Mike Maples Jr.: Dare to Do Legendary Things [Entire Talk] | Summary and Q&A

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February 1, 2016
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Stanford eCorner
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Mike Maples Jr.: Dare to Do Legendary Things [Entire Talk]

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Summary

In this video, the speaker discusses the concept of Thunder lizards, which refers to companies that are big, adaptable, fearsome, and radioactive. He explains the three exponential laws of entrepreneurship - Moore's Law, Metcalfe's Law, and the Power Law - that drive startup opportunities. He also introduces the value stack framework, which includes proprietary power, product power, company power, and category power.

Questions & Answers

Q: What is the concept of Thunder lizards?

Thunder lizards refer to companies that are big, adaptable, fearsome, and radioactive. They are like Godzilla and they hatch from radioactive atomic eggs, representing the stage of the market that investors like to invest in.

Q: What are the three exponential laws of entrepreneurship?

The three exponential laws are Moore's Law, Metcalfe's Law, and the Power Law. Moore's Law states that the performance of computing doubles every 18 months at a given price. Metcalfe's Law states that the value of a network is a function of the square of the number of nodes. The Power Law states that a small percentage of startups create the majority of the value in the industry.

Q: How does Moore's Law impact the tech industry?

Moore's Law guarantees that the tech industry will remain magical because it ensures a continuous supply of new companies that can change the way we view the world. It guarantees that even the largest incumbent companies will eventually be overtaken by new companies benefiting from the power of compounding.

Q: What is Metcalfe's Law?

Metcalfe's Law states that the value of a network is proportional to the square of the number of nodes in the network. This means that as a network grows, it becomes more valuable because each new node has the potential to connect with all the existing nodes.

Q: What is the Power Law?

The Power Law states that a small percentage of startups create the majority of the value in the industry. In a typical year, there are thousands of startups, but only a few of them create 97% of all the exit value. This uneven distribution of value is a characteristic of the startup ecosystem.

Q: How does the value stack framework work?

The value stack is a hierarchy of powers that build upon each other. Starting with proprietary power, which gives a company an unfair advantage, then product power, which involves creating a product that people want and love, followed by company power for rapid scaling, and finally category power, which introduces a new category to the market.

Q: What is proprietary power?

Proprietary power refers to having an unfair advantage over competitors. It could be deep technology that is difficult to copy, or it could be a structural competitive advantage that makes it hard for competitors to attack you effectively.

Q: What is product power?

Product power means creating a product that people love and want. It involves achieving product-market fit, where the market pulls the product because it solves a problem or fulfills a desire. The goal is to delight the customer and exceed their expectations.

Q: What is company power?

Company power is about preparing for rapid scaling. It includes having a scalable business model and scalable management systems. It involves having a clear pricing strategy, increasing margins, and creating a strong company culture.

Q: What is category power?

Category power means introducing the world to a new category of product or service. Category Kings are the companies that redefine our point of view and change how people and businesses spend money. They capture a significant portion of the profit pool in a given market.

Q: What is the purpose of a seed round?

The purpose of a seed round is to marry proprietary and product power. It is about proving that you have created something that people love and that is defensible. It also lays the early groundwork for company power and category power in the next funding round.

Takeaways

The key takeaways from this video are the importance of identifying and investing in Thunder lizards - companies that are big, adaptable, fearsome, and radioactive. These companies are driven by the exponential laws of entrepreneurship - Moore's Law, Metcalfe's Law, and the Power Law. To build a successful startup, it is crucial to focus on proprietary power, product power, company power, and category power. These layers build upon each other and enable startups to achieve exponential growth and disrupt the market. Additionally, the purpose of a seed round is to establish a strong foundation for future success by combining proprietary and product power.

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