Pajama Entrepreneur

The Financial Times has an article on the growing number of startups in Europe, a region known for bureaucracy, high taxes and lack of entrepreneurial spirit, but now blessed with the arrival of . . . Seedcamp!

The FT article talks about Saul Klein, a UK-based British ven­ture capitalist and entrepreneur, who created Seedcamp (”a week-long series of masterclasses for high-technology businesses from across the European Union”). Seedcamp begins on Monday September 3 in London. The Financial Times is covering the highlights (like the Olympics). A panel of VCs has already chosen 20 companies out of 270 to participate. The list is at http://blogs.ft.com/techblog/. S0 readers of the Financial Times can follow their “progress” online. This is looking more like a Big Brother-like media stunt.

What’s the prize? Free advice! From successful entrepreneurs, professional advisers and executives from Oracle, Google, Yahoo and Microsoft. Then, the startups get to do their elevator pitch to VCs like Accel and Index. Seedcamp will choose 5 companies who will get 50,000 EUR each. Unfortunately they will have to stay in London for three more months (ouch!) and continue doing elevator pitches.

I’m sorry I can’t see the point of all this. And to associate the growing desire among Europeans to start new companies with a thing like Seedcamp is laughable.

(1) If you are a startup and need to participate in a contest to reach any of the above mentioned VCs and waste your time at the media circus studying how to be a successful entrepreneur instead of working on your product, you will not get anywhere, not with 50,000 EUR or 50 million EUR or all the advice in the world.

(2) Three months in London doing a dog-and-pony show, listening to a VC advisor tell you how you need to hire a VP of Marketing when you don’t have a launchable product yet is totally ridiculous. Waste of time.

(3) Real entrepreneurs do not think this way. They are self-driven, they experiment a lot (many of their initiatives generate results that they did not expect), they do not wait for cute little contests put on by VCs. If they manage to develop a compelling product (after experimenting, tinkering around), the VCs are banging down their door to invest.

I am certain that successful European startups - not in terms of how much VC money they manage to suck up, but in terms of how many people in their target market find their product truly useful - will not come from Seedcamp or anything like it. It’s a waste of time. Success does not always mean having 10 million customers. If you create a product or service and are targeting a small market but have 80% of that market, you are successful.

And success isn’t measured by the amount of VC money you get. In Silicon Valley circles, this is some kind of badge people are proud to wear. This is very WEIRD and it’s an attitude that has blown over across the Atlantic. Very unfortunate. There are many faux entrepreneurs running around, bragging about how much VC money they raised. But their applications suck, they flame out after one year, and nobody hears about them again. This is not what entrepreneurship is about.

So what is being an entrepreneur about?

(1) Not knowing what’s going to happen next week or next year. It’s easier to have a job with a big company or the government. Sure, there’s no job security even in Europe but it’s still hard to fire people. The good thing is if you get laid off next week from Big Co, you get unemployment insurance compensation for months, sometimes years. This is why a lot of Europeans sit on their butts working for large companies, complaining endlessly about how boring and crappy their jobs are.

(2) Lack of financing is not to blame for the absence of HUGE Internet players like Google or Amazon. What’s to blame? The absence of a HUGE integrated market where everyone speaks the same language, has the same legal and financial system. I love these articles in financial newspapers (appealing of course to financiers) where the authors complain that Europe does not have as many startups as the US because of lack of VC funding or because large financial institutions that do not appreciate cute little startups, and so on. That makes a difference in a few cases but when we are talking about numbers - large numbers of people going out to start their own tech-related business and out of those large numbers, out come a handful that are hugely successful - I am afraid we are talking more of attitude and environment, not money.

You need the large numbers of people starting new things, otherwise you don’t even get Skype, Amazon, YouTube, Facebook (developed by students by the way), Google. And as I mentioned earlier, you need a HUGE market. Skype succeeded because it developed an application that appeals to everyone from Algeria to Ghana. That’s not so easy. Most online services still rely on local markets to grow, especially the trend-of-the-moment, social networking sites.

How do you get large numbers of people throwing the dice and saying, “To heck with it, I’m going for it?”

Change in Attitude - see (1) above.

Environment - people in the US are hugely supportive of those who go out and try something new. If you sit down with friends or even strangers at a cafe, and explain to them that you are about to start a new business, that you are worried about being able to support yourself and your family, and you wonder if the new business will make money but you think you have a good shot, they will say, “Go for it, dude!”

Try this in Europe. You will get 101 reasons why you shouldn’t.

But it’s changing.

Ten years ago, I’d say you would get the 101 reasons all the time. Today, you’d get it 50% of the time. Why? Because a new generation of Europeans has grown up who are used to: (a) working on temp contracts, (b) seeing their parents laid off time and time again, (c) independence (traveling around, having their own money at a young age, valuing other things than security).

They realize that having a job in a big company is a joke. You are not supposed to take it seriously, except as a way to get training and new skills. For them, Dilbert is very real: the stupid, nasty managers who get promoted year after year, the idiotic company mission statements, the pretense around loyalty, the face time nonsense (showing up in the office just to show you are there, not to do real work because your manager is a control-freak who wants to see his staff present all the time, like an Army commander who oversees his troops).

In the technology business, it’s never been easier or cheaper to start something new. You don’t have to launch a new product or online application. You can also be a very good web designer, programmer, etc. with your own business — that’s also entrepreneurship, but it’s yours, you are not working for an evil boss. You don’t need VC funding. Office space, if you need it, is cheap. You can also work from home because broadband in Europe is super cheap. You can source help from countries like India or the Philippines or Roumania, if necessary. Countries like France and the Netherlands have made it more fiscally attractive and much easier (from a paperwork point of view) to start a company. There’s a growing network of tech startups in every country (and across Europe) so you won’t feel lonely.

Entrepreneurship is about having a more profound vision of what your life should be. You have one life on this earth and it is very precious. Do you want to waste it sitting around with Dilbert and his office mates complaining about the pointy-haired boss? Or do you want an interesting life?

You don’t need Seedcamp for this!