The startup world and entrepreneurship are both so competitive, so carving your own territory is critical.
This is the opinion of billionaire VC Tim Draper, who I had the pleasure of speaking to on my podcast.
Tim Draper is one of the most powerful and influential people in Silicon Valley. His most prominent investments include Hotmail, Skype, Tesla, SpaceX and Twitter.
Tim says in the face of all the competition, finding out your own arena is critical:
“An entrepreneur that is just chasing other entrepreneurs is doomed to fall behind those other entrepreneurs. You have to stake out your own territory if you’re an entrepreneur. Let’s say you’re another ride share company, there are thousands of you out there! And maybe you’re just focused on bicycles, well there’s still thousands of those!”
Tim says we have to be different:
“So what makes your bicycle ride share business its own unique industry? Is it that you are a transportation company? Or are you a delivery business? Are you something else? I think people need to position themselves as one thing so that they grow away from all that competition. They grow in another direction and they understand what the customer needs and they grow with that customer. That redefinition of what you are also helps you really think about where you’re going, what you’re doing.”
Tim says it’s okay not to know where you’re going as an operation:
“Sometimes you don’t know exactly where you’re going and that’s okay. But it’s a good time to sort of settle — go through sort of a plateau and then say: ‘Okay here is our new direction, this is what we’re doing.’ Then you need to communicate with your team that: ‘We did this for a while, it worked for a while, but now we’ve got this new direction.” Pivots are not a bad idea. I know that Hotmail came to us with a very different idea. Skype came to us with a very different idea.“
As one of the first investors in Tesla, Tim revealed that Elon Musk had a very different idea from the start:
“I know TESLA had a — they were going to OEM the car and then just put in all the battery the electronics and all that. Well it turns out they needed to redefine the entire car. So people can redesign. All these groups had to pivot and what you have as a startup that no big company has is that you can change direction pretty quickly — whereas a big company has to just keep sailing straight forward to be successful.”
Tim Draper Startup Advice: Startups vs Corporations
Tim had the perfect analogy:
“I always think of startups as the little boats in the ocean that can turn on a dime but can get smashed by a wave. And the big, big boats on the ocean aren’t really affected by the big waves. But they cannot turn. So if the world jumps to the left they can’t move to the left, but the little boat can.“
Do you have your territory clearly marked?