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How what I do helps make the world a better place (storylane.com)
14 points by mikeland86 4993 days ago
5 comments

Entrepreneurs don't NEED VCs, but a VC can't do anything without entrepreneurs seeking investment.
Some percentage of entrepreneurs get funded, some percentage of those actually make it. You need both, but there are fewer VCs than entrepreneurs. Therefore VCs have more reach even though they don't directly effect change. The potential of the change that happens is driven by the entrepreneurs of course. Trying to fit that into a "who's more important" hierarchy is just wanking. Reality doesn't fit in such a simple model.
You misunderstand the question posed: who has more power? For instance, all entrepreneurs need customers, but not all customers need entrepreneurs. So, customers have more power to change the world? Of course not.
Well, in aggregate, yes, the customer's have the most power to change the world. The world can't change without people driving the change. A new company's success is directly tied to how many customers need what the company is selling.

Customers have the power to buy a solution. VCs have the power to fund a solution. An entrepreneur figures out what customers need and a way to provide that. And at the same time, also figures out how to get this venture funded. It's their position at the intersection, connecting the otherwise-unconnected dots, that gives them the power to really make something big happen.

EDIT: perhaps a better way of expressing what I'm trying to say is that taking the step to become an entrepreneur after seeing a problem is the most direct way to try to actually change the status quo and fix that problem.

Entrepreneurs, duh. There are lots of ways to get money.
My goodness, a VC has never, not once, changed the world. Unless they were an entrepreneur first.
That's a massive oversimplification that ignores that everyone who has changed the world had lots of help doing it.

Larry and Sergey changed the world. I suspect that their path was significantly easier because they had help from Andy Bechtolsheim, John Doerr, and Michael Moritz - to say nothing of Craig Silverstein, Urs Hoezle, Amit Patel, Jeff Dean, Sanjay Ghemawat, Paul Buchheit, Marissa Mayer, and the hundreds of other early Google employees.

Sure, but ...

I think the main differentiator is the degree to which the help is generic—if person X could have been easily replaced by hundreds of others, X was probably not all that crucial to changing-the-world-process-Y even if they provided a great deal of assistance to Y.

For instance, the people who made the food Larry and Sergey ate while hacking late all those nights, had a very direct effect on the creation of Google: they kept the creators alive! But food providers are easily replaceable (cold as that sounds) in most cases, so it seems a little bit silly to say that the delivery guy for Sergey's favorite chinese takeout "changed the world."

So when it comes to VCs, it seems the relevant question is: absent a given VC, how easily could the entrepreneur secure funding elsewhere? A very, very, risky project that requires tons of money may indeed have an extremely difficult time raising enough funding, in which case the role of a VC that "takes the leap" is much more crucial than it might be otherwise. In other cases, VCs may be more akin to interchangeable service providers.

So, then you get into the question of how replaceable the founders are. For Google that's probably "not much", since there were some pretty big intuitive leaps that were non-obvious when they came out. Even then, however - a lot of people I know say that the inflection point in Google's success was when they hired Urs Hoezle as employee #9, because he had been through the process of architecting a massively-complex system before (he founded the startup that eventually became Java's HotSpot compiler).

But for Facebook - millions of programmers could have written Facebook as it existed in 2004. Mark Zuckerburg did, and he got the billions.

And Twitter - millions of programmers could have written Twitter as it existed in 2006. Jack Dorsey did, and he gets the reputation (and the paper billions).

And Instagram - millions of programmers could write Instagram. Kevin Systrom did. And he happened to know Adam D'Angelo, who introduced him to Marc Andreesen. Who was the critical link in the chain? Kevin, Adam, or Marc?

"An entrepreneur is an enterprising individual who builds capital through risk and/or initiative." According to this definition, a VC is an entrepreneur. If that is the case, then it would seem entrepreneurs would have more power to change the world as VC's are a subset of entrepreneurs. :)