Boris Wertz is a top tech early-stage investors based in Vancouver. He is the founding partner of Version One and a board partner with Andreessen Horowitz. Previously, Boris was the COO of AbeBooks.com which sold to Amazon in 2008. I recommend to read his blog and follow him on Twitter.
1. On scaling a business to $100 million in revenue: "Generally speaking, there are two ways (and only two ways) to scale a business to hit that $100 million threshold: Your business has a high Life Time Value (LTV) per user, giving you the freedom to spend a significant amount of money in customer acquisition. High LTV can usually be found in transactional or subscription businesses. Your business has a high viral co-efficient (or perhaps even a network effect) that lets you amass users cheaply without worrying too much about the monetization per user or spending money on paid acquisition."
2. On what to outsource: "Never, ever outsource something that is core to your business. Outsourcing a core function may give you a short-term uplift, but it also means you fail to build the expertise within your company. If you want to build a sustainable competitive advantage, you simply can’t outsource your core functions to another who may not be as invested in your success. In other words, you can’t build a great company on an outside agency’s stuff. The number one marketing priority for any start-up is to figure out a clear communication strategy for the brand and the product — the message must be simple, clear and differentiated. Users must understand right away what problem the product solves and why they should use it and engage with it. And hopefully you also take this communication opportunity to show a bit of personality!"
3. On experimenting and learning effectively: "Too many start-ups fall into the pitfall of running experiments for the sake of running them, and then never actually learn anything since the parameters were too fuzzy. Drive your activities toward reaching tangible learning milestones…as many as possible, as fast as possible."
4. On having and staying true to your long-term vision: "To be wildly successful, you cannot sacrifice your long-term vision for short-term success just as you can’t sacrifice your current product and customer base for your long-term vision. You need think about innovation in start-ups in 3 time horizons: short-term, mid-term, long-term. Short-term innovations are incremental, mid-term you need to make bigger bets and long-term you need to define a new market category."
5. On pivoting (hint - you need to pivot hard): "Course changes happen all the time and can lead to brilliant things. But when pivoting, you need to completely separate your old and new businesses. Approach your pivot as if it were a completely new startup. Then see which pieces of your current setup (people, product, etc.) can potentially help you accelerate the new opportunity."
6. On having high standards: "The entrepreneurs who succeed always have a unique perspective as to what is world-class — they don’t limit their perspective to what is best in Canada. It’s a super-important benchmark to always have in mind. Today you have a worldwide market. There are no national barriers any more."
7. On planning for an exit: "Amazon was, from the beginning, the natural buyer. But it took a long time: nearly three years from when negotiations started until the deal closed. So the major lesson is that you can’t plan for an exit. Stay focused on building a really great business. I’m not interested in founders that think about an exit right away. I want people to think about how to build a great stand-alone company."
8. On having productive meetings: "One key message that can apply to any start-up is to never end a meeting without a decision (unless everyone determines that more data is needed to make that decision). If a meeting begins to succumb to group think and indecision, you need to ask why we can’t make a decision today instead of another day. After all, you just need to move forward."
9. On decision making: "Here’s the principle that I’ve really started to embrace. Ask yourself the following: If you look back at this decision 10 years from now, which path will you most regret not having taken?"
- We don’t have enough great tech companies
- How to overcome decision paralysis
- How to really learn from your experiments
- How to stay nimble as you scale
- If you need to pivot, pivot hard
- Never, ever outsource your core
- The only 2 ways to build a $100 million business
- Version One founder Boris Wertz tells Canadian entrepreneurs to look abroad
- Why you need to innovate on three horizons