The Cost of American Success
Chris Dixon wrote an excellent post on entrepreneurship the other day that I’ve continued to ruminate on. Chris argues that contrary to popular belief venture-backed innovation could and should actually increase, but we have a systemic cultural problem in that we don’t champion entrepreneurship enough as an American society.
I’ve made the argument before that, damn the numbers, perhaps the venture industry needs to expand as we retool our country through entrepreneurship amidst the current crisis. Yet after making those claims, I quickly fall back to the same math that Fred and others have done assuming a fixed cap on potential venture-backed exits.
But why? Why are we resigned to the fact that innovation is of a fixed quantity in our society? More importantly, what happened to the American entrepreneurial spirit?
America was founded on the back of entrepreneurs. The folks that came to this country, those that pushed west, literally built the U.S. on their entrepreneurial backs. We were established and we grew as a society of entrepreneurs.
But over time, we’ve moved from an economy of builders to an economy of servicers. As Chris correctly points out, many of our best and brightest college graduates end up at banks, consulting firms, law firms, large companies, etc.
I believe that the decline in American entrepreneurship is entirely a function of our own success. I’ve always found people with nothing to lose — rich or poor — make the best entrepreneurs. Americans, on the other hand, simply have way too much to lose. Our success as a country has bred a sense of comfort, which ultimately leads to complacency and a drive towards safety and protection of wealth rather than expansion.
Will the current financial crisis beget more entrepreneurship. Absolutely. Is it enough to turn the national tide? Probably not.
Can this systemic risk aversion we display as a culture be perhaps turned through education? Maybe. But we’re going to have to start young and somehow figure out how to inspire, as we can no longer rely on the inordinate powers of fear or necessity to drive us.
I’m often guilty of being a skeptic when it comes to these types of tectonic societal shifts. But I sure as hell hope we can gather enough momentum around this one. I for one am committed to do my small part to help us get there.
Lying & Entrepreneurship
Jonah Lehrer wrote a very interesting piece recently entitled Lying & Creativity. In it, he makes the profound point that learning to contain our inclination to confabulate, or lie, is fundamentally at odds with our urge to create.
Quoting Picasso, Lehrer writes:
“Every child is an artist. The problem is how to remain an artist once we grow up.” From the perspective of the brain, Picasso is on to something, as the frontal lobes (and the DPLFC in particular) are the last brain areas to fully develop. And so the super-ego settles in, and we become too self-conscious to create. Obviously, we need the frontal lobes to function…but every talent comes with a trade-off. When we repress our urge to confabulate we also repress the urge to create.
In reading this, I was struck by how similar this idea is to something I’ve often observed in entrepreneurs.
Talented entrepreneurs seem to have a unique ability to put aside fear and convention and channel creativity and persistence with an almost reckless abandon. Nothing will stand in their way.
So is this quality of entrepreneurship, or business creativity, unique to certain types of people?
For those of us out there contemplating taking the plunge yet having difficulty doing so, take comfort in Jonah’s claim that this is something we all have within us. As he says about a patient in his piece:
Such confabulations tells us something important about the mind: spontaneous creativity - the ability to make up a story on demand - is a fundamental feature of human cognition. We’re all natural storytellers, weaving narratives out of the confusion. In other words, SB’s brain damage didn’t lead to some special new mental capacity, which the rest of us are missing. Instead, it released a latent creative capacity that we all have, if only we learned how to stop holding it back.
So if you’re out there cooking up an idea, but afraid to jump in with both feet, lie to yourself. You may get something out more beautiful than you imagine.
There’s No Time Like The Present
Today the Spark Capital team announces a new seed program, Start@Spark.
Having helped incubate a number of start-ups in the past, I am personally very excited for this new initiative. There is no greater challenge or bigger thrill than trying to build something from nothing. We at Spark look forward to supporting entrepreneurs at the earliest stages of ideation and innovation.
It is also fundamentally important that we do our part to help bring this great country out of its current financial and economic malaise. It is our time to rebuild. And hopefully Start@Spark can do its small part to contribute to that rebuilding.
As Santo said eloquently in his post this am:
So, this must be a terrible time to fund a start-up company. Correct? Au contraire. This may be the best time in the last 8 years to start a company. While capital is scarce, the tectonic plates continue to shift creating major rifts. The walls are coming down and the barriers to entering new markets are falling along-side.
Looking forward to hearing your ideas!
The Changing Face of Risk
I spent some time yesterday with a close friend who has been an investment banker for his entire 10+ year career. He worked at a shop he loved led by an industry superstar and advised interesting companies on complex transactions.
But one day everything changed. The markets collapsed, his firm vanished and his career was literally upended overnight…ultimately leaving him searching for a new job.
During our conversation, he made a comment that resonated with me and confirmed something I had been thinking about for some time. He said that his perspective on risk had fundamentally changed over the past three months. What he once considered the lowest risk path to the greatest financial reward had become anything but that. And for the first time in his professional career he began in earnest to think about how to prioritize the other benefits that one can derive from work beyond monetary ones.
I have been thinking and saying for some time that one potential positive (among others) that can arise from the current financial mess is a resurgence of smart, talented folks pursuing more entrepreneurial opportunities. Wall Street has for too long had a firm grip on many of the best and brightest, capturing their attention from the day they graduate and holding their wallets hostage long after that. But I have believed for some time that the tide will eventually shift, and my conversation yesterday gives me some hope that it’s starting to happen.
Entrepreneurship and entrepreneurial opportunities, in all their forms, will begin to look more rewarding and safer than that ‘sure thing’ hedge fund job previously so alluring. Building stuff rather than moving money around will be in vogue again. And especially in NYC where the work culture has been so heavily skewed towards finance, this should bode very well for the entrepreneurial and venture community.
I sure hope this proves right…
