We're Rookies, not Minor Leaguers
As the Boston entrepreneurial community works to fix many of it's issues that have been identified recently, one of the early and important changes are mindsets. Often, the most important early step in bringing about change is to change how you look at an issue. I'd like to change one of those mindsets here.
One of the specific big challenges in the community today is how we can better utilize the incredible talent pool we have in the region due to the extremely high concentration of universities here. As you may recall from previous posts, a study revealed that only 29% of Massachusetts grads who found companies actually start them in Massachusetts. The national average in the study is 45% and Silicon Valley has an astounding 68% rate. There is plenty of room for improvement there, but how do we do it?
Here's a few ideas to get started:
1) Recognize the talent here.
We have over 30 schools in greater Boston alone and countless others within reach of the city. We need to start better tapping into this talent pool to identify potential entrepreneurs and bring the talent into these growing organizations. We're hard at work here at Greenhorn Connect to implement something that will be a key part of the solution. Stay tuned as we'll be asking for your help soon.
2) Cultivate the talent within organizations.
As the previous linked study showed, statistically, a person works in industry for 16.4 years before starting their company. Anyone who works for startups during that time is going to be better suited to build their own great company. Most striking is the fact that, "only 1 S&P-1500 Technology company was created in the Boston area during the Internet era of the past 20 years compared to 19 companies in Silicon Valley." Who is better suited right now to build the next generation of great companies?
We can't change the past, but we can start doing it right today and accept the fact that this is going to be a long journey that cannot waiver in the years to come.
3) Change the Mindset: We're Rookies, not Minor Leaguers
I've previously used the phrase "minor leagues" to describe the problems DartBoston and Greenhorn Connect are helping take on with the young population in Boston. That is the wrong mindset.
It's been mentioned many times within the community that there are not enough chances taken on young people in the community. A mindset that we're merely "minor leaguers" implies we're not ready to be contributors as entrepreneurs. That's a mistake and reinforces the status quo in our ecosystem. Let's consider some of the most successful entrepreneurs who lead great companies now:
- Elon Musk, started his first company at 24 and started PayPal at age 28.
- Mark Zuckerberg, started Facebook while at Harvard at age 20.
- Mark Cuban started his first company, Micro Solutions at age 25.
- Sergei Brin and Larry Page started Google when both were age 25.
- Steve Jobs and Steve Wozniak started Apple when Jobs was 22 and Wozniak was 27.
These are key examples of the kind of "Play Big" companies we say we need from the past 30 years and all were started by "Rookies".
Let's agree "Minor Leagues" isn't the right term. This is a global game and we need all the innovative ideas we can get. The next Musk, Cuban, Jobs or Brin may be in Boston right now. Let's cultivate our Rookies, so they they don't leave like Zuckerberg.
Photo Credit: "The Rookie" by Norman Rockwell.
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Discussion
Elon Musk
It is really amazing that these people managed to end up with their great ideas. Elon Musk has made millions through technology advancements, and now he has a new challenge. Now his financial issues are hitting rock bottom, requiring numerous payday loans to live. He and his wife are getting a divorce, and his wife is supposedly fighting for all the cash. I support her wanting the cash if it is for the sake of giving the children the lifestyle they are growing up with. However, you never can tell if that is the reason behind someone wanting cash. I fear that she only wants money for her own self interests because that is how the world works today.
I like, "Rookies, not Minor Leaguers"
Jason, great post; brilliant line! Love it. And the way we'll know that people get it is when the VCs in Boston start to invest in the rookies. The successful company founders you note were all rookies when their VCs -- west coast VCs in each case -- invested in them. And Boston VCs need to not only invest in rookies, but they also need to invest in companies that are outside the narrow comfort zone in which many (most?) Boston VC's operate. Reference the data from the 30 January 2010 Wall Street Journal; The GDP growth for the last decade has almost all been in areas outside those where most Boston VCs invested. Tough to understand their thinking. See great graphic here: http://bit.ly/bzrYor
Des
Des Pieri
Re: I like, "Rookies, not Minor Leaguers"
Des,
Great point. I think what may also help are the new VC organizations that are popping up. Whether it's TechStars taking chances on 10-20 Rookie Companies a year, the Founder's Collective or Harrison Metal Capital, they're innovating in the investment space (perhaps long overdue?).
