The dark side of entrepreneurship, continued
petewarden.typepad.com
petewarden.typepad.com
My first real girlfriend's father (let's call him David) was a reclusive "entrepreneur". He basically had the idea/vision for Google Earth about 20 years before that application actually appeared. By the time I met him, we were just before the first dot com era.
Every time I would go over to my girlfriend's house, David would be sitting either in the kitchen or in his basement office, much to our teenage hormone-induced frustration. When I first met my girlfriend, I'd assumed her family was at least upper middle class. Their house was at least twice as big as my family's. It was in a better part of the city. In my world, they were rich. Little did I know that the house was rented, that David hadn't contributed income to the family in several years, and that her mom was working two jobs to sustain everyone.
Even as a teenager just coming to grips with relationships, I saw utter contempt growing like a cancer in the marriage of my girlfriend's parents. I saw a man have to check-in his ego as he asked his wife for what basically amounted to allowance, which he'd often pass on to my girlfriend. About the only thing that was his in the entire house was his laptop. There, he sat and "worked" on his business. He was like one of those business founders who seeks out a technical co-founder. Except he had no technical co-founder. So he tried to do everything himself, piecing the system together using awfully mis-used tools, usually whatever he could get his hands on for free.
David had one gigantic -- yet common, at the time -- weakness as an "entrepreneur". He put too much emphasis on his idea and wanting to get funding to build it out. He couldn't realize that if it never got built, the value of his idea could never be realized and that investors had a hard time perceiving potential value. It was a chicken and egg problem. On the other hand, if it never got built, he could take solace in it never failing either. He always made it sound so impressive, the idea could sit on his slide deck's and in his head where it would never be critiqued by the marketplace.
On more than one occasion, I thought to myself what an asshole he was for making his wife work two jobs. He'd been working at this for at least 5 years and had nothing to show for it. I stupidly brought this up during a heated argument with my girlfriend. I forget why, but I was trying to get her on my side about something. She'd shared similar thoughts with me before, citing frustration that he could never provide for her and her mom. Instead, my girlfriend got really upset with me. Lesson learned, if I was right, that meant her dad, as a person was a complete and utter failure and had been for most of her conscious life. Try having to accept that as a teenager who was daddy's little girl.
One day during the height of the dot com era, some guy from the U.S. (I was in Canada at the time) phoned him up out of the blue. My girlfriend called me up asking me over to dinner. This gentleman would be the guest and he wanted to meet the family. We'll call this guy Rob. Rob claimed to have a deep network with the elite in the United States. He wanted to bring David down to California to pitch the idea to investors.
I couldn't believe it. But for once I saw my girlfriend look to her dad with pride, and the contempt between husband and wife seemed to have washed away. Yet, there were some oddities. Rob hadn't flown up from the U.S. to visit David. He'd driven; in an early 1990s Mustang LX (the crappy one with an inline 4 cylinder and this being 1999). And they'd drive to California... from Toronto. Bringing details like this up would cause Rob not to get confrontational. Instead, he'd cite his love for long road trips and wanting to make a few stop-offs to introduce David to some elite families along the way. I bought in; even when the stories started to get more grandiose. Rob claimed he was a first cousin of a U.S. senator whose family is one of those fairytale American dynasties. One day after Rob had left, David even showed me a fax that he'd received from Rob. It was from the Canadian government supposedly sent to the U.S. embassy. It was supposed to have been confirmation that a VIP from the U.S., specifically Rob, had entered the country. David implied it was some sort of diplomatic memo. One evening when Rob was over, he even joked that some folks were spying on him for industrial espionage purposes. The stories were so farfetched, it's embarrassing to say that after a lot of denial, I loved my girlfriend so much that I wanted this to work out for her and her family.
I remember sharing this story to my parents, whose alarm bells went off right away. I dismissed them, wanting desperately to give the benefit of the doubt to everything being kosher. My mom went as far as calling Rob an obvious con man. But by that time, Rob and David had already started driving to the U.S..
The shit hit the fan three weeks after they left. We kept getting progress phone calls from David. The second-to-last phone call ended with him being so optimistic that he said the family would be financially set for life within a few months. The last phone call still haunts me, and came a day or two after that one. It was David. He was at the border and Rob had dropped him off there. He had no money but he needed to get a bus back to Toronto. Whatever "deal" was in the works was off. As my girlfriend's mom listened to this conversation, she started whimpering. I'm a facts/numbers guy, and I wanted details. I didn't understand what was happening. But her mom couldn't talk after getting off the phone. Here was a woman who literally (and I'm not exaggerating) worked as a nurse 12 hours per day 6 days per week at two different jobs. She looked so much older than her actual age. I can only imagine what she was looking forward to had this "deal" worked out.
