Naval Ravikant – AngelList 2 of 2

“The founders’ founder.” Naval and AngelList are fundamentally disrupting the way startups get funded at an unprecedented scale and speed.

Matthew: Again, people have some myths, especially people who haven’t founded or started something. They have myths about founders, about entrepreneurs, about how they get things done. People like you and other founders you’ve met, we think they tend to make starting things look easy when in fact it’s really, really difficult. And so one of the questions we like to ask our guests is what are some of the things that you make look easy, that kind of maybe come intuitively to you, and then in terms of building out your team and partnering or co-founding, what are you looking for?

Naval: Yeah. I don’t know what I make look easy. It’s all hard. It’s all really, really hard and you just do it because you want to and you like it and you have a bias towards action. I guess one thing that I do a lot better these days than I use to is I decide much faster. I follow my gut. I used to think that you have to logically reason through everything and I’m a highly logical person, but now I’ll just say that doesn’t feel right to me and I’ll go with my gut. I don’t need to survey 20 opinions and take the average. 

So I think you have to trust yourself a lot because at the end of the day, it’s going to be your company and you have to succeed and fail and die on your own merits. So you can’t listen too much to other people, especially in something you know well and you care about. 

In terms of recruiting, I always like Warren Buffet’s criteria. Intelligence, energy, integrity. So, hard-working, smart people you can trust. That’s the gold standard. And you kind of don’t want to compromise on any of those three.

Matthew: Right. I’ve read some of your posts about finding co-founders and building founding teams to launch startups and that definitely resonates with those. I know that you’re kind of the front man for Angel List.

Naval: Right. We say if it was A Team, I’m Face and Nivi’s Murdoch. 

Matthew: Okay. So we’d like to hear a little bit more about Nivi. I know that you guys are both co-authors of Venture Hacks. He’s an entrepreneur, very active angel investor as well. But I’d like to learn a little more about how you guys met, the dynamics there, so our audience can hear that.

Naval: Yeah. Nivi’s a very smart guy. MIT and then he was at [ER], Bessemer, and Atlas. He helped startup a company called Song Bird which raised money from Sequoia and during the fundraising, he reached out to me and asked me for some advice because I was known as a little bit of a fundraising guy. I gave him some advice and he said well how come this has never been written down before? So he started writing it down as Venture Hacks. We started talking even back then in 2007 about how to productize it. We had a couple of failed efforts and then AngelList worked.

Matthew: And can you shed light on any of those failed efforts?

Naval: Yeah, we had a deal flow network that we ruled out in 2007. We had a Yammer group in 2009. We had a Google group in 2008. We sort of tried one variation every year for the last four years.

Matthew: Okay. So I think this is a really important point again for our audience because, again, lot of media channels just cover the big winners.

Naval: Of course, yeah.

Matthew: People watch that and they think wow, these people must be brilliant.

Naval: Right.

Matthew: They just started this over night.

Naval: They were just rats in wheel, or hamsters on wheels who keep running long enough.

Matthew: That makes sense.

Naval: You just have to keep trying. You can’t succeed until you fail a bunch of times.

Matthew: Excellent. And so in terms of where you are with AngelList, are you guys rolling out new features? What’s the big vision for AngelList? Are you still discovering more from your users?

Naval: Oh, constantly. There’s an infinite number to be built. Just today, we rolled out very sophisticated location matching.

Matthew: Okay.

Naval: So we can match up startups and investors by geography. We initially rolled out market matching. We have some crowd voting active on the site. We started making more and more of the site visible without revealing the startups identities to people who come in off the web in general. We’re automating a lot of the startup curation and angel curation processes. There’s tons and tons of features coming. We’ve got infinite runway in terms of things to build.

Matthew: Excellent.

Naval: It’s a very, very inefficient market that we’re operating in.

Matthew: So then would it be safe to say that there’s a lot of room to offer products and services that are marginally better than the status quo and people are going to love it?

Naval: I hope so. I think it’s more than marginally. I think this is a market that has been hidden from the light of day for a long time. And so I think there’s a lot of opportunity here.

Matthew: What is one of the things that you know now that you wish you would have learned prior to starting AngelList?

Naval: Yeah. I should have done it more sooner, not wait so much. Not think so much. Even to the extent that I have a bias towards action more than most people. I should have done it sooner. Actually, the most important thing I learned by far though, that’s secondary. The most important thing by far is doing something you really, genuinely care about because that’s the only way you’ll stick with it long enough and hard enough that you’ll find the answer at the end. You’ll get it working.

Matthew: That makes sense. We interviewed another founder who said marry the problem, not the solution and that’s a really good way to put it. Right, right. And so the second part of the question is what’s the most important lesson you’ve learned? Would it be what you just said or is there, I guess it doesn’t necessarily have to be with just AngelList but just an entrepreneur and active angel investor. If you could share that with our audience.

Naval: Yeah. I think it’s better to be more open and helpful than closed and short term optimizing. You’ve got to long term optimize in life. You want to cooperate and work with people that you know are going to be in your life a decade or two from now. You want to work on problems that you know you’ll still be interested in a decade from now. 

Just like you want to marry someone you know you’re [inaudible 06:00] a decade from now. So focus on the long term. Short term optimization. Get rich quick schemes. Working with someone you can’t tolerate but you say you’re going to do it just for another six months or another year. Working on a problem that you’re not generally interested in but you’re like oh, I think there’s money here. Those are all mistakes and traps. 

Matthew: That’s good advice. Thank you for that. In terms of launching a startup, what do you think are the key elements?

Naval: I think you have to pick a huge market because you’re definitely going to screw up so you have to have room to pivot. You’ve got to work on something you really care about. You have to work with people that are high intelligence, energy, and integrity and you have to come up with some kind of unfair advantage that you’re going to be able to, either by getting some distribution that nobody else has or by doing some really hard technology that other people would have a hard time solving or by having some clever insight in the market which you can exploit before everybody else gets there.

Matthew: Makes sense. And then, before we close, I’d like for you to give our audience, again, kind of your vision for AngelList and how you hope to change the world with it.

Naval: We’re going to get every worthy startup funded quickly, efficiently, and on market terms.

Matthew: Excellent. And so, Naval, we really appreciate you being here as a guest. We hope you’ll come back and for our audience, for those of you who would like to, if you’re founders out there and you’re looking to raise capital, you can learn more about AngelList by visiting their website, which is

Naval: Dot co, correct. Without the m.

Matthew: Dot co, without the m.

Naval: Perfect. Thank you.

Matthew: And again, this is Matthew Wise with FounderLY and thanks a lot Naval.

Naval: Thank you for having me.


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