What it takes to found a successful start-up

Andreessen Horowitz partner Scott Weiss says start-up founders should first work for a venture capital-backed Silicon Valley start-up to maximise their chance of success.

Writing for TechCrunch, Weiss – who was co-founder of Cisco-acquired networking play IronPort Systems – mulls over the question of what it takes to found a successful business, stating outright that no experience is better than working for a well-run start-up in tech’s mecca.

“I spent five years at a large technology company, two years at business school, and then two years in consulting before I went to a start-up. Even with that experience, I still believe I was too green to jump right in and start a company,” Weiss says.

“It’s not that those experiences weren’t valuable — it’s just that the most valuable lessons for successfully running a startup come from actually working at a well-run start-up. I’d go even further to assert that the start-up should be based in Silicon Valley and backed by venture capital.”

The venture capitalist goes on to expand on why he thinks a VC-backed Silicon Valley start-up is a better training ground than most, by arguing that young entrepreneurs probably don’t have the experience to pick out a well-run company when they’re fresh out of university.

Instead, he says, VC’s who’ve backed a company have done this vetting for young wannabe employees, while the funding they’ve injected helps boost the start-ups credibility as well as the resources it has available to build the business.

On the Silicon Valley question he writes, “within each technology region, there is a dense network of specialised talent, financiers, and service organisations (eg legal, PR, recruiting) that form a start-up ecosystem. Silicon Valley is by far the largest ecosystem and therefore holds the most potential for job opportunities and the strongest network”.

Weiss also draws on his own experience, lobbing into Palo Alto in 1996 with no contacts and $US100,000 in student debts to flesh out a list of five steps any budding entrepreneur can take to start realising their dream:

• Prepare for a long haul – “You’ll need to move out here [Silicon Valley] without a job while most of your friends have jobs locked up well before graduation. If you don’t have enough savings, you may need to get a part-time job while you job hunt. If this step makes you nervous at all, you may want to reconsider the entrepreneurial job choice.”
• Research – “Start by downloading the last four venture capital surveys from the San Jose Mercury News website. These PDFs summarise the last year of companies that have been funded by VCs. Included are the company name, amount raised, VC involved and headquarters city.”
• Focus – “There are many different types of start-ups and many different jobs within a startup. If you can code, there will be obvious roles within engineering, sales engineering or quality assurance. If coding isn’t for you, you’ll need to figure out the best entry-level role to position yourself ... The more you begin to focus, the more credible you’ll become.”
• Make a target list – “After doing all this research, narrow it down to 20 to 30 target companies and make a market map or web of every possible link to the company — names of the investors, management team, PR firms — every potential connection (I’m thinking similar to an FBI board targeting a mafia family, but not quite that creepy).”
• Start networking – “I went to every meet-up that had the word “Stanford” in it. Before I knew it, one coffee led to another and after awhile I started asking smarter questions and got stronger referrals.”

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