FT: Silicon Valley entrepreneur under pressure

As we all know, Silicon Valley is a high-tech field of "Entrepreneurial paradise", where not only a number of technology giants and investment institutions, but also has a unique talent advantage. Over the years, we've seen dozens of start-ups, including Google and Facebook, born, grown and successful in the world, so what motivates Silicon Valley to move so fast?

The FT has analyzed this from a number of ordinary Silicon Valley entrepreneurs, describing the hardships of entrepreneurship, the pressure on themselves and the reasons for sticking to it. The following is the main content of the article.

5:30 A.M. (or earlier) on weekdays, Ruian Hoover, in San Francisco, climbs out of bed and starts worrying about his company's future. Hoover is the founder of Silicon Valley's new company product Hunt, which has successfully conducted two rounds of venture capital in less than a year, mainly through its own web site and iphone clients, to recommend novel and interesting applications for users, many of which are based on product Hunt's technicians first discovered and quickly released it. In general, Hoover will issue his first "application Recommendation" at around 7:30 A.M., not later than 8 o'clock.

"When I was sleeping, there were still a lot of people using product Hunt, I would be very worried if I didn't get these things straight," said Hoover, who was 27 years old with brown hair, and he started his first company at the age of 12, a website that posted jokes, The site made Hoover earn 10 dollars.

Product Hunt was online last year when Hoover told his friends by email. It is rumored that in May this year, Product Hunt won 6.1 million dollars in the second round of financing, with the company valuing $20 million trillion. While many investors are bullish on the prospect of product Hunt, new investments have raised new concerns.

Hoover took out his iphone and opened an app to look at the traffic on the company's website, "It's something I always do," he said, staring at the screen. What makes me so stressed now is that web traffic has fallen by 10% since last week. "The site currently has 15,000 visitors online. Hoover did not know whether the upcoming holiday would continue to pull down the site's traffic, and if logically he didn't have to worry too much about it, he was extremely concerned about the data, "Now that we've got the investment, we should redouble our efforts," he said.

A new round of "Gold Rush"

Today, the world's High-tech industries are booming, but San Francisco and nearby Silicon Valley is undoubtedly the fastest growing region. Whether it's an Open-plan office in Bay Area or a suburban tech park, engineers and executives are sparing no effort to "invent" the future of mankind. There are a lot of people here who are creating billions of of billions of dollars of wealth, and a lot of people have gone through the embarrassment of making ends meet.

"This is actually a new gold rush, isn't it?" "Patsy Price, a 57-year-old programmer, said he had previously studied in a more rigorous coding school and is now developing in San Francisco." The proportion of Harvard Business School graduates in the financial services sector has fallen from 42% in 2006 to 27% in 2013, while the technology sector has risen to 18% per cent from 7% in the same period.

In addition to Harvard, the employment of other top universities is similar, as is the case with Stanford University in Silicon Valley, which has a huge talent for Silicon Valley companies every year. Goldman, which last year encouraged young senior staff to take more time off on weekends, is a measure to try to retain young talent.

However, there are many little-known hardships behind the shiny Silicon Valley. Most startups in the San Francisco Bay Area, for example, ended up failing, and many companies were far less productive than investors had expected. Skhar Ghosh, a professor at Harvard Business School, estimates that about 40% of new ventures end in liquidation and that up to 80% of new ventures are struggling to achieve the expected return on investment. Startups such as Google and Facebook, which can achieve huge success, are rare, and investors call the "unicorn" an investment that can get a huge return.

Paul Graham, a well-known investor in support of youth entrepreneurship, said that even those companies that had successful ventures had experienced what they called a "painful trough". During this period, the initial investment exciting period has been spent, people are increasingly looking at the feasibility of investment. In addition, the distribution of software has changed dramatically in comparison with the last round of the technology investment boom, from the previous CD-ROM to the current cloud download, which means that the industry is growing faster and the entrepreneur is under greater pressure.

