Vator held its second ever Splash Oakland event on Thursday and we were honored to have Slava Rubin, co-founder and CEO of Indiegogo, give a keynote address about what he has learned as an entrepreneur.
In his speech, he counted down what he called the "10 myths of entrepreneurship," or the things that everyone says are true, but which he encouraged members of the audience to question.
"When we were younger, most of us, our mom or dad, would saying say something like this: 'Don’t touch the tea kettle, it's hot.' 'Don't drink the soup right away, it's too hot.' 'Put a jacket on, it's cold outside.' When were little, we're like, 'Whatever, I'm gonna touch the tea kettle!' And then you touch the tea kettle and you go, 'Whoa, that was hot! Definitely not doing that again!' Or you go outside, 'It doesn't matter, I don't need a jacket. Whoa, it's pretty cold. I'm going to go back home and I'm going to put a jacket on.' When we ere little, most of us, we always had to test our own truth. We didn't believe anybody, about anything. For us, we had to be able to figure it out ourselves," he said.
"The funny thing is, as entrepreneurs, or as people thinking to become entrepreneurs, that whole concept has changed. See, we've gone to school in the American school system, and that's not to say that any global school system is any better than America's, and not only have we not been taught to be entrepreneurs, like that little kid who said, 'I will figure it out and test the reality for myself,' but we've actually been taught, 'No, no, no. There are ways that life works, and any creativity or risk taking you have in you will get beat right out of you."
They teach you that failure is terrible, and that they need to follow a path unquestioningly.
"Not only is our educational system no supporting you becoming an entrepreneur, from children becoming entrepreneurs, it's beating it right out of them. Because when we were little kids we didn't get paint by numbers, anything was possible. We believe anything we wanted to in our minds because we had no understanding of limitations."
Rubin then share the 10 myths, those things that people have begun to believe to be true without ever testing for themselves.
1. Its all about the idea
"Ideas are a dime a dozen. We could probably brainstorm and we can probably come out with 100 crazy ideas," Rubin said.
"Really, what matters is the work; it is the execution. As a matter of fact, you and I can do the same exact idea. One of is going to do it better."
Using a football analogy, he said that he believe that the offense can tell the defense what their play i going to be, and see if they can stop them.
"Because if you have a good idea, everyone will copy it. So what does the idea have to do with it?"
2. Go for the biggest market
This is what Rubin called the "1% of China syndrome."
"People like to say, 'Oh, I'm going after this amazing market. See, in China, there are like a billion people who are interested in this. SO all I need is 1% of China and I'm going to be making a boatload of money.'
He called this kind of thinking "garbage."
"What it means is, yes, you might be able to get more customers, but that doesn't mean you have one customer to start off with. See, in my opinion, if you go to a small market, like Luxembourg, and you actually do well, it is my opinion that winning 100% of Luxembourg, 10 million people or whatever, is way better than probably getting 0% of China," said Rubin.
"Because, chances are, if you're pretty good at getting Luxembourg, I'm just guessing, maybe somebody from Belgium, from France, from Denmark, will go, 'Hey, what's going on in Luxembourg? Sounds interesting. I might be interested.' This is a class example of what you thought was a company doing one little thing all of the sudden start expanding."
3. You need lots of money
The average small business will start with $6,500. Facebook started with $21,000.
"So anybody who said they don't have enough money to do their startup isjust making excuses. Small businesses today become big businesses tomorrow and we romanticize how big these companies have gotten with their A, B, C, D, E funding. But it all usually started with with a small little thing," Rubin said.
Indiegogo was passed by over 90 VCs and couldn't get funding for three years, but it wasn't about how much money they had.
4. You need a business plan
"If you write a good business plan, I recommend you go get your Masters of Fine Arts in writing. What I mean is, if there was a library, there's probably an Isaac Asimov science fiction book. Your business plan should be right next to it, because it means you are very creative and a good storyteller. It does not mean that you know anything about anything about being an entrepreneur," Rubin said.
"So 40 page business plans I think are total garbage. But I do think that having a a one pager, just having a little bit of direction, you know my elevator pitch, what am I trying to accomplish, how much money am I going to spend, who am I going after, is valuable."
He used the analogy of Mike Tyson, who was the champ at the time, fighting Michael Spinx. The fight was built up but Tyson knocked Spinx out in a minute and a half.
When asked about it, Tyson said, "Everybody's got a plan until I punch him in the face."
