For the past few years now, I think we’ve all seen this “explosion” of start-ups, and the corresponding ‘hip-ness’ associated with either founding a start-up, or working for one. I would be the first to say that innovation, building something of value, and all the rest that comes along with creating a successful company from nothing is amazing. However, I think our generation has gone way overboard with this concept to the point where people give up great opportunities just because they don’t have the term “start-up” associated with them. But let’s face it guys, it takes more than great food to build a sustainable restaurant – meaning, it takes more than a great idea to build a sustainable company, especially in today’s global economy where you have people around the world who can hire programmers at $5/hour working round-the-clock to leverage the web. In other words, it takes a great idea, the right management team, significant capital, and last but not least, a lot of luck to build a sustainable start-up. If playing in the NBA is a one-in-a-million shot, creating the next Facebook is a one-in-a-billion shot. That’s not to say I’m a pessimist, but I am a realist. I see ‘kids’ left-and-right, leaving perfectly good “foundational” jobs to go work for these companies that might have gotten Series A VC financing and that is their justification for sustainability. Do you know how many companies Sequoia Capital, Kleiner Perkins, or Benchmark have funded with Series A that have never amounted to anything? Too many. But, I think that is where the disconnect is. These VC firms have so much money and such a wide breadth of all things tech these days, that it’s not a big deal to throw around money with the hopes that the company they are funding becomes the next Google or LinkedIn or Paypal.
But, I do believe that a lot of this has to do with the generational landscape. People want to be their own bosses and they want to come to work in jeans and play XBox during lunch. I think that’s great, but not at the sacrifice of learning “foundational” job skill-sets. When the music stops, and it will for many start-ups, these people are going to face the harsh reality of the real workforce – one that pays salaries and not stock options. I believe that the amount of efficiencies that our economy is currently losing by our youngest talent competing against one another in this “start-up” war is very unfortunate. Think about how much value could be added to established companies with all of that creativity and brainpower. The biggest misconception of our time is that innovation can only happen on Sandhill road. That couldn’t be further from the truth. Just last week, I read about a girl who has brought Web 2.0 to American Express leveraging FourSquare and the like with amazing financial results. A company like AMEX is not exactly xyz startup, but this girl is changing the landscape of that organization by leveraging the “one-in-a-billions”. I truly hope more young bright-eyed MBA students see opportunities to innovate within companies like Nike, AMEX, P&G, Gap, etc., rather than choose the path of trying to be the next ’one-in-a-billion.’ It’s better for them and it’s better for us.