Rahim Rahemtulla: Hello, everyone. Welcome to this Silicon Valley Innovation Center interview. I’m your host, Rahim Rahemtulla. Today, we are diving into the challenges that early-stage companies face and we’re asking, What qualities do entrepreneurs and founders need for success? And so, helping us answer those questions today is an expert in that field, it is Said Mia. He is the founder of a startup advisory firm, Sweat Equity. He is with us now. Said, thanks so much for joining us today.
Said Mia: Pleasure. Thank you, Rahim.
Rahim Rahemtulla: And so, Said, Sweat Equity is your startup advisory firm and it’s also a blog that you have going as well there. And I noticed on the logo to that blog, you’ve got a slogan there, I suppose. It says “The intersection of grit and innovation.” And so, I want to start there if we can, and just so have you unpack that slogan for us a little bit, “grit and innovation.” So I think innovation, sort of intuitively I think, “Okay, innovation, you need new ideas, a new product maybe, a new service.” The grit. Tell us about grit. How does that play into the cocktail of what you need to make a good startup?
Said Mia: Well, it’s actually the key ingredient to that cocktail, Rahim. As an example, one of the earliest founders that I dealt with in my practice, she was rejected 148 times before raising nearly $30 million for her startup. And a big name in Silicon Valley, here, Marc Benioff, he couldn’t raise a single dollar from venture capitalists, many of whom were his friends. And so the folks at LinkedIn, they stated that investors simply couldn’t buy into their initial vision at LinkedIn, the fact that they’re amassing scale over revenue just simply didn’t go over well.
In fact, yesterday I came across a founder who five years ago was sleeping under his desk in a sleeping bag and hiding it in his closet until just before his co-workers came in so they wouldn’t find it, and it was simply because he couldn’t afford a place to live. And he showered at a 24 Hour Fitness every morning, despite no workout, and ate Subway every day with a coupon. Every dollar, he invested back into the company. And it was a really bumpy, grueling ride along the way, but fast forward to today, he actually took the honeymoon of his dreams with his wife because they just exited the company for eight figures. And that worked out really well. And so, more often than not, what separates the winners from the losers is that grit, is that determination, is that tenacity and it’s one of the key common denominators that I’ve seen in my practice, throughout my career, what separates the great founders from the mediocre ones.
Rahim Rahemtulla: And so is that just about being willing to try and try and try again? I mean, just believing in you having a great idea and just going to one investor after another before they also see that and they’re willing to invest in you? Or how does that grit manifest itself?
Said Mia: Well, I would just say, Rahim, that a common sentiment among founders is that starting a company was way harder than they ever could have fathomed. People kick dirt in your face, they’ll tell you that you won’t make it, ignore your emails and continually cancel on you. Especially in their early goings, it will be incredibly difficult. And I’ve seen it firsthand, but as a founder as well as an investor and advisor. And succeeding not only requires a great product or offering, but also the grit and tenacity to overcome that. And I would just say that they need grit because, especially in those early innings, there will be regular adversity at every turn. If it were easy, everyone would do it. And it’s not easy and people will jump at the opportunity to get in your way.
And I recently helped a social commerce founder raise seed funding and get accepted into one of the top accelerators in the world. And out of 100 applicants, the company was one of three that were selected and, along the way, the founder was constantly told she’d never make it. Now, top brands are lining up and company investors are beating down her door, she is transforming an industry and it’s because she stuck with it.
And, for me, when I was launching my first ventures, things were going well until they didn’t and taking that rejection and licking my wounds as an urge to greater effort, that’s what kept me going and ultimately made me successful. And so, I know I kind of put a lot out there, but you get the gist of it in the sense that you need to stick with it. Every time you kind of get knocked down, you should take that as a greater urge to get back up, because that’s essentially what’s going to keep you going when things get tough.
Rahim Rahemtulla: So why do people want to put you down? Why does that happen? Is it just because of a competition, because so many people out there are trying to do this? Why is that sort of the default position, if you will, to be prepared for that, for that sort of backfire, backlash?
