What makes this so interesting is that its not coming from someone like a creative agency -- who of course you would expect to say something like this. The fact that its coming from a very data driven adtech platform makes it much more powerful.
This is definitely a concern. In the case of Google Ventures, there have been 4 acquisitions by Google of GV portfolio companies since 2009 and the partners of GV recuse themselves from those convos: http://techcrunch.com/2014/01/14/double-google-all-the-way/
I have had both highly positive and mildly negative experiences. It all depends on the corporation in question, its particular risk tolerance and investment objectives, and its history of doing this sort of thing.
It's important to pause, for a beat, on the "objectives" part. A VC firm and a strategic investor often have very different goals, and those goals will drive their behaviors and expectations. The VC wants explosive growth, followed by a big exit. The corporation wants to build option value for its working capital. That's a subtle distinction, but it makes a world of difference in many situations.
Here are some pros and cons I've dealt with:
Pro:
- Corporate investors are more likely to keep giving you chances, ironically enough. This is partially for cynical reasons, but also for political-functional reasons. No corporate exec wants egg on his/her face, so there's a big incentive to keep funding your project until it can no longer be justified. (The period of ostensible justification can be quite long.) An angel or VC, by contrast, has plenty of other horses in the race if yours breaks a leg. This leads to a paradox in risk tolerance. The VC expects, and even encourages you to pivot and to "find your business model" -- but it won't have years' worth of patience. A corporation is less likely to understand the Lean approach, and will be less forgiving of true startup methodology. But it will be very hesitant to pull the plug on you. Corporations are very susceptible to the appeal of sunk costs, whether real or fallacious. (Important note: I would strongly discourage you from actively seeking to game this fact, i.e., by attempting to make a career peddling bullshit up the corporate ladder. That's doable, but it's a very dishonest and often counterproductive strategy that will eventually catch up to you.)
- In theory, you can call upon internal and external corporate partners as immediate revenue sources, partners, or clients.
- Risk of abject failure is heavily cushioned. If you strike out completely, you're probably going to be forgiven, to a degree.
- Corporations have no incentive to fund your competitors.
- Corporations who invest for the long haul will do everything in their power to go to bat for you. Never discount the value that phone calls or intros from a Fortune 500 C-level exec can do for your business, for instance.
Con:
- Much more limited upside in many circumstances, because the corporate investor has no real incentive to sell or bring in outside investment, particularly if things are going well. Remember: they're buying a call option when they invest in you; they're not actually trying to build you toward an exit.
- Depending on the corporation, and the size of its stake, its presence in your cap table can discourage outside investment from institutional funds and angels. (Though not always, and as with every rule, there are plenty of exceptions and outright reversals.)
- Emphasis on, and pressure toward reporting, vanity metrics. Depends on the corporation, but generally speaking, corporations like their vanity metrics. More accurately: your corporate's internal, political sponsor likes selling his peers and superiors on vanity metrics.
- Depending on its level of control, the corporation might exert pressure to move in specific directions that benefit its internal business portfolio. Those directions may not align with your objectives. (A variant of the "agency problem".)
- Corporate executive ranks tend to shuffle like musical chairs, and when they do, project priorities shift for largely political reasons. Your startup might be one of those "projects."
I like feeling smart about the places I know about, and I think it actually could be really interesting to put the tips/insights/thoughts inspired by/etc type of information you have about a place at the front of a service. Excited for this to come to SF!
I think Klout is doing really interesting stuff and I love how much they're sharing about their methodology and ideas on their blog, but I like how this post refocuses our eyes on the prize of understanding the true measure of influence: people's ability to get others to do something.
I lived in Cairo on and off for up to 6 months at a time between 2004 and 2009. The whole situation has been somewhat surreal to watch. The places are all the same, where I lived and spent time, but the context is so radically different that it's hard to imagine this - even watching the videos on Al Jazeera.
But there is something about the quiet of this memorial and the simplicity of the names and ages of these people who I was in classes with just a few years ago, or riding the metro with, or practicing Arabic with, juxtaposed with the brutality of the way in which they died, that really hit me.
I'm glad you took the time to email 1000memories and I'm glad that they responded like they did.
Thanks for your support. When I saw a picture and a name in my news feed on facebook I had the same feeling as you describe. I believe as people we have come desensitized to hearing massive numbers of people being killed all over the world, but when a face is put to a name, and in this case when a whole profile is put to the name, the world might really feel the magnitude of the loss and its every individual.
Actually, if we treat "ideas" as more than just the starting notion, but the myriad small decisions and vision of user behavior, and we look at the ecosystems of
Startups, then "potentially good ideas" look a lot more scarce. The crowdfunding landscape is a great example. The "good idea" isn't about needing crowdfunding for x, it includes all of the decisions about incentives that make them work (or not). When the world is full of startups bouncing over really working through a problem and their vision of a solution - which is happening more and more in my experienc - it's not a straw man to make an argument that dismissing the value of ideas weakens the startup ecosystem
My problem with this argument is that it positions an "idea" person as static and fixed in time rather than dynamic and evolving. Over the life time of a startup, the idea becomes less about the initial spark and more about the way things evolve. Data can drive lots of that, for sure, which is why things like lean startup are so valuable. But what about the big decisions about where to go next? What's your next product? What's the behavior that's not working? What have you fundamentally misunderstood about your users? A ton of that comes back to judgement and prioritization of ideas. Lots of great developers have that, but it is a fundamentally different skill.
I agree with this, and sense some conflation between the terms 'concept' and 'idea' in this argument -- at least so far as it applies to the execution vs. ideas debate. Some seem to believe that the role of ideas in the process of a start-up is limited to the initial concept. But this is like saying that the ideas in a screenplay are limited to those contained in the two sentence 'high concept' that spurred the project, with the execution being the writer's typing and grammar.
However, it's not altogether clear just what execution means if it is necessarily divorced from ideas. Aren't all new features, enhancements and marketing campaigns driven by ideas and then carried out by technicians? Or can successful execution be attributed simply to coders writing code? By this view (which, granted, is an exaggeration) success can be achieved by simply filling a room full of contractors and assuming they will work something out.
Rather than being at odds, ideas and execution seem more like mutual components of the division of labor: one cannot work without the other, and both are participants of every stage of the process. However, it doesn't follow from this fact that ideas and execution are equally responsible for success. I view a venture's success primarily as a function of consistently applied creativity, imagination and discipline. Luck is a necessary too, but certainly cannot be executed.
While I recognize the importance of ideas and technical execution, I would argue that vision and imagination are scarcer, more valuable resources than technical proficiency and practical know how. After all, development needs can be fulfilled by contractors in a pinch, but the same cannot be said for the role of a visionary -- a fact may explain why Apple continues to compensate Jonathan Ives so handsomely when his pay could be used alternatively to hire dozens of young hacker savants and electrical engineers.
How many highly successful startups have outsourced their development to contractors ? My guess is practically none.
I agree with you that ideas are needed throughout the process. In fact one of the points that certain people here seem unable to grasp is that software development is itself a creative activity that requires not only linear logical thinking but also continuous inspiration to find a good path through the solution space. It is not the equivalent of hammering nails to carry out someone else's grand design.
I agree with you 100%. Maybe it's better to call them a "concept person" rather than "idea person". Ideas are fleeting. Concepts need to be refined and fleshed out.
