十個創業家常犯的錯誤 by Standford (Top 10 Mistakes Made by Entrepreneurs)

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[Music]
So the first question why did he become an entrepreneur and
this anybody can you know go first?
Well I started by entrepreneur journey you know
unconventionally, I actually dropped at high school on 16 so
actually it would cause me to become an entrepreneur was a
little bit different. My family was going through little
hardships I was trying to go ahead and help out and you know
basically try it out. My first job and only job was trying
out for McDonalds and they rejected me so. I realized that
hey there is something called the internet and looked at
what was going on I mean the full year of it and fell in
love with the whole online advertising space and you know
the beauty of the internet is you don't need the stigma
that's attached to kind of business as it was probably 50
years ago. I mean you can be a 16-year-old in a bedroom and
start a business that two years later you can sell for $40
million. And you know that probably wasn't possible 50 years
ago so you know part of the survival helped me become an
entrepreneur but on top of that I love building stuff out of
nothing so encashment about it as long as you are having a
DNA be successful.
So I became an entrepreneur pretty much out of necessity. I
had been working at a public accounting firm then passed
over for partnership two times and I can see that the third
was coming up. And the only reason was because I was woman
and at this point there were 0 women in the partnership
across the world. And that just wasn't okay with me but I
had butted my head up against the glass ceiling enough times
and at this point had enough visibility across the whole
firm to know that I wasn't personally going to be able to
change this organization from the inside. So I left and
turned around and offered them my services for basically the
exact same thing that they would have had if I had been
partner within their structure and asked them to pay me
three times as much. They agreed, which was the amazing
part, provided me an office and let me keep my
administrative assistant for their first six months and I
was totally billable from the very, very first day. And that
grew into an organization that had employees across the
world and then you know kind of once you get the bug it just
kind of starts taking over and so I was like well you know
there is a problem here, I can solve it by doing this. There
is a problem there and I can go solve that by doing this and
I love it.
Yeah, so I guess the best answer that I can give is that I
didn't decide to become an entrepreneur, and I mean that in
two ways. One, I am actually not quite an entrepreneur. I
don't really deserve to be called an entrepreneur unlike all
the other people up here. I have always sort of helped
entrepreneurs. I joined the LinkedIn and Facebook before we
raised venture funding, before the companies were built and
so on so very, very, very early in those companies. But I
always sort of liked helping entrepreneurs. They used to
call that thing a venture capitals but that means something
else today I guess. So the second way in which I mean that
and just really amplifying what Carol just spoke to is I
think of lot of the time people who end up being
entrepreneurs don't really exactly decide to become
entrepreneurs. It's not like being an accountant where you
say you know I am going to go out and you know take a test
and get a license and go become an accountant. You know I am
going to go to an entrepreneur school and become an
entrepreneur. It's a little bit more organic than that, a
lot of the time in my experience. And it's just something
that almost happens to you or that you get the bug for like
you said usually because something is broken that you want
to fix or because something doesn't exist that you think
should exist. And you just decide you know I am going to do
it. And that can take lots of different forms but I think
it's a more organic process than a lot of other so-called
career paths.
I actually never aspired to become an entrepreneur and I was
working as a research scientist and I thoroughly enjoyed
that. And as I know I inspire to become an entrepreneur
working as a manager or working in business in the first
place. But the thing that made an impact on me was that I
was actually reading the specification for Netscape 2.0,
some years ago some of them may remember the browser
Netscape. But I was reading the whole night and I was really
taken by this, and it had an enormous impact on me. So the
next day I actually quit my job and started my first
company. And I had no idea what kind of business idea I was
going to pursue and I really didn't have so much of a plan
but it was more this incredible passion I felt for internet.
I could just sense that internet was going to be a really,
really big and I felt it was too big of a thing to walk away
from. So that's actually why I started.
So in a life of an entrepreneur, now you are all living a
life of an entrepreneur what is it you like about the life
of an entrepreneur and what is it that you don't like about
the path that you have chosen? Anybody, you can just go to
anywhere you like?
I guess what I love about is you know it probably goes both
ways. I love creating something out of nothing and seeing
that impact it's almost like you can see it nurture and you
can see the positive result as quick as you can kind of make
it happen. The downside of it being an entrepreneur is that
it's not as you know passion stable as a typical company
where you have enough stings in place but you don't have to
worry about the revenue, you don't have to worry about
profitability, you don't have to worry about the individual
things so you end up losing a few hairs almost everyday. So
part of being in the startup is you know is you have your
good days and you have your bad days but you know you fall
down and you get up and you keep going.
So in the corporate world I used to be called a workaholic
and I am a pretty passionate person and when I am on a
project or working on trying to get something done I pretty
much stay focused on that and that used to be considered a
bad thing. And when I became an entrepreneur everybody just
started saying oh she is an entrepreneur it's okay. And so I
suddenly became socially acceptable about the fact that my
work life and my personal life had a very, very blurry line.
Blurry line if you are lucky. Yeah, you know, the best thing
about it is that it's amazing and all consuming and
exhausting and crazy and the worst thing about is that it's
amazing in all consuming, exhausting and crazy. It will
become your life if you are lucky and you are doing it well.
And there are straight offs in that but you know I feel like
the last ten or so years of my life or more or less this
vortex of non-stop startupness which is great I wouldn't
trade it for anything. But I think it almost becomes an
either-or decision at some point if you are lucky enough to
be facing that problem.
