Would you have funded Columbus?

I have just finished reading Daniel Boorstin’s classic book – The Discoverers.  I strongly recommend it to anyone who is interested in a well-written and well-structured survey of scientific thought and progress throughout the ages.  Boorstin’s book focuses on those key individuals who have brought about scientific progress in all branches of science, from geography to psychology.

At the same time, Guy Kawasaki has recently posted an entry on how to attract a VC’s attention.  It continues Guy’s posts on the interaction between entrepreneurs and VCs.  I find Guy’s post to be very relevant to Boorstin’s book.

With each passing generation we seem to consider VCs as an institution grounded in the present.  For example, few recall that it was VCs who launched the PC revolution (with the funding of Apple Computers way back when in the 70’s).

But VCs (and VC-like institutions) existed long before modern technology.  Take Columbus’s story for example.  Here is an entrepreneur who is trying to get funding for his start up:  To discover the western passage to the Far East.  His powerpoint presentation is a collection of new and ancient maps and manuscripts.  His business model is based on being able to provide a more stable, more profitable supply chain for goods from the Orient (vs. using obscure land routes to get there). 

The VCs in question are the rulers of western Europe – Portugal, Spain, Italy, and the city-states.  The pitch is clearly VC in nature – “you invest in my venture and in return you get a piece of the action”.  This is very different from the bankers’ approach (rich Venice merchants) – “you loan me the money, I get rich, I repay the loan + interest”.

It took Columbus 7 years to get the funding he was after.  For one thing, he was pitching his plan at a time when someone else was already providing a solution to the same problem.  In 1488 Bartolomeu Dias was the first European to round the Cape of Good Hope in Africa, proving that it was an eastern sea passage from Europe to the Orient.  In fact, Columbus was just about to get funded by the kind of Portugal, when Dias sailed back from his journey and disclosed the news.  Columbus was promptly turned away.

Taking advantage of the competitive market in which he was operating (with European states competing for trade routes) Columbus pitched his idea to the Spanish royals, eventually getting the funding he was looking for.  His contract with his investors sounds surprisingly familiar:  A profit sharing agreement, with the financiers owning parts of the deal.

Columbus was an entrepreneur, but, as Boorstin points out, not an innovator.  He did the right thing for all the wrong reasons.  His ideas were very conservative, as were his sources.  He got most of his facts wrong (to the end of his life he was still claiming to have reached the Orient).  In fact, it turns out Columbus got lucky – he had managed to find what turned out to be the only good navigable route between Europe and the New World.  Years later, navigators would still use the same route.  Regardless though, it is Columbus’s drive and focus, coupled with his leadership skills, that enabled him to exploit his (accidental) discovery.

Yet another similarity comes to mind between Columbus’s venture and today’s start ups.  Columbus was totally ignorant of the magnitude of his discovery.  It would take others to figure out that he had in fact discovered a new continent.  It would take years before the full impact of his venture would be realized.  This is not unlike the modern PC/software/web revolutions, where value is created in ways unimagined by the original innovators.  Think WWW, HTML, TCP/IP, open source, mobile communications, Web2.0 and so on.  It is interesting to consider what would our world be like today if funding was not available for such endeavours.

So, would you (or Guy Kawasaki for that matter) have funded Columbus?

— Oren

Why Words Matter – Can you Feed me that Chicklet?

13 years ago I was participating in group discussions on the FidoNet network.  I even had a personal profile, and could even engage groups of my friends in discussions and what not.  In retrospect, I was using a social networking service.

10 years ago I setup my first web-page on Geocities.  It had a guest-book, a comments section, the works.  In retrospect, I was running a blog.  The site also had a “links” section (Blogroll) and even had icons linking to other sites (Chicklets)

10 years ago I was receiving web content via push technology.  Remember Pointcast and Backweb?  In retrospect, I was processing content feeds (RSS).

We seem to have an urge to invent and reinvent new terms for old concepts.   From a purely cynical standpoint, one would simply point to the Hype Machine – RSS feeds are hip (and you can raise money off them), so let’s flog them to death.

But I think there are more compelling reasons that underscore this phenomena.

1. Using these specialized terms enables us to have a more focused, concise discussion.  The terms imply a shared common understanding that includes expected functionality, look and feel, APIs, standards, etc.  “I’ve setup a new chicklet” is a shorter, more informative, statement than “I’ve setup an image link which takes you to another site…”.

2. This shared understanding enables us to extend the terms in innovative ways, which would have been impossible before.  Whereas my Geocities site can be compared to a blog, it is totally foreign to the concept of a video/photo/mobile blog.  And yet once we had defined a blog, it is easy to extend its usage.  The terms we define early on become the building blocks of the next innovative layer.

3. Using these specialized terms allows us to focus on what is really important.  “I’ve set up a new social network for book-lovers“.  We immediately understand that the importance of this statement has to do with book-lovers.  We’re no longer bogged down by the term “social network”.

4. Most importantly, defining new terms tells us where we stand in terms of institutionalizing our space.  By creating a specialized jargon we clearly define who we are, what we do, what we do not do, etc.  It gives us a communal sense and clearly separates “us” from “them”.  Where would lawyers and physicians be without their mambo-jambo terminology?  We do away with the terms of the past to symbolize the uniqueness of what we do in the present.  

This is the process by which pure hype is transformed to a shared experience which takes a life of its own.   It is when your parents start referring to blogs that you know something has happened at the societal level. 

5. Practically, these shared terms simply make it easier for us to communicate.  Imagine trying to pitch a social network concept to VCs 10 years ago.  Without being able to use such concepts as tags, blogs, feeds – you’d have to hack at it, feature-by-feature, on a proprietary basis.

Of course, this is an evolutionary process.  We tend to over-hype and to create many more terms than we’ll ever be able to use.  We’re also using extremely ill-defined terms (Web 2.0 anyone?).  But the evolutionary process ensures that (a) selection shall over time weed out the less relevant terms and (b) terms shall adapt over time to the changing environment.

I find this whole topic very exciting – we are in the process of creating new products and services, but we are also creating a new language, a new way to look at the world.  Whether terms are purely internal to the industry (end users don’t care for AJAX or chicklets) or whether they cater to the general population (Podcasts, blogs, social networks, tags, etc.), this is an exciting process to observe.

— Oren

So you think you should blog…

The myth (Blogger front page):
Create a blog in 3 easy steps:

1. Create an account
2. Name your blog
3. Choose a template

Real life:

Deciding to start blogging: 1.5 years in the making

Choosing blog platform: 1.5 hours

Choosing blog name: 2 hours

Creating account: 5 minutes

Creating profile: 10 minutes

Choosing blog template: 2.5 hours

Understanding widgets: 25 minutes

Setting up feedburner: 15 minutes

Creating feedburner profile: 15 minutes

Setting up digg: 15 minutes

Creating digg profile: 15 minutes

Setting up Technorati:  you know it by now…

Setting up Technorati profile:  see above.

Writing a post:  Who has time to write anything?  I’m too busy looking at stats, posting at other sites, networking, etc.  Content?  What does that have to do with a blog?

 — Oren