Start-Up: the book

The Stanford Venture Technology Program is one of the best source of info I know about start-ups. In one of their recent newsletter, they mention a video of Vinod Khosla (a co-founder of Sun Microsystems and former venture capitalist with Kleiner Perkins). STVP summarizes his views as follows:

“Launching a start-up is not a rational act. And Vinod Khosla, a partner in Kleiner, Perkins, Caufield & Byers and former Sun Microsystems CEO, believes that success only comes from those who are foolish enough to think unreasonably. Entrepreneurs need to stretch themselves beyond convention and constraint to reach something extraordinary.”

Tom Perkins is one of the icons of Silicon Valley. I have not read yet his new autobiography but Andre Mercanzini, a colleague at EPFL, just mentioned to me an interesting podcast from VentureVoice. Here is Perkins’ views about why Silicon Valley is unique:

The difference is in psychology: everybody in Silicon Valley knows somebody that is doing very well in high-tech small companies, start-ups; so they say to themselves “I am smarter than Joe. If he could make millions, I can make a billion”. So they do and they think they will succeed and by thinking they can succeed, they have a good shot at succeeding. That psychology does not exist so much elsewhere.

If anyone had doubts about my views on venture capital in Europe, newspaper Le Temps published a nice article entitled “Le capital-risque européen profitera d’un effet de rareté”. The article claims that there are only 12 major VC funds in Europe following the Internet bubble. The next table also confirms the IRRs have not been brilliant.