Said Mia: Well, it’s actually just because people, human beings just gravitate towards what’s comfortable. So say, for instance, that you’re a Fortune 500 company and you’re looking to adopt a new enterprise software suite. Are you’re going to go to a proven commodity which you’ve been with or which all of your partners and other folks in your ecosystem have gone with day in day out for the past several years? Or are you going to go with an unproven commodity, which is just kind of a wild card and it may work out really, really well or might not?
And just bouncing back from that a little bit, life as a founder, it doesn’t get easier until you start building traction. Yet, it’s kind of a catch-22 in the sense that gaining traction in the first place is tough. Potential customers, they’ll heavily scrutinize you, investors will tell you you’re not the next Facebook, they don’t think your opportunity is good enough and partners and others in your ecosystem, they won’t give you the time of day because you’re simply too small. And so, I’ll say it again, having the conviction and self-belief to keep pushing along, that’s really what separates the winners from the losers. And my take on that is that they say the failure rate of startups is over 90% and I just think that’s complete nonsense. I mean, someone has to make it, why not you? And what I say there is just, you just have to believe it each and every single day and keep pushing away.
Rahim Rahemtulla: And so, what about you, Said, because you’ve also been a founder. That’s right. You’ve also had your own venture as well. Sweat Equity, of course, as a case in point there. But, I mean, how did you do develop those resources to be resilient? Did you have that? Did you have to get used to that? And if so, how did you do that?
Said Mia: Well, I mean, I drew upon a lot of my life experiences along the way and I definitely had my share of bumps in the road that I manage to leverage in my current practice. So, Sweat Equity itself, it began as an advice blog for founders based on my experience as an investment banker, most recently as a founder, as an investor, as an athlete and also as an underprivileged minority raised by an unemployed immigrant single mother. And so the life lessons I picked up from being a breadwinner at a very early age to this day are incredibly valuable and they’ve also pushed me to value diversity and to find opportunities in unexpected places. And I draw up on those experiences every day in terms of being able to see what traits like high growth, resourcefulness, grit, tenacity, determination really look like. And when I was going through those earlier experiences, it was literally swim or sink on a much more fundamental level that what some founders may take for granted. And I leveraged those both of my own ventures and starting prior companies and Sweat Equity and have been able to help founders much more profoundly than I ever could have otherwise.
Rahim Rahemtulla: Yeah. Your own story is quite inspiring us, I suppose, in a way. Do you share that often with founders and sort of draw upon that background to show them that? I mean, coming from your situation, like you say, I wonder there the expectations but what you might have achieved with your life, you know, people may not have given you a chance, but there you are.
Said Mia: Absolutely, absolutely. And I think, before, I used to be kind of sheepish about it, quite candidly. I mean, for better or for worse, people tend to judge a book by it’s cover, but the more I kept running into opportunities were I had to kind of scratch and claw away, I just found that I was tougher, more resilient because of the adversity that I’d faced earlier in my life. And one of the things that founders often face is it’s a tough journey and you feel lonely and you feel discouraged on a regular basis, not unlike what I went through at a very early age in my life and so I feel as though that’s helped me empathize and get on the same level with the founders and help them, as opposed to someone who’s never been in their shoes or never really faced adversity to the extent that they try to empathize.
And I would just say, it has also pushed me to take control my own destiny because, obviously, if I kind of just went along with the flow, I wasn’t really in position to succeed given the cards I was dealt. But with Sweat Equity, for instance, I forged my own path because I simply wasn’t interested in waiting for someone to hand me an opportunity.
I really wasn’t interested in being an ancillary hire at another firm; I knew what I wanted and I created my own experiences accordingly. And the determination and the grit that I picked up along the way has really allowed me to help those founders in more ways with a greater impact than that otherwise possible.
Rahim Rahemtulla: And what about the founders that you do meet? It strikes me that there is a certain kind of founder, I suppose, that has probably gone to good schools and then gone to Stanford or Harvard and done really well there and then maybe got into an accelerator program or something. And maybe it seems on the face of it that it’s not been that difficult for them, up to a certain point. But I think your experiences, in a way, have equipped you possibly better to deal with that adversity that comes with wanting to do your own company and forge your own path. So do you meet founders in startups who are just not prepared or the life they’ve had up until that point just does not prepare them for the grit and for the adversary which they face starting a company?
