Elad Gil does not need an introduction. As an operator, Elad worked at some of the top Silicon Valley companies, including Twitter and Google. With his battle-tested and honed knowledge in startups and ideas, he has invested in some of the most amazing companies of our time, including Airbnb, Flexport, Coinbase, Gusto, Stripe. So, when Lunchclub, an AI-based networking solution that I had been using since Nov 2019, put together a fireside chat with Elad, I had to attend. To my delight, the Lunchclub team asked me to be a panelist so that I could directly ask my question.
The following are the key takeaways for me, based on my understanding of the exchange during the fireside session with Elad.
“Entrepreneurship is an act of desperation.”
There can be a variety of reasons why people pursue entrepreneurship. Usually, it boils down to the following two drivers:
- As an individual, you desperately want a solution to a problem that you deal with personally or have a deep understanding of.
- In some cases, accelerated career advancement while doing something impactful is the objective.
“Culture is a set of unwritten rules that help run and govern the organization.”
A lot has been said and written about the Culture. It isn’t the weekly ritual of grabbing alcohol after work or having a pool table or catered food n times a week. Culture is the way people interact with one another, irrespective of their roles, functions, and yes, titles. It is how conflicts get resolved. The bottom line is, Culture defines how work gets done regularly and outcomes across teams and the organization accomplished.
On Silicon Valley as an innovation hub, Elad stated that clusters matter. The clusters, such as Silicon Valley, attract talent, capital, expertise and know-how, and early customers. A self-sufficient ecosystem that survives and thrives. COVID-19 may have an impact and lead to some migration, which happens cyclically. We may see the formation of new clusters across the country (and perhaps the world). However, this will depend upon the city politics and policies, including taxation.
Early Stage Founders
The three critical things for an early-stage startup to focus on are:
- Finding a Product-Market Fit
- Not running out of money (see #1)
- No fighting amongst the cofounders
While all of the above seems obvious, #3 is critical. There’s plenty of fights for a new business to take on; the last they need is amongst the Founders. Succinctly articulating roles, defining boundaries, responsibilities, clear expectations, and staying out of the way is essential for a company to run successfully. Setting rules of engagement, embracing conflict, and wherever possible, seeking external help are other ways to stay focused and make progress.
The vague “equal cofounders” notion can backfire and lead to very unpleasant situations.
Startups in Markets with Incumbents
While incumbents have deep pockets and market power, startups have two things working for them:
- Speed: Startups have ability to execute and deliver value quickly. Besides finding the niche to cater to, agility is a superpower to exercise with a sharp focus.
- Disruption: Startups usually do something new, weird, niche to gain traction. They can drive hard to get adoption. Startups should explore all avenues to destroy existing revenue streams for the incumbents.
Elad had an excellent example of Slack and Microsoft Team to drive this point home. Slack has enjoyed a ton of success over the years as a startup in the collaboration space. In recent times, Microsoft flexed its muscle with Microsoft Teams and gained some of the lost ground.
My question to Elad was around launching and disrupting a regulated industry with incumbents. His response, “…to drive change in a regulated industry, [such as HealthCare, FinTech], a startup cannot set out with an antagonistic approach,” made a lot of sense to me. To build on this, I’d say, understand the nuances, be deliberate, and initiate gradual changes.
From a Go-To-Market standpoint, Elad pointed out that companies with product-led growth need a Sales team sooner than they think. Often, the direct sales team comes in too late. Instead, startups should start hiring a direct sales team from day one. Example: Snowflake
Keeping track of personal goals and growth is vital for all of us. However, only a few have some processes to keep track of. Elad takes it to a whole new level with personal Objectives and Key Results (OKRs) that he tracks annually. He categorizes life in four spheres:
- Health and
I could personally relate to this a lot. His comment about becoming a “Sadhu,” a hermit, really drove it home. Helping others, finding peace, and purpose is a lifelong journey. And while many of us desire to it, very few move in the direction with clear actions.
Hot In Tech
Elad expressed his belief in the power of technology to transform lives. Education, Healthcare, and Real Estate were top of mind areas he thought as most under-penetrated.
High Growth Handbook ++
High Growth Handbook is a must-have for all entrepreneurs, irrespective of whether you are aspiring or have had multiple exits. It shares the collective wisdom of Claire Hughes Johnson, Marc Andreessen, Mariam Naficy, Ruchi Sanghvi, and many others. It is a go-to reference on many situations a startup leader has to deal with – role definition, managing the board, partnerships, product management, marketing, and PR.
Elad mentioned he might add Human Resources, Go To Market, and Work From Home (WFH) adoption as additional sections in a future edition.
Elad was quick to mention that he is more market-driven than most other angels. He firmly believes in and referenced Andy Rachleff’s model.
great team + lousy market >> market wins.
lousy team + great market >> market wins.
great team + great market >>something special happens.Andy Rachleff’s Law of Startup Success
Listening to the brightest minds and thinkers allows us to push ourselves, validate some of our thinking, and reevaluate some of the positions. The fireside chat with Elad Gil hit on all counts for me. I am thankful to him for taking the time, and also to Lunchclub for organizing. You can read more on his blog.
Twitter handles of folks mentioned in this post. If you know of twitter handles of other panelists, please let me know. Be great to tag them here as well.