Nothing says, "Hey we should change!" like seeing someone else making money off a different method of investing.
Best,
-Jason
Jason Evanish
CEO / Co-Founder
Greenhorn Connect
Twitter: @Evanish
Blog: www.JasonEvanish.com
Interesting Stories
Changing the terms of the dialog from minor leaguers to rookies is a useful shift toward a more optimistic and actionable view.
Your list of successful young entrepreneurs is informative. To your point, each company and entrepreneur has a very interesting story, from which a lot can be gleaned about how innovation occurs. I thought it would be useful to provide a few illustrative snippets from these stories:
“Elon Musk, started his first company at 24 and started PayPal at age 28.”
Elon Musk’s first company, Zip2, was sold to AltaVista. PayPal was formed as a merger between Musk’s X.com and Confinity; eventually, Peter Thiel, a co-founder of Confinity, became CEO of PayPal. Though Musk made out well financially, he says that both Zip2 and PayPal could have been more.
“Mark Zuckerberg, started Facebook while at Harvard at age 20.”
After moving to Palo Alto, Facebook received $500K seed funding in late 2004 from Peter Thiel. According to one story, another motivation for the move to Palo Alto was that Zuckerberg wanted to be CEO, which would not have been allowed had he stayed in Boston.
“Mark Cuban started his first company, Micro Solutions at age 25.”
Cuban bootstrapped MicroSolutions with Martin Woodall, who still works with Cuban. Woodall, ~31, had his own PC software business at the time, and previously worked for Texas Instruments.
“Sergei Brin and Larry Page started Google when both were age 25.”
In mid 1999, Brin and Page, after a brief meeting, received $100K in seed funding and with it credibility from Andy Bechtolsheim, one of the founders of Sun Microsystems and well known in the technology community. At the time, with so many search engines, many questioned whether another one was needed. A year later, http://infolab.stanford.edu/pub/voy/museum/google.htm”>Google received $25M Series A funding. Page remained CEO until 2001, when Eric Schmidt became CEO.
“Steve Jobs and Steve Wozniak started Apple when Jobs was 22 and Wozniak was 27.”
In mid 1970s, while working at HP, Wozniak designed the Apple I during nights and weekends, working out of Job’s family garage. In 1977, in order to produce the Apple II, Jobs and Wozniak received $250K angel funding (and business expertise) from Mike Markkula, then age ~35, who became the 3rd founder. Markkula had “retired” a couple of years earlier with proceeds from Intel stock options, where he was a marketing manager.
These stories have several common themes, but they differ from typical formulaic approaches to innovation.
What other themes are relevant? Something to think about…
Re: Interesting Stories
Branko,
Wow. Awesome comment. It really takes the issues I brought up to another level. I couldn't agree more with the themes you point out.
One point that really stands out is that it feels like investment that leads to a change in who makes the day to day business decisions is a negative towards making great businesses. While it's a small point in your comment about Facebook, I think it's very important to note that a key motivating factor in Zuckerberg's move to Silicon Valley was the ability for him to continue as CEO. Leaving even relatively inexperienced founders in control of their businesses seems like a good idea, but uncommon on this coast. If you're investing in the company, it's because of what the young founder was able to accomplish, so why would you remove him for someone who hasn't been eating, sleeping and breathing the company for years?
Another trend I think is worth noting, that my initial entry brought up, is that all of those founders were young and new; their lack of knowledge of "how it's done" can be a big advantage as you're bringing fresh ideas and innovate way to do things to the table.
It's going to take time, but hopefully this gives us all some food for thought that will lead to changes in action; Boston has the talent to build great companies here and what momentum and talk we have now needs to translate to changes in action.
