30 Observations about Tech and Silicon Valley

Recently I read a Brad Feld post titled “A Week of Intellectual Dissonance” in which he shared in bullet-point form some thoughts that have been on his mind. I really liked the format so I’m going to copy it and share some thoughts of my own on the tech ecosystem here in the San Francisco Bay Area (aka Silicon Valley).

  1. I don’t think anyone my age (mid 20's) has any idea what a bubble looks like because we’ve never experienced one as members of the workforce. But it’s mind-blowing to me that people who have been through a few bubbles still don’t seem to know a bubble when they see it. If they did, we’d have consensus on whether we’re in a bubble or not. But we don’t have that consensus, and so I have no idea if we’re in a bubble.
  2. As the number of software engineers grows, it’s becoming harder and harder to tell who is really talented and who is just capable of building an app. In smaller tech ecosystems, caring about the difference is often a luxury.
  3. The number of founders with a true Vision is abysmally low. Most see an opportunity and jump on it. Most successful founders have either pivoted their way to success or have a financial background that allowed them to weather the bank account depletion that comes with banging your head against the wall for a few years before anything actually happens. This includes both founders with previous exits and trust fund babies.
  4. There is nothing I can imagine myself gaining from earning an MBA other than an extended network. My relationships with folks in the Stanford GSB network have confirmed to me that for someone like me who studied business and already started a company, the main value of earning an MBA is building a network.
  5. The “Series A Crunch” is real — there’s a ton of seed money floating around but the bar for Series A is super high.
  6. VCs are people. Like most people, most VCs are followers — not leaders. VCs embody the herd mentality. Most VCs just want to put their fund to work but lack the balls/skill/conviction to lead a round before anyone else shows interest.
  7. Andreessen Horowitz has done an absolutely astonishing job building a reputation as the top VC firm in tech. Sequoia may be a better firm but they’re a lot quieter so you don’t hear about them as much (unless it’s when Whatsapp got acquired for $19bn… In that case we heard all about Sequoia because they returned over $3bn on that investment).
  8. Ben Horowitz is fascinating to follow. I’ve never met him but from everything I’ve seen online, he wins on charisma, honesty, hustle, vision, and story-telling… not to mention actual success. I loved The Hard Thing About Hard Things and this talk he gave about “how to manage” at Stanford.
  9. I have heard from multiple founder friends that startups are listing open job postings just to make themselves look better/bigger on the outside. Basically, there are a ton fake openings online that companies have no intention/need of filling.
  10. Brad Feld and Fred Wilson are probably the most known investors outside of California.
  11. Y-Combinator is the most respected tech accelerator.
  12. Sam Altman is extremely well-respected. I’ve never heard anyone say a single bad word about him. I love his writing and really got a ton of value from his startup school series at Stanford.
  13. Making an introduction that results in a successful software developer hire is one of the most valuable things you can do for someone in early stage tech.
  14. The best first step to getting a job in the Bay Area tech world is to be located (physically) in the Bay Area.
  15. Immigration reform is much needed. There are way too many smart people who are either unable to work here at all or are stuck in jobs they can’t leave because if they do — they may lose their work visa.
  16. It’s nearly impossible to go to a busy coffee shop in San Francisco during the day without overhearing a conversation about a startup.
  17. Finding the minimum amount of clarity needed to make a hire is an art, not a science. Most early stage job listings are posted prematurely. There’s a lack of job clarity for a ton of openings at companies that are smaller than 20 people. Determining the acceptable level of ambiguity in a role is super complicated.
  18. Being a generalist can work in your favor if you’re lucky / if you know how to hustle. The ones who have true leverage in tech are specialists and people with deep pockets.
  19. Working 80 hours per week doesn’t impress me if you can produce the same results in 60 hours per week. If you’re in a culture where those extra 20 hours will allow you to progress faster (even if there are no marginal benefits), you’re probably in a toxic culture. Or you’re inefficient. Either way, make some moves!
  20. Traction and Product/Market Fit are both overused buzzwords which most people don’t understand. Here are the metrics that matter for an early stage startup: revenue (b2b) and user growth (consumer). Other things matter too but without nailing revenue or user growth, respectively, the other things won’t really matter.
  21. At this point, it’s assumed that SaaS products will store everything in the cloud. If you try to sell me on using a SaaS service that doesn’t store my shit in the cloud, I’ll most likely say no.
  22. Big sales figure cure all ailments at a revenue-based company.
  23. Customer Support is undervalued at the majority of tech startups. CS knows your customers better than anyone in your company. CS should be leveraged, interviewed, and given a stage to educate the rest of your company about your users on a regular basis.
  24. Most employees have no idea how their stock options work. They just think they’ll make money if the company gets acquired. Many people are blown away when they find out that the only scenario in which their stock ends up being worth anything is if the company is acquired for a lot more money than it raised. Or if it goes public — in that case, congrats — you hit the lottery. I recorded a podcast about this one a couple months ago.
  25. Silicon Valley is to other startup ecosystems what the Sun is to any object in the solar system. It’s objectively a different ball game by several orders of magnitude. It might not be for everyone, but there’s no denying the sheer mismatch in scale between any other place and this place.
  26. The risk-taking history of the Bay Area is a big reason it’s the tech startup hub of the world. High risk tolerance is built into the local DNA. This area is populated by decedents of those who migrated here during the Gold Rush. Silicon Valley epitomizes that same mentality in 2015.
  27. We have an abundance of builders and creators but a shortage of people with a sound understanding of business and profitability. Gross margins, profit margins, EBITDA and CAC vs LTV are new concepts to many people with amazing technical skills.
  28. Selling and marketing the product should matter as much as the product itself. The most amazing product has zero impact if nobody knows about it. Same goes for features within a product. The market is so saturated with options that the “if you build it, they will come” scenario is extremely rare in tech. Build, sell, build, sell.
  29. Raising a big round has come to be viewed as a sign of success. I think this is because most founders don’t have a clear definition of what success means to them. The ones who do have a clear definition of that view each round of fundraising as a necessary milestone on the long journey to the final destination.
  30. There is a filthy amount of money floating around the tech recruiting industry. Most recruiters get paid 10%-20% of the first year salary of the candidate hired (if he/she stays 90 days). If over the course of this year, a recruiter places 5 engineers at $150k per year, they’ll earn $75-$150k this year. The money is real and therefore “recruiters” with no understanding of software are reaching out to folks multiple times a week with openings they “might find interesting”. I would love if the number of professional tech recruiters was cut in half.

this post originally appeared on www.viabilify.com