Said Mia: Yeah, absolutely. And it’s a big wake up call because I feel as though Silicon Valley tends to romanticize the idea – at least on the outside looking in – to romanticize the idea of starting your own company. And there are a lot of folks who feel as though it’s a way to get rich quick or to be your own boss. And it’s just that’s a really big wake up call for those folks in the sense that, when you’re starting your own company, everyone’s your boss – your investors, your customers, your distributors, everyone – and you probably won’t go with a regular salary or there are many, many ways to get rich quicker than taking a swing at entrepreneurship.
And so, I find that the best founders that I can really resonate with are the ones who face some adversity. And it’s no surprise that most of the founders in my portfolio, they are female founders who’ve experienced gender bias along the way or whatever you want to call that and then a lot of them are minorities as well, who have had dirt kicked in their face or have had their share of adversity, even getting in front of investors and partners or whatever it may be. And so it’s no surprise that Stanford and HBS are definitely factories for successful founders, but I’m just saying, when the going gets tough, the ones who are able to weather the storm are the ones who faced at least some adversity along the way.
Rahim Rahemtulla: Do you think there are any particular things that people should do before they become entrepreneurs if they want to be able to learn these skills?
Said Mia: Well, I would say that I’m not really a big fan of just telling people to do something just for the sake of doing something else. If you’re passionate about what you’re doing, then chase after that until you get what you want. That is similar to how I did. That said, I found that a founder’s chances of success are often enhanced by lessons learned along the way. So, for instance, Harry’s, the direct-to-consumer razon brands, it was founded by Jeff Raider, who’s leveraging the lessons that he learned along the way from co-founding Warby Parker. And there’s a luggage company – a D-to-C luggage company – called Away here and it was founded by early employees of Warby Parker. And it’s no surprise that countless companies here in Silicon Valley, they’ve been founded by folks who started cutting their teeth at the likes of Sun Microsystems, Google, Microsoft, Apple, Facebook, and others. And what I’ll say about that is that, at those places, those people, they didn’t necessarily build character, but instead were given a very unique lens from which to spot opportunities for their own businesses.
And I would just say that you’ll still need that grit, that determination, that tenacity along the way but, at the same time, you need to be chasing the right opportunities in the first place and you need to be able to see what’s the best use of your time and what’s the best fence to take a swing at. And so I would just say that perhaps go work somewhere else or at least find a way to spot opportunities in the first place and then go from there.
Rahim Rahemtulla: So it’s as much about the ideas as well as the, as you say in your slogan, the innovation and the grit? How does the innovation come about for you? When you meet founders, who are the ones who have the best ideas? How do they know what problems to solve?
Said Mia: Well, I would just say that it’s the ones who are doing it for the right reasons. And so, like I said, the folks that are doing it to get rich quicker, to be their own boss are not necessarily in it for the right reasons, but the people who’ve faced opportunities or challenges on a regular basis and can really identify what’s going on and why they should be solving that problem, those are the ones who are on the right path right away.
And so just backing up a bit, the right reasons include attacking a challenge or an opportunity that you face on a regular basis. And, as an example, I would say, the founders that have Airbnb, their backstory is that they couldn’t afford San Francisco rent – go figure – and during an industrial design conference in the city, they realized that every hotel room in the city was sold out. So, go figure, they decided to inflate a bunch of air mattresses in their apartment and then rent out the space. It made a ton of sense, Rahim.
And I would just say that folks like Uber, Warby Parker, Casper mattress, they’re all founded on the premises of disrupting archaic industries such as taxis, eyeglasses, mattress industries that simply consumers just took for granted and they just took it as is. And again, they didn’t do it to get rich quick or even become their own boss, but they did it because there was simply nothing they’d rather do and they gain genuine fulfillment out of chasing these solutions to longstanding problems and the opportunities they faced. And that’s a great litmus test in terms of being on the right path from the get-go.
Rahim Rahemtulla: And so looking into one’s own personal life, looking at the problems one faces, challenges, it seems to play a big role in your thinking there. To be successful, you really have to do things out of genuine reasons and have personal experience with them.