I think for me the biggest thing is the dream you know that
you can allow yourself to dream, you can allow yourself to
you know you are going to credit company, you are going to
have an impact over the world you know and it's at the end
of the day it's really all up to you. So I think that's a
fantastic luxury that there is really no limitation. It's
all about your capability, your creativity and your hard
work that at the end of the day hopefully, you will be able
to accomplish what you are set out to do.
You know the things that all of us are talking about is that
we are doing it because we have some passion about what we
are doing and with whom we are doing it. And you know one of
the things that you will hear people give you advice about
over and over again is stay focused on your passion and the
reason is if you hate what you are doing you won't be
successful as an entrepreneur because it requires too much
extra effort. And you have to really love it to make the
sacrifices that are necessary to be successful.
You also are a little bit crazy to enjoy the ups and downs
of it because there is a lot of ups and lot of downs along
the way but I think the other key thing is like if you look
at just how the business world works you know big companies
get to run it but in a startup you get to change it. And you
know if you look at you know company like Facebook, Twitter
and just social media in general that's really transpired
the way we communicate, big companies are now falling onto
that. So I think that's the highlight of being entrepreneurs
when you can make that big of an impact and if you are part
of that genre you can really go ahead and see why you are
passionate about it you are making a change and it's a lot
of fun.
[Informal Talk]
Don't you have the phenomenal when you are entrepreneur and
that is to pick the people you actually are going to work
with and I think that really makes a big difference, you
know one thing is to have this, objective, dream, desire but
you can actually work with people that are phenomenally
inspiring, people that are fun to hang out with, people that
you really care about. And regardless of where you want to
go with the company, regardless what you want to accomplish,
just a luxury that everyday you will go to work, you are
working with people that fundamentally are people that you
like and you want to hang out with I think that is a
phenomenal perk if you can put it that way.
So it's a great segue through the next question and so we
have some we have both pure entrepreneurs and we have some
venture capital experience here so you can answer it from
either perspective. Do you think it's better in the
construction of an entrepreneurial company to partner to
have a partner with someone that maybe as complementary
skills or vision or whatever or is it better we go it alone?
I think it's a frustrating answer but it depends on the
person. And you know there are people who are absolutely
solo creators who have a very individual drive and that's
the way they function. There are people who you know thrive
and need a partner. I think you know the funny thing about
startups is this whole thing is driven by exceptions, you
know you can create anywhere you like you know, oh you know
startups where the husband and wife are founders together
that always goes well except for Cisco. You know startups,
so I mean no matter what you pick there are always
exceptions. So it's very hard to generalize out of those
things. You know I have been involved in companies where
there were kind of cofounders and a founder and cofounders
and just a founder and I think all of them can work. The
most important thing if you are starting something yourself
I think is to ask yourself what's the right thing for you.
And just like with a lot of the other things that we have
been talking about it really should be a sort of an organic
process. I think if you sit down and say alright today I
need to go out and find myself a cofounder that's probably
not going to succeed.
I think it's all about you know the couple of ways to look
at it part of it is finding your dream team and you know,
either all your cofounding employees and that's really
essential for any startup your first five people make it or
break it to actually seeing if it's going to survive first
20 people, make it to see if it's going to be a large
company or not. And you know when you get to that standpoint
you got to go ahead and realize who your right partners are
going to be and partner can be beyond cofounder it's really
VC. And you know just a short plug for Stanford. Stanford is
actually an investor in gWallet, so I think we have got you
know we picked the right investors for the right reasons and
partly is because you know they can actually add a
tremendous value. I mean if you look at my first company I
actually take no funding whatsoever. I bootstrapped it
mainly because nobody wanted to fund me. I was 16, 17, 18 so
no offense on that but you know what I learned on the second
time around is when I actually raised venture capital is it
matured me as an entrepreneur. It actually brought a
different perspective on how to grow large company, how to
actually sustain certain things that you do international
expansion so forth and picking that right partner is key,
because if you put the wrong one, you know VCs can either
add a lot of value or take a lot of value out. So, that's
the caveat, no offence but that's the big formula into
finding the right magic in that partnership.
So you know the other part is whether or not to do it alone
or in the team. It is also based on if you need outside
money you know, how are you going to get it, and in the
venture world one of the conventions is basically never
invest in a single entrepreneur. And the bottom-line is if
that entrepreneur gets hit by a bus you know what do we
have, so if we have at least two people on a team and one
person gets hit by a bus then at least theoretically there
is somebody to kind of go forward and so typically by the
time you see them any entrepreneur company coming forth to a
venture capital from, you will see that they have you know
gotten to a point where they have at least the outward
appearance of being a team.
[Informal Talk]
Angels kind of go back and forth and since I happened to
[inaudible] both communities you know there are lots of
angels that will fund single entrepreneur and then tell them
you have to go find you know other cofounders but you know
it depends on how much money you need.
I think the question when you need a cofounder or not,
perhaps the most important thing is who you choose as
cofounder and in the hit or the moment or in the excitement
actually hatching an idea I think that is easy to find
somebody that is your soul mate right there in than right,
they are all excited, oh let's do this and you know they all
worked up about it, but if you in a cofounder looking for
somebody that can help you build a company long term I think
it's very important to dive below the initial excitement
right, what is that person's long term contribution and what
is that person's long term commitment and aspirations for
the project. And when I see in startups fail and succeeded,
I have seen a lot of startups fail, that founding team was
wrong founding team and the founding team did not have long
term aligned objectives and perhaps one was wanted to work
really hard for a long time and the other one decided to it
was fun for a year or two but then later the person was not
willing to work as hard any more and if they didn't then
have a shareholder agreement that who regulated for whatever
reason was going to happen down the road. It creates a lot
of tension, right then one person that was a part of the
founding team has a large stake with the company that is
really moving on to do something completely different, so
that can create a lot of issues and problems for a company I
think.
