Elad Gil

Quotes are word for word from the source.

• Social network value

  “In general, most of the value of a social product is the network and interactions of the people using the product, with the remainder of the value coming from the product software scaffolding itself.”

  Our noteElad discusses why the network effect is more important than the software itself in social products.

• Beating incumbents

  “To beat an incumbent as a startup you usually need to either build something so dramatically better that you overcome the distribution, capital, and pre-existing product moats of the incumbent, or you need to focus on a brand new customer segment”

  Our noteElad explains the high bar for startups competing against established companies.

• The 10X rule

  “In general you need a 10X better product.”

  Our noteThe minimum threshold for a startup to displace an incumbent.

• Innovation through infrastructure

  “Google's approach to building distributed systems across a large number of machines spawned a variety of technology innovations such as Map Reduce.”

  Our noteElad discusses how Google's custom hardware approach led to significant software breakthroughs.

• Market selection benefits

  “Being in a hot market increases the ability to hire great people, get press and awareness, raise money, and eventually exit via M&A or IPO.”

  Our noteElad explains why choosing a rapidly growing market is a strategic advantage for founders.

• Cash burn risk

  “any company burning rapidly through its cash will likely fail.”

  Our noteElad emphasizes the danger of high burn rates in markets that take a long time to mature.

• Vetting secondary buyers

  “Don't get stuck waiting for them to raise a fund to buy your shares.”

  Our noteHe warns against buyers who offer a price but don't actually have the cash ready.

• Selling the dream

  “Before launch, investors can imagine whatever they want for your product. This is called "selling the dream".”

  Our noteExplaining why fundraising before launch can sometimes be easier than after a slow launch.

• Avoid technology-first traps

  “AI for AIs-sake alone is simply a technology looking for a problem - and those sorts of startups tend to fail”

  Our noteElad warns against building AI companies without a clear market need or problem to solve.

• Startup reality

  “People who have not started a company often do not realize how hard and painful the very early, raw days, of a startup can be.”

  Our noteElad discusses the common misconception about the difficulty of the earliest days of a company.

• Negative signaling risk

  “When you go out to raise a series A, investors will wonder why you don't raise the money from the venture fund that already invested in your seed.”

  Our noteHe explains the signaling risk when a seed VC doesn't follow on in Series A.

• Regional Market Concentration

  “NEW UNICORNS The regional nature of private tech market cap continues to dominate. The big shifts over the last year include: NEW UNICORNS SINCE OCTOBER 2020 (1) United states: Over 67% of the new unicorns by # are in the USA with 154 total.”

  Our noteElad discusses the geographic distribution of new billion-dollar startups in 2021.

• Lower development barriers

  “This lower bar to development means that despite its sparser engineering and product talent pool, NY startups can get up and running with fewer people and still pull off amazing things.”

  Our noteHe discusses how modern tools allow small teams to build significant products.

• Honest communication

  “If you can't call each other out and learn from mistakes, then your startup won't be able to advance. The basis for the above is mutual respect and trust”

  Our noteThe necessity of being able to give and take critical feedback under stress.

• Founder reputation

  “Don't worry about your reputation being hurt. Savvy investors see founding team issues all the time and understand early teams don't always survive the stress of a raw startup.”

  Our noteReassuring founders who are asked to leave that their career is not over.

• Company culture evolution

  “I think a lot of people forget that, because now Google is almost viewed as the opposite in terms of a lack of culture and all this stuff.”

  Our noteElad reflects on how Google's intense early culture has changed over time.

• AI and layoffs

  “Most of the "layoffs due to AI" announced so far are probably just companies that overhired during the COVID zero interest rate environment slimming back down.”

  Our noteElad discusses whether current job cuts are truly caused by AI or just post-COVID corrections.

• Early equity gifting

  “One of the things I regret not doing when I set up Mixer Lab (since acquired by Twitter) was that I did not gift any stock to my family members when incorporating.”

  Our noteElad reflects on a missed opportunity to provide for his family during his first startup's formation.

• Capitalizing on Change

  “The smartest entrepreneurs ask themselves "why now?", "what has changed?" and build products that take advantage of newness or big trends that are reshaping our world.”

  Our noteElad explains how successful founders identify trends before they become obvious.

• Market correction opportunities

  “If your company has good underlying economics, can grow at a good rate, and is not dramatically overvalued, this could be a golden period for you”

  Our noteExplaining how healthy companies can thrive during a market downturn.

• Software transformation

  “Software, the Internet, and AI are transforming a variety of industries on an ongoing basis and I am a huge fan of software is eating the world pmarca statement.”

  Our noteElad discusses his belief in the ongoing impact of software across industries.

• Closing candidates

  “You can not count on anyone joining until they show up on their first day.”

  Our noteA reminder that candidates can back out even after accepting an offer.

• Accelerating development cycles

  “as you reach certain capabilities within a model, you can start to accelerate the pace at which you can build the next model, because you can use, say, a GPT four level model to do rlaif”

  Our noteElad discusses how existing high-performance models can be used to build better models faster.

• Perceived time duration

  “Awkward moments always seem to last 5-10x longer then a normal moment. If you can create a lot of awkward moments time will pass slow.”

  Our noteElad discusses how to make life feel longer by creating awkward social situations.

• Raw capacity to learn

  “The strongest entrepreneurs I have worked with take in multiple sources of information on a topic, synthesize the information and draw the conclusion that applies to their situation, and then drive that conclusion.”

  Our noteElad Gil explains why the ability to synthesize information is a core trait for success.

• Board member impact

  “A great board member can add enormous value and truly be helpful to the company. A terrible board member can truly screw a great company up.”

  Our noteThe quality of a board member can determine the ultimate success or failure of a startup.

• Founder board rapport

  “The independent board member should be someone you feel comfortable calling up to ask a dumb, newbie question about your business.”

  Our noteTrust and open communication are essential qualities for an independent director.

• Ecosystem health signal

  “We view dispersion of market cap across many companies as a broader signal of startup ecosystem health.”

  Our noteElad explains why a diverse set of successful companies is better than one dominant outlier.

• Importance of network

  “I view this as the most important thing to optimize for in a job. Network includes both who you work with, and for, day to day.”

  Our noteElad explains why the people you work with are the most critical factor in career decisions.

• Setting round terms

  “The entrepreneur sets the terms, often by bringing on smaller investors with no leverage first to get early commitments for the round.”

  Our noteElad explains how entrepreneurs take control of valuation in a party round.