Be a risk taker.
About two weeks ago, me and some other Endeavor entrepreneurs from all around the world had a fireside chat with Simon Rothman. It had happened two days before the Growth and Innovation Program that we were all going to participate at Stanford Graduate School of Business.
Simon is a partner in Greylock and an expert in marketplace businesses. That came from his experience being a VP in eBay and being the one who founded eBay Motors. After that he also became a board member in Tesla since the early days. I’ll share some of the learnings I had during this amazing conversation.
- It’s better to risk and do something big than keep years walking sideways and turning something mediocre. You are going to fu** it up anyway, believe it, so you don’t need to keep avoiding the mistakes you’re going to make.
- Most of the successful entrepreneurs he lived with are really cold-blooded. Everytime you’re going to face a decision that represent a risk, most of the times the biggest thing that could go wrong is not going to be so destructible than you had imagined. Just stop waiting and start doing it.
- Believe in compound growth for everything in your life. From the effort that you put in your relationships with family, friends, to the effort that you put in the company that you’re running. Sometimes you will think you’re putting a lot of effort in, but seeing no results. That’s usually because you are seeing only a timeframe in your life. The beginning will always be slower, but as a compound growth, you’re going to see the results as the time passes by.
- Related to that, success does not come overnight. People don’t even know what was the real effort entrepreneurs have put into their business before it started to be famous. Airbnb for example was commemorating their 10th anniversary and 3 years ago people didn’t even know what it was. They had a long path to find out what really worked and start scaling.
- When companies grow, some founders tend to start being averse to risk, afraid to mess everything they have accomplished. But avoiding the trap of being risk averse is one of the common behaviors of successful entrepreneurs. A strong sense of purpose is another trait they share too. So even as crazy as their idea sound, they are just a huge believer in a way that maximize their chance of success. Some of them are also naturally insensitive since excess of empathy can actually hurt their business sometimes. Building a successful business requires being able to make tough decisions whenever is needed.
- If you have the personality of being obsessed to understand how things work and have the addiction of working long hours to find the right solution, you’re just like every successful entrepreneur. The amount of hard work that they put in is unbelievable. In the past some of them used to be worried about and tried to control it, until they realised that this was not going to change since it was already running through their veins. The secret was to know how to channel it in the right direction and work hard in the right stuff. Working hard in the wrong direction is just a waste of time and energy.
- There is a moment in your company that you just feel that everything will workout. You can still think there is a lot to optimize, but you know that you have something big in your hands. If you still didn’t feel this, maybe you will in the future if you get through a really successful company. There are two main points in your startup that you get through this: when you reach product market fit, and when you have free cash flow.
- Before market fit, most of the credit goes to the founders. For both sides, if they make it right, and also if they mess everything up and don’t reach that inflection point. After hitting the growth phase everything changes and the team becomes the most important driver to the success of the company. The entrepreneurs need to accept that since from that day on everything will depend on how good they are hiring a A+ team, and not doing everything on their own.
The biggest takeaway from the conversation is that we should always aim high and not be afraid to take risks. There are two kinds of people, the one that is afraid to make mistakes, and the one that is afraid of losing a big opportunity. Be the second one, and go for it.