How a 19-Year-Old Boy Built a $7B+ Business
To build a unicorn company you need risk-tolerance and data
“If you aren’t willing to take that leap now, then when are you willing to?”
He thinks to himself.
After completing one year at the Massachusetts Institute of Technology (MIT), he continued to interview for summer internship opportunities and received positive feedback from DeepMind, Stripe, Snapchat, and Opendoor.
But now Y Combinator (YC), one of Silicon Valley’s hottest accelerators that injected the first money into companies like Airbnb and Dropbox, is ready to put an initial investment in his project.
Accepting this capital means he has to decline all the exciting internship offers he looked for, drop out of MIT, and start his own business.
In a family where mom and dad are both nuclear physicists, and the two brothers are academics, he would be “the chip that fell pretty far off the block.” That’s a risky gamble! But he sees it differently.
Growing up, the boy loved math. When he was in sixth grade, this love allowed him to win at the math competition MATHCOUNTS and travel for free to places where he’d never been, like Disney World.
Later on, he took part in more competitions, including coding competitions and the USA Computing Olympiad (USACO).
Fascinated by his skills, though he didn’t have a degree and was just a high school student, the Silicon Valley company Addepar hired him as a Software Engineer.
Then he grew into a Tech Lead position at Quora when he was about 16-year-old. After a few months of working 12-hour days at Quora, he’d improved as an engineer in a way that he felt like he went from a code monkey to a legitimate system architect.
His experience at early and mid-stage startups allowed him to gain an insider’s perspective on how these fast-growing companies were being run. He pieced together what he learned over the years and wanted to solve practical computational problems.
Now, he got the opportunity, and he has to give an answer to the YC partner.
“As you get older, you’re only going to become more and more risk-averse. If there’s a risk today that you aren’t willing to take, then you might never end up taking that risk.”
He smiled quietly remembering these words Eric Wu said to him in a try to persuade the boy to work for his company, Opendoor, instead of a larger one. It seems that this insight persuaded him to take a different direction.
Though he shares many characteristics with all of them, the boy’s name is not Mark Zuckerberg, neither Larry Page nor Sergey Brin.
His name is Alex. He dropped out of college to pursue a dream of selling the picks and shovels needed to speed up the development of a booming sector: Artificial Intelligence (AI).
The estimates indicate that the enterprise AI software market will be worth $44 billion in 2024, according to C3.ai and he is aware of it.
In June 2016, at the age of 19, Alexandr Wang started Scale AI, a startup focusing on labeling and delivering high-quality training data to help other companies — especially those whose core business relies on machine learning — to tag their datasets.
At the end of the year, his “API for human intelligence” achieved to help Uber, Alphabet, Houzz, and P&G among others. His adoption of a risk-seeking mentality and hard work has paid off.
“If you have a lot of momentum, it’s not too difficult to keep grinding even further.” — Alexandr Wang
In August 2019, Bloomberg reports that “Silicon Valley’s Latest Unicorn Is Run by a 22-Year-Old.” Scale AI achieves a valuation of over $1 billion in its third year and succeeds to get customers like Waymo — formerly the Google self-driving car project.
In December 2020, with a workforce of 200 people — not including the tens of thousands of contractors used to label data — the firm hit a $3.5B valuation. Its group of customers has spilled over into e-commerce, government, enterprise automation, and robotics. General Motors, Toyota, Nvidia, Airbnb, Pinterest, OpenAI, and DoorDash have used Scale’s platform.
On April 13, 2021, Alex announced that Scale raised $325M in Series E of funding at a $7B+ valuation:
Looking for more details about his journey and the process he went through, I’ve found an interview of Alexandr Wang with Mike Volpi at Candid with Index, where he rewound a few years back in his life and shared some insights.
Below are four points that struck me when I was listening to and reading his story.
Unrelenting Persistence & Mental Toughness
In his answer to the question “What are the most important lessons you learned from your parents?”, Alex has mentioned unrelenting persistence and mental toughness.
His parents’ goal to do their PHDs in IUUC, let them immigrate from China to the US where they’ve faced a lack of money and other difficult situations. They had to just be very persistent and doggedly pursue their ambitions.
As a little kid, Alex liked mental games and ended up playing chess. Dad has noticed this early interest in his boy and encouraged him by explaining how playing chess teaches us mental strength — even if you’re in a critical situation, you have to just work through it and “stay in a good headspace”.
How to Find an Original Idea
Alex’s insight about landing on the original idea of Scale AI was:
“You want to build things that you yourself would use.”
His excitement about technology, his work at Quora, and a bunch of side projects have guided him to recognize that one of the biggest bottlenecks he was facing was data.
This lack in the market has inspired him to come up with a solution to offer “a better way to get a bunch of data for machine learning,” by creating an API where you send an image and it comes back labeled.
Though the idea of “an API for human labor” has got good traction and people were excited about it, the young CEO confessed it was not going to solve real problems for customers.
Acknowledging this truth, the company moved aside to focus on autonomous vehicles, a decision that he considers one of the best ones made at Scale.
Keep Up with the Flood of Ideas
In his reflection on the first year for Scale, Alex has explained how he leveraged his hard work to build his ideas and survive his startup:
“Generating a lot of ideas is another great motivator for hard work. […] when the rate of good ideas exceeds the rate at which you can build them, time becomes the enemy, and you begin craving 100 hour weeks. The higher your execution speed, the more you’re able to keep up with the flood of ideas. This flooding (and sometimes wastage) of ideas is one of the reasons why moving fast is so important for startups.”
The Secret of Scaling Scale as a Business
With no doubt, the young businessman has attributed his success and the velocity of growth of his company to his team when Mike Volpi asked him about it:
“It’s all about the people. […] I’m sure the stuff that makes the whole thing work is actually just really great people: smart hard-working, proactive, really go-together, …”
He adds:
“The thing that I should spend the most mental energy, the most heart, and soul on is just making sure that we find and we attract and we get really amazing people.”
Final Thought
In our lives, we face moments of doubt in our decisions or hesitate to take one. At this time, we need something to hold on. Alex and Scale’s story is a great reminder that we need to tolerate risk and adjust when things go wrong to be able to reach our goals.
“Be steadfast in vision but flexible in approach.” — Steven Li
References
[1] How The 22-Year-Old Founder Of Scale AI Built A Billion-Dollar Business
[2] Candid with Index: Scale.AI
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