6) Find out where you can break rules
In order to be able to move quickly and achieve scale, successful entrepreneurs often look for ways to break conventional wisdom. One example Reid used was in regard to unit economics. If you ask a Series A, B and even C founder in Silicon Valley their unit economics, more often than not they simply don’t know. Whilst MBA’s are taught the need to figure out unit economics before they scale, in Silicon Valley these rules are thrown out. Instead, it’s more important to achieve scale first.
Reid emphasised how entrepreneurs should think pretty seriously about which rules you can throw out, in order to get your larger scale-up round of financing. He emphasised the need to solve as few and as important problems as possible and don’t try and solve them all at once.
He talked about the importance of OODA loops, a fighter pilot’s term that stands for Observe, Orient, Decide and Act. Just as the fighter pilots that have a faster OODA loop have a higher chance of survival, so do startup companies. “Individuals and organizations throughout the Valley talk about their OODA loop, their learning, the speed at which they are moving, etc. because they feel that that speed is critical,” said Reid.
As an entrepreneur, you need to be asking yourself, which rules can I throw out in order to go faster and reach scale?