How to build a multi-billion dollar company?

The goal of most startup founders is to build a unicorn. General Partner of Mindrock, Pavel Cherkashin, formulated an interesting theory of how to do it in the fastest way. I gathered some of his most significant points to share with you:

1. First, choose the direction you want to go; the direction you're willing to spend your whole life going.

2. When you have established your direction, gradually become a serious expert. As you are interested in it, you should easily accumulate more and more expertise.

3. Next, start the process of creating a product by iterating through hypothesis/idea testing. As a rule, a good iteration is two weeks. There is no idea/hypothesis on earth that can't be tested in two weeks. Take the example of building an elevator to the moon. You can sketch a preliminary drawing in 2 weeks, make a calculation, talk to 20 experts, and come back with a clear understanding of how this elevator can be built. If in two weeks, you don’t have a clearer understanding, you won’t be able to build it.

The important thing is that the less time one iteration takes, the more iterations you can consistently make, knowing that the smaller the iteration, the less fear of throwing away what you have already done in that time. Statistically, it takes about 20 to 70 iterations to find a product/market fit. Rarely do you get people who can handle it in less than 20 iterations.

As you can see, 20 to 70 iterations, each taking 2 weeks, adds up to a serious job taking a couple of years!

Very often, entrepreneurs have an idea, spend a year on just one iteration in order to make the ideal technical product, but find, sadly, that it is not really needed by the market. It doesn’t end here, those same entrepreneurs sometimes spend a further one to five years trying to save an unnecessary project, because they have already spent so much time, resources and effort on it.
As a result, putting aside the result of 2 weeks of work is hardly a problem at all, but it is very difficult to put aside the result of a year’s work.

Artists use a good technique - ‘Draw and throw away, draw, and throw away. Do not get attached to the results of your work’. The same should be true for entrepreneurs.

The successful iteration formula is as follows:

1) You invent/formulate a hypothesis.

2) For two weeks you stay with this hypothesis alone. You have no other business, no other variations. As long as you're in this hypothesis test mode, it should be the only one you're doing. You can test any idea in two weeks in this focused mode.

3) If the hypothesis has been tested as is not working, simply put it aside.

4) Take the next one idea and check it, and if it doesn't work, again, put it aside.

Instagram arrived after seventy iterations! All the entrepreneurs that Paul knows and who have used this method have succeeded.

The conclusion we can take from this method is that if you follow this methodology, you will be successful. The only question is when it will happen. Statistically, it takes about 2 to 2.5 years. Most entrepreneurs give up in about a year and a half.

If you are ready to spend the next 2 years of your life checking and studying another hypothesis every 2 weeks, sooner or later you will succeed.

Author - Alexey Shashkov