Just to add on that I think it's pretty crucial when you
actually find that person or find your dream team is to find
the right DNA that has the hunger because partly even one
hiring in my third company it's you know you would assume I
would have the pick of the run in hiring the best talent and
personally there is that pool there but it's really, really
hard when you can look someone in the eye and say is this
person hungry or this person just expecting a great outcome,
because any startup regardless of it doesn't guarantee an
outcome and it's really, really hard to go out and find out
that the consensus DNA is going to go out and do what it
takes to make the exit happen or make the positive outcome
happen and probably 1% of the people are interview I can see
their hunger. 99% just don't have it, so it's really finding
that 1% especially in that first five employees, especially
in the first 20 employees because if you don't you are going
to set yourself up for disappointments and failures.
So, this is one of the questions that I personally can
relate to, have you ever experienced a black day? Now I
describe a black day as all despair and no hope and so if
you have could you tell us about it, you know kind of
anecdotally share it with us and then tell us you know how
you dealt with it internally because it's certainly
difficult and how did you deal with your company. So I think
everybody probably has a story I think that but -
I think for any successful entrepreneurs you have to have a
few black days because they ground you and they also teach
you a lot that something that something school or -
You have more than one.
I have had my fair share and probably more than I wanted but
I think the primary one that sticks the mind was, I was 16,
six months in my business dropped out of high school was
doing $200,000-$300,000 a month in revenue, highly
profitable and started hiring the right people and I didn't
have any formal contracts in place with the primary engineer
person that I had that was managing the technology and I
just got threat from them that, if I did not give my third
of a company they will shut me down. And again 16 and half
years old, did not have any idea so I was trying to play
Poker and obviously they don't work in my favor and they
actually did shut me down. And obviously when you are under-
funded you don't have a board, you are 16, nobody is going
to really take you seriously. So imagine all the odds
against you, and imagine completely being out of business
for a full week. So imagine no Facebook for a week, imagine
your e-mail not working for a week, imagine whatever service
you are running is gone from the internet, and the internet
is 24x7 business, right. So that happened and it took me a
week to go ahead and recover from that until I recovered
from the servers and until I got the right people to turn it
back on, and you know it was a mess, it was a mess and what
I realized is that there is a couple of things you got to
do. #1, never keep yourself vulnerable, if you are an
entrepreneur always have a backup plan, always have someone
else that's you can have back or you better make sure you
have that skill-set on yourself because if you don't you are
going to have situations like this. #2 always surround
yourself around people that want to make you win and see you
win. And you know make sure you have the right rock stars
with you, because if you don't have the right people you are
going to have you know so many of these horror stories over
and over. And you know I learned a lot from that and I wasn'
t cheap on employees, I wasn't cheap on any of the
structures I needed to do from thereon and you know a year
and two months after that point is actually when I sold the
company for $40 million. So yeah that was probably the most
black day of any teenager's life that you can imagine but
you know it ended up becoming a positive outcome because I
learned a lot from it, and a lot of it, from at least from
my entrepreneur journey came from making these mistakes and
actually seeing these disappointments come to life, because
they ground you and they teach you a lot and they prepare
you for the future.
So, I think there is probably two kinds of black days. There
are the black days, which Mark defined as there is where
there is truly all despair and no hope and we have all had
those days in our lives in some ways. You know this is just
part of life, so these things happen. I think with startups
in my experience, it usually takes one or two forms either
you have had some great momentum and it suddenly stopped or
it's just slowed down dramatically and you don't know how
you going to find your way back out of that, or a people,
and you know those take-all kinds of forms. But there are
also a lot of black days where there actually is some hope
in there, if you look at it closely. And so in terms of how
you deal with it, I think trying to find that hope and you
know trying to find the kernel of what's going to enable you
to turn this around whether it's something specific and
tactical or something emotional is really important. You
know personal example of that which has been talked about a
lot is when we launched the news-feed at Facebook in the
fall of 2006 and we had a product that, we had a lot of
conviction around and felt it was a great product, which was
a great product. We just did a really, really incredibly
terrible job of actually launching it and preparing people
for it, or not preparing people for it. And the reaction was
you know unbelievable. We had 10% of the user base actively
protesting against us, 10% of the user base a million people
actively protesting. We got a phone call from the Palo Alto
Police Department saying turn it off right now because there
is going to be a protest rally in Downtown Palo Alto on
Monday and we know have the infrastructure to support a
protest rally in the city, so you have to stop it. Camera
crews coming up the windows of the office, peering into the
office to you know try to get pictures of people. It's just
really unbelievable amount of you know bad feeling and
pressure coming from the entire outside world but what was
so meaningful about that moment for me was that was the
moment when I fully understood for the first time just how
important this was to people, that people cared about this
so much that they would get this subset of habit in large
numbers. So my god there is something going on here, which
is really, really rare and very special and we have a
problem that we need to deal with. But you know underneath
that all there is something very powerful here that we can
harness you know if we do it in a right way, so there are
situations in life whether in your startup or the rest of
the life where things are just bad and there just is no,
nothing can do about it, but get through it. But a lot of
times there is actually something more in those situations.
So I would encourage everybody to at least ask the question
is there is something else to this story.
