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Deep Dive: 10 Ideas from Naval Ravikant
Sunday Deep Dives condense days of research into 10 insights from the world’s best founders. Upgrade to Startup Archive Pro to read today’s full report.
Today we dive into 10 ideas for founders from Naval Ravikant:
You only have to be right once
Networking is overrated
Raising money is an emotional sale, not a rational sale
A long-term mentality is the single-most important indicator of an entrepreneur’s success
To operate at peak performance, you have to learn how to tame your mind
Naval’s checklist for starting a company
Investors know how difficult startups are
Stay small until you’ve found a repeatable business model
The curse of venture capital
The future will be almost all startups
#1 You only have to be right once
In the clip below, Naval reflects on how it took 13 years after starting his first startup when he was 23 before founding AngelList.
“Entrepreneurial ventures fail all the time. Most of my companies failed. I actually started seven companies, and I’ve launched about 40 or 50 projects over my career. And AngelList is the first one that I would truly say is product, market, entrepreneur fit for me that might succeed down the road.”
He tells the audience:
“It’s a low hit rate over your career, but you only have to be right once… So just keep trying, just keep iterating… a lot of it is market timing and you learn a lot of lessons.”
In his essay How To Be Successful, Sam Altman writes:
“’I will fail many times, and I will be really right once’ is the entrepreneurs’ way. You have to give yourself a lot of chances to get lucky.”
#2 Networking is overrated
“Don’t spend your time doing meetings unless you really, really have to. I really think networking is overrated. There’s all these articles about how you’ve got to network more, and it makes me want to vomit.”
Instead he suggests:
“Go do something great and your network will instantly emerge. If you build a great product or if you get a good customer base, I guarantee you will get funded.”
Recruiting (customers and employees) and learning from really smart people are two exceptions. But don’t worry about building relationships with VCs or going to conferences early on. Just focus on your product, your team, and your users.
#3 Raising money is an emotional sale, not a rational sale
“The process of raising money from an investor, a friend of mine once joked, is the process of young men and women seducing old men and women. You’re essentially trying to get them to look at you, and to see themselves in you… And so it is an emotional sale. It is not a rational sale. And you have to understand that at its core level.”
As Naval explains, emotional sales do not happen via checklists. For example, it’s rare to fall in love with someone because they check a bunch of boxes (e.g. pretty good looking, pretty nice, pretty smart, etc.).
“Usually there is one thing about the person that is so overwhelming that makes you fall in love with them. And in that same way, when an investor is deciding to make an investment in a startup, they usually look for one exceptional characteristic about the startup that they truly adore.”
Naval believes there are four categories in which you can really excel:
Team. “If you can show that you have done something exceptional, other than starting this company, that’s a huge thing.”
Product. “A lot of entrepreneurs make the mistake of showing investors a half-finished or not-working product and then try and explain their way around it. The reality is investors are users also, so they’re highly visual. They want to see it. They want to play with it. And they’ll make up their mind very quickly.”
Customer traction. “If you have users and if those users are organically joining and growing, that’s very good. If you have to say: give us money and then I’ll go get customers, they don’t like to hear that.”
Social proof. “Social proof is basically looking at what other people are doing and doing that. So in the investing context, what this means is if you have one investor committed, very often you can get more investors interested. Or if you have a famous entrepreneur or advisor who’s very knowledgeable, involved with with the company, that can help bring investors.”
Naval concludes:
“So those are the four criteria that I think most investors look at, and you really want to be exceptional at at least one of them.
Full video: SVC2M, Kenote Session by Naval Ravikant
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