In a recent post on his new blog, Mazen Araabi an analyst with First Round Capital who were investors in StumbleUpon and who was part of the founding team at MySpace, talks about " the most common mistake entrepreneurs make is wanting to start a company rather than wanting to solve a problem."
I think that is the trouble with the MBA, or MBA wannabee, entrepreneurs but not the technical entrepreneur. The engineer, scientist, or mechanic has a different, but probably equally common mistake: they try to sell a product without properly forming the company. That is, they have a great widget and they think it will sell itself.
I think these are two sides of the same coin. What is needed is to have both sides together. That is, a technical person with a solution and a company builder who knows how to build a business.
Mazen also quotes Vinod Khosla, "No Problem, No Solution, No Company" which reminded me of the 3 C's from my presentation has been on YouTube for a few weeks (click the image if you have 4.2 minutes). The 3 C's are "No Competition = No Customers = No Concept" In other words:
If what you have is so original that there is nothing that competes with it, then why would anyone want one? More over, if you think there is nothing that competes with it, then you are so wrong that you are probably wrong about a lot of other things and you will fail. Finally, if there are no customers, then you have no reason to build a company.
This is not to say that there are no inventions that are so spectacular that they stepover existing products. This means that you will compete for time, money, or attention with different, but existing things. Football is a different sport but it still competes with Baseball for the time, money and attention of sports fans. Cars replaced horses, they did not begin the idea of transportation. People had their clothes made by hand before ready-to-wear. Before there was the Internet people sent mail using paper. Yes, even email had competition. It was not much to some people, and there are still people who do not use email.
What do you think is the greatest mistake most entrepreneurs make?
Is Mazen right? (He is a VC analyst, MBA from UCLA and MySpace legacy member.)
Am I right? (Caltech PhD, 4 Start-ups, Author "Maps for Modern Magellans"...this is my blog...)
Is Vinod right? (Stanford Faculty - not bad credentials)
What is the greatest mistake? (Picking a fight with these guys???)
(Matt, from MyPunchbowl did.)
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