Matt Clifford: Hello, and welcome to The Entrepreneur First Podcast, where we explore the stories and thought processes of some of the world’s most ambitious entrepreneurs.
My name is Matt Clifford. I’m the co-founder and CEO of Entrepreneur First. And I’ll be your host for this episode.
Today, we’re going to give you a taste of what it takes to found a unicorn, that is, a startup worth over a billion dollars. On this very special episode, we have two guests who have built such companies.
The first is Reid Hoffman. Reid probably needs no introduction but, just in case, he’s the co-founder of LinkedIn, which he sold to Microsoft for $26 billion, and now a partner at one of the world’s leading venture capitalists, Greylock Partners. We’re also lucky to have him as an investor and a board member at Entrepreneur First.
Our second guest is Alex Dalyac. Alex is the co-founder and CEO of Tractable, a company that EF funded back in 2015. Tractable has just become EF’s first unicorn. And we recorded this special episode of the podcast for the live virtual audience to mark their achievement.
So, sit back, relax, and hear how these two founders built their billion-dollar companies.
So, I’ve told you the Tractable is now worth a billion dollars. But what do they actually do?
I asked Alex to explain.
[00:01:36] Alex Dalyac: What Tractable does is computer vision for accident and disaster recovery. The basic premise is two facts. When you get into a car accident, getting back to normal can take you up to 20 days, but actually fixing the car is only 8 hours of work. So that huge deadweight loss, we think computer vision can dramatically accelerate. And that’s what we’re doing to about a million households a year right now, grown 600% in the last 24 months.
The second fact is climate change makes natural disasters worse, and those natural disasters… I’ve got haze outside of my flat in New York City right now from the wildfires… leave people without a roof over their heads for months. Same thing here. Computer vision can help accelerate that.
[00:02:23] Matt Clifford: Tractable’s achievement belongs to the founders but it’s also an important moment for talent investing the new model of venture capital that EIF pioneered, and that for a long time seemed a pretty controversial idea.
The core idea of talent investing is that it’s possible to identify and fund great founders before they start a company. We seek out individuals who we think could be exceptional entrepreneurs, back them pre-company, and support them to find a co-founder and build a company from scratch.
You can imagine the questions this raised when we got started. “Don’t you suffer from adverse selection? Can the founders really be mission-driven? Will teams built this way hold together?” And many more.
Tractable’s team has answered these questions pretty conclusively. They’re one of the most dedicated customer-obsessed teams you could hope to meet. And they’ve built something that will have enduring value.
As you’ve probably gathered, at EF, we want to back many more founders like this, people who aspire to build enormous companies. And our job is to help them start that journey.
Back in 2017, Alice and I wanted to get Reid Hoffman involved in EF because he’s one of the world’s most successful company builders. I asked him to tell us how his journey into the world of entrepreneurship began.
[00:03:30] Reid Hoffman: I actually went to Oxford to study philosophy. My interest is always people. So, how do we reason? How do we think, how do we talk to each other? And then I realized that actually, in fact, entrepreneurship would actually be the higher-scale impact because this kind of software medium that we create in this world around us allows us to express our identities, communicate with each other, find other people, collaborate, form relationships, strengthen relationships, and engage in work and life and play, and all the rest of that. And so, I went back to my undergraduate university, Stanford, which was in Silicon Valley and said, “Okay, how do I start doing this?” And I was like, “Well, first you get some experience shipping commercial software.” So, I did that.
But I wanted to move quickly to building the new kinds of network products that I want to do. So my very first company, SocialNet, was always a learning experience. And the view is how do we help ourselves as individuals and in groups make each other better, like evolve in capabilities and wisdom and compassion? And instead of doing that, what I’ve done, both as an entrepreneur and as an investor.
[00:04:35] Matt Clifford: Meanwhile, for Alex, who just graduated from the London School of Economics, it was a love affair with a summer internship at blitzscaler, Rocket Internet, that made him realize he wanted to build his own company.
