A MIT entrepreneurial history – Part 2 : Ecosystems & Culture

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I continued reading the excellent From the Basement to the Dome by Jean-Jacques Degroof and found more inspiring elements about ecosystems, culture and also technology transfer from academic institutions after my first post. Here they are:

6 ingredients of the MIT ecosystem

Degroof gives us the cultural elements of the ecosystem: But what is it about this culture that has been supportive of entrepreneurship? The argument of this book is that entrepreneurship is particularly congruent with at least six elements of MIT’s culture: a well-ingrained, bottom-up organizational dynamic; excellence in all things that one studies or attempts to do, as well as a belief in hard work and fortitude; an interest in problem-solving and having a positive impact on the world; a belief in experimenting and a tolerance of failure; the pride of being viewed as rebels, sometimes eccentric and even a bit geeky, pursuing unconventional solutions; and the tradition of a multidisciplinary approach to problem-solving. [Page 90]

Why startups?

Here is an interesting comment about academic technology transfer: “Established firms are seldom interested in licensing emerging technologies from academia for several reasons. They don’t understand the potential of the technology; the time frame to develop the tech into a viable product exceeds the time horizon that most firms are comfortable with, or else they fear that they could cannibalize their existing business. As a result, in 1987, the TLO’s new director, John Preston, took the initiative to license technology to new ventures in exchange for equity, first as an experiment because there was a great concern at MIT about potential conflicts of interest. During the first year of this policy, six companies were formed based on such licenses, including ImmuLogic and American Superconductor. Sixteen more companies were formed during the second year. [Page 34]

Degroof then describes the multitude of ecosystem tools, all in a bottom-up logic, with serendipity (chapter 6) as a fairly common mechanism. The beginning of chapter 8 on technology transfer with the example of Amberwave is another must-read:

Often the initial performance of the new technology is either lower than that of existing solutions or not high enough to justify the switching cost for potential clients. As a result, established companies often don’t see the potential of new academic technologies. Moreover, in the few cases when the technology’s advantage is obvious or clearly promising, established companies are often concerned lest they cannibalize market share from their existing technology—a technology in which they have invested time and money, and around which they have built whole supply chains and other infrastructure.
It is estimated that an investment equal to 10 to 100 times the cost of the academic research is needed to bring an academic technology to market. This process also requires patience and perseverance. It can take at least two to three years for a patent to get issued once it is filed. When a company finally licenses a technology, it might take an additional five to ten years before it generates revenue. All in all, the uncertain performance of developing academic inventions, the associated costs, and the time lag between invention and revenue generation make investing in embryonic academic inventions extremely unattractive.
This does not mean that large firms never license patents from universities, but more often, inventors are the only ones to understand and to believe in the commercial potential of their technology. They are, therefore, frequently the only candidates interested in founding (and sometimes funding) a company to commercialize their technology. This process involves obtaining a license for the patent or patents based on their invention from their university, since, following the Bayh-Dole Act of 1980, the university owns the intellectual property of government-funded research. The edge that inventors have is the extensive and unique knowledge that they have accumulated through their research efforts and exposure to industry over the years. [Page 156]

Managing technology transfer

And more interesting information here about avoiding conflicts of interests at MIT: Policies do not allow faculty members to use students for research and development (R&D) related to a start-up in which that professor has equity, nor may students be employed by such a start-up. A start-up in which a professor has an interest is not allowed to fund research in that professor’s lab. Similarly, a professor is not allowed to conduct federally funded research in collaboration with such a start-up, with the exception of SBIR and Small Business Technology Transfer (STTR) funding. A start-up venture may not be located in a lab. Employees of a professor’s start-up may not be involved in the research activities of the professor’s lab. Research in the lab may not be influenced by a professor’s other professional activities. A faculty member’s full-time employment at MIT prohibits significant managerial responsibilities in a start-up. [Pages 161-62]

Or about making money with Technology Transfer: Many universities expect their technology transfer activities to be profitable and bring in revenue. Although MIT is one of the most successful and experienced universities in terms of technology transfer, its experience shows that this kind of financial gain is a misleading expectation. “Any university that counts on its tech transfer to make a significant change in its finances is statistically going to be in trouble,” said Nelsen. To that end, her motto during her tenure as head of the TLO was, “Impact, not income.” [Page 162]

