Over the past decade, tech entrepreneurs and innovators have scaled some of the industry’s highest peaks and struggled through its lowest valleys. In that time period, I had my share of successes and failures: I was part of the founding team at PayPal, I co-founded and ran LinkedIn, where I am now executive chairman, and I have advised and invested in more than 80 high tech start-ups, including high-fliers such as Facebook, Zynga and Flickr, as well as a number of others with more limited elevation. Looking back on the lessons I’ve learned by partnering with great start-up founders and being a part of the creation and growth of a number of companies, I have realized the path is more challenging than it might initially seem.
The summary of advice people often give entrepreneurs seems simple enough: Identify a market opportunity that supports a massive company with strong revenue, incredible growth and high margins. Identify a market opportunity that has either insignificant or significantly outdated competition. Develop a core product or service that your small company can develop and use capital efficiently. Build your start-up by recruiting great talent and establishing a powerful and agile organization that can adapt the product or service as the market changes. Aim for a product or service that has a powerful, sustainable competitive differentiation –- like network effects.
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Author: Reid Hoffman
