Although there is one .00006% the opportunity for a startup to achieve a 1 billion dollars assessment, Silicon Valley investor Mike Maples Jr. has placed early bets on more than one startup that beat the odds.
In all his ready two decades in his investing career, Maples found that the startups he invested in early and now have value over a billion dollarsHOW vibration, I tweetAND Lyft, share one thing in common – they break patterns. Instead of competing in a crowded space, successful startups defined the future on their own terms.
“Most people, when they saw the iPhone 4S, didn't realize that the thing in their hand or in their pocket could change the future, but the Lyft guys and the Uber guys did,” Maples said on Thursday's episode. Master's degree podcast with LinkedIn co-founder Reid Hoffman.
Maples added: “I have to break the mold in order to escape the gravitational pull of now, right? And so, I like to say that great startups have to force a choice, not a comparison.”
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Panje gave Airbnb as an example of a startup that successfully forced a choice. According to Maples, Airbnb turned the strengths of the status quo (identical stays wherever you go around the world) into a weakness (wouldn't you rather have a unique stay that reflects where you are for the same price?).
In doing so, Airbnb created a distinctly different category than what was already out there—one that forced consumers to make a choice rather than a comparison to what already existed.
Maples said Airbnb also had another hallmark of an innovative startup: It created a social movement beyond money or business. Instead, Airbnb focused on transforming society and people's lives.
“What I've found is that great startups are very often more like social movements,” Maples pointed out. “Typically a movement has a minority of people who feel a sense of grievance with the majority of the status quo. And that minority of people want to change the future.”
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The ideas of startups that break the mold and start social movements are polarizing, and most people won't like them at first — but Maples says all you need are those few people, the minority who can start a movement, to who think the idea is “amazing” and can't live without it.
In a special Harvard Business School profile, Maples explained that when Twitter co-founder Evan Williams pitched him the idea for Twitter, Williams had no roadmap or revenue model.
Williams' reasoning was that when he created Blogger, a million people wrote blogs. If there was a micro-blogging platform, maybe it could get 10 million people to write micro-blogs.
Twitter, now X, was acquired for 44 billion dollars in 2022 by Elon Musk.
Twitter co-founder and CEO Evan Williams. (Photo by David Paul Morris/Getty Images)
What makes an early-stage investor say yes to an idea like Twitter, with little data to draw on the startup's success or the market it's trying to create? The answer is the founders themselves. Maples stated in the profile that he was looking for technically brilliant founders with strength and tenacity.
Maples noted additional qualities on the Masters of Scale podcast: the founder's ability to find innovative ideas and their ability to deliver on those ideas.
“Every once in a while, the product that ends up winning is not the product you see when you're making an initial investment,” he said at Masters of Scale. “It was true for Twitter. It was true for Twitch. It was true for Lyft.”