SkyChat with Chon Tang
SkyChat is an opportunity to get an inside look into the SkyDeck advisor network. In the past three years, SkyDeck has expanded from 30 to 90 mentors who are the leading minds in the Silicon Valley. These advisors regularly meet and mentor our teams to discuss anything from challenges with business models to financial management.
Tell us a little about yourself.
I’m a Berkeley / MIT-educated dad of three who loves taking risks. I had early experiences in my career that convinced me failure ain’t nothing but a word. I’ve purposefully worked in just about every industry under the sun, and I’m sure there will be a few more I’ll experiment with before I’m done. I love respectful differences of opinion, and I’m constantly thrilled to learn. I’m currently managing the Berkeley SkyDeck Fund, and I’m extremely excited to both enable the next generation of founders from around the world, while also supporting my alma mater.
What is your favorite SkyDeck or Berkeley memory?
The first memory is probably the first day I stepped on Telegraph, by myself, as a 17-year-old undergrad. I was born in China, and grew up in northern California… but quite frankly, Berkeley is just like nowhere else on this planet! The sense of finding myself in such a *diverse*, *strange* place packed with such a high density of brilliant people was both scary and exhilarating at the same time.
The second memory: Cal vs. USC back in 2003. I brought my girlfriend to her first Cal football game, assuring her we had no chance of winning that game. Three overtimes and a win later… I decided I needed to marry her and make her a permanent good luck charm.
What’s the most common mistake made by startup CEOs?
Too much hero worship of VCs. Investors and VCs often seem like the gatekeepers to success for a startup founder. And due to perhaps a variant of the Stockholm Syndrome, some founders often find themselves worshiping or even aspiring to become a VC.
In reality, venture capitalists exist to service founders. We’re like plumbers, and our role is solely to enable the efficient transfer of risk capital from our investors (the folks we work for) to you guys. If founders didn’t exist, or if founders simply chose to select a different plumber, we’re unemployed. We can only *enable* a founder in the creation of value; indeed, we’re often a replaceable commodity, while the founders are what’s truly unique.
So, if you’ve already started pitching and find you aren’t getting meetings, or your conversion rate after a meeting is low…. stop worrying about your pitch, stop worrying about pleasing the VC, and focus on your business. Focus on providing value to your customers, and especially on demonstrating product-market-fit with actual booked, sustainable revenues. Indeed, any founder with a success business will remember the day when they turned the corner… you’ll find VCs beating a path to your door.
And the next time you feel nervous walking into a VC meeting… visualize the partner sitting across the table from you in overalls, holding a plunger, standing in a pool of waste water.
What’s the one-thing startup founders should be thinking about?
Already alluded to this above, but the answer is most definitely revenues, revenues, revenues. In my opinion, the act of getting a customer to give you money for your service / product is almost sacred. You’ve convinced someone that you’ve built something valuable, and that they should give you a share of their hard-earned wealth. To me, generating that first recurring PO is 100x more exciting than any VC term sheet.
More founders need to understand that investment transactions in the public markets, the later rounds (as well as M&A / PE deals) are really based off of revenues as proof of market success. A business built on ideas and future potential will get a premium on top of current revenues… but there’s really no substitute for actual paying customers.
With a few notable, rare exceptions (those of you truly pursuing moonshots)… all startup founders should be focused squarely on convincing customers to pay for your service. If you exit SkyDeck with meaningful sales figures, you *will* get funded; the only question then becomes one of how high of a valuation you deserve.
What’s your number one indicator of success in a company?
The difference in efficiency from individual to individual is *amazing*. I’m surprised no one has come up with a quantitative metric for measuring this yet, but whoever does so will revolutionize the hiring industry. GPA, or even professional achievement, is unfortunately a very poor measure of hustle. Some people just don’t take “no” for an answer, and will blaze their own paths where one didn’t exist before. These people also tend to attract amazing teams to support them.
If you were to launch another startup tomorrow, what sector or vertical would you be in?
If I could go back to basics and restart college, I would look into life sciences. I think we’re quickly reaching an inflection point in cost where synthetic biology is going to change all of our lives, just as affordable personal computing changed it for the first time 30 years ago.
But now that I’m too old to learn new tricks… probably ag-tech. It’s obviously a huge market, but also one where go-to market for venture backed businesses has been extremely difficult. That tells me stresses and opportunities are building. The first companies to successfully use IoT and autonomous devices to create an order of magnitude improvement in production yield will own the world.
by Marie Maier, SkyIntern