The talk is highly entertaining and thought provoking. He argues against the notion that startups that want to have a huge exit need to raise big money, noting that Microsoft raised just $1 million and eBay just $5 million, in venture capital.
He says small startups can be hugely disruptive, and have proportionally huge exits. he calls these companies Thunder Lizards. He’s talking about Godzilla, which eats his competitors and disrupts like crazy. These are the market leaders, he says. Second place is boring.
Silicon Valley entrepreneurs and venture capitalists tend to be wine sippers, he says, when beer slammers tend to be the big winners. He uses Chegg as an example, which grew to $50 million in revenue in just three years, but it took them two years to raise funding. The company, which rents textbooks to students, just didn’t make sense to most VCs.
This is a perfect situation, he says, because there’s no real competition out there getting funded, either. He calls this being “non consensus right.” That’s the sweet spot. The key is to attack a huge potential market, with an emphasis on “potential.” You want to be right, and you want to be one of the only people to see it ahead of time.
Great presentation. I’ll try to get the presentation to post as well. The video is below.