Becoming an Entrepreneur in Silicon Valley | Documentary

[Music] [Music] I mean San Francisco is the heart of it all right it's where the original web based company came from over Facebook Google here we are in the country of the gold rush like the the attraction Hawk here [Music] speed is just part of the natural flow something that may take a month to develop in Washington DC we can do here in three days because there's probably 15 companies trying to tackle that problem [Music] I think Silicon Valley is a really special place it's really unique that you have so many different people who are like-minded who want to solve large societal challenges and do it using technology [Applause] [Music] people just really want to make a difference and they find some unique way to do that we are flying from France to California to discover the Silicon Valley startup ecosystem we will spend a whole month there we have scheduled a lot of meetings with some of the major actors in the Bay Area among all the people we are to meet Alex sold his company to Facebook in 2015 we will discover Google campus in Mountain View and meet with axel Brackett and finances the companies acquired by Google will go to TechCrunch and visit Tito Hamza the famous host of the daily crunch report Nicholas is another successful entrepreneur whose company was acquired by Apple in 2015 we will meet with him in downtown San Francisco in view of exploring more deeply the specific features of Silicon Valley we will visit its two main startup accelerators Y Combinator and Palo Alto and 500 startups in San Francisco entrepreneurship is the engine that drives the economy whether it be in France in the US or worldwide without entrepreneurship your economy is not going anywhere the purpose of our trip is to get an accurate overview of what being an entrepreneur in Silicon Valley meets and what the path to success may look like we will go progressively from the process of getting an idea to the bright process of selling your company to a great corporation let's go behind the scenes we're going to the University of California at Berkeley on the other side of the Bay Area to attend the Berkeley method of entrepreneurship boot camp where ideas are floating all over the place and where students get a great amount of help and mentoring to see if their ideas are worth going on a journey indeed before reaching awesome success everything boils down in the beginning to finding an idea it's a short period of time where they bring in great instructors and great mentors and and really help these entrepreneurs think about their next business and how to be successful and then learning from great instructors people who have been there from people inside business and outside business and academia just it's a lot of information jammed into a short five day workshop [Applause] during that boot camp students learn that it's all in their interest to share their ideas and their vision explain their motivation for the product they want to build you're at Berkeley professors and mentors are here to challenge students and give them feedback on their ideas as we watched students defending their ideas and their project we got a hint of the energy that we are about to find when exploring Silicon Valley and there is one main takeaway that we want to share when working on your idea you want to make sure to avoid one first mistake that is fatal to your project and here is Alex Mayer founder of dating website zoosk giving Berkeley students that first lesson on the road to entrepreneurship the first lesson is this pursue product market fit at all times at all costs in every aspect of your life and business this is a product this is a market you put a product in front of the market this act of bringing product in front of the market is called marketing or sales as an entrepreneur and I would argue in your entire life your job is this find products that once you put in front of the customer they buy it that is literally as entrepreneur is your first job is to determine the product that you're building or you plan to build or we have built or you're currently building whatever your customer would buy it if you put it in front of them as cheaply as quickly as possible why because 95% of the time you would move you would make the product put in front of the customer and nothing happens that is the truth that is a statistics do I did I make something that people want that people are willing to pay for or that I'm able to monetize through other means so many people start companies they raise money to hire teams but they never get product market fit and so there's like a 0% chance that if you don't have product accurate fit you're going to succeed so I think there's a lot of mistake that entrepreneurs make is that they're building something really cool that they would want themselves and you know it's gonna be better and that's all that matters and you know they're gonna educate their customers about this new product that they're gonna want that almost never works so it's what's really important is to build something that consumers or customers really want and that you can prove that and prove that and verify it before you spend a lot of time building the product they're actually almost always a lot of interesting ways that you can do tests or do experiments to validate customer interests before you actually build almost any technology we got it product market fit is a thing let's hear some entrepreneurs who will explain to us how they found it my testing learning and iterating I spent not millions of dollars but I've spent thousands and thousands of dollars on different ideas that I've tried pursuing and stuff figuring out what works and what doesn't base off of customer feedback and then applying those things I work and some of them have worked out quite well some of them have been little companies that I've attacked that little niche and have made some money and some of them have completely failed and you know I just threw them off to the side but that's the beauty of it is you get to be very nimble and you to like you to try many things and and over here in Silicon Valley it's like you meet so many people that are trying to pursue their ideas so you can like talk to them and figure out what they're doing and we learn from that and then apply it to your idea so Alex's first