[00:04:45] Alex Dalyac: I wasn’t going to be an academic. Unfortunately, I was going to be much worse than that. I was going to probably be a banker, which is what people did at London School of Economics in the UK back then. I remember applying for internships, and under banking, you had hundreds, under accounting and consulting as well. On entrepreneurship, you had one. And it was this company, which is not necessarily Silicon Valley’s favorite, yet incredible blitzscalers, Rocket Internet.
And so, I did an internship at Rocket Internet over the summer and just fell in love with entrepreneurship. And it was just conviction from there on that I’d want to do nothing but build a company.
[00:05:29] Matt Clifford: There are more than 700 private companies valued at more than a billion dollars around the world today. These companies vary a lot in the services they perform and the products they provide. But one thing that most of them have in common is they’re, at heart, technology companies.
I asked Reid to tell us a bit more about why technology so often plays a role in building huge companies.
[00:05:45] Reid Hoffman: Part of what it is to be humanity evolves as we evolve our technology. Now, part of the technology question is the relatively few paths by which an individual can accomplish very massive scale. And they tend to be, especially on the entrepreneurial, when you kind of say, “Hey, I’ve got an idea. I’ve got a drive, I’ve got some talent. I don’t want to do this,” technology is one of the most central ways because, of course, that can, in various ways, spread. And it’s one of the reasons why, kind of within blitzscaling, the key thing is this is how technology companies of the future are being built, 80% plus. And, by the way, all companies are on route to becoming technology companies.
When you think about this, it’s like, all right, Alex is saying, “Hey, this is a critical thing that could make people’s lives a lot better by not having kind of like 20 plus days of my car out of commission, affecting my commute, affecting my quality of life. And now, with software, I can radically shorten that and make lives a lot better.”
Well, that’s partially because there’s this old industry that kind of doesn’t understand the new technological platforms and new ways that you could operate this. And it requires a kind of a new entrant to say, “We’ve reimagined, we’ve seen the technology, we’re rebuilding something like it’s an application of computer vision and deep learning is essential for the next great services for consumers fitting within the kind of economic ecosystem that we all live and make our lives better on.”
And so, that’s where technology plays, and that’s also one of the reasons why the techniques about how we build these product services and how we build the companies behind them is one of the things that we refine. And, obviously, that’s one of the things that Entrepreneur First, in going and saying, “Hey, if you would like to build great new technology companies, we’re refining them, where we’re building a network, we’re sharing information, we’re sharing connections. We’re sharing what is the modern ability to do this.”
[00:07:38] Matt Clifford: Tractable has been a breakthrough company, not only for EF but also for the insurance industry as a whole.
I asked Alex how his experience at EF helped him understand how to make use of technology to build his business.
[00:07:50] Alex Dalyac: One thing Entrepreneur First taught is we need EF companies to solve a tech problem, really, really deep tech problem that nobody else has solved. You’ve got to be the first ones there.
Another thing that’s amusing is one of the very wise things that Y Combinator teaches is start with a personal problem for building your own company. That is absolutely not, weirdly, how Tractable started. Maybe the EF approach is actually known as start with a huge tech breakthrough.
In 2012, you had a huge breakthrough in deep learning where it was the first time that we took these image net data sets that weren’t just hundreds of thousands of images, but 15 million, each labeled with what’s on the image. And we fed that to deep learning algorithms, which… or convenance, which had been around since the 90s but, for the first time, instead of being run on some CPUs, they said, “We’re going to reprogram GPU’s and run it on that, and the compute power will be a hundred times stronger.” And that led to a massive breakthrough where, all of a sudden, for the first time, we saw algorithm starting to be able to understand what’s on an image, even when it’s very cluttered and there could be all kinds of objects on it. And that was just previously impossible.
So, we became obsessed over what are the real-world image classification tasks that, therefore, these algorithms are going to be able to start doing instead of humans?
[00:09:08] Matt Clifford: Of course, technology is an important foundation but if you want to reach a billion-dollar valuation, the most important thing is customers.
Tractable’s customers are mainly large insurance companies. I asked Alex to explain his enterprise sales strategy.
