Having interviewed the biggest tech founders and venture capital titans of Silicon Valley, Startup Grind founder Derek Andersen believes just 2pc of them are actually geniuses, and one of those rare 2pc is Ireland’s own Patrick Collison, co-founder of Stripe.
Startup Grind, a Silicon Valley-based group powered by Google for Entrepreneurs, educates and mentors entrepreneurs around the world through monthly speaking events that centre around fireside chats with leading founders and entrepreneurs.
Andersen founded Startup Grind with Spencer Nielsen in 2010 as an informal event for friends at his office. After an entrepreneur encouraged them to do more, it became a monthly event and, since then, has spread to 200 cities worldwide.
One of the earliest overseas Startup Grind events was held in Dublin and now Andersen is in town tomorrow night for a Bank of Ireland-supported event hosted by NDRC’s David Scanlon.
‘Dublin was one of our first chapters and it is such a cool tech city, I’ve heard so much about it. Now there’s a good chance for me to finally see what it is all about’
– DEREK ANDERSEN, STARTUP GRIND
Prior to starting Startup Grind, Andersen ran an incubator called Vaporware Labs, out of which Startup Grind grew as a project. Another project, a business social network called Commonred, was acquired by Income.com in 2012.
Before embarking on the entrepreneurial journey in 2009, Andersen worked at EA, where he worked in marketing roles around popular games like Battlefield, Mirror’s Edge, Need for Speed and Sims 3.
Summing up his career as an entrepreneur before founding Startup Grind, Andersen described it as mostly a series of “spectacular failures over and over again. That sums up my entrepreneurial career”.
Self-deprecating humour aside, Andersen left EA and ran various consulting projects for companies like Palm, Netgear, EA and Activision.
“Most of those things really failed miserably and Startup Grind was started as a fun side project for me and a friend of mine and we invited friends to attend it one night and it was fun and it worked and we decided to do it again.”
After selling Commonred to Income.com, Andersen decided to double-down on Startup Grind.
“That’s where it went from being a meet-up to this broader community and we’ve been working on that basically for the last four years.”
Opening up founders to fellow founders
Startup Grind’s format – an hour-or-so-long fireside chat – provides entrepreneurs with an immersive experience where founders recount their life lessons in front of fellow founders.
“Founders by their nature are hard to teach. And so they are sort of like ‘we know everything and we have to learn everything the hard way’… [but] once we started doing the fireside chats, we found that it had a great value proposition.
“It was really good for the audience because they got to learn and, sometimes when people go on stage they make sales pitches, so this was a good way to avoid that and get a more off-the-cuff, less sales-based type of conversation [going].
“What I find with these talks is the best part of the talk is usually between 30 and 45 minutes in – that part after it takes them a while to warm up and get past the usual stuff and into the more interesting things and at the end it kinda tails off at some point.”
Anderson prefers these hour-long one-to-one interviews over panel discussions where speakers only really get between five and 15 minutes to say anything.
“Sometimes people need more time and giving someone the full stage is a good way to do that.”
‘Countries everywhere are putting tons of money into innovation and entrepreneurship – everyone wants Facebook in their city’
– DEREK ANDERSEN, STARUP GRIND
This brings us to Andersen’s favourite interviews. “I just did this interview with Clayton Christensen and Marc Andreessen, which I prepared for months for, and it was really good and one of those things that will live on for a long time.
“There is an interview from two years ago that Marc Suster did with Clay on our stage that is probably the best interview we’ve ever had at Startup Grind
“I did an interview with the co-founder of Stripe (Patrick Collison) back in 2012 right after they raised their Series A, I also had a very interesting conversation with Matt Rogers from Nest right before they were bought by Google.”
Other favourite interviews include the founder of Atari, Nolan Bushnell, the founder of EA, Trip Hawkins, and Ann Miura-Ko, a partner with Floodgate Capital.
But, interestingly, Andersen’s ultimate favourite interview was with rapper MC Hammer.
“You may just think ‘what has he got to share’? But he was a really insightful, smart guy and his talk was fascinating. He is famous for having squandered tens of millions of dollars and he talked about why he did it and how he lost the money and it just made sense. It didn’t sound like he was an idiot, he did it because he wanted to get people off the streets that he knew were going to die on the streets. He hired 80 people because he knew they would die in Oakland. You kind of have a different perspective [after speaking to him].”
Traits of successful founders
Having worked in Silicon Valley as an employee, then an entrepreneur and now from his vantage point of interviewing some of the outstanding individuals in the entrepreneurial world, Andersen is quite exacting when it comes to figuring out the traits of successful founders.
“Only 2pc of the people I’ve interviewed are geniuses – you might think that would be higher. I think Patrick Collison is a genius, I think Matt Rogers is a genius. Just above and beyond intelligence, not even the average person but the average uber-successful person. They are just way in a different stratosphere above them and they consume information at a totally different pace than the rest of us.
