They say “What you have is difficult.” But isn’t that the point?
I recently met with a very smart and experienced entrepreneur and investor. After less than 5 minutes of looking over what I could possibly show in five minutes, he gave me his feedback:
“I think what you built makes sense but will be really difficult to get
to market, especially based on what you told me and how you
are thinking about it. I am happy to give you more feedback,
but it literally 100x more complicated than you think now.”
My respose to myslef was a mixutre of “well yeah” and “shouldn’t that be the expectation?”
I think creating a start-up should imply solving a big problem, a problem no one else has yet solved. It is also the reason for an investor, because the problem isn’t simple and needs a team of experts attacking the problem from many sides. The VC’s response (he is not the first to say that) showed me that there is a sickness or malaise in the VC world. Silicon Alley and Silicon Valley have become the place for a quick buck where VCs look for a sure thing and a sure team. Sadly, this means gravitating towards a problem that doesn’t need to be solved: ie Snapchat or Instagram and aversion to problems which need to be solved: Tesla, SpaceX, SolarCity etc.
When the first Venture Capital company emerged, it was a brilliant finance guy from New York, Arthur Rock, helping brilliant engineers (Fairchild) create the first mass-produced and portable transistor. Their company would later spin-off Intel. Fairchild’s transistors allowed United States to put people into Space and allow the creation of the PC. What do the VC’s do now? They allow people to send pictures to eachother with text on them or aps that allow people to send videos more efficiently, or ability to get a cab with your phone or to sleep in someone’s spare bedroom. These are the Fairchild and Intels and Apples of today. When the VCs of today are approached with important problems and possible solutions, they pass because they are afraid, they are afraid because the VC’s of yesterday were finance people looking for a way to create change by joining engineers whereas the VCs of today are often wealthy engineers who sold stock options or companies similar to those they are investing in, they are often inexperienced in broad subjects which ought to be the requirement for that job and instead they know a lot about a very niche industry. For that reason and the overall culture of Silican Valley/Alley, they are afraid to be eclipsed by other engineers. They seek to become rich and make others rich on a get rich scheme, they no longer aspire to change the world, they live in a bubble, in a world that does not need to be changed because they have everything and need nothing.
What does this do to the rest of us? The rest of the world with big problems, big oportunities, big dreamers? It leaves us to find other ways to find our dreams, it leads many to give up, it allows Snapchat to become millionaires and Colyndra, Luxtera and SpaceDev to lay off engineers and eventually dissapear. We and our ideals become the laughing stock of the media, when those dreams are the planes of the future, the ideas that would push us ahead and solve the problems that plague us. Sadly, there is little space for solutions like that, because the VCs of today want a sure thing, they are afraid of a challenge, they are afraid of changing the world, they are after one thing: a quick buck. As a result, we all lose. But it doesn’t have to be that way.