company built virtual agents for customer service so you can think about like Siri but for customer service actually our idea was to make a very smart assistant for everybody but we soon realized that first it was not feasible technically to complex and then nobody was ready to pay for that so when we focus only on me to be for customer service we solved boss problem at once first it became feasible because the scope is smaller it's easier to train at efficient agents to do the job and then the company is ready to pay for its because it can save them a lot of money because they get less emails and voice customer call before joining Y Combinator is a partner Dalton Caldwell founded imeem after graduating at Stanford University he is a good example of iterating well I think I think the story of I mean is similar to a lot of the stories for startups where you end up trying a bunch of different things like like it doesn't work right in the very beginning and you end up having to iterate and so the first version of that was a desktop client that you had download and that didn't work too well people didn't really want to download software they didn't trust it understandably and so we ended up moving the whole thing to just be a website and then it started to take off more and then we were able to focus more and more on music as being the most exciting thing rather than video and other things like that and then we spent a lot of time doing deals with all the record labels which took again a couple of years and so all in I think I worked on that for eight years seven years it was a very long time and so it wasn't like I had the idea oh I'm gonna make a music site and it's gonna do this at all I use in video all the time I do stuff shoot stuff make stuff if it's easiest for me to you know test something on a phone I'll do that on a phone first and then I'll use like a more high high-end production camera but uh so Lean Startup methodology is you know having an idea and then validating that idea so if you have a hypothesis right you go you test it you get customer feedback you feedback your YouTube comments and whatnot and then you apply that to make your product better you pivot if you have to pivot in my case you just shoot another video crunch report airs every weekday at 7 p.m. Eastern 4 p.m. Pacific on techcrunch.com - iTunes and on YouTube and guess what guys see you on Monday have a doobie pivot pivot is one of those words that people use all the time that can mean different things and so it was always called I mean it was always about media sharing and it was always about a social a social network media share so in some ways yeah the feature set changed the way we made the features had changed but it wasn't like a complete pivot don't force your idea or your concept to someone else go find out what that pain is in the marketplace what that need is from that customer and solve that need that will greatly improve your chance of success and then if you're not solving that adjust your concept so that you really solve real pains for real customers who are willing to pay you for that solution on top of that let's say that you do have product market fit let's say that you are able to grow then you need to really understand what the economics of your business are if you're able to do something profitably and if you're able to scale it up to get huge so an example of my first company hi meme we definitely had product market fit right that's how we got so big and the issue was at scale we couldn't get positive margins it cost us too much money to do licensing from the amount of money we were able to make from subscriptions and this is exactly the same case with some of these other media startups like your Spotify your sound clauses people love those sites right they love them but think about how much their money how much money to make any subscriptions and how much they have to pay the labels and there's a chance that even if you get to that scale of success that still may not work and the way that would I would extrapolate that for startups in general is that the first and most important thing is do i a product market fit and then once you have that it's like does this actually work can I make enough money on a per transaction basis or on a regular basis to pay for all my costs because at the end of the day it's it's got to do that you can't just you know go public on hopes and dreams anymore very often then comes the time when it becomes interesting to get VCS to invest in your company to be able to scale but before getting their money you need to be able to convince them and talk to them we're back at Berkeley's boot camp where students are taught the challenges of the pitch which is an end principle step before going in front of a VC our next thing we're working on here is the elevator pitch so each team is going to have two minutes to do their pitch and then we're going to have four minutes of feedback from our mentors and experts here so the big idea of the elevator pitch is that when you start a new startup you have to be able to think on your feet and also be able to explain the whole idea of your startup in two minutes or less if it's really being able to do concisely express what your startup is and the idea behind it is just really important not only for talking to investors but talking to your customers and really for yourself as an entrepreneur to know exactly what you're going to do and what your plan is so this is that step that we're going to do right now hello I'm Chris hey Chris how are you doing today pretty good I really have this awesome idea that would work to solve medical adherence which costs 100 billion dollars annually in the US alone as well as 125 thousand lives in the US every year so I think it's a really massive market and it's a great idea I have a solid team and I'd love if I could have about two or three minutes to come by tomorrow if that's possible and give you the full pitch you can meet the team and we can bring slides and full working prototype if that's possible I think everybody is afraid of going in front of somebody and putting their work out there and their product and saying I want you to write me a check to make this happen it's it's a very scary thing you assume that I knew half the things that you were talking about using very specific terms I can't