 Rwy'n credu yn cael ei bod yn ysgol y maen nhw, Scott Nolan yn ymddir i'r peth ym Madyfodol, iddynt yn ei gael ei bobl yn rhan i Cyligyn, i'r hyn sy'n bod yn ynynuio'n cymhwylliant i'r cyfnogi a'r cyfrannu cymhwylltau ar y cael ei sektors yn enog, biotech, ar y cyfrannu arlau arsigol, ac yn ymddiadau cyfrannu. Yn ymddir i'r rôl, gan ymddiadau i'r cyfrannu yma yn yn ysgol, yn ymwneud o'r Ffarkon 1, Ffarkon 9, a Dragon rockets. I was actually at SpaceX last month and it just blew my mind away. One of the things I learnt when I was there is Elon's idea of letting everybody see what's going on really seemed to work so when you walk into SpaceX, everything is manufactured on one floor, so you've got rocket propulsion with carbon fire layout series and actually what was and software guys sat on the top and overlooked the whole thing. What I loved about SpaceX actually was that everybody saw where they fit in the puzzle and it goes back to this communication thing. If you were only doing one thing, but you can see how you fit in with everybody else, I just thought that SpaceX really had that sort of foresight to make sure that everybody knows their place and what they're working towards. And without the final day before we all die sort of thing on the walls on. So sorry, Scott has worked on some of the highest impact and most innovative startups Commander Silicon Valley, including Airbnb, SpaceX, Dropbox, Spotify, Facebook, all the big famous ones that you've heard of and he's really hard to Google stalk. So here's the thing, right? I found out 24 hours ago that I'm doing this. So what do I do? I frantically Google everybody so I can come up with a bio and Scott, you are like the most private person ever. So I had to Google stalk other people to find out stuff about you. So thank you Andy Hamilton for last night tweeting a picture of their fishing trip in which I can say, and follow Andy Hamilton, that Scott caught the biggest fish of the trip, apparently, and it's huge. Go take a look at this picture. So he caught the biggest snapper of the day while fishing and I think it'd be pretty impressed with the pic. So in asking Scott about advice to his younger self, he answered being secretive and being afraid to share equity with employees or investors are both very counterproductive. And so with that, I would like to invite all that speaker for the day, Scott Nolan. All right, thanks everybody. And thanks for all the people who helped to organize this. I don't think it would have even been remotely possible without all the help and all the all the logos that you saw earlier earlier today. So Sam started off the day by talking about how do you build a startup? What are the steps? What are the necessary ingredients? And at Founders Fund, we usually get involved a little bit later. So we get involved once a startup exists, often once it's found product market fit. And so then the question that we really focus on is how is the startup going to be actually really important for civilization? How is it going to change all industries? How is it going to actually move the needle forward for humanity? And we, you know, I think a lot of people say that we actually try and do it. So the questions that we asked for companies are things like, how are you going to make sure no one copies you? How are you going to make sure that you actually scale to have all the impact that you possibly can with your technology or with your insight? So that's the stuff I'm going to focus on today. And so it's really about how do you do these really big things and hopefully impact a whole industry? So Sam talked a lot about execution. I think people have talked about both of these today. You know, basically strategy and execution get you from point A where you are today to point B. It's pretty simple. And I'd say at Founders Fund, we've worked with a lot of great companies. So we've seen how important both are. The piece I want to focus on is strategy. And so I'm going to talk about strategy a little bit later. But if you ask yourself, well, I want to get from A to B. I need to execute, obviously I need to get a plan of how to get there. You've got to start with the end. So where do I want to end up? What's my point B? And I think the thing here is you can look at startups a lot of different ways. You could ask yourself, well, how should we categorize startups? Should we do it by stage? Should we do it by geography? Should we do it by sector? And I think all those are valid. One lens I like to put on startups is what is the scale of the startup? What's the core insight? And the reason that this is important and there's a spectrum that you can end up at. It could be anything from a feature to something where now this concept feels more like a product or maybe we can build a suite of products and it's kind of like a company. Or maybe the company is so important that it's going to do something fundamentally different than the way anything's ever been done today. And so that would be an industry. And the reason that this matters a lot and that this is like a very relevant lens is because it tells you a lot of things about the company. Is this something we bootstrap or do we raise money for it? Do we need to hire employees or do we go it alone? And so I think that's really the starting point is you start at the end, you start with point B. Where do you want to end up? And a lot of this is going to be personal preference. What type of company do you want to run? Do you want to start off and build experience? I think that's really