I’ve been in Silicon Valley in northern California for the past few days meeting some interesting folks, and listening to some great presentations at StartUp School @ Stanford University. There was an interesting mix of speakers from Jeff Bezos, Amazon.com’s billionaire founder to Peter Norvig, former head of computational science at NASA and now Google’s research director. Most of the audience spent the day browsing the web and programming as some others have pointed out, but I imagine there were a small few like myself that actually listened to all the speakers.
One particular series of events that unfolded silently between Greg McAdoo a partner @ Sequoia Capital and David Heinemeier Hansson the inventor of Ruby on Rails and partner at the growing software company 37signals was the question of whether or not it’s better to go for the big grand idea as an entrepreneur, or solve a simple problem and recursively grow your business. It is truly an interesting debate.
Find the Big Wave, and Learn How to Ride it.
This analogy was the foundation of Greg’s talk and will likely be what keeps their marketing department in work for the next little while. Everything he talked about was related back to finding a big wave and learning how to surf it. YouTube found the wave of online video and we’re able to stay up on their surfboards long enough to successfully ride the wave to success. The same goes for Facebook and social networking; they weren’t the first company to try and ride the wave, but they we’re clearly the best and staying up and riding it.
While I value the information Greg provided, he really made it seem that unless you’re going to spend the rest of your life fishing for the next big thing and generate 1×10^10 your investment size :), don’t give them a call.
Another interesting point he made was that aside from advertising, social networks don’t have a clear monetization strategy at this point. Sequoia anticipates that digital goods and games taking place within these social environments will be big money in the coming years.
“F*ck the Wave”
David was two speakers after Greg, and boy did he come out firing. David feels that young entrepreneurs are being brainwashed into thinking that they need to make the next Facebook to be successful. By creating small, incremental growth, it is his belief (and I agree) that you give yourself a better chance at success. Another interesting point worth noting is that side businesses just might give you a better chance at success. Many of the entrepreneurs I met at the conference had given up their day jobs and were working 12-14 hours a day on a startup. Only having a few hours a day to work on something really focuses your energy. Keep that in mind the next time you allot huge blocks of time to accomplish something.
Gain Critical Mass and Offer Free, or Build a Great Product and Charge
That is what it boils down to; either your product reaches enough people that it doesn’t matter you’re not making money and you have the user base to support adding a model later, or you build something great and charge users who also think it’s great. I had a chance to chat with David outside of the conference and it was clear he is passionate about charging for products and services that solve a critical problem. No one seems to care about you (from a VC standpoint) when you’re running a profitable business cough whydowork cough cough :), but if you have something viral or very ‘web 2.0′ you’re at the top of their list and it was refreshing to hear from someone like David that can validate small business success.
Watch Both Presentations and Judge for Yourself
Greg McAdoo “Ride the Wave” - here.
David Heinemeier Hansson “A Secret to Making Money Online” - here.
It’s really interesting to see total opposites during the same day of presentations. Both have some great pointers, but you be the judge of which model makes more sense for you! 
If you enjoyed this post, make sure you subscribe to my RSS feed.!