Many startup stories

Degroof adds anecdotic descriptions of individual companies, rich with lessons: these are BBN (1948), Teradyne (1960), Analog Devices (1965), Prime Computer (1972), Apollo Computer (1980), Thinking Machines (1983), Harmonix Music Systems (1995), Amberwave (1998) ThingMagic (2000), Momenta Pharmaceuticals (2001), SmartCells (2003), Ambri (2010), Firefly Bioworks (2010), Sanergy (2011), Wecyclers (2012), Nima Sensor (2013), Bounce Imaging (2013), ReviveMed (2016), Biobot Analytics (2017), not forgetting Robert Langer’s 40+ spinoffs from 1987 to today!

Internal venture capital – The Engine

My experience with academic venture capital funds is mitigated to say the least. So this is an interesting experiment: Faced with this perceived market failure, MIT’s leadership pointed to the need for patient capital to bring ventures that are trying to commercialize tough science and need more time than do digital businesses to reach a stage where they are ready for venture capital. […] In October 2016, President Reif announced the creation of The Engine, https://www.engine.xyz , a for-profit but public benefit corporation, separate from MIT, that would act as an accelerator for start-ups trying to commercialize “tough techs” by providing advice and physical facilities, as well as an investment fund of patient capital. […] In addition to going against MIT’s policy of not funding entrepreneurial projects, The Engine also broke with Institute tradition by incubating the entrepreneurial projects of its members, which certainly raised substantial objections within the MIT community. [Page 64]

The Engine has a double bottom line: it seeks financial returns and it seeks impact. The Engine raised $200 million for its first fund, with MIT contributing $25 million. […] The fund invests from $250,000 to $2 million per venture, and its investments are not exclusive to MIT-related firms. The investment is made with a time horizon of eighteen years, rather than the typical five to eight years given in the case of venture capital funds. […] Second, The Engine gives start-ups access to infrastructure, such as expensive, specialized equipment, including some from MIT, that otherwise might represent a barrier to entry to firm foundations. The Engine’s facility was initially located in 26,000 square feet of space in Cambridge, with the ambition of expanding to 200,000 square feet through a network of offices, labs, and prototyping and makerspaces a few blocks from Kendall Square. […] Third, the new initiative comes with a network of professionals and mentors in the so-called hard-tech space. [Page 173]

In 2020, The Engine raised a second $250M with $35M from MIT and Harvard University joined as a new LP. Is this different than VC? Will it succeed? Time will tell…

Why you should never look for a cofounder

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This recurring question of looking for a cofounder has been bothering me for years. Similarly I do not like the idea of giving titles in the early days of a startup (project) as you may read here : Titles in Start-ups.

My argument is that you don’t look for cofounders. You have them already, you found them by talking about your project to friends or colleagues. It’s a bit like falling in love, you do not look to marry, you meet people. Point.

Of course, this does not help much, because there remains the loneliness of the entrepreneur. But do we get married just to fill the loneliness? As it turned out, thinking about it, I came across an excellent article in which I totally recognized myself: Everything You Need to Know About Startup Founders and Co-Founders.

Here are some key points:
– A founder is a person who comes up with an idea and then transforms it into a business or startup. If a founder sets up a company with other people, they are both a founder and a co-founder.
– “Founder” and “CEO” are two […] startup titles that people can carry simultaneously. One is a permanent title, while the other is not. “You will always be a Founder or Co-Founder.” Be sure to be careful however how you dole out the Founder/Co-Founder titles. That should be a lifetime title so be sure it goes to the right people who played a major role in the starting of the company and who will continue to play a role in the years to come.
– A founding member can often feel similar to a founder or co-founder because they come on so early in the process that they’re also putting in crazy hours and maybe even taking a pay cut in order to be a part of something important. But a founding team member is an early employee, not a founder. One important difference? The types of stock the two groups receive. Founder’s equity is different from Employee Stock Grants.
– “I’m totally unconvinced that two people can find a person they haven’t known previously, and become effective co-founder,” […] “I think you’re better off finding the money to hire someone than actually find a co-founder.
– If someone has come along a little later in the game, but still early — as in, pre-first employee — then you treat the same any other co-founder! If you’re choosing to add a “co-founder” after you already have employees, though, things can get a little tricky.

