Have you ever thought about what it takes for a startup to reach a $1 billion valuation? The odds are slim – just about .00006%. But Silicon Valley investor Mike Maples Jr. seems to have a knack for spotting those diamonds in the rough.
Over his nearly two-decade investing career, Maples has identified a pattern among the startups he invested in early that have gone on to achieve billion-dollar status. Companies like Twitch, Twitter, and Lyft all share one key trait – they broke patterns. Instead of following the crowd, these successful startups defined the future on their own terms.
In a recent episode of the Masters of Scale podcast with Reid Hoffman, Maples explained, “Most people, when they saw the iPhone 4S, didn’t realize that the thing in their hand could change the future, but the Lyft guys and the Uber guys did.”
Maples emphasized the importance of breaking patterns in order to shape the future. He believes that great startups force a choice instead of a comparison.
Take Airbnb, for example. By turning the strengths of traditional accommodations into a weakness, Airbnb created a unique experience for travelers that forced consumers to make a choice, not just a comparison. Maples also noted that Airbnb’s success went beyond money – it sparked a social movement that aimed to transform society.
Maples sees groundbreaking startups as more than just businesses – they are social movements. These ideas may be polarizing at first, but they only need a minority of people who passionately believe in them to start a movement.
When Twitter co-founder Evan Williams pitched the idea to Maples, there was no roadmap or revenue model in place. But Williams had a vision of creating a micro-blogging platform that could attract millions of users. And we all know how that turned out – Twitter was acquired for $44 billion in 2022.
So, what makes an investor like Maples say yes to an early stage idea like Twitter? It all comes down to the founders. Maples looks for technically excellent founders with drive and tenacity. He believes in their ability to find groundbreaking ideas and deliver on them.
As Maples said on Masters of Scale, “The product that ends up winning is not the same product you see during a seed investment.” It’s the founders’ ability to evolve and adapt that ultimately leads to success.