In this post from PandoDaily, Francisco Dao hits the mark. Max Marmer of Startup Genome has also written in a similar vein on the Harvard Business Review blog, that we are over celebratising entrepreneurship. We need to be discouraging a few more people from entrepreneurship, based on sound assessment of character, which should also be the first criteria for investment as well. Dragon’s Den and Silicon Valley reality TV need to go!
Originally posted on PandoDaily:
With an almost blind devotion, the technology sector loves to champion entrepreneurship as a universally good thing, but is it possible we’ve taken it too far? After all, if everyone is an entrepreneur we would end up in a classic “all chiefs, no Indians” situation. In many ways we’re already there, or at least close enough for it to be a legitimate problem. At the risk of saying something blasphemous, I think there’s a strong case to be made that the ecosystem as a whole would be much better off if we started discouraging a few people from pursuing entrepreneurship.
When the Y-Combinator Start Fund launched, most people celebrated it as a great development and a victory for the entrepreneurial ecosystem. But was it? Pre-Start Fund a typical YC class would have some winners and some losers. Obviously it would vary per class, but let’s say it was 30 percent strong, 70 percent weak. The weaker 70 percent would die fairly quickly providing a rich source of talent to the surviving members of the class.
Now since every YC graduate gets $80,000 (originally $150,000), the 70 percent that previously would have died get to ride it out on hope for another year, virtually ensuring that the strong companies go starving for, or at least in search of, quality talent. Is this actually good for the ecosystem? Wouldn’t it make more sense to let the weak startups die quickly so the talent can be deployed to the stronger YC graduates that are actually going somewhere?