Theory #7 | We're going to see more Silicon Valley startups that operate like small businesses. And some of them will have big outcomes. Perhaps even billion-dollar ones. I call this phenomenon the Silicon Valley small business (an SV-SB for short).
It's an original phrase I've used here to 1) capture the hybrid nature of the archetype and 2) challenge what I believe is common thinking - that "Silicon Valley" philosophically contradicts with "small business" ideology.
Fascinating! Yeah I see this as the combo of less-VC-prestige and people understanding you don't need to (or may not want to) 100x in order to run a buisness.
SV-SB is a great name for it; truly the best of both worlds! Ha!
I really like this and it puts an intellectual framework on something I've been thinking about as well for a long time. However, I would try to pick a name that doesn't emphasize the "small" and puts more emphasis on the leannes and efficiency.
I think its more complex than that - first the article starts by talking about startups, but later on makes it clear it only means TECH startups, which is a small subset of all startups. I do mostly mentoring of technology (not "tech") startups with an impact focus - that's a whole other category. In the startup mentoring space we often use the terms SME (Small to Medium Enterprise) - current size ~2 success is doubling in size; versus SGB - current size ~2, success is 10x or 100x. These could be what the author has rediscovered and called Silicon Valley Small. With the VCs increasingly chasing mythical unicorns i.e. very low likelihood of success, but billion+ exit, there are of course a bunch of startups chasing that funding but the risk from a startup entrepreneur perspective look much worse. The VC gets to spread their risk across multiple potential unicorns, the entrepreneur only gets one chance and most will fail with a zero (or negative) return. With VCs focused on potential unicorns, there are lot of good, very investable, SGBs that are not getting funding, even though they have the a high likelihood of delivering the 10x return previously sought by VCs. Most of my mentees (and my previous companies) fall in that category.
One of my favorite pieces of the year so far! Have shared it with more than a few friends at this point
Appreciate it 🙏 Glad it resonates with you!
Very interesting, I happened to start a SV-SB few months ago! Feels like reading about myself :D
I am doing one of these! It was so cool to read your post and realize that more people are going to be building companies this way.
🙌 Ty!
Is the SV-SB a common/known term or you have come up with this?
It's an original phrase I've used here to 1) capture the hybrid nature of the archetype and 2) challenge what I believe is common thinking - that "Silicon Valley" philosophically contradicts with "small business" ideology.
Fascinating! Yeah I see this as the combo of less-VC-prestige and people understanding you don't need to (or may not want to) 100x in order to run a buisness.
SV-SB is a great name for it; truly the best of both worlds! Ha!
This is SO good. Before-the-buzzer addition to my favourite-pieces-of-the-year list.
I really like this and it puts an intellectual framework on something I've been thinking about as well for a long time. However, I would try to pick a name that doesn't emphasize the "small" and puts more emphasis on the leannes and efficiency.
I think its more complex than that - first the article starts by talking about startups, but later on makes it clear it only means TECH startups, which is a small subset of all startups. I do mostly mentoring of technology (not "tech") startups with an impact focus - that's a whole other category. In the startup mentoring space we often use the terms SME (Small to Medium Enterprise) - current size ~2 success is doubling in size; versus SGB - current size ~2, success is 10x or 100x. These could be what the author has rediscovered and called Silicon Valley Small. With the VCs increasingly chasing mythical unicorns i.e. very low likelihood of success, but billion+ exit, there are of course a bunch of startups chasing that funding but the risk from a startup entrepreneur perspective look much worse. The VC gets to spread their risk across multiple potential unicorns, the entrepreneur only gets one chance and most will fail with a zero (or negative) return. With VCs focused on potential unicorns, there are lot of good, very investable, SGBs that are not getting funding, even though they have the a high likelihood of delivering the 10x return previously sought by VCs. Most of my mentees (and my previous companies) fall in that category.