‘People were investing five times as much two to three years ago as they are now, everyone has pulled back and is nervous and that will have a cascading effect’
– DEREK ANDERSON, STARTUP GRIND
“The common trait I see – all of these people have to eat, go to the bathroom, put their pants on one leg at a time, just like you and I, but they really are normal people, maybe a little eccentric, but basically normal people. The link between everyone, the founders that have managed to get to success, are the ones who are the best survivors.
“These are people who can just outlast, outsurvive what happens to them. Start-ups are a war of attrition and most people – and I mean the really good people, not just the losers, but really great people – most of them give up.
“And these people that don’t, they just have something that pushes and pushes them to really unnatural levels like climbing Everest. They are the ones that do lose their fingers and toes in the process but some people can just figure out how to get to the top of the mountain better than others.”
Bursting the bubble
Andersen was in college when the dot-com crash of 2000 struck and left his job in 2009 as the financial meltdown was underway. He believes the current tech economy might be due a correction but not in the same way as doomsayers might expect.
“I just think that innovation, start-ups and entrepreneurship has so much momentum. I think there are so many governments involved. The EU is putting hundreds of millions of euros into innovation, the Nordics are putting in billions and this is reflecting on every country in the world. Countries everywhere are putting tons of money into innovation and entrepreneurship – everyone wants Facebook in their city.
“But do I think some correction may need to happen? Yes, because people were investing five times as much two to three years ago as they are now, everyone has pulled back and are nervous and that will have a cascading effect.
“But still, there is so much money for entrepreneurs – the early stage won’t suffer that much. There are growing numbers of angel investors, there are over 7,000 incubators: Y-Combinator wants to fund 1,000 companies, 500 Startups has funded 1,000-plus companies, Techstars has incubators seemingly everywhere. So I don’t think that is going to change, but I don’t think we are creating that many more winners
“There are 10 companies a year that are driving all the returns in the industry and no one that I have talked to says that that has changed. So, even with all the unicorns, the number of companies you need to get in with as an investor in order to get a Google-style return fund, as the early Google investors did, it is like 10 companies.
“I’m an optimist but clearly there are some issues right now.”
Rules of entrepreneurship
Observing fellow start-ups, and after experiencing the kind of high-octane networking that defines Silicon Valley, Andersen has developed some ground rules for how to conduct yourself as an entrepreneur.
“If your founding team is not looking really good, you are starting a marathon with two broken legs and you may get some of the way down the road on your knuckles but you are doomed from the start.”
When it comes to networking, have values: seek friends, not contacts.
“I am hoping to be an entrepreneur 30 years from now and I am playing a relationship game. Everyone I talk to, every interaction, I am not thinking what can I get out of this right now, I am thinking how do I build a relationship with this person for the next five to 10 years.
“It is the idea of giving before you take, which is what all the great entrepreneurs do and, if you go to events, if you begin every relationship with ‘what do I get out of this?’ you will find that people don’t want to work with you very quickly.
“But if you have a give-first mentality and mean to help people, then doors open. That is part of what makes Silicon Valley special.
“Also, always read cold emails. You never know where the next opportunity is going to come from and I have billionaires who respond to my cold emails and if they can do that then I can certainly do it. And other founders can certainly do it.
Educating every entrepreneur
Looking to the future of Startup Grind, getting to 200 cities in 75 countries worldwide is quite an achievement. But Andersen is keen to preserve the spirit of Startup Grind.
“Our goal is to educate every entrepreneur in the world, we help about a few million a month, mostly through online content. Between 8,000 and 10,000 people attend our events every month.
“But there are 400m entrepreneurs in the world, so we have a long way to go and, as far as organisations that do this, we are one of the best, one of the biggest, mostly because we focused on helping start-ups and educating people, and we look up four years later and there’s a lot of compounded interest on that.”
What Andersen is proudest of is the diversity of where the chapters are, from Palestine to Rwanda, London to New York and Dublin.
“If we find a great person we will do it anywhere. It’s not about money or how much we get out of it. We are an impact company and there are specific impact metrics that we abide by and if we can impact in that small city in Kenya, we will do it if the right person presents themselves.”
Vetting hosts is critical and competitive and, in Ireland, the Startup Grind events are hosted by NDRC’s David Scanlon in Dublin and Bank of Ireland’s Pat Carroll in Limerick.
Andersen said he has recently gone through 4,000 applications for directors of potential chapters. “It is a gruelling process to apply and become a director. The key is that the person is a volunteer and you are often at the mercy of what they can do and how passionate they are. They have day jobs and this is like their 20pc project, as if they are at Google.”
He said that he is excited about taking the stage tomorrow night (9 June).
“Dublin was one of our first chapters and it is such a cool tech city, I’ve heard so much about it. Now there’s a good chance for me to finally see what it is all about.”