Top ten geek business myths
Since I've started my new career as a venture capitalist I have become keenly aware of some of the classic mistakes that geeks make when trying to raise money for a new business. Instead of writing the same comments over and over again I thought I'd try to summarize some of the mistakes that people -- especially smart people -- make when they decide to try to turn their bright ideas into money. Here then is my top-ten list of geek business myths:
Myth #1: A brilliant idea will make you rich.
Reality: A brilliant idea is neither necessary nor sufficient for a successful business, although all else being equal it can't hurt. Microsoft is probably the canonical example of a successful business, and it has never had a single brilliant idea in its entire history. (To the contrary, Microsoft has achieved success largely by seeking out and destroying other people's brilliant ideas.) Google was based on a couple of brilliant ideas (Page rank, text-only ads, massive parallel implementation on cheap hardware) but none of those ideas were original with Larry or Sergey. This is not to say that Larry, Sergey and Bill are not bright guys -- all three of them are sharper than I can ever hope to be. But the idea that any of them woke up one day with an inspiration and coasted the rest of the way to riches is a myth.
Myth #2: If you build it they will come.
There is a grain of truth to this myth. There have been examples of businesses that just built a product, cast it upon the ether(net), and achieved success. (Google is the canonical example.) But for every Google there are ten examples of companies that had killer products that didn't sell for one reason or another. My favorite example of this is the first company I tried to start back in 1993. It was called FlowNet, and it was a new design for a high speed local area network. It ran at 500Mb/s in a time when 10 Mb/s ethernet was the norm. For more than five years, FlowNet had the best price/performance ratio of any available network. On top of that, FlowNet had built-in quality-of-service guarantees for streaming video. If FlowNet had taken over the world your streaming video would be working a lot better today than it does.
But despite the fact that on a technical level FlowNet blew everything else out of the water it was an abysmal failure as a business. We never sold a single unit. The full story of why FlowNet failed would take me far afield, but if I had to sum it up in a nutshell the reason it didn't sell was very simple: it wasn't Ethernet. And if we'd done our homework and market research we could have known that this would be, if not a show-stopper at least a significant obstacle. And we would have known it before we spent tens of thousands of dollars of our own money on patent attorneys and prototypes.
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Myth #3: Someone will steal your idea if you don't protect it.
Reality: No one gives a damn about your idea until you actually succeed and by then it's too late. Even on the off chance that you do manage to stumble across someone who is as excited about your idea as you are, if they have any brains they will join you rather than try to beat you. (And if they don't have any brains then it doesn't matter what they do.)
Patent protection does serve one useful purpose: it can make investors feel warm and fuzzy, especially naive investors. But I strongly recommend that you do your own patent filings. It's not hard to do once you learn how (get the Nolo Press book "Patent it Yourself"). You'll do a better job than most patent attorneys and save yourself a lot of money.
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Myth #4: What you think matters.
Reality: It matters not one whit that you and all your buddies think that your idea is the greatest thing since sliced pizza (unless, of course, your buddies are rich enough to be the customer base for your business). What matters is what your customers think. It is natural to assume that if you and your buddies think your idea is cool that millions of other people out there will think it's cool too, and sometimes it works out that way, but usually not. The reason is that if you are smart enough to have a brilliant idea then you (and most likely your buddies) are different from everyone else. I don't mean to sound condescending here, but the sad fact of the matter is that compared to you, most people are pretty dumb (look at how many people vote Republican ;-) and they care about dumb things. (I just heard about a new clothing store in Pasadena that has lines around the block. A clothing store!) If you cater only to people who care about the things that you care about then your customer base will be pretty small.
Myth #5: Financial models are bogus.
As with myth #2 there is a grain of truth here. As Carl Sagan was fond of saying, prophecy is a lost art. There is no way to know for sure how much money your business is going to make, or how much it will cost to get to market. The reason for doing financial models is to do a reality check and convince yourself that making a return on investment is even a plausible possibility. If you run the numbers and find out that in order to reach break-even you need a customer base that is ten times larger than the currently known market for your product then you should probably rethink things. As Dwight Eisenhower said: plans are useless, but planning is indispensible.
