We’re experiencing a new kind of innovation in startups, a revolution that’s already underway. The perfect storm of open source, low capital requirements, and democratized distribution is enabling a new class of entrepreneur, one that doesn’t have to ask permission to make things happen. That entrepreneur is, however, running into a new kind of problem: they can’t do it alone.

There is a constant that all truly great companies seem to share: they were not the product of a single individual. There’s a lot of talk regarding the “proper” number of startup founders, and while there’s no consensus, the number is never “one”.

Startup people are weird folk. I don’t mean that in a disparaging way, it’s just that the people who have the fire and the passion to create, to endure real uncertainty for the chance at changing the world, these people are statistical outliers. Compounding this fact, many successful startups are founded by people with pre-existing personal relationships. Not only do you need to have one odd misfit but at least two, in proximity, and preferably with an existing relationship. If startup founders are one in a hundred, then by pure random chance the probability of finding a pair of them will be one in 10,000. [1]

Ask most experienced entrepreneurs for startup advice and you will invariably be told that one of the most critical, if not the most critical factor affecting the eventual trajectory of a startup is the initial team, the first co-founders. As a community we’ve left this crucial component of the early success of startups to fate. We’re dependent on serendipity, that two statistical outliers happen to room together in college, work together at the same company, or be part of the same circle of friends.

I spent many years trying to convince friends and co-workers to take the startup leap with me. I thought it was a failure on my part to sell an idea, share the sheer joy in the process of creating something wholly new, or really explain the appeal of being master of your own destiny. What I came to realize is that there is something that sets startup entrepreneurs apart and it’s not a quality that’s easily imparted. It doesn’t make startup entrepreneurs any better or worse, OK maybe a little bit crazier, but it’s a drive that is not present in everyone.

Ultimately, I was unable to convince my circle of friends and co-workers and ended up starting out on my own. To say this was a difficult journey is an understatement. My first startup experience was radically altered when I met the individual who was to eventually become the co-founder of my first company.

Initially, this veteran of the startup process acted primarily as a mentor. This initial help led to many positive developments in my startup. The idea that I had been deeply focused on, that I was convinced was “the next big thing”, was completely altered by coming into contact with his vision. Together our varied experiences molded a completely new idea. Over several months, he continued to act as a mentor and sounding board, aiding me on the startup process and the core of the company. After months of working together informally, he joined me as a co-founder, transforming what had been my startup into our startup. [2]

The key, I believe, is that we built a relationship before we became co-founders. We forged a sense of trust. I trusted his vision and experience and he trusted my ability to deliver technology. We realized we could work together, and that our combined energies summed to a whole greater than our individual parts. More importantly, we were both able to determine that the other had the spark, a commitment to the company, evolving the idea, and creating something wholly new.

I see a gap in the current startup ecosystem. In Boston, we have lots of networking events for entrepreneurs, ways to socialize with others that share our startup enthusiasm. Even though this leads to some connections, there’s no clear mechanism for building the deeper trust-based co-founding relationships that are necessary. We’re still relying on fate.

As a community, we’re starting to become aware of the problem and there are many solutions being tested. Co-working spaces, founder match programs, and networking events specifically focused on co-founders, are all steps in the right direction. I think we need to go further though, hacking the startup process to build more potentially viable startup founding teams.

TechStars, YCombinator, BetaSpring and other seed accelerators are a tremendous resource but they still require, as their raw material, teams of “outliers”. They provide great resources and direction for those startup individuals who have already found each other. The more startup entrepreneurs we can bring together to form viable teams, the more seed accelerators can flourish, and the more startups we’ll have in Boston.

We need a way to build trust and working relationships between the outliers that have the spark, the ones that didn’t happen to room together in college. If we can accomplish this, we will be increasing the pool of potentially successful startups in the community. We have an opportunity to cultivate the raw materials of a new class of startup, a new population of those with the drive to make things happen, connected together in a network unlike anything seen before.

Notes

  • [1] Obviously these populations tend to self filter and cluster. Engineering schools, entrepreneurial clubs, technology companies, etc… so it’s not purely random. There’s still a large element of chance in the initial formation of teams though.
  • [2] My first startup evolved to become Grazr.com. After building some strong core technology and launching several products focused on feeds and social media monitoring, Grazr corp. wasn’t able to find success with those products and ceased operations on Sept 30 of 2010. I left my position as CTO of Grazr in June of 2009.


Thanks to Juliette Kopecky, Shannon Holmes, Navin Sharma and Mike Walsh for reading drafts.

{ 13 comments }

Chris Dixon has a good post, “Old VC firms: get ready to be disrupted”, talking about the dynamics between LP’s, individual partners in a VC firm and the innovation and technology sector. His primary point seems to be that the VC business is really all about the partners themselves, the value in the VC model is a direct result of the individual partners and not the institutions (even though Limited Partners still invest in VC firms based on reputation and track record of the firm).

I agree there is disruption coming, especially with the amount of innovation happening in the overall startup process (especially at the “low” end of the startup lifecycle) but I’m not sure I understand his advice to fund managers and LP’s.

To intelligently invest in VC firms, you need to roll up your sleeves and dive deep into the startup world. You need to learn about the startups themselves, assess the entrepreneurs, use their products, analyze market dynamics – all things that good VCs and entrepreneurs do. If you want to understand a VCs brand and abilities don’t look at their track record in the 90s – ask today’s entrepreneurs. The answer will likely surprise you.

The whole VC, LP dynamic is one where LP’s are “outsourcing” the expertise in the innovation sector to the VC’s themselves. If LP’s have to really understand the startup space, what’s the role of the VC in that kind of model?

{ 0 comments }

College Based Seed Fund Accelerators

April 22, 2010

In an effort to boost the entrepreneurial ecosystem, a number of colleges and universities in the Northeast have started there own Seed Fund Accelerators.  In recent weeks, I have run across  programs put in place by Penn State (State College, PA),  Rochester Institute of Technology and Oberlin College.  Over the next couple of weeks I [...]

Read the full article →

New Blog

February 14, 2010

I’ve finally gotten around to connecting a blog up for TenZeroLab. The posts here will reflect my vision for TenZeroLab, some thoughts on startups in the Boston area as well as some discussion of the various projects I’m working on.

Read the full article →