Thanks,
-Jason
Jason Evanish
CEO / Co-Founder
Greenhorn Connect
Twitter: @Evanish
Blog: www.JasonEvanish.com
Founder CEO Passion
FastCompany just released their 2010 list of The World's Most Innovative Companies, aka Fast 50. Facebook is first on the list, up from 15 in 2009; but that's not the reason for this comment. The excerpt below further supports comments that Jason and I made about the different dynamics created by a founder CEO. Would Facebook be as committed to and focused on its business, if Zuckerberg was not a majority stakeholder? In contrast, consider MySpace (parent News Corp. did not make it onto the 2010 Fast 50). Bold emphasis added to the excerpt:
[P]art of the genius of Facebook is that it has used this seemingly unassailable position to double down on its commitment to improving itself, even in the least-visible aspects of the site. Despite the grim economic outlook early in 2009 -- "We didn't know how bad things might get," says Zuckerberg -- the young CEO did what every great Valley CEO has done in down years: sink money and time into continually perfecting "the product." Zuckerberg grew Facebook's engineering ranks by 50%, and those teams, though increasingly staffed by greenhorns, unveiled features and products at a record pace -- from the very practical (tripling site speed) to the profound (the launch of peace.facebook.com). At the same time, the company encouraged its people not to fear the monstrous thing they had created. "If you roll out a feature to 10 million people and 10% don't like it, that's a lot of hate mail," says Mike Schroepfer, VP of engineering. But not enough to threaten the site's existence. (A recent revision to its privacy policy was, relative to past experiences, largely uncontroversial.) And although the company achieved cash-flow positive status for the first time last year, that wasn't the primary goal. "What 2009 was about for us was making the site better and growing users," says Zuckerberg.
Zuckerberg himself, a majority stakeholder who cannot be shoved aside, exemplifies the way that crushing the competition has freed the company to gamble even harder. "A lot of companies are set up so that people judge each other on failure. But I'm not going to get fired if I have a bad year. Or a bad five years." It's an attitude he hopes will outlast him, and will liberate even those who are less insulated. "I don't worry about making things look good if they're actually not," he says, nodding to invisible investors in the room. "So many businesses just get so worried about looking like they might make a mistake that they get afraid to take any risks."
Re: Founder CEO Passion
Great point...there is much to be said for maintaining control and motivation in a business. The whole issues companies face when going public are a big part of this; they have to answer to quarterly reports that don't consider the long term vision of a company.
The real challenge is lasting this long...all it would have taken was one early hiccup and Facebook would have needed investment at a bad valuation that would not have Zuckerberg in control the way he is now.
Jason Evanish
CEO / Co-Founder
Greenhorn Connect
Twitter: @Evanish
Blog: www.JasonEvanish.com
Love the Baseball Analogies
Great post, Jason.
I'm completely in favor of beating this baseball analogy to death. Let's start talking about people playing different positions, and who's going to be the manager, and making trades. Let's talk about Free Agency, long-term contracts, and the Designated Hitter Rule.
Better yet, let's start a Fantasy Entrepreneurship league. I'm drafting you in the first round. :)
Josh Bob
Re: Love the Baseball Analogies
Josh,
I see what you're saying. Perhaps the emphasis on the analogy may be a bit much for some, but I think that it can actually serve the goals of the ecosystem well by helping frame our mindsets; by comparing it to something we all generally understand, it lends itself well to continued comparisons that extend to many of the goals of the community.
If you take certain parts of baseball and tie them to two parts of entrepreneurship, then the connections between the two baseball elements can then logically be extended to the two parts of entrepreneurship. If we're trying to change mindsets, this can be very advantageous.
Thanks,
-Jason
PS: As for drafting me, I'm flattered, but I hope it's a keeper league. It could be some time before that pick would pay off...
Jason Evanish
CEO / Co-Founder
Greenhorn Connect
Twitter: @Evanish
Blog: www.JasonEvanish.com