20VC: The Two Biggest Mistakes Every Founder Makes, Why Founders Are Not Ambitious Enough Today, Why Having a Narrow Target Customer is Dangerous & The Three Possible Outcomes in Company Building with Matthew Prince, Co-Founder @ Cloudflare
Oct 16, 2023
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Matthew Prince, Co-founder and CEO of Cloudflare, discusses the mistakes founders make, the importance of narrow target customers, and the three possible outcomes for companies today. He shares his journey from selling fireworks to being a public company CEO. Matthew also shares his thoughts on money, identity, and happiness. He evaluates his own relationship with money and what success means to him. Lastly, he explores the potential for Cloudflare to become a $200 billion company and reflects on the conversation with the host.
The subscription model offers scalability and growth potential for SaaS businesses.
Deep dives
Importance of Picking the Right Co-founders
One of the biggest mistakes entrepreneurs make is picking bad co-founders. The success of a startup heavily depends on the synergy and compatibility of its co-founders. Choosing co-founders who complement each other's skills and have a shared vision for the company is crucial for long-term success.
Setting Ambitious Targets
Another common mistake entrepreneurs make is not setting ambitious enough targets for their startups. By setting high goals and aiming for substantial growth, entrepreneurs create a sense of motivation and drive within their team. Having a big vision can attract top talent, excite investors, and enable companies to have a significant impact.
The Power of Subscription-Based Business Models
SaaS businesses, with their recurring revenue and compounding effect, provide the opportunity for significant growth and value creation. The subscription model offers a natural pathway to scalability and long-term success. By focusing on providing value to customers, optimizing efficiency, and continuously enhancing the product, companies can unlock substantial growth potential.
The Risk of Staying in a Slog
Many startups fall into the trap of being in a perpetual slog, where they experience minimal growth and fail to capture market attention. This can lead to stagnation, frustration, and loss of motivation. It is important for entrepreneurs to avoid this trap by constantly reassessing their strategies, exploring new opportunities, and pivoting if necessary.
Lessons Learned from Cloudflare's Journey
Cloudflare's success is attributed to its co-founders focusing on hiring incredible talent, setting audacious goals, continuously learning and adapting, and keeping the big picture vision in mind. They emphasized the importance of building a strong team, addressing big market needs, and delivering value to customers. Cloudflare's subscription-based business model provided them with a compounding effect and the ability to scale. The co-founders also recognized the significance of trust, both in terms of building trust-based relationships and in creating a trustworthy brand.
Matthew Prince is the co-founder and CEO of Cloudflare, on a mission is to help build a better Internet. Matthew has scaled Cloudflare to over $1BN in revenue, $20BN in market cap, and over 3,200 employees. Today the company runs one of the world's largest networks, which spans more than 200 cities in over 100 countries. Matthew is a World Economic Forum Technology Pioneer, a member of the Council on Foreign Relations, winner of the 2011 Tech Fellow Award, and serves on the Board of Advisors for the Center for Information Technology and Privacy Law.
In Today's Episode with Matthew Prince We Discuss:
1. From Selling Fireworks to Public Company CEO:
How did Matthew first make money selling fireworks as a kid?