The barrier to entry for founders barely exists. With a laptop, internet connection, and some AWS storage, virtually any programmer can build a mobile app thanks to all the tools from Apple and Google.
As a result I’m see a flood of founders. But many mentor meetings are one and done. Of course, we don’t know what happened to these founders, but follow ups show a number have decided to work for someone else. Of course, that doesn’t stop them from trying another startup in the future.
I fell in love with entrepreneurs at my first company, nearly 40 years ago. The founders were brilliant MIT grads who had hired other brilliant MIT programmers. But it took a Prime minicomputer to develop VisiCalc – not cheap! Having attempted to start a sound reinforcement company in my early twenties, I was too green to realize that I was entering a capital intensive business with no capital. I ended up working for two different sound reinforcement companies. As so often has been the case, I was recruited into my second job, where we sold headset systems for communications between the stage and the mixing desk for bands like the Grateful Dead. But in addition to learning how to solder and how to mix house sound and monitor sound, I learned the downside of a small business. Jeff Beck went back to England without paying for the thousands of dollars he owed us. Collections can be the bane of a small business.
Why am I attracted to founders? They are very smart, usually well–educated, and often charismatic, like Mitch Kapor, founder of Lotus Development. But that’s all the ante as far as I’m concerned. What I look for is fire in the belly: unquenchable desire to build something based on their vision of the market. Incredible enthusiasm and energy. Not willing to take “no” for an answer. Passion for the product or service. Unworried by competition. Able to stretch the dollar until George Washington yelps.
Unfortunately what I’m seeing a lot of these days is not passionate founders but partners who just want to start a business, some sort of business because they can and everybody else seems to be doing it. Not because they need to. The term I hate – “pivot” – is endemic and shows me that many founders lack the one trait I find indispensable in founders: persistence.
Of course, at MIT VMS and other places I’ve mentored we try to help every founder who asks for our mentoring services. So what are the pros and cons of this flood of entrepreneurship? On the pro side very smart men and women now want to found companies rather than go to Wall Street to make money or to a big consulting firm, to make money. Many of the founders I see are driven by social impact: getting clean water to those who need it, helping veterans get a job when they transition out of the service. I’m constantly amazed by how many founders want to help people, not just go for the fame and money that the media endless tout.
But wannabees take up valuable time away from the real deal founders. Other than that I really don’t see any negatives to the flood of founders. And who knows, maybe they will some day actually find a problem they are passionate to solve.
The law of large numbers says that at least a few of these hundreds of startups I’ve seen will succeed, and perhaps inspire other bright people who just a few years ago aspired to go to Wall Street, where nothing is built – it’s all financial engineering. I’m seeing quite a few fintech startups, so instead of going to Wall Street these founders want to disrupt it!
I can’t blame would be entrepreneurs for jumping on the startup bandwagon. They are young enough not to have families to support or even a mortgage, so they have little to lose and a lot to gain. Even if their startup fails they can take what they have learned to a job with an established company and perhaps infuse it with some entrepreneurial zeal.
All I ask of founders is two things: one is be passionate and engaged with the problem they are trying to solve. The other is that they do a minimum of market research to ascertain whether there are competitors and if they present a barrier to entry. You would be amazed at the number of founders who never Googled their idea. I’ve seen this done by mentors during a mentoring session and what they find dismays the founders who thought their idea was unique.