Earlier this week I read Recode’s profile on Evan Spiegel, the cofounder and CEO of Snapchat. The story got me thinking about when I first met Evan, and how far the company has come since then, which Business Insider talked about a couple of years ago. From the beginning, he had a clear view of the future of the company:
During the meeting, Spiegel shared his vision for Snapchat. Facebook is a place where you can share superficial feelings with the world. It’s for sharing times when you’re happy, confident, and enjoying life. But what about all the other times when you’re sad, feeling crazy or even depressed?
Spiegel felt there should be a place where intimate feelings could be expressed privately via fleeting messages. After all, true friendships are formed when people share both positive and negative experiences. And negative experiences can’t be housed on a public, identifying platform like Facebook.
Spiegel’s app hadn’t been downloaded many times, but engagement metrics were strong. “People were using it like crazy and staying for a really long time,” Liew recalls.
Lightspeed was the first investor in Snapchat, and it is far and away the most successful company that I’ve ever funded. Success has many parents, but it got me thinking about the relative impact that the right founders, the right execs and the right investors have in creating a successful company.
I think the right founder makes a 30X difference to the success of a company. Evan Spiegel and Bobby Murphy are the right founders. Founders are the heart and soul of a company; they provide the vision and the drive; they see a future that no one else sees yet, and then they make it a reality. With Snapchat we’ve seen Evan and Bobby’s vision upend conventional wisdom time and again, from disappearing photos that relieve the pressure to make each post perfect, to chronological stories when the dominant paradigm was reverse chronological feeds, to the genius of using sophisticated computer vision technology to create funny lenses that have become part of the popular culture of an entire generation.
As a company grows, it becomes impossible for the founders to do everything. The right exec team can make a 3x difference to the success of a company. The right exec team will channel the founders vision and operationalize it. They can make that vision become a reality faster and more efficiently. Snapchat has built an excellent team as it has grown, adding domain expertise across finance, media, engineering, strategy, legal, recruiting and most recently product.
Investors, board members and advisors can make a 30% difference to the success of a company. If founders are leading actors, and execs are supporting actors, then investors are extras. A 30% difference isn’t nothing. And +30% is a heck of a lot better than -30%. But our impact is very much on the periphery. It can help a great company be perhaps a little better, but it can’t make a good company great.
As investors, we provided some help to Snapchat at the very beginning; money, support, counsel. We provided them with office space, introduced them to their outside counsel, helped them recruit their first two engineers (alumni of our Summer Grant program), and introduced them to investors who led the subsequent rounds of financing. But it very quickly became clear that the strategic and product judgement of the founders could not be improved upon. Snapchat became a verb because of Evan and Bobby.
So there you have it. Founders make a 30x difference. Execs a 3x difference. investors a 30% difference.
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