9 Lessons in Entrepreneurship From Silicon Valley
Successful executives are mentored by amateurs about as often as great athletes are coached by novices. That would be never. If you want to learn how to be the best at something, learn from the experts. And when it comes to building successful businesses, the experts are in the technology industry.
Entrepreneurship has fanned out around the globe, but its center of excellence undoubtedly lies in Silicon Valley. This is where the “innovation – venture capital – startup” engine that created powerhouses like Apple, Cisco, Facebook, Google, and Intel began.
Every day, groundbreaking companies such as PayPal, Netflix, Uber, Tesla, and Airbnb are challenging the status quo, transforming age-old industries, and changing our lives in profound ways.
If you have any interest in founding, growing, or leading a startup, this is the only place to start. These are among the most fundamental lessons I learned growing up and becoming a senior executive and consultant in the high-tech industry.
Software is eating the world.
Netscape cofounder and VC Marc Andreessen was right about that, but what he meant was that software is disrupting and reshaping the competitive landscape of nearly every industry on earth. So here’s a question for every startup: Got Geek? If not, you might want to start looking for a cofounder who can code.
There is no 4-hour workweek ... or work-life balance, for that matter.
If you want to be a successful entrepreneur, you need to be prepared to work 24/7 and jump through hoops of fire to make it happen. That’s a big reason why you have to love your work. If not, you won’t survive the brutal hours, tough hurdles, and challenges of building a real business. Passion for their work is what inspires true entrepreneurs.
No man is an island.
The tech world is full of stories of powerful partnerships and great groups, from the Steve Jobs and Steve Wozniak and Intel’s Andy Grove and Gordon Moore to the legendary teams that developed Apple’s first Macintosh and the SUN workstation at Stanford. One of many reasons I’m not a fan of soloproneurs. It’s extremely rare to break through on your own.
You can’t grow without cash.
The failure mode for most startups and small businesses is running out of cash. Like many companies, Facebook, WhatsApp, and Alibaba were initially bootstrapped but they still raised capital as needed to scale. Remember this equation: founders + venture capital = startup. Bootstrapping to extreme kills a lot of companies. You can’t scale without capital.
If you don’t build it, they will not come.
“If you build it, they will come” may be false, but “If you don’t build it, they will not come” is absolutely true. You have zero chance of making it as an entrepreneur unless you get up off your butt, get to work, make a product, and get it into people’s hands. Mark Zuckerberg calls that “The Hacker Way: Move fast and break things.” Indeed.
The user experience is sacred.
Customer experience with a product drives engagement, satisfaction, and traction. That’s what made breakout successes of Tivo, Uber, and the iPhone. It’s also where lots of business opportunities originate. It was the GUI (graphical user interface) and computer mouse developed at SRI and Xerox PARC that made the Mac successful. Likewise, the Netscape Navigator user interface was key to the broad adoption of the Internet.
Your first idea is not sacred.
Companies don’t always make it big based entirely on their initial idea or product. Twitter was invented while its founders were part of Odeo, a digital media startup. The search market was highly fragmented and Google had just 8 percent share when the company launched AdWords in October of 2000. That’s what made it a breakout success, not the search engine.
Differentiate or die.
There’s a popular notion that the mobile web lowered the barriers so it’s easy to do business on a shoestring. Sure, the web leveled the playing field, but not just for you. It leveled the playing field for everyone. So the benefits are negated by the brutal competition. Now more than ever, your product must be way better than anything else out there if you want to win. And yes, you do have to want to win.
Trust your gut.
Every startup has to be laser focused on one priority at a time: first demonstrating a concept, then launching a product, gaining customer traction, and finally scaling to grow market share. Of course you have to raise capital as you go, but mainly, you have to learn to focus and say “no” a lot. That said, when the right opportunity comes along, you have to recognize it for what it is, like when Jobs saw the GUI and mouse demo I referred to earlier. You have to know when to say “yes.”
How can you tell the difference between all the times when you must say “no” and those rare opportunities you have to jump on? Trust your gut. Behind every successful startup is a founder or two who had the courage to face his fear of the unknown and take a flying leap off a cliff. That is the essence of entrepreneurship, Silicon Valley style.
Related: Is the American Dream Dead?
Steve Tobak is a management consultant, columnist, former senior executive, and author of Real Leaders Don’t Follow: Being Extraordinary in the Age of the Entrepreneur (Entrepreneur Press, October 2015). Tobak runs Silicon Valley-based Invisor Consulting and blogs at stevetobak.com, where you can contact him and learn more.