pros like yeah or here's some let's let's think about how do we bring in professionals into

SPEAKER_111: the problem but yeah and or if we can't make it to that airport by the way here are two other airports we might be able to land i don't know if you've ever been to durango but you know we had to

SPEAKER_46: land there one time so you can kind of give them some some help and be a guide on the side but

SPEAKER_31: you are not uh at the controls from aaron is it worth working as a product manager for a startup

SPEAKER_103: before becoming a first-time founder zach um absolutely i mean look this this is a business about getting exposure to growth and the earlier like you know that that famous line that um what

SPEAKER_50: cheryl was was was given when she was thinking about whether or not she should join facebook and i i think it was uh bill campbell basically said if someone offers you a seat on a rocket ship don't ask but your seat is just get on and if you can get on any sort of growing business you're gonna

SPEAKER_103: learn so much and at some point the learning will decrease and then you can either decide to jump into another one or you can start your own thing but let me tell you the brutality of starting a business

SPEAKER_50: is is unbelievably hard and if you can learn that on somebody else's dime at somebody else's like guidance and apprenticeship like highly highly recommend it and well then think about the

SPEAKER_55: credibility you have oh i was at facebook during this period of time i.e chamath chamath was a nobody

SPEAKER_46: in the industry he worked at what mayfield like yeah and then before that he was at aol doing icq or and then working before that with dave samuel on spinner or whatever that was like he literally had a meandering career to his own admission and then this rocket ship shows up and he gets on the rocket

David Friedberg: ship and he grows it from you know four million to four hundred million you can never take that away from chamath he watched that happen and he hired the team that was responsible for growth so to your

SPEAKER_11: point if you can get on a rocket ship you can experience growth product manager is one of those brilliant positions where you are at the locus of power and decision making you have to deal with engineers you have to deal with designers you have to deal with whoever the stakeholders are the ceo

David Friedberg: founder the sales team i mean it is the locus of power it is the center grab that job and do a great job and if we were if somebody emailed us and said i was a pm at google facebook uber airbnb and i'm

SPEAKER_46: starting a company how much more credible are they than somebody who didn't have that credential zach

SPEAKER_62: in your mind oh it's huge especially if you're there during the growth periods like if you know now

SPEAKER_50: like an early days pm at those companies is different than one when those companies are much more established but the thing is is that like when a company is growing what happens is that everybody basically gets escalated to the limits of their own competence every that you have in as a as a as an insider you have institutional knowledge about the business about how things are working and they're constantly pushing you to solve harder and harder problems and so the limits to your ability to learn and your ability to like to grow as a human are not opportunity but instead your own personal competence and so that's just it's just an amazing crucible well said for for for human growth and then therefore when those people come out of that experience i mean they just have seen the other side of stuff that very very few people get to see and they understand in a way that i don't think you can understand it until you go through that hyper growth what that's actually about both in terms of like delivering value and understanding how that works and then how to basically deal with the insanity that

SPEAKER_11: comes when you you succeed that is so well said zach if you get into one of these big companies they're going and they hit that hyper growth period like think about robin hood the last couple years i don't know if you heard today but i think vlad said 22 million members and then last year it might have been a 10 or something now imagine you're at a company when it goes from 10 to 22 million members in whatever it was a year or two years uh or even from one from zero to one million like those moments

David Friedberg: in time are so rare now if you are in one of those companies that it happens by definition that company is under resourced which means each person there is not going to be fighting for responsibility or opportunity they're going to be drowning in opportunity you're literally you know in a surge and the ship is just flying at a hundred miles an hour across the ocean full sails open you're going fast they need all hands on deck and you're there for it oh my lord it's so exciting and this is why our industry is such an amazing industry because what does it take to be a product manager you have to be you have to be organized you probably need to know how to do mock-ups you need how to do project management software you can learn all that this weekend and over five weekends you can learn how to be a project manager make wireframes and whatever you know wireframe software you want to use there's

SPEAKER_11: envision there's balsamic there's a zillion different ones project management you can learn super easy there's 10 books on it just buy all 10 read the top three people are so limited in their thinking about how to break into this industry i think being a product manager or working as a growth hacker

David Friedberg: or just in the growth department are two of the easiest ways to break in because there's no college

SPEAKER_131: degree for those are there i wouldn't trust it like yeah it's just a course online yeah any college basically who claims to teach you how to operate in silicon valley is a line different and you could

David Friedberg: learn to be a product manager so quickly and you would love to have the robin hood project manager

SPEAKER_46: product manager today and previously you'd want the google one but a google product manager today it's probably not as valuable as a robin hood one today yes who's going to the hyper growth is your point and i think it's a great point well one of the things that a lot of people

SPEAKER_50: underestimate is when you're hyper growing like that you actually get exposure to secrets that other people don't get to see and so you get to be the first one exposed to like some aspect of the business that nobody knows yet but like you guys have discovered and those secrets are not always just in terms of the actual way the business operates but often it's in the infrastructure so like for instance in my business we were one of the first companies to get exposed to quantitative marketing at scale how do you use data to execute really really high volume marketing campaigns and then measure it back and then my sister basically took that and she's built this multi-million dollar performance agency with all of those secrets that she learns and she took ring from 10 to 100 million in revenue just by taking what we had learned went into ring and was like hey guys here's how you do it and like woof off goes the business and she's done it literally

SPEAKER_55: like you get this secret playbook and this it's almost like you become a mutant like you're becoming

SPEAKER_46: a superhero by getting exposure to this you know startup radiation yeah that's a good i like that that's

SPEAKER_107: right all right zach you're awesome we'll see you all next time bye-bye