Advice to entrepreneurs

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I found instructive to compare two short videos from the STVP. The first one is dated 2002 and shows Larry Page, the co-founder of Google. The seconde one, with Aaron Levie, has just been published on january 19, 2011.

And here is a comparaison

Larry Page vs. Aaron Levie
  • Work with the right people, great people you are compatible with
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  • Do not compromise. Be passionate
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  • Have a healthy disregard for the impossible
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  • Do something which was impossible 3 years ago
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  • Do not follow the hype. Good ideas always get funding.
  • If you feel comfortable, you are probably not doing the right thing.

    • Clearly passion, ambition but also self-confidence are ingredients of entrepreneurship.

    Another very good post on the topic is Should You Really Be A Startup Entrepreneur? by Mark Suster, where the reality of entrepreneurship is superbly described.

    Is there something rotten in the kingdom of VC?

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    Following my recent post, Is there something rotten in the state of IP, I could not avoid to add this provocative statement despite all my respect for venture capital. When Kleiner Perkins, one of the best West Coast VC (not to say one of the best VC ever), Charles River, one of the best East Coast VC and Index, one of the best European VC co-invest in an IP company (a “Patent Risk Manager”) such as RPX, I thought there had been a major event. And Randy Komisar who is mentioned in my latest post is on the board… Now RPX is filing to go public so as I do usually, here is the cap. table. All these data remain subject to the IPO date and share price which I just had to imagine… You may also be interested to know that the founders of RPX come from Intellectual Ventures…

    The top VC bloggers

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    A friend of mine (thanks Rémi!) just sent me the TechCrunch article about the top VC bloggers. The Techcrunch article referred to Larry Cheng and his 2011 edition of the VC blog directory.

    Let me just mention the top 5:

    1. Paul Graham (@paulg), YCombinator, Essays>
    2. Fred Wilson (@fredwilson), Union Square Ventures, A VC
    3. Mark Suster (@msuster), GRP Partners, Both Sides of the Table
    4. Brad Feld (@bradfeld), Foundry Group, Feld Thoughts
    5. Chris Dixon (@cdixon), Founder Collective, cdixon.org

    I read regularly Fred Wilson and those would not know Paul Graham’s essays should read a few. A must!

    Success is Management of Failure

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    “Of course, business, just as life, is never a smooth curve. Failure can come as quickly, and more unexpectedly, as success. But true success is management of failure. Every time you hit a bad patch you must be able turn your fortunes around. That’s why it’s important to be always prepared for failure and build strong teams. To be a successful entrepreneur, venture capitalist or philanthropist, you must bring together people who know there will be problems, love to solve problems, and can work well as a team.” … “It reminds me not to be too proud. I celebrate failure — it can temper your character and pave the way for great achievement.” Kamran Elahian.

    Kamran Elahian is a famous Silicon Valley entrepreneur. He was the founder of Cirrus Logic which is famous enough to be in the Silicon Valley Genealogy poster. The extract below lists the founders of the company, you can not read their names but they were 5 and here what the poster says: Suhal Patil (Patil Systems), Michael Hackworth (Signetics), Bill Knapp (General Instruments), M. Kei (Intel), H. Ravindra (Patil Systems) and Elahian himself (CAE Systems). Strangely, Elahian has a different list on his website — Suhas Patil, H. Ravindra, Bill Knapp, Mark Singer.

    Nesheim in his book High Tech Start Up also mentions Cirrus as a success story and gives the cap. table at IPO. It is indeed his model I follow for my own cap. tables.

    Then Elahian founded Centillium which unfortunately did not have the same end though its IPO was a great success. In 2008, the company was acquired for about $42M. So failure is followed by success and by failure again. Elahian also gives Centillium founders on his site: Shahin Hedayat, Faraj Aalaie, Babu Mandeva, Tony O’Toole.

    In the same area of chips, semiconductor for telecommunications, there is a similar story: Atheros has just annouced it would be acquired by Qualcomm for about $3.1B. Atheros is a company I had studied in my book because its two founders are two Stanford professors (Theresa Meng and John Hennessy, currently Stanford president) and its CEO is Craig Barratt whom I had as a teaching assistant when I was studying in California. Who says scientists/engineers cannot be great business people?!!

    But the (possible) interest of all this is that you can compare three stories, more than 20 years apart and you cann see that there are tons of similarities and the web2.0 start-ups I covered recently are not so different.