"A business plan is the same thing for an entrepreneur. It's nice having a plan. God bless you. What's happening in reality is that the punch in the face is the thing that, while you were writing the business plan, is what's happening in life. If you're a good entrepreneur, you don't even know what the punch is going to be but you know you need to be ready for it."
5. Make sure you have a good brand and PR strategy right away
When a company does really well, sometimes others will attribute it to them having great PR and great branding. But that isn't true.
"Usually, the only reason any of these things work is because these people are, number one, product obsessed, and, then number two, customer obsessed," said Rubin. "If you have garbage product, and you don’t care about customers, you can do all the marketing you want but it's just going to be wasted money."
Netflix, for example, may have great advertising, but they actually have a good product, that people want to use.
6. Hire people like you
"Diversity in thinking is the key to diversity in result, which gets you the best possible end product. So if you just have a lot of the same people, doing the same thing, with the same skill sets, and a lot of yes men, yes women, around you, all that's going to happen is exactly what it is you are trying to, which will have nobody questioning where the holes are in your product, in your thought process," Rubin said.
"And it is in those uncomfortable feelings where you get the best results."
Having tough dialogue gets you a well rounded point of view on how to improve product, marketing, brand and PR.
7. Values and culture don’t matter in the beginning
"This couldn’t be any further from the truth," said Rubin. "What people don't really think about is the best permanent solution is temporary solution. The only way to know how to play is how you practice."
There are a lot of questions that need to be answered, including how to treat coworkers, what they think about work/life balance, how they deal with diversity.
"'I'm going to start thinking about that when it matters, in the A round, when we get our 10th employee, or our 100th employee, or after we get our million dollars from customers,' or whatever threshold you want to set which is not millisecond one, you are just lying to yourself."
8. Profit, power, or fame can drive you through th tough times
"It's pretty sexy these days to try to be an entrepreneur. Super cool, easier than ever to be an entrepreneur, clearly get money, right fast, easier than winning the lottery," Rubin said.
If profit, power and fame matter to you, though, "just go become employee number 200 at a C or B funded startup with quality VCs and you are going to really raise the probabilities of making $10 million in next six years."
You have a much better chance of becoming rich that way than by becoming an entrepreneur.
"If you want power, definitely don’t become an entrepreneur, because you give up all power. Power goes to your employees, your customers, your VCs, the media, the government. Everybody has something to tell you about how you're doing it," said Rubin. "If you want fame, just ask Justin Beiber. YouTube is awesome."
Passion is the only thing that really matter.
"You're trying to bring something to the word that will improve it," he said, "and you need to be passionate about it because it's the only way you're going to get through hard times."
Profit, power, or fame "won't get you through anything."
9. Entrepreneurship is linear
Rubin compared entrepreneurship to the movie Inception, and its concept of the real world, the dream world and the meta dream world.
"In the real world, the top will fall. In the dream world, it will continue spinning. The only different is gravity, is how you can tell between the two. Being an entrepreneur is the exact same thing," he said.
"Being an entrepreneur, in your mind, is the dream world. And in reality, this is the real world. Being an entrepreneur is being able to navigate what is in your dream world but, see, in your dream world, it is already reality. We, as entrepreneur, everything that is in our minds, we have already navigated it through our own mind, how will play out. See, cause our minds do not have limitations of the gravity, or of the limitations of the resources, that is true in the real world. So we try to play out the future, the way we evolve in our minds, so that we understand how we need to navigate the real world."
Entrepreneurs take everything they decided to do, and try to navigate it "through our limitations," including the resources that they have.
"Sometimes people will call an entrepreneur dumb, or crazy, or stupid. And what I'll say is all that is an entrepreneur who is actually just as smart, just as brilliant, and has just as good of a dream world planned, just had some limitations. Or maybe some bad luck as to how they navigated through the resources and the limitations, into the real world" said Rubin.
"And others will say, 'Wow, that other entrepreneur, He/she is brilliant. They're really incredible. Everything is perfect.' What I would say is they've just done a really nice job of navigating their dream world into reality."
10. Mom will never understand what you do
Rubin ended his presentation with a story about his mother, who was worried about him quitting his job as a strategic consultant to become an entrepreneur, especially because he wouldn't have health insurance. She couldn't understand what he did until an incident a few years ago, when a bus monitor was bullied by a group of kids.
The video helped raise over $680,000 in three weeks so she could have a vacation. When Rubin's mother found out that she raised that money on his site, she said, "I like Indieogo, but when are they going to give you health insurance?"