[00:09:21] Alex Dalyac: In terms of scaling revenue, what we found really interesting is most tech companies, you think of scaling revenue by going from ten thousand to a million customers. I think what’s really interesting, in our case being, going specifically after enterprise customers, the biggest companies in the world, is you can also scale by going from a six-figure to an eight-figure contract. So, you kind of have bi-dimensional scaling.
And, interestingly, the key to us was actually scaling the contract size and realizing that, for a large insurance company, we could help them save eight figures. We could help them or generate that much value in terms of improved customer experience and greater efficiency. And key to that was really being able to say, “Look, every time your customer has an accident, we’re going to be able to help.” And there’s lots of workflows there. You know, “Sometimes I take my car to a shop. Sometimes I just want to get paid cash. I want to get it fixed. I want to take it to my own shop.” And when you’re an enterprise world, there’s just so many workflows that the key has been being able to attain 100% account penetration.
[00:10:23] Matt Clifford: Reid spent a lot of time thinking about scaling. He even wrote a book on the subject, Blitzscaling.
He gave us an insight into how he thought about growth strategy at LinkedIn.
[00:10:34] Reid Hoffman: Small differences and how you go to market can really have an amplifier. And if that plays back into what your product services, then, oh, my God, your product or service should be that way. And so, these each play different ways. And one of the things, for example, Alex said that was very smart about Tractable, was to say, “Hey, here’s a way that we can start applying this technology. And we have actually reasonably good error bars.” So, that means that people can start adopting it because the downside of a missed categorized case is relatively limited, just an economic analysis. And you can very, straightforwardly, do the kind of calculus about like, “Okay, why should we start adopting this right now?” And then refine, of course, and iterate as you’re going.
And so, in the LinkedIn case, the theory was, well, first you wanted to build a network of professionals who are all there with their identities, helping each other, connecting each other with opportunities, where also companies and recruiters and entrepreneurs and managers can come and find you.
And in our Series B deck, I published, it was to say, “Hey, this is how we went about it. This is what we learned. This is what we do. Here’s what I do differently after doing this deck, how I’ve learned, because each time you do something, you should be learning how I would improve it the next time.” We thought it was going to be individuals expensing it to their companies because we thought, “Okay, it’ll be a business activity. We’ll have a set of features.” But, on the other hand, the work that goes into talking to an enterprise is a huge amount. You know, Salesforce and RFPs and all the rest them go to market, along with your product engineering how to operate. And you’re looking at what are these places that gets you to a scale where you have a kind of a strong growth curve in your business because first mover isn’t usually what matters. It’s first mover to scale is most often what matters. And so… Anyway, that was part of how we looked at it.
Now, that being said, LinkedIn was one of those companies that innovated how it acquires businesses because, essentially, one of the ways that the LinkedIn sales force works is it sees new companies coming in and starting to actively muse. And it says, “Oh, we should reach out to this company and say, “Hey, we have an enterprise suite, and look, here’s all how you’re already using it, and here’s our fit from our enterprise suite in business.”” And so, that network allows innovation on the go to market and it isn’t just, “Well, okay. We’ll double our sales force.”
[00:12:44] Matt Clifford: Building strong relationships with customers is key to success.
I asked Alex about how Tractable works on building customer trust.
[00:12:52] Alex Dalyac: So, a big next chapter for us, as alluded to the beginning, is moving from cars to homes. And from getting you back more quickly, not just after an accident, but after a natural disaster.
So, actually, last week, we published this in the Japanese news that there will, unfortunately, probably be typhoons again this autumn. And when they strike, it becomes impossible for like a manual workforce to deal with. These poor Japanese households just end up with no proper roof on their heads for months waiting for someone to show up and inspect, get their payout, and then try and get it fixed. We want to try and accelerate that. But the fact is our AI is not ready. We do not have an AI that, today, can completely create a end-to-end accurate estimate of the cost of a house because that’s next-level complexity. So, it’s a whole other ball game.
But, to your point, the scale… So, the big difference is that now we have customer trust. They’ve seen us go from young scrappy little company to a fully automated AI system on the vehicle side. We also have all of the top five Japanese insurers as customers. And so, we now can get access to pooling the historical data. We now have the funds to kick off digitization projects to be able to amass that training data faster. And yet, none of that would be possible if we didn’t have the scale.
