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June 9, 2024 • 1hr 22min
Lessons from a two-time unicorn builder, 50-time startup advisor, and 20-time company board member | Uri Levine (co-founder of Waze)
Lenny's Podcast: Product | Growth | Career
Uri Levine is the co-founder of Waze and nine other companies. He has sold two companies for over $1 billion, been on 20 different startup boards, and advised over 50 founders and startups. He recently wrote a book summarizing his advice for founders called "Fall in Love with the Problem, Not the Solution: A Handbook for Entrepreneurs."
In this episode, Uri shares insights on finding product-market fit, making tough decisions around hiring and firing, fundraising tactics, understanding users, and the importance of focusing on problems rather than solutions. He draws on his extensive experience building and advising startups to provide practical advice for entrepreneurs at all stages.
Lessons from a two-time unicorn builder, 50-time startup advisor, and 20-time company board member | Uri Levine (co-founder of Waze)
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Key Takeaways
- Fall in love with the problem, not the solution. This is Uri's core advice for entrepreneurs. Focusing on the problem serves as a North Star and makes your story more compelling.
- Product-market fit is critical. For Waze, it took over a year of iterations based on user feedback to achieve product-market fit. Retention is the key metric - if you create value, users will come back.
- Make hard decisions quickly, especially around firing. Uri recommends setting a calendar reminder 30 days after hiring someone to ask "Knowing what I know now, would I hire this person?" If no, fire them immediately.
- Fundraising is a numbers game. Expect to hear 100 "no's" for every "yes". Start with your strongest point and tell a compelling story focused on the problem you're solving.
- Understand different types of users. Watch how new users interact with your product. There are innovators, early adopters, and the critical early majority. Simplicity is key to winning the early majority.
- Don't be afraid to fail. Failure is an inevitable part of the entrepreneurial journey. When you fail and get up, you get up stronger.
Introduction
Uri Levine is the co-founder of Waze and nine other companies. He has sold two companies for over $1 billion, been on 20 different startup boards, and advised over 50 founders and startups. He recently wrote a book summarizing his advice for founders called "Fall in Love with the Problem, Not the Solution: A Handbook for Entrepreneurs."
In this episode, Uri shares insights on finding product-market fit, making tough decisions around hiring and firing, fundraising tactics, understanding users, and the importance of focusing on problems rather than solutions. He draws on his extensive experience building and advising startups to provide practical advice for entrepreneurs at all stages.
Topics Discussed
Falling in Love with the Problem (2:48)
Uri emphasizes the importance of falling in love with the problem you're trying to solve, not just the solution you're building. This serves as a North Star for your startup journey and makes your story more compelling to users and investors.
- Solving a problem is the simplest way to create value
- When you fall in love with the problem, you're more likely to make course corrections and be successful
- A compelling problem-focused story engages customers and makes them want you to succeed
"Fall in love, fall in love. Fall in love with the problem. And then actually what you're trying to do is engage everyone else to fall in love with the same problem, to go into this journey, into this path and follow your leadership."
Finding Product-Market Fit (21:56)
Uri shares the story of how Waze iterated to achieve product-market fit, which took over a year of gathering user feedback and making improvements.
- Retention is the key metric for product-market fit - if you create value, users will come back
- It took Waze 4 years to find product-market fit, Microsoft 5 years, Netflix 10 years
- Iterate based on user feedback until you reach "good enough" to win the market
"If you create value, they will come back. If they are not coming back, that means that you are not creating value."
Phases of the Startup Journey (29:44)
Uri outlines the different phases of building a startup and the importance of focusing on one thing at a time:
- All-over phase: Think about everything but focus on figuring out product-market fit
- Product-market fit phase: Iterate until you create enough value for users to return
- Growth phase: Focus on scaling once you have product-market fit
- Business model phase: Figure out how to monetize the value you're creating
"The main thing is to keep the main thing the main thing."
Fundraising Tips (39:52)
Uri shares tactical advice for improving fundraising pitches and navigating the fundraising process:
- Start with your strongest point on the first slide - it will be shown the longest
- Investors make quick decisions, so engage them emotionally early
- The CEO should go to investor meetings alone to be the focus
- Expect to hear 100 "no's" for every "yes" - it's a numbers game
- Tell a compelling story focused on the problem, not just facts and figures
"Most people are missing the most important slide of their presentation. The most important slide of your presentation is the first slide, not the one that you think about it. The first slide, the one that says company XYZ intro. This slide is going to be presented for the longest period of time."
Firing and Hiring (53:45)
Uri emphasizes the importance of making hard decisions quickly, especially around firing underperforming employees:
- Set a calendar reminder 30 days after hiring someone to ask "Knowing what I know now, would I hire this person?"
- If the answer is no, fire them immediately - they're already on a trajectory of not being successful
- Top performers will leave if you don't make hard decisions to remove underperformers
- Firing is a harder decision than hiring, but critical for startup success
"Every time that you hire someone new, mark your calendars for 30 days down the road and ask yourself one question. Knowing what I know today, would I hire this person? If the answer is no, fire them immediately."
Understanding Users (1:04:11)
Uri discusses the importance of truly understanding your users and how they interact with your product:
- Watch new users to see how they actually use your product - it may surprise you
- There are different types of users: innovators, early adopters, and the critical early majority
- Simplicity is key to winning the early majority who are afraid of change
- Talk to users who churned to understand why your product didn't work for them
- Product owners are often innovators or early adopters and struggle to understand the early majority
"If you're building a product and you don't know that [users interact with it differently], then you are building the wrong product. You don't know that there are other people that are not like you."
Embracing Failure (1:14:04)
Uri emphasizes the importance of not being afraid to fail and learning from failures:
- Failure is an inevitable part of trying new things and innovating
- When you fail and get up, you get up stronger
- Teaching children to fail helps them discover what makes them happy
- Don't be afraid to get out of your comfort zone and explore
"Don't be afraid to fail. Right? In your journey, you're going to fail multiple times. And when you fail and get up, you get up stronger."
Conclusion
Uri Levine's insights provide a comprehensive guide for entrepreneurs at all stages of the startup journey. His core message of falling in love with the problem serves as a foundation for building successful companies. By focusing on creating value for users, making hard decisions quickly, understanding different types of users, and embracing failure as part of the process, founders can increase their chances of success.
Uri's practical advice on fundraising, achieving product-market fit, and navigating the different phases of a startup offers actionable steps for entrepreneurs to implement. His emphasis on simplicity, user understanding, and continuous iteration highlights the importance of staying focused on solving real problems for customers.
Ultimately, Uri's experiences building multiple successful companies, including Waze, demonstrate that entrepreneurship is a journey of persistence, learning, and adaptation. By falling in love with problems and staying committed to solving them, entrepreneurs can create significant value and build impactful businesses.
