Yesterday I attended the annual meeting of a visionary and exceptionally responsible venture capital fund. There are not a lot of them out there — maybe these are the real unicorns. I heard a few interesting things:

  • Extraordinary entrepreneurs take on huge, open-ended problems, never talk about revenue but are obsessed with mission. Revenue is the successful side effect of being obsessed with solving gigantic challenges (how to organize the worlds information.)
  • Jack Dorsey – Square/Twitter – is extraordinary at getting to the essence of things, which is what’s required of great designers.
  • The biggest business opportunities are in the industries that are the hardest to penetrate, the industries that have used their wealth and power to build the biggest walls around them, the greatest barriers to entry. These walls are often regulatory.
  • How to evaluate a new business in 30 minutes? Focus on one thing: does the entrepreneur have unique insights that meaningfully change how you think about an industry, or the world?
  • Cash is oxygen to start ups, there can never be enough.
  • Success requires a “big” market where an entrepreneur has the space to make lots of mistakes and still achieve validation of their business idea.
  •  Mobile first. Always. If you start out designing for a desktop you’re a dinosaur. 30 – 40% of all time spent on mobile devices is spent on Facebook.

Despite the huge reduction in value that Square received when they went public (a pre-IPO valuation of $4 billion knocked down to $2 billion) the sense in the meeting was that Uber, AirB&B, and Box along with all the other multi-billion Unicorns, are NOT overvalued when you analyze the size of the industries they participate in and compare it to their current sales and sales potential.

The unicorns will keep eating the dinasours.

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