[00:14:08] Matt Clifford: Since to take a company from zero to billions requires great technology and a great sales and marketing strategy. But you’re not going to have either of those things without great people.
Tractable has built a world-class team. I asked Alex about the challenges he faces in hiring, motivating, and retaining new talent.
[00:14:28] Alex Dalyac: The hardest thing up until maybe now is, as a young founder, I always have the bias of why would someone exceptional and more experienced than me want to work for me. That doesn’t make sense. I feel weird hiring people with more experience. You’re cutting off 99.9% of the job market. And so, what was huge for us, for Raz and I, we’re both straight out of college, was Adrian, a third co-founder who’d co-founded Lazada, which is kind of an Alibaba in Southeast Asia, come in and say, “No, no, no. You know, you need to set the bar extremely high. And of course, people are going to love coming to work for you.”
And I think having that experienced business exec as third founder is just so important. Because, once we got over the first few humps and we started getting world-class candidates, each incremental hire was easier because candidates will go and identify with the other team members. And I think that’s been something I’ve had to fight against like all the way up until now hiring senior executives. I think now that we’re a unicorn, it’s probably different.
[00:15:26] Matt Clifford: Reid, meanwhile, told us that choosing the right people to work for your company is a critical part of any entrepreneurial journey.
[00:15:33] Reid Hoffman: This is one of the things that’s awesome about entrepreneurship is that there’s a whole tool set, and you solve problems in multiple ways. And so, what Alex is mentioning is, generally, it’s better to have two to three co-founders than one because the diversity is skillsets adding in.
Another thing, which I think is also really key, is that you’re continually bringing in new talent, and the new talent has skills and capabilities that enhance the group. And sometimes that new talent is an executive or the new talent is even better talent at solving problem X, Y, or Z.
Now, I think part of the thing for Alex, and for all the other folks out there, is to say, “Well, actually, in fact, there’s a bunch of really valuable things,” like figuring out a really valuable market before other people have, maybe haven’t originally been contrarian and write about it, and then making some traction, assembling a company that is on this mission where the mission resonates with people.
One of the things that I think is really fundamental in talent is that everyone wants to be a hero on the thing that they’re doing. And so, you enable them a path. Someone who goes, “Okay, I’ve been an executive for 10 years or have this but here is a way in joining your amazing company, your mission, that I can be a hero.” And sometimes my hero is, “I’m bringing something you guys don’t have!” Right? “And that will be really important about how we all succeed together.” And that’s just part of the entrepreneurial journey.
[00:16:52] Matt Clifford: Another challenge, when building businesses at scale, is dealing with competition.
Alex explained how you can use your professional network to stay ahead of the competition.
[00:17:01] Alex Dalyac: Absolutely all the tech giants are trying to build computer vision platforms, visual systems, you send it an image and it can tell you as much as possible about the image. But it’s just not going to get to the level anytime soon, I think, of being able to appraise vehicles at that level of granularity, that that data is not even available openly online. You need to work with a whole bunch of insurance companies for a certain amount of time for it.
And we’re fortunate to have some network effects as well because, actually, you’ve got repairers and you have insurance, right? And so, every repairer of a car or a home is going to work with every single insurer out there. So, if you can get a big insurer to say, “This platform is fantastic. I’m going to ask all of my repairers in my network to adopt it,” there you go. Now you’re really, really easy to adopt for the next insurer.
[00:17:50] Matt Clifford: An important ingredient in Tractable success has been its ability to raise capital. Alex and his team have raised more than a hundred million dollars from world-leading VCs.
He told us a bit about how Tractable has pitched its investors.
[00:18:00] Alex Dalyac: There’s definitely a bunch I wish I would have done differently because we have never managed to get the top-tier Silicon Valley VCs really interested. They’re not in any of our rounds. This last one was the only one where we had one of the top tiers really saying, “We would love to lead.”
