Posts Tagged ‘startup lessons’
A few recent events …
1. Recently I had a discussion with a Babson faculty member, for whom I have tremendous respect, about much of entrepreneurial education missing the point. On one extreme it is about theory, business plans, 5 year cash-flows, to most young entrepreneurs, what is termed as bullshit. On the other extreme, it champions young hotshots who have raised money. It makes venture capital the most aspirational of all goals. I sometimes cannot believe I actually spent time studying the components of a J-curve. What about building a great profitable business?
2. In a ridiculously yet awesomely long episode of @Jason Calcanis’s This Week In Startups(#TWIST), guest David Heinemeier Hansson, Partner in 37 Signals, criticized passionately the entire entrepreneurial landscape for being too focused on coasting on other people’s money rather than hustling to make your own.
- Jason argued for the home runs, large amounts of capital were necessary.
- DHH retorted that those home runs are like trying to win the lottery.
- Jason didn’t disagree, agreeing the large majority of VCs either perform below market or lose money.
In their recent book, Rework, DHH and Jason Fried argue that ‘entrepreneur’ is a bad word with too much baggage. What happened to building a profitable business from the low hanging fruit, similar argument Gary Vee makes.
3. All of the articles on StartupVisa Bill are just me-too, which is fine, that’s just how journalism works. It’s the same Geoffrey Moore diffusion of innovation curve, one influences the other, etc. The real juice comes from Eric Ries. But what is really interesting is the me-too articles draw varying comments from different demographics, i.e. not everyone reading Inc is reading Eric Ries’s blog Startup Lessons Learned. What I find amazing is this absolute illogical argument that a StartupVisa would take away American jobs.
Fact: My startup is three Americans and me. I’m now in Shanghai because of this; Invent a Cool Clothing Site, Now Leave the Country. From June, two of my co-founders are joining me in Shanghai. So yes, a lack of #StartupVisa is in fact taking jobs away from America.
4. Our recent team conversations have shifted very much from ‘we want to build a great business and bootstrap to profitability’ to ‘if by some statistical anomaly the #StartupVisa gets passed, we’re going to have to try and raise $250,000 to get Fan back in the country’.
We have a lost generation of entrepreneurs. Not enough 20-somethings, or let’s even say under 35, have had the opportunity to see success at a young age and learn the important lessons of start-up leadership … When my partners and I tried to develop a list of today’s under 35 entrepreneurs who had started companies and seen meaningful success with them, it was a depressingly short list.
When I first started exploring the Boston startup scene, I was brash and arrogant. In fact, Scott Kirsner, publicly asked, “okay, you’re angry, what are you going to do about it” in response to a rant that the community wasn’t doing enough for young, first time entrepreneurs. When I asked James Geshwiler if he was committing Common Angels (he’s the Managing Director) to any support of young first-timers, he immediately went to quote the Kauffman Foundation report from late last year citing that the average ‘successful’ entrepreneur was 40. I used to get blindly frustrated at responses like that and wonder how were things ever to improve for young guys inspired to start interesting companies. But if you think about, it’s fairly logical right? 20-somethings can’t really be expected to launch, grow and run successful companies? A community or a society shouldn’t be supporting something that’s most likely going to fail?
Through my various interactions with people in the Boston startup community, especially with a lot of young peers launching companies, I started to wonder what really was the optimal age to start a company. A really close friend of mine took a year off from a top Boston engineering undergrad program to work on an education software-as-a-service technology. He and his team came up with something fairly interesting, but it’s a big project and startups are difficult. After much work, many lessons learned, he’s now back at school finishing off his degree, and ready to spend the summer at Google, possibly, and probably, leaving the dream of launching a company whilst still at school behind. Instead, he’ll probably go to Google after college, then to Harvard Business School a couple of years later. At that stage, he’ll have a bit of financial capital, be much more connected, and generally have far more knowledge to be in a much more optimal position to launch a great company. Am I sad that this would mean potentially one less young rock star Boston entrepreneur? Definitely. But do I think this is the right move for my friend. Most probably.
Given I haven’t started a successful company, am merely attempting to, I can’t properly answer the question in the title. What I will say is, without empirical evidence, there are a lot of early 20s (not to mention the freakish Mark Bao‘s of the world) in Boston, and I’m sure in a lot of other places, passionate about startups. There is an element of ‘it’s the cool thing to do’ (thinking back to the post Why for Students Entrepreneurship is the New Investment Banking) but there are more compelling fundamental reasons why the ‘supply’ of companies entering the marketplace founded by an early 20-something will increase by multiples in the next five years.
Is it best that a significant majority try and fail, but learn and try later in life, or are there solutions to this social phenomenon of young people going from lemonade stand to hiring their father’s friends.
a big advocate for the influence of environment, i find myself surrounded by first-time entrepreneurs because i find it useful to share notes, laugh about mistakes we’ve all made, and mostly importantly have a common naive belief we can all change the world. the statistical reality is that we all won’t. that in fact it’ll be well less than half of us. unfortunately that fact alone will put off a lot of people.
one of my favorite entrepreneurs, founder of pyramid digital solutions, blogger of on startups and co-founder and cto ofhubspot, dharmesh shah, once said, entrepreneurs should i) learn useful things, ii) meet interesting people, iii) make money, and if you’ve done two of the three, you’ve done okay. as a first time entrepreneur, this was especially pertinent. everyone knows founding a startup is a rollercoaster, in the morning you feel like you’re going to change the world, in the afternoon you feel your company has three weeks left to exist. in the lows i inevitably go through, i think about dharmesh’s point is well made. in the worst of it, i’m still so glad i’ve given this a go. my personal development as a human being, my learning curve as a business person has been so much better for it. i’ve had the most amazing opportunity to meet truly inspirational world changers. and thankfully blank label‘s started making money. but if for whatever reason if the last one wasn’t the case one day, no one can ever take the other two away from me.
[photo courtesy of tomdog, dharmesh teaching more useful startup lessons]
being in a student leadership position at babson, i get the good fortune of seeing and meeting a lot of students at babson and olin college exploring opportunities for their first entrepreneurial endeavor. they’re always concerned about their idea not being a big enough marketing opportunity, that the idea isn’t somehow sexy enough, that they’re somehow not going to make massive bank in three years. first i tell them that very few people make serious bank in three years. i also encourage them to pursue opportunities that they or someone they know and trust have the skill set to carry it out. but more importantly in my most cliched voice possible, i tell them to pursue something they’re actually genuinely interested in, or dare i say it, even passionate about.
balance of probability will have it that you’re not going to make bank on your first venture, but if you care about it, you’ll be active in it. with that, you’ll cross the biggest hurdle in a startup, and that’s the initial 100 day momentum, i.e. getting started. you’ll research, you’ll speak to prospective users, you’ll tell everyone and anyone you meet. you’ll meet the most amazing people, many of whom will genuinely want to help you. and you’ll learn so many useful things about so many different things, and arguably most importantly, about yourself.