Said Mia: Yeah, absolutely. And I know you touched on other traits or keys to success here and on a base level everyone needs to be smart, hardworking, gritty, and tenacious, and those are all a given and those are traits that you’ll hear everyone else has. But I would just say, Rahim, that one really unique trait that I’ve really discovered as a common denominator among successful founders is creativity. And so you’ll run into roadblocks and hurdles and responses will often be unfavorable in the early innings, but you’ll need to be thoughtful and creative about how to overcome those obstacles.
When I started my past ventures, I got really creative about not only the ideas and the business model, but also about finding creative ways to network and fundraise and get my company out there. There was a guy, actually, a few years ago here in the Bay Area, who, in the early days of his company, he would go out to all the Apple stores in Palo Alto and preload his company’s website on to the computers there before the employees chased him out. And then, when customers would come into the store, they check out all the Apple computers and see this new website and they are like, “Wow, pinterest.com. This is actually a really cool website. Let’s, let’s find out more.” And things have actually worked out quite well for that company, that guy.
Rahim Rahemtulla: Yeah.
Said Mia: That creativity is really an ace up your sleeve and can go a long way to giving your company an edge.
Rahim Rahemtulla: For sure. But do you ever feel that there are limits to this sort of creativity, grit, these personal qualities, which can only take you so far and, at some point, maybe your ideas are just not very good or there’s just no market for it or it’s not ready? Do you encounter that dilemma in your work? And if so, how do you know when to sort of say, “Okay, let’s try something else. You’re actually working really hard, you’re very resilient, but it’s just not the right time for this idea”?
Said Mia: Yes. I’m not saying that grit and tenacity and creativity are guarantees to success, but there are key ingredients there. And then, ultimately, you need to have the right opportunity and the right product, but I wouldn’t get too caught up in the sense that, in your investor deck, you need to have a big slide with an enormous TAM – total addressable market – on the slide because, one of the knocks against Uber, for instance, was that in the early days, how much could they really address in terms of an addressable market, given that the taxi industry is only X billion dollars? And the thing about them is that they’ve actually created their own addressable market more so than ever before. Similar to Airbnb, they created their own market and they dwarfed the hospitality and the hotel companies that were the long standard incumbents in those industries.
That said, I take a dedicated, hungry, driven founder over a decent idea any day of the week. And the reason there, Rahim, is that maligned ideas can be fixed, they can be tweaked, but you can instill hunger or drive in a lackadaisical founder.
As an example, I just I helped raise seed funding for a company who is actually one of the top e-commerce brands right now. A year ago, her product wasn’t as good as it could have been, so she got on a plane and she directed herself out to rural Vietnam to connect with farmers and source the world’s best ingredients for her product and the product improved by leaps and bounds. And fast forward to last month, investors were beating down her door because we’re product and selling so well they can’t even keep up with it. And it’s a great case of a driven, gritty founder forging a better product and it’s really not possible vice versa. And so, myself as an investor and I know that others feel the same way, I’ve passed on investment opportunities comprised of good products accompanied by founders who simply weren’t passionate enough. You can teach product and you can teach market fit and all that stuff, but you can’t teach hunger, you can’t teach drive, you can’t teach someone to be obsessed about the opportunity that they’re chasing.
Rahim Rahemtulla: Fantastic, Said. Thank you so much. It’s been a real pleasure to talk to you. I think that’s such a nice note to end on, that you can’t teach some of these things, they are those traits that you have and those are the ones that really can make success. And of course, Said, we wish you success as well and I’m sure you’re going to be putting your hunger and drive into Sweat Equity. Hopefully, you won’t have to sweat too much, but some hard work. So, Said, thank you so much for being with us today.
Said Mia: My pleasure. Thank you, Rahim, for having me.
Rahim Rahemtulla: And to our viewers as well, thank you for tuning in. I hope you’ve enjoyed our talk today with Said Mia of Sweat Equity. I just want to remind you that we do have another expert talk coming up on November 27 10 am Pacific time. We’re gonna have a webinar this time, a discussion panel. We’re going to be talking about conversational AI, a very hot topic today in digital transformation. We’ll have three expert speakers who are going to be coming together. So that’s November 27 at 10am. I do hope you’ll join us and check our website, siliconvalley.center for all the details and to register. For today, that’s where we’ll wrap up. So, once again, from me, thanks for watching, and from my guest today, Said Mia of Sweat Equity, it’s been a pleasure. We’ll see you again next time. Goodbye.