And, if I reflect on why, I think one issue was that we didn’t have proprietary groundbreaking technological breakthroughs. I think our timing was incredible, right? We were to market with the deep learning breakthrough out there. If one of us had been the author on one of those top 1% deep learning papers, winners of the image net competition, no problem. We would have secured funding. We didn’t have that.
The second thing is we also didn’t have a hundred-billion-dollar [town 00:18:47] because we didn’t go horizontal. We started vertical. We want to go full-stack and not just deliver a great technology but deliver a solution. If you’re the platform that interconnects people who are owners of the cars and homes, their insurance companies, all the government agencies like FEMA that are coming in to help, and the people that’ll do the repairing, the repairers. If you’re the visual intelligence platform that connects all of them so that the whole thing gets done 10 times faster at a better cost for equally good outcomes, then you could probably end up charging a fraction of this two trillion dollar. That’s a material company.
So, the second amusing thing is we have going 600%, we’re into high eight figures of revenue but we only have 5% of the US market, and we’ve just announced probably the most prestigious one. So, the odds that we’re going to go from 5 to 70%… in Japan, we are at 90… are pretty high. And so, it’s probably a good chance looking more mid-term.
But then, even looking long-term, what I find fascinating, actually, is that insurance is basically protecting every facet of the economy. And when you’re coming in at the client, that’s the moment where you’re assessing the value of the things that have gone wrong. Our AI, now, is one where you can pull out your phone, scan your car, and we can understand the damage to the car. That’s also important when you want to sell that car, or when you want to insure that car, or when you want to refinance your loan on that car. Every time, today, you need to book an appointment with someone, they’ll come check it out. It’ll take five days, and then they’ll give you a quote. And it’s super high friction to shop that around. Imagine what happens if you’re pulling out the visual expert in your pocket, and it is immediately giving you price-compared quotes for each of these; insurance sale, loans, repair. Each of these are trillion-dollar industries. And that’s just the car. We’re doing this for the home.
[00:20:48] Matt Clifford: As an investor, Reid has backed some of the world’s most exciting companies like Facebook and Airbnb and, of course, EF itself.
He shared his views about the value that investors can bring and the role they play beyond just providing capital.
[00:21:00] Reid Hoffman: Your average top-tier VC looks at somewhere between 600 and 800 companies per year and says yes to zero to two of them. That’s the kind of raw math of it.
Roughly speaking, one of the things is, for the top-tier Silicon Valley investments, it’s if we succeed, it’s going to be massive. This is one of the reasons why I give the advice of contrarian and right. Because you don’t, by the way, need every person to say it. You need just the right person to say, “Yes, I’m going to go on this journey with you.” And, obviously, it’s better if it’s two or three. It’s better dynamics around. But you certainly don’t need everyone. And that’s part of the reason why it can turn right. So, one example; when Airbnb came and pitched us at Greylock for our Series A, I really wanted to do it.
The primary partner was David Z. He was my most useful LinkedIn board member. He looked at me across the table and said, “Well, every VC has to have a deal they can bail on. Airbnb can be yours.” David, six months later, realized exactly what kind of investment I should be doing, and came to me and said, “Well, you know, what did you see that I didn’t see?” And I said, “Well, look. I agreed with you. I saw all these risks. It’s a strange thing about one person renting something from another versus the kind of industrialized set of a hotel. The question’s about, look, what would local city regulation and neighborhoods and other kinds of things play into this. But there were interesting plans to getting past those. And if it did that, it redefines an industry. And that is the kind of thing that we look for.” And, it, obviously, not just within the consumer space. They’re redefining industries, for example, whether it’s kind of insurance or whether it’s dealing with tsunamis or typhoons, those are actually impact the kinds of things that are looked at and technology, as per our earlier conversation, is they enable.
[00:22:40] Matt Clifford: A billion-dollar valuation is a serious landmark. And companies that have been able to achieve it have certainly earned their unicorn title. But no one who’s able to take a company to that height is ever going to be the kind of person to settle there.
As someone who’s managed to take the next step and turn one billion into much, much more, I asked Reid to give Alex some advice on going from one billion to twenty-six and beyond.
