From Google’s First PM to Backing 50 Unicorns — The 10X Principle | Felicis, Aydin Senkut

Don't Let People Put You in the Box

00:00There were maybe six or seven things in my life where I was in a very difficult situation and I was having a very tough time and what I did then uh led me to being here today. I think as human beings whenever there's a setback whenever there is tough time there's almost like two things we can do either we can accept the setback we can say okay this is terrible but then what we do after really matters right and so I think the most important thing is like to suspend this belief and I think it's really important because one of the things that I tell people is that I am

00:30really sitting here almost in every critical part of my life people tried to put me in a box and that was not the box I wanted right like they're like oh like you're going to stay in Turkey, you're never going to get out of it. Then I come to the US and like, oh, like, you're only in this university and not the best university.

00:44Then I go there and they're like, you're not engineer and you won't work at a tech company. Then I come to a tech company, it's like, well, you haven't been trained for this. You'll never do it. And I do it and it's like, well, you were not a VP and you won't do this.

00:56And then I come to venture capital, it's like, you can never do venture capital because you've never done venture capital. So I think this is just one example of like a setback and disappointment. Like as founders, like they're going to tell you it's never going to work.

01:07This idea is horrible. it's not going to happen. And I think at that point what you need to do is like set everything aside and burn the bridges and say the only way is just basically like do whatever it takes. Come up with a different idea like go back.

01:20Is there some other way it could be done? And that literally is the difference between being successful and making it or essentially you let other people put you in a box, right? And like the nice thing about it is a much harder and it's big effort but it means that you control your destiny, right?

01:34Like yes, it might be horrible. It might be even more difficult and nobody's believing you or depressed, but just remember that that doesn't mean that somebody is taking charge of your destiny. You still have control of your destiny. And what you do with that matters and that's why I like to say all that setback, all that difficulty, I see it as jet fuel.

01:53So put that jet fuel back in the jet and like get into the rocket and try to uh try to get to where you're trying to go. [Music] Hi, thank you for having me. My name is Iden Senkut. I'm the founder and

Introducing Aydin and Felicis

02:10managing partner of Felicis, early stage venture firm with a global mandate. We are also very proud that so far from the companies that we've invested early, more than 45 of them have already crossed and exceeded a billion dollars in valuation, 100 exits.

02:23especially proud that in a little less than 14 years. Our portfolio, we already have 17 IPOs, some notable portfolio companies include companies that have gone public and achieved a very high valuation like Shopify and then some of the largest private companies including Canva in Australia, Notion uh in the US.

02:43I believe notion was also already on the EO channel. And then some other really exciting companies uh some especially focus on AI like Runway and then also some other interesting companies like one of our labs which is in defense and

The 10X Principle

03:09AI. So before I started Felicia's Ventures I was Google's first product manager. When I started at Google, one of the most interesting and brilliant things we did is to launch Gmail. I think Gmail was extremely important to us and it really helped Google scale.

03:24Google was just beginning to monetize. Believe it or not, we did not have ads yet and Larry and Sergey were vehemently against ads because they did not think yet how we could incorporate ads in a very quality way into our search results. that came while I was at Google and a huge breakthrough where we decided that the way to make ads as relevant was to basically measure and rank them by click-through rate because then we could have confidence that as users indicate which ads are most helpful to them the ads could be as interesting and useful as the search results.

03:54I I would say there are three main lessons. One is and this is something that I especially learned from Larry but he was very adamant and he always really cared about focusing on a very few things. I used to joke that his favorite word was no.

04:08Uh I think 90% of the time he just said no and then very few times he said yes. But when he said yes, you knew that that was something that mattered and everybody rallied around and try to make that possible whatever it was he was asking. The other thing that Larry did that I think was very interesting is he always asked for very uncomfortable, very difficult goals.

04:29I think that the other message from that was you cannot build a truly great company if you're only striving for a 10% or 20% improvement. We did something interesting at Google where we essentially had a very healthy disrespect of status quo and what we did is often times we tried to find the world's smartest people gave them challenges whether they had an experience or knowledge in this area or not and just told them to do it.

04:52So a good example of that I used to bike with the lead engineer in the ads serving team and interestingly that engineer was not specialized in ad serving at all. One day Sergey went to him and said, "Oh, we decided that we're going to build an ad server.

05:05Chad," his name was Chad, "you're very smart. Pick five more engineers. You have about 6 months. And in 6 months, I want to make sure that we have a functioning ad server." And they did it. And I joke, they did it because they had no idea what they were getting into.

