Youtube Founder: How A 27 Year Old Built A $400 Billion Company! (Steve Chen)

An exclusive interview with Steve Chen, co-founder and former CTO of YouTube, reveals the journey behind the platform's massive success. With 500 hours of video uploaded every minute and over 2.5 billion monthly active users, YouTube is now valued at $400 billion, a huge jump from its $1.65 billion acquisition by Google in 2006. Steve shares his experiences, lessons, and advice for new entrepreneurs.

The Early Days: From Taipei to Silicon Valley

Steve Chen's entrepreneurial journey started early, driven by a mix of timing, luck, and being in the right place. Born in Taipei, Taiwan, he moved to Chicago, Illinois, and later attended the Illinois Math and Science Academy. His first real exposure to the internet came at 14 or 15 years old, a time when PCs and the internet were just starting to become popular. This early access, combined with the freedom of boarding school, allowed him to explore the internet without limits.

His move to Silicon Valley in 1999 was a one-way ticket, a commitment to either succeed or fail there. This move was influenced by pioneers like Marc Andreessen, co-founder of Netscape, who also came from the University of Illinois. Steve's connection to the "PayPal Mafia"—a group of former PayPal employees who went on to found successful companies like LinkedIn, Tesla, and YouTube—was a key part of his journey. This group, all around the same age, found themselves at a crossroads after eBay acquired PayPal. They chose to leave and start new ventures, benefiting from the internet's evolution and widespread adoption around 2005.

Silicon Valley's Unique Mindset

Silicon Valley remains a unique place where talent, investors, and ideas come together. Steve points out that while other global hubs are emerging, Silicon Valley's concentration of resources and its risk-taking culture are unmatched. The ease of meeting with top executives and quickly closing deals, as seen with YouTube's acquisition by Google, highlights this unique environment. The people in Silicon Valley are often those willing to take big risks, move there with a one-way ticket, and surround themselves with others who share that mindset.

Steve notes that this culture of risk-taking is not common everywhere. In places like Taiwan, smart engineers might prefer stable, long-term careers over the uncertainty of a startup. This difference in mindset is a big reason why Silicon Valley continues to be a hub for world-changing companies.

Key Lessons for Startups

The Importance of Adaptability

Steve emphasizes that startups must be ready to change and adapt. YouTube, for example, started as a dating site. When it failed to get video uploads for a week, the team made a tough decision: they changed it to a generic video-sharing site. This willingness to admit mistakes and pivot was crucial for YouTube's survival and eventual success. Founders need to be flexible and not get too attached to their initial ideas, especially in the fast-changing tech world.

Prioritizing Growth Over Early Monetization

One of the biggest mistakes startups make is trying to monetize too early. Steve explains that YouTube, even after its acquisition by Google, focused on growing its user base and service before turning on the monetization. This approach, supported by investors like Sequoia Capital, allowed YouTube to become a strong brand and product first. If they had focused on making money too soon, it might have slowed down their growth and prevented them from becoming the platform we know today.

Common Rookie Mistakes

• Not being in the right ecosystem: Being in a place where investors are not willing to take big risks can limit a startup's growth. Silicon Valley's willingness to write large checks and allow companies to focus on growth without immediate returns is a major advantage.
• Ignoring user growth: Focusing on monetization too early can stop the growth of users and creators. The priority should be to build a strong user base and brand before trying to make money.
• Lack of adaptability: Not being able to admit mistakes and change direction when an idea isn't working can lead to failure. Founders need to be ready to pivot and adjust their plans based on market conditions.

Founders vs. Operators

Steve sees two main types of leaders in companies: founders and operators. Founders are the ones who come up with the ideas and build the early stages of a company. Operators are more focused on making things efficient, scaling the service, and managing a larger, often public, company. While some, like Mark Zuckerberg and Elon Musk, can do both, Steve prefers the early, problem-solving phase of a startup. He finds excitement in the daily challenges and surprises that come with building something new.

Reflections on AI and the Future

AI is changing the world at an incredible pace, similar to how the internet did in its early days. Steve is amazed by its rapid advancement and adoption across all ages and cultures. He believes AI is a revolution for mankind, comparable to the Industrial Revolution or the information age. While it's making things easier and faster to build, it also means more competition for new entrepreneurs. The ability to quickly generate code and launch ideas means that having a unique idea is more important than ever.

Advice for Aspiring Entrepreneurs

Steve's main advice for new entrepreneurs is simple: don't give up and keep trying. The tech world changes fast, and with AI, it's moving even quicker. While it might be harder to start a successful company now than it was in 2005 due to increased competition, there are still many opportunities to integrate technology into daily life and make things better. The satisfaction of taking an idea from your head and seeing it become a reality, or watching someone else use what you've built, is incredibly rewarding.

Steve also advises founders to be in the right place. He encourages entrepreneurs he invests in to move to Silicon Valley, even if their engineering teams are elsewhere. The connections, events, and overall mindset of the Bay Area are hard to replicate through virtual meetings alone. It's about being where things are happening and connecting with people who share the same drive and willingness to take risks.

Current Ventures and Future Goals

Steve is always exploring new things, often different from what he's done before. He's interested in Web3 and AI, looking for ways to bring them together. He even launched a meme token named after the first cat video uploaded to YouTube, seeing it as a learning experience in the world of decentralized currency. He believes the post-COVID world, with its increased online connectivity, offers new opportunities for collaboration and highlighting unique attributes from different parts of the world, not just Silicon Valley.