Good morning, All,
Ok, we’re mixing metaphors today, thanks to a tweet by @davemcclure: driving entrepreneur education, building community, making bets b4 traction are more reliable+sustainable foundations 2 finding unicorns.
We know the usual VC drill: Invest in successful serial entrepreneurs (which, for the record, not only doesn’t always work out, but in such cases, they tend to invest more money than necessary and well, we know what that end result it. And yet, lemming-like, many a VC holds hard and fast to that rule); invest in the team, which usually means the co-founding team, like Tumblr’s David Karp and, wait, no co-founder there; and putting money on Ivy-educated entrepreneurs is always a better bet, like Steve Jobs (oops, no, he dropped out of every non-Ivy League school he ever attended. Oh, David Karp. Nope, again, non-Ivy, nor is Jack Dorsey, who, like Jobs, never finished college).
As for the mixed parables: the blind men are all standing at different parts of the elephant, and each has a theory of what’s before him. Of course, none is right, as each experiences only part of the animal. And an elephant in the living room is something that’s so big that despite the fact that it’s standing right before you, you can’t see it: you miss the obvious.
Investors love unicorns, which are startups that have entered the $1B club. But based on the criteria/popular misconception, it’s no wonder that there are so few unicorns.
We would add a couple more criteria to McClure’s list: vision and passion. Note that we did not say visionary. Those people are few and far between. We’re talking about entrepreneurs who can see 20 minutes into the future, and can spot that pain points that no one else has noticed. We wish we had a dime for every time we heard an investor say, ‘if you think you have no competition, you don’t know your space. Do your homework.’ We don’t necessarily agree with that: not in all cases. There may be other startups/companies in the space, but if they’re solving 10% of the problem, and you have a solution that can potentially solve 75% of the problem, did we miss something? Yahoo owned search until Google built a better mousetrap. (Actually, what put them ahead was that they developed a business model.) Google didn’t exactly prevail overnight, mind you, but there were a lot of naysayers around in the early days of google, because, well, Yahoo owned search! A potential also-ran that turned out to be a unicorn. (Although we’re sure that there are those wags out there who might call it a Trojan horse.)
And without passion and that unwavering belief in what you’re doing, no matter the obstacles, the noes and the naysayers, you won’t have the drivers it takes to reach the finish line. True entrepreneurs don’t do what they do because they want to: they do it because they have to. There’s something burning inside them that drives them or that keeps them awake at night. Even if they don’t get the funding that they need at first. That’s when they get out there and let the market decide. They build their community and their customer base. But they aren’t the golden geese that the investors spot at out of the gate. Most investors follow the herd, or go by the checklist: Ivy-educated? Check. Previous success? Check. There is very little diversity among founders in the Unicorn Club. We rest our case. There very well could be more unicorns. But therein lies the elephant in the living room. Onward and forward.