How to Hire an Entrepreneur
As Erin Kutz wrote about a few weeks ago, my fellow ATG co-founder Jeet Singh and I have recently launched Redstar, a “company that builds other companies.” Unlike most incubators and angel funds, which invest in companies that are already formed or at least well along in the process, Redstar’s goal is to create a stream of valuable startups completely from scratch. If you liken Redstar to a factory (for whatever reason, the startup business is rife with metaphor, so I will beg your forbearance for dragging in a few more by the scruff), then the inputs to our assembly line are essentially three things: ideas, people, and money. In contrast to the archetypal startup story, which invariably features a bolt of Eureka from the blue, we believe that it’s possible and even desirable to create startups more methodically, recruiting talented entrepreneurs and matching them to the ideas, fellow founders, and seed capital necessary to launch.
So the whole Redstar factory metaphor begs a very concrete question: How do you hire an entrepreneur? Aren’t entrepreneurs, by definition, people who have no inclination whatsoever to be hired, and anyways, aren’t all the good ones running stark and raving down the street? In fact, I think the best entrepreneurs know who they are from very early in their careers and are drawn, often defying all logic and reason, to the startup world to carve their own distinct paths by building and running their own operations. They’re just not assembly line sorts of people.
One of my mentors memorably advised me to invest in jockeys, not horses (those damn metaphors again). In this light, I think not so much of hiring entrepreneurs in the conventional sense, i.e. with a salary, bonus, and vacation packages, but rather in betting on a rider and then helping them choose or even breed a steed. In my experience, startups tend to end up doing something pretty far afield from the original idea (ATG’s original business plan, for example, was to build computer music systems for live rock shows—that’s why we called it “Art Technology Group”). In other words, the initial concept really functions more as a point of departure. So what we are really trying to do is invest the earliest tranche of seed funding in a super-talented person who can grow and evolve an idea with the help of some folks who have been around the track a few times before.
As for the entrepreneurs themselves who, if they are any good, are asking what’s in it for them, we’re offering a way to break out of the chicken-and-egg cycle of experience versus funding. It’s extremely hard to attract backers without a strong track record and just as hard to build a track record without ever having been backed. By investing in jockeys for several months before the race, everyone has a chance to learn a lot before the starting gun. And if it turns out the first horse just won’t run, there are plenty more in the stable to develop.
As my kids are fond of asking me, “How’s that working out for you so far?” I’ve just started a series of meetings with our first batch of potential entrepreneurs for hire, so I’ll continue to blog about what I see, hear, and learn…