    Is there something rotten in the state of IP?

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    I have been surprised not to read more about Intellectual Ventures’ recent legal actions. You can read more about the companies they are suing for infringing IV’s IP.

    If you do not know about Intellectual Ventures, you should know they have filed or bought about 30’000 patents or patent applications and raised billions of dollars. Until now, nobody really knew why, but their recent actions show IV is just another patent troll.

    Around the same period, Paul Allen has been dismissed by a judge about the complaint he had filed for another patent infringment. More here. I should add I read about both pieces of news thanks to the Xconomy web site.

    This is an opportunity to say that I have never been a big fan of IP, intellectual property, patent applications and copyrights. I do not have good alternatives to propose, but innovation is often more a matter of speed and being more advanced that being protected by IP. I am aware it is not so simple though. I have worked in the field for a while and I still give general courses on the topic. Those interested may click on the picture below or on this link.

    Intellectual Ventures was founded by Nathan Myhrvold, who was formerly CTO at Microsoft. Not need to add which role Paul Allen had at Microsoft. All this could be funny when you think about the fact Microsoft success was not based on patents (and Microsoft did not suffer that much from all the people who copied all their software…)

    Early mornings on innovation at the Swiss National Radio

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    I was invited this morning on RSR, the (french-speaking) Swiss National Radio, to talk about innovation and start-ups in their morning (5am to 6am!) Petits Matins. For those who know about the topic, nothing fundamentally new, with the slight exception that I learnt recently that a common feature to many entrepreneurs would be dyslexia (two studies were made in the USA and the UK). In total, a 30-minute conversation on my favorite topic, that you may listen on the RSR website if French is a language you like. Many thanks to Manuela Salvi, the talended RSR journalist.

    More importantly, I could invite a guest on the phone at 5:45am (what a gift!) I was delighted to let Peter Harboe-Schmidt talk about his novel The Ultimate Cure, a beautiful thriller with a Lausanne-based biotech start-up as the background. I had already mentioned that book on this blog. Peter just announced the novel had just been translated in French.

    Steve Blank’s on entrepreneurship

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    Steve Blank is famous in Silicon Valley as an entrepreneur and teacher of entrepreneurship. In particular, he has a Secret History of Silicon Valley which shows the importance of the military and cold war in its development.

    He recently published a very optimistic blog When It’s Darkest Men See the Stars.

    He claims entrepreneurship barriers are changing. These were:
    1. long technology development cycles (how long it takes from idea to product),
    2. the high cost of getting to first customers (how many dollars to build the product),
    3. the structure of the venture capital industry (a limited number of VC firms each needing to invest millions per startups),
    4. the expertise about how to build startups (clustered in specific regions like Silicon Valley, Boston, New York, etc.),
    5. the failure rate of new ventures (startups had no formal rules and were a hit or miss proposition),
    6. the slow adoption rate of new technologies by the government and large companies.

    And we are facing a new world he calls “The Democratization of Entrepreneurship” and he sees
    – A Compression of the Product Development Cycle
    – Startups Built For Thousands Rather than Millions of Dollars
    – A New Structure of the Venture Capital industry
    – Entrepreneurship as Its Own Management Science
    – Consumer Internet Driving Innovation

    I reacted on his blog and wrote this: I have to admit I am puzzled. Let me elaborate.
    On the positive side, the optimism expressed is very refreshing and I felt really good after reading it. I tend to agree with the lower barriers to entrepreneurship, and probably I kept my sun glasses in the dark too long, so I do not see the stars. (But I will think this is a great article that I want to mention to my own little network.) But on the other side, I am concerned that the same barriers still exist in biotech, semiconductor (and most hardware products if they embed radical innovations) or even in cleantech/greentech (which by the way maybe be more a bubble than a real new field). In these fields, product development is as long, VCs are afraid sometimes of the capital requirements, Richard Newton, the Berkeley professor (http://www.eecs.berkeley.edu/~newton/presentations), had noticed a long time ago, that most talents go out of these tough fields to easier or more promising fields (it was from electronics to internet in the 90s). It might be that we do not (have to) innovate as much in these classical fields anymore, in which case you are totally right. But if not, we are just moving to the low hanging fruits of innovation, and we are blinded by superstars but do not see the myriads of others (needs, opportunities) we should also focus on…