make that assumption right so you got a narrow down the jargon to you know what every day people don't the way they speak what's in it for me why should I commit my time to meet with you because so far all you've told me is you're gonna send a whole crew to tell me more jargon at a later time so the exercise of the elevator pitch it's more about forcing people to think through what they're doing in terms of benefits and value in a short way so that they can express to you what this is good for and what it can do and then you can tell them if you're interested in talking more or not you can have a great concept a great idea but if you can't tell the story if you can't get people excited about it if you can't convince them that you're excited and enthusiastic and you believe in what you're doing then all of your energy is going to be misspent here everything is about storytelling which is a very specific approach to the narrative so that like Hitchcock for instance did in his movies you have to create a climax a suspense and you have to somehow connect the dots as you know Steve Jobs did explain to students at this time it was at Stanford but anyway that works here also at Berkeley it's not just we wanted to start a startup and so we made up an idea that's not as great of an answer as people that maybe oh I had a job working at this one place and I realized that we have this huge problem and so I left that company and started this to solve that problem right and so people that find ideas that they find in the real world or a products that really want that's the mean we also look for they want to see that you have a logical path to get to where that target is whether it be X amount of dollars at a five-year point but they have to know what's in it for them and why you're the one that should receive their funding pure and simple you know you meet primarily people through networking so you go to an event you meet someone and when these environments or opportunities happen you have to be able to very quickly create or generate interest you're not gonna give me half an hour for me to explain to you what I'm doing so I have to be able to very briefly give you enough of a feel for what I do for you to say if you're interested in not in talking more a great way to build up a good pitch is to understand what the VCS are looking for let's now look at the issue from their own perspective and understand their reasoning and their main criteria for selecting startups they want to invest in AI I invest in clothes like 90 companies like a year at least right like every other VC is sort of what who's a team we think the team's good is a real market here is this problem interesting like you know this is a major problem that leads to a large market what does a competition look like is there down stream capital we look at all these things and so there's not one thing that we look at I think one thing we really look for is founders that are very strong technically that does not necessarily mean programmers what it means is they're able to build the thing they have the idea for imagine you had founders with a really great idea but no idea on how to build it you're gonna have a tough time so whether it's that you need to be a good programmer you need to be a good scientist you need to be a good mechanical engineer whatever the skills that it takes for you to be able to make the thing happen we look for that on the team so it's not like everyone on the team has to necessarily be technical but you want to see at least one founder that has the ability to build the thing that they want to build and the market has to get a high traction a high pace in the growth and value creation potential and then the team has to be on the one hand very creative to to reengineer and to create a very new value prop and on the other hand which is quite a paradox to be very disciplined because the team has to go through a very disciplined and timed execution of the plan and then the third reason why an investor goes into a tech company is the business model you know we're gonna look at all the things I told you about you know is there a real market is this the right team is there a real opportunity and if you mix it all together is it the right team to take up advantage of this opportunity today it's not a perfect science that's why there's such a huge rate of failure in the startup ecosystem so you you really don't have a perfect answer but usually here in Silicon Valley somehow you would be introduced to us through someone who knows you knows us and is willing to help with some level of indirect trust we also look for commitment in a sense that they're actually serious about it say you have someone that's like oh I have a startup idea and once you fund me then I'll start working on it that's maybe not as good a commitment as someone that said ok have a start-up idea and I'm gonna at least do some early customer acquisition and I'm gonna try to have a first customer I'm gonna try to make the prototype whatever progress is demonstrating that you're willing to make that progress before other people and invest in you that's usually a pretty good sign and something that I would recommend you know at the end of the day investment is a human business and so you tend to meet people one way or another you tend to meet them through your network through a common relationships through an event etc but it remains very much centered and focused around the human relationship because you are you know you're investing in people before you're investing in a company you know keep in mind that everything can change the product the technology the positioning the pricing but you can't really change the human aspects and so the first thing that you look at and that you establish a relationship with is the person on the other side most Evangel investment is about the people right and it's it's always difficult to say no to an amazing friend and entrepreneur when you believe in the person and the culture that he has shown along all his life and all his professional life indeed aurélia is investing in edwin's company called feedly we are meeting them along with Michael Lamar another investor in feedly they will help us understand the challenges of a fundraising round and highlight what is at stake in the relationship between an entrepreneur and his investors