Go Forth And Conquer

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Editor’s note: Guest author Aaron Levie is the founder and CEO of Box.net.

The old technology guard of Silicon Valley is rapidly unhinging.  From the really old facing oscillating strategies and leaders; to the newly old churning through CEOs as fast as they dead-pool products, refocusing the entire company on competing with Zuckerberg, or causing major customer confusion as they shift into the future; or even the older-new, content with a pivot or two before a friendly landing into Google or Facebook.

With this transition of old to new, and new to old, comes a strikingly rare opportunity to build the next great technology powerhouses. Today’s revolving technology landscape will favor those with a bias toward speed, change, and disruption.

In the past few months alone, I’ve heard of new companies that stand to radically transform how we interact with healthcare, blow open television consumption, and make education mobile.  And refreshingly, I didn’t need any modifiers to describe these startups: nothing about “watching television while tweeting,” or “facilitating healthcare with local coupons.”  No, these have the potential to be game-changing services from entrepreneurs that have set their eyes on the dream.

Marc Andreessen recently laid out an amazingly tight argument for why software will pretty much take over the world.  Or, to be more precise, eat it.  But this will only happen if we’re working on truly world-changing technology.  Technology that helps us to communicate, save and improve lives, or make better decisions in our businesses, faster.

The launches at Disrupt and Demo a few weeks ago got me thinking about that magical stage in the startup lifecycle: the point in the building process where anything and everything is possible.  You have yet to make your first pivot, you couldn’t have been turned down by more than a couple of VCs, and I’m sure the team dynamic is just copacetic.  Ah, the glory days.

Well, before you get much farther, here are a few unsolicited lessons I thought I’d share after five roller-coaster years in the valley:

Make sure you’re constantly doing something that wasn’t possible 3 years ago

The only companies worth starting in this industry are those that couldn’t have existed in another era.  And with the speed of change on the internet reaching escape velocity, eras are measured in quarters, not years.  If you’re not taking advantage of some fundamentally new enabler, you’re toast.  Maybe the advantage is an order of magnitude change in the price and availability of infrastructure because of the cloud (Cloudera, DotCloud, Twilio), or the now-ubiquitous access to powerful ‘smart’ devices (Square, Uber, Kno, Airy Labs), or a change in social behavior at both work and home (Yammer, Jive, HealthTap), or all three.  The idea is to constantly be reaching for the edge of what’s possible, extending the limits of what’s expected and turning the novel into habit.  If you don’t do this, you won’t stand out, you won’t gain traction, and you won’t win.  As Andy Grove would point out, if you’re not creating a 10X improvement on the dimension of cost, efficiency, or benefit to the consumer, you’re hosed.

And emerging startups aren’t unique here.  The same rule applies to building new products within existing companies.  It’s how Apple has stayed “in power” in such consistent yet – at the time – unpredictable ways.  It’s how Facebook has modeled its innovation engine.  Facebook routinely assures us they’ll remain in a position of strength by enabling experiences and value that is at the bleeding edge of what’s technically and socially possible.  And for this same reason, we’ve seen Yahoo flounder over the past decade.

In Yahoo’s case, we witness the fate of an innovator that has ostensibly “lost its way.”  On the web, you have very few opportunities for missteps.  To be the exception, the pace and frequency with which you need to build and bring new creations to market is incredible.  Even then, you’re assured of nothing, but it’s the only way to survive.  Consumers are fickle and a single technology cycle or trend that is missed can cost you relevance in the next wave.  Yahoo gave Google the keys to the search castle; they saw the internet media revolution coming, but fumbled by disintegrating Broadcast.com and producing poor user experiences throughout their media properties; and they let services exist without any clear and consistent strategy to unify the products, and with little innovation to boot.  This is an expensive lesson for one company, and serves as a great reminder to everyone else, large and small.

Do something you’re extremely passionate about

Startups are freaking hard.  Pretty much every day you go through a mood swing that would make you a poster child of TMZ (if you were only a little cooler).  For every one thing that goes right, there are no less than twenty-five things that have gone wrong.  There are dozens if not hundreds of other companies – some you’ve heard of, and some that won’t be launching until the next Disrupt – that would love for you to fail.  Andrew Mason has to contend with thousands of competitors, reporters, and speculators that would love to see his Groupon IPO falter.  That’s real pressure.  Employees, strategy, capital, competitors – and that’s assuming you don’t have any personal baggage.  Good luck with that.

If you don’t build something, or solve a problem, that you’re extremely passionate about, you’re really only going to be able to handle the good times.  When things are going extremely well, life will be great.  You’ll love your job, you’ll love your investors, and your mom will love you, too.  But when crap hits the fan you’re going to begin to get weary.  And tired.  And depressed.  And if you’re not extremely passionate about what you’re doing, a market’s quick turn or a VC’s even quicker “no,” is more than enough to discourage you from your effort.

But what kicks you back into gear is the utter energy, drive, and conviction that what you’re doing is so extremely badass – so uniquely tied to your actions and no one else’s – that you must go on.  This works even if you did happen to land somewhere other than your initial start.

When we started Box in 2005, we didn’t do so with the goal of eradicating SharePoint from corporations.  But we did believe people should fundamentally be able to share and work from anywhere with extremely simple software.  The enterprise then became the context in which we executed our vision. The overarching challenge and potential of the technology gave us the passion to drive forward.  It also brings us clarity when our marketplace gets ugly, when we experience new threats, and when we’re pressed to make strategic decisions that will determine the fate of the company.

Keep looking up (and never look down)

There have been countless times when Box was supposed to be engulfed by lumbering giants, offering the same services more cheaply to corporations.  It’s a risk that all startups face, but competing in a category so dominated by – and important to – legacy enterprise players, we’ve experienced the extreme of this challenge.  And at times, the academically correct solution to a problem would have been to over-pivot, to fail fast and cut our losses. Like when Microsoft got into the cloud game.  Back in 2007.  Well, we’re still here.

And this is where so many startups go astray.  Maybe it’s that they never believed in the idea in the first place; maybe it’s that they’re reading the market wrong, or taking faulty advice; maybe it’s because they’re tired.  I don’t know.  They will give up too early, quick to move onto the next idea, or act too small and not go big enough.

But looking around the ecosystem, the companies that remain relevant today, after years or even decades, are ones that always looked upward.  Even at $140B in market-cap, and 35 years in, Oracle still thinks about what it wants to be when it grows up.  Amazon has done this fairly masterfully as well, successfully expanding their range of competitive products in various markets in just a few years.

Thinking limitlessly about what you can be doing, and cutting the right moves to get there, is the game.  This often comes from a mix of having the right strategy (hard), the right people (harder), and maintaining the right psychology (hardest).  Are you growing as fast as you could be?  Are you taking on your big competitor in earnest, competing on the dimensions where you’re optimized and they’re not?  Is your business model optimal for your market?  How are you going to get your product past early adopters?  Are you building the right team to 10X your business?

The lean startup methodology, in which startups entrust most of their core strategy, teaches us so much about building products and learning from customers, but painfully little about building companies.  I find that we’re often so obsessed with the idea of disrupting the status quo that we sometimes forget what that means and what it entails to do so.  Everyone has that opportunity, but not everyone takes that opportunity.  Or takes it to the fullest.

Maybe I’m just in a sentimental mood, but we can probably all learn a little something from being introspective now and again.  We all have been given the gift of amazing resources, significant access to capital, amazing mentors, and the most democratic distribution channel the world will ever know.  Why shouldn’t every ounce of that good fortune go into building the absolutely most impactful and important companies that we can create?  Go forth and conquer.

Photo credit: Robert Scoble.