The Dangers of a Startup

One of my most favorite magazines is Inc. It is a publication targeted primarily at small business owners and entrepreneurs and they do an outstanding job of mixing articles about people that are Silicon Valley business owners like Mark Zuckerberg and others with traditional business owners like Bobbi Brown of Bobbi Brown Cosmetics and Norm Brodsky who has owned a litany of service businesses in the past. The most recent issue of Inc. featured the co-founder of PayPal, Elon Musk who you might also know from the Tesla Roadster, Solar City, and SpaceX. Elon goes on and on about his current endeavors and how they are bound to change the world but the one part of the article that caught my eye was the section on how his very first startup company lost all control after the first round of venture capital.

Whoa! This wasn't what I had envisioned going on in Silicon Valley! I thought it was all ideas and money being bandied about on a daily basis. Meetings over Starbucks and offices full of beanbags. I never envisioned that the business side of technology companies would get in the way of groundbreaking work. Apparently that is the case when Elon had the brilliant idea to match up one company's maps that he published online and combine it with a standard telephone directory. What was going to be a brilliant platform for selling advertising turned into software for newspapers that never got off the ground. What happened? Why did the vision get lost?

It came down to something as simple as losing control. Once the venture capital came in the man who came up with the original idea and software only owned about 7% of the company when it was all said and done. The same thing happened to Friendster when it was finally getting big the main focus was lost by the "responsible adults" who came in to manage all of the VC money. What does this teach us about tech? It isn't all fun and happy times running around with millions of dollars and changing the world, unfortunately. There is still a very serious business side that must be tended to so if you are a tech major with a great idea, might I suggest a minor in business?