picking the investors is probably one of the most important decision that you have to make and most entrepreneurs when they want to raise money you know they have to kiss a lot of frogs to find a prince for multiple reasons I think if you get the wrong investor it's almost like in a marriage where you're not you know fully married to the right person you see your relationship with your investors it's it's hard to generalize if you're just starting it's your first company you are trouble you have difficulties to raise money this Russian ship will be completely unbalanced to the advantage of the investor you'll be just listening to them and say yes sir yes madam and whether you like it or not include rock like that if it's not your first company you had success you are you all you had a very successful start and you are able to choose to keep your investors then you are in the controlling seat it will be a completely different relationship I think to make it successful you know round of investment you need to find one lead what they call a lead investor because you're not going to negotiate with 15 people so you want to find you know the first person that you like the most and go with that person sit down and with understanding of what are all the cards on the table make a deal where they feel like they're winning and you feel like you're winning when you invest you invest in the team and you invest in also the milestones that the company already has made so the percentage is directly connected to what is the expected next milestone to get to the next valuation level and most entrepreneurs break through something that doesn't exist that doesn't have an established base that doesn't have a full market that's defined defined both in terms of who and how much and basically it is your job as an investor to decide how much money you're going to put in how much money you think it's gonna it's going to be going the the biggest problem we see is when an entrepreneur gives too much la and so when they get to later rounds they really become you know diluted so much that they're owning five ten twelve percent and then you kind of go is this all worth it it really seldom occurs that the VC wins when the father doesn't it's about a land man of interest and the alignment of interest is about you know discussing the business plan and then decide what is the point a what is the point B which is the destination and then the execution of the plan to go from A to B which is the responsibility of the management of the of the company and backed up by the veces as board members was the right terms if you're in the right position and have a right valuation that's not overvalued you can most likely negotiate better terms for yourself and that sometimes may mean keeping the control of your company much longer because of special rights you may be able to put in and as a founder and entrepreneur I think being able to retain control of your company sometimes has much longer and lasting impact than being able to value a company a little bit higher if there is a success from the entrepreneur founder perspective there is also a success from the VC's perspective just because the entrepreneur is the enjoying of the company and the VC is the the gasp of the of the company you're never going to be able to operate for them but you were there to help them if they need your help so you want to be able to trust them and you want them to trust you you know typically when things are all good then it's all very easy but it's when things go bad that you want to make sure that those relationships are strong and that you know the entrepreneurs are going to feel comfortable coming to tell you hey this thing went bad we need help you know I need what are your thoughts about this etc and so you want to build that trust relationship over time so that you can have different levels of interaction based on the needs of the company I don't personally believe in you know micromanaging an entrepreneur you can never get there stuff done for them you'll never know their company or their market as well as they do but you know you can probably bring some external help and external look at the situation if they ask you for advice and it's hard for you to understand that accident you know sometimes the entrepreneur they they are better than you actually because they do the stuff all day long they got the idea that got energy and you just from the outside so it's hard to know you know when to jump in and what not to jump in and actually and just accept that you might not be heard that's part of the game but it's it's very difficult at the beginning you might say go I did this mistake don't do it again and and you can't do this and you're very adamant as Michael says there's nobody else than a founder or a team that spends 24/7 thinking about the topic that is gonna be in a better position to take advice filter it and decide what to do you know as an advisor I suggest and then the entrepreneur decides that's how it always works this is are by definition hands-on with minority stakes so they have to be ok they are shareholders for sure but they also are huge influencers and connectors and mentors and so on and so forth it's very common for an investor to keep a long term relationship with an executive or a founder because they might interact with your companies at multiple occasions it is definitely when the entrepreneur and his investors agree on a vision and align their interests that it becomes possible to boost their company it turns out that Silicon Valley entrepreneurs can also find a huge support with incubators or accelerators we're going to visit the two main accelerators of the Bay Area which happened to be two of the most famous in the world my name is Marvin Leal I'm partner 500 startups we're here in the San Francisco office of 500 startups which I run as five men startups is global seed fund that also happens to run a very well-known accelerator they're coming to our program mainly for the access to expertise access to the sort of like the online marketing be to be sort of like customer acquisition sort of expertise that's the main reason they're joining I don't think most people are joined because of like they want that the net hundred and twelve thousand one hundred and twelve thousand five hundred dollars in the program that's not why