I have actually liked the answer of that question in a
slightly different way. I am a little bit older than most of
the other panelists so I think I have had probably more
black days but what's got me through them is that I picked
up the phone and talk to an advisor and the advisor helped
me put the situation in perspective and one of the
attributes about a really bad black day is the reason why we
call it black is that things went from gray to black.
The black days they are really black.
Yeah, I mean all you can see is bad and negative and your
normal personality of positive and seeing the silver lining
and all, suddenly just left your body and it was that
ability to reach out and have perspective brought back in,
and it's amazing when I look back through my life and I look
at those black days it was literally less than 24 hours
before I was able to reframe that as this is when the
universe changed rather than this is a black day. And I have
now gotten to the point where when I hit black days I am
like, oh universe is about to change, okay. And I actually
now try to very actively be that special advisor for our
portfolio companies and I hope I am the one that, when they
get in trouble that I am the one that they call.
Yeah I think one example of black day for me would be a
complete R&D dead end. So this was this fingerprint research
company that I started Jenkie. So this was a very ambitious
projects and initially we thought it was going to be pretty
easy, we are going to revolutionize how fingerprint matching
algorithms were done. But it turned out to be much-much
harder than we thought and on the way we actually found a
textbook saying that this was actually not possible. It was
theoretically an exciting idea but in practices it wouldn't
work. But of course, that made us more excited and we wanted
you to go on. But as time goes moving on, we were really not
getting any progress and we had spent I think three and a
half years and I spent several millions in funding this and
it was to the point when the engineers on the team they
didn't believe it anymore and everyone else was questioning
whether it was possible to move forward. And I had a wake-up
call one day when one of my friends which I trust really
well said you know you are so stubborn. Why is it that
everyone else in the world believes that this is impossible,
even your engineers working in R&D team and still you
believe that this is doable. And then I started to ask
myself am I delusional, am I completely irrational, am I
just trying to pursue a dream that is really not ever going
to happen and that was a really tough moment for me. And I
was really mulling this over and I was thinking the only
rational thing actually is to throw in a towel, right.
Everyone around me told me that that was going to be the
case. But the thing that made me not throwing the towel was
that when I was really feeling and really thinking through
it deeply I realized that if I threw in the towel now I will
never be able to forgive myself. I am always going to
continue in my life asking what if I didn't throw in the
towel. And when I came to that realization that I decided
that you know whatever it takes, okay, I set aside this
amount of money and whatever it takes this amount of money I
am able to set aside and I am going to go all the way, all
the way to the absolute point where there is no hope
whatsoever that this is going to be successful and then I am
waiting to throwing the towel. But I know for sure that I
have done everything I can. And after that it wasn't so
black anymore, because now then I kind of felt good, then I
had to cut out my plan. And what happened was that we
actually had to get a completing your R&D team so I am
moving the whole R&D to the US and slowly and securely we
are able to turn around and we are able to get a
breakthroughs that we were hoping for three years later.
Alright, I have done everything I can that's it. I am
throwing it the towel.
That was very close at that point, right. But I decided that
okay whatever it takes this is the moment I am willing to
spend. This is how far I am willing to push it and I was
thinking about selling lots of things I had and whatever you
know I am willing to bring it to this point. I once I had
that made that mental decision I was kind of ready to go and
then it wasn't that black anymore.
I think the flip side of that is I think a lot of people
when they are walking to what they want to do they are
walking with fear and they are walking with fear. So you
know they are basically saying okay I got this great idea, I
want to go and work on it and then they are spending 80% to
90% of their energy on the fact that it's going to fail
already, versus that 10% okay maybe it won't fail, right. So
I think it's great when you can go and set aside okay this
is my plan and this is my point of how far I am going to
take it and I am going to give them my all and I am going to
spend that 100% of my time in making it happen. The flipside
of that is that when you haven't even started it, when you
have nothing to even go ahead and do it and you are
consuming yourself with all this negative energy where you
are like oh my God, I am going to fail and if I fail my
family is going to think this, my friends are going to think
this and I think that's really where when you starting off
as an entrepreneur, you have a clear head on that and just
walking that failure is not an option and you are going to
give it your all from day one.
Actually, I think that's one of the big characteristics of
really successful entrepreneur is that they actually never
recognize that they could fail.
It's part stubborn and part emission.
Yeah.
Yeah I have a feeling that
[inaudible] was never actually going to reach that point
where he said you know I have done.
No, there was no money left you know there was nothing left,
right.
I would go raise more money.
Every great entrepreneur that I ever worked with when they
hit that point somehow managed to go find more money.
Exactly. Alright you know just because maybe I don't know if
I have seen more black days than anybody else but boy I have
seen my share. And over time I have actually come to look at
them as opportunities, leadership opportunities you know you
can, you know everybody looks at you the leader of the
company and everybody is down and you know they are looking
at you and you are down. But it's an opportunity to say let'
s do something, let's take action and let's you know create
a plan and if you prevail you actually build tremendous
bonds in that leadership team and the team inside the
company. So if you can kind of step out of the blackness
just for a moment and say is there an opportunity here there
really actually is, I mean that's one of the things I have
seen. But keying off of Carol's comment, the next question I
had was what are the characteristics of an entrepreneur and
I mean there are many I mean I certainly have, as I teach
this as a subject matter and I have come up with a list of
20-40 different words of that what do you think of the
characteristics that are essential to the character of an
entrepreneur?
