Peter provided his formula for launching a successful company. The start-up magnate was an early investor in Facebook and founded Valar Ventures and Founders Fund, both venture capital funds which have backed peer-to-peer lender Transferwise and Airbnb, the flat sharing site valued at $20 billion.
He believes having the right team is vital for start-ups. The other two must-haves are a decent product and a solid business strategy. “You want to be doing something that’s so different there’s no competition at all, or a huge gap between you and them,” said Peter.
Companies that are really successful are the ones that are able to pull away from the pack, he added. The rest are engaged in “ferocious, non-stop competition” that takes a heavy toll on ventures.
Like a growing number of business schools CEIBS has seen students turn to entrepreneurship in increasing numbers. Hosting high-profile start-up founders adds to the air of aspiration sweeping its way across Asia, the US and Europe.
Peter said that buzzwords and trends are overrated and overvalued. “If you hear the words big data [or] cloud computing, think fraud and run away as fast as possible,” he said. They are a sign of bluff. “What great business is no one starting? What is no one else investing in? Those are the questions to ask,” he said.
In a session moderated by CEIBS visiting professor of management Paddy Miller, Peter said that pivoting, or “failure”, has turned into a virtue in Silicon Valley.
But the venture capitalist added that changing a business model is not something that budding entrepreneurs should aspire to. “We shouldn’t talk about how wonderful failure is. We don’t celebrate failure; we celebrate success,” he said.
LinkedIn executive chairman Reid said that entrepreneurs should celebrate learning from failure, rather than failure itself.
A partner at Greylock Partners, the Silicon Valley venture capital firm which has invested in Instagram, Tumblr and Dropbox, Reid said that networks are a great way to share information and bounce ideas off of others — they foster entrepreneurship.
The former executive vice president of PayPal told his Shanghai audience that he expects to see more “domination” from Chinese companies in future. “The key is how much companies realize the need to adapt when they go to other countries,” he said.
Peter, whose net worth is estimated by Forbes to be $2.2 billion, added: “Silicon Valley is underestimating China. There will be a major effort in the next decade by Chinese companies.”
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