Narrow Idea, Enormous Market
Levchin: The investments that work out great are the ones where the idea is actually relatively narrow and the entrepreneur is really focused on doing something exceptionally well — but they're doing this in a market that has enormous potential.
Narrow idea. Exceptionally focused. But in a market with enormous potential.
An Awesome Review Site for San Francisco
Levchin: One of my more successful investments is Yelp. When those guys started, they had all kinds of ambition. But the number one ambition at the very beginning was to just make an awesome local review site for San Francisco.
San Francisco is a small market — less than a million people. A lot of my friends told me it was a wacky investment. Those guys throw local parties, they rent out bars — it's always going to be landlocked in San Francisco.
Their number one ambition: an awesome local review site for San Francisco. My friends said it was wacky.
Replicated Everywhere
Levchin: I didn't really mind that, although I had my concerns. Five years later, they were an international juggernaut — just nailing it with their local review service.
They were able to figure out the exact formula in San Francisco and replicated it everywhere else in the world.
They figured out the exact formula in San Francisco and replicated it everywhere else in the world.