One thing is forgotten in the article, it is the investor (friends & family, BA, VC) or institution entering at the creation and from my point of view they are not founders because they do not (generally) contribute to the business…

Finally, the term founder does not seem to me to have a legal existence. It is only awarded by the group of people who recognize themselves as such. There is, however, an interesting example, namely how one of the founders of Tesla filed a complaint against Elon Musk, in particular because he considered that he was not a founder. The complaint is readable here (see page 28).

If you wish to dig a little more, here are two older posts:
– The Founder’s Dilemmas – The Answer is “It depends!”
– Founder without experience, lonely founder.

A MIT entrepreneurial history by Jean-Jacques Degroof

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With an impressive foreword by Bob Metcalfe (the inventor of Ethernet et cofounder of 3Com) who rightly renames MIT a “Innoversity”, Degroof explains in From the Basement to the Dome that entrepreneurship is engrained in the MIT history and culture, not so much from a political decision but from serendipitous events.

Its motto (Mens et Manus, “Mind and Hand” in Latin), its logo, the right given to professors to spend 20% of their time in consulting since the 20s and the creation of the patent committee in 1932 are all indications that practice is as important as theory in engineering science. The importance of military funding through the creation of OSRD was also critical to the richness of MIT’s inventions.

The culture is exemplified by Ray Stata, a cofounder of Analog Devices : “It’s like ‘monkey see, monkey do.’ If you see others start companies and become successful, you say, ‘If they can do it, so can I.’ Whereas if you don’t see that up close and personal, there’s a fear and a mystery about how to do it. The entrepreneurial spirit at MIT gives you confidence.” [Page 17] And what about his experience in business: “I don’t have a clue about how to be a president, but I’m going to take the next twelve months to learn. And if at the end of that twelve months you guys collectively decide, or if the board decides, that I’m not the person who can provide leadership, I’ll step down. But in the meantime, while I’m learning, you’ve got to help me.” Fortunately, Stata’s direct approach worked. “Everybody dug in, and there was then no way I could fail. Over the next twelve months I learned how to be a president, and that process has continued for four decades.” [Page 18]

If you didn’t know Ray Stata, you might have known the building on MIT’s campus with his name.

I wondereed before beginning the reading if Degroof would mention the debate about why Boston did not end being as successful as Silicon Valley. And he does! Early in his book, on pages 24-25. This is a must-read and I am not finished yet. Degroof quotes famous Regional Advantage by AnnaLee Saxenian. I will let you discover.

This table that I had copied a long time ago is another illustration of the differences, not so much between Stanford/Berkeley and MIT/Harvard but about the number of firms spun-off from established firms. Just compare what happened at IBM on the west and east coasts. (PS: I had not initially mention the source of the table, it is part of High-Tech Startups and Industry Dynamics in Silicon Valley, Public Policy Institute of California, Junfu Zhang (2003) San Francisco, California.)

Let me finish this 1st part with another quote by Lita Nelsen, former head to MIT’s Technology Licensing Office: “People say to me, ‘Does MIT have an incubator?’ And my classic answer has been, ‘Yes, it’s called the city of Cambridge.’” [Page 26] This reminds me a quote of Richard Newton, a former professor at Berkeley. He had written stating a colleague of his: “The Bay Area is the Corporation. […When people change jobs here in the Bay Area], they’re actually just moving among the various divisions of the Bay Area Corporation.” This is a critical explanation of ecosystems, they are not so much about institutions but about the fluidity of exchanges between individuals.

Doris Lessing again – about great men

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I wrote in Testament or Testimony ? Lessing, Reich, Grothendieck, Jobs, Arles how much I loved reading The golden notebook.