Embrace the bitter fruit of failure

The trader? Cruise (Toke Kruse) and co-founder, who came to San Francisco two years ago with "suitcase only", started a accounting software company called Billy's billing, who lives at home in a newly built apartment building near the Soma area of the new company's relatively concentrated Home decoration is very simple, a glass tea table and a plush teddy bear sofa. Cruise has no pay, just a few small projects to make ends meet. For two years, Cruise and his company have not been successful, and "the pressure on entrepreneurs like me to stick around in Silicon Valley is quite large," he said.

Billy ' s billing was not the first company that Cruise started, and he had many companies in Denmark, some survived and some didn't. According to Cruise, he founded a photo-sharing company in 2005, but unfortunately it was not as ubiquitous as the current smartphone, and ended in failure.

But this is a common occurrence for many entrepreneurs. "There is actually a special acronym for this situation," said Sha Inferno, chief executive of the Monkey of the new venture incubator company, Shaan Puri, "That's Wfio, which is ' we're finished (we ' re f***ed, it ' s over.) ' Meaning. Once at this time, the entire entrepreneurial team needs to be calm, whether for themselves, the team or investors, we should not be discouraged, but also must find out what happened. ”

Getting, 26, has chosen to join Silicon Valley's entrepreneurial bandwagon after attending a university lecture called "Rich". According to his recollection, there were many real-life entrepreneurs who shared their entrepreneurial experiences at the lecture, which was originally his study in medical school. "Seasoning", but unexpectedly prompted him to give up his plan to become a doctor, and to the entrepreneurial direction. The Monkey inferno has now been supported by Michael Birch, the British entrepreneur brother, and Siochi Boqi (Xochi). They profited hundreds of millions of of dollars in 2008 by selling their social networking Bebo to AOL.

Inferno has a very luxurious office, with a chef, massage room and bar, where a new product from the concept to the prototype is only 6 weeks, of course, most of the products ultimately failed, a few products can be small achievements. Inferno hopes to hatch a successful product, and for that they are actively trying to do so, for instance, with high hopes for the next product, the Bebo of a new, playful message.

"We don't think failure is a good thing, we just know that failure is normal for a new company," says Puri, who will soon regroup and move on to the next project after a failure, "I used to joke about Do you want to print out the code and burn it off? "Of course they won't, but it's a positive attitude to discuss where the problem is and what is right."

Inferno that some of the current product ideas in the future are fully hopeful for a big success. All of the company's employees and operating funds are supported by the Boqi brothers, so they will together the lessons of failure to stay within the company rather than letting team members focus on other new projects. In contrast to a single entrepreneurial team, Inferno's unique internal management mechanism has reduced the pressure on the company to a certain extent, allowing some teams to worry less about the funding problem and devote more energy to product development.

The Kauffman Foundation's Entrepreneurship course, Meg? Heilsberg (Meg Hirshberg) says most entrepreneurs can feel that the first time things get worse, "the sense of the entrepreneur is always reasonable and they are always connected to their company," Meg said, "Usually, There is no obvious dividing line between their lives and their work. ”

The "entrepreneurial dilemma" is one of the most recent public discussions in the Silicon Valley, but it is often not appropriate in the event of a celebratory victory, although everyone knows that "failure is the mother of success". Heilsberg says entrepreneurs are often reluctant to stress in public that they are successful entrepreneurs, not just the "machismo" that is widespread in the industry, but that entrepreneurs worry more often about their employees, Investors and customers may feel the company's troubles and choose to leave.

Sam Altman, President of Combinator, a well-known start-up incubator, recently wrote a widely publicized blog article---"The frustration of entrepreneurs," and Altman encouraged entrepreneurs who worked with Y Combinator to speak out about the problems they encountered. Instead of trying to solve it alone. The article received hot and high praise on media such as the official forum of Y Combinator, Facebook and Twitter, "No matter what value you do, you are not alone in your struggle," Altman wrote. ”

Rand Fishkin, founder of Moz, a marketing software company, wrote an article that was also very hot, in which he described the process of fighting depression after resigning from the company's CEO because of the failure of a new project. The 500,000-dollar debt and financial crisis failed to bring him down, but the failure of a product had made him feel that he was doing badly and the company had to change, but at the moment he was powerless to prove more.

