I attended a great entrepreneurship panel at Stanford tonight called “Finding the Next Google: The Future of Technology, Startups and Venture Capital”. On the panel were:

  • Peter Thiel, Co-Founder of Paypal
  • Reid Hoffman, Founder of LinkedIN
  • Matt Cohler, VP, Facebook
  • Sean Parker, Co-Founder, Napster, Facebook

I just thought I’d post some of the more interesting wisdoms that were imparted (this is only a small fraction of what was discussed).

  • A message that was repeated several times throughout the evening, and that I’ve heard Reid discuss on a panel in the past: distribution is key. It is the first problem you should solve when starting a consumer internet company, preferably before you seek funding and definitely before you spend time trying to figure out the business model.
  • Fortunately Matt elaborated on the most common distribution models for a consumer internet startup: buy traffic (e.g. Paypal initially paid users $10 for signing up friends), partner for traffic, piggyback off the success of another company (e.g. youtube and myspace), viral (e.g. facebook), macintosh-itis (build the best product and they will come).
  • It is just as hard to build a small company as it is to build a big one, so you may as well aim big. Change the world!
  • One of the big challenges of being an entrepreneur is that it’s hard to convince people you are not crazy. One way to overcome this is to continually re-craft your pitch, and practice it over and over until people start to catch on quickly.
  • Don’t keep your ideas secret. Go and talk to people, get feedback. Startups are all about execution (which is really hard), not the idea. Ideas have a huge value in academia, but are virtually worthless in the real world (a nice follow-up to my recent post). This is a problem for young entrepreneurs fresh out of college.
  • When asking for feedback, ignore the first two or three good things people say (due to their intrinsic urge to make you feel good), and keep going until you get to the negatives – this is where the real value is.
  • Perfect is the enemy of good. Don’t spend too long planning – move fast, get it to the point of “good enough” and move on. As Reid likes to say, if you aren’t embarrassed by the first version of your site, you launched too late.
  • Don’t start a company planning to partner to achieve success. Riding on the coat-tails of another success, however, is definitely a viable strategy. ‘Real’ partnerships are very difficult to manage, especially for startups (primarily because each party in the partnership is ultimately going to act in their own best interest which, is not necessarily in the best interest of the other partner).
  • A comment from Peter WRT VCs: “If you want money ask for advice – if you want advice ask for money.”

One of my take-away observations from all of this is that the dot-com mentality is well and truly back (by this I mean the notion that when creating a consumer internet company, it’s important to focus on getting users and worry about the business model later). However, it is becoming increasingly clearer that this is not necessarily a bad thing. While a lot of people’s hearts start pounding when hearing these type of thoughts (remembering 2000 all too well), this approach seems to be necessary in the extremely fast-paced world of consumer internet startups.

As Reid said tonight, you have to get moving immediately – only solve the most critical problems initially. The business model is unlikely to be one of these problems. It’s better to just get started, than to spend a long time perfecting your plan and then have someone else beat you to it. At the same time, it is foolish to blaze ahead without thinking about a potential business model at all. The key is balance. Solve the distribution problem, and maybe some other core issues then get going. The business model is a much easier problem to solve than the distribution problem.

This is perhaps best summarized as: It is much easier to create a business model for something people love, than to convince people to love your business in the first place.