Investor Wesley Chan has proven a knack for making very early investments into multi-billion-dollar unicorns, akin to Plaid, Gusto, Flexport, and, most just lately, Canva.
Chan comes from an unconventional background — he grew up in an immigrant household and had solely middling grades in highschool. However he landed a job washing check tubes in a lab at Caltech and impressed lab supervisor Ellen Rothenberg sufficient to get her assist in entering into MIT.
From there, his serendipitous journey continued: He majored in laptop science as a result of it appeared like a superb profession path, however landed in Silicon Valley simply after the dot-com bust, when the one firm hiring was a search upstart referred to as Google. After practically a decade there engaged on very important merchandise akin to Google Analytics, Chan was able to do his personal factor, however co-founder Sergey Brin satisfied him to affix the corporate’s nascent enterprise arm, then referred to as Google Ventures (now GV), and from there he’s had an extended profession in enterprise, spinning out his personal agency, FPV, with associate Pegah Ebrahimi, just a few years in the past.
The purpose of all that is there’s an unimaginable quantity of luck and timing concerned in any success story, and Chan is the primary to confess it, telling the viewers at TechCrunch Disrupt 2024, “luck issues so much, however the perfect founders who know find out how to push luck of their favor actually have a eager sense of why timing issues.”
He factors again to what Brin instructed him about founding Google, which they began at a specific second when different search engines like google and yahoo have been making an attempt to maintain customers on their websites so long as attainable to point out them adverts. Google’s innovation was delivering outcomes nearly instantly, then giving customers no explicit incentive to stay round, however to ship them off on their method. (It’s modified a bit since then.) However Brin mentioned that timing was the whole lot — in the event that they’d began six months earlier or six months later, enterprise situations would’ve been totally different and the competitors wouldn’t have given them such a straightforward opening.
So what does Chan search for when he’s making an attempt to select the following unicorn? He says there are nearly no commonalities within the corporations he funds aside from founders who remind him of Sergey Brin and Larry Web page, with a powerful conviction that they’re fixing an pressing and well timed drawback with really distinctive perception. That, and a give attention to constructing a terrific product first, as an alternative of making an attempt to purchase prospects or purchase development.
“Quite a lot of challenges for founders within the early phases, they increase cash after which they spend all of it in 18 months, shopping for development, however there’s no motive for folks to remain on it, or have interaction within the product, or inform different folks. And you then burn all of your cash, and also you go, oh, I would like to boost one other spherical.”
That product focus can be very important if you wish to get Chan’s consideration. He doesn’t discover founders at conferences or occasions, he says, however solely talks to those who’re launched to him via phrase of mouth from different founders in his community.
“There are solely two of us on the agency, proper? We are able to’t go take each chilly e mail or each pitch, or each person who exhibits up on the door. So the perfect founders come to us via our different founders, proper? They construct one thing we both discover or our founders discover. You bought to fulfill this man. Like, the merchandise, unimaginable. We’re utilizing it at our board conferences. We’re utilizing at our corporations. I’ve it on my iPhone, proper? Or we meet them via our community, the place one in every of our founders actually says, ‘I’m placing some cash on this man; he’s superb.’”
