Every city and region in the West with a technology industry has a massive case of self-loathing when it comes to Silicon Valley. If I had a dime for every article or blog written about how to emulate Silicon Valley, I would retire. There is only one Silicon Valley, and there are a lot of reasons why it will never be duplicated. So this isn’t another article about how B.C. can become another Silicon Valley, home to Apple, Google, Cisco and Oracle. But I do want to talk about one prominent factor that helped create the home of four of the five largest technology companies on the planet: the serial entrepreneur.
In northern California, it’s a badge of honour to have failed at creating a company – as long as you have a success or two in the end. The opening line at the cocktail party in Santa Clara is not how much your company sold for but how many companies you have started. The serial entrepreneur is the epitome of the old adage about trying again if you don’t succeed at first.
Imagine that you have pulled tens of millions of dollars of personal wealth (commonly referred to in the Valley as “plane money,” as in being able to afford your own jet) and you stuff it in the bank and start a new venture all over again. Think about it: you have more money than you will ever need and you go back to working 70 to 100 hours a week, you grovel at the feet of venture capitalists and commit to four to six more years of the hardest white-collar work anyone can ever do. Wouldn’t it be easier to just summer in Kelowna and winter in Hawaii?
Serial entrepreneurs are invaluable to any tech industry because they’ve learned how to lose and how to win. When they start a new venture, they know what they are getting into. The rest of us who start something new are completely and utterly naive. It is OK to be naive. If all of us knew how hard it was going to be to raise money, commercialize a product and hire and manage good people, there would be very few startups. Serial entrepreneurs are slightly crazy, definitely passionate and wholly committed to success. They have to be in order to give up an easy life for the grind of a new company.
We have a plethora of success stories in B.C.’s technology industry that, in turn, have made a lot of men and women very wealthy. To my recollection (going back to the mid-’90s), not a lot of these entrepreneurs have started a new company. This is a tragedy for B.C.’s technology industry, but certainly not a condemnation of these individuals. Far from it. While we have lost the chance of growing a new technology business that benefits handsomely from the collective experience of a serial entrepreneur, we have created valuable mentors, angel investors and government advisers from these success stories.
There are a few notable exceptions, including Adam Lorant, Paul Terry and John Seminerio, who are on venture number three. Or Jon and Josh Bixby, who are deep into venture number two. Or Ian Wilkinson, who just can’t stay away from the video game business. This is not an exhaustive list, but it is a shorter list than those who have had one success and seem to be done.
The serial entrepreneur’s experience improves the odds of new successes. The ability to attract capital changes dramatically as institutional investors prefer to back the “been there, done that” management team. Ask any VC: Would you rather back the new team or the experienced team? In Silicon Valley, every VC has at least one entrepreneur in residence – a serial entrepreneur looking for a good startup to parachute into and run, backed by the very VC that is giving them an office.
Silicon Valley is not a perfect world, and we shouldn’t emulate everything they do down there. However, when it comes to creating great technology companies, we could certainly learn a lesson from them about the importance of recycling our entrepreneurs.
Brent Holliday heads the technology practice for Capital West Partners, a Vancouver-based investment bank.