[Informal Talk]
So I think the details are actually a very little bit by
market but to abstract out from that to what some of we all
have been talking about I think that the most important
thing is that it's something that comes from passion for
whatever it is that you are doing, whatever it is you are
building, whatever it is you are making, whatever problem it
is you are solving, whatever new thing it is you are
bringing into the world that can manifest itself in lots of
different place. There are a few people out there for whom
that passion is actually the act of entrepreneurship and
those are people who I think generally are called serial
entrepreneurs. But for those people it really is like
entrepreneurship itself is the thing that they are
passionate about. Some people like that a lot of people who
are great entrepreneurs aren't really like that and don't
even necessarily sort of self-identify as entrepreneurs and
just self-identify as yeah I am doing this thing you know
it's just this thing that you know not that even I want to
do is just like this is just what I do. I do this, I have to
do this. And so I do think the details very little bit by
market but the best abstraction that I can or the best
example template that I can think of for that particularly
for the areas that I focus on is Martin Luther. That's sort
of the template that I always hold off for somebody who is a
great entrepreneur. The reason that I say Martin Luther in
particular is you need to sort of be you know just a little
bit crazy, completely convicted that you know your idea and
your way is the way the world needs to go but not sort of to
the point of rationality and self destruction. You know
there is a difference between somebody who is an evangelist
and a creator and somebody who is a martyr. And you know I
hear people talk about you know Joan of Arc as an
entrepreneurial architect sometimes. I would argue that's a
little too much martyr than a little too little impact. So
you know getting the balance in that right is very tricky
but it's that just conviction that's completely transcended
to everything and is just something that the person does,
must do so just you know it is what it is that's sort of the
architect in my mind.
I think one characteristic you got to swallow really-really
hard is you got to embrace rejection and sometimes it is the
hardest thing to do as a human being. But if you can swallow
it and understand how to you know deal with it, you are
going to probably solve 80% of your problems. And I mean if
you just look at my career path nobody wanted to fund me
like quick agents. I was doing millions of dollars of
revenue and millions of dollars of profit but nobody wanted
to fund me because I wasn't part of the dotcom Euphoria and
in the way things looked all these back in the heyday. And
then a BlueLithium I had three different venture capitalists
pool away from doing a deal with me at the last minute. So
imagine like doing HiFis with your employees and realizing
oh we are going to get millions of dollars in for the
company and then getting it pulled. I even had one very
famous venture firm in the valley told me that I was going
to miserably fail at BlueLithium and then I should listen to
them and you know divert my attention to something that's
actually going to work. And I wonder where he is now. But I
would love to have a drink with him. But you know if you
look at that and then just kind of look at even you know
other industries you know look at garment that you know the
founder of that company tried 88 times till we get an
investor to actually say yes. And then if you look at J K
Rowling as an author so most respected, she is a billionaire
author and she got rejected seven times from her first book.
So all that comes down to the human nature of realizing what
your pain tolerance is for embracing rejection and so long
as you can grow a fix skin, drawn out the noise and focus on
that objective I mean you will prevail.
I think yeah the way I look at an entrepreneur is really
that entrepreneurship is really a way to express yourself.
In the same way an artist is creating or painting a painting
or composer writes music I think fundamentally an
entrepreneur creates a company that's a great organization
in a way to express himself or herself. And so there is an
underlying passion and there is an underlying desire to
contribute in some way, to get their voice heard add to the
world or make the world in that tiny way a little better.
And I think that perhaps there are three qualities that I
would on the top of my head think of that is important
qualities and I think one is I think they are optimistic. If
you see the world through a positive lens every person you
meet is a potential partner or an employee or a pursuant
client, right. And if you have been negative perspective
every person you meet is a competitor or there is an
obstacle towards your success. So how that positive mindset
I think is hugely important because then you see the
opportunities that comes your way that you perhaps didn't
even think about initially. The second one is the same thing
as GE was talking about the ability to absorb rejections,
the ability to absorb disappointments, setbacks because it
is going to be a long way, it is going to be way where we
have a lot of setbacks and to withstand that I think is
essential to be successful as an entrepreneur. And perhaps
this last thing is a way to impact people around you because
as an entrepreneur typically you have to create a phenomenal
team around you for the company to be successful. And you
don't need to be the delight of the party you don't need to
have phenomenal people skills but at least there is
something with you that you are able to inspire all the
people perhaps you are the best developer that you are
extremely passionate about what you do or you had this
strong conviction that other people see, they like and they
want to follow you. So I think there is an element of having
ability to do influence and attract and inspire all the
people as a key ingredient in that so being positive
absorbing rejections and affecting people in one way or
another.
ay or another.
Caroline you may have been there.
The one thing I want to just schedule is conversation and in
my mind there is a gigantic difference between an inventor
and an entrepreneur. And in Silicon Valley we tend to blend
the two. And I think that's a big mistake. There are lots of
people who can create interesting technologies but they can'
t deliver and so for me the entrepreneurship part shows up
in their ability to deliver and that's a very vague term but
anybody who has been an entrepreneur will understand that
that is where the rubber hits the road.
It's a great plan and I think and a lot of where that
delivery happens just as your status is around people,
people, people, the people you can rally to work with you
and help you, the people who you can inspire who are going
to be your customers or your users or your other
constituents that are going to inspire to invest in you
exactly that ability to not just create something but to
inspire others with your creation I think is the thing that
propels you forward from
[inaudible] ideation actually succeeding.
I think entrepreneurship is kind of like an art and there
are probably three stages of it and I am in that
wholeheartedly. There is probably the first stage where you
are the creator and you the inventor and you are trying to
proof of concept, the second stage is you are the manager
you are actually trying to go ahead and scale the company,
you are actually trying to build, you are actually trying to
go ahead and prosper in that regard and the last part is you
are the executor, you are actually executing against a
potential outcome and that itself is a different strategy.
