Start-Up: the book

Listen to Loic Lemeur’s views on why “Why Silicon Valley kicks Europe’s butt”. Nothing special if you read regularly my blog but said by someone who has visibility, credibility and experience on both sides of the ocean.

Check his arguments:
- the main reason is how much time we take for lunch in Silicon Valley (i.e. feeling of urgency)
- all in one place (i.e. critical mass)
- like a campus (i.e. easy connections, young, sunny)
- business happens 24/7 even when you don’t expect it (i.e. obsession)
- seed funding and VCs (i.e. money)
- flexible (i.e. changes happen fast)
- “how can I help” attitude (i.e. open and pragmatic)
- easy to get an appointemnet (i.e. open again)
- people trust by default (i.e. open mindedness)
- diversity (i.e. yes diversity works in the US)
- press and bloggers (i.e. tech friendly culture)
- Europeans begin locally (i.e. not globally)
- too much copy / paste in Europe (i.e. no real innovations?)
- Europeans hire local (i.e. challenging to go global)
- Think in English (i.e. another challenge)
- you guys can fix it (i.e. self-confidence and confidence in others - empowerment, remember class A people hire class A+ people)
- aim at being a world leader (i.e. ambition)
- focus on execution, ideas do not matter (i.e. action oriented)
- gather a community and iterate (i.e. learn by doing, by trials and errors)
- believe in yourself (i.e. …)

Well even if this may be obvious for some of you, I still had to fight against people who disagree about this (check my previous post!)

yYou can compare all this to my summary slide when I talk about Silicon Valley. No frustration in all this as we all have to say these things endlessly, but sometimes, still too often!

Not only is The Ultimate Cure a good novel which describes the start-up life, the venture capitalists and what it costs to be an entrepreneur (and it reminds me of Po Bronson’s The First $20 Million Is Always The Hardest) but it is also a great novel, about human nature and what drives us in life. Here it reminds me of Swiss rising star, Martin Suter and his psychological thrillers. Most importantly, it is a great pleasure to read.

Author Peter Harboe-Schmidt has done a really nice “oeuvre”. Here is just a small piece:

“Take your start-up as an example. Why did you do it? If you analyzed the pros and cons for doing a start-up, you’d probably never do it. But your gut feeling pushed you on, knowing that you would get something very valuable out of it. Am I right?”
Martin speculated on why he was so drawn to a world that at times could appear to be no more than sheer madness. Like a world parallel to real life with many of the same attributes, just much more intense and fast-moving. People trying to realize a dream in a world of unpredictability and unknowns, working crazy hours, sacrificing their personal lives, rushing along with all those other technology based start-ups. Medical devices, Internet search engines, telecommunications, nanotechnologies and all the rest competing for the same thing: Money. To make the realization clock tick a little faster.
“Funny you should say that,” Martin finally said. “I’ve always thought of this start-up as a no-brainer.I never tried to justify it in any way.”

I had read In the Company of Giants in 1997 just before becoming a venture capitalist. Then when I began to read again about entrepreneurs, I just could not find it anymore and had to buy it through the reseller network of Amazon. It is as interesting as my previous posts (Once You’re Lucky, Betting it All, Founders at Work).

I will let you link the names and quotes with the pictures if you have time!

Steve Jobs: “In the early days, we were just trying to hire people that knew more than we did about anything and that wasn’t hard because we didn’t know a lot. Then your perspectives are changing monthly as you learn more. People have to be able to change.”

T. J. Rodgers (Cypress Semiconductor): “the standard entrepreneurial answer is frustration. You see a company running poorly, you see that it could be a whole better. Intel and AMD were arrogant. If you think about it, any billion dollar company, that has so much money to spend on R&D should be unassailable. But the large companies routinely cannot crunch little companies so something’s got to be wrong.”

Gordon Eubanks (Symantec): “What makes a company successful is people, process, product, and passion. You must have great people and product and passion balanced by process.”

Steve Case (AOL): “Do something you really love, you are passionate about. Take a long-term view, be really patient. There are going to be bumps on the road.”

Scott Cook (Intuit): “People [customers] won’t tell you what they want. Often they can’t verbalize it because they don’t understand things they’ve not seen. You must understand fundamental motivations and attitudes.”

