entrepreneurship Archive

Attention World: Don't Give the Arnon Kohavis Your Money

Robert-preston-musicman-3It's a sign that I'm ready to get back to blogging that at 7 pm on Christmas night, cuddled with my new baby and surrounded by my family, I read a Tweet that made my blood boil. It boiled with that special kind of anger that can only be quenched with a long, blog rant. 

That's fortunate, because my "maternity leave" has about another week left on it. It's unfortunate, because I haven't started my increasingly less mysterious new job yet. That leaves me with one place to write: This blog which has a tiny readership.

So hopefully this story finds a way to circulate out to the wider audience of government officials and old money elites who have good intentions of wanting to make their city a beacon for entrepreneurship. Hopefully it reaches them before they get bamboozled into giving the wrong people money to make it happen. People like Arnon Kohavi. 

The Next Web has an article on why the venture capitalist who rushed into Chile and declared it the next coming of Silicon Valley has now pulled out a mere six months later. Here's what any Chilean entrepreneur reading this needs to know: That's all total and complete B.S. It's not you that's the problem, it's Kohavi. 

I have seen this kind of thing a lot in my travels. Throughout the emerging world and increasingly corners of America that have fallen on hard times, seemingly everyone has gotten the memo on how high-growth entrepreneurship-- not hand-outs and bail-outs-- is the answer to economic bliss. Everyone wants it. Countries are desperate for it.

The problem is few city governments and city boosters have the foresight and patience to make it happen. Everyone wants to be the next Silicon Valley; few people want to face the reality that Silicon Valley took decades and decades of supporting the most brilliant, crazy and cocky entrepreneurs to get to where it is today. The ability for anyone-- and, trust me, I mean anyone-- to come up with an idea and a week or two later have a full bank account, incorporation documents and the emotional support and good will to make that dream a reality is rooted back in the 1950s and the days of Robert Noyce and Fairchild Semiconductor. In fact, it goes back even further to the 1930s and the days of radio technology, spinning out of Stanford and being purchased by the national defense department. 

Because the prospect of building something like that is so daunting, people are looking for someone who can promise them a quick fix. Something like Harold Hill in the Music Man who came to River City and promised a band could be formed just by thinking about playing instruments. But the real lesson of Silicon Valley isn't one of cheap tricks and hacks. It's one of perseverance, hard work and doing something because you have an illogical belief it in-- not because you want to make any money. Money is the by product of true entrepreneurial creation, not the other way around. 

So when a modern day Harold Hill comes swaggering into town telling you he can make you a Silicon Valley in a matter of months: Don't listen. Even if he sells it in a glitzy musical number. Run him out on a rail. Don't let him finish his corny dog and pony show, don't introduce him to the local librarian, and don't give him one red cent, because he doesn't know what he's talking about. He doesn't even understand the thing he's promising you'll become.

In the musical, the fraudulent "thinking method" somehow worked--to the surprise of even Harold Hill himself. Real life is far less forgiving. No one has ever produced a shortcut to building an ecosystem of entrepreneurship, and no one ever will. Real ecosystems take real time and real work. They take people who care about entrepreneurs and want to help them develop, whether they personally make money or not. That's not Arnon Kohavi. This is a lesson Chileans almost learned the hard way when Kohavi came to town. 

Arnon Kohavi. Remember that name, don't give him money and don't let him invest in your startup. He's technically a venture capitalist but only because that's a club you get to elect yourself into if you have enough money. Good VCs invest because they love great entrepreneurs and want to be around them and help them realize their dreams. If this interview with him on the Next Web is accurate, Kohavi is nothing more than a short-term profit seeking Harold Hill wrapped in venture capitalist's clothing.

I hope Kohavi was grossly misquoted. I hope his words were twisted out of context beyond recognition. I hope when he read that post, he was aghast at how it made him look. 

But I doubt it. Sadly, there are plenty of Kohavis out there who travel country to country promising the moon and then asking for a big check. When they get it and those promises invariably don't happen, they come up with plenty of excuses why. When they don't get it, like Kohavi, they sulk away and blame others. On to the next town and the next batch of promises.

To wit: Just six months ago he moved to Chile and declared that "The next Skype, Facebook or MercadoLibre would come out of Chile," setting up a Santiago venture capital fund called Yarden VC. ("Seventy six trombones led the big parade..." Just imagine the oompas and the baton-wielding dance moves as you read that quote.) 

