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Ten Geek Business Myths
hpcanswers writes "Venture capitalist Ron Garret has posted a list of eleven (despite the title) common mistakes entrepreneurs with a technology background make. A common theme is that good ideas sell; in reality, what a customer wants sells. By extension, having a Ph.D. and holding a patent are not particularly helpful if the intended end-user does not have the same level of understanding of the widget as the creator does."
Myth #7: A Ph.D. means something.
Reality: The only thing a Ph.D. means is that you're not a moron, and you're willing to put up with the bullshit it takes to slog your way through a Ph.D. program somewhere.
I agree with the second part of this statement, but take issue with the first. I deal with PhDs all day, every day. Many of them are indeed morons who happen to have a great depth of knowledge in one miniscule area. After several years of doing this job, I've concluded that the only thing a PhD proves is that you were able to devote several years to a PhD program.
This guy's the limit!
Myth #1: A brilliant idea will make you rich
:P
No a brilliant idea will make some other company rich because a single person doesn't have the capacity to make a full item. I've had many ideas that made other people rich in my life. I never run out of them. But I still live in the boonies
God spoke to me.
He should take a look at a company called Microsoft. Creating a no-competition environment seems to have worked out well for them.
Two words: iPod and iTunes
Only to idiots, are orders laws.
-- Henning von Tresckow
Myth #11: The marketing department can run a engineering company.
I had a job interview for a QA position at 3Dfx a year before it went under. The interview with the QA manager went OK even though I kept asking myself if I wanted to work with someone who has a mohawk and body piercings (not exactly uber-professional). Then I had to be interviewed by the marketing hack. At that point, I did not want the job and they didn't offer the job since I had nothing to say to the marketing hack. Shortly after that, 3Dfx announced they were screwing over the board manufacturs by making their own boards to compete against them. Of course, they all jumped ship to nVidia and nVidia picked up the 3Dfx engineering team out of bankruptcy. No word on what happened to the marketing hack.
- Sales team. The first person you'll ever need is the VP for sales. Then you'll need a good, experienced sales team. No matter how expensive they are, these people will make or break a business. I ended up leaving my job and joining a startup precisely for this reason.
- Time frame and financial needs. One thing all startups underestimate is the need for quality assurance. Generally, testing for defects takes more time than assembling a product. Thus, the time to market should be at least tripled and the cost doubled from what you expect.
- Intellectual property. True, patent protection is overrated. However, there are thousands of inventors and companies waiting to sue your ass off if you infringe on their patents. More important than filing your patent is to research whether you infringe on others' patents or not, and settle any licensing issues. This will get very costly, and in this case getting good lawyers is worth their weight in gold. We pay roughly $5000 per patent examined, but they decreased the number of patents we thought we would license from 40 to 2.
- Company share. Many inventors don't want to relinquish control over the company, and want to maintain a majority stake at any cost. Most investors wouldn't agree with that, with a good reason - a researcher running a company is recipe for disaster. And as the classic saying goes, it's better to have 5% of $100 million than 100% of nothing.
- IP ownership. I talked about infringing on others' IP already, but what about the inventor's IP? The inventor must transfer all the rights to the invention to the company. Otherwise, the inventor will exercise undue influence over the business, and sooner or later (rather sooner) this will create conflicts between the inventor and the management.
There are plenty more rules of the game, but this game is too flexible to make any of them universal. The best thing is to give over your technology to a seasoned entrepreneur and just ride along.But he just reiterates what I've read in many other places (although he puts a different spin on it).
I've read that you are essentially protected, as an inventor, by the act of inventing. You have created the work on which other things may try to be based, but you are protected by virtue of the fact that you first created it. The patent puts some extra teeth into the matter, but most of it is completed by the creation itself.
I've never quite heard it reasoned, however, in the way the author did.
It's also refreshing to read this from a business perspective instead of from the perspective of "Inventors - pay us money to patent your ideas, and then you'll be rich (if you can find a way to do something with your idea)."
Take it to the limit, everybody to the limit, come on, everybody fhqwhgads.
This whole article smacks of one critical difference between entrepreneurs with an idea and business majors.
Entrepreneurs with an idea think that money exists as a tool to bring ideas to realization, and they want their idea realized. The money to them is rather irrelevant if it's just doing the same old shit.
Business majors think that ideas exist as ways to make money, and they want their money. The realization of the idea is rather irrelevant to them if it's not the best way to make money.
At the end of the day, both can be opportunities for each other, but neither needs the other.
A brilliant idea can make a business major rich and powerful, but they can still get rich with the same old capitalist tactics they're familiar with and nary a novel idea in sight.
On the other hand, a lot of money can motivate people to support your idea and get it out into circulation, but there are other ways to motivate people than money. For an example of this, look at RMS.
It's my opinion that the best way for an individual to get their idea out there is to not only discard the existing business models, but to create models where other parties particpation is rewarding in and of itself, rather than some distasteful task they are being bribed into completing. If you can do that, it will scale globally and you don't need a dime to pay them. If you can't, you'll probably get crushed by the existing players with WAY more money than you and either be destroyed or absorbed.
Unless you're an existing player with tons of money, of course. Then you can bribe people to get behind whatever silly idea comes into your head.
-1 Uncomfortable Truth
A good manager should carry themself in a fashion that wouldn't shock or offend ANYONE they might be called upon to administer,
That's just not possible. No matter what you do or how you dress, I promise you that somebody finds it offensive.
Trying to cater to other people's desires, expectations, etc. is generally a waste of time and basically stupid.
// TODO: Insert Cool Sig
Smug lisp weenies have been reduced to "lisp has powerful macros!", since perl, python, ruby, pike, etc all have all the other functionality of lisp that slws used to brag about in the 1970's. Many people consider slws to be just outright wrong though, and that the idea of dynamic languages is not actually good. Try ocaml or haskell, and then notice how not only can you write code faster than you can in lisp, but its an order of magnitude easier to maintain.
Which part of "Patent protection does serve one useful purpose: it can make investors feel warm and fuzzy, especially naive investors." is hard for you to grasp? Nobody gives a rats ass about wether or not their bogus startup patents will do well in litigation, or in negotiations for licensing. They exist solely to make stupid investors feel good about you, so they will give you money. I know my patents are bullshit, wasting more money on having them filed by a professional crook will not change that. I just need to say "look, we have 12 patents" to the stupid investors so they think we are special and give us money.