This myth is the basis for one of the most classic mistakes that geeks make when pitching their ideas. They will say things like "Even if we only capture 1% of the market we'll make big bucks." Statements like that are a dead giveaway that you haven't done your homework to find out what your customers actually want. You may as well say: there's a good chance that only 1 customer in 100 will buy our product (and frankly, we're not even sure about that). Doesn't exactly inspire confidence.
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Myth #6: What you know matters more than who you know.
Reality: You've been in denial about this your whole life. You were either brought up to believe that being smart mattered, or you just didn't believe your mother when she told you that getting along with the other kids was more important than getting straight A's.
The truth is, who you know matters more than what you know. This is not to say that being smart and knowledgable is useless. Knowing "what" is often an effective means of getting introduced to the right "whos". But ultimately, the people you know and trust (and more importantly who trust you) matter more than the factual knowledge you may have at your immediate disposal. And there is a sound reason for this: business decisions are horrifically complicated. No one person can possibly amass all the knowledge and experience required to make a broad range of such decisions on their own, so effective business people delegate much of their decision-making to other people. And when they choose who to delegate to, their first pick is always people they know and trust.
Myth #7: A Ph.D. means something.
Reality: The only thing a Ph.D. means is that you're not a moron, and you're willing to put up with the bullshit it takes to slog your way through a Ph.D. program somewhere. Empirically, having a Ph.D. is negatively correlated with business success. This is because the reward structure in academia is almost the exact opposite of what it is in business. In academia, what your peers think matters. In business, it's what your customers think that matters, and your customers are (almost certainly) not your peers.
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Myth #8: I need $5 million to start my business
Reality: Unless you're building hardware (in which case you should definitely rethink what you're doing) you most likely don't need any startup capital at all. Paul Graham has written extensively about this so I won't belabor it too much, except to say this: you don't need much startup capital, but what you do need is a willingness to work your buns off. You have to bring your brilliant idea to fruition yourself; no one else will do it for you, and no one will give you the money to hire someone to do it for you. The reason is very simple: if you don't believe in the commercial potential of your idea enough to give up your evenings and weekends to own a bigger chunk of it, why should anyone else believe in it enough to put their hard-earned money at risk?
Myth #9: Having no competition is a good thing.
Reality: If you have no competition the most likely reason for that is that there's no money to be made. There are six billion people on this planet, and it's very unlikely that every last of them will have left a lucrative market niche completely unexploited.
The good news is that it is very likely that your competition sucks. The vast majority of businesses are not run very well. They make shoddy products. They treat their customers and their employees like shit. It's not hard to find market opportunities where you can go in and kick the competition's ass. You don't want no competition, what you want is bad competition. And there's plenty of that out there.
Myth #10: : After the IPO I'll be happy.
If you don't enjoy the process of starting a business then you will probably not succeed. It's just too much work, and it will suck you dry if you're not having fun doing it. Even if you get filthy stinking rich you will just have more time to look back across the years you wasted being miserable and nursing your acid reflux. The charm of expensive cars and whatnot wears off quickly. There's only one kind of happiness that money can buy, and that is the opportunity to be on the other side of the table when some bright kid comes along with a brilliant idea for a business.
All these myths can be neatly summarized in a pithy slogan: it's the customer, stupid. Success in business is not about having a brilliant idea. Bright ideas are a dime a dozen. Business is about taking a bright idea and assembling a team that can turn that idea into a product and bring that product to customers who want to buy it. It's that simple. And that complicated.
Good luck.
