Accel Invests in Tailscale

Podcast Summary

• From AirPods to 'Sleeping Dogs': Technology's Impact on Our Lives: Technology shapes our daily experiences, from frustrating moments with personal devices to innovative solutions for entertainment and business.

  Technology has been a significant part of people's lives for decades, and it continues to evolve and make an impact. For instance, Scott McGrew shares his experiences with his young son hiding his AirPods and his older roommate taking them, showcasing how technology can be a source of frustration. Meanwhile, Scott reflects on his early computer experiences, starting with an Apple 2 plus when he was around 12 years old and his father's Tandy color computer when he was just 3. Fast forward to the present, entrepreneurs like Avery Penneran are creating innovative tech solutions, such as Tailscale, which allows devices to communicate with each other seamlessly. Technology's impact is far-reaching, from entertainment, like the gripping murder mystery "Sleeping Dogs," starring Russell Crowe, to business, like Tailscale, which offers a programmable network solution. As we move forward, it's essential to embrace technology and its advancements, whether that's starting a new smile journey with Byte or delving into the shadows of the mind with "Sleeping Dogs."

• Discovering product-market fit early on is crucial: Early focus on product-market fit can save a startup from prolonged growth and potential sale, leading to greater success

  Figuring out product-market fit early on is crucial for a startup's success. The speaker started a company in their dorm room as a co-op experience, but they accidentally discovered a profitable product. However, they failed to achieve mainstream adoption, and after several years of manufacturing and growing the business, they sold it to IBM in 2008. Although they didn't become rich, they managed to make their investors happy and exit before things got worse. However, the speaker noted that acquisitions often don't go as planned, and IBM struggled to digest their acquisition. The lesson learned is that focusing on product-market fit early on can save a startup from prolonged growth and eventual sale, potentially leading to greater success.

• Google's unexpected shutdown of a project leaves an employee disillusioned: Despite working for a tech giant, job security and satisfaction aren't guaranteed. Employees may seek control, job satisfaction, and longevity by starting their own companies.

  Even working for a tech giant like Google, with its impressive infrastructure and innovative projects, may not guarantee job security or satisfaction for every employee. The speaker, who spent eight years at Google, shared his experience of having a product he spent six years building being shut down unexpectedly. This event, coupled with previous experiences of being acquired and having projects shut down, led him to feel disillusioned and ready for a change. He wanted to create something that would last, and the only way to do that was to start his own company. Google's focus on building infrastructure for large-scale projects, such as search, meant that smaller projects had to use the same resources, which could be inefficient and frustrating. The speaker admired Google's achievements but felt that the company's culture and infrastructure didn't align with his goals. Ultimately, his decision to leave Google and start a startup was driven by a desire for control, job satisfaction, and the ability to build something that would last.

• Discovering the value of simplifying tasks for early-stage businesses: Venture capitalist Amit Kumar invests in Tailscale, a company that simplifies tasks for engineers, recognizing the importance of addressing neglected needs in the industry.

  While it's impressive to build solutions for a large user base, the reality is that most projects don't require such massive scaling. After leaving Google, the speaker discovered that the industry's obsession with scalability had led to neglect of simpler tasks. Tailscale, the company they started, aimed to simplify things for engineers, allowing them to focus on easy tasks while leaving the complex ones to others. Amit Kumar, a partner at Accel, saw the potential in Tailscale and invested in the company, recognizing the value of addressing the often-neglected needs of early-stage businesses. As a venture capitalist, Kumar looks for opportunities to invest in world-changing entrepreneurs and build conviction in their businesses, ultimately joining their boards to help them succeed.

• The role of investors as supportive partners and advisors: Investors like Tom Hulme serve as pseudo co-founders, providing empathy, perspective, and guidance to entrepreneurs they invest in, while their primary role is finding great entrepreneurs, making informed investment decisions, and collaborating for the company's success.

  Effective leadership and a strong board of directors play crucial roles in the success of a company. The founders or entrepreneurs are the driving forces behind the business, but investors, such as Tom Hulme, serve as supportive partners and advisors. Hulme, who sits on the board of directors for CarMax and Hyundai, views his role as a pseudo co-founder, providing empathy, perspective, and guidance to the entrepreneurs he invests in. While good governance is important, the venture capital job primarily involves finding great entrepreneurs, making informed investment decisions, and then working closely with the company to help it thrive. Ultimately, the relationship between entrepreneurs and investors is a collaborative one, with both parties working together to bring new ideas and innovations to the world. So whether you're an entrepreneur looking for investment or an investor seeking the next big thing, remember that the journey is about finding the right fit and working together to create something special.

• Collaborative approach in VC industry: VCs collaborate to support company growth, providing resources, hiring talent, and fundraising assistance, leading to better outcomes for all involved

  In the venture capital industry, collaboration is key even when a firm is not the sole investor in a company. Excel, as an example, not only coaches and supports the growth of Tailscale but also hires executives and refers talented people from their network to the company. This collaborative approach is common in the industry, with multiple venture capital firms investing in and supporting the growth of successful companies like Slack, Uber, and Dropbox. The role of a venture capitalist on the board is to help organize fundraising and connect with other firms to collectively invest in the business. While the founders ultimately make the decision on who to bring on as investors, having strong representation from multiple firms can lead to a better outcome for everyone involved. The goal is to deliver a fantastic outcome for the company, regardless of who holds the largest share.

• Partnering with new investors or companies brings benefits: New partners or investors bring valuable advice, support, and fresh perspectives, leading to better outcomes for the company. Leaving a stable job to start a company can increase employability and attractiveness to other companies.

  Bringing in new partners or investors with complementary experiences and resources can greatly benefit a company, even if it means sharing the ownership or control. This approach can provide valuable advice, support, and fresh perspectives, which can lead to better outcomes for the company. Additionally, taking the risk to leave established companies and start something new can actually increase one's employability and attractiveness to other companies, especially those looking to initiate new initiatives. The decision to leave a stable job to start a company should not be taken lightly, but the risk can lead to valuable learning experiences and opportunities.

• Emphasizing persistence and continuous learning in entrepreneurship: Persist, learn, and adapt: key factors in entrepreneurial success. Seize opportunities, work with talented people, and learn from experiences, even in failure.

  Persistence and continuous learning are key factors in entrepreneurial success. The speaker, who has started three companies, emphasizes the importance of getting better, working with talented people, and learning from experiences, even if some ventures don't turn out as planned. These experiences ultimately led him to venture capital and the opportunity to invest in companies like Tailscale. Working in Canada as a startup entrepreneur might offer personal financial advantages due to lower living costs, but it's essential to consider the specific circumstances and challenges of each situation. The speaker's story underscores the importance of resilience, adaptability, and seizing opportunities to grow and succeed.

• Staying focused and open to opportunities: Perseverance and being in the right place at the right time can lead to success despite financial constraints. Stay focused on goals and be open to opportunities to grow your business.

  Perseverance and being in the right place at the right time can lead to success, even with limited resources. Avery Penner, the founder of Tailscale, shares his experience of considering moving back to a lower-cost urban center due to financial constraints, but eventually securing a first round of funding and a high-profile customer within six months. This allowed him to continue building his business without dipping deeply into his savings. Penner's story highlights the importance of staying focused on your goals and being open to opportunities, even when faced with challenges. Additionally, the podcast episode touches on the importance of having the right team and resources in place to help drive success.