James D. Robinson, Michael Greeley, Jim Breyer et. al. I believe - TopicsExpress



          

James D. Robinson, Michael Greeley, Jim Breyer et. al. I believe this is hogwash -- fly by journalism at its worst, but Im curious what you think. As I wrote to a friend who emailed me a link this am: There has long been a tilt towards youth among entrepreneurs in Silicon Valley and elsewhere, due to some combination of lower opportunity costs and awareness of the pitfalls. Hewlett and Packard who got started in the days before venture capital were a few years out of college for instance. The rank-and-file also tend to be young -- again because of the opportunity cost issue and because of the sheer energy and stamina thats required. In the early days of venture capital there was a further factor -- skepticism that startups could make it against the big guys These are quotes from Vinod Khosla in a case that I wrote on Sun Microsystems (the time frame is 1982-83) On why he could not hire an experienced marketing manager I made organization charts for every major company I could think of, and I made over a hundred phone calls. Most of them just hung up on me. When you are 26 years old, look like a little kid, talk with a funny accent and have two people in your company and youre calling the Vice President at DEC or HP, you dont get very far.... Besides, you cant hire someone until you have the money to pay them. Nobody wants to leave established companies to join someplace where they cant even see six months of salary. or on the recruitment of the software and engineering staff Most of the engineers came because they wanted to work with Bill Joy and Andy, who were leaders in the field. They also wanted to work on commercial products that could be leadership products. They were all excited about this kind of stuff because it was well publicized in the research community by Xerox PARC. These worker bees werent as conservative as the senior managers who wouldnt talk to us. In fact, the worker bees considered management in their existing companies a problem. It was the same managers that didnt want to come to work for us. So whats changed between 1982-83 and now. Id say most of the changes have had a tendency to push age up rather than down. 1. Working at a startup is seen as less risky, 2. There are a lot of people in Silicon Valley, even at the middling ranks, who have made it. With cash in the bank, the opportunity costs are lower. 3. The amount of VC has exploded, along with deal size. That means that the expected payoffs have to be many times (in absolute numbers) what was expected in the early 80s. Thus companies have to become gynormous very quickly. And to build something gynormous you need technical teams -- and mangers of such teams that really know what they are doing i.e have lots of hands on technical experience. This is not as critical btw after companies go public -- the likes of Microsoft, Google and Facebook will take in and train bright college graduates. But that was always the case with good blue chip companies. VCs also now bring on entrepreneurs in residence who have made it big before and fund the ideas they eventually come up with. These guys too tend to reach out to their network of contacts to staff their ventures. And their networks tend to be of a certain age. One possible countervailing force may be that Silicon Valley does more consumer deals (eg Facebook, Netflix). Historically 70-80 of businesses sold to other businesses (b-to-b in the jargon) rather than to consumers. Arguably this reduces the pressure to hire experienced sales and marketing staff (though interestingly enough even companies like google do maintain large sales staff for fact to face selling). I have not looked at the numbers so I dont know how large the shift to consumer has been. Even so consumer startups like Facebook, Netflix, Twitter also now have a huge and complicated technological backbone which cant stand many glitches or down time. So if anything the pressure to hire experienced technical staff is even greater than in Vinod Khoslas time. Again an exception to this are startups that produce apps for the ipad, iphone and Android devices and do not require much technological sophistication. But these companies are almost never VC backed because they dont scale easily. In short I dont think whoever wrote the story has much of a clue...
Posted on: Mon, 24 Mar 2014 18:16:27 +0000

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