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創(chuàng)業(yè)者們的十大迷思
我最近成了一名風(fēng)險投資人，所以經(jīng)?？梢杂龅揭恍﹦?chuàng)業(yè)者[1]在創(chuàng)業(yè)時常犯的錯誤。為了避免一遍又一遍的重復(fù)說教，我想把這些錯誤在這里做一個總結(jié)：
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迷思一：一個好想法就可以讓你賺大錢
事 實是好想法對于商業(yè)成功既不是充分條件也不是必要條件。微軟應(yīng)該算是獲得商業(yè)成功的典型，但是在它的整個發(fā)家史上卻找不到一個完全獨創(chuàng)的"好想法"。事實 上微軟正式通過模仿對手的想法并在競爭中打敗對手而一步步發(fā)展壯大的。Google確實有一些獨創(chuàng)的，像Page Rank，Ad-words，廉價機器集群等。但是這些沒有一個是由Larry和Sergey想出來的。這并不是說Larry、Sergey和Bill不 夠聰明，實際上他們?nèi)齻€比任何人都要犀利。但如果你認為他們只是有一天突然有了一個靈感接著就發(fā)財了，那只能說你是癡人說夢。
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迷思二：東西做出來自然會有人用
有 時候事實確實如此。Google就是個好例子。但是像Google這樣的公司只是鳳毛麟角，更多的公司生產(chǎn)的產(chǎn)品因為這樣或者那樣的原因賣不出去。我自己 就有這樣的慘痛經(jīng)歷。那是我在1993年創(chuàng)建的第一家公司，名字叫FlowNet。它同時也是一種新的高速局域網(wǎng)通訊設(shè)備的名字。10M的傳輸速度是當時 的標準，但FlowNet提供高達500M的傳輸速度。在后來的五年中FlowNet一直都是擁有最佳性價比的網(wǎng)絡(luò)設(shè)備。它甚至提供了一個內(nèi)建的可保證畫 面質(zhì)量的視頻流媒體服務(wù)。如果FlowNet能夠得以流行全世界，今天的視頻流媒體將比現(xiàn)在的狀況要好得多。
但是盡管FlowNet在技術(shù)層面上 可以打敗任何競爭者，它卻在商業(yè)上遭受了巨大的失敗。我們連一塊也沒有賣出去。原因很簡單：它與局域網(wǎng)標準不兼容。如果當時我們做足功課，做些市場調(diào)查， 我們就會知道兼容性即使不是致命的也將會是個大問題。那樣我們就不會把自己數(shù)以萬計的美元浪費在專利申請和樣片生產(chǎn)上了。
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迷思三：如果你不申請專利，別人會偷走你的想法
事實上沒有人會對你的想法有興趣，除非你的想法被證明是成功的，但那時對于偷學(xué)者為時已晚。即是說真的有人對你的想法非常認同，但是他聰明的話自然會選擇跟你合作，如果不是，他做什么都是威脅不到你的。
有時候?qū)＠€是有點用的：它會讓投資人感覺很保險。但我強烈建議你自己來處理專利申請，通過一些學(xué)習(xí)你可以做得比專利申請代理商做得更好，而且可以節(jié)省一大筆錢。
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迷思四：你的看法很重要
事 實上你和你的合伙人對你們產(chǎn)品的看法沒有任何意義，重要的是客戶會怎么看待你們的產(chǎn)品。我們很自然的會假設(shè)，如果你和你的伙計們都認為你們的產(chǎn)品很好，那 么其他成千上萬的人們也會這樣認為，事情有的時候是這樣，但大多數(shù)的時候不是。原因是你是如此的聰明可以設(shè)計出這么好的產(chǎn)品，那么你跟那些產(chǎn)品的使用者是 不一樣的。相對于你，你的客戶們要更為平庸一些，他們的口味也會更為平庸一些。如果你的產(chǎn)品是為了迎合那些會在乎你自己在乎的那些東西的人的話，你的用戶 群將會非常小。
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迷思五：盈利模式都是假的
就像迷思二一樣，有時候這也是事實。像Carl Sagan常說的"預(yù)言是失敗的藝術(shù)"。你永遠也無法知道你的生意會賺多少錢，也無法知道要花多少錢去占領(lǐng)市場。需要盈利模式的理由是讓你自己做一個全面 的思考，并讓自己確信投資將會得到回報。如果你經(jīng)過計算發(fā)現(xiàn)，即使只是要保持不虧損你的用戶群也必須比現(xiàn)在的市場大十倍，那么你也許就需要重新考慮了。就 像艾森豪威爾說的，計劃一無是處，但作計劃卻不可或缺。