David returned, dejected and broken. A few months after this, the family moved out of the house. The mom was calling the shots now and she'd managed to get some sort of very low interest mortgage requiring little downpayment. The house they'd bought was about as far north as you could get, way past the Toronto boundaries into the cheapest real estate people could find at the time which was just newly developed farmland. I was happy that they could get a mortgage, but David did confide in me at one point that it was all over for him. He was unemployable having been out of the workforce for so long. The dot com bubble had bust. Living all the way out there would make him essentially a hermit (very poor public transit and they had one family car which the wife needed to get to/from work). So you want to talk about dark stories, this is freaking dark. It's akin to those writers who work on the one epic script of their entire lives never to have the guts to do anything with it.
It's one of the reasons I've bought into the MVP strategy and felt so strongly about PG's early essays in the 2000s. It might not be apparent, but a lot of "entrepreneurs" had no clue how to build a business, and many thought you had to have these grandiose ideas and build it all before you actually could go into business. It's a ludicrous concept but not much more than 10 years ago, that's how people thought. Keep pitching the idea hoping for millions in VC funding instead of actually trying to build a MVP. Take everybody close down with you while you're at it, except the ones who essentially win the lottery in spite of the poor tactics. I'm pretty sure there are more tragic stories like David's because so many folks thought that was the way to start a tech company.
Incidentally, to this day, I still don't know exactly what happened. Growing up and seeing how the business world actually works, I can only imagine that Rob was some sort of con man. Either he was trying to con David directly, or he was using David as an honest pawn to try to con some folks in the U.S. during the absolute hysteria of the dot com era. This is the first time I've actually recalled this story in its entirety, which is probably why I've rambled and so long. It's a bit therapeutic actually.
The last I heard of David, he had been diagnosed with Parkinson's disease. My girlfriend had dumped me. She'd met another guy. I came over to her place to pick up some things of mine while my ex-girlfriend was gone. David begged for me to keep in touch with him. We got along well and I think one day he hoped that I'd be able to program his idea (he'd mentioned the idea once or twice). But I was heart broken and went through some terrible times of my own because of that break-up. I never contacted him again. I haven't heard from him since and he very well might be dead as he was in his late 60s back then.
TLDR If you want a dark side of entrepreneurship, imagine being an entrepreneur whose family sacrifices everything only to get conned.
I just had decided:
1. Make a lot of money and save them.(Freelancing for real)
2. Move closer to my college so I can walk and not use car.
3. Make cool stuff in my room, for fun.
Now...time for me to finish that damn game that I am getting paid to work on.
Gates was funded by a wealthy attorney father. Apple got revenue fairly quickly and was huge soon after launch.
Amazon I don't know about but the site was a market darling even during the years they hemorrhaged money. That funding would provide a more stable environment than some basement shop without Ivy league credentials struggling to attract VC.
This is a different environment than any startup I or many others could attempt. That kind of financial backing or quick success helps tremendously. I could never start Pandora and struggle for years given the cost of my insulin.
If I quit my job and started a business I would sacrifice stable earnings and existing assets for the chance of ruin and success. It's different with wealthy parents or with investor confidence. There's a safety net. Not many people jump without one - for good reason.
It shouldn't be romanticized. It should be realistically assessed. If you're deluding yourself about that there's too high a chance your personal worries and rose-colored glasses will doom your business.
You may be able to succeed and many do. But if you can't admit the possibility of failure and realistically assess risk or evaluate opportunity costs you have no place running a business. I used to make money reselling computers on ebay. I made good cash. But the shit I never considered ate away at my profits the most.
The difference on Wall Street or working as an accountant is that you generally know where the next paycheck is coming. That's something most people can't handle or survive losing. Even the insurance is a safety net that a family with children needs desperately.
I was diabetic at a young age. How would my mom have coped if my dad had sacrificed insurance and steady income for the chance of riches when I got sick? Think she'd stick around?
Bezos was already well beyond f-u money when he left D.E. Shaw to found Amazon.
Jobs did not have a stable personal life during Apple's early days; he did not meet his wife until several years after he was removed from Apple.