valid in Wellington two days ago. We had Rod from Zero and he talked a lot about how he thought it's really valid to start with a small idea and build up experience. And each company you do, you do a little bit more. I think that that's a great point. But at the same time, if you have a really big insight where you say this insight's so fundamental that we think we can really change a whole industry. One that's maybe even been really resistant to change, like SpaceX, decided to do to the commercial space industry. If you have that big vision, then you should go for the whole industry. And so there's the famous Steve Jobs quote. We're here to put a dent in the universe, otherwise wild to even be here. I think if you have that big vision, the one thing I would say is don't hold yourself back. At Founders Fund, we really like to work with companies that have that really big vision that we think can really move the needle. And that might not otherwise get to pursue that big vision. So that's why we really focus on that. And so that's kind of the mentality we have. I think a lot of investors do that for one reason, which is, well, if it works, we're going to make a huge amount of money. It's going to be really big. So there's that outcome piece, but the other big piece here is this is a strategic question. It's actually not about getting to point B and how big point B is, but it's what are your odds of actually getting there? And counterintuitively, I would argue that if you have a huge vision and you're going to pursue it like with everything you have, if this is something that you're willing to do for 10 years, if you feel like this is the only thing I can do, I don't want to go work for another company. I have to like take my idea and do something with it that's going to be really, really big. And I'm the only person in the world that can do this. And if I don't do it, no one else will and it's got to happen. That's I think the really big vision piece and you should go for it. So we've worked with a bunch of company that have big visions, Airbnb. Their vision was, let's take the rental marketplace and put it online, short-term rentals, doesn't really exist. Facebook was online identity, Sean talked about that. Palantir, cover that one, SpaceX, Spotify, like online streaming music wasn't even an industry before they started. It was piracy and bio CD somewhere. And Stripe is trying to build developer tools for making payments online a real infrastructure. So it's these types of things that we really like to back. And so the question is, why is that strategically a good choice? Well, a huge vision actually has strategic rewards that you wouldn't really think of. This is obviously a war chest. And one great thing is, let's say you're going after someone huge, something huge, investors will realize, actually this is really hard, this is really important, this is something we can get behind because if it works we're going to see return for the risk that we're taking. And so a great startup that has a huge vision once it's changed in industry, they'll actually be able to raise way more resources which helps every employee in the company get way more leverage. So instead of each person having to do 10 things, you can grow at the scale of it and each person can really focus on one. The other thing it does for you is it actually creates a situation where the more resources you have, the harder it is for anyone else to start up. So other investors might say, wow, okay, there's already this great company in this space, they've raised $100 million. We're not going to back anything else, we'll have to dump in $100 million just to compete. So it actually becomes a really big piece of deterrence which is the other thing. That's Alcatraz, people thought it was impossible to escape from, don't even try, you'll just die. This is what you want for your company. Everyone also looks at what you're doing to say, that's so crazy, like you'd have to be stupid to try and do that, go ahead and fail. And if you guys, if you succeed then, you're probably the only one who's been trying for the last five, 10 years and you'll be so far ahead at that point. No one can really compete. And I think the third piece is motivation. If you and your team feel like this is like your life's mission and a few people have touched on this, and when the going gets really, really tough, you'll just keep going no matter what. So even when it's irrational, when financially you're probably better off selling the whole thing, you'll just keep pushing through those really hard times and every company has them. And you know, people will think you're crazy. So Elon said at SpaceX a bunch of times, he said to the whole company, if you don't want to work 80 hours a week, maybe this isn't a company for you. That wasn't him telling people, hey work harder, you're not working hard enough, crack the whip. This was more like if you don't feel that motivation, if this isn't your life's mission, then it really might not be the right company. So you want everyone else to think you're totally crazy, like why are all the people that are working 100 hour weeks, they must have like no life, they must be borderline insane. Well, it also goes with deterrence. It's like if nobody wants to fight a crazy person, you don't know what they're going to do next, right? So it's like if you can just be so completely insane, like the old blacks and everyone's like terrified, you know, that's what you want. No one's going to try and mess with you basically. And another