Of Startups, Scams, And a Mystery Based in The Silicon Valley
An interview with a serial entrepreneur and author who’s seen the startup world change a zillion-fold in the last 25 years.
This is the all-new Stash Interview series, where every week we have conversations with founders and CEOs of interesting and innovative startups. In today’s interview, we have DC Palter, a serial entrepreneur, investor and author of the book To Kill a Unicorn. He’s here to talk to us about his 25-year long journey in the startup industry, how things have changed and whats different being an investor. He’s here to talk about everything affecting the startup industry today from AI to inflation and economic woes. His stories, insights, success and regrets can help the startup community grow and learn.
DC Palter is a serial-entrepreneur turned investor. He bags 25 years of experience in the startup and tech industry, during which he saw the industry grow from a risky affair into the colossal trend it is today. He has built four startups, two of which have seen successful exits, and invested in dozens more. He recently also wrote a mystery novel based in the Silicon Valley — that has everything from startup culture, fatal technology, and scams to teleportation.
Can you give us the highlights of your startup journey from launch to exit?
I founded/co-founded four startups, with two successful exits.
My first startup was a software development company focused on networking infrastructure that I joined to lead sales and marketing. We invented a way to make networks run faster; and restructured the company to become a network accelerator business. It took a lot of iterations before we found product-market fit. When we did, the business took off, and we were eventually acquired by a larger company with a complementary product that wanted to combine our technology into theirs.
That journey from joining the company and bringing the product to market to acquisition took 10 years.
Once the acquisition was complete, a friend and I left to create a new startup, Apposite Technologies. The goal was to build network simulators — something we’d needed at the earlier startup and knew there were no products available that fit our needs. That was also a long process of building the product, bringing it to market, finding the users who needed a network simulator (it wasn’t who we’d thought), and expanding to higher speeds and increased functionality.
After 13 years, we had a strong, profitable business that we sold to private equity investors.
What specific industry/consumer problem(s) were you solving?
At Apposite Technologies, our users were developers who needed a way to see how their applications would work over different network conditions. Obviously, this is a specialized B2B product made for developers, test labs, and network engineers.
As a former entrepreneur, what are the challenges you see in the startup industry currently?
Times were a lot different back then. Startup culture wasn’t so pervasive and trendy. It used to be hard to build a startup.
There were no accelerators. There was no remote working and no shared offices you could rent without a 5-year lease. There was no AWS to run your applications in the cloud. It took a lot of money to build a startup, and there were only few investors interested in funding startups.
Founders had to mortgage their homes (and have a home first) to build the startup and work for no salary for years.
Obviously, that’s all changed. Now, conversely, it’s almost too easy to build a startup. Which means, for every interesting idea, there are probably a dozen startups working on something similar. With so many startups looking for customers, looking for employees, looking for funding, it’s become hard to stand out from the crowd.
As an investor, what do you think is the next big thing in the startup ecosystem in the near future?
In other words: What should startups lookout for in terms of development or investment opportunities?
The hot space now is climatetech and sustainability. It’s become clear that climate change is the defining challenge of our age, and everyone wants to contribute to finding solutions.
Many investors, including me, are focusing specifically on sustainability.
What is your book about and what’s the one reason that entrepreneurs should read it?
I wrote a mystery novel called To Kill a Unicorn that was recently published by Pandamoon Publishing. It’s set in Silicon Valley about a startup that claims to be developing teleportation. Now one of the scientists is missing. His friend, a programmer, has to use his hacking skills to try to find him. He realizes the company is either a scam or is hiding fatal problems with its technology.
Nobody else writes novels about startup life despite how interesting (and crazy) it is. So I wanted to write a story where the main character is a programmer working at a big tech company who joins a startup and finds out they’re really awful.
A wild trip through the startup world with founders, hackers, venture capitalists, and bitcoin billionaires, I promise it’s the most fun you’ll ever have reading about Silicon Valley.
An investor insight entrepreneurs should know.
When pitching to investors, most founders focus on the product with a few details about the business. But the point of the pitch is to sell stock in the business to investors, so the pitch needs to tell a story of why this is a great investment, which comes, yes, from having a great product that fills an important need in a large market, but also from something that scales quickly.
Investors need to believe that your product will touch hundreds of million in revenue and get acquired at a huge multiple by an industry giant, bringing a huge return to investors within a few years.
You’ve been on both sides of the funding pond — as a startup pitching to investors as well as an investor receiving startup pitches. What’s the one major difference in perspective between both sides?
As a founder, we focus on the product. What does it need to do, who needs it, how do I sell it? We spend all day thinking about how to make a great product and we get very excited about what we’ve created.
As an investor, though, the product doesn’t really matter. The question is: is this a good investment?
Can this generate a 100x return? So things like an exit strategy, competitive moat, market size, and a team that knows how to scale from 0 to $100M are more important than the details of the product.
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