05:19And so they just made it happen. And if this wasn't in any other large company, they would have asked for hundreds of engineers and probably said it would take them a couple years to build something like that. So, one of the rules or principles that stuck with me from my days at Google is the 10X principle.

05:33Meaning that if you want to be really great at something like if you have a startup, even in an investment firm, whatever it is that you're doing, if you're working at a company, starting a company, scaling a company, it is very important that whatever is you do has to be 10 times better, 10 times cheaper or 10 times faster, maybe ideally all three than the competition, than the existing solutions.

05:54this uh give me a sense of the philosophy of your own mind. I mean you have this idea of 10x I mean you you don't simply want uh to go in some small measurable arena of progress. Yeah. I think you know many of the things we just talked about are like that where they're really non you I almost use the economic concept of additionality.

06:18Yeah. Which means that you're doing something that wouldn't happen unless you're actually doing it. And um I think the more you can do things like that, the bigger impact you have. And you know that's about doing things that are you know people might not think are possible.

06:36And I've been amazed the more I learn about technology the more I realize I don't know. And that's because this technological horizon the thing that you can see to do next. The more you learn about technology the more you learn what's possible.

06:53you learn that the balloons are possible because there's some material that will work for them. So the 10x principle can also apply to the markets that you decide to go after. I think one of the things that we really care when we're making investment decisions, the number one thing is that we try to find markets that are poised for great growth.

07:11The markets can be either very large or can potentially become very large, especially if there is great growth, if there is a critical product. And one of the things that we like to think most of our most successful companies have a very broad customer base.

07:25For instance, if you look at Shopify powering commerce, I mean commerce basically applies to almost every business in the world. Adan with payments. Any business if they want to create revenues, they have to have payments or some of our other companies like recursion or cancer.

07:38I mean at the end of the day there are certain illnesses and diseases in the world that unfortunately at some point might affect either ourselves or our family members or our friends. So, we love companies that are doing something not just important, but something that's potentially applicable to almost anywhere in the world.

07:54We can see this as the extension of the 10X principle because the larger the market, the higher the potential for a company to be successful. But one of the other things that we really pay great attention to is that the companies are doing something that is so revolutionary, so incredible that the impact coincides with the 10x principle.

08:11It's that 10x better, 10x faster, 10x cheaper. We tell our team over and over again is look for that either that the company can do it or the company has an idea and the potential to do

Market Always Wins

08:27it. We really start with the market and one of the reasons for that is I call it is almost like a Newtonian law in startups is that when anything else goes against markets the markets win. So you have to be in the right market and you also roughly have to get the timing right.

08:41So I think one of the ways that we try to make our decisions better and use mental you know conserve mental power we are very selective in the markets that we go after and once we choose that I feel it's one of the most important parts of the decision then the secret is can you identify the founders that can really scale I obviously am not going to lie to you founders are extremely important and the next most important thing in our decision process is essentially understanding founders understanding people and this is an important point because not only do we

09:10have and this is the reason why the teams Diversity is really important, but one of the things that I don't think people appreciate it in my background is the fact that I spend a lot of time in sales. Spend a lot of time trying to understand people.

09:21And everybody thinks venture capital is finance. It's all about the numbers, but everybody's good at numbers in venture capital. What is more difficult and more rare is being able to understand people and being able to relate to people. So, I feel like that was my superpower that really helped me be a great investor.

09:36And we actually went even beyond that. And one of our operating part amazing operating partner we brought on uh Michelle Delra who joined us from stripe and she also worked at stripe octa data bricks each one of these companies were 10 billion plus in value and she specializes in you know people and like recruiting and interviewing people.

09:54So, we actually like have her often join our investment meetings when we're evaluating founding teams because we want her to also look at the founding team and say what she thinks of the team and if she thinks that their culture or their ideas or something about them gives us confidence that they're going to build a truly great and enduring company.

10:10And it's again something that we do that's very different and unique where people that have these different strengths and not necessarily part of the investment team are leveraged before we actually make an investment decision. I mean, I can pick some some examples.

10:25Look, I think one of the most impressive ones is Shopify. Shopify was another incredible concept. You know, Toby, who's the founder of Shopify with his two co-founders, actually he wanted to do a snowboard store and realized that there were no no great tools available to do that.

10:39And then he basically decided that actually a better idea was to start a software company. He was clearly very good at that. But he had some really unique insights. One, Shopify underpriced the product to make it available. Shopify I think always undercharged for the product because they thought hey if people are getting value and those businesses are scaling they can grow with those businesses.

10:58I think Toby also made some really great decisions. I will mention couple for instance from very early on even though Shopify was very easy to use. People were still finding Shopify and using it through agencies and other channels. So they went to the channel and agencies said look we're not going to give you a one-time fee.

11:15If somebody is using Shopify through you and they continue using it through you, you're going to get lifetime commissions. So, underpricing the product, fantastic product, treating the channel really well and being very creative of giving them lifetime commissions.

11:26I think the other aspect of it, similar to what I experienced at Google, Toby realized what were the most important product aspects. So, for instance, when Shopify launched payments, it was at a perfect time and it really contributed the company's stratospheric growth.

11:40So again, the idea that hey, listen, if you want to scale a business, there's going to be a few really important decisions and it's important to get it right. The last nuance, this by the way happened both at Google and Shopify, but both Google and Shopify had very good internal uh data, real-time data on how the business ran.

11:56And for instance, like early on Google when we were even like 50 people, we had internal dashboards that I could see anything from which servers are up to how many cues are being served around the world and how our customers doing. Every aspect of the business is available.

12:09the information on it was available in real time. I think Shopify built something like that internally as well. I always like to use the example of F1 is one of my favorite sports and one of the things that's special about it is it's a sport where everything is measured in 1/1,000 of a second and the success is often determined by very very tiny like minute differences and they can do that because they measure every aspect of everything that's happening.

12:32One of the biggest things that I learned for startups is that yes, you might want to be successful, but the only way to do that if you know what to measure and you're measuring it in a very comprehensive way because that then allows you to realize that

The DNA of Exceptional Founders

12:50performance. I think there are many factors. We will talk about personal elements of founders but I will reiterate I think being in the right market is very important. So if you choose the wrong market is very difficult to be successful if not impossible.

13:02So no matter what happens I think finding the right market and ideally getting the timing mostly right is very important. After that I think there are certain elements. Number one whoever is the founder you need to be very focused. I think early on because you have very few people the tendency is well the only way I can feel successful and great as a CEO is if I'm doing like 50 things.

13:21But the reality is there are very few things that truly is going to make a difference in the company. and doing 50 things or 20 things, it means that you're not going to do each one of them extremely well. But success in the beginning means you have to be focused.

13:34You have very limited resources. Understand one or two things that matter and absolutely do the best job in those things. The only way you can do that is if you're able to focus on them and do a great job. One important thing is uh just consistency and you know staying at it like I'll give you an example like one of the tough things as a startup speed is your biggest friend.

13:51You can do many things with a small team but because the team is really small in the beginning probably the progress will not be super big. There will be like small things but what we forget is small things can compound to something very big.

14:04And then the other thing that I will say I think everybody thinks that great companies succeed in a straight line and they never succeed in a straight line. So I think one of the hardest things to do as a founder is essentially like take setback, take disappointment, take no, take skeptics and then keep going, right?

14:19like you have to like be at it. And to me like what I always like to say is um people that underestimate me or my team any type of rejection any type of setback or disappointment I call it jet fuel like it makes you angry you know it makes you upset creates this feeling it's like no like we deserve better honestly how you feel doesn't matter but what does matter is to take that mental energy and then say okay you know what I'm going to take that and make things better I'm going to do try one more time I'm going to try a different way and that's what it takes

14:50and sometimes it might be 10 times 20 times 30 times until you get to the first time where it's a yes or it works or your first customer. But it's very important that you stay at it and you don't give up. I think the second thing we kind of touched on it but how important it is to find a way to measure success.

15:07Let's say that we have a vision. We you know we want to be very successful. Well like for instance if you want to be a great successful investment firm you need to have you know density of success from a 100 investments you make. How many of them are exited?

15:19how many of them become successful companies. These are very black and white numbers. If we say we have a global strategy, one of the things that I'm very proud of any stage that we worked at, any sector we looked at, any country we invested in, pretty much every single area of our strategy, we have a success.

15:34We have an IPO or an exit. And so that basically makes it very black and white. And when you can measure things that specifically, it really does help like optimize and you know like make the business successful. Um that's I think like super important as well.

15:46I think the last aspect of it is combination storytelling, combination charm. Let me explain. I think one of the most important jobs of a founder, especially a CEO, is you have to be able to get customers. You have to be able to hire people.

15:59You have to be able to keep scaling the company even when times are hard. A lot of times that means that you have to be a great storyteller because let's be honest, if you're buying something today, you're not buying something just because of the product and some future, but there is something about that brand that appeals to you.

