| Topic Name: |
Ask me VC questions |
| Message Name: |
Perspective from experience |
| Date Posted: |
11/05/2002 |
| In Reply To: |
Although I have to agree that there are VCs that match your description, I think it's more than a little heavy-handed to make those statements about the entire industry.
The reason why VCs put a huge emphasis on management, sometimes over the technology, is because startups have significant market and technical risk. It's very likely that the technology changes from when the company gets funded to when the first product gets released - eBay started out as a classifieds website, for example. You need to have a solid management team that is able to be scrappy and roll with the bunches as the market and technology changes. Investing in the idea is what got us all these 20 year old CEOs more interested in Aeron chairs than building solid companies.
For the same reasons, there is more of a focus on business models than the technology, since if you can't sell to customers, it doesn't matter if your product is "cool." So to be a successful VC, inevitably it's more important to be a business person - although I want to point out that a HUGE number of VCs have PhDs, and we do a lot of consulting with professors and top science/engineering talent.
The points you are making can be applied to general companies - engineering people complain about how management isn't technical enough, etc., etc. The truth of it is, techincal skills are not necessarily the most important ones in business.
So blame VCs, blame CEOs, but just understand that pure techies that don't look closely at business models and management make VERY POOR decisions. |
| Message: |
Hi Vc-Null and willi wilson. First of all, I would be upfront with you what I am writing is based on only three years of expeience working with a friend on his start up.
In th boom of internet bubble, a friend of mine with his bunch of friends ( all Ivy league MDs and Ph. Ds) started this small start up.
I cannot say exactly what but something to do with bio tech. Great concept, great product, thought would make next Microsoft. As went along the path, realized that there were many deficiencies in the b- plan. Did not really know how to structure product from start to fininsh and then also how to marekt it.
Today this so called company is still running, they are trying to break even and going much slower than they wanted.
Lessons what we learned:
1) Great product does not automatically mean great company.
2) Overnight success is not a common occurence, it is more common to work sleepless night to be an entreprenuer than to make a company break even in six months to year.
3) No matter how much we calculated our work input, we needed tow ork much harder and also by the time we could finish the ultimate product in beta stage, others were picking up in the market.
So paranoia of being NOT THE FIRST ONE in the market is of utmost improtance.
Havings aid that I know that this was an experiemnet in life, from which we learned.
Also, I took this opportunity to write because I wantd to share my experience with you.
Overall, I can only say that VC-null is right that 'cool' product not always mean 'cool' company.
VC-null thanks for your comments and advice given in this b-board. It had been a pleasure to read yor perspectives.
Cheers!
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