Short story. “Joe” has been working for 5 years to bring a software product to market while keeping the day job waiting & bussing tables. He has a wife, two kids, a dog and they live in a small nothing apartment.
For years, Joe toils away while pounding the VC pavement looking for angel, seed, anything. He is in the apartment because he’s already sold the house, already maxed the credit cards, hiding from bill collectors, etc, but he believes! He also driving a Pinto with a billion miles on it; trillions if you do it in kilometers.
Finally, one day, he gets funded. 3 million brand new Yankee dollars into the company. He is flying. The VC says, Joe, you gotta do this full time, quit waiting on tables and Joe says, amen. The VC says, Joe, take a salary with the founder title and Joe says Amen.
After seeing the first actual paycheck for this business and seeing some personal income, Joe decides he owes his wife; big time. Joe leases her a 2002 Mercedes (in Dec 2005). He keeps the Pinto. I didn’t know you could lease a car that old, but that’s another story.
One day, Joe drives the Mercedes into work because, surprise, the Pinto is in the shop. Board meeting day. Later that morning the VC comes into the meeting and, in front of the whole board, with two guests (employees) in the room, proceeds to lecture Joe on spending VC money for Mercedes. Joe says, excuse me, it is my wife’s leased car not mine. VC says, doesn’t matter, we didn’t pay you to go off and get cars for anybody. If we had known you were going to buy cars, we could have cut your salary, we think for the good of the company, you should never drive that car again.
I got all this because “Joe” called my cell today, told me the story, said he’d read my blog, and asked a simple question:
“How hard is it to return VC money, I can get my waiter gig back.”
This is probably an extreme case. I’m sure it is, but it started me thinking about my VC world. My conclusion is this world has some issues that need to get fixed. Everything from being nice (no referrals) to defining the customer (you, the start up), we have lots of issues. Add this to the changes happening on the Web, the big guys using the HR department to handle buying small companies (hire em and ‘buy the company’ via big sign-on bonus), we’ve got trouble brewing.
It was this thinking that lead me to think about ways to make things better both for VCs and for our customers, the start-ups. I’ve taken input from Robert Scoble, Chris Pirillo, Hugh Macleod, and Doc Searls, to name a few. I spent a day with Doc which you can read about here. He has forgotten more about pretty much everything I know. When you add his knowledge to his lovely wife Joyce’s knowledge, you get 2 + 2 = 100. In the end, we concluded a number of really fun/smart things that should be done. Hopefully, I can convince Doc and a few others to take a shot, make some new rules, and try to apply the clue train and hughtrain to the art of getting good ideas into sustainable forms that create the because of effect.
Read Doc’s piece and stay tuned.