16:15It's the same thing when we're joining companies is that yes, you know, maybe at the end it's a job, but the company's culture and the company's vibe really matters. How charismatic the leader is matters. And so that's very important. And I think something that I found in founders and it is unfortunately not negotiable.

16:29Like you either have to have yourself or like maybe a co-founder who's very good at storytelling, who's very charismatic so that it allows you to hire amazing people. And part of it is also the mission. The more ambitious the mission of the company, obviously the more people will get excited about it.

16:44And that comes again back to the 10X principle is that a lot of times ideas are ideas but some ideas are more powerful and more scary than others. So the bigger the idea and the bigger the impact I think then even though it might be difficult it's going to inspire people and it's going to motivate them to do something that's really hard because at the end of the day we want our lives to have purpose and the best way to do that is if you're pursuing a very challenging problem.

17:06I think I was a horrible storyteller and how do I know that? When I first tried to start Felicis, I had, I think, at least 40 nos. It was very disappointing because I thought I was telling a great story and I was very proud of my idea and I was very excited about what we're going to build.

17:24And honestly, the main strategy has always been the same. But what I realized is that what I was trying to talk about and what people were hearing were not always the same. What I also started appreciating is that it wasn't just important what I was telling but I needed to understand what people cared about on the other side.

17:41And so for me a lot of it came down to just practice. I think I shared with my team but when we got our first check I think the version of our deck was like 107 which means that we had 107 revisions to the deck that the message was the same.

17:53The strategy was the same but we like iterated 107 times to tell the story 107 ways until the first person said yes. I think the second thing is you have to be a great student of people. I think a lot of times we get so excited about the ideas as founders.

18:08All we can think about is what we love and what we are going to do and why we think this is going to be successful. We don't think as much about the other people. And so part of being a great storyteller is know your audience. And in order to know your audience, you need to really understand them.

18:22Who are they? Where did they come from? What do they like? Where did they go to school? How how were they brought up? And I think that matters because it feels like the last 10% of the details are maybe the 90% of the value. But most people do the first 90% but then they don't want to put the effort into the last 10%.

18:37And the last small details can make a very big

Why Investment is More than Just a Numbers Game

18:47difference. One of the things that I'm really proud of investment is a tough business because what we do is essentially like we're writing checks but the thing that we're doing is not something you can touch. like you can't touch this table and say look we are carpenters and we make great tables.

18:59The thing that really means the world to us is twofold. One, we feel that as our portfolio globally becomes larger, it's becoming more and more clear to us that every minute, every hour of the day, somebody in the world is interfacing, interacting with the Felic's portfolio company and hopefully in a good way, right?

19:17Whether it's one of our, you know, biotech companies like curing a rare disease or cancer, diagnosing a disease, it's one of our other companies like Shopify helping somebody uh become an entrepreneur or at the end, you know, help process payments.

19:28uh or one of our you know creativity company like Canva maybe it's a kid at school and you know they want to create something and the first tool they use is Canva and that's a very fantastic feeling that the way that the world is today the way it's going to be in the future and as the future gets created it's Felissa's companies that are taking the lead to create that future and that's an incredible feeling and then I think the same is true uh about our limited partners so the people that invest in our funds basically they're all like endowments they are health systems uh

19:59their organizations that have kind of a charitable cause or mission. Uh and some of our other foundations or families that we work with are working on freedom of speech or you know they have like great charitable causes like saving the oceans and all of that.

20:09So what we feel great is that we are not just about financial returns but the impact of that is going to be making the world a better place. Partly true with our companies but also partly through our limited partners and our investors. I really would like to see technology play a bigger role in peace whatever that may be.

20:27I mean, look, I I think I also want technology to make us happier because one of the things that I'm seeing that stresses me out. I have two kids, teenagers, and I see how much technology is pervasive in their life. But I am also seeing maybe compared to my generation.

20:43This generation has a lot more in terms of technology and wealth, but they're more stressed and they have more mental issues than I've ever seen. I think it's very important that we have to take ownership and responsibility. the world is not just about the impact that technology can have and the wealth that it can create, but if it's making us more depressed and less happy, I feel like then we we lost the point.

21:03We missed the point. So to me, my dream and my hope would be that not only does technology keep advancing, which it will, will create more value, which it will, but it also has a positive impact on humanity. I'm not just saying like cleaning up the oceans or whatever, but we as people hopefully like my kids generation can say, "Oh, like we are a little bit happier and we're little bit less stressed uh than my generation."

21:30Uh, and that would be a great dream. If technology can achieve that, I feel like we're going to be in a much better place.