That's a big claim. What'd he base it on? Apparently meeting some government people who wanted a local entrepreneurial ecosystem. Ok, that's every single place in the world. Find me the city that would rather not have jobs and wealth created there, Mr. Kohavi. The next Skype and Facebook can't from everywhere. Based on government enthusiasm, Kohavi says he came to Chile for six months as a test to see if he could create a "real" venture capital fund. Only that's what he says now. That's not what he said at the time. At the time, he said-- definitively-- that the next Skype, Facebook or MercadoLibre would come out of Chile. 

Guess what? In six months that didn't happen. Of course it didn't. It took far longer for the actual Skype and Facebook to succeed, bolstered by far stronger ecosystems. But don't pay attention to facts like those-- look at the kids in those spiffy new band uniforms! Somehow the great Kohavi was going to divine whether they were in Chile in six months, and he determined they weren't. The ecosystem wasn't ready for his investing brilliance so he picked up stakes and pulled out. He's going to try Asia next-- not surprisingly Singapore, a city-state known to give large cash handouts to investors moving into its ecosystem.

Let's take a closer look at his razzle-dazzle excuses and justifications.

Point one: Kohavi blamed Chile's not being "ready" on the older generation of elites in Chile who "just don't get it." Entrepreneurship is about disruption not getting an engraved invitation from elites who already have power and money. Those people will never support a toppling of the established order, and more to the point, who cares if they do? If you are enabling great entrepreneurs with great ideas, some stuffy old-world elites won't be able to stop them. Real innovators and investors hear those people "not getting it" and see it as a challenge. They can't wait to make them eat their words. 

Point two: No one can "test" your startup ecosystem in six months, and come up with a binary result like "YES! The next Facebook is coming from here!" or "No, sorry you aren't ready." Anyone who has studied entrepreneurship knows that the best companies are started in the bleakest times and the worst companies are started when it seems like a slam dunk. No one can predict if a great entrepreneur will come out of a certain place and time, and many investors better than Kohavi have lost money and been humbled trying. It wasn't very long ago that most of the Sand Hill Road establishment deemed the consumer Internet dead. In fact, it was during the time when the *actual* Skype and Facebook were forming. And they were laughed out of many investors' offices. 

Point three: Kohavi says Chile is ten years off from being "ready." So his solution is to leave. If he really believed in Chile's potential, he would stay and help build that ecosystem. I guarantee you there are brilliant entrepreneurs there now who could use cash and mentorship. More to the point, venture funds are ten-year investment cycles. That would make now the perfect time for him to roll up his sleeves and make himself an integral part of building that ecosystem. Ten years isn't very long for a real venture capitalist to wait, and he'd be perfectly positioned to reap the rewards. But, of course, that would depend on him believing any of the stuff he's saying.

Point four: Kohavi has the nerve to criticize Endeavor-- a non-profit organization that came into Latin America to help entrepreneurs before it was fashionable and before governments gave charlatans money to do so. He says "Chilean family offices may still give money to Endeavor, but for them it's not about entrepreneurship-- it's just a way to brush their ego and they only do it because it is all conducted in Spanish."

First off, who cares why they do it if it helps local entrepreneurs? I've seen first hand the impact Endeavor has had on countries in Latin America and South America. No one has been a better friend to entrepreneurs there. The fact that Endeavor can wrangle money out of these "elites" Kohavi says don't care about entrepreneurship is a credit to the organization's ability to do what's necessary to create an ecosystem for entrepreneurship, even when strong forces are aligned against it. 

But the second half of that statement is the weirder part, which brings me to… 

Point five: If I am reading it right, Kohavi is criticizing elites for wanting to invest in projects and entrepreneurs who speak the language of the country. Um….. really? So, let me get this straight: Part of this elite's crazy inflexibility against entrepreneurship was a preference for doing business in their native language. Does anyone really think that's an outrageous request? Even top venture capitalists from Silicon Valley hire locals when they go into other countries. No one credible is trying to invest in China speaking English. This is foreign investing 101.

