John Doerr's Startup Manual

Founders rarely mortgage their homes to finance a venture. We don't ask for it. There's already plenty of stress in starting a new venture. We are, however, seeing lots of Internet companies that bootstrapped their businesses. Guys like Jeff Bezos, the founder of Amazon.com. He was working on Wall Street as a quant, thinking ahead of the Net phenomenon. Jeff thought long and hard about the best possible businesses to build on the Web. He was incredibly systemic, and early. So he was able to self-fund Amazon.com into business with a little seed capital from family and friends.

So why would Jeff Bezos go to John Doerr?

Jeff Bezos came to Kleiner Perkins because, in his words, we are a center of gravity in the Internet. Amazon was also pursued by other venture capitalists. We had to compete like crazy for the right to invest in Amazon. Jeff approached us the same way Intuit's Scott Cook did. Jeff said, "I'm not going to publish 30 business plans along Sand Hill Road. No one will pay attention. Instead, I'll work through my network of friends to find the good firms and best fit for Amazon." Bezos figured he could grow without VC money, but would like their help. It's less about capital than it is experience and relationships. So he interviewed and auditioned his venture backers. Adding an investor like Doug Mackenzie or John Doerr to a venture is like hiring a vice president. So he carefully checked references. He talked to entrepreneurs from KPCB ventures that won, and some that failed.

Entrepreneurs should insist from the beginning that the VCs communicate clearly with them. Their time, and ours, is very valuable. When the first meeting is over the entrepreneur might say, "I'd like a yes or no right now, but I understand you may be more deliberative and will need more than one meeting or one business plan. So what's your level of interest and what's the next step?"

Frankly, you'd prefer a swift no to a long, drawn-out maybe. Those are death. Unfortunately, few teams ask that. So I volunteer it. It's the only responsible way to handle 2,500 incoming plans and 100 meetings a year. Now, more than before, if KPCB decides not to back a venture, another good firm will.

And our team at the House of Pancakes? What's their fate? If the team makes it, how many of the original members will be left in few years?

It needs the passion and commitment to go beyond success - to build a durable enterprise. The best entrepreneurs don't focus on success. They focus on building a company that can be a leader in the global economy. They know success will follow. If you focus on success, you won't get there. If you focus on contribution and customer value, then you can win.

Michael S. Malone (MSMalone@aol.com) is one of Silicon Valley's most influential journalists.