[00:23:00] Reid Hoffman: Well, it seems very well on track. And one of the things that has been great on this conversation is Alex demonstrating one of the things I think is most fundamental about successful entrepreneurs, which is being infinite learners, right? So, it’s like, “Okay, how do I do this better? How do I do this better? What did I learn here? How do I improve it?” And so, it’s not surprising to me that, despite an early no from EF, and kind of weaving the path early, say, “Yeah, yeah. No, I’m just building it because it’s success in the business that most matters.”
Now, from here, I think, obviously, he’s already highlighted a set of the different considerations, which is how do I change my applications into more platforms? How do I have those platforms touch kind of key industries? What does that mean in terms of how I iterate my go-to-market? As I’m growing the company, how do I bring the new talent in that helps us solve the new problems? Obviously, some of the talent from within the company will grow as well.
And those are kind of all the reasons why, Matt, as you noted earlier, that I kind of wrote Blitzscaling was to have some sense of it. Because part of the thing is when you’re doing blitzscaling, you can actually, in fact, share this book amongst the company to say, “Look, sometimes the seal’s pretty chaotic sometimes when we’re shifting from our levels of scale, and what our new managers are, and how we communicate internally, and how we coordinate on projects, and that kind of thing, those change, and that we should embrace that because that’s part of success. And I think that I am also, indirectly, a very enthusiastic shareholder. So, Alex, great work.
[00:24:42] Matt Clifford: Once you create something valuable, you have to be able to defend it. How should founders think about the risk that a tech giant like a Google or an Amazon might set their sights on their market?
As a final question, I asked Reid how a company like Tractable can set itself up to protect itself from the biggest fish in the pond.
[00:25:00] Reid Hoffman: So, the short answer is, is every organisation really can only have a short number of high priorities, whatever size it is. So, for example, if you’re trying to take on Microsoft Office or Google and Search, or Desktop Search or Mobile Search, et cetera, et cetera, you’d better have a really interesting contrarian but possibly right idea. It’s not zero. It’s not near you should do it. But then, part of what, I think, happening is that most of the… Even though there may be a group within this company that says, “Yeah, yeah. I want to build your thing,” and so forth. If they’re not prioritized within the organization, you, as a startup, have all kinds of, actually in fact… They have some advantages; sales channel, kind of persistent budget, existing talent that’s in the company, and so forth. But you have speed. You have an ability to be disruptive, to bring new customers and partners and allies and experiments and go to market, and all the rest of that stuff.
And so, almost all of these startups are like, well, of course, like take, for example, Tractable. It’s like, well, all the big companies are doing intense classifiers and deep learning but none of them are applying it to the kinds of things. And Tractable is like, “We’re focused on this. This is what we’re doing. And there’s a huge industry here.” And so, those are the kinds of things.
Now, when you get to defensibility, part of the thing is, one defensibility, obviously, Alex gestured at this, is some depth of the tech stack. Other kinds of defensibility. It’s one of the reasons why everyone talks about network effects because that the network is a form of defensibility. Sometimes, it’s key channels. Sometimes, it’s owning the key customers. Sometimes, it’s moving much, much faster and getting that learning curve, as you’re acquiring customers and going. There’s a whole stack of things.
Now, you need to articulate them in your strategy to make them real to your investors to believe that you could build something that’s… can endure. But I think all of that is kind of how you look at the defensibility. And very rarely do I worry about the large companies, unless somehow that they’re top priority, or somehow they’re sitting on the only asset or channel, or something that really matters in this. And which case, then, maybe you should think about something else.
[00:27:21] Matt Clifford: Yeah. Alex, any other thoughts on that? Did you ever fear Google would do this?
[00:27:26] Alex Dalyac: They did! They did. One of the biggest American insurers worked with them on it. The company that we were partnered in and dependent on for data announced a partnership with them. So, that was concerning. But I think, as we’d said, it wasn’t top on their strategic agenda. And so, they just couldn’t have the focus on it.
I think Larry Page says, “Look, what we choose to focus on is does it pass the toothbrush test? Are people going to use this at least as often as they use their toothbrush?” Well, people don’t get into accidents that often, thankfully.
