The Venture Cafe

Victor Cruz writes "If there is one thing I can't stand, it's watching a bunch of rich, fat, overpaid, overhyped dot-con executives blathering on and on about some "business lessons" they supposedly learned while they were out wasting millions of dollars of venture capitalists' money. When I came across Teresa Esser's new book, "The Venture Cafe: Secrets, Strategies, and Stories from America's High-Tech Entrepreneurs," I thought it was going to be that same thing all over again." Read on for the dramatic conclusion! The Venture Cafe: Secrets, Strategies, and Stories from America's High-Tech Entrepreneurs author Teresa Esser pages 280 publisher Warner Books rating 9 - reads like a novel reviewer Victor Cruz ISBN 0-446-52783-1 summary Non-fictional accounts of entrepreneurs' struggles and triumphs

Oh, no, I thought. Not another one of these rags-to-riches, I've-got-mine and-so-now-I'm-going-to-rub-your-face-in-it type books.

Thanks, but I've had enough. And then I took a moment to actually read this thing.

Turns out that this Teresa Esser isn't even an entrepreneur -- she's the wife of an entrepreneur. So what business does she have trying to tell me how to start a company?

Esser watched her husband start an Ethernet telephone firm that was eventually sold to 3Com for $90 million. After the company was sold, she spent three years interviewing 150 entrepreneurs, venture capitalists, corporate lawyers and high-tech headhunters about how a person can start their own high-tech company.

She interviewed members of the MIT blackjack team, asking them what it was like to gamble with other people's money. That's what the high-tech entrepreneurs were doing, you know, when they were financing their businesses with venture capital.

A lot of these new companies wound up going out of business. But some of them did not. Some of the new companies ACTUALLY SUCCEEDED at creating wealth for their investors -- including their venture capitalists, which more often than not happen to be pension funds.

So, when these high-tech entrepreneurs succeed at solving a problem and creating a solution and getting the product to market, and achieving a liquidity event, they make money for their investors.

There are a lot of business authors who spend half of the book thanking their wives for putting up with their obnoxious behavior and the other half bragging about how great they are.

Teresa Esser doesn't brag, really. I have to say, I admired how candid Esser was when she was talking about serious problems, like the time her husband got burned out and had to leave his company.

This was obviously a very painful experience, but she lays it all on the line. Esser didn't have to go back and dredge up those repressed memories about what it was like when her husband was on the verge of losing control of the technical direction his company was taking, and freaked out and asked Esser to turn off the electricity so that they would have to prematurely end an annoying board meeting.

She didn't have to fly to White Plains, New York and convince the God of high-tech headhunting, Chuck Ramsey, to spill the beans on how exactly you convince an top-ranked executive to leave his job and join a high-tech startup.

But she did.

She could have spent the past three years lying on the beach in the Bahamas, drinking pina coladas and putting on sunscreen. Instead, she schlepped around Boston's financial district, asking jaded venture capitalists how an unknown entrepreneur could increase her chances of obtaining venture capital financing.

You know, most of these dot-com brag books make me sick. But I have to say, this one made me laugh.

I liked the story about the rat. These two kids started a company out of a disgusting apartment in Philadelphia and they tried to have a formal business meeting with a director of new business development from a Wall Street financial firm, but it was hard because they had these twelve-inch rats.

When the director of new business development came to visit, they didn't even have any clean cups to serve him tap water in. That story was funny. They gave the director of new business development a dirty dinosaur cup that they had gotten free from Burger King. And then he left. And the guys tried to figure out what had gone wrong with the meeting.

I mean, okay, okay. It's hard to start a new company. But with a book like this, at least you know that you're not the only one going through hard times.

To go through your own hard times, you can from The Venture Cafe from bn.com Also, check out The Venture Cafe web site. Slashdot welcomes readers' book reviews -- to submit yours, read the book review guidelines, then hit the submission page.

Comments

Read on for the dramatic conclusion? Sheesh!

[dmccarty]

Read on for the dramatic conclusion!