Kohavi adds later: "It's crucial for the local startup community to get used to speaking English." Why? The Spanish speaking Web is a massive market opportunity. I'd be willing to bet that the next huge Web company that comes out of Chile will be for the Spanish speaking world, just as the huge Web companies that have come out of China are for the Chinese speaking world. That's the big market opportunity. That's what the Valley won't do well. That's the reason to be funding companies in Chile. 

Kohavi tries to compare this to Israel, but Israel is a totally different country that rose to entrepreneurial prominence at a very different time in the global startup ecosystem. I've written at length about this so I won't rehash it here, but Israel had to build stuff for the Western world not only because it was a small country but because it was surrounded by hostile neighbors and there aren't hundreds of millions of people who speak Hebrew. The opportunity for Chile is completely different. Furthermore, Israeli entrepreneurs succeeded because they built an ecosystem tailored to their exact strengths, whether they were speaking English or not. (And, by the way, Israel has struggled to produce stellar returns since the technology bull market of the late 1990s.) Chile will succeed building an ecosystem tailored to its strengths, which with all due respect to the Next Web, Kohavi didn't become the expert in during his short six month stay. 

Point six: Kohavi says, "At the moment, Latin America still feels back in time. Many of the local websites I have tried to use were not updated, and the service was bad." OK, that's just a bizarre thing to say to argue a place isn't ripe for entrepreneurship. Most investors would see that as a sign of market opportunity, not a reason why entrepreneurship would fail.

He continues, "This is a serious issue because entrepreneurship isn't formed in a vacuum; for startups to thrive, the whole country has to be tech-driven, and use the latest gadgets and online services." That's absurd. Who creates those gadgets and services to begin with if not entrepreneurs? Silicon Valley arose out of fruit orchards! How high tech is that? Kohavi's arguments just collapse on themselves with the slightest application of common sense. 

Let me strip away the phony promises and glitzy dance numbers and decode what Kohavi is really saying here: People didn't give him money so he's off to Singapore-- a city state known for giving people like Kohavi who can talk a good entrepreneurial game scads of cash. If Singapore does produce the next Skype or Facebook, I guarantee you Kohavi's presence there will have had nothing to do with it. The real Skype and Facebook weren't overnight successes anymore than Silicon Valley was as an ecosystem. No one can give you something he himself can't even understand. Kohavi wouldn't know the next Niklas Zennstrom or Mark Zuckerberg if he walked in and pitched him any more than Harold Hill could spot the next Yo-Yo Ma.

Why Reid Hoffman May Be the Only Thing Under-Valued at LinkedIn

Well, I am back from most of my jetsetting. My trips to Berlin and New York were great, but towards the end the travel and pace got pretty brutal. Particularly, my flight back from JFK. I'd asked to be booked on an early flight, because all Hell seems to break loose after 12 pm at JFK. But AOL Travel booked me on a 7:15 pm flight.

Evening before Memorial Day weekend-- you can imagine how packed that place was. The security guy told me the flights leaving JFK were collectively at 95% capcacity. Mine was overbooked, and people were already being rolled over to Saturday. Then a storm West of us meant forty planes could not take off, leading to an epic backup of flights that meant we sat on the plane for more than four hours. (Per the FAA rules, we went back to the gate at three hours, but I didn't get off the plane. I was basically staging a sit-in until I got to San Francisco.) 

In case you've never been pregnant, let me tell you-- 4+ hours with no water in an upright coach seat isn't a good idea. I landed at 4 am dehydrated and with about ten pounds of extra fluid in my legs, but thankfully no blood clot.

None of this has to do with Reid Hoffman. But the general insanity of the last week explains why I'm only now linking to this TechCrunch story I wrote on him on the eve of LinkedIn's rocket-ship IPO. If you haven't read it, you should. Not because I wrote it, but because the insanity of LinkedIn's stock has twisted the mass-media story into something about greed and capitalism and OMG! ANOTHER BUBBLE! Unfortunately, that obscures the core of who Hoffman is as an entrepreneur and what made LinkedIn so successful. 

I have followed LinkedIn since I was an unknown reporter at the San Jose Business Journal-- nearly ten years ago. I've written magazine stories, blog posts, books and done video interviews about LinkedIn and Reid as my career has twisted and turned since then, and LinkedIn's future has slowly but steadily mapped up and to the right. 

