How to Build a Successful Startup, According to an Investor Who Made Early Bets on Twitter, Lyft, and Twitch

Even though there's a .00006% chance that a startup will scope a $1 billion valuation, Silicon Valley investor Mike Maples Jr. has placed early bets connected much than 1 startup that hit nan odds.

Across his astir two-decade investing career, Maples recovered that startups he invested successful early that are now worthy over a cardinal dollars, for illustration Twitch, Twitter, and Lyft, shared 1 point successful communal — they collapsed patterns. Instead of competing successful a crowded space, successful startups defined nan early connected their ain terms.

"Most people, erstwhile they saw nan iPhone 4S, didn't recognize that nan point successful their manus aliases successful their pockets could alteration nan future, but nan Lyft guys and nan Uber guys did," Maples said connected a Thursday section of nan Masters of Scale podcast pinch LinkedIn co-founder Reid Hoffman.

Maples added: "I person to break nan shape successful bid to flight nan gravitational propulsion of nan present, right? And so, I for illustration to opportunity awesome start-ups person to unit a prime and not a comparison."

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Maples gave Airbnb arsenic an illustration of a startup that successfully forced a choice. According to Maples, Airbnb turned nan strengths of nan position quo (identical stays wherever you spell astir nan world) into a weakness (wouldn't you alternatively person a unsocial enactment that reflects nan spot you're successful for nan aforesaid price?).

In doing so, Airbnb created a abstracted class noticeably different from what was already retired location — which forced consumers to make a prime and not a comparison to what already existed.

Maples said that Airbnb besides had different trait of a groundbreaking startup: It created a societal activity beyond money aliases business. Instead, Airbnb focused connected transforming nine and people's lives.

"What I find is that nan awesome startups very often are much for illustration societal movements," Maples pointed out. "Typically a activity has a number of group who consciousness a consciousness of grievance pinch nan position quo majority. And that number of group wants to alteration nan future."

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Pattern-breaking, societal movement-starting startup ideas are polarizing and astir group won't for illustration them astatine first — but Maples says that each you request are those fewer people, nan number who tin commencement a movement, who deliberation nan thought is "amazing" and can't unrecorded without it.

In a abstracted Harvard Business School profile, Maples explained that erstwhile Twitter co-founder Evan Williams sounded him nan thought for Twitter, Williams had nary roadmap aliases gross model.

Williams' rationale was that erstwhile he made Blogger, a cardinal group wrote blogs. If location was a micro-blogging platform, possibly he could get 10 cardinal group to constitute micro-blogs.

Twitter, now X, was acquired for $44 billion successful 2022 by Elon Musk.

Twitter co-founder and CEO Evan Williams. (Photo by David Paul Morris/Getty Images)

What gets an investor to opportunity yes astatine an early shape to an thought for illustration Twitter, pinch small information to spell disconnected of astir nan startup's way grounds of occurrence aliases nan marketplace it is trying to create? The reply is nan founders themselves. Maples stated successful nan floor plan that he was looking for technically fantabulous founders pinch thrust and tenacity.

Maples pointed retired further qualities connected nan Masters of Scale podcast: nan founder's expertise to find groundbreaking ideas and their expertise to present connected those ideas.

"Time and again, nan merchandise that ends up winning is not nan merchandise that you spot erstwhile you're doing a seed investment," he said connected Masters of Scale. "That was existent of Twitter. It was existent of Twitch. It was existent of Lyft."

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