There’s nothing that used to make me feel more like a pompous VC than when I would respond to an entrepreneur by saying their idea isn’t big enough–that a success for them would likely be too small for what our firm was looking for.
Even though First Round is a small, seed stage fund and we don’t have the kind of approach that forces more money on an entrepreneur than they need, the idea of calling something too small made me feel uncomfortably close to that mindset. It almost seemed hypocritical when, at the same time, I’m saying that our size means that we don’t need the big, billion dollar outcome to be successful.
That’s when I realised I was arguing the wrong side of this. It’s not about what our fund return criteria is. That’s not nearly as important as one simple fact:
It’s your life.
You are the entrepreneur. You’re making the big sacrifices. It’s your days off that are going to disappear. Your missed vacations. Your friendships and relationships that will be tested. It’s your body that is going to have to deal with all the stress of starting a company, having the responsibility of outside investors, and employees depend on you. Whether you’re trying for something world changing or something a little more modest, it actually takes just about the same amount of work.
So why bother with a small idea?
Is your life really worth making those kind of sacrifices in and is all that opportunity cost for a smart, motivated person like you worth it to build something whose outcome isn’t likely to make more than a minor dent?
Recently, I’ve done a fair bit of travelling and sat through a number of pitch events and competitions both in NYC and in other cities. I sat through one event and asked the person next to me, “If everything that all of these entrepreneurs said they were going to do comes true, how many of these ideas are going to change the world?”
“How many of these companies would be billion dollar outcomes in a best case scenario? What about even 500, or just $100 million?”
The answer, unfortunately, seemed like none.
I may not have succeeded in my own startup, but the thing that kept be going throughout was that, if we succeeded, we were going to help tens of millions of people make a huge impact in their lives. Frankly, I don’t think a lot of first time entrepreneurs are really grasping how difficult it is to succeed, and the impact their companies will need to make to achieve success.
This summer, in NYC alone, over 50 companies will be participating in various incubator programs. My fear isn’t that they will fail or won’t get funded after the summer. It’s fine to fail. My fear is that too many entrepreneurs will work on ideas that really aren’t worth all the effort. I’m afraid that these programs will bring entrepreneurs into the market that weren’t driven by the mania of a burning question or problem–but by the attractiveness of the program and its resources. I think it’s fantastic that we’re looking for ways to make success easier for people with big ideas–but there’s a fine line between making success easier and making just starting easier. Are we glorifying the start when we should be elevating the goal?
More than anything else, in my job, I try hard to respect the time of an entrepreneur. It is a precious, scant resource. Unfortunately, I see a lot of entrepreneurs not valuing their own time nearly as much as they should.
I was talking to another venture capitalist the other day, and he suggested that too many entrepreneurs are falling in love with the idea of being entrepreneurs–and not being driven by the “big idea” that keeps them up at night. Let me tell you that you don’t need to start a company or take outside capital to be entrepreneurial. There is plenty of opportunity to be entrepreneurial in a bigger company or even a small local business. In fact, these companies really need that entrepreneurial spirit badly to succeed and survive.
If you’re going to take the entrepreneurial plunge, do it for something that, when you can’t find a single investor, or your site crashes in the middle of your PR launch, or when you’re fighting with your co-founder, you know is worth the struggle. Take on a problem where the sheer possibility of success will drive you forward when you’re running on fumes. Your time is incredibly valuable. Be patient with your ideas. Hating your job isn’t reason enough to go start a company. That’s when you should just get a better job.
The question is “What do you get if you win?” If your ideas win, do you change the world? Is changing your world and turning it upside down worth it if you can’t make a similar impact on everyone else?
Just because us investor types argue for simple, focused ideas, and starting out on not a lot of money, doesn’t mean your goals should be small. The path to changing the world should always begin with one step–just make sure your destination makes the journey worthwhile.
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