I won't pretend I'm totally impartial here: Hoffman is one of the more generous, good-hearted people I've met in my 15 year career interviewing entreprenuers aorund the world. It's almost impossible not to like him. But what's important about Hoffman is that he's also incredibly good at what he does. I argue in the TechCrunch piece that he should be the model for wide-eyed entrepreneurs looking to the Valley for role models, not Mark Zuckerberg. 

I didn't mean this as a knock on Zuckerberg at all. He's one of the most impressive founders I've ever met. But Facebook is a once-a-decade phenomenon. You are likely not a Mark Zuckerberg. But with hard work, talent, dedication, and vision, you could be a Reid Hoffman. 

And certainly no one should emulate the phony Mark Zuckerberg that Ben Mezrich and Aaron Sorkin invented to enrich themselves. Just after "The Social Network" came out, I had lunch with Valley entrepreneur and angel investor Shervin Pishevar and we were talking about the movie's potential impact. He said he was worried that a generation of kids would watch the movie and think that's Silicon Valley-- the same reason a generation of douche bags went into finance after watching Wall Street-- a movie that was supposed to be warning America about glorifying greed. 

I was reminded of this conversation at Disrupt earlier this week. I don't want to get into the details (again) but a company named Lumier was set to demo. Instead, a guy who looked to be clearly mimicking the Sorkin version of Zuckerberg got up, bragged about his role in the Windows ecosystem (who knew people bragged about that?), demoed little more than an animation he was proud of, and essentially told the panel of esteemed judges, the audience that had paid thousands of dollars to be there, and a room of startup hopefuls who didn't get the opportunity to launch their companies on stage, that "that should be enough" for us. 

The way he spoke sounded a lot like Zuckerberg from the movie, which I chalked up to a coincidence. But several people who've worked with him before have since emailed me to say he never talks like that normally, and it was as if he was affecting an accent. 

I have no idea if that's true. I've never met him before, and have no desire to talk to him ever again. But I do know this: This kid gained nothing but contempt for his performance. No one thought he was badass. You know what made the real life Zuckerberg badass? BUILDING A HUGE $50-BILLION COMPANY.

I first met Zuckerberg when he was 19, and he was a bit of a punk. (Still nothing like the movie's depiction, by the way.) But tellingly, no one was feting him then. It was only when he rapidly grew out of that bratty mid-college phase, surrounding himself with people he could learn from, and conciously working to become a better person that Facebook became the phenomenon it is today and Zuckerberg became the person that would-be entrepreneurs aspire to be. The person who was worthy of a film. Too bad one wasn't actually made about him.

So to sum up: You probably aren't the next Mark Zuckerberg. But if you're going to try to be anyway, pick the right one to emulate. You know, the actual one

OK, There's Stuff I Love about the Valley Too...

If you read this blog regularly you probably know all the reasons I love traveling to emerging markets, landing in a new place knowing no one and spending a few weeks digging around, finding some of the greatest entrepreneurs the world has ever heard of.

So you might be wondering how my adjustment back to life as a reporter in Silicon Valley has gone. It's hasn't all been easy. One morning I was fresh back from a particularly inspiring trip to Brazil trying to stretch a coffee-bandaid over my jetlag headache, when I overheard two people in a heated argument. The great debate: Whether or not Farmville was the most important development of our lifetimes. These were professional adults working for startups. I was drained, exhausted and my bank account was running on fumes, but I almost hopped another plane that day.

There's an element of entrepreneurship in the Valley that's about flips and cash outs and playing a game that doesn't interest me. But the longer I've been back, I've been reminded of the things that I love about the Valley, the things that make me never want to leave permanently, and the reason that the Valley will always be an important hub for technology and venture captial no matter where the bulk of economic growth is happening. It's the deeply engtangled, intertwined community of people doing something real. To wit: I just wrote this story for TechCrunch about "mafias," specifically Facebook's surprisingly strong one that's behind some of the more exciting companies in the Valley right now.

This was not a typical blog post. I spent several weeks reporting in and about three days writing it.I hope I'm able to do more stories like this. Like being back in the Valley, being a full-time blogger has been a challenge too. I'm trying to find a way to report the way I have in a lower-volume, old media world and still produce enough content to be relevant for this platform. But after spending two years consumed in one project, it's a nice new challenge.

Life in London: Does Fun Have an ROI?