I just read another strange page which stroke me. And even more strangely, I discovered that the French translation (that I first discovered) was quite different from the original version. Have a look here at the French post if you read French or at my translation below. Here is the original text (but please read until the end of this post for some surprise):

You and I, Ella, we are the failures. We spend our lives fighting to get people very slightly more stupid than ourselves to accept truths that the great men have always known. They have known for thousands of years that to lock a sick person into solitary confinement makes him worse. They have known for thousands of years that a poor man who is frightened of his landlord and of the police is a slave. They have known it. We know it. But do the great enlightened mass of the British people know it? No. It is our task, Ella, yours and mine, to tell them. Because the great men are too great to be bothered. They are already discovering how to colonise Venus and to irrigate the moon. That is what is important for our time. You and I are the boulder-pushers. All our lives, you and I, we’ll put all our energies, all our talents, into pushing a great boulder up a mountain. The boulder is the truth that the great men know by instinct, and the mountain is the stupidity of mankind. We push the boulder. I sometimes wish I had died before I got this job I wanted so much – I thought of it as something creative.

Now here is my translation of the French translation, and it is quite different from the original version!

But, my dear Anna, we are not the failures we think we are. We spend our lives struggling to get people hardly less stupid than ourselves to accept the truths that great men have always known. They have always known, for ten thousand years, that by locking a human being in total isolation we can make him or her an animal or a beast. They have always known that a man who is poor or terrorized by the police or by his owner is a slave. They have always known that a terrorized man is cruel. They have always known that violence leads to violence. And we know it. But do the great masses in the world know this? No. Our job is to tell them. Because great men cannot waste their time on it. Their imaginations are already busy inventing ways to colonize Venus; they are already creating in their minds a vision of a society made up of free and noble human beings. Meanwhile, human beings are ten thousand years behind them, and are locked in fear. Great men cannot waste their time on it. And they are right. Because they know we are here, the rock pushers. They know that we will continue to push rocks on the first foothills of a huge mountain, while they are already free at the top. They are counting on us, and they are right. And that’s why we are ultimately not useless.

I am not sure which version I prefer, but I was quite amazed by what Doris Lessing had written more than 50 years ago, all the more it reminds me again the quote by Wilhelm Reich in the post I mentioned above.

Now shame on me! I had second thoughts and could not believe the translator was so creative so I looked again, and I found this new piece:

‘But my dear Anna, we are not the failures we think we are. We spend our lives fighting to get people very slightly less stupid than we are to accept truths that the great men have always known. They have always known, they have known for ten thousand years, that to lock a human being into solitary confinement can make a madman of him or an animal. They have always known that a poor man frightened of the police and his landlord is a slave. They have always known that frightened people are cruel. They have always known that violence breeds violence. And we know it. But do the great masses of the world know it? No. It is our job to tell them. Because the great men can’t be bothered. Their imaginations are already occupied with how to colonise Venus; they are already creating in their minds visions of a society full of free and noble human beings. Meanwhile, human beings are ten thousand years behind them, imprisoned in fear. The great men can’t be bothered. And they are right. Because they know we are here, the boulder-pushers. They know we will go on pushing the boulder up the lower slopes of an immensely high mountain, while they stand on the top of the mountain, already free. All our lives, you and I, we will use all our energies, all our talents, into pushing that boulder another inch up the mountain. And they rely on us and they are right; and that is why we are not useless after all.’

Why was there Anna and Ella, I should have thought about it immediately. The Ella piece is on page 107 and the Anna one on page 311 of my version. My mistake at least is an indication of the strange richness of Lessing’s novel.

Silicon Valley will soon be 65. Should it be Retired ? – The Darwinian Dynamics of the Region

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Silicon Valley will soon be 65. 65? Yes, I usually say that the region began its growth with the foundation of Fairchild Semiconductor in 1957 (even if the name itself was created in 1971).

endeavor-insight-sv-2-retina

The region is increasingly criticized for both good and bad reasons (see for example here and there) and perhaps it is a little out of breath. Too old ? Ten years ago I had looked at its “Darwinian dynamics” in Darwinian and Lamarckian innovation – by Pascal Picq. I had noted there the remarkable dynamics of creation (and destruction) of businesses. “Twenty of the top 40 SV companies in 1982 did not exist anymore in 2002 and twenty one of the 2002 top 40 companies had not been created in 1982.” So I just did the exercise again.

