Elon Musk's Startup Commandments

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Today at a glance:

💡 Opportunity: Modern PitchBook

PitchBook is supposed to be a source-of-truth platform for detailed information about the fundraising history for startups, among other things. They charge a crazy amount of money (their pricing is hard to find but it's around $25,000/year for 3 users — you can probably negotiate that though) for access to their dataset and compete with Crunchbase and CB Insights.

Well, they’re apparently posting data they know is false as a growth tactic.

According to Justine Palefsky, who I hosted for a fireside chat with our community recently, PitchBook refuses to fix the data unless founders give them extra (likely private) data. Really gross.

Thankfully it looks like some VCs are starting to look for alternatives:

The simplest way to disrupt them? You guessed it — offer more accurate data for 1/10th the price. That’s easy.

Rather than employing a giant research team that likely drives their costs up, you can maintain a low price point at scale by creating an AI-first approach to find the most up to date data online at any given time.

PitchBook would likely try to compete with you by saying they have data users can’t find anywhere else, but those opportunities would present themselves to you as you grow and find ways to incentivize users to share more data with you.

A recommendation: don’t try to manipulate them into giving it to you like… some people.

🧠 Framework: The Rule of 3 and 10

Rakuten’s CEO, Hiroshi Mikitani, is not as well known as some other big tech leaders but his Rule of 3 and 10 framework is useful.

The TLDR is that at a startup everything breaks each time your company triples in size. It’s meant to be a rough approximation based on Hiroshi’s own observations at Rakuten as they scaled.

It’s called the Rule of 3 and 10 because, if you start from a size 1, then tripling is size gets you to 3x that and tripling again gets you to (~~roughly) 10x. And repeat:

And when he says everything, he means it — payroll systems, meeting scheduling, and communication processes need to be rethought when you triple in size (among many other, similar things). These are the types of things that are easy to overlook and not prioritize when you’re scaling. It’s much harder to measure the impact of taking the time to address operational processes than it is to ship a new feature and see metrics change right away.

For the fasted growing startups, they’ll blow through these triplings without even realizing it and then a 300 person startup with have the processes in place of a 10 person startup. That’s when things get messy. It pays to addresses processes as you grow, not after the fact.

📈 Trend: Longevity

Even if Elon Musk doesn’t think people should want to live forever, a lot of people are interested in living longer. And the potential for an industry to develop around the trend is massive:

We’re already seeing this as life expectancy declines in the US:

• Thiel Fellow Laura Deming’s Longevity Fund has raised $22 million to invest in longevity-focused companies

• Braintree founder, Bryan Johnson, has been making increasingly wild posts on X about his obsessive journey to extend his life and improve his health in measurable ways. Some people call it cringy but to me it’s just intriguing.

Most practically, the subreddit r/Longevity has continued to grow, If the trend reaches the mainstream, the pace of growth will dramatically increase. Overall the longevity market is expected to reach $44 billion by 2030 and today’s five-year olds are expected to live to 100.

💬 Quote: Elon Musk’s Startup Commandments

In the new Elon Musk biography, Walter Isaacson outlines what he calls “The Algorithm” which sounds more ominous than it is. It’s Musk’s five commandments he lives by when building his companies.

1. Question ever requirement

2. Delete any part/process you can

3. Simplify and optimize

4. Accelerate process time

5. Automate

The common denominator with each of these is that they are all in service of increasing execution speed.

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