Kind of reminds me of those cheesy kung fu movies you see at the video store with a description like:

• Don't miss the exciting last half hour, in which it is revealed that the brotherhood of Purple Shaolins was actually founded by Tsao Houxi!
• Make sure to watch the dramatic martial arts conclusion as Red Daggers Li at the last second defeats Black Dragon Xu!

Or my personal chrisd favorite:

• Hey folks, "she" is actually a he!!!

I mean, okay, okay. It's hard to start a new company. But with a book like this, at least you know that you're not the only one going through hard times.

And this "dramatic conclusion" ends with a Joe Pesci line--okay okay okay--that I would've recognized as terrible writing when I was nine. Hey Slashdot, since you're posting book review stories by the uneducated, can my little brother write one?

Re:Read on for the dramatic conclusion? Sheesh!

[L. VeGas]

Oh, man. That is funny. What drama! What suspense! At first I actually thought he wasn't going to like the book. Fortunately, he "took a moment to actually read this thing". It's that kind of research that makes the difference between a good and great review.

What is the message/point of this book?

[GuyMannDude]

I had a difficult time understanding what this book "does" for the reader from this review. Is it simply a collection of stories of people who succeeded and those who didn't. Or does she provide some kind of analysis and state what she thinks were the important reasons for success?

I would be very interested if this book postulates some reasons (even though it must always be remembered that they are her opinions and not facts) but if it's just a collection of stories, then why should I buy this book? I can read all about the rediculous wastes that went on during the dot-com years in the newspaper. Or see that one documentary movie whose name I forget now (you know, it was that one where the filmakers planned on following the success story of a startup only to end up capturing the true story of a dream gone bad).

Hey, if anyone has some theories about what seperated the winners from the losers, please post a reply to this message. I'd be interested in hearing them. I was never involved in the dot-com bust (except via the stock market) so I really "missed out" on an important lesson here. And I'm not convienced that this book would help me out.

GMD

So you can ...

[Ungrounded Lightning]

Is it simply a collection of stories of people who succeeded and those who didn't. Or does she provide some kind of analysis and state what she thinks were the important reasons for success?

... if it's just a collection of stories, then why should I buy this book?

So you can get a few raw facts and draw your OWN conclusions about what works and what doesn't?

Re:So you can ...

[GuyMannDude]

So you can get a few raw facts and draw your OWN conclusions about what works and what doesn't?

There's certainly something to be said about that point of view. Indeed, almost immediately after my original post I realized someone was going to say this. However, it's the "few raw facts" part that bothers me. The review says that the author spent 3 years and interviewed 150 people involved in the dot-com story. I guarantee that she didn't commit each of those 150 stories to paper. I suspect that she just took the most shocking (e.g., the rat story) and wrote about them. And I sure as hell am not going to spend 3 years myself to figure out the facts. The bottom line is that when I read something, I expect the author to give me their "expert opinion." Now I want to emphasize that I am not going to mindlessly accept and assimilate that opinion. I do want to see some good supplementary logic and some case histories. But in my case (someone who was not involved in the dot-com crash) I have NO experience and really do have to rely heavily on someone elses. This is actually the purpose behind my post. Remember I asked for slashdotters to submit their opinions, knowing full well that there is going to be a lot of disagreement. I reserve the right to accept any or none of what I see.

I like to read other people's opinions (provided that I respect them as intelligent and have some knowledge of what they are talking about). That's why I come to slashdot: we've got ample amounts of people from both camps here (and for those of you who think I'm karma-whoring by praising slashdot, I've nearly got my 50).

Bottom line: I agree that you have a point but I am skeptical that this book (or any book) which is simply a collection of "a few raw facts" is going to provide me with a statisically significant amount of data from which to formulate a theory.

GMD

Re:So you can ...

[sabinm]

I have'nt read the book. But I do know some things about Dot Coms. And I'll tell you something important. It's not a big deal to go out of business. Most ventures fail. Most enteprise businessmen have a business failure twice in their career. The most damning fault of all dot comm companies is that after failure, they all gave up. And we (yes, I too) spent time making fun of them instead of realizing that business failure is a fact of life.