So all three require a completely different approach and it'
s up to you as an entrepreneur to see if you can mould
yourself as a company grows so you know exactly how to go
ahead and act. You can't act like the creator when you
already had a company that's already doing a $100 million in
revenue. And you try to go ahead and have a potential exit,
you got to be a completely different CEO. So partly it's you
know the problem that I see in most entrepreneurs is that
they get way too emotional with certain things whether that
is owning certain amounts or controlling certain amounts but
I think the best thing about being an entrepreneur is being
able to adapt to different changes that you are able to do
in the various stages of entrepreneurs.
And on the other hand though, I want to make sure that
people are clear about the fact that entrepreneur does not
necessarily mean founder, I mean there are lots of people
that were extraordinarily entrepreneurial at Google or at
Intuit or at Cisco and at Yahoo, I mean pick the company, I
mean being entrepreneurial is a state of mind, it isn't you
know the fact that you are the founder.
How do you in this character issue, how do you feel about
you know risk seeking risk avoidance kind of thing that a
lot of people describe by entrepreneurs as risk seeking, how
would you comment on that?
So I think your ability to live in a risky environment is
pretty important as an entrepreneur. You know that the whole
concept of you know can you sleep at night, becomes a big
one and if you are going to put your health at risk being an
entrepreneur probably isn't the right thing for you. And you
know there are times in your life where you can't afford to
take a risk, you have too many other individuals in your
life that are depending on you. And so I think there is some
you know kind of reality checks that you need to have about
your risk levels. Having said that most of the entrepreneurs
that have been incredibly successful are the ones who took
risk at extremely inappropriate times in their lives and so
rotate a mass point you set a rule down and somebody is
going to think of an exception to it. But risk, being
willing to live with risk is a big one.
That's a big distinction. The distinction between being okay
living with risk, being risk tolerant and being risk seeking
you know I think it's kind of crazy to be risk seeking per
se I think great entrepreneurs tend to be change seeking and
when you are trying to change things risk is inherently
apart of the process. You have to be okay with that, but
people who sort of seek out risk for the sake of seeking out
risk maybe you get lucky but that doesn't seem like the way
to make things happen to me.
Actually you know in many cases I think especially when they
are starting up the company you don't see the risk, I mean
you are so clear about your vision of the future that to
Gee's point failure isn't an option.
Blinded by the vision.
But I don't agree with that you know because a lot of times
when you talk about entrepreneurship a lot of people talk
about the risk, with taking risk. And there is nothing that
rubs me the wrong way because I don't think necessarily
entrepreneurs are taking risk at least I don't look at
myself as taking risk, on the contrary I feel like I
continuously try to minimize risk, but what they do try to
do is pursue opportune as I say that I don't look at myself
as a risk taker. I am willing to live with risk and willing
to tolerate to live with risk, but I am not a risk taker. I
minimize risk for whatever ability I am capable of doing you
know so it's more I think it's a being distinction.
But in reality the fact that you are willing to operate
without a net by definition and I think it moves you into
the risk, you know.
Perhaps more risky tolerant, once you say that you are at
risk, I feel that you are stepping over a line that I am not
comfortable associating myself.
Right.
Well I also think there are two types of risk that
entrepreneurs take, I mean there are also two types of
entrepreneurs. You know there is a type of entrepreneur that
says okay I am going to change the world, so I am going to
go with the crazy idea and nobody has done it before. And I
am going to try to go ahead and prove myself right.
I love those.
I am not one of those. I am one of the second category which
is basically saying okay I recognize that there is enough
people doing this and I understand this maybe a crowded
space, but I am going to copy exactly what they are doing
but I am going to go ahead and catch up to them by executing
them better and then I am going to innovate. And if you
cannot think about that that's how majority of all of the
successful companies in Silicon Valley have actually
started, I mean if you look at you know kind of Friendster
and MySpace you know MySpace was just copying Friendster but
if it could scale, right and then if you kind of look at
MySpace and Facebook, yeah it's very different now but it
had the same functionalities at a certain point too. And you
know that's really where I think the my recommendations for
entrepreneurs is that don't put yourself I mean again I know
you love the first category but I kind of fear that if
people try to go ahead and prove something that haven't been
proved before you are walking into a room that isn't hard to
qualify you. So you know that --.
So some of that happens with depending on industry, so I
mean for instance the area that we have made the most amount
of money is in medical devices,
[inaudible]. And the reason why our companies have been
successful and have made us a lot of money is because they
did something totally new and different and so I mean you
know I think there is room for both.
I think there is, all I am saying is there is a lot of risk
in putting something in a category that hasn't been proven.
I mean just based on enough data that supports you know new
investments that haven't been proven versus going after a
category that is already out there and you are competing
against it, there is always going to be a leader, there is
always going to be an incumbent, so that means that's just
the nature of business, all I am saying is that at least for
me as an entrepreneur I reside in the later where I am not
going to take that risk of coming up with something
completely different and you know be left kind of you know
[inaudible] in a marketplace versus kind of going in with it
and you know replicating something and then innovating it by
out executing them and you know after I reach to a certain
point.