The table below gives the data for 1982 and 2002 again, then those for 2020. I should have waited for 2022 and the 65th birthday of Silicon Valley, but I didn’t have the patience! Ten of the 40 largest companies did not exist in 2000 and seven more did not exist in 1995. Sixteen of the top 40 of 2002 no longer exist in 2021. The region is therefore a little less dynamic but it remains quite remarkable… The retirement seems to me far away in reality !

As a final comment, five years ago, I had mentioned the evolution of the American capitalism in The top US and European (former) start-ups and in particular The Largest Companies by Market Cap Over 15 Years. You could compare it with the dynamics of French CAC40.

Forty Largest Technology Companies in Silicon Valley
(the same data are provided in jpg format at the end of the post)

1982 2002 2021 Revenue Market Cap
1. Hewlett-Packard 1. Hewlett-Packard 1. Apple $294,135 $2,153,363
2. National Semiconductor 2. Intel 2. Alphabet e $182,527 $1,169,351
3. Intel 3. Cisco b 3. Facebook d $85,966 $787,268
4. Memorex 4. Sun bc 4. Intel $77,867 $194,491
5. Varian 5. Solectron c 5. HP Inc. $57,667 $31,545
6. Environtech a 6. Oracle 6. Cisco $48,026 $192,007
7. Ampex 7. Agilent b 7. Oracle $39,403 $191,539
8. Raychem a 8. Applied Materials 8. Tesla d $24,578 $77,574
9. Amdahl a 9. Apple 9. HP Enterprises $26,866 $15,677
10. Tymshare a 10. Seagate Technology 10. Netflix e $24,996 $236,117
11. AMD 11. AMD 11. Gilead $24,689 $74,058
12. Rolm a 12. Sanmina-SCI 12. SYNNEX $23,757 $6,588
13. Four-Phase Systems a 13. JDS Uniphase c 13. PayPal e $21,454 $277,047
14. Cooper Lab a 14. 3Com c 14. salesforce.com e $21,252 $208,200
15. Intersil 15. LSI Logic 15. Applied Materials $18,202 $78,716
16. SRI International 16. Maxtor b 16. NVIDIA $16,675 $328,615
17. Spectra-Physics 17. National Semiconductor c 17. Western Digital $16,327 $16,183
18. American Microsystems a 18. KLA Tencor 18. Adobe $12,868 $241,275
19. Watkins-Johnson a 19. Atmel b 19. Uber d $12,078 $93,549
20. Qume a 20. SGI c 20. Lam Research $11,929 $69,264
21. Measurex a 21. Bell Microproducts bc 21. eBay e $10,713 $36,576
22. Tandem a 22. Siebel bc 22. AMD $9,763 $115,364
23. Plantronic a 23. Xilinx bc 23. Square d $9,498 $106,173
24. Monolithic 24. Maxim Integrated b 24. Intuit $7,717 $99,872
25. URS 25. Palm bc 25. Opendoor d $7,324 $1,221
26. Tab Products 26. Lam Research 26. Sanmina $6,875 $2,117
27. Siliconix 27. Quantum c 27. KLA Tencor $6,073 $40,492
28. Dysan a 28. Altera bc 28. Equinix e $5,999 $63,238
29. Racal-Vadic a 29. Electronic Arts b 29. Electronic Arts $5,670 $41,368
30. Triad Systems a 30. Cypress Semiconductor bc 30. NetApp $5,590 $14,480
31. Xidex a 31. Cadence Design b 31. Agilent $5,530 $36,607
32. Avantek a 32. Adobe Systems b 32. Intuitive Surgical e $4,551 $92,762
33. Siltec a 33. Intuit b 33. ServiceNow d $4,519 $110,315
34. Quadrex a 34. Veritas Software bc 34. Juniper e $4,445 $7,478
35. Coherent 35. Novellus Systems b 35. Workday d $4,318 $57,934
36. Verbatim 36. Yahoo bc 36. Synopsys $3,821 $39,023
37. Anderson-Jacobson a 37. Network Appliance b 37. Autodesk $3,790 $67,066
38. Stanford Applied Eng. 38. Integrated Device 38. Palo Alto Net. d $3,783 $33,851
39. Acurex a 39. Linear Technology 39. Twitter d $3,716 $44,436
40. Finnigan 40. Symantec b 40. Airbnb d $3,378 $94,765


NOTES: This table was compiled using 1982 and 2002 Dun & Bradstreet (D&B) Business Rankings data and Blommberg data for 2020. Companies are ranked by sales.
a – No longer existed by 2002.
b – Did not exist before 1982.
c – No longer existed by 2021.
d – Did not exist before 2000.
e – Did not exist before 1995.