I did very little blogging while I was in London, but it wasn't because I didn’t find anything interesting to write about. It’s because I was talking, laughing, eating or drinking nearly every moment of my two-week trip. I proudly announced to my husband that I hadn’t taken a single Ambien during the visit. Unfortunately, it wasn't because of some no-jet-lag magic, it was because I only got about two hours of sleep a night.

Every time I visit London I find a city with zero downtime filled with entrepreneurs, investors and the like who are offering to take me for afternoon tea or a drink to talk about the industry or well, just talk into wee hours of the morning. One Oli Barrett even serenaded me with several songs from Mary Poppins and Chitty Chitty Bang Bang late after the TechCrunch Europa awards. After all, that’s how we Americans all think the British talk, right? That’s pretty accommodating stuff.

And look no further than these pictures to see how much fun Scoble was having. Even Last.fm had a sense of humor when a TechCrunch editor stormed their offices somewhat unannounced. (Michael Arrington? Less of a sense of humor about that post. Sorry, Mike.) People are intense about their companies, but there’s a sense in the UK that it’s not the only thing that matters.

The joviality is all the more surprising given the rough times UK start-ups are having, as I detailed today on TechCrunch. Money available for early stage start-ups is perilously low and good many entrepreneurs I know have already closed their companies or sold them on the cheap. But here they are all still hanging out, supporting one another, having wild parties and enjoying life. It’s as if (gasp!) the world doesn’t revolve around the Internet.

As a business reporter, I’m of two minds on whether this is a good thing or a bad thing. I’m a big believer that there’s no such thing as work-life balance when it comes to start-ups—a view that frequently gets me in trouble especially when I’m talking about why there aren’t more women in the business. But sometimes the Valley takes the macho-look-at-me-working-24-hrs-a-day thing too far. Startup or no, I’m not sure I know anyone who works just 40 hours a week here, and I know I don’t know anyone who isn’t checking their email every minute of the day. The debate about whether that’s healthy is one thing—but does it actually make us more successful?

Typhoid Sarah

It's another one of those up-early-because-I-can't-sleep-but-yay!-the-house-is- quiet-enough-to-blog mornings. The reason I'm up too early is because I was horribly ill last night from taking the pill form of the Typhoid vaccine. I'd felt so bad-ass that I'd found a way to avoid the Typhoid shot several days ago. Now, I'm dreading the fact that I have three more to take this week and wondering if the shot might have been a better option. Hint: When they say drink several large glasses of water; they mean it. Every bit of moisture seems to be sapped from my body. I can barely even blink without my eyelids sticking! (TMI?)

All the vaccines signify a change in my travel plans for 2009. While I'm having to be coy on exactly what they are, let's say there's a significant project or two brewing that's going to involve some extended international travel. While some of the projects are new, the growing obsession with studying entrepreneurship around the world isn't.

I grew up in a family of seven with parents who are teachers; we had no money for international travel. When I got my first reporter job for $21,000 a year-- I wasn't exactly flush with funds either. More than ten years of being a beat reporter with two weeks vacation hasn't helped matters. So ever since I quit BusinessWeek to write my book, I've been making up for all that lost travel time. Last year, I went to Israel, Cannes, London (twice) and Mexico, but the bulk of my traveling was my 15-city-book tour.

That book tour was amazing, but exhausting. Part of what made it so exhausting was that I was wedging tons of small trips into my already packed schedule. So I'd wake up at 5 a.m., go shoot at Yahoo all day, hop on a plane to, say, Omaha, go to a late night tweet up, get up for a few more events the next day, stay out talking to entrepreneurs until 2 a.m., wake up at 4 a.m. for a flight home, write a BusinessWeek column on the plane, then race into Yahoo to shoot more. I'm not exaggerating.

So this year, as my job switches from book promotion back to reporting, my new travel plan is focus, especially because most of my travel is self-funded. I am only doing two types of trips: Ones where there is a very specific reporting ROI-- where I am following a specific, amazing story that has not been written-- or ones with a more literal ROI-- ie, where I'm getting paid to speak to support the former travel.