以此為基礎(chǔ)，很多創(chuàng)業(yè)者們都會犯一個典型的錯誤。他們常這樣說"只要我們占有哪怕是1%的 市場份額，我們也會賺大錢"。這樣的說法直接暴露出你沒有仔細的分析過用戶的需求。你也許同樣會說"100個客戶中至少會有一個客戶買我們的東西吧（或者 坦白地說，這一點也不能肯定）"。這樣想根本無法增強自信心。
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迷思六：懂得的知識比認識的人重要
你一直都拒絕否認這一點。從小到大，你都相信聰明比什么都重要，你也不會相信媽媽所說的"學(xué)會與他人相處比學(xué)習(xí)成績更重要"。
事 實是-人際關(guān)系比知識要來的重要。這并不是說聰明、有學(xué)問沒有用。你的學(xué)識一定程度上決定了你會被推薦給"誰"。但最終，你認識并信任，更重要的是信任 你，的人會比你的學(xué)識對你的前程有更大的決定性作用。商業(yè)活動是異常復(fù)雜的。沒有任何一個人有可能具有完成一個商業(yè)決定所需要的所有知識和經(jīng)驗，所以精明 的人們會把他們的權(quán)力下放給其他人。而當他們選擇下放的對象是，首先想到的就是他們認識并信任的人。
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迷思七：博士頭銜很有用
實 際上擁有博士頭銜只能證明你不是低能兒。從我的經(jīng)驗看來，擁有博士頭銜只會對獲得商業(yè)成功產(chǎn)生負面影響。因為在學(xué)業(yè)上獲得成功的方式與在商業(yè)上獲得成功的 方式恰好相反。在學(xué)業(yè)上，你的同僚決定你的成功，在商業(yè)上，你的顧客決定你的成功，而你的顧客，基本上可以肯定的說，不會是你的同僚。
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迷思八：我需要500萬作為啟動資金
事實上除非你是做硬件的，否則你根本就不需要任何的啟動資金。Paul Graham 說過很多關(guān)于這方面的內(nèi)容，我就不展開了，之說幾句：你不需要啟動資金，但你必須愿意自己做。你必須自己實現(xiàn)自己的想法，沒有人會為你去做，也沒有人會出 錢雇人為你去做。原因很簡單：如果你都不愿意為你想法的商業(yè)潛能而放棄你的休息時間，為什么別人要用他們辛苦賺來的錢為此冒險。
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迷思九：沒有競爭對手再好不過
如果你所處的行業(yè)沒有競爭對手，最有可能的理由是，它根本就不能賺錢。這個世界上有60億人口，幾乎完全沒有可能還存在一個沒有任何人發(fā)覺的有利可圖的市場。
最好的消息莫過于你的競爭對手都很菜。絕大部分的公司都運作的不是特別好。他們制作贗品、欺騙顧客、他們的員工都很傻冒。你總是可以很容易的找到市場機會，進入，然后打敗競爭者。你并不想要沒有競爭對手，你想要的是差的競爭對手，放心，他們多得是。
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迷思十：上市會讓我開心
如果創(chuàng)業(yè)的過程讓你厭倦，你大概是不會成功的。它是如此艱難，如果你不能從中找到樂趣，它會讓你筋疲力盡。即使你通過骯臟的交易變得富有，當你回首往事的 時候也只是會惋惜青春的流逝。古董和跑車帶來的快樂是短暫的。只有一種快樂是可以用錢買到的：就是當你作為投資人聽一個小伙子興奮的向你講述他新鮮的商業(yè) 計劃。
所有這些都可以總結(jié)成一句話：重要的是客戶。商業(yè)成功的不只是一個好想法，好想法到處都是。商業(yè)成功是需要有一個好想法、組織一個好團隊、把想法做成好產(chǎn)品、最終把它賣給客戶。很簡單，也很復(fù)雜。
祝你好運！
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[1] 原文中用詞為Geek，一般被翻譯為駭客或者奇客，根據(jù)語言環(huán)境，這里被翻譯為"創(chuàng)業(yè)者"
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