Same table in jpg format

Female founders – an analysis from 800 (former) startups

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I just decided to add a new analysis to my recent study of 800 (former) startups. Although the topic is an important one in high-tech entrepreneurship, I had never looked at it except anectoticaly in the posts with the tag #women-and-high-tech.


Eight female founders or entrepreneurs. I am not sure how many I would have automatically recognized. And you?

And here are the results I found. My apologies in advance as this work is far from perfect: I tried to identify female founders from their name and this is not always easy. I believe however I cannot be too far from the exact results.

So what does this say?

– There are 76 female founders in 825 companies, which says 9% of these former startups had a female founder. Now to make it worse, the total number of founders identified is 1644.
– It is in the biotech field, that they are most represented (hence Boston, Switzerland, California outside Silicon Valley)
– The good news is that the number is up to 15% for the last decade. Still…
– Now there are only 31 female CEOs, this is only 4% (remember that founding CEOs are a little more than 60% so this is even worse as some of these female CEOS are not even founders – see here if you don’t know what I am talking about). In fact, 20 of these women were founders and 11 were not…

Testament or Testimony ? Lessing, Reich, Grothendieck, Jobs, Arles

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August is a good time to look back at things. It’s when I was thinking of this, that I wondered if there was a common etymology to Testament & Testimony. Apparently, there is not. Whatever… 1370 posts since July 2007 (in fact close to 700 as the blog is bilingual French-English, that’s about one per week), about 600 comments (ah ah!) and a lot of lessons.

August was also special on different sides, particularly cultural… I’ve been reading The Golden Notebook by Doris Lessing, a remarkable novel. Here is an extract: The Communist Party, like any other institution, continues to exist by a process of absorbing its critics into itself. It either absorbs them or destroys them. I think: I’ve always seen society, societies, organized like this: a ruling section or government with other sections in opposition; the stronger section either ultimately being changed by the opposing section or being supplanted by it. But it’s not like that at all: suddenly I see it differently. No, there’s a group of hardened, fossilized men opposed by fresh young revolutionaries as John Butte once was, forming between them a whole, a balance. And then a group of fossilized hardened men like John Butte, opposed by a group of fresh and lively-minded and critical people. But the core of deadness, of dry thought, could not exist without lively shoots of fresh life, to be turned so fast, in their turn, into dead sapless wood. In other words, I, ‘Comrade Anna’ — and the ironical tone of Comrade Butte’s voice now frightens me when I remember it — keep Comrade Butte in existence, feed him, and in due course will become him. And as I think this, that there is no right, no wrong, simply a process, a wheel turning, I become frightened, because everything in me cries out against such a view of life

This reminded me another post dated May 2009 about innovation and revolution which I found a little similar. “Entrepreneurs are the revolutionaries of our time.” And he had added: “Democracy works best when there is this kind of turbulence in the society, when those not well-off have a chance to climb the economic ladder by using brains, energy and skills to create new markets or serve existing markets better then their old competitors” You’ll find it here, Entrepreneurs and Revolution. And also a quote from the autobiography of Malcolm Little , which I had copied in my book. “When he was still at school, he wrote, his teacher asked him what he would like to become as an adult. A lawyer, he answered. Uncomfortable with his answer, she told him he’d rather think about becoming a carpenter thanks to his manual skills, but also because of his status. From that day on, he decided not to listen to such advice”.

August was also the opportunity to see some of the Rencontre photographiques in Arles.

