Startup Lessons from Silicon Valley
I graduated college the year Facebook offered to buy 24-year-old Evan Spiegel’s Snapchat for $3 Billion. It was also the year that Forbes named 30-year-old Elizabeth Holmes the youngest self-made female billionaire.
Anything seemed possible in Silicon Valley.
Wanting to get in on the action, I spent the first 3 years of my career working in high growth, vc-backed startups and soaking in the ethos of what Silicon Valley deemed the right way to build and what the rest of the world was trying to learn.
Here are three key lessons that I learned in my time there that still inspire the way I build companies today.
Do things that don’t scale - until you have scale.
If you pay attention to the world of startups, you must have heard Paul Graham’s phrase “Do things that don’t scale.”
But what does that actually mean and how does that apply to startups?
When I joined Wish in 2016, I was tasked to bring on global brands.
At that time, Wish was a shopping app full of Chinese merchants selling cheap, brandless products. No globally renowned brand wanted their brand image associated with $1 makeup kits and $20 wedding dresses.
The first brand we brought on as a North American seller was Cole Haan. Cole Haan agreed to test their products on the platform but only if they did not manage it at all. No one from Cole Haan was to manage the Wish storefront, inventory, fulfill orders, or even do an integration with the Wish platform.
Every day the e-commerce lead at Cole Haan would send a CSV of inventory changes that I would manually update on Wish. When an order was placed on Wish, I would go to the Cole Haan website to place the order as a customer with the order details from Wish. Once the order was placed on Cole Haan, I would go back to manually confirm order fulfillment and tracking information on Wish for the customer.
At this time, Wish was worth over $1 Billion dollars, one of the largest advertisers on Facebook ads, and moving millions of products per year around the globe. We still had to do what didn’t scale until there was enough sales volume.
You’d be surprised how many products and operations at the top companies are the world are duct-taped together through manual work and no-code apps. There’s no need to spend resources on scale before there is proven demand.
In the next 2 years, we ended up getting brands like Nike, Apple, Samsonite, Marvel, Guess, Overstock.com and more onto the platform resulting in $200M+ in GMV. Only then did we dedicate resources to build integrations with top e-commerce channel management tools used by US and European sellers.
“When is it time to start building the product?” I get this question a lot from new founders at BETA Camp who envision building complex technical stacks.
The truth is that Doordash’s minimal viable product was just a website with the founder’s number on it.
They only started building an order platform when there were too many orders to take by phone.
They only hired drivers when there were too many orders to be delivered by the founders.
The most successful companies didn’t automate and scale every single action from day one. They started by doing things that don’t scale in order to generate momentum.
Today, as I build, I often think about whether I have enough momentum to justify spending resources to scale an action. If my minimal viable product style products and processes are not breaking yet, it means that I should be focused on the demand and offering first.
Tiny tweaks lead to big results
I learned business strategy by working through cases on how Target should enter Canada, if a company was to launch a new product, or whether a factory should invest in new equipment.
I graduated business school thinking that the only way for businesses to grow was through capital heavy, long-term decisions that all fell into the consequential and irreversible quadrant of the decision matrix.
At my first job, I was hired as growth analyst at an early stage fintech startup and introduced to the term “growth hacking.” It turned everything I learned about business growth on its head.
In Silicon Valley, a growth hacker is defined as someone who uses creative, low-cost strategies to help businesses acquire and retain customers. My job was to run experiments to increase number of conversions from a lead to a customer on the landing page, onboarding flow, and email funnel.
To my bewilderment, a small change in subject line could increase an email’s open rate by 20% which in turn led to more click throughs and thousands of dollars of additional revenue.
Adding a “featured by Yahoo finance” instead of a “secure payment” logo next to credit card entry point lifted conversions by 5% - another few thousand in revenue.
No wonder one of my friends, a Princeton computer science graduate, spent 3 months tweeking the like button at Twitter.
At most startups that have achieved some level of product market fit, there are entire teams and millions of dollars invested in tweeking the colors of buttons, the copy that customers read, or the order questions show up in an onboarding flow - because a small win can generate multiple millions for the startup.
I used to think making the big directional decision was all it took. Turns out, the page conversion rates, email open rates, and sale success rates are just as important to get right. A different word, a different photo, or a different call to action can make a huge difference.
People do business with people they like
I remember vividly the networking sessions hosted at conferences and by my university career center. Attendees raced to speak to as many people as possible, jumping from conversation to conversation while calculating whether the person they are speaking with can be of use to them.
How transactional.
This is not how relationships are built or how business is done.
People do business with people they like. They refer jobs to those they like. They make introductions for those they like.
So how do you get people to like you?
By having a mutual connection point outside of the transaction.
When I moved to the Bay Area, I had a mentor based in Palo Alto. She had bi-annual parties where she would invite neighbors, the parents from her kids’ school, friends from the gym, distant relatives and their friends etc. It was the place to be.
What seemed like a completely ordinary get-together would lead to millions of dollars worth of deals. As the host, my mentor purposely make introductions for each of her guests based on what they needed at the time. I watched the SVP at Meta discuss business deals with a marketing manager at Apple while their kids got their faces painted together and an entrepreneur get introduced to VCs in his field over some hor d’oeurves.
Connection happens when you have a shared hobby, friend, or experience. We feel like the person is more like us, and therefore closer to us. Our “us vs. them” tribal mentality kicks in and we group them as part of our own group.
I learned quickly that educational or interest based events and social events were the best places to meet people and build relationships.
My first job came through an angel syndicate social where I was a guest and my third job came through a referral by a friend I met at a house party.
Because Silicon Valley is so densely populated with tech talent, everyone you meet in any kind of setting would likely lead to open doors for opportunities. Might as well meet them in a casual setting and build trust first vs. vulturing for attention at a transactional networking event.
Silicon Valley is an incredibly unique place. It’s an enclosed ecosystem where money flows from VCs, tech workers and companies are eager to be first customers, and the talent draws in more talent. The buzz is palpable and infectious. Everyone is working on something big and everywhere you look there are people who can help enrich your experience. There is so much to learn here.