Elements of Sustainable Companies

This list is from Sequoia Capital, the people who have funded the biggest names in computer industry, including Apple, Oracle, Cisco, Yahoo!, Google, and YouTube. Other companies in the portfolio include LinkedIn, Meebo and RockYou, showing Sequoia's social networking savvy. They are the most respected VCs in the Valley (and maybe the world), because of their consistent ability to make the right decisions.

Before we get to the list, here are a few thoughts:

• There's plenty of money out there for the right idea. If your idea is getting turned down by super successful VCs, then you should consider re-working it. (If it's getting turned by schmucks, ignore them) Sequoia has all the money it needs, literally. After seeing this (scroll down and read the list, it's interesting stuff), I phoned and asked if I could invest. Yea, right. No surprise, never got a call back. I'd give up a body part to be able to invest in a Sequoia fund.



• Having the right investor is expensive. I've been told about companies that have received term sheets from Sequoia. It's validation that's as good as it gets. However, it will be expensive money, because Sequoia almost never gives you the valuation that other firms would. They think they can make it up by giving you better advice and bringing you more success. Judging from past performance, they may be right.



• Mike Moritz is the billionaire VC at Sequoia who put Larry and Sergei together with Eric, who are arguably the three most powerful men on the Internet today. Mike's their buddy - 'nuff said.

Elements of Sustainable Companies:

Start-ups with these characteristics often foretells the success of a business and the likelihood of it becoming a sustainable, enduring company. We like to partner with companies that have:

Clarity of Purpose
Summarize the company's business on the back of a business card.

Large Markets
Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop.

Rich Customers
Target customers who will move fast and pay a premium for a unique offering.

Focus
Customers will only buy a simple product with a singular value proposition.

Pain Killers
Pick the one thing that is of burning importance to the customer then delight them with a compelling solution.

Think Differently
Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition.

Team DNA
A company’s DNA is set in the first 90 days. All team members are the smartest or most clever in their domain. "A" level founders attract an "A" level team.

Agility
Stealth and speed will usually help beat-out large companies.

Frugality
Focus spending on what's critical. Spend only on the priorities and maximize profitability.

Inferno
Start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower.