Rules For Startups From VC Heavyweight Randy Komisar

Photo courtesy of Randy Komisar

The market has never been more fertile for the next big thing than it is now. Yet the competition is stiff and achieving success is a challenge. So how can you approach your big idea the right way and attain your goals?

Randy Komisar was the co-founder Claris, the CEO of LucasArts, and senior counsel for Apple. He's the author of several books including The Monk and The Riddle, and Getting to Plan B. Currently, he teaches entrepreneurship at Stanford University and is a general partner at the legendary venture capital firm, Kleiner Perkins.

His new book is Straight Talk for Startups: 100 Insider Rules for Beating the Odds, From Mastering the Fundamentals to Selecting Investors, Fundraising, Managing Boards, and Achieving Liquidity.

I recently interviewed Komisar for the LEADx Leadership Show, where we discussed his new rules for success. (The interview below has been lightly edited for space and clarity.)

Kevin Kruse: In your book, rule number one is that starting a venture has never been easier, but succeeding has never been harder. Tell me more.

Randy Komisar: Well, in today's market there is a surplus of capital. Not necessarily in all startup markets, but certainly in the large startup markets, and there's more capital in all the markets than there probably has been in decades, maybe ever. So, the reality is that it's not that hard to go off and raise a little amount of capital to test a new idea. It's a lot cheaper to bring those ideas to market, to understand how consumers or customers are going to respond to those ideas. Money's more available and it's cheaper to test them.

The problem is that money's more available and it's cheaper to test everybody's ideas. So, there is a plethora of ideas out there, and they're crowding each market, forcing what I call really perverse behaviors. Because, each market now finds the leaders spending capital in what I call uneconomic ways, meaning ways that aren't going to lead to a profit, in order to try to establish dominance.

Once one company does it in a sector, all the companies need to do it in a sector to keep up. So, you end up with these perverse behaviors that aren't good entrepreneurs, they're not good for investors, they're not good for customers, and it makes it very, very difficult to succeed because you're having to do things that aren't businesslike in order to rise to the top.

Kruse: What advice would you give someone who has competitors with deeper pockets. How would you compete?

Komisar: Well, you have to understand that the first mover advantage is not always an advantage. The reality is that the second player in a market often times gets it right, by learning from the mistakes of the first party in the marketplace.

I think that if you take a look for instance at Lyft and Uber right now. Lyft is gaining on Uber much more quickly than Uber is growing today, and Uber's gone off and made a bunch of billion dollar blunders in the process of spending inordinate amounts of capital to try to dominate markets far beyond what its target market was.

In the process, Lyft has kept to its knitting. Continuing to grow its business in a methodical way, satisfy customers, satisfy their drivers. So, you begin to see that it is quite possible to be the second in a market and still be able to compete against the first.

Kruse: The war for talent is fierce right now. How can we attract and keep great people?

Komisar: Well, in Silicon Valley now it's so difficult to recruit people and retain people, but the perks are really outlandish. It's not just free lunches. It's free dry cleaning, it's free pet insurance. It's everything you can imagine to make the lives of these workers easier to keep them wedded to your business and keep them from finding the next job.

Silicon Valley, again, is doing something that is not good for business. Because, what employees really want more than anything is to be challenged, and to have a sense of purpose. To have the opportunity to develop their skills and grow, to be paid fairly and have future opportunities to advance. That's what they really want, and if you give them great work and a sense of purpose, then you can win the hearts and minds of your people without having to lavish them with absurd perks in order to try to keep them in the seat.


In the end, the race to the top is not necessarily about which company corners the market first. There are advantages in being the runner-up, namely that you can watch for mistakes from those up ahead. In the meantime, keeping your team engaged with a sense of purpose is the greatest way to achieve success

Tara has been writing for over 7 years, from stand-up comedy, to think-pieces, to political satire and blog posts. She now writes and edits for, and her door is open to any interested contributors.