Startups + Incubators03.15.11
In the past week or so, two startups that I'm friendly with asked me what I thought about the various incubators out there and if they should do one. Just to set context -- both are run by first-time entrepreneurs and both sets of founders are still in school (one is by UChicago guys, the other by Harvard guys -- both teams are primarily CS talent).
My response is that with anything, I think one wants to go somewhere where the extraordinary is ordinary.
Right now, I'm in post-production on my documentary. My editor has edited films for PBS: POV, National Geographic, feature releases, etc. I don't know the sum total of films he's edited, but let's say it's 6. Then I'm documentary #7 for him. That's all. I'm not special. This is good. That means when we talk about docs -- he has a wealth of knowledge to draw upon (not to mention all the resources in the doc community as well) and he has reasoned and well informed opinions.
I think this is the same with startups. It's kind of madness with a startup. There's too much to do, but of greater difficulty, there's too much to learn. Here's what easily could happen in a typical day for a startup: conduct design review, decide on actors for promotional video, make board presentation, create pitch deck for investors, interview engineering candidate, find larger office space, have compensation discussion with disgruntled employee, trouble shoot recent marketing candidate -- and the list goes on and on. My point here is that there's a lot of things that happen with a startup and the domain knowledge will (especially for a first-time entrepreneur) will likely best reside elsewhere -- or at the minimum, there's great value in leveraging other people's experience and expertise. It's also not all glamorous -- strategy and raising money and blah blah blah -- if you have a bad landlord, it's gold to be able to talk to someone who has been there before and has thoughts on how to resolve that situation.
Here's another reason why it's really valuable and this ties back to my story about my documentary. If you go pitch a venture capitalist and he's really crappy to you -- maybe if you've never done this before, you're going to feel bad. It might derail your day or make you lose some small amount of confidence in yourself or your company. Or maybe it might make you react in a certain way that you start changing your strategy. What's important here is that this should be ordinary. Talk to any entrepreneur and they'll tell you everything across the board about venture capitalists -- the ones that are smart, thoughtful, responsive, and add a lot of value to the ones who are boorish, rude, have no technical ability, and only offer to invest once they hear of interest from others. But an entrepreneur who has been through this before knows this. In an environment where you know other entrepreneurs -- this bad meeting = a phone call to a friend where you go, "Hey -- you ever meet with so and so? What'd you think?" or "Hey -- I just had this meeting and such and such happened. Anything like that happen to you before?" It helps contextualize and frame those types of meeting so that the most value (to you and the company) can be gleamed from it.
I don't really know enough about the individual incubators out there to have a great opinion on one vs. the other. I will say this though -- I think the value of being an incubator can be quite high for all the reasons I mentioned. However, I think the big caveat is to choose wisely. It's all about alignment. You're interacting with not just other startups, but the folks that run those incubators. I think it's critical to have shared values and a similar perspective on the world. For example, how product development is done at Microsoft is very different than how it is done at Google. So, hypothetically, looking at an incubator run by ex-Microsoft people vs. one run by ex-Google people -- I think it would be false to merely say, "Well, both have their pros and cons." One is likely going to be a stronger fit for your startup -- in terms of the type of work you do + the type of people you are + the way you view business and the world.
I'm going to close this post with one more story. I'm accidentally a magician. I started taking magic classes because after moving to L.A., I googled "top things to do in L.A." and discovered this place called the Magic Castle where Mark Wilson taught magic. I bought his book when I was a kid and even though I never really broke it open, I knew who he was and had some idea how big he was in the magic community. To me, this was like taking boxing classes from Mike Tyson -- hard to turn down.
Over time, I've gotten to know a lot of professional magicians, many of them award winners. To them, magic is magic. It's work, it's interesting, it's awesome, but it's their life and in some ways, it's very ordinary. I wouldn't describe myself as a professional magician -- but I have performed professionally (most recently at a Children's Hospital L.A. event) and I perform informally at the Magic Castle. I don't say this on any level to brag about my skill as a magician. I know how deeply deficient I am in skill and knowledge and how far I have to go to get to where I'd like to be. However, I say this because in a relatively short period of time, I have acquired enough skill to perform at the level I perform at now and it's not because I'm inherently good. It's because I aligned myself in the right community with the right mentors.
So I think it's the same with startups. Alignment with people where these issues are not big issues -- they're just problems to be solved with similar experiences they've had in the past. The highs aren't too high and the lows aren't too low because there's a deep well of experience to draw upon. Whether it's an incubator or something else -- I think it's that alignment that gives great chance at success in any endeavor.