way to get that really good motivation that I mentioned in Wellington the other night was give everybody in the company equity. That way they're not just motivated by the mission, but they're motivated by the fact that if they can help make this work, everybody's going to benefit. So the next piece is, you know, you've got a great vision. You know you want to go after something big. What do you do? And so that's a second piece. It's really strategy. So back in 2012, we taught a class at Stanford. Me and one of the guys that worked with Peter Thiel and some of this content is from that class. These are some of the big insights that we had. So for every great company, they do three things really well. Obviously you create value, you capture value and you've got to last otherwise. How long are you going to be really making a difference? So this is a framework for creating value. First you say, well, what's important? What can I do? And what are other people not doing? This is basically like a really helpful question for anything in life. How do I have impact? Well, I do something that matters that isn't going to happen anyway. And so, you know, maybe one, like a question for New Zealand startups could be well, okay, what do we do? What do we do specifically? And you should never listen to what someone else sells you to do. If you hear what I say, and then you're like, oh, I should go do that. Maybe you should not do it actually. So discount everything I'm about to say. But before Sam and I came down here, we said, well, what sort of things might we see? What would be like naturally things that would fit with New Zealand? Well, you want to do stuff that no one else can do that matters? World experts in ag, film, CGI. We've actually seen multiple companies in this space since we came down like two days ago in both of these spaces. Another thing is since it's a small country, you actually have lower regulatory overhead, like much easier to change systems. And so things like drones were in the US, we've been waiting five years for the FAA to say, hey, here's how drones are going to work. Here's the rules. Companies are building up the tech and they can't even commercialize it because the rules are so unclear, they're going to get sued or shut down. They're going elsewhere. So, you know, places like New Zealand where there's less of that regulatory overhead natural fit. Second thing is capture the values. Everyone, I think everybody realizes this. You want to make money. You know, you have to be able to charge more than some of your parts, which proves that you're creating value. But the other piece of this is you want to make sure that once you go through all the hard work of finding product market fit, customers love what you're doing. Well, let's say you spent three years figuring that out, you release a great product and then someone spends a weekend copying every pixel of your product. That's not a great thing. So you want to figure out what about this is really, really hard for someone else to do because if they copy you then, you know, what's it going to come down to? It's going to come down to who can raise more money, who can compete on price at the end of the day. And so you don't want to get in that world because if you're competing on price, you're not taking home any net profit. You're unable to reinvest it and you're actually going to drive a negative lesson for the startup ecosystem. You're going to tell people, hey, you can work really hard and create something great. You might not even profit. And so that's the last thing you want to do. So you really need to ask yourself if it works, why can't others just copy it? And finally, you have to last. And this is for a couple of reasons. Obviously, you need to stick around to have all the impact that you want to have. But second, if you actually look at the cash that a high growth startup generates, most of the money is in years 10 and onwards. So that's where all the value comes from. And let's say, okay, well, we don't need to be here for 10 years. We're going to make a big difference in the short term. M&A is good. We could sell this thing off to someone else who can run with it. That may be true. But if you plan for the 10 years and onwards, the potential acquirer knows that you're here to last and they can't just wait you out. They can't just say, well, we'll wait another year to acquire them and it'll be half the price. It really gives you a lot of leverage. So keep that in mind. For these last two, why can't others copy you? Why do you last? This is all that competitive advantage, barriers to entry. There's four main types that we think of at Founders Fund network effects. So that's like Facebook, everyone's on it, you want to be on the platform that's got the most people since that's part of the user experience. Number two is technology. So what about this is so hard that even if you make it work and you basically show it to someone else, like put the rocket engine on the table, they still won't be able to copy it. Scale like Amazon, you just get so big that it's really hard for someone else to replicate and that scale gives you a cost advantage. And then brand, like customers just immediately recognize your product and it drives on marketing costs. So there's these four things and it's not really sufficient because you could say, well, we have a great company, we have all four of these things. We found our model, we've got a great strategy, but what's next? And I think this is where the execution piece comes in. This was