This means, I'm cutting out most conferences. It's a hard call, because conferences are fun. I'm sad watching via Twitter right now as all my friends arrive in Munich for DLD while I suffer through mini-Typhoid fever on my couch. But I can't be on the road as much as I was in 2008, for the sake of sanity, health, my marriage and my work and that means something has to go. And if I study my travel in 2008, I got way more out of trips where I filled my time meeting with new people without all the distraction and noise of a conference around us. Conferences are great for connecting with people and deepening relationships with people I already know. But increasingly I don't meet a lot of great new sources at them, and I don't get great new stories ideas. By definition, being at an event with a hundred other reporters keeps you in the echo-chamber.

That was the reason I reluctantly skipped Le Web in December. And why I'm on my couch, not in Munich right now. It also means I won't be attending SXSW; I'll be in another country instead. If you read my BusinessWeek columns you know I never attend Ted, and this year is no different. I will still attend AllThingsD and The Lobby (assuming there is a third Lobby), but those are two of the only ones set in stone on my calendar.

So you won't be getting conference circuit news, fun videos and photos here in 2009. But you will (eventually) get genuinely new and different stories that could never come out of a conference. Some of those will appear on the blog, some may appear in my BusinessWeek column, and some you won't read about for quite a while. But I'm pretty sure you also won't read about them anywhere else. And that sort of makes the Typhoid stomach-ache worthwhile.

We've Been in Idiot Land a While Now, Scoble. Get Comfortable.

Robert Scoble has a heartfelt post today that sums up his frustration with noise becoming more important than substance. Well, welcome to journalism in the Internet age. Actually, welcome to journalism period. It's just more pronounced in an age when we can measure how stories do and tend to place value on them solely for that reason. And it's in no way limited to Tech. If it were, CNN wouldn't be reporting on Paris Hilton.

This was a huge personal frustration when I was at BusinessWeek covering startups before they were hot again and important, but unsexy, technology trends like open source software. I would spend months breaking a story with huge impact, only to be dwarfed by traffic for a story that just rehashed the latest Apple rumor. To BusinessWeek's great credit, they still run those unsexy stories prominently, because the BusinessWeek brand of delivering all the news business people need is just as important as sheer page views. (Ahem, they also renewed my columnist contract for another year. Thanks, John Byrne!)

But is this the same in the blog world? Where the whole business is predicated on page views?

'Tis the Season of Disasterous Unintended Consequences

As I've said before, I'm starting to get irrationally freaked about the downturn and just how much worse 2009 could get. But my fears of every employer of ours going insolvent, and Mr. Lacy and I ending up in the poor house are-- by any stretch-- a long shot. Even the worst case scenario is likely some belt tightening, which we've done before and can do again. (Tip: Short Diane Von Furstenberg if this occurs.)

But there is something else I'm very scared about, and it's all too rational: Unintended consequences of government intervention. The TARP bailout was merely the beginning to a drunken spree of spending, regulation and scapegoats that'll continue at least through first quarter of 2009, and I'm betting even longer. It's a mad-dash to soothe the stock market, which is irrational at best. And you know what happens in mad-dashes? People fall and trip on scissors.

First, consider, a cautionary tale from the last bust: Here's a great piece in the Wall Street Journal by Mike Malone, one of my very favorite authors. (In fact, Infinite Loop is the best book written on Apple IMHO. Not too late to get one for your favorite fan boy for Christmas....) Malone's piece echoes several of the "Nontrepreneur" chapter in my book, and a good many columns I've written about the very real problems venture capitalists are facing, although I tend to point the finger at Wall Street more than Washington. As usual, Malone makes his points in elegant style.

And now a cautionary tale for 2009. Paul "It's only fairly apocalyptic" Kedrosky likes to come up with doomsday scenarios, and sadly in 2008 a lot of them were right on. But this situation he describes in our video below is one of the scariest. (Hint: ZOMBIES!)

This is what happens when we slap-dash regulations and bailouts to pacify voters and mob-investors. I don't know a single expert, journalist, commentator or luminary that said the bailout plan was well thought out. But at the same time there was high-pitched screeching when it wasn't immediately passed. This is just one unintended consequence of the "YOU HAVE TO DO SOMETHING!" school of governance. Do you know how many we haven't even seen yet?

I started my career covering regional banks and you can't overestimate how much the fabric of America is woven into them. The U.S. Government certainly can't afford to bail them all out. Already we're stretched so thin, China is downgrading our credit rating for the first time.

I know, I know, not exactly happy Christmas wishes. The above video is far more suited for Halloween.

