8 tips from Andreessen Horowitz’s Jeff Jordan on scaling a business

Jeff Jordan at the Tech in Asia Tokyo 2016. Photo credit: Tech in Asia / Michael Holmes.

Speaking on stage this week at the Tech in Asia Tokyo 2016, Andreessen Horowitz general partner Jeff Jordan shared one thing that makes the firm disruptive to venture capital. “Every general partner has scaled a tech company,” he said.

Because who better to mentor their portfolio companies about going global than people who’ve been there, done that?

a16z is Jeff’s first stint as a professional investor. For the past decade or so, he had been in the Valley, managing ecommerce giants.

He was CEO of OpenTable, the world’s biggest online restaurant reservation site. Prior to that, he was president of PayPal and championed the company’s sale to eBay, where he also served as a general manager at some point. At a16z, he works closely with early-stage startups and serves on the boards of Airbnb and Pinterest, among others.

If you want to build an important company, Jeff believes there’s no other way but to scale. To achieve that, he has these tips for founders:

1. Understand the problem

What is the problem you’re trying to solve and what are you doing differently than others?

“In a lot of successful startups, the founder has a great sense for what’s unique in what they’re doing, why users are responding to it, and they treat their users as part of their core constituents,” Jeff said.

2. Get product-market fit

“You have to get a product-market fit that’s working somewhere before you worry about expanding,” he pointed out.

Is there a market opportunity? Does the business makes sense in that market? What’s your competitive edge? These are things you should ask yourself before taking the plunge.

Jeff cited the case of OpenTable, which he said could only be present in markets that have a fine dining culture where reservations tend to be needed. “Brazil is a huge market, but they don’t do reservations or they don’t turn tables so it’s a bad fit.”

When entering a new market, make sure you’re ready, he said. “It’s really hard to do well if the company is not ready. All it does is dilute its limited resources. A lot of companies have gone in new markets too early and lost their focus on their core markets.”

3. Localize

It’s cliche, but what works in your initial market may not work in others. Jeff said eBay learned this the hard way.

eBay bought a lot of its global footprint. It bought a subsidiary in Europe and Latin America. It wanted to buy an Asian one but it wasn’t for sale so it decided to launch the business in the region on its own. The site was first launched in Japan – in English. “Which was a terrible idea! There was no localization at all. It was a disaster in terms of performance. Japanese consumers said there’s nothing on the site I wanna buy and it’s not even in my language. It was a really crappy experience,” Jeff recalled.

4. Go global at a pace that’s right for you

5. Hire the right team

6. Take risks

7. Welcome feedback with open arms

8. Look for an investor you’re willing to have a relationship with