We’re fortunate to have some network effects as well, Reid. Because, actually, there’s you’ve got repairers and you have insurers, right? And so, every repairer of a car or a home is going to work with every single insurer out there. So, if you can get a big insurer to say, “This platform is fantastic. I’m going to ask all of my repairers in my network to adopt it,” there you go. Now you’re really, really easy to adopt for the next insurer. And so, there’s those beautiful network effects out there.
[00:28:24] Matt Clifford: Awesome. Well, from network effects to network building, question two, which I think, both of you, it’s sort of dear to your hearts. So, if you’re a B2B founder, particularly one, maybe from a technical background, how do you build a network to sell to relevant companies? Like how do you build out a network into an area that isn’t originally, maybe, your background?
[00:28:46] Alex Dalyac: I think advisors can make a huge difference. So, advisors will typically be people that are much later on in their careers and they have a really prestigious career. And so, they’ll have a Rolodex. They’ll have a whole bunch of connections into that industry. And they may be at a point where they want to do something cool. They’ve been in a big corporation their whole life, and actually being able to say at dinner parties that I’m advising and investing in this cutting-edge technology startup is nice and worth it. For you, it’s a great gamble as well because it’s usually .25% of equity, which is not as much as getting another VC onto your cap table.
I think the one thing I would caution against though is you’ve really got to make sure that these are people that have a really high bias to action and a high tolerance for risk. So, sometimes, they’ll say, “Yeah, sure. I want to advise.” And you’ll be like, “Okay. Are you making introductions?” And they’re just not. And it’s because they’re really worried about recommending to these really big people this completely unproven technology. And then worry that it’ll harm their brand.
And so, actually, I would really advise testing first before you start working with that advisor. Are they making introductions? And then you know if they’re comfortable doing it.
[00:29:55] Reid Hoffman: Yep. And look, I… Network problem, network solutions. What Alex mentioned is exactly right, which is how do you get alignment to people who have, or aligned with you in solving your problem? And, Alex’s detail was biased action, et cetera, et cetera. Like look, they’re going to help you because getting you in front of kind of building those channels, it really what matters.
And then there’s a variety of ways to do it. I mean, part of the… For example, the design of LinkedIn is to realize that sometimes there is surprising connections. Your college classmate might actually, in fact, know some people in the relevant industry and be able to introduce them. And, by the way, you don’t necessarily have to be introduced on the basis of, “Oh, this product’s amazing!” It’s like, “Oh, actually in fact, look, Alex is super smart and talented, and is working on this thing. And I don’t know about the business side, but he’s a great guy, and you should talk to him.” Right? And then that conversation can lead to the relevant thing.
So, it’s network solutions in these things. It’s one of the things that, obviously, kind of looking at LinkedIn, is a way to do it. But also, anything else. Like, for example, the EF alumni network; “Hey, does anybody here know someone that I could start beginning to build bridges into industry X.” Right? And then, obviously, EF tries to help with that as well, so…
Anyway, so it’s network solutions in each of these different vectors. And this is just the beginning of the scratch of how to do that.
[00:31:21] Matt Clifford: It’s been amazing to watch Tractable’s journey from the Entrepreneur First office, at that time the basement in London, to a world-leading billion-dollar company. Alex, Razvan, Adrian, and their team, have built something remarkable. And, as you’ve heard, in many ways they’re just getting started.
That brings us to the end of this episode of The Entrepreneur First Podcast. It’s rare to have the opportunity to sit down and chat with people like Alex and Reid about building companies. So, I’m really grateful they came on the show.
I hope you enjoyed listening and learned a bit more about what it takes to build a tech unicorn.
Tune in next time when my co-host and co-founder, Alice Bentinck, will be speaking to Hazel Savage of Musiio about introducing artificial intelligence to the creative industries.
If you enjoyed this episode, please subscribe on Apple Podcasts, Spotify, or wherever you listen. For more information about Entrepreneur First, visit joinef.com.
Thanks to Cofruition for consulting and and producing the podcast.
And thank you for listening. Bye for now.