I started Knewton to do my bit to fix the world’s education system. Education is among the most important problems we face, because it’s the ultimate “gateway” problem. That is, it drives virtually every global problem that we face as a species. But there’s a flip-side: if we can fix education, then we’ll dramatically improve the other problems, too. So in fact, I started Knewton not just to help fix education but to try to fix just about everything…OK, yes, that’s crazily ambitious. But we have a vision of how it will happen and a plan to get there. It won’t be easy and maybe we won’t accomplish all of our goals. But whatever progress we make will be extremely positive.
So if I had to give one piece of advice to a budding entrepreneur, I would say: aim big. Go after a giant problem, one of the great problems of our time, a problem that, if solved, would usher in an era of large-scale transformation across industries and nations. It won’t be easy. The really BIG PROBLEMS, like education, are big problems for a reason. But there are already too many entrepreneurs and venture capitalists going for the easy and obvious stuff.
The venture capital industry in the United States is the envy of the world, and rightly so. But it’s been getting a bit stale of late. As VC ranks have swelled with recently-minted MBAs over the last 10-20 years, venture capital has become more financial and less inspirational. These new VCs are obsessed with de-risking venture investing. Reducing risk, all other things being equal, is obviously a good thing. But they are taking it too far. They focus so much on models and metrics that they have stopped focusing on big ideas and vision.
There are notable exceptions, both among entrepreneurs and investors. Knewton is lucky enough to be working with some of these investors. Our newest investor, Founders Fund, has made it their mission to find companies with these kinds of enormous visions. Take SpaceX. The idea of funding a company whose long-term mission is to colonize the solar system and whose early goals were merely to compete with the Space Shuttle, was something that maybe no other VC would have found appetizing. Today SpaceX represents America’s only domestic launch capability and is producing phenomenal revenue.
Many venture capitalists say they’re looking for the next big idea. But they aren’t really; they’re looking for something derivative, because derivative is safe.
Founders Fund and just a few other funds prove with their actions that they really are looking for entrepreneurs with huge ideas that will change the world for the better. Peter Thiel sums up their philosophy with a wonderful quote: “People do the same old thing because they think it’s less risky. We think it’s actually riskier to do the same thing as everyone else. It’s risky to be a lemming.”
It was at Davos last year that Knewton met Founders Fund. They subsequently led a $33m investment alongside education giant Pearson to help us achieve our big vision for education. I’d love to see many more investors, entrepreneurs and big corporations embrace that spirit exemplified by Davos: think big and change the world!