all the strategy piece, but the execution really matters and execution done poorly, you can have all these things and you're just going to not go anywhere. Execution done really well. Some of these can actually be really weak. Maybe all of them could be really weak, but if your execution is good enough, you can probably get away with it. So the question is, why is that? Well, everybody thinks of consumer interact companies and the viral loop, right? It's like, this is how you grow. This is how you have success. I think people like to talk about this a lot and for people starting companies, for the first time in consumer interact, maybe this is what you think a lot about. This is a classic thing where a new user joins by using the product, they invite people, those people join it, it keeps going obviously. And if you get this right, you get exponential growth. And so people like to talk about this a lot. It seems like an easy way to make a huge company. Maybe if you've made a huge company, you want people to believe this is how you did it because maybe they'll never figure it out or they'll be missing the execution piece and then they won't be able to copy you. And so there's this execution loop that actually has a lot of the same dynamics where you get some sort of resources. Even if you're starting with almost nothing, how much can you do with those resources? And by pushing those as far as you can and investing those resources, you can basically convince people, hey, give us some more resources. It's like, look at what we did with what we had. You should give us more, we'll do even more with it. And so you can start doing this loop and those people are giving you new resources because you got profits or milestones accomplished. They could be friends and family, angel investors inside New Zealand, outside New Zealand, whatever. So you just kind of be scrappy and make your way around this loop as fast as you can. And the good thing about this is that unlike consumer internet, it applies everywhere. Unlike viral growth in consumer internet, any business can do this. So you can apply it to every single piece. So sales and marketing, if you can prove that customer lifetime value is more than acquisition cost, well then guess what? Someone's gonna give you money to pour fuel on that fire and give you marketing dollars to put to work because that's good ROI. Tech R&D, if you're building up a whole tech stack that no one's gonna be able to copy, people will fund that. The same goes for operational efficiency and scale and building a brand. So that all sounds great. It's like fantastic. I can run this operational loop that's gonna really grow, just execute like crazy. Or maybe I don't have to do that. Well the bad news is you actually have to do it even if you don't want to. So it's like the viral growth. Imagine like a consumer internet service that just grows linear. You know it's gonna eventually get taken over by someone who's growing exponentially. So you have this aggressive scaling loop where if you're in the everything else category and someone else says I'm gonna run that loop as fast as possible, they'll catch up to you. Even if you think you're the only one, eventually they'll catch up. Especially if you're doing something valuable. So eventually competition's gonna find you. If you're doing something that's important, if you're creating value and capturing value, someone else will eventually see those profits and they will say well we should probably get a piece of that, we can make this. And that's an inevitable thing and I think every company eventually sees that. So this is why it's actually not optional at all. You have to do all these things. You have to create value, capture value, you have to last and you better execute as hard as you can. The good thing actually about New Zealand markets is that there's time here to perfect what you're doing and prepare. So you need to prepare for this competition, whether it comes to you or you go to it. You have to be good at fundraising because that's going to be part of that scaling loop. And you just have to be ready and you have to have a plan for how you're going to do that. So the takeaways, I'd say set a vision that you're really passionate about, that your team can be passionate about. Make everyone passionate about it by making them an owner of the business too. Give them sock options. You have to both create and capture value obviously. And put defensibility at the very core of what you're doing and then scale fast once that time comes. So I think the last thought is, I think California and New Zealand aren't actually that different. Coming down here, it's my third trip down. I love it here. There's also a lot of stuff about California that I love, but that there's obviously Milford Sound and then the one below is Yosemite. They don't look that different. Both countries, California is almost like a country within the US. Both actually have people that really want to build new things and make the world a better place and are willing to be really innovative about how to do that. So I'd say, don't look up to California. See it disappear. It's not fundamentally different. And so I think our trips have been fantastic. We've met so many great companies. The incubators here look a lot like the incubators in the US. It's not a whole world apart or anything like that. So I'd say, yeah, go out and whatever vision you have, go pursue it. And yeah, I think me and Sam and everyone else here would love to help any way we can. So thanks a lot.