Controversy at Le Web? Sacre Bleu!

I had to skip this year's Le Web conference, and I have to say, as much as I enjoyed it last year, on Monday I was so happy not to be jet lagged (again) and cold. (Well, colder than it is in my non-heated house. Brrrrrrr!)


Of course, when I travel to conferences I never get the posh treatment of Michael Arrington, who has apparently picked a fight with Loic about American vs. European entrepreneurs. Loic answers back here. As someone who has gone on four trips to Europe in the last year and has met with hundreds of entrepreneurs, here are my thoughts.

First, Loic is right when he says at the end of the post that this is no longer an interesting or meaningful debate. That said, like it or not, we'll keep having it because of the stark and honest reality that Michael describes:

"...the joy of life is great, but all these two hour lunches over a bottle or two of great wine and general unwillingness to do whatever it takes to compete and win is the reason why all the big public Internet companies are U.S. based. And those European startups that do manage to break through cultural and tax hurdles and find success are quickly gobbled up by those U.S. companies. Skype (acquired by eBay) and MySQL (acquired by Sun) are recent examples.

The crowd jeered but the stark reality of it all is unavoidable. And the fact that the panelists on stage, all either American or living in America, suggested that you can somehow succeed with a startup while maintaining a healthy work-life balance is unfortunate. Too many people choose to be entrepreneurs as a lifestyle, without realizing that it takes everything you have and more to win. And if you aren’t in it to win, why not just take that nice job down the street that gives you five weeks of vacation."

2108970601_d1637211cb I couldn't agree with Michael more. I think we're going to see entrepreneurship explode globally over the next decade; but as of now, there are very, very, very few examples of startups that have become billion dollar, stand-alone companies that are not at least headquartered in the Valley. So as a result, sharp entrepreneurs around the world who I've met want to know what the Valley does well. And what the Valley does well is tireless work. During several of my book tour stops in the Midwest and the South I was asked if you could have a family and be an entrepreneur. You can. But not if you are trying to build the next Google or Facebook. There is no work life balance at that level. Again, know the game you are playing.

That said, I am not sure what Silicon Valley Loic is living in when he writes this:

"There is a huge difference between being lazy and taking time to know each other. It is one of the main cultural differences I feel everyday as I moved to Silicon Valley: every minute, every coffee, every phone call must have a point. When you call someone in Silicon Valley for anything you will likely get "why are you calling me?" ...

...Don't even think about starting a conversation in Silicon Valley by "how was your week-end" or "how are your kids", they all want you to go straight to the point and no time to lose. I never thought inviting someone I really liked to know better to dinner would get me an email from his assistant "why would you like to invite him to dinner?". I do not think europeans are lazy taking the time to know each other and build deep long term friendships that are not limited to business and I do not think this hurts Europe in any way. On the contrary."

As hard as we all work, this is in no way my experience. Everyday I IM, email or have calls with people that all start out with us chatting about our personal lives. In fact, my favorite conference, the Lobby, is entirely centered around that, which is a big reason most of the attendees bring their families. Several times a week I have long meandering dinners with entrepreneurs and investors where we talk about everything from entrepreneurship to family life to politics to tech and, yes, business. This is why I love living in the Valley. I'm rarely bored in a conversation.

The most extreme example was the research for my book. Incredibly busy entrepreneurs at the most crucial stages of building their companies took hours at a time to talk to me about life and work, repeatedly over more than a year's time. I was never asked what they'd be getting out of it. In fact, a lot of people have asked me why they gave up so much time, and I never have a great answer, because I never once had to have that conversation. So I asked Max Levchin that at the Churchill Club event we did. He looked a little stumped, as though he'd never really thought about it that way either, and said that he just thought telling the whole story of the Internet from the bust through this generation of companies and doing it right was somehow important.

Perhaps Loic just needs new friends in the Valley? ;)

[PHOTOS: Me interviewing Kevin Rose on stage at Le Web last year by Adam Tinworth. Me laughing it up with Le Web's incredibly talented content creator Cathy Brooks after one of those amazing French dinners. Doc Searls took a zillion photos that night of Mr. Lacy and me, Evan and Sara Williams, Jason Calacanis, Jeff Pulver, Pistachio and others chilling in the hotel lobby. If Loic was right...would all those people have flown to Paris just to hang out?]


