How To Start A Billion Dollar “Unicorn” Startup

I’m not a smart man. BUT…. I started two of the biggest websites on the internet. My first one, Genius aka “Rap Genius” tells you what lyrics mean. The new one, Everipedia, is Wikipedia built on a cryptocurrency called “IQ” that rewards you for educating the masses.

I want to share these tips with any readers out there who want to make a shit-ton of money, while also changing the world. If you think a “rap lyrics translator” is not exactly world-changing / earth-shattering, then fuck you! But if you appreciate my work then please read on. Some of these are tips are conventional startup wisdom while others are quite antithetical to what people who have way more money and tech influence than I do tend to preach. Whichever the case may be, I am right.

1. Whoever Built It Needs To Be In Charge:

Elon Musk didn’t build Paypal, but he got to be CEO. The days of Elon Musk are OVER. I know he’s in the news for amazing accomplishments like tweeting on acid and smoking blunts on the radio, but believe it or not, these days, it takes more than a bit of Musky charisma to build a unicorn company. Musk built his fortune on the back of a lesser-known nerd named Max Levchin. Levchin was such a beta male that — even though he was doing all the work — he let Musk and Peter Thiel be in charge and take all the credit.

But then another, more alpha nerd stepped up and changed the “Paypal Culture”. This alpha-dogg-nerd’s name is “Zuck” and he started a company called Facebook. You might hate this guy — you might even think he’s a bigger dweeb than Levchin. But Zuck wasn’t willing to let some asshole sit in his throne. He built the company, and he runs the company. Zuck had non-technical charismatic douchebags serving him — Sean Parker would get him dates and cocaine.

My companies are built on the “Facebook Model”, and that’s the only model that will make you rich nowadays. The competition is too high for a Musk to succeed. The CEO of Genius — Tom Lehman — is probably the biggest nerd ever to live. I had to spend years making him feel confident, convincing him that he’s actually 5'7'’, and serving as his Cyrano: composing his text messages to girls. The Everipedia President, Sam Kazemian, is known as the “Persian Zuck”. I coined the nickname for him and I made him famous in his home country of Iran. That’s how I earned my spot! (I’m “Chief Community Officer”)

Reddit, another success, was built this way too, with the hype-man (named Alexis Ohanian) serving the nerds. Nowadays — if you want to be an Elon Musk and push your nerds around, rather than kiss their ass — then prepare to fail!

2. Traction Is Everything:

You’ll never be a successful tech-faker if you don’t learn the lingo — and the most important word to learn is “TRACTION”. It sounds like a fancy word but it is a simple concept: “traction” means that it doesn’t matter how cool your idea is — it doesn’t even matter if you’ve raised millions of dollars from clueless old fogey investors — you won’t succeed unless you have millions of people using your product. In fact, you shouldn’t even try to raise money until you’ve already built a product that millions of people are using. The investors might give it to you if you ask — especially if you’re white, or went to Stanford, or both! — but you’ll just shit all the money away and will never build anything sustainable. Getting money before delivering users is a recipe for disaster.

My companies both had millions of users before raising significant capital. This was unusual even in the Rap Genius era, but nowadays, in the cryptocurrency era where pretty much ever single cryptocurrency project has raised millions of dollars without even having a working product — much less millions of users — Everipedia is pretty much the only show in town! I hardly know of a single other cryptocurrency project that even has a legitimate working product. That’s why, even though I possess a cryptocurrency fortune, I pray every day for the crypto markets to crash. I want to get rid of all the bullshit floating out there because I know, at the end of the day, my product will still be standing, even when everyone else is out of money and has given up.

3. Scalability Is A Myth:

I went to Stanford, but somehow, someway, I managed to avoid internalizing the bullshit they teach you there. At Stanford, they teach you that the way to succeed at startups is to do no work yourself, and instead, to sit around like an asshole and try to convince other, lesser mortals to do work for you and make you rich. They call this “scalability”. The same douchebags who manage never to learn the word “traction” certainly learn the word “scalability” — it becomes their favorite word! They love it because the “Scalability Philosophy” permits them to sit around and tweet all day, or post in Hacker News, whereas the “Traction Philosophy” seems to require actual work.

The way I built both of my huge companies is that I sat and did the busywork myself. I didn’t try to recruit others — I actually was pretty protective of my product, with Rap Genius especially. I wanted to break down all the rap lyrics myself (at least all the 2Pac lyrics). Right now, with Everipedia, I want to write the encyclopedia pages for all my favorite restaurants, and bars, and homies, myself. I don’t even care if anyone else wants to join me. Unless you are ultra-dedicated, I’d honestly rather not have you with me at all. A small group of highly dedicated, highly motivated peeps can get a lot more done than a huge community of folks who only care somewhat. Look at Wikipedia: they never really scaled! It’s a small group of around 5,000 nerds working for free. And they seem to have done pretty well! You know why? Because they drink the Kool Aid! And I drink it too.

I’m sure I’ll get into lots of trouble for this article. And at this point, I honestly don’t care. It’s like Sodom and Gomorrah. For every 1000 people who will read this and think I’m a pariah, I’m hoping just one of you will read this and will see I’m spitting truth, and you’ll reach out to me. You’ll want to work with me, whether by getting involved in Everipedia, or pitching me my next project. That’s how I met Sam and got involved in Everipedia myself and — who knows? — maybe some nerd reading this article will reach out to me, and we can get started building my third unicorn company. Together! That’s what I want most of all, because I know if I build a third one, then the haters will have to stop calling it a fluke. Nobody gets lucky three times — even if you do, people have to listen to your bullshit advice and take you seriously after your third unicorn blows up…

How To Start A Billion Dollar “Unicorn” Startup was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.