If I had a chance to grab my boss, I'd tell him a couple of things: DO NOT separate the techs from the non techs. Techs are not gods or even the trump card. Techs will not one day rule the world. The world will be ruled as it has always been ruled , by the three Ps: Politicians, Priests and Poets.

Concentrate on your SALES FORCE. A lot of programmers, sys admins, some execs who got their job the easy way, don't think a sales force is nessecary, as if their product would sell itself. NO PRODUCT EVER SELLS ITSELF. Get able, hard-working people staffed in your sales force, and get a good sales manager. Make sure the sales force uses the product. They don't have to be technical. Most sales are not to technical entities, but to non-technical businesses.

Pay/train your customer service/tech support well. Don't skimp on tech support. You don't want your coders having to solve tech's problems, and you don't want your tech support handling angry clients. Use the right tool for the right jobs. Don't hire techs for customer support. Don't promote people to tech support who do not have good problem solving skills. If they are good customer service reps, give them a promotion, or a raise, but don't put customer service reps in your tech support division. Keep your programmers programming and not answering tech-support questions.

Reward consistently, expect more. Don't give 10,000 bonuses unless the people deserve it. If everyone owns Porches, how can you tell who's your hardest worker? Reward excellence with excellence, reward laziness with the boot. When someone screws up but works hard, help them, don't punish them, but don't give them financial incentive if they havent generated revenue. When they generate revenue, then reward financially.

Make do with less than high tech. Companies went out and bought cisco 8500 switches and 7200 routers. The bought service contracts for thousands for each. They had a total of fifty employees and no high bandwidth utilization. Spend what you have and make do otherwise. Don't buy your equipment outright. Go to a holding company and lease if from them. It's cheaper in the long run if you plan to expand within five years. Remember fixed costs are zero in the long run. Spend as little as possible and get as much as possible.

I'm not saying that the DOT COM period would have been as great as we thought, all I'm saying is that a lot of good companies went down with the bad because of poor planing or people like me on the side lines saying: "I knew they'd fail". It's okay to fail and even to be an inexperienced company. But for what it's worth, get experienced financial and legal advice at least and manage your company like a BUSINESS and not like a chess club.

I worked for a union in New Jersey

[DuckDodgers]

Where the janitors earned $15.00 an hour to push a broom. I know intelligent people with college degrees who work longer hours at tough jobs for less money. Nurses, teachers, human resources, data entry... a big chunk of people employed in those sectors don't make that much money.

I worked for a union in rural Pennsylvania, and the low seniority guys were earning $9.50 an hour to not push a broom. The high seniority fellows that earned $13+/hour drove the equipment, while six or seven of the newer guys took turns using two shovels.

I'm not saying unions are all bad, and I'm definitely not saying this country would be better off without them. But believe it or not, some unions abuse employers just as badly as some employers used to abuse their workers.

But you didn't tell us....

[dmorin]

...did the kids with the rats and the Burger King cup get $5 million in VC money?? :) See, THAT would be a funny story. Granted, funny in sort of a "shoot me in the head now" type of way, but still funny.

Reminds me of myself a few years ago

[PeterMiller]

In the early stages of planning an ISP biz about 7 years ago, my partner and I had organized a meeting at his place with our potential bank manager. He lived with 3 other people in a "soon to be condemned" building. We looked somewhat presentable, and the room was semi clean (roaches took a vacation) but I think we were a little concerned when one of his roommates arrived with an underage teenage girl under each arm, and noisily disappeared into his bedroom.

Needless to say we did'nt get that bank all fired up about our business plan.

On a scale of 1 to 10, this is a 3

[Animats]

This is one of the lesser business books. There are far better commentaries on the dot-com mess. The new edition of "The Internet Bubble" contains more insight. Especially since the first edition was published before the collapse.

I'd like to see a good "where are they now" book covering the CEOs of disasterous startups.