Boulder: A Redemption Post

Yeah, so yesterday's trek to Boulder could have been a recipe for disaster:

-Waking up at 4:30 am for an early morning flight (woof)
- Wandering aimlessly around the confusing Denver airport (two levels and four "islands" for passenger pick-up? seriously?)
- Walking in circles for 30 minutes in search of a burger joint. That was 300 feet away (left means right at 5400 feet apparently)
- Waiting on the street corner like idiots for a taxi cab that was dispatched to Denver by mistake (and accidentally clotheslining a monk with a heavy bag of books...yay karma)

Mix in some preconceived notions (which Sarah touched on here) and things were not looking so good. That is, until Matt Galligan changed our minds and stepped up to bat for a little one on one with the Sarahcuda (video after the jump)

Pssst. Hello, It's Boulder Calling. Just Don't Tell Anyone.

OK. Boulder. What a roller coaster!

Let's set aside the lack of sleep, charmingly odd doll house we stayed in, and continuation of bizarre UGBT cab drivers for a minute. As I've said, it was our last stop on the whirlwind, and honestly career-changing, User Generated Book Tour.   I already had mixed feelings about it coming to a close, but I'll save all that for another post. And as we've detailed even more I was getting a less-than enthusiastic response to my impending arrival. Still, I knew there was something in Boulder. And I was right.

Here's the thing. Boulder has a ton to offer. The companies that presented at New Tech were pretty amazing, and the people we hung out with where smart, confident, collegial and surprisingly effortless to be around. They just, um, don't want anyone to know?

This is what puzzles me about Boulder. It's a very, very tight-knit community. While entrepreneurs from London, D.C., Memphis, Los Angeles and several other cities have complained that it is hard to develop a regular startup "crew" because the cities were so spread apart geographically, Boulder is only a cuddly 100,000 people or so. There are twice as many bikes as people, so either people have calves of steel or everyone is just a quick cycle away. The New Tech event itself was like a more earth-conscious, savvy version of a Town Hall meeting in Stars Hollow. There was something so genuine and non-poser about it. It was unlike another one I've seen.

But for whatever reason, there's a general desire to protect that unique vibe by fencing out everyone else. More on this in the next post, which features a point-counterpoint between Matt Galligan of Social Thing/AOL and me, so I won't belabor my thoughts now.

But while my gut still tells me that kind of thinking inherently limits companies in Boulder, I love that the scene is its own animal and it feels utterly different than any other stop on the tour. As I've written throughout the tour, the single most important thing is that cities play to their own strengths. In Boulder, a core strength is clearly this community, cooperative vibe. After all, one of the biggest entrepreneur success stories is Celestial Seasonings-- right down to the early days when town's folk helped the founder pick herbs from around the town to go in our teas. (Which I'm inhaling as I write, thanks to a nasty cold.)

I'll be interested to see what develops out of Boulder over the next few years. Hopefully, some new hot shot will actually return a Silicon Valley call...

Now to that dollhouse...this video was shot before our pleasant surprise of an evening, hence the apprehension. (and Olivia's hair in progress)

Boulder of Love? from sarah lacy on Vimeo.
Part insightful analysis of what ails Silicon Valley and part madcap journey to far flung hubs of aspiration and innovation, Sarah Lacy takes us around the world in 180 pages to find the fascinating people who are creating the new wealth in a new world of start ups and ventures that America ought to be paying a lot more attention to.
Brilliant. Crazy. Cocky.

New Book

An unforgettable portrait of the emerging world's entrepreneurial dynamos Brilliant, Crazy, Cocky is the story about that top 1% of people who do more to change their worlds through greed and ambition than politicians, NGOs and nonprofits ever can. This new breed of self-starter is taking local turmoil and turning it into opportunities, making millions, creating thousands of jobs and changing the face of modern entrepreneurship at the same time. To tell this story, Lacy spent forty weeks traveling through Asia, South America and Africa hunting down the most impressive up-and-comers the developed world has never heard of....yet.

Excerpt »

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Srah Lacy

Sarah Lacy is an award-winning reporter who has covered high-growth entrepreneurship for more than fifteen years. She is the founder, CEO and Editor-in-Chief of PandoDaily.com, the site-of-record for the startup ecosystem. She lives in San Francisco.

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