John Doerr's Startup Manual

The 46-year-old partner at Kleiner Perkins Caulfield & Byers (KPCB) is, by all accounts, the most influential venture capitalist of his generation. Over the last 16 years, he has built an unrivaled record of backing industry-defining start-ups in fields as diverse as computing, (Sun Microsystems, Compaq), software (Lotus, Intuit), biotechnology (Genentech, Millennium) and the Internet (Netscape, Amazon.com). But for all of those past triumphs, Doerr says, "there's never been a better time than now to start a company. In the past, entrepreneurs started businesses. Today they invent new business models. That's a big difference, and it creates huge opportunities."

A graduate of Rice University and Harvard Business School, Doerr joined Intel in 1975 as an engineer and project manager. He often points to his years with the semiconductor giant as critical to his ability to empathize with young entrepreneurial teams. Doerr's Intel record was, in fact, extraordinary. Bored after three years in the factory, he talked his way into the sales force where he quickly became Intel's top-ranked systems salesman.

It was also at Intel where John Doerr first exhibited some of his now-legendary personality traits: his unrelenting drive and competitiveness, his willingness to take huge risks and go beyond standard procedure to achieve success. Once, to close a microprocessor deal, he even threw a lawnmower into a deal.

Doerr is also known for his almost superhuman energy. The standard image of John Doerr is that of a rail-thin man in a rumpled blue blazer, with a lick of hair falling across his forehead, rushing to a conference, simultaneously holding a conversation with three people around him and talking on his cell-phone.

Three years ago, Doerr was already a famous Silicon Valley venture capitalist. But the event that moved him to global business fame was the arrival of the Internet. Recognizing the Net's potential before almost anyone else, Doerr has turned Kleiner Perkins into the cradle of the Web revolution. Doerr and his partners have backed dozens of ventures building and defining the Internet, from America Online to iVillage, and from Ascend to Verisign. Netscape and @Home are two of the best-known Doerr projects. But Doerr prefers to talk about linked "initiatives" rather than stand-alone investments. In June, 1996 KPCB organized a $100 million Java Fund to back a slate of startups using Sun's Java programming language, including Active Software, Calico, Internet Security Systems, Marimba, and Netiva.

As the avatar of the Web, Doerr's greatest contribution may prove to be his ability to network all of KPCB's investment for mutual advantage. Thus Intuit's Quicken incorporates the Netscape Navigator. Early adopters of Sun's Java were Netscape and Macromedia. If you've seen this kind of connectedness before, think Microsoft. Although Doerr protests otherwise, with his portfolio of software and netware companies, his drive to create entrepreneurial teams, and his capacity to sight new emerging markets John Doerr may be Bill Gates's greatest competitor.

Fast Company visited Doerr in his Sand Hill Road office outside Palo Alto and asked him to put his web of personal experiences to work advising us on the challenges of startup life.

Let's say you're advising a 28-year-old engineer or marketer who's worked at a successful high-tech company for a few years and is moving up the ranks. Then one morning, his pals say, "We're all meeting at the House of Pancakes at 9 p.m. We've got an idea for a startup. Do you want to come?" Should he go?

Absolutely. Remember, Compaq was conceived at the House of Pancakes. But before throwing in with the group, I'd advise the 28-year-old to think carefully about the business opportunity, the markets, and the technology. And think hardest about the team.

Why the team? Doesn't the best technology and product win?

In the world today, there's plenty of technology, plenty of entrepreneurs, plenty of money, plenty of venture capital. What's in short supply is great teams. Your biggest challenge will be building a great team. There's enormous change underway in every facet of the world. Some is technology driven, some is market driven. All that change creates unprecedented opportunity. But to take full advantage of those opportunities, focus on the team. Teams win.

So our 28-year-old goes to the startup meeting. It's now midnight, and they're on their 11th cup of coffee. Looking around that table, what does this person need to consider?

That's the moment of truth. That's when you ask: "Are these the people I want to be in trouble with for the next 5, 10, 15 years of my life?" Because as you build a new business, one thing's for sure: You will get into trouble.