In Defense of Optimism re: High-tech Entrepreneurship

Jeff Bone
Wed, 09 Jan 2002 00:25:46 -0600

("free lunch over" --> "innovation over") == FALSE

Yeah, it's a lot harder to get funded these days.  Yeah, it
takes a WHOLE lot longer.  Yeah, the business needs to be much
more developed, the concept more sound, the road to
profitability and liquidity a lot more clear.  Yeah, it's
tough.  Yeah, there's more of the old-boy network games back in
effect;  you've got to play the game at a level you didn't have
to for a couple of years there.  Buck up.  If you've got
something that's worth doing, you'll get it done.  If you don't
get it done, it probably wasn't worth doing in the first place.

I'm *optimistic* about what the current economic and business
climate means to technology entrepreneurs.  The noise level has
dropped to a more sane level.  Junior programmers ("I read _How
To Write A Java Program In 21 Days_ last month") don't cost
north of $100k a year, and it's a buyer's market for talent.
All the bullshit about dogs in the office and crap is no more.
Office space costs are back in a reasonable neighborhood.  You
aren't competing with a zillion nutty non-businesses for the
time and attention of required professional services, vendors,
etc.  Customers actually have some time to spend evaluating real
products that are likely to solve real problems for them.  The
poser entrepreneurs ("Here's my e-commerce concept:  shop by
color.  Items for the home, organized by color!  Isn't that
brilliant!?!  Um, no, I never did work retail, why?")  are
gone.  The seasoned VCs --- the ones you want in your deal ---
are in a mode where they are healthily skeptical and yet not
seized with analysis paralysis:  that's good for your play.
Dealflow at the funds has receeded to a manageable level.  Even
though customer spending is down across the board, there's
always room for products and services that control or reduce
costs or demonstrably impact the bottom line in a reasonable
timeframe.  It's a *great* time to be an entrepreneur --- if
you've got something that's worth anything at all.  The world
has re-internalized the idea that --- all evangelism to the
contrary --- the goal of business isn't to improve people's
lives, it's to make a profit;  yet improving people's happens as
an inevitable side-effect.

The tail is no longer wagging the dog.

The current environment is going to breed a small, tough,
high-performance crop of sustainable technology companies.
Yeah, there won't be many;  but if you can be one of those few,
in my estimation the chances of recognizing substantial and
persistent value for your efforts has actually *increased*
dramatically relative to '98-00.

Beberg, if you really want to go be a welder or whatever, then
you should follow your muse.  But just because you've written
off technology entirely doesn't mean that there's a general
failure of technological innovation or the capitalist system
that sustains it.

One word about dumb ideas:  everybody's got 'em, and I've had
*more* than my fair share of 'em, as others on this list can
attest.  ;-)  I'm not casting aspersions on anybody in
particular who fell pray to the fin de siecle dotcom madness;  I
know I bought into it and as a consequence saw net worth
contraction of, really, an unbelievable --- an *insane* ---
amount.  But everybody I know involved in technology, even the
most die-hard skeptics --- everybody on this list to a person
ate the dog food at least a little bit.  The "shop by color"
lady (poser entrepreneur) mentioned above isn't entirely
responsible for the stupidity of the concept;  for a couple of
years, there, the world was in the business of breeding and
funding stupid ideas.

The important thing is to not read too much into your successes
and not suffer too much from your failures, but rather to learn
both, persevere, and do better the next time.  The holy grail is
an infallible ability to discern the dumb ideas from the good
ones.  Not all are dumb any more than all are good.  Couple this
with a clear understanding of what differentiates success from
failure and you've got a winning formula for entrepreneurship.

At least, that's what I keep telling myself.  :-)  That's a
process, though, not an endpoint.  I just keep plodding along...