But I think when it comes to risk, sometimes I am not sure
if I understand all the discussion either because what are
you risking right, there is an underlying assumption that
there is this something specific that you are risking and I
think that people have different aspects of what is
worthwhile risking or what is worthwhile not risking, right
so if you don't have a good understanding of what you are
risking then the discussion becomes very abstract too. And
the way I look at it is that you have a certain amount of
time on this planet, tomorrow you can be hit by a truck and
do I want to live my life doing something that I don't feel
fulfilled with that's a big risk that you live the whole
life and be miserable, right. So it depends a little bit on
what it is that you really want to do and what you are
willing to risk and in that perspective I think I understand
that risk is associated with entrepreneurship but I don't
like the notion risk is put on an entrepreneur saying that
this person is a risk taker.
Let me move to one more issue of this entrepreneurial
character that I think is interesting to discuss, you know
and my thinking over the years about what motivates
entrepreneurs. I have kind of come with three categories
change the world, build a great company, get rich. So what
is the I think offer is fine, but some people are driven
more by one than by other so how would you describe you know
those three words for yourself in terms of how would you
kind of slide yourself or profile yourself with those
things. Do you think those are relevant to entrepreneurial
motivation?
I mean I would say, I mean I never did anything for the
money and I think that anybody that walks into an
entrepreneurship endeavor to get rich has already failed.
And I mean monetary exits cash that you make is really comes
after all of the hard work and you can't even think about
that from day one and if the minute you do you are going to
start making you know short-term decisions that are going to
go ahead and effect your business decisions that you should
be making so for me it's always been about being successful
and improving myself that I can do it again and that I know
the formula and so long as I know the formula I want to
challenge myself for the next opportunity. And you know sure
the money that comes along, it's like keeping score but
that's about it.
I think that changed the world idea we are very - on that
like for me the way I would articulate it personally is sort
of you know be involved with the most interesting things I
can be involved with is that's it. And all of the best
entrepreneurs I know tend to look at the building of a great
company and the making of a lot of money as means to the end
of accomplishing the goal that they are trying to
accomplish. You know the idea that I want this to be
structured as a company because a company is the best
vehicle to accomplish what it is that I am trying to
accomplish. If they were a better vehicle I would use that
other vehicle on set, but this is the best vehicle so that's
what I am going to do. That's the mentality that resonates
most with me and I think you know can get you to the biggest
and most exciting questions.
I think changing the world is such a big term but I think
definitely there is a part of me that trips so I have to
contribute somehow and my different way, so I think and the
reason why I think that is important because I think
everyone is looking for some kind of meaningful purpose we
are able to do that you actually see that what you do has a
positive effect. And that I think is an important part of my
drive. In addition to that I think it is going back to what
I told previously, working with people that you really care
about, working with people that you are really passionate
about, and indirectly that it's really building an
organization that you take pride in.
I think the kind of the core motivation in where the company
is in its growth process is going to motivate where the
money sources are coming from and so if you are trying to
change the world but there is no clear path to making money,
the type of investor that you are going to attract is going
to be very different then when you come in and say you know
here is the plan. I am going to do this. This is going to
happen and you are going to get your money back in three
years at x percentage. Having heard that speech a lot of
time I never believe it but the point is that it attracts a
different type of investor and so part of the game and one
of the things that craters any startup is not being properly
capitalized. And so part of the game is figuring out where
are the right pockets of money for your startup. And I think
you needed to understand when do you need to attract money
because of passion, when do you need to attract money out of
greed and where do you need to attract money out of the
philosophy of building a bigger stronger company.
So one of the questions I think is to generally for students
that I teach is where do great ideas, great insights come
from and if you are willing to share what's hot now.
I would say social gaming and social media is probably from
a sector probably one of the interesting sectors that I see
right now, I mean something in it. But in terms of ideas and
execution I mean part of my philosophy is that idea when we
get it is 1% of the journey, 99% of it is all execution. So
I know a lot of people that get wound up because they see a
hot idea or a hot sector and you know they basically, I mean
I even get crazy e-mails saying; "Hey I have the next
trillion dollar idea". I don't even know if that idea exists
but still in terms of people's mindset they think this idea
is going to make them rich or this idea is it, that's it.
That's 1% right there. You know 99% of how you actually see
from starting a company, making it into something and going
through the ups and downs that you are going to have to go
through is really the outcome that you should focus on.
I refuse to even answer the question because it's not what
anybody should be thinking about if they are thinking about
starting something. You need to be thinking about you know
what you wish for hot tomorrow, not what's hot now. My job
is to spot what's hot now before anybody else spots what's
hot now. But that's a different topic, that's being a
venture capitalist. You know the entrepreneur's job is to do
the thing that they want to do. And so I wouldn't worry
about what's hot now; actually the only extent to which I
would worry about what's hot now is if you really want to do
something and you look and you say you know this is really
hot right now that's probably a bad sign. But beyond that
just forget it, don't you know don't look at it as positive
or negative, just ignore it, just ignore everything, just do
what you want to do.
I strongly support what you are saying. I totally agree and
I think that's, sometimes it's a little bit of a fever that
we are chasing what is hot and I think that is a big mistake
you do that you try to come up with something that is hot.
It must be something that you are passionate about. It must
be something that you can really see that this will have an
impact, that this will really create value and where to
look, you know. I have no idea really but I love internet. I
think internet is fantastic and particularly when you think
about combined that with mobile phones. And I think that
some people say that old innovational internet is down. Some
people say that social media and social network is the last
big innovation of internet, I don't think that's true
whatsoever. I mean yeah the first generation that grew up
with computers, internet has just come up in the last few
years. Social media didn't come nice too until one year ago.
So within that space there are just phenomenal and
phenomenal opportunities to come with innovative products
and services and I am sure that we have just scratched the
surface of what we are going to see going forward.
