A conversation with Guy Kawasaki

Uma conversa interessante com o venture capitalist Guy Kawasaki, que saiu recentemente no blog  http://www.statesman.com!



A conversation with Guy Kawasaki

Lori Hawkins, Plugged In

Guy Kawasaki venture capitalist, former Apple fellow, author and entrepreneur is a product of Silicon Valley, but he sees the possibility for innovation everywhere.

Kawasaki, a founder and director of Garage Technology Ventures, a Palo Alto, Calif., firm that invests in startups, was in Austin last week for South by Southwest Interactive, where he judged the Microsoft BizSpark Accelerator business competition.

“It took Silicon Valley eight decades and a lot of luck to get where it is today. No one place has a monopoly on smart people,” he said. “What matters is providing a good service that people want to use. If you can’t do that, it doesn’t matter where you are.”

Kawasaki, whose latest startup is Alltop, which describes itself as an online magazine rack, says it’s easier than ever to launch a technology company but still as challenging to build a successful one.

“One thing hasn’t changed: Nine out of 10 entrepreneurs will fail,” he said. “Does that mean you shouldn’t try? Of course not.”

We asked Kawasaki to share some thoughts on today’s startup climate.

Has it become almost too easy to do a tech startup these days, especially in social media, attracting too many people who think they have a cool idea but are more or less oblivious to the hard business realities?

It may be too easy in terms of costs, but it’s still very hard to achieve critical mass and significant revenue.

This is like saying it’s too easy to publish a book or magazine. You still have to write a great book and sell it. The more companies that start, the more likely there will be some great ones in the mix. It’s the law of infinite monkeys.

Are they more oblivious? Maybe, but obliviousness is a good thing. If people knew how hard it really is to start a successful company, very few would do it.

Venture funding for true startups has been in somewhat of a retreat. That’s been perhaps more acute in Austin than in some other places. As the economy recovers, do you think that’s likely to turn around, or has the venture model changed so substantially that getting money to launch a startup will remain a serious challenge for the foreseeable future?

The venture model hasn’t changed because the venture capitalists wanted it to change. They’d love to continue the 2.5 percent baseline (in management fees) and $500,000 salaries whether you do good or bad.

The costs of starting a company have changed — free, open source tools; cheap talent; free or cheap marketing via Facebook, Twitter, and blogs; and cheap infrastructure in the clouds.

Entrepreneurs need venture capitalists less, and this is a good thing. The venture capitalists that stick it out can pick from more mature companies, and companies can pick from more stable venture capitalists as well as determine more of the terms upon which they take investments.

What’s the toughest tough-love advice you’d give entrepreneurs these days?

Add one year to your shipping schedule and divide your revenue by 100 when you do your forecasting.

I’ve never seen an entrepreneur achieve even her most conservative sales forecasts. Most entrepreneurs conservatively forecast achieving the fastest revenue ramp in the history of mankind.

Does technical expertise even count in a startup these days? If so, what kind?

Good engineering counts as much as ever. Companies still have to create great- looking products with great functionality and great reliability.

Nothing has changed here. Indeed, because the barriers to prototyping are so much lower, there’s greater competition to create great stuff.

Any guesses as to what the next breakout technologies will be?

By definition, someone in my position is unlikely to know, much less create, the next breakout technologies. The richest vein for this is two guys, two gals, or a guy and a gal in a dorm room.

What would you have asked Twitter co-founder Evan Williams at his South by Southwest Interactive keynote interview? (Editor’s note: Hundreds of attendees walked out early, saying the interviewer was boring and that Williams didn’t have anything interesting to say. There had been wide speculation he would unveil Twitter’s ad platform, its first real source of revenue.)

How have you convinced your investors that revenue doesn’t matter?

Where do you see Twitter headed?

Twitter is a platform, and as a platform, people will define what it does for them. For some, it’s warm and fuzzy social interaction. For others, like me, it’s a marketing mechanism.

There is no wrong or right — it’s whatever works for you. In many ways, Twitter is like “the Internet” in general.

As you were leaving Austin, what things stuck in your mind about the event?

As I was leaving Austin, all I could think about was how much I loved the Lucchese black ostrich boots that I had just bought at Allens Boots.

Lori Hawkins covers venture capital and startups for the Statesman.
 lhawkins@statesman.com; 912-5955


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