What makes a successful startup founder today … and tomorrow
The companies that have started and gone on to be hugely successful over the last decade have been predominantly been started by computer science graduates or people who have been coding more than anything else. These aren’t just limited to companies making software. They could have been providing services in industries that have nothing to do with computer science. I had a very engaging discussion with Professor Christian Borch recently. It helped me understand a common thread of crowd dynamics among many industries, that explains why CS founders have been doing well.
Let me share something about my industry. Here I was a 23 year old guy, dropping out of a PhD program to enter finance because I thought the ideas of Best Expert Learning and Boosting are applicable here. The odds were stacked against me since there is a ton of core finance knowledge I did not have. I happened to do better than fine and so did a lot of other CS guys who entered finance in early 2000s. This is true about other disciplines too. Perhaps that is because of the implementation heavy nature of change. Perhaps it is because CS guys were able to automate the simple parts of other professions, and that was good enough in an increasingly digital world. Perhaps that was simply because consumers and users are increasingly spending a lot more time with devices than people. Whatever it is, I was lucky to be riding the wave.
Let’s step back from the migration to the knowledge worker for a moment and talk myopically about the ideal startup founder. If I were to think what has been the ideal founder in the last few years, it has probably been a CS guy with empathy and EQ to connect to others, and execute ideas well. But the question is why? Why a CS guy?
I discussed with a few others founders as well. Toying with a number of explanations we felt that the evidence overwhelmingly suggests that founders who were able to make technology that engages people were the ones whose companies were huge successes.
Those who could engage crowds with the technology they have built, have been successful.
Did the technology have to be simple ? There was no clear pattern about complexity. Both complex technologies and simple have worked. The answer was crowd dynamics and the learning that brings. There are a number of catalysts of this success like monetization machine of online ads. But again there is no clear pattern if that applies everywhere.
The common theme is the crowd learning together and toying with an idea together, and a founder’s ability to make that happen.
That also explains the market share concentration in tech. Why is the dominant success in a tech sub-industry so much better than others! In Investment Banking for instance, the industry leader has 10% market share at best. However, in technology, google search market share is perhaps north of 75%. Apple’s profit share in smartphones and Facebook’s market share in social networks is probably similar. It is not that others can’t build similar technology. Others have not been able to get users to migrate. It is simply that crowds have chosen to come together somewhere and anoint it the winner in its category. I think it must be a combination of good timing, UI, stage in the industry, but those details aside, it is safe to say that the crowd makes the industry leader a success and not the technology.
Who is the ideal founder today?
I feel that the ideal founder today is a marketing genius. Getting people to pay attention has become very difficult. We all learn together and we all face so much information all the time. We have information coming at us from everywhere. It has reached levels that you will notice a reduction in your heart rate after keeping your devices switched off for 24 hours. We need a break and we aren’t giving ourselves a break. More importantly, we all learn together and we all know from our school days that one needs to pay attention to learn. The ideal founder today needs to understand the changing impulse response of an information consumer and find ways to manipulate it to get the crowd to pay attention to their new offering. It is so difficult to get us to pay attention to a good idea now!
The age of the computer scientist is now over. The age of the growth hacker has begun.