Keith RaboisManaging Director, Khosla Ventures

A Formula for Startup Success - Keith Rabois

Name: A Formula for Startup Success - Keith Rabois
Uploaded: 2020-10-08T07:00:02+00:00
Duration: 42 s
Channel: Keith Rabois
Description: In this brief monologue, Keith Rabois acknowledges that a universal formula for startup success is a myth, yet he outlines a repeatable set of principles…

8 Oct 2020 · 1 min

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In this brief monologue, Keith Rabois acknowledges that a universal formula for startup success is a myth, yet he outlines a repeatable set of principles that have produced outsized results. He argues that the most fertile opportunities lie in highly fragmented industries where customers are demonstrably dissatisfied—often reflected by low Net Promoter Scores (NPS). By building a vertically integrated company that directly addresses the core pain points, a startup can simplify the value proposition and deliver a markedly better customer experience. He cites Open Door and Square as concrete examples of this approach and expresses enthusiasm whenever a startup’s strategy aligns with these elements.

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A formula for startup success is sort of a fool's errand, but nevertheless, I've occasionally tried to distill it. There is no specific formula for success, but one common set of principles that has yielded a disproportionate number of successes is to find an industry that's very fragmented, where customers are very unhappy and measured, let's say, empirically by a low NPS score, to then create a vertically integrated company that addresses the pain points simplifies the value proposition and therefore creates a more compelling experience. This has worked for companies like Open Door and Square, among many others. So when I hear a formula in articulation that has all those elements, I'm very excited.