Building Web3 Hectacorn
Silicon Valley Deconstructed Two weeks ago, we had a 4.5h flight in the future, and the foundation of this future is Nikil Viswanathan and his hyper-growth decacron Alchemy. In 4.5 hours, we learned invaluable lessons from a person who built 12 failed products, was unemployed for 10 years after his graduation from Stanford but succeeded in building the highest growth company in Silicon Valley history. Thanks for reading Silicon Valley Deconstructed! Subscribe to receive new posts Most people give up after 1-3 failures, the rest after 3 more. But when you don`t give up after 12 – you behave in the top 1% of who you truly are, and you`ll figure out how to make this happen. Here are some takeaways:
Co-founders Co-founders. Co-founders. Co-founders. These are the words Nikil emphasizes as being the most important decision in the life of your startup. After college, Nikil was busy working on many ideas. One day, he was approached by Joe, who expressed interest in working on the idea and working with him. Joe asked for a 50/50 split. Nikil loved working with Joe, and they had been lifelong friends, but Nikil had been working on the idea for longer and wasn’t sure if 50/50 was fair. One of Nikil’s mentors told him that the chances of getting along with someone super well and enjoying working with them are super low; don’t lose the person over equality. This convinced Nikil to work with Joe, giving him half a share, but the idea didn’t work out in the end. The next idea also failed. They continued cycling through ideas, but what stayed together was Joe and Nikil. Nikil spent 160 out of 168 hours of the week in the space with Joe, either working or exercising or enjoying their time. Your co-founder is the most important decision you’ll make. He advises new entrepreneurs to choose their co-founders by asking themselves if they enjoy hanging with each other when they’re not working. It’s very rare that you get along super well with someone. If they come, get them, don’t worry about equity.
Team When people were visiting Nikil, Joe, and the team building Down to Lunch, many said the culture felt like a bunch of college students living in a dorm. One of the key points that Nikil mentioned in building a successful team for his startup is having an incredibly fun work environment. Employees join Alchemy because it’s a flat structure organization, full of fun and memorable moments where everyone enjoys being a part of it. That’s why Alchemy targets hiring people who come from startup ex-founder backgrounds. Startup founders culturally fit better in a chaotic and free environment. It’s hard for Alchemy to hire big tech employees who are used to bureaucracy because they fight over titles and their salary/equity without noticing the high potential upside of Alchemy and the fun culture. Especially for 0 to 1 companies, hire ex-founders vs. FAANG superstars. Alchemy employees are so dedicated that they respond to customer messages at midnight. Having a great and fun work environment like a college dorm is one of the crucial reasons employees love Alchemy.
Startups For ten years, Joe and Nikil encountered no success until suddenly Down To Lunch gained traction. While building Down to Lunch, they stumbled upon the node infrastructure issue for crypto hedge funds, which looked promising. They emailed 80 companies to ask what their top problems were in working with blockchain: node infrastructure was always at the top. Because Joe and Nikil worked on Down To Lunch for years, they felt uneasy about moving on, so they agreed to try Alchemy, which addressed the node infrastructure issue, as a 1-month experiment. They began by defining three fundamental shifts in tech. In each stage, large companies have developed the innovations: 1. Computers were invented to compute numbers quickly (Hardware -> IBM) 2. Computers could talk to each other (Internet -> Google, Apple, ...) 3. Computers can exchange value (Blockchain -> ???) The rationale was that whenever you allow innovation to happen on top of the product you’ve built, there’s a boom in innovation. For instance, imagine what AWS did for the cloud, and they thought something like that should exist for blockchain that allows others to build on top. This is a clear example of first principle thinking, which looked very promising, but it took them three years to leave Down to Lunch behind and fully focus on Alchemy. Nikil advised new founders to think ambitiously and set high bar goals. Building a $5m company is as hard as building a $10b company. So why not think boldly? And always keep asking yourself, “Is doing X helping me to build a 10 billion dollar company?” For instance, “Is getting a nice office helping me to build a 10 billion dollar company? No.” “Is hiring good people helping me to build a 10 billion dollar company? Yes.” And based on these responses, allocate your attention and resources to the right place. He talked about the importance of listening to customers and being quick with building MVPs. For Alchemy, he built the dirtiest MVP in 5 days that showed the product's core value, and if customers didn’t beg for more, he wouldn’t have continued building it. You don’t need to be fancy. For Alchemy, having a log-in page and API key management would have overloaded the team, so they asked themselves why not just use telegram now for the MVP and think about fancy features later.
Life Nikil spoke transparently about his life. He talked about the days he cold-called people and wouldn’t get any response. Addressing the Stanford community, he underscored that when people don’t respond, don’t be discouraged. “I get 100 emails a day. Be specific in your emails about what you want, but asking for a 20 min chat is always a tough ask, ” he said. His time is now worth $ XX m/h, so it’s difficult for him to always be available. Value your time and delegate as much as you can if something is not commensurate to the value of your time. Furthermore, Nikil confessed that many of the all-nighters he pulled through didn’t matter in the end. Startups are a marathon, not a sprint. So he prioritizes his health and relationships. Have confidence and perseverance. These characteristics are ultimately what matter to build something great.