Founders at Work: Stories of Startups’ Early Days
By Jessica Livingston
“Chance favors the prepared mind,” said French chemist Louis Pasteur, and Jessica Livingston has put together a collection of profiles that amply illustrate this maxim. Her Founders at Work: Stories of Startups’ Early Days is essential reading for anyone who is interested in the entrepreneurial process or has even thought about getting involved in a business startup. In 32 chapters of interviews, Livingston, a founding partner at the seed-stage venture firm Y Combinator, records the recollected tales of 29 men and three women who founded some of the hottest high-tech enterprises of the past 30 years. Although there is no summary of lessons from the stories, Livingston is an expert interviewer, asking just the right questions without ever becoming formulaic. The result is distilled wisdom about what it takes to succeed as an entrepreneur in the United States.
People are the most important ingredient in a successful startup. As Joe Kraus, cofounder of Excite, puts it, “Venture capitalists…will tell you that they’d rather fund a great team than a great idea…. If they have a bad idea, great teams can figure out a better one…. Mediocre people even with a great idea can screw it up.”
How do you select the people? “Chemistry, mechanics, religion,” responds serial entrepreneur Ron Gruner, of Shareholder.com fame. That is, first you have to get along with them personally; then they must have the necessary skills; and last, they have to have a passion for the startup’s mission.
Business plans, according to Livingston’s subjects, are far from a necessity for running fledgling businesses; rather, they are employed almost exclusively as selling tools to gain support and resources from outsiders. What guides the businesses themselves is close, persistent attention to customer needs and an opportunistic ability to turn on a dime — even if it means throwing out the old business plan and devising a new one in the process. They offer varied perspectives, too, on the often ambivalent, sometimes vexed, relationship between startups and their investors, particularly venture capitalists (VCs). For the latter, unfavorable comments outnumber favorable ones by a wide margin.
It is also interesting how many of the entrepreneurs lack either the skills or the interest to manage the companies they create (which may account for their relationships with the VCs). Few are quite as reclusive as Steve Wozniak, cofounder of Apple Computer (who describes himself as “an engineer that works”), but many of the founders are impatient with activities that they regard as peripheral to the core competence of the business.
None of these entrepreneurs, in fact, seems to be in business to make money. Rather, in true entrepreneurial fashion, they want to “do something cool,” as several young founders put it, and change the world. Throughout the book are plenty of clues regarding how to nurture the spirit of entrepreneurship in established organizations — a quality the author call “startuppyness.”permalink.