Companies Matter Faster

Fred Wilson’s post on “Counting the Hits” led me to William Mougayar’s list of the universe of companies valued at more than $250 million. What I’d really like to see is some data on the *time* it took those companies to achieve those valuations. A chart that plots the time to achieve a $250 million valuation against months from founding parameterized by the year of founding would be quite telling. My guess is that the cohort of companies founded in 2009 and later have been able to achieve that valuation at a faster clip than their peers founded earlier.

I have a thesis that companies matter faster than they ever have in the past. Whatsapp, Instagram, Nest, Snapchat, Oculus, Tumblr and others achieved significant exits after being around for about 5 years or less. Several others have achieved large valuations in their “youth” via funding rounds as well. It doesn’t seem like this phenomenon is limited to lightning in a bottle consumer startups either. Similar trends are occurring on the enterprise side as well.

These companies may be the outliers, but they’re also the ones having an outsized impact on the industry. This has big implications for VCs and corporates alike. When the ability to disrupt an industry happens at a faster rate, you need to engage earlier in the startup lifecycle. This is one reason more corporate VCs and innovation groups are getting involved at the seed stage. Successful startups seem to be growing up faster and faster. And like promising athletes, they seem to be turning “pro” and asserting themselves on the biggest stages at younger and younger ages.


Right to Win

When thinking about new initiatives, lots of big companies talk about needing the “right to win.” I’ve never been a fan of using this entitlement definition of ‘right’ when talking about new market entry.

Yes, companies need to make sure they have the ‘right’ assets and resources to win — meaning the “most favorable or desired” assets and resources to service the opportunity. What they don’t need is the “moral or legal entitlement” to win.

This current age is characterized by a decided disrespect for rights of way. The future yields for no one. Google becomes a car company. Amazon becomes a media company. Nike becomes a technology company. Companies must not wait to till they feel they have the right to win. In this environment, you’re only right if you win.

The future isn’t made by those you feel entitled. It’s made by those you feel empowered to try.