What It Takes to Build a Startup | Andrew Chen & Matt Perault

Andrew Chen (0:00)

This is truly little tech. The average team is two to three people. They're running their companies not in their office, not in the co-working space, they're running it at the kitchen table. For these founders, they are so mission focused, trying to survive as a business. They just don't have time to participate. They don't have lobbyists, they're not really represented. It's a choice whether or not each state or each city wants to have startups or not.

SPEAKER_2 (0:25)

What does it actually look like to build a startup from day one? In this episode, Matt Perault sits down with a16z General Partner and Speedrun lead, Andrew Chen, to talk about little tech, the tiny teams at the very beginning of building a company. Andrew shares what life looks like for founders who are often just two or three people building from a kitchen table, focused on getting a product to work and finding their first customers. They rarely have lobbyists, policy teams, or even the time to participate in debates about rules that could directly affect them.

Matt and Andrew discuss how regulation can influence where start-ups choose to build, what policy makers can learn by hearing directly from founders, and what it takes to create an environment where the next generation of companies can get started.

Matt Perault (1:12)

Andrew, welcome to the a16z AI Policy Brief.

Andrew Chen (1:16)

Thank you for having me.

Matt Perault (1:17)

So you lead our Speedrun program. So can you tell us a little bit about what Speedrun is?

Andrew Chen (1:22)

Yes. So many folks in the audience will know that start-ups have to come from somewhere. And so our job is to try to find them on day one, when the founders are just starting to think about their companies. And so what's great is we host a program based in the San Francisco office, where we will announce to the broader internet and through our marketing channels and podcasts and sub-stack-Ds, letters and everything else that will be investing up to a million dollars into brand new start-ups. And the ones that we really focus on are the ones that where folks are just getting going. Folks that maybe have full-time jobs and they're starting to come up with a new idea with their best friend and they want to go start something. It could be folks that have already left their roles or they just graduated from school and they are coming up with something new. So what we do is we spend 12 weeks with them. They get the full force and power of the firm and all of our relationships and all of that great stuff. And then after we invest, then we share them with the broader ecosystem. We host a Speedrun demo day where we have over a thousand angel investors and seed funds and many others come and invest.

And then we go from there and kind of release them off in the world. And hopefully we have the opportunity to invest more in the future and to work with founders as kind of the beginning of a lifelong relationship with them. That's the idea.

Matt Perault (2:47)

How do you decide what looks like a company that you want to have as part of the Speedrun program?

Andrew Chen (2:52)

At its core, in the earliest days, there are just so many famous examples of ideas changing all the time. Many of you guys know that a product we use every day, Slack, originally started out as a browser-based video game company.

And many, many other examples down the line. And so what we try to do at its core is to really just invest in the best people.

And so we're looking for folks that have had some really unique experience in their past. And that could be anything from enormous athletic accomplishments on their way to a career in tech, or it could be that they started a GitHub repo that has now thousands of stars and is growing incredibly fast. Or it could be some of the traditional markers where they have gone to elite universities and had sort of learned elite, like incredible, unique insights at some of our best AI companies. And then they're ready to use that in a new company as well. I think we're very open minded. So we actually have mostly folks out of the Bay Area, actually all over America, a little slice from other places in the world, mostly focused on the US. And it's amazing to watch founders that are from, whether it's New York or Texas or Florida or Midwest or any of these other places actually come to San Francisco, get to experience kind of what it's like to be in the Bay Area. We work with them, of course, and a lot of them go back to their home communities and continue to build their companies. And, of course, quite a few of them stay in the Bay Area as well to build the next generation of tech companies here. We're very happy when either of those happen.