they're doing this I think for us our program is really focused around sort of growth and distributions of sales and marketing customer acquisition and so any company that comes to the program you know our goal is to make sure that their they are able to understand not just the fundamentals but are able to execute and actually deliver on actually being able to sort of grow their customer base typically we have every week we have about four to five workshops or talks and then in between we usually have like just the the ad hoc meetings and weekly meetings that we have with the teams just to track their metrics and to basically to help them on whatever issues that they actually have and so a lot of times it's just like they should be here sitting here working on their business if they're not meeting with us are meeting with other people in the program it's very startup II if you're here you can tell it's an Open Office plan 500 has given me all the tools to be successful as an entrepreneur maybe not this week or the following week maybe these things will like you know help me within a year but maybe it helps me within ten years it's good to you know train yourself to the best of your abilities push yourself to the best of your ability is it 500 startup is definitely a great structure to support promising entrepreneurs just like Y Combinator I'm the partner in charge of admissions for who we decide to fund as well as just a partner who works here yeah our business model is to fund companies at the early stage so we invest $120,000 and we get 7% of the company we have partners that have a lot of experience we funded a lot of the best startups in Silicon Valley like Airbnb Dropbox and that Network and that expertise is what makes makes us a good place for good founders to go and so I think it's that Network that it's the biggest difference Queen this in other places even though the business is very similar Airbnb is worth tens of billions of dollars at this point and people use all over the world I think if you talk to the founders they credit YC a lot with their success they had started the site it wasn't really taking off they were about ready to give up and going into YC was sort of a last ditch effort before they went in got jobs and what they got out of YC was honestly focus and hope and I hope I mean they got a lot of encouragement from the YC partners that actually it was a good idea because they were so used everyone telling him it's a bad idea and telling them to give up and it's never gonna work so there was a lot of like negativity around them and Paul Graham really saw the value of Airbnb and saw how it could be big and you know push them really hard to focus I believe that you're in YC he told them to really focus on getting New York to take off instead of trying to get it to take off all over the US he was like go to New York go there spend all your time there when you're not here so he would tell me to fly out and you know talk to users spend time one of the things that they did is that they would personally go stay in the air beam bees of their hosts like the founders would come stay with you so that way they could talk to you and learn your feedback does that make sense so that's like say you're and you're like oh I put my apartment on Airbnb then you get your first booking and you'll be one of the Airbnb founders and they would come sleep on your couch and they would like become friends with you and they would they would ask you for feedback and all that stuff and so during YC they they kind of got hope again or they got belief again that it could be a big thing and definitely if you hear them tell the story or what I've read in interviews they continue to credit that as if they wouldn't have done what I see they would have just like given up they were they were that close Airbnb is obviously one of the main successes of Y Combinator 500 startups being more recent it is likely that in a few years they will have such amazing stories to tell one difference though between their programs is that 500 startups offers a co-working space I think what makes us very very different is Y Combinator is a very sort of like off-site sort of driven program so they meet like once or twice a week and so there most of the companies are typically like not sort of you we believe in co-working I think that's the biggest part is that all our companies are here sort of been co-working for like for a month co-working is indeed one of the values of the work ethics in Silicon Valley let's now focus on the resources available to entrepreneurs and the way they boost their company starting with a co-working space in downtown San Francisco we have urban campuses like this where startups come in they pay a membership fee and they get content they get workshops they get a ton of programming to kind of help level up their company you're not taking equity like accelerators are doing we don't have the batch model so it's not like a Brotherhood of like ten companies that are going through this process together we have 200 companies with over 700 members and we also offer mentorship so we have a mentor program in every campus across the country in San Francisco specifically it's 550 for a seat like this it's a hot desk concept so you can sit anywhere in the campus there's also seven $50 desks that are permanent it's yours and you can put up your monitors whatever you like and then we have bigger suites so for the companies that are a bit more established they like to set up their own private offices and so we have that availability as well this is a place where I can come and I can work and I have sort of a small family that I get to work with and and I've even worked with other people in the worldwide garage and we all sort of feel part of this family and coming to the space at 9:00 9:30 in the morning and working until 6:00 we we get this this great rhythm of camaraderie and then that's elevated by me as a designer I set where my developers sit so if the developers have a bug that is user experience related there's not some chain of emails and setting up a phone call in two days which would go against our lean practices they just stand up and they say Adam can you come here for a minute all right and we have a 10 or 15 minute conversation about what needs to happen and and we work around the bug or we create a