Ali Partovi on the time for startups to diversify

Serial entrepreneur, angel investor shares lessons learned at Splash Oakland

Ali Partovi, serial entrepreneur and angel investor joined us at Vator Splash Oakland, to share his Founders' Lessons Learned in this Splash Talk.

Partovi says that business schools teach us diversification to mitigate risk. But as an entrepreneur, diversification doesn't work. Startups should have one brand, one revenue stream. "When you're a startup. You don't have much to lose. Diversifying creates overhead... diversification is a good idea in the third or fourth year."

He lists a number of companies that have had "one" focus. Companies can be described in one or two sentences. The best companies can described with just one or two words.

Airbnb = place to stay

Amazon = books

Dropbox = storage

eBay = auctions

Facebook = college friends

Google = search

PayPal = payments

Pinterest = photos

Skype = calls

Twitter = Tweets

Zappos = shoes

Partovi co-founded LinkExchange, an Internet advertising pioneer which was bought for $265 million by Microsoft. He also founded iLike in 2007, that had 50 million users in five months. Then things started going downhill. Facebook and the music labels starting "f-king with us." It began to diversify and built apps on multiple platforms. By 2009, if you described what iLike did, the company lost the essence of what the original vision was. Lesson Learned: Better to focus or to pivot entirely.

Thanks to our Vator Splash Oakland video sponsor, Oakland Forward and Bryan Parker, Oakland Mayoral candidate.