Favorite Story of Student Entrepreneur Ageism

I teach a course on software product management where I sometimes cross over into startup-land. During a recent class, I showed students a rara-talk by a VC, who was trying to convince them to become entrepreneurs. So I asked the class:

Statistically speaking, a 40-year old entrepreneur is much more likely to succeed than a student entrepreneur. Why is this venture capitalist so eager to get you to become an entrepreneur rather than a more experienced person?

After a bit of back and forth, one student finally said:

Well, if it takes 10 years to grow a startup, a 40 year old entrepreneur may not be be able to stick around for such a long time.

I’ve gotten used to such statements and take them rather stoically. A 40-year old PhD student of mine, however, was rolling on the floor laughing.

Where to Focus a University Incubator

Fueled by the success of Silicon Valley startups and other success stories, there probably isn’t a single university today which would not like to foster startups from their student ranks. There is a lot to be said about how to do that, but before all operational decisions, a university incubator needs to know where to focus, and this is easy to get wrong.

The figure above shows my thinking on a key aspect of the subject: The type of student to spend your efforts on. A university incubator should focus on those students (and teach them and make it easier) who are sitting on the fence. It should ignore those whole will never do it and it should neglect those who will always find a way, no matter what.

The Wall Street Journal and Berlin Reporting

The Wall Street Journal provides a nice infographic on the “billion dollar club“, that is, startups of valuation $1B or above. In Europe, the WSJ counts six >$1B startups, of which one is in Amsterdam (Adyen), one is in Stockholm (Spotify) and two are in London (Powa, Shazam) and Berlin (Delivery Hero, Home24). In addition, the WSJ lists two more Berlin-based companies (Rocket Internet, Zalando), which exited (to the public markets). So 50% of companies worth counting are based out of Berlin.

Now comes the print version of the WSJ with a Feb 19, 2015, article on “Europe’s Tech Startup Landscape for 2015”. The writer of the article discusses the general situation and then proceeds to present Wall Street Journal’s non-obvious picks of companies to watch out for, or in their words, “a useful map of the EMEA tech startup landscape for 2015”. The twelve company list is all over the map and includes Stockholm (KnCMiner), Berlin (Wooga), Serbia (Nordeus), Stockholm (Klarna, Truecaller), France (SigFox, Withings), Great Britian (Kano, Oxbotica), and Israel (SiSense, Fiverr, Lumus).

Somehow this list of companies to watch out does not vibe with the $1B club… If anything, Berlin has been taking up much more speed from the time those in the $1B club were founded. Go figure.

Cargo Cult Public Investments?

Richard Feynman, in an enjoyable-to-read article [1], explains what he calls the cargo cult:

In the South Seas there is a Cargo Cult of people. During the war they saw airplanes land with lots of good materials, and they want the same thing to happen now. So they’ve arranged to make things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas—he’s the controller—and they wait for the airplanes to land. They’re doing everything right. The form is perfect. It looks exactly the way it looked before. But it doesn’t work. No airplanes land.

The cargo cult people confused correlation with causation. They thought that creating one condition (runways, controller) would lead to the desired effect (planes with lots of good stuff). It is a common fallacy to confuse correlation with causation, that is, the coinciding of two events (correlation) with a cause and effect relationship between them (causation).

Continue reading “Cargo Cult Public Investments?”

Startupinformatik

“Startupinformatik” is a German term for “informatics (computer science) for startups” that I just made up. It is intended to be close to “Wirtschaftsinformatik”, which is German for “informatics for businesses”. So it is about the business of startups and the role software (IT) plays in it. You can read my prior thoughts

Enjoy!