Sandy Kurtzig (ASK): “I did not see it as incredible risk. Many entrepreneurs would tell you why it was obvious to do what they did. When you have nothing, you have nothing to lose. That’s why so few entrepreneurs can do it a second time. Even Jim Clark did not really start Netscape or Jobs did not really start Pixar. They funded it. You need other people to be hungry… Believe in yourself, surround yourself with good people, be willing to make mistakes, don’t get wrapped up in your success. You are still the same person you were when you started.”

John Warnock and Charles Geschke (Adobe): “Actually there was the very first business plan, then there was the second business plan, and then the third business plan; we never actually wrote the third business plan.”

Michael Dell: “It did not seem risky to leave school because I was already earning obscene amounts. The worst thing that could happen is I would return to school. The greater risk was to stay at school.”

Charles Wang (Computer Associates): “Managing is not just telling people what to do, but it is leading by doing. Know your strengths and weaknesses and complement yourself. Be realistic and objective. Surround yourself with great people.”

Bill Gates: “It’s mostly about hiring great people. We are [in 1997] 18,000 people and still the key constraint is bringing in great people. We naively thought there were guys who could tell us we weren’t doing things the best way.”

Andy Grove: “I can’t look at a startup as an end result. A startup to me is a means to achieve an end.”

Trip Hawkins (Electronic Arts): “You don’t have an objective, rational process. You need a certain amount of confidence. There are many things that you don’t know will go wrong. If you knew in advance all the things that could go wrong, as a rational person, you wouldn’t go into business in the first place.”

Ed McCracken (Silicon Graphics): “My venture capital friends tell me that many of the ideas they’re seeing for new businesses are coming from people under 26 years old.”

Ken Olsen: “Business school’s goal today is to teach people to become entrepreneurs. I think it’s a serious mistake. You learn first how to be a team member, then a leader.”

Bill Hewlett: “It was 1939 and it was no time to start a company. It was probably the supreme optimism of youth.” and “It’s not all due to luck, but certainly a large percentage of success is. We were in the right place at the right time. We were lucky and we had wonderful teachers and mentors. HP didn’t start in a vacuum.”

Following a long phone conversation with a Swiss entrepreneur based in Silicon Valley, I received from him an email where he put his thoughts. They are indeed quite interesting and he authorized me to publish them:

“It’s a bit depressing to see that things change slowly (I had that intuition already)…

On a philosophical standpoint, I was thinking while driving my car that one of the issues is self-confidence.In the USA, everyone is raised with the idea that “anything is possible”, the “American dream”, to the point that it is sometimes stupid and annoying… On the contrary, in Switzerland, anyone wants to do things well and the culture is more about “this is not possible” or “I do not know how to do this”. But to be an entrepreneur, you must not be afraid of trying, of being far from perfect, of doing things in fields you do not master and sometimes even “quick and dirty”. It is the opposite culture of the Swiss craftsman who is a perfectionnist, the “travail bien fait”)… In summary, it is important to learn by doing things such as:

- Who to raise money, wher to begin?
- How to negotiate a shareholder and investor agreement?
- How to deal with partners?
- Learn how to negotiate
- How to work with Head Hunters, Lawyers, Customers…?
- How to build and manage a team? - How to hire a sales team (a tough thing for an engineer). By the way, what are marketing, sales, operations?!!

- What about productization, schedule, specs, qualification?
- Where to find distributors?
- etc…

All this can not be taught in schools, I am not sure it is covered in an MBA. I am not conviced it can be taught anywhere. According to my experience, an entrepreneur does not stop doing new things, quite badly the first time and hopefully better and better with time. One should not have the negative attitude of never trying difficult and risky ventures, which does not mean one should launch or fund unrealist projects… There is a fuzzy line between arrogance (one should know its own limits) and dynamism of a good entrepreneur.

It is certainly a bad thing that engineering schools do not provide enough about marketing, accounting, legal elemts in the curriculum. But this is also true in teh USA, by the way!”

I was yesterday in Grenoble for a round table on the Nouveaux Conquérants:

The topics that were discussed were very similar to the comments above: self confidence, uncertainty, risk taking, passion, and success & failure.