Investor Wesley Chan has shown a knack for making very early investments in multi-billion dollar unicorns such as Plaid, Gusto, Flexport and, most recently, Canva.
Chan comes from an unconventional background: he grew up in an immigrant family and received only average grades in high school. But he got a job washing test tubes in a Caltech lab and impressed the lab director. Ellen Rothenberg enough to get his help to get into MIT.
From there, his serendipitous journey continued: He majored in computer science because it seemed like a good career path, but he landed in Silicon Valley right after the dot-com crash, when the only company hiring was a search startup. called Google. After nearly a decade working on vital products like Google Analytics, Chan was ready to do his own thing, but co-founder Sergey Brin convinced him to join the company’s nascent venture arm, then called Google Ventures (now GV), and From there he has had a long career in the business sector, creating his own company, FPV, with his partner Pegah Ebrahimi, a few years ago.
The point of all this is that there is an incredible amount of luck and timing involved in any success story, and Chan is the first to admit it, telling the audience at britcommerce Disrupt 2024: “Luck matters a lot, but the best founders who know how to do it.” to put luck in your favor I really have a keen sense of why timing is important.”
He remembers what Brin told him about the founding of Google, that they started at a particular time when other search engines were trying to keep users on their sites as long as possible to show them ads. Google’s innovation was paying off almost immediately, giving users no particular incentive to stay, but rather firing them. (It’s changed a bit since then.) But Brin said timing was everything: If they had started six months earlier or six months later, business conditions would have been different and the competition would not have given them such an easy opening. .
So what is Chan looking for when trying to choose the next unicorn? He says there is almost no commonality in the companies he funds, except founders who remind him of Sergey Brin and Larry Page, with a strong belief that they are solving an urgent and timely problem with a truly unique vision. That, and focusing on building a great product first, rather than trying to buy customers or grow.
“There are a lot of challenges for founders in the early stages: they raise money and then spend it all in 18 months, buying growth, but there is no reason for people to stay there, get involved in the product or tell other people about it. . And then you burn all your money and say, oh, I need to raise another round.”
That focus on product is also vital if you want to catch Chan’s attention. He doesn’t find founders at conferences or events, he says, but only talks to those who introduce him to them through word of mouth from other founders in his network.
“There are only two of us in the firm, right? We can’t receive every cold email or every proposal, or every person that shows up at the door. So the best founders come to us through our other founders, right? They build something that we notice or our founders notice. You have to meet this guy. The products, incredible. We are using it in our board meetings. We are using it in our companies. I have it on my iPhone, right? Or we meet them through our network, where one of our founders actually says, ‘I’m investing some money in this guy; “He’s amazing.”