You know I think there are so many problems in the world and
you know kind of the core areas that tend to trigger people'
s passion is that they are trying to solve a problem or they
are fantasizing a different world. So you know current state
of the transportation industry drives me nuts, anybody who
can do Beam me up, Scotty, I am like so there. You know I am
concerned about health and I know that there are like
several core things that I need to do, exercise and sleep
and what I eat are the three you know big things that will
impact my health. So anybody that can make that easier or
simpler and you know I can eat anything I want and never put
on a pound would be fabulous. I mean you know you could, I
mean you start working through you know what's wrong in the
world, where are the big problems, where are the big trends,
I mean we have a huge bunch of people that are crossing the
50-year-old line and the world is different when you are 50.
And so how do we meet those needs. We have a younger
generation that is moving into a global world not a village
world. How does that impact? I mean pick an area and you can
discover that there are problems and the minute you
discovered the problem you start fantasizing about how to
solve it and bingo.
You know people talk about this idea of changing the world a
lot. I think a lot of the times what they really mean is
changing your world you know. The really great things that
people create and build and turn into big companies, I think
they usually come from very personal places. And so you know
you have to sort of find what's personal for you and what is
about your life that you want to change and I think it could
be subtle but in lots of ways that extension is the driver
for people. When you start thinking about problems at sort
of grand levels of abstraction I think you risk getting into
sort of dangerously unemotional territory. This is hard,
right, it's really hard to do this. You have to really-
really-really want to do this all day and all night, seven
days a week for the next, I assume it is going to take 20
years, you know. And completely disrupt and interfere will
then screw up the rest of your life. So it better be really-
really-really personal. So it's great to want to change the
world. But I think a lot of times when people talk about
changing the world they are really talking about changing
themselves and changing their world and changing the world
around them. And that may sound selfish but you know
emotions are important.
When I talk about in class I always use the word authentic
that there is an authenticity, the great idea has come from
personal experience, the ability, they are happy with
something, seeing opportunity to change it and apply that
and that's you know that yields the ideas and what's hot now
question which I you know always ask it's kind of like the
[inaudible] which is you know who would want to be member of
club that would have me and you know what's hot now if I
knew that I would be sitting, you know I would be out doing
it instead of even sitting here talking about it, right.
But you know the thing that I want to make sure that at
least I am communicating is that entrepreneurship is not
limited to technology, entrepreneurship happens in all walks
of life and in all business segments. And there are
investors that will support that. We happen to have a
particularly high concentration of technology based
investors here in Silicon Valley but that doesn't mean that
that is the world.
Yeah, they built Starbucks on a great cup of coffee and
there is nothing
[overlapping].
We have five minutes left, let's open it up and see if there
are any questions from the audience for all or any
particular panelist.
You spoke about surrounding yourself by great people. When
you go back sort of to startup mode, how much credibility
behind you, not many people know you to have this what you
think is a great idea. How do you actually hire these main
players, like what are some practical sort of steps from the
knowledge you know now of how you would go out and try and
influence these people to come on board?
There is probably, there is two categories of Rock Stars,
there is the first category of the founding employees Sweat
Equity Rock Star and then secondly the Rock Stars you hire
at a second stage of the company. I think you are asking
about the primary stage and just a quick story on my side is
that when I started BlueLithium I actually found a company
in Belarus of all places through the internet. And you know
they had a great technology, I actually went down there,
visited them and there was a scrappy entrepreneurs building
code and you know in apartment building you know next to
about 18 different computers and I love that. I loved the
scrappiness, the boot scrappiness and you know when I looked
them in the eye and said what do you want for your company
and they basically said half a million dollars. And I said
okay how about if I can give you more than that and when I
can go ahead well in a different way and the way was you
know for them to bind to my vision of what I wanted to
create and you know you got to understand when you are
trying to look for that Rock Star you got to have people
that want to take that risk, and when they take that risk,
they are going to go ahead and you know work their ass off
for that and when they do they will deliver it and that risk
where they ended up taking a stake in my company rather than
for wall paper rather half a million dollars. Three years
later it ended up becoming $50 million for them. So when you
look at it from that context there are enough people out
there that are hungry, it's not that many but there is
enough out there and when you can find them you know
everybody is after the same journey. Everybody is after the
same goal.
I totally agree with a lot of that. One thing that I want to
amplify and give a little bit different view on is, there
are lots of different ways to be hungry. And some of the
ways to be hungry can be very destructive for your company.
Some of the ways people will be can be incredibly powerful
for your company. I think you really want to find people not
who are a low ego which is what people always talk about but
rather who have a strong ego and a desire to supplement that
completely into what it is that the company is doing which
is a different thing but is very important distinction. So
how do you that, you have to be really careful to find
people who are you know no one will ever be as deeply
passionate about what the company is making as the founder
perhaps but you need to find people who are really-really
passionate about what the company is doing as opposed to the
fact that the company is hot or the company is you know in a
interesting space or the company has funding from good
investors or whatever. That's hard to do. I think there are
some tactical ways you can do it. You know some of the
companies I have been involved with we have had people take
title deflation on coming into the company which is a
somewhat contributing thing where our management theory
said, it's a very bad thing to do but actually I think it's
very good, like let me test for why is this person here, why
are they coming here. There are lots of other ways you can
do that too. But those subtle differences can have a huge
impact on how things go.
I think we have actually passed our time but let me say
thank you to all panelist. I assume that some of you will be
available for some people to come over and say hello to
afterwards, thank you very much.