7 Powerful Insights From a Silicon Valley Insider
BY Peter Cohan
What's it take to be a start-up success story? A lot more than a good idea.
Mike Maples, Jr. is one of Silicon Valley’s greatest new generation venture capitalists. His father was a top executive at Microsoft. A Stanford and Harvard Business School graduate, he helped found Trilogy, a Texas-based software company. He also started and took public a broadband software company, Motive. And as head of Floodgate, a venture firm he started in 2006, was an early investor in Twitter, Digg, and others.
Maples has been amazingly successful. On average, one in 10 venture investments is a hit. But as he noted in a recent interview, ”I’d say about a third of them, we break even or lose money; about a third of them, we probably make two to five times our money; and about a third of them are special.”
Maples has learned seven important insights that can help you boost your odds of success.
1. You have to be the best. Period.
Whatever field you’re in, you should aspire to be the best. One thing I know from interviewing over 160 start-ups for my book, Hungry Start-up Strategy, is that start-ups don’t have much money to pay high salaries. So the goals they set are a powerful currency. Aspiring to be at the top of the heap is a powerful motivator that yields the best rewards - if the venture gets there.
As Maples said, “First place is the only place. So if you’re going to have any strategy, it should be a strategy to lead. The difference in outcome for the number one player and everybody else is very dramatic. So it’s not a statement of arrogance as it is irrational not to try to be number one.”
2. Fulfill your commitments.
Obviously, it’s hard to do that. But one very practical thing you can do to boost your odds is to say what you’ll do and do what you say.
Maples explained, “You should try to do what you say you’re going to do. It turns out, that’s just hard to do. It requires you to think about what you can do, and what commitments you’re really going to make, and what does it really mean to carry the ball.”
3. Go with your gut.
You should only lead others if you believe in yourself. That means trusting your instinct about what is right and doing what you believe. If you do something you don’t think is right because you’re guessing it will be popular - odds are good you’ll regret the decision.
Maples told me that he “learned [it was important to] believe in yourself. Usually, you know the right answer, and you just have to give yourself permission to pursue the right answer and believe in yourself enough to know that that’s going to be okay.”
4. Play offense.
You can’t win if you’re defending yourself against competitive onslaughts. So if you are setting the terms of the debate - for example, by presenting potential customers with the most value for the money of any competing product - then you will be putting your opponents on the defensive. And that puts you in the lead.
As Maples argued, “If you refuse to play defense, the other guy can’t score on you. So keep your offense on the field the whole game. The way to win is, rather than be out-marketed, to out-market them, to put them on the defensive to force them to react to your positioning. It’s all about winning the air wars by setting the tone for the market. It’s about not reacting to the other guy’s positioning, but making him react to yours.”
5. Take pride in your work.
You must believe in the importance of what you’re doing. If you are just going through the motions in your job, you are wasting a precious resource. But if you are proud of your organization’s mission and the people who are working to realize it, you will make a difference in how much you achieve. What’s more, taking pride in your work leaves a rewarding legacy.
Maples believes that as an investor, it’s a mistake to get involved with companies that are just ho-hum. Instead, he believes it’s important to create a proud legacy to think about when you look back. As he said, “It’s about: Did you get involved with meaningful, important companies that you’re proud of? If you do that, the rest will just take care of itself.”
6. Do what you’re good at.
Different start-up jobs require different skills. If you don’t excel at the skills needed to do that job, don’t do it. And find someone else who is.
Maples thinks it’s important for entrepreneurs to stick to building companies and investors to be good at buying a piece of a great company -; rather than trying to usurp the entrepreneur’s role. To be one the top-performing VCs, Maples believes that “you have to commit yourself to being a very discerning judge of people and companies and opportunities in markets.”
7. Grow the pie and you’ll get your slice.
Maples thinks that entrepreneurs and investors must be open to giving back. He has found that “people have this belief that growing the pie is more important than claiming your particular slice. If the pie grows super-fast, over time everybody wins.”
Maples sees Silicon Valley as being built on a philosophy of accelerating abundance, noting, ”What I’m trying to do is to back companies where the pie is going to grow so massively that everybody wins. When you’re creating rapidly-growing positive outcomes, you can afford to be magnanimous and idealistic.”
Using these seven insights has helped Maples prevail. If you follow them, you can boost your chances of winning too.
Strategy consultant, start-up investor, teacher, corporate speaker, pundit, and author PETER COHAN has invested in six start-ups, three of which were sold for a total of $2 billion. Before founding Peter S. Cohan & Associates in 1994, he worked with HBS strategy guru Michael Porter.