Yale Herald: Both of your parents are doctors.
Divya Narendra: That’s right.
YH: When did you first feel the spark of entrepreneurship?
DN: It began with ConnectU when I was a junior at Harvard. It’s funny—it didn’t work out at all as I planned it. I knew that I liked coming up with an idea, building a team, and the ownership of it. One of the nice things about being a business owner is that you’re always going to work on your business, whereas if you go work at a big corporation, sometimes you have issues where you’re not actually motivated to do anything. Or you don’t really want to get up in the morning. When you have material ownership in something, you’re so much more motivated.
YH: You said in your talk that for a lot of undergrads at Ivy League schools that finance and consulting is a default option. For you, though, it was a backup plan?
DN: Yeah. I always knew it was an option because, at least at Harvard, our Office of Career Services (OCS) is built around finance and consulting, so there are all these firms that come to you—and this is true at Yale too, right? They come to your school to hire you, so you get a lot of people who aren’t necessarily passionate about it, but because it’s easy for them and there’s structure around it, they do it. But for me I knew when I went to [Credit Suisse after graduating] that I wasn’t going to be a lifer. It was only going to be something I did for a couple of years; most of these programs are only two-year programs anyway.
YH: Some people, like Peter Thiel, now think that college is a waste of time and that 20-year-olds shouldn’t be learning applied math or philosophy. Instead they should be out in the real world building companies with their youthful energy and creativity.
DN: I totally disagree. In college you get exposed to a wide variety of things that aren’t necessarily related to your career, and that’s one of the best things about it. One of the things I regret is not taking music theory. Now I play the guitar and wish I had taken music theory then. But beyond that, the social growth that occurs in college is hard to replicate outside of that setting. When I got to school as an 18-year-old, I didn’t know anything in the social sense. You learn so much because you’re forced to; you’re living with hundreds of people in a dorm, you’re sharing meals with 10, 20 people at a time, and that never happens again. It’s kind of like being on a big team. And the other thing about college is that it’s engineered to be diverse. So yes, there are some people who can start companies in high school, but doing so at 18, 19, or 20—there’s a cost to that.
YH: Moving onto entrepreneurship, your hands are full with your company SumZero. But if they weren’t, where do you think the biggest problem is that an entrepreneur could come along and solve and win big?
DN: I honestly don’t think that much outside of my current business. But the first thing that comes to mind is the huge amount of noise out there. There’s so much information out there from various sources, and a lot of that information is user-generated, and as a result it’s not clean. You hear buzzwords like “Big Data,” and it stems from the fact that there are services now that collect so much information about people: every time you transact, every time you visit a webpage, there’s probably a company tracking where you’re going and what you’re doing with a cookie. There’s so much information out there that trying to distill it down to what really matters, I think, is tough.
Recently there was the announcement with Graph Search, Facebook’s new search tool. It’s trying to make more use of this massive pile of data that exists. Twitter’s an interesting example. People tweet all the time, but trying to figure out which tweets matter and which ones don’t, and how much credence to put in something that’s trending versus something that isn’t—it’s just difficult. I think the companies that try to make sense out of this huge pool of user-generated data will do well. That’s a pretty hard problem to solve. Everyone feels like they can be a journalist or a publisher of content now; the blogosphere is bigger than it’s ever been before. But as a result it’s hard to stand out. A lot of people have a tough time getting the answer they want given how much is out there on any given topic.
YH: When you’re assessing the viability of a startup or an idea, you mentioned in your talk that what really matters is the size of the market.
DN: That’s step one. I’m not an investor. I’m an operator: I run my business. I don’t run a venture capital firm. But if I did, that’s something I would want to understand off the bat: What space are you playing in, and how big is it? Sizing the target audience and understanding the magnitude of their particular need is one of the first things you want to know about as an investor, and certainly as an entrepreneur. If you’re attacking a problem that’s too small, it’s hard to build a big business out of that. If it’s a problem that’s easily solved, you run all kinds of competitive risks, because you get all these different folks who can do the same thing. For example, we see that today in the daily deals space. There are so many daily deals sites or discount sites that there’s no barrier to entry, it’s just very hard to stand out in that market. It’s supersaturated. You want to be ahead of the curve.
YH: Based on the number of times that you bring up Facebook in your talk, you seem to follow it pretty closely, which makes sense given your influential role in its founding. There are a number of people who over the past few years have predicted its collapse. It seems to be doing still reasonably well despite the slight fall-off after the IPO, at least in its stock. I’m wondering if you think someone could come along and topple Facebook.
DN: There’s always a chance that a company becomes extinct for some reason. Right now I don’t see that happening to Facebook. The reason is 1) huge network effects: it has a billion users, so it’s difficult to compete with that, as Google + has seen, and 2) it’s a platform. There are a huge number of applications that live on Facebook. SumZero does not. It’s important for us to own our own network. We’re not reliant on Facebook or LinkedIn or any other social network, and that helps us stand alone. The truth is, there are a lot of apps that sit on Facebook and are reliant on Facebook. That’s great for them. They’re almost like infrastructure for the Internet in a way. The more they do that, the more they become this operating system for the Internet, and that’s going to help them sustain. Now whether in ten years Facebook still exists, I don’t know, but it’s hard to predict.
Some people think there’s fad risk to Facebook—that’s probably what you’re alluding to. I think because they’re so ingrained in people’s lives that it’s tough to see something else coming in and uprooting it.
This interview was condensed and edited by the author.