An Investor in Airbnb, Pinterest and Square shares what founders should focus on

Shruti Gandhi (Array Ventures), Laura Mandaro (USAToday), Elad Gil (Color Genomics)

Elad Gil shares Shruti Gandhi of Array Ventures & Laura Mandaro how he invested in Airbnb, Pinterest, Square, Stripe, Wish, Zenefits, and Gusto, successfully founded Color Genomics and Mixer Lab (acq by Twitter), and hustled for a job after moving to Silicon Valley

Early Career & Development

Early Career Insights from Elad

- Be selective about who to work with on a day-to-day basis because typically it is a small group of people that ends up doing great things (e.g. ‘PayPal Mafia’)

- Understand the market for the type of company you work for — working for a growing company is vital to your success

To Get More Career Advice From Elad — Visit His Blog Post Here

After graduating from Massachusetts Institute of Technology (MIT) with a PhD in Biology, Elad knew he wanted to work in the technology sector. Though he didn’t have any technology experience, he had the hustle to get his foot in the door. He took meetings with anyone and begged people for a job.

He eventually was able to intern for Cisco and leverage that experience into working at a Telecom Equipment company in the early 2000’s — during the technology bubble.

After working at another job, Elad decided to transition into working at only software companies. Again, he put his hustler hat on and was willing to initially work for free to get his foot in the door.

Life As An Entrepreneur

Entrepreneur Insights from Elad

- Good companies have a clear value proposition for customers

- Don’t raise ahead of where you are at — you don’t have to take the higher valuation

- Have a clear financial plan: understand your burn rate and have enough cash for 18, 24, or 36 months and then save more than projected

After working at Google for three years, Elad co-founded his first company — Mixer Labs. It was a company that created a location engine for developers. Two years after founding the company, Twitter purchased Mixer Labs for roughly $5 million.

Several years later after working at Twitter, Elad co-founded another company called Color Genomics. The company screens your DNA to indicate your risk for developing certain cancers. In September of 2016, it raised a Series B round for $45 million.

The company’s value proposition is clear. Color Genomics sells test kits for $250 as compared to $4,000 from other companies — a major reduction in costs for consumers!

Insights As An Investor

Investing Insights from Elad

- Understand whether you or an enterprise would use the product

- Understand the market size and dynamics

- Only invest if willing to lose all your money

- Understanding how the team functions is very important

After Twitter acquired Mixer Labs, Elad invested in many different great companies — Airbnb, Gusto (Check out my interview with Gusto CEO), Square, Stripe, Pinterest, Wish, Zenefits. As an investor, he adds value to early stage entrepreneurs through recruiting efforts and guidance for financing rounds. In the later stages, he helps founders with an acquisition strategy. His phone line is always open too; he connected with Stripe’s founders on a late Saturday night!

Insights On Market

When the market was better, founders assumed their company would be acquired by a larger company, despite lackluster growth. When the market was frothier, larger companies would even acquire start-ups just for their talent base only.

Today, as valuations have come down, larger companies will only make an acquisition to gain market share, grow revenue, or cut costs. Additionally, larger companies will make an acquisition if they believe a start-up has a superior product.

As we’ve seen throughout the Elad’s career, having a hustler’s ambition and taking measured risks can pay very high dividends in the future.

Still want more? Check out the entire podcast here:

Shruti Gandhi is thankful to Elad Gil for his early advice and support during early days of Array Ventures. Array Ventures is VC firm focused on investing in founders creating companies that take advantage of data, artificial intelligence, and new behaviors to create new platforms for large markets.