way through the bug very quickly and we never slow down and and and you have to be in a space together this open space to to be able to do those sorts of things I always recommend that entrepreneurs get any kind of help if they can and oftentimes it's not just one piece of a help or advice it's finding a series of support throughout the life of the company that might be at Stanford that might be at Berkeley that might be in France or somewhere entirely different what matters is the resources and getting the help that you need incubators and others the Eva where a lot of information is very useful and I think you can do it without there is no know the reason why you cannot build this this network yourself but making doing it in so quickly I mean after three months you really get likes it really quickly is it would be really hard Bill Gates or others they didn't have accelerators in house so I don't know but I think there's plenty of great resources I don't believe resources by themselves make great entrepreneurs and so I think there's certain entrepreneurs we're gonna go and do it on their own and make it happen and I think those others are gonna use those resources and the ones that are really you know driven and successful and desire they'll be able to put those resources together to really help accelerate or you know turbocharged their opportunity everything is about working hard and zoosk founder Alex Mayer uses a metaphor to emphasize how important that is like we grow up soft because our parents take care of us but business is like a bare-knuckle battle right so it is a little bit of that thinking that nothing ever goes as planned and you need to go with such overwhelming force that you always win that's not just commitment that is capital that is like hiring people basically go from this the mentality of the scarcity to the mentality of the abundance it's a mental switch we're at the University of Southern California in Los Angeles where serial entrepreneur Thomas Knapp explains to us that he didn't raise any money and did his utmost to bootstrap his businesses the way we raise money is you bought one you sold it now you had a little bit more money you could go buy two after a while so we really did that and that's part of the real advantage of starting in college is that you in a lot of cases you don't have what we call baggage you don't have house payments you don't have you know kids that you're covering in other things like that so you look at this opportunity of hey if I could stay on someone's couch I can eat a lot of ramen noodles I can you know do a lot of things that you don't so you can plow a lot of that money again and so when we arrived we ended up in in Palo Alto in the very small apartments that we rented monster mounts and first thing we did is just pick up the car of a friend was here for work was Mountain View actually and we went to a thing with Walmart and we picked up plastic chairs a plastic table and you know one of those air beds that we put on the on the flow of the of the very small apartment it was just a small pond with the kitchenette isn't just something to cook on pots and that's all we started like a bunch of like folding chairs and the plastic table and laptops and and we were sleeping with my one not not my co-founder but my roommates that I actually mentioned that I made at CERN he came with us for the startup and beginning and we were sleeping on that on that mattress and was horrible every time was someone was moving was like waking up the other person because we know like all this plastic noise but this was kind of interesting interesting step then we moved to a much bigger house actually still in Palo Alto on University Ave which is kind of a very famous University Ave leads to Stanford and that's where you know companies like the Google Facebook kind of started we got like you got a credit college there and it was kind of what you can see in the Silicon Valley TV show no way you know like computers everywhere a garage full of computers for the cluster because we were running a GPU cluster there yeah exactly what you seen in the TV show I saw has pictures of that and you know anything from from that time it's kind of amazing now it's a normal life it's not like you know kids in the garage playing Lego I mean you have to admire all these all these companies and all these entrepreneurs and people that are at times are putting everything on the line and they're putting the everything they have out there just for just for an idea that they're trying to make and do and like you can call that you can call that you know the American dream or you can call that whatever you want but it really just comes down to a ton of hard work and a ton of luck and a ton of just making it happen like Tito homsy we admire and feel inspired by all those very hard workers and smart entrepreneurs that we are meeting doing startup is definitely very very hard but when you manage to go through all the steps that we've seen so far and provided that your company keeps growing two main options come up going public or getting acquired now does that necessarily mean great exit for the founders certainly not always that's what we're going to focus on now in order to understand how the acquisition process works and then potentially the integration within a larger company when your startup and you receive an email from any company who wants to acquire you you feel very excited and proud and and it's a very dangerous feeling because nine times out of ten it won't happen either because I'm not interested or because I'm just trying to acqui-hire the team or try any kind of it just it maybe just intelligent business agents so it's very very dangerous to become excited but you still get excited you see every day small startups get pushed around get taken advantage of get bad deals you name it that is very common selling your company to a larger one does not always mean a bright success for the entrepreneur Dalton Caldwell boosted his company I'm aim to the point that he could sell it to MySpace its peak there is a 25 million registered users we streamed music across the web we raised 80 million I think that's what I never came from so it was quite large at the time I think it was number 75 most popular web site in the US according to Alexa so it was pretty big however he sold it around 