Pareto Efficient

In search of pareto improvements

Posts Tagged ‘vc

Good-deferral isn’t that great

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Like most people, I’ve always wanted to help people less fortunate than me…at some point in my life.

I met some legendary Silicon Valley investors while restarting a social networking startup in early 2005.  They invested in or built billion dollar companies, and now they hang out, make angel investments and give back to the community.  It’s the “standard” Silicon Valley model, and it sounds great.

I bought into it 100% with every ounce I had.  Work every minute of every day — okay.  Take up polyphasic sleeping to wring a few more hours out of the day — sure.  Drink the kool aid — yummy, tastes great!

There’s only one problem…most VC-backed startups don’t make it, and even good entrepreneurs strike out.  There are so many things that can go wrong.  So, what happens if you spend your whole life chasing big payouts that never materialize?  In the standard model, you never get to help people.  Life FAIL.

The issue lies in the separation of value creation from helping people.  In the standard model, you have to make a truck-load of cash in step 1 for the privilege of helping people in step 2.

What if you just merged the two?

What if you started a company that creates value by helping people.  That way, the number of people helped scales along with the company’s success.  Even if it eventually fails, at least it has helped some.

In this new model, ROI = monetary returns + people helped.  In two words its: social entrepreneurship.

So that’s the theme of my life right now.  Everything I do is to this end.

  • How can e-commerce help people in Africa?
  • Why learn to code (yikes!) instead of hiring an engineer right away?
  • Why bootstrap a startup when investors are throwing money at you?

Those are subjects of future posts…


Written by thetyson

February 1, 2008 at 8:22 am