11 Lessons from The Valley
What separates the winners from the losers?
Nearly 10,000 startups are created every year in Silicon Valley and anywhere from 75–90% of these don’t make it through the first year. Competition is fierce and the markets are ruthless. What can be done to increase your odds? A good start is entering the right state of mind.
Every year the Aaltoes team travels over 5,000 miles to the Bay Area to do just that; find the right state of mind and get inspired to create the next wave of Nordic unicorns. This year we toured companies and accelerators ranging from Y-Combinator alum Sudden Coffee working from a garage, to programs such as HAX, the worlds first and largest hardware accelerator. Along the way we heard insights and stories from the founders themselves and got a feel for what it takes to make it in the tech mecca of the world.
The following points are an overview of my biggest takeaways from the trip. If you live or have worked in the valley drop your 2 cents in the comments, would love to hear if these have any bearing.
Hard work beats talent 10/10 times.
Good news for many of us mortals; we can in fact make it without out-of-this-world talent. Just have to add elbow grease.
This mantra was reflected by almost all who we spoke with. You don’t come to the valley to enjoy the weather, you don’t come to the valley to enjoy the awesome variety of cuisine, no, you come to the valley to work hard and capitalize on 100% of the opportunities that come your way. As Mårten from HackerOne preached to us; things will not just fall in place, you have to have a plan and you must execute on that plan.
The fantastic thing here is that with time hard work turns into skill. At that point it’s easy to let off the throttle but thats in fact the critical moment to push even harder! In the valley, when hard work is thrown on top of a stellar skillset magic happens.
Getting the sale is easy.
…if you are selling the right thing. Listen to the world around you. What do people need? What do people want? Focus on the former. Often it’s easy to come up with a seemingly great idea but it’s important to get out of your head and get out of the office. Go talk to people and observe their reactions, you might be surprised. Unless you can convince investors that you have massive future cash flows in store (in which case sometimes it’s better to remain revenue-less!) start selling from day one.
Learn how to low key flex.
This isn’t so much a lesson on self presentation or self promotion, something Finns are naturally terrible at, but more so about efficient networking. What do I mean by low key flexing and networking? I mean that in The Valley and generally in America for that matter you have to talk big and paint very bold and audacious pictures. That’s whats expected of you. When you do that you pique people’s interest and you potentially find common interests that enable you to collaborate in the future.
“‘I am the greatest.’ I said that before I even knew I was.”
-Muhammad Ali
Working on ambitious projects and “talking big” is what’s expected of you. But if you really want to change the game learn how to low key flex. Low key flexing is a mixture of supreme confidence, modesty, and intimate awareness of your audience. The key is to become intimately aware of your audience, place yourself on their level, and placidly bring your achievements/endeavors to light while also helping them uncover theirs. When done well, you will surely be the topic of their discussions for long thereafter. They will share your stories and ambitions with their friends and family and next thing you know you have created a WOM effect that will work wonders for growing your personal network.
Good leadership is about letting go.
The attention of a CEO is generally in extremely short supply. Many aspects of the business critically depend on him (or her!). It’s easy to get caught in all the details of the business and strive to make them perfect. But perfect does not exist. Perfect does not bring a good ROI on your time. Time is limited and a good CEO has an eye for recognizing which aspect of his business he must absolutely nail and which ones can stand to be “just good enough.”
Focus your time on the key value drivers. The Pareto principle applies in this case as well; 80% of your returns will come from 20% of your activities. Delegate everything else freely and don’t give it a second thought. Your time and energy is much better spent on the essentials and your employees will benefit from an increased sense of autonomy and control.
The absolute worst thing you can do is waste someone’s time.
In Silicon Valley money is abundant, knowledge and resources are abundant. You can always get more money, get new employees, or secure new resources but time is the one thing you will never get back. Time is the only limited resource. DO NOT waste people’s time and it’s good to note: do not waste your own time either!
Where you get your money from matters a lot.
