This morning at PulsoConf, we got a chance to hear from one of the most elusive sectors of the tech ecosystem – the investor. Adam D’Augelli, an associate at early-stage investment fund True Ventures, gave a presentation titled Missionaries, Mercenaries and Madmen – The Key is to Just Start. Inspired by conversations from the evening before, he tweaked his speech to discuss the history of Silicon Valley, the common elements of successful startups and his point-of-view of the tech world.
D’Augelli noted that fear of failure and concern for analysis and planning are two elements of the local startup ecosystem he’s observed since his arrival in Colombia – both of which hinder the community’s development. While such anxieties prevail in Latin America, in Silicon Valley, he said, “Failure is the best thing in the world, and planning is like a dirty word.”
Silicon Valley: A History
The Valley, of course, wasn’t always like this. To understand how Silicon Valley has evolved and matured to its current state, D’Augelli provided a bit of a background.
In 1999, life was simpler. There was one real platform in existence, so no one ever had to think what they wanted to build for, and development choices were limited. The competition was slight – through 1999, the first internet bubble, only 30,000 startups launched. They key to unlock the door to success was money.
Unlike today, at the end of the last millennium, capital was an important requirement to get a startup off the ground from the get-go. Long-term planning was required, and tools and support systems were expensive. Even distribution and marketing, which are now largely taken care of free of charge through app stores and social media, were extremely costly. In such an environment, capital held the power, which is not the case today.
The Valley Today
Thanks to the tools and avenues available now, the issue of funding can be dealt with farther down the road. D’Augelli said, “On a relative basis, it doesn’t cost any money to get a product out into the wild.” What matters first is to get a product out there, see how customers react, and go from there.
Of course, the current situation in Silicon Valley isn’t all smiles and butterflies. Because starting a company is so easy to do, more and more people are doing it. Entrepreneurs are confronted with more competition, more platforms and more choices.
This scenario fosters cases of fast, exponential growth. D’Augelli mentioned the cases of Urban Airship, Minecraft and Instagram. These are companies that have hit massive scale with little money – small teams that have identified a point problem in the market and built for it.
Startup Pillars: Failure Means Quitting
What, then, are the most important elements for startup success right now, in Silicon Valley or elsewhere?
First, focus on a single purpose and the identification of a single problem to solve. Second, emotion and the ability to tap into the user’s feelings and sentiments. Third, community, both internal and external. D’Augelli noted, “People want to feel like they are a part of something bigger than themselves.” Fourth, story and the founder’s ability to tell his or her story better than anyone else to inspire investors, employees and even themselves. Finally, passion. Going the startup path is very difficult, and passion is absolutely necessary in moving forward. Failure, in D’Augelli’s eyes, is nothing short of quitting.
D’Augelli characterized the Latin American ecosystem as a version of what Silicon Valley was 10 years ago, when capital had the power and things were just beginning to take off. As founders find success, reinvest in the community and help it grow, power will shift into the hands of entrepreneurs and the ecosystem will grow.
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