One of the major issues I’ve seen in mentoring over the past decade is the discomfort, pain and even confusion great engineers go through when they enter the dreaded “time to start a company” phase. As a serial entrepreneur, my product sweet spot was building the company. I enjoyed the entire process, from idea to idea validation, to forming a business entity with a partner, to recruiting. The thing I didn’t like and wasn’t good at was finance and I always had a CFO to handle that. But engineers are just the opposite. Engineers like building things, but things don’t include companies. It’s amazing to me how many teams form and never have a founder’s agreement, only to run into problems when they actually have to create a business entity. So how do engineers get their products to market without going through the pain, hassle, and major distraction of not just forming a company, but then running it?
Scott Kirsner, The Boston Globe correspondent who writes the Innovation Economy column weekly, has an excellent article entitled This former venture capitalist is reinventing the way a company works that focuses in on one former founder’s response to this problem.
Phil Libin, founder of Evernote and a former venture capitalist thinks he has the answer.
“The whole venture capital model is stupid,” Libin says. But “the stupidest thing,” he continues, “is the idea of a company. Companies are increasingly archaic, as a unit of organization in the world. What is it about companies that makes the most sense?”
People who are smart and skilled at creating products, Libin says, shouldn’t have to “raise money, have human resources drama, and run a small little fragile company.” Instead, they should “use their superpower to build a great product,” while having ownership in what it becomes
Libin has founded an alternative to creating companies for entrepreneurs. All Turtles. (All Turtles? Yet more proof that all the good names are taken!) I found the AI generated painting on their home page rather disturbing – not a great way to attract people to your venture. But don’t let that stop you!
I’m have a passing familiarity with two Boston-based attempts at solving this problem:
Paul English’s Blade Network and Joe Chung’s Redstar. I’ve met both founders and they are super smart, very experienced entrepreneurs. I wonder if Libdin has talked with them. I also worked in one of the region’s first incubators, HyperVest. All Turtles is not an incubator nor an accelerator. The former incubates startups, the latter accelerates the progress as a company. The product of All Turtles is products, not companies.
What differentiates All Turtles from other attempts at taking ideas to market without the hassle of creating a company as the vehicle is that AI is the foundational technology. I can’t remember if this is an original idea or I read it some place, but I believe that AI will be like electricity – it will be everywhere, in everything, but rarely visible to consumers. The competition for great AI developers is intense – they are more options than just about any other tech niche.
But Libdin is really aggressive.
Startup creation and venture capital funding, in Libin’s view, are too focused on “the 50 miles around Stanford University,” in the heart of Silicon Valley. All Turtles has already set up operations in San Francisco, Tokyo, and Paris. Libin says Mexico City is next, and his goal is to be active in 20 of the top 50 cities worldwide in the firm’s first decade. That is largely a strategy to tap markets where there is technology, design, and product development talent that are less competitive than Boston, New York, or the Bay Area.
While Libin seems to disdain VC money he’s accepted a $20 million investment from General Catalyst (a great name, by the way).
“Phil has a brilliant mind and has been able to attract incredible talent from all over the world,” says Niko Bonatsos, a managing director at General Catalyst. And Libin is “spot-on to notice that not every amazing product thinker loves or cares enough to do the company-building part of the equation.”
Depending on the value-added and T’s and C’s of working with All Turtles it may well attract great engineers and scientists, but I’m not optimistic, as it’s just one in a series of series of attempts to create a Ford-like assembly line for technology concepts that could turn into the next big thing.
My best guess is that All Turtles will go the way of the Blade Network and end up creating a company or two and putting all their resources there. But time will tell. In the meantime there’s at least one viable alternative for creators of great products who want to avoid the hassle of creating a company, while participating in the wealth a truly great product can generate. Check it out if you aren’t afraid of see the disturbing image on the home page.