1 million dollars it was it was around there it was kind of a complicated deal but it was definitely less than the amount we raised and so this 1 million dollars exclusively went to the investors yeah like I said it was a there's a complicated deal with earn outs but essentially if you sell your company for less money than you raise then you don't get anyone and so in the end he did not get anything right yeah yeah Sylvan Kailash is the founder of Hobart in school on coding school in San Francisco where students do not pay tuition fees but give a percentage of their salary after they finished the school but before that he joined SlideShare as an engineer shortly before the company was acquired by LinkedIn when you work for a company you can get your Stoke option if you walk for a minimum of a year and so when we got acquired by LinkedIn it was I was working as a full-time employee from less than a year meaning that in theory I should have got zero right I should have got peanuts but because LinkedIn was nice they accelerating my vesting and so they were like okay we'll consider that you know you got this much so I didn't make a great exit you know like as people would think but sometimes yes entrepreneurs can make really great exits just like Alex success ago I would never have guests I would one day be there I started my first company in France in 2002 we moved the company to California in 2008 when you raise the series B we sold this company in theatres in 2012 and then I started a company called width dot AI which is an AI platform for developers and this company was acquired by Facebook two years ago so now I've been with Facebook since Mike Alex Nicholas met with bright success after working hard for two years on his AI startup called percept yo he received an email from a certain Mark Zuckerberg because as ironic as it may seem he didn't have a Facebook account at the time just like Facebook founder and CEO Mark Zuckerberg the other major companies in the valley show their interest for very promising tech startups just like like new tech companies is pretty active in looking at acquisitions and that's very vertical we've made a lot of pretty good acquisitions in the past if you think of where our business is today we have a lot of our really big business pyrrha that came from acquisition think of YouTube for example think of Android as well that is still pretty much and Duke of a llama dive strategy think of ways as when in my portfolio and so these are like just a few examples of many equations that we've made across across the u.s. so they matter some of them did well some of them less so one thing that's interesting is that cultural matters right you try to make sure that beyond oh I'd say the purely the the business question there's also some degree of cultural fit so that you you get a good sense that the people are benefiting way into the company the Facebook as a very interesting approach to acquisitions and try to keep the startup living inside Facebook and try to not break it down by integrating too fast and too much so when we joined Facebook we really became one team inside Facebook but still the winter day I team with all of you our product or even our culture remained as being remaining and expanding for two years now so it's yeah it's a it's a very interesting approach to to integration after receiving a proposal by Facebook among others Nicholas finally chose Apple for cultural reasons Apple there is no book there really translate what what kind of experience it is inside and that's what was also one of the IP I mean everywhere multiple appeals they care about privacy a lot and we cared about privacy a lot they really wanted to do mobile deep learning where everyone was in the cloud we wanted that the culture was about products and we wanted to deliver a really good product not only technological because we're coming from technological background science but we were interested in learning about how you deliver product Network cycle and also about the culture just in general even if it's very secretive it's really hard to learn about it unless you're inside so also about this kind of understanding of this you know immensely successful arguably company right so that's that's yep so it's really hard so I think it is special they all have special cultures and they are all very exciting to work for time most of them will have something to offer to use it's very depending on your character and we achieving life the environment that Facebook provides for small acquired companies like like else like weed are they I and I didn't think it was possible okay it's a freedom you get stealing your part I was a larger company is a mission you your inter family but you keep some some autonomy that makes you very very efficient that's I'm still very two years after still very impressed like that we've been melting in wall team we shipped a lot of the stuff we produce at perceptual in the release of the iOS 10 micro ser and also the iPhone 7 plus all of the stuff that we've been infusing at a perceptual has been integrated at least the seeds have been integrated in the in the parts are Apple so I'm very very happy about this because now my mom can touch the stuff I've been working on for so long you know every time she was asking about what are you doing and yeah you know research and then now she can actually touch it you know on our iPads indeed big corporations offer a completely different structure than a start-up also with regard to the working conditions it's a very different environment in you in a small start-up you basically have like little resources you don't have a lot so you have to be very frugal which makes you kind of on the edge and creative when you're in big corporation that the problems are a little bit different you have a lot of resources but you have a lot of corporate red tape in a way so it's a lot harder to kind of iterate fast but you can really interact very very deeply and have for example integrated and the human factor is very important there so you can you know talk to a lot of different teams to make sure the power gets released properly so very different things that you have to learn very different environments in a small team just be cooperation when you work for big companies there is a lot of things that are done for you by you know tools that are