Entrepreneurial Success & Alchemy

alchemyI watched the first episode of HBO’s Silicon Valley last night. Yes I know I’m several weeks behind at this point, but I wasn’t sure if I was going to get into this series (still not sure actually). FWIW I’m a big fan of Mike Judge’s films like Office Space and Idiocracy, and also enjoyed his prior TV shows. But as I said to my wife, I suppose it’s a little like a doctor watching ER back in the day or a cop watching contemporary crime dramas.

In that very first episode we have a brief glimpse at the aftermath of a successful exit worth “hundreds of millions” and then also the main character’s dilemma of whether to accept a $10 million offer for a fledgling side project. And it occurred to me that tech entrepreneurs’ success is a little like alchemy to the average person.

Picture this… some people that seem at the fringes of the mainstream (developers & entrepreneurial types) do some stuff that you don’t really understand (innovation & company building) and then poof the entrepreneur possesses vast riches. Today’s journey from startup to $19B acquisition by Facebook must seem comparable to turning base metals into a pile of gold for the average 13th century man on the street. Regardless of how important one thinks luck may be in entrepreneurial success, and it undoubtedly plays a material part, most people know that startup success is not exactly the same as hitting the lottery. But the success of software entrepreneurs it is less understood and probably feels less intentional to the average person than most other forms of accomplishment.  And perhaps those of us in the entrepreneurial ecosystem could do more to foster a broader understanding.

Most people can grasp other forms of success in some way. Few will ever achieve the investment success of Warren Buffet, but wide swaths of society have at least tried their hand at buying a couple shares in a brokerage account or allocating their 401k in some way. Lots of people played little league or tried out for sports as a kid, so while few of us will ever be A-Rod, Tiger, or Tom Brady we have some sense of what it must take to climb to the heights of professional sports.

But relatively few people have written a software application. Few have quit secure jobs and gone without paychecks to pursue an entrepreneurial dream. Few have mapped out a market opportunity in detail, and then fought and scrapped to bring an innovative product to that market. And even fewer have done all three and been successful in the process.

The easy thing to do would be to simply say “most folks don’t understand tech entrepreneurship”. But those of us who live and work in “Silicon Valley” could probably do more to help the broader world understand what entrepreneurs actually do and also don’t do. Tech entrepreneurship and building innovative, successful businesses should rightly be celebrated by our own ecosystem and society more broadly. But we can also hopefully admit that not every startup is truly changing the world.  Perhaps we’re a little commercially minded in addition to disrupting a market and improving customers’ lives.  Hard work is always involved but occasionally we simply get lucky.  And all of this is ok to admit.

Hopefully those of us in the startup ecosystem can speak truth to all these, in addition to highlighting the determinism, brilliance, and effort that goes into entrepreneurial success.  Perhaps then it won’t feel like alchemy to the rest of world.

Lee Hower

I’m an investor, entrepreneur, and helper of technology startups. I’m currently a General Partner of NextView Ventures, which focuses on seed stage internet-enabled businesses. I co-founded NextView in 2010 with my partners Rob Go and David Beisel. I started in the VC business as a Principal at Point Judith Capital, an early-stage firm. I joined PJC in 2005 and served as a Principal at the firm through early 2010. During this time I co-led investments in FanIQ, Sittercity, and Multiply and sourced investments in Music Nation and NABsys. Prior to becoming a VC, I was a startup guy myself. I was part of the founding team of LinkedIn, and served as Director of Corporate Development from the company’s inception through our early growth phases. Before that I was an early employee at PayPal, and worked in product management and corporate development roles through the company’s IPO in 2002 and subsequent sale to eBay later that year. I went to college at UPenn and received degrees from both the School of Engineering and Wharton School of Business.