Editor’s Note: In the new podcastMasters of Scale, LinkedIn co-founder and Greylock partner Reid Hoffman explores his philosophy on how to scale a business — and atEntrepreneur.com, entrepreneurs are responding with their own ideas and experiences on our hub. This week, we’re discussing Hoffman’s theory: the most scalable ideas often seem laughable at first glance.
When Tristan Walker pitched Bevel, a razor for men with curly or coarse hair, investors didn’t see an innovative way to reach an untapped market. They saw a bad idea.
“I don’t know, it’s niche, I don’t think it’s scalable,” Walker recalls VCs saying on Masters of Scale, a 10-episode series hosted by Reid Hoffman, the LinkedIn co-founder and Greylock partner, exploring unconventional theories for growing businesses.
In fact, even after three rounds and raising more than $ 33 million, Walker says his pitch still gets rejected 99 percent of time by investors. But what investors see as red flags, Walker sees as advantages. In fact they’re often the very things that drove him to found Walker & Company, a family of beauty and skincare products targeting people of color, with the first product being the Bevel.
“’Usually what looks like bad ideas are good ideas, and usually what looks like good ideas are bad ideas.” Walker remembers mega-investor Ben Horowitz telling him. ‘”All too often, people try and chase the good ideas, and there’s not much value to be created there.”’
Hoffman couldn’t agree more. “I have a theory that the best business ideas often appear laughable at first glance,” he says in the podcast. “You should expect to take ‘no’ for an answer. If you’re laughed out of the room, it might actually be a good sign.”
And yet Walker’s “bad idea” seems to be doing just fine. The company is readying its second product line for release and has just landed a partnership with Target – all after continued rejection from investors.
It wasn’t the first time Walker has gone against the grain. In his conversation with Hoffman, Walker shared other times he didn’t follow the pack — and the two discuss what those experiences can teach any entrepreneur. Excerpts from that conversation with Hoffman — as well as extra insights from Reid’s conversation with Walker that you’ll find first on Entrepreneur — are below.
1. Great founders come from anywhere.
Walker doesn’t have the usual founder backstory. He grew up in the projects in Queens, NY where his family lived on public assistance. At the age of three, his father was shot and killed. “I had one goal in life,” Walker tells Hoffman, “and that was to get as wealthy as possible, as quickly as possible.”
After considering acting and sports and then trying his hand at Wall Street, Walker decided the quickest path to success was entrepreneurship.
“Tristan doesn’t sound like your typical Silicon Valley geek. But I can’t stress this enough—you don’t have to wear a food-stained hoodie to succeed here,” Hoffman says in the podcast episode. “Neither do you have to play World of Warcraft, or write code until sunrise. You only need to have a sense of curiosity.”
2. You don’t need a tech background.
While engineering backgrounds are highly prized, Walker had an MBA — often a red flag for Hoffman.
“Typically, when I give talks at business schools, I tell them the two negative factors that need to be explained away for me to invest,” he says. “One is a background of management consulting, the other one’s an MBA.”
Unlike many MBA students, Walker wasn’t just looking for a higher salary, he’d hope to change the world. Hoffman believes his level of enthusiasm and drive propelled him forward.
As Hoffman explains, entrepreneurs can come from any number of backgrounds – tech, business, poverty — you name it. They just need to have the grit, motivation and perseverance to start something from the ground up.
3. The idea that everyone loves isn’t always the greatest one for you to launch.
Often, investors follow the herd. Fearing they’ll miss out on the next big thing, VCs tend to gravitate towards risky ventures, hoping to find the next unicorn. Walker thought he, too, had to think that way.
Initially, Walker thought he wanted to solve very ambitious problems – obesity, the banking industry or fixing freight and trucking.
“Everybody, 100 percent of folks, would say, ‘That’s awesome, go do it. I’ll fund it,’” he recalls.
But he quickly realized he knew nothing about these industries and they were a terrible fit. When his Walker & Company concept got shot down — a concept he knew he could execute — Walker knew he was onto something.
“Increase your humility a little bit, and really think about what you’re uniquely qualified to do, and then chase the bad ideas,” Walker advises.
4. You don’t need to found a tech startup.
Pitching a physical product — and not a tech solution — created extra headaches for Walker when he sought investors. “There’s this belief, a mistaken belief, and bias that physical products stuff is very hard to do, low margin, etcetera,” Walker says. “So there are these cognitive biases and implicit biases that folks have—that doesn’t make my idea bad, it just means that they don’t understand it yet.”
Rejection, as Hoffman explains, is a process that can help you hone your story and get you closer to success. “This is frequently one of the things that people who haven’t done the fundraising process don’t realize: you don’t care how many ‘no’s’ you get, Hoffman adds. “It’s the right ‘yes.’ The right ‘yes’ is the only thing you need.”
It’s a fact Walker wishes he’d learned earlier on.
“One of my biggest regrets was trying to retrofit a tech answer around what we actually are,” he says about trying to tell his ecommerce story to investors. After a while, the team realized they were indeed a consumer-packaged goods company, but one that could use tech better than its competitors.
“It took us three years to really understand who we are, because we were chasing the funding, as opposed to chasing the business model.”
For more anecdotes and lessons from Walker’s journey to scale, check out the latest episode of this new series below. Listeners can also access the podcast on Apple, Google, Stitcher and other streaming platforms.