This past October I was invited by Steve Blank to speak at Stanford for their Enterprise Thought Leader (ETL) series. The topic I chose to speak about was "lessons on starting a company" but I created the subtitle in class "a Silicon Valley heresy" since my goal was to slay many of the myths I believe exist right in the heart of Silicon Valley!
The truth is that I love Stanford, Palo Alto, and the Bay Area in general. I grew up in NorCal and I formerly lived in Palo Alto. But I think that the "group think" that can sometimes form there creates a sense that there is but one way to skin a cat. Myths such as "real companies raise venture capital," "you're selling out if you sell your company for JUST $15 million," or "companies need two co-founders" need closer examination. I disagree with all three of these.
In the presentation I also discussed why the fail fast mantra needs to fail, fast, why financial models still matter, why the lean startup movement needs to be careful about changing the definition of the adjective "lean" and why Silicon Valley could learn a thing or two about branding from Madison Avenue.
The awesome thing about this presentation is that Stanford took the time to slice up the content and add titles to each section so that each topic is clearly labeled and anywhere between 2-5 minutes long (the whole video is 57 minutes). If you're an entrepreneur (or just interested in the topic or love watching a bit of controversy) I highly recommend checking out the The "sliced up" version, which here (if you click on the video image embedded above it will show the whole video). You can download the deck here.
The group discussion was led by Tina Seelig who asked some very direct and well prepared questions during the session. Afterward, I came and spoke to her (and Steve's) class on entrepreneurship. She opened the Q&A session with her class by saying, "Mark, you talked a lot about money in your presentation. Most Silicon Valley legends seem to say 'it's not about the money—it's about changing the world or solving a problem' that they had." Gulp.
It was actually a great question and I thought she asked more insightful and thought-provoking questions than I'm used to. Actually, it was a wonderful chance to slay another dragon. The only people who don't care about money are the people who have plenty of it at which point it's easy to be "above it all." Or as the excellent Micah Baldwin says in this must read blog post, "it all changes when the founder drives a Porsche."
I get that some people who are in their 20's also care less about making money. But then a few funny things happen to you: You get married, you have kids, your parents get older and need access to health care, you buy a house, etc. Basically, financial pressures percolate and become real.
I hadn't given much thought to the topic in the way that she asked it so I had to ad lib my answer. Did I care about money? Do I care about money? Should you care about money? Is it okay to want money? I pondered out loud.
Yes. People do care about money, up to a point. Many of you would have heard of Maslow's Hierarchy of Needs, which highlight how as humans we need our most basic needs solved first in order to be happy such as food, clothing, shelter, safety, etc. In the version in my head, most of us as entrepreneurs have the most basic life needs already met but when we start our first company (or maybe our second or third) we may not have gotten the basic amount of money to feel financial security out of the way.
Clearly different people have different motivations but I believe the majority of entrepreneurs would love to make this initial money (I call it "feed the family money") to get it out of the way. Just knowing that you have enough money to make you feel comfortable (however much that is) is enough for most great entrepreneurs to focus on what really makes us happy: building a company, building great products, taking on the establishment, bucking the rules, leaving a footprint on society and in some small way trying to "make a difference in the world."
Oh, and as I said in November at a speech at Columbia, another big motivator is simply having the chance to tell all the naysayers to Eff Off when we become successful.
There. I said it. It's not so bad to want a small pile of money. Many of the people I hear preach, "it should never be about the money," or "founders should never take money off the table" make those arguments from the convenient confines of their posh Atherton homes having lost touch with what it feels like to share a small apartment in The Mission.
I for one am very pro in seeing founders make this initial pot of money so that our incentives can be aligned. It is not a gift, the founders need to earn it. But as I've expressed in my two posts on the topic—The Entrepreneur's Thesis & Should Founders be Allowed to Take Money off the Table—and if you haven't read these I'd encourage you to check them out.
Or to quote somebody who thinks a lot about what makes people happy, Gretchen Rubin of the Happiness Project wrote in this blog post:
"money can't buy happiness, but it sure can buy lots of things that contribute mightily to happiness."
True, that. And it's okay to say it out loud.
And once you've made your initial coin, get back to work. But this time on your own set of rules. You now have something bigger to play for. And you've solved for Maslow's unwritten rule, "keep thy wife or husband happy and all else in life is easier."
Reprinted from Both Sides of the Table
Mark Suster is a 2x entrepreneur who has gone to the Dark Side of VC. He joined GRP Partners in 2007 as a General Partner after selling his company to Salesforce.com. He focuses on early-stage technology companies. Follow him at twitter.com/msuster.