Our mentor J.R. Johnson shared some truths with us regarding money (Check out his new job relating to the matter):
There is dumb money and there is smart money. It can be tempting to take up dumb money in the short term since its typically much easier to get but be very very weary. A good investor brings much more to the game than just money and those are the guys you should aim for from day one. A good investor will attract other valued investors but a bad one may repel good ones altogether. Finding a good investor is kind of like finding a co-founder, there has to be a strong foundation of trust, complimentary knowledge/experience, and a sprinkle of chemistry as well.
There’s Silicon Valley and then there is everyone else.
This gem came from an awesome set with Mike Jones from Science, the guys behind scaling behemoths like Dollar Shave Club and MeUndies.
This is said a lot but it really is true. Even if you’re in LA seemingly close to the bay area, raising funding, finding top talent, it’s all significantly more difficult than in Silicon Valley. A company outside the valley has to be significantly better and at a farther stage than a similar one inside the valley in order to compete. As Mike put it, he and his companies have trouble competing with the 22 year old CS kids with pitch decks from Stanford when it comes to finding VC money.
Passion is necessary but can be extremely dangerous.
Passion is blinding. The last thing you need while taking on the most challenging phase of your life (a.k.a. building a startup) is to be blind. When you are extremely passionate about your startup it’s easy to disregard the negative signals from the markets. But don’t get blinded. Stay rational. Measure everything and always remain skeptical.
Passion is good and it’s necessary for keeping at it even through the darkest of times but make sure to listen to the data. (click-throughs on landing pages, engagement rates, etc.) The data is king. If the numbers are fucked be ready to kill your idea in a New York minute. Furthermore make sure you are actually collecting good data. If you aren’t collecting smart data points and concretely measuring your moves you are only fooling yourself.
Collecting data has an added bonus. Everyone in the valley has passion, passion is a commodity. Investors hear “passion” all day every day. Show them the numbers, numbers don’t lie, and you will surely get their attention.
If you try to hire for perfect you will never hire anyone.
The perfect employee doesnt exist. The perfect anything doesn’t exist. If you are pushing out a product that is perfect you have not optimized your use of time. Like most things with startups, as harsh as it is employment is also about iteration. Some believe in “hire fast and fire fast” but there is more to it. Get good at recognizing potential in new hires. If you can hire for potential you can hire under the market rate. The key here is to know when to hire for potential and when to spend the big bucks on the superstar.
Xander Oxman from Winc shared his story about hiring the first lawyer for their firm. At the time they didn’t have the money for the superstar but they hired for potential and the inexperienced fresh grad they picked up in the early days is now a top 5, if not the best, alcohol beverage and liquor licensing lawyer in the United States.
Persistence/grit/sisu, whatever you call it you’ve got to have it.
This tidbit inspired by our conversation with Susan Johnson from Women.com.
The age old adage is true. Winners never quit and quitters never win. It won’t be easy, but it will be worth it. At the end of the day a big big part of making it in the valley is keeping at it. From the outside looking in there are “overnight” successes everywhere, but behind every success story there are many many previous failures, mistakes made, and lessons learned.
Stay strong, carry on, and learn from every misstep.
Nobody really has it figured out.
From the outside looking in, the money, the glamour, the big exits and fancy offices are all incredibly misleading. It can seem like the confident CEO fresh out of YC has all the answers and has it all figured out but that is never the case. Nobody has it figured out. Nobody has all the answers, and your answer can be just as good as anybody elses.
Although founders and CEO’s can often make it look easy from the outside on the inside they are most likely spending many sleepless nights second guessing their decisions and living in a constant state of paranoia. The markets are so unpredictable and move so fast that staying paranoid is the only way to be even remotely ready for the curve balls of the future. In other words the guy that’s telling you he has it all figured out is feeding you some bullshit.
Business ideas in Silicon Valley aren’t especially greater or better than anywhere else in the world. There are three ingredients that make those ideas the best of their kind in the world:
- Quick access to money
- Quick access to talent
- A can’t fail mentality
With that said, always remember:
Aim high, and don’t be afraid to make it look easy.
A big big thanks to all who supported us throughout our trip and made it unforgettable, especially J.R Johnson and Helena Yli-Renko from LA!
Thanks also to Vilma and the whole team for helping me gather highlights and lessons from the trip!