already been built out by also you know co-workers and then when you create your setup you're like oh damn I need to do it like if there is everything to do after I graduated I started to work for nature it was very flat in time a few like my bus was the city already we are not like ten minutes found on me and then when we got a quiet you know bad engine which is a 10,000 employee company my job totally change right like before you might you know one person to do you know multiple things let's say tensions and now you have one team you know six ten person to do every one of this itching right like you can produce more quality work and you can spend more time on details right that you might not have the time to do for a start-up as individual your parameter of action is like quite small right so you can you know ready that produce your walk when joining big corporations those entrepreneurs discover the standards of Silicon Valley for working for big companies Facebook is a very open company there is a lot of freedom like in many Silicon Valley companies you all judged on the results not on how many hours you spend during the day or and so some people will start at seven and an early I like to start early some some people will just come from the afternoon but work on light that's fine but it's obvious I mean forced by Silicon Valley standards it's completely obvious today some just facebook at facebook.com/dspacestv acknowledge that sometimes there is a noise or you can be disturbed but the improvement of communication that this boat is bigger than the loss of effectiveness because you have nice you can also recognize Facebook offices across the world because there is no sailing well there is a it looks like it's an industrial building that it's not finished it's it's a way to say nothing is really finished it's an ongoing we are building it's it's I'm going it's unfinished so it's a message actually it's not it's not a random design I honestly think the culture in Silicon Valley for working at companies is awesome I mean they give you it's not everybody here works super hard right and but it's not a it's not a it's not a like our focused like you have to work a certain amount of hours or you know per week culture it's more of like here's the job you need to get done get it done if it takes you like two hours or if it takes you 20 hours you know I don't care about how it happens just just get it done at least yeah that's how I see it right but people will they want to do better they want to do more so and then all these perks that are at offices like yeah if you can afford it why not why not have like your ping-pong machine your ping pong tables and your pool tables and all the snacks and and food if if it just keeps people working this is like Disneyland right I mean this network I guess it's like the Club Med like you know you're basically doing what you like and you you know since that since people really like this kind of stuff these days like you're being paid well and you can have really interesting lights you know the price of life of living here is quite expensive but so it's Disneyland for for people like us and it's like playing Lego all day and you're getting paid really well to do so and you interact with people all around here that are kind of as fascinated as as you are and you can learn a lot and and I don't know it's as I said it's like the Club Med of Eastern and so like really good commissions and general thing I know I'm really happy here and I think I'm in ER I think we cannot complain if you look around it's true that that's what the truth like with everything is very powerful to post-flight mater and I think it's not on your face I think there's a real doesn't need energy and there's a really like positive attitude in this place which is everything now is it always fun no it's not always fun we all have forums to solve we all have challenges and in my mind that's okay you have this concept of sometimes you have to be serious even if you're not wearing the suit I think is one of those like catchphrases I think it's true it's not because people now they look like very relaxed that done that working seriously and actually actually if you look if you look around you walk around the floors and Google you see a lot of people who are actually pretty intensely focused on their work so we are not just like riding bikes and chatting there's also someone somehow the of course [Music] you might think it's like a Disney World and it's like it Disneyland and everything all the companies are there and if I go there I'm gonna make it big right but it's it's so much harder than that anyone who tells you that being an entrepreneur is easy is fooling you it's really hard because there's going to be a lot of days that are really tough things aren't gonna go well you're gonna hit roadblocks or potholes in the road and and you're gonna have to figure out how to navigate around them the first thing I learned when I came here was like oh you can actually fail and then people ask you what did you learn from it it was such an accepted part of the culture that you can go start a company that you can go work at a startup part of being in the Stanford networker going to school there is to really imagine that you could do this too and that this is actually a totally valid career path don't make enemies and think about people you meet as potential future advisors investors co-founders partners this is what's amazing about an environment like this you end up getting something back ultimately it seems like oh if it's another night sometimes some people will have also - - because they know at some point you'll get back to them right there's so many companies and people who are who are trying for that dream and are trying to make it happening and and they just are put in hard work like you don't even hear about them or anything and like I said you always have to be having fun so if you're having fun what's the point [Music] [Music] [Music] [Music]

Channel: Mehdi Balamissa

Views: 44,658

Rating: 4.9027553 out of 5

Keywords: Silicon Valley, Silicon Valley documentary, startup, entrepreneur, entrepreneurship, Berkeley, Y Combinator, 500 Startups, Tech Crunch, Crunch report, Tito Hamze, Mehdi Balamissa, Partech Ventures, pr

Id: 9boLWQi1-Vo

Length: 53min 46sec (3226 seconds)

Published: Wed Nov 07 2018