A few exhibitions, from left to right and top to bottom: Masculinities, Pieter Hugo, Jazz Power!, Sabine Weiss, The New Black Vanguard, Thawra! ثورة Revolution!, Desideration (Anamanda Sîn)

Street artists have also been active in August. Just have a look at Banksy or Invader. Artists show the world as it is, the crises, more and more of its diversity, its uncertainties too. Transmission, accepting to disappear have been recurrent topics here, a rather darwinian view of the world. And that’s why I would just like to mention again a few other important quotes to me:

Reich_Listen_little_man

“I want to tell you something, Little Man; you lost the meaning of what is best inside yourself. You strangled it. You kill it wherever you find it inside others, inside your children, inside your wife, inside your husband, inside your father and inside your mother. You are little and you want to remain little.” The Little Man, it’s you, it’s me. The Little Man is afraid, he only dreams of normality; it is inside all of us. We hide under the umbrella of authority and do not see our freedom anymore. Nothing comes without effort, without risk, without failure sometimes. “You look for happiness, but you prefer security, even at the cost of your spinal cord, even at the cost of your life”. Wilhelm Reich already posted in March 2010.

sjobs

No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true. Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary. Steve Jobs already posted in July 2007.

Finally, not a quote but an extract from a text about how Alexandre Grothendieck also discovered this painful passage from youth to future disappearance: In May 1968, the machine goes wrong. Shourik, as his relatives call him, goes to Orsay to dialogue with the “protesters”. The anar is scolded by the “enraged”. The outcast discovers he is a Mandarin. “After that, he was not the same” […] “It was a terrible slap, it was incredibly violent”. I spoke about this math genius in March 2016 and August 2020.

I finish this post which may look a little gloomy with a link to a very good article about trusting science: How to make the future more rational. It is optimitic, enthusiastic and shows that we can be realistic about the world, and our limits and still be positive and happy. Just a testimony or small, fragile testament.

Updated data in equity of 800 (former) startups

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As you might know, I regularly compile capitalization tables from companies which filed to go public or were acquired with shareholder data. The last time I published posts about it was in April 2020 with 600+ such tables. I have now more than 800.

I just posted two articles using these updated data:
– The age of founders and non-founding CEOs on August 4,
https://www.startup-book.com/2021/08/04/the-age-of-founders-and-non-founding-ceos/.
– Employee ownership in startups – The stock option millionaire on August 6, https://www.startup-book.com/2021/08/06/employee-ownership-in-startups-the-stock-option-millionaire/.

The content is as follows:
– Individual cap tables: pages 8-834.
– Updated statistics: pages 835-850.
– Table of content: pages 851-860.

I do not plan to do a new analysis. The one with 600 was rich enough I think. Still the individual cap table are available here:
Equity List 800 Startups – Lebret – Aug2021

or on Scribd but you might need an account to fully benefit from them.

Here is the link to the document or to more similar ones on my Scribd account.

Employee ownership in startups – The stock option millionaire

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August is a good month to look back at data and previous posts. I just published one about the age of founders. Here is a quick look again about what employees may gain in startups when succesful. In addition to hopefully what they do with more pleasure than in big established companies, they usually have access to stock options and one of the myths of Silicon Valley is that in the most succesful startups, everyone becomes a millionaire.

A few years ago, I published some data about employee onwernship based on 600 startups. Have a look here. I also commented a guide about stock options in Rewarding Talent – A guide to stock options for European entrepreneurs by Index Ventures.

So how much ownership an employee have in a startup. I looked at my 800-startup database, and built the following tables. Please go to the end of the post for another analysis.

The three tables show some nuances depending upon the field, geography and period but with an ownership around 0.1%, yes employees are close to being millionaires. Now as the next table show, the situation might be different depending who you are in the company from a manager to a junior.

This last table is an extended version from the one used in the presentation I make about equity sharing in startups:

The age of founders and non-founding CEOs

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The age of founders has been a recurrent topic here as you might see from tag #age. In my analysis about hundreds of startups (822 at this time, and 600 lately), I just thought it would be interesting to check the correlation, if any, there might be between the age of founders and a CEO among these founders or not. Intuitively, one might think that the less experimented founders may induce a non-founding CEO. So here are the results:

The numbers speak and may seem counterintuitive. A majority (and often an overwhelming majority in the digital world) of startups have a founding CEO and the average age of founders is lower in this case. Question of dynamism, of envy of the team, I do not know …. Do not hesitate to react and comment.