When Fishekin posted the article on Hacker News, he immediately received a lot of comments. "In the emails I received, most people said they had similar experiences," We've had it, and we've struggled with it, "Fishekin said," There are many founders and CEOs who are so stressed out that they are always worried that their businesses will reduce their investors ' and customers ' confidence for a variety of reasons. " ”

One of the challenges he faced was the pressure from the VCs, Fishekin said that while his investors and board are very "considerate", winning the support of VCs is not just a success, it means that the company can continue to succeed under pressure, even greater success, This is challenging for a new venture. ”

"The company's growth does not meet expectations, because this is a necessary growth, only high growth can meet expectations," said Fishekin, whose company got a lot of venture capital in 2012, and despite the company's growing success at the time, they still wanted to expand the product line to get more users to meet investors ' expectations.

Moz's $18 million trillion in risky money by selling 17% of its shares, the average investor expects 10 times times as much from Moz, "which means we have to figure out what the company can do in the next few years, because 10 times times the return on investment looks pretty incredible," Fishekin said.

Hunt's Hunter says that some of the pressure on Silicon Valley entrepreneurs comes from a sustained focus on their entrepreneurial processes, and that some entrepreneurs may not be ready to meet these concerns, "If you're not ready, you show you're still in a bit of heat." "said Hunter.

A blessing in disguise

Dana Severson, the entrepreneur, Severson for a whole week after the failure of Wahooly, the founder of the company.

Severson, a native Minnesota man who came to San Francisco to try his luck, co-founded an incubator Wahooly with a former Google employee, but the platform failed to come online one months ago because Severson had been unable to find a competent developer.

The frustration of failure has led Severson to another idea that eventually proved to be quite successful. His founder, Startups Anonymous, has now become a popular site for entrepreneurs to complain, worry and pressure anonymously, according to Severson, startups Anonymous has gathered more than 700 entrepreneurial stories since January this year, And this site currently needs the operating capital has its own another profitable project to provide.

After the launch of the startups Anonymous, Severson found that he was not the only one entrepreneur under great pressure, nor is he alone lack of knowledge of all aspects, such as a failure of a new venture to bear the debt problem. "This is really a very important question, but after all, there are many young entrepreneurs who have been in this field for the first time," said Severson, more than 30, "who are inexperienced in recruiting, managing and operating, and may have to disguise themselves as seasoned veterans when necessary. ”

Dean Shepherd, a professor of business school at Indiana University, argues that the Shffield of an entrepreneur is also stressful, and that executives in big companies are much more relaxed than entrepreneurs, who may be fired, but whose savings are enough to keep them in a state of worry, And the company that suits them is unlikely to disappear altogether.

Shffield also points out that entrepreneurs tend to push themselves hard, while still insisting on the right time to give up. "If you're just looking at successful entrepreneurs, you're likely to get caught up in their overly optimistic, confident, and successful cycle of thinking, and you may not be paying attention to the experiences of entrepreneurs who have been displaced as a result of their entrepreneurial failure." ”

While such assertions have so far failed to resonate in Silicon Valley, the Silicon Valley region has a familiar motto-"rapid failure", that is, to admit defeat as soon as possible, and then to concentrate on remaining forces, regardless of how many setbacks have been overcome by those with tenacious will. Failure is like a sword of Damocles hanging over their heads forever, so that they can continue to maintain their efforts without the slightest slack.

"You need to invest a lot of time in product development, you always count time for work and life, you are always in a busy rhythm, and all of this is very great," Severson said, "especially for the new company, they need not only to make more efforts for their dreams, You need to be brave enough to admit defeat and end it at the right time. ”

Translator: Xiao Kai

(Responsible editor: Mengyishan)