

Beware of those who say they help entrepreneurs - abarrera
http://alwaysnewmistakes.wordpress.com/2010/12/13/beware-of-those-who-say-they-help-entrepreneurs/

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mixmax
This sounds eerily similar to the so-called startupscene in Denmark.

The events revolve around bankers, bureaucrats, lawyers and consultants trying
to make a buck off the entrepreneurs. This is an evil spiral since nobody
knows what the heck they're talking about, and drain the few startups of the
money and resources they've got. The result is that there are very few
startups that succeed, thus fuelling more of the same bullshit with the state
giving grants to entrepreneurship events and programs that are promtly sweeped
up by aforementioned consultants and lawyers.

And the state keeps pouring money into the black hole not understanding why
the new Google doesn't emerge.

Two years ago Ernst and Young's highly publizised entrepreneur of the year in
Denmark managed to give the first prize to a company which _two days_ after
the event was exposed as one of the biggest frauds in Danish history. A few
years earlier the prize was given to a company with 500 employees that was
founded in 1956.

I stopped going to these events years ago - they're a total waste of time.

It's a structural problem - if there aren't any successful entrepreneurs
there's noone to turn for for guidance, no capable investors and no role
models. Which of course leads to even less successful entrepreneurs.

Maybe this is a European problem?

~~~
pmjordan
_Maybe this is a European problem?_

I think so. Some Europeans don't like to be thrown into the "Europe" pot ("but
we're so diverse!") but it seems we're pretty united on this point of
entrepreneurial un-culture. All across the continent, business plans,
consulting companies, etc. are mistaken for entrepreneurialism. Everywhere I
look, governments think the solution is throwing ever more complex grant
programmes and sponsored bullshit events at the problem. The established
players and the lawyers egg them on of course, as they're only the ones who
can afford to benefit from all this stuff.

Personally, I think the best thing the government could do is to get the hell
out of my face. I'm discriminated against (in Austria) for healthcare compared
to the employed and the unemployed. (I have to pay for insurance and social
security whether I made any money that quarter or not; I _then_ have to pay
20% of my healthcare bills. Employees pay a percentage of their monthly salary
and nothing else; of course they also get paid sick leave) I pay _more_ income
tax (employee bonuses are taxed at 6% - my lowest tax rate is 36.5%; it's
tradition, and in some cases _law_ , for employees to get 2 months' salary as
a bonus). I'm forced into _paid_ membership of useless interest groups which
are just extensions of the political parties.

Sure, I could try to apply for grants. Except for startups the main expense is
the cost of living of founders (most of which turns out to be taxes...). And
guess what, that's not considered a valid expense for tax relief. Plus, the
grant wouldn't cover the lawyers' fees anyway, let alone the amount of time
I'd spend chasing after it.

Hiring people is super difficult and _very_ expensive for startups. Most seem
to employ their staff as perpetual freelancers because the rules (and taxes)
are so arcane. I'd guess that doesn't exactly make them attractive to
potential hires, so you're losing out on talent.

It's better in the UK to a degree. (shame about the weather...) The
bureaucracy is much less (there's a reason UK Limited Companies are popular in
the rest of the EU). Still, at my (UK) university, we still had all the
bullshit business plan competitions. But they seem to have those at Harvard,
too...

~~~
joshhart
The funny thing about business plan competitions is how often the "failures"
turn out to be massive successes. The one I know of best is Raising Cane's
chicken fingers. The business plan was given a C- and then the founders went
fishing in Alaska to make the money for the downpayment.

<http://en.wikipedia.org/wiki/Raising_Canes_Chicken_Fingers>

~~~
metageek
I was once told (in 1987) that the business plan for FedEx had been developed
for a class, and it got a C because the professor believed nobody needed
overnight delivery.

~~~
vietor
Obligatory snopes link: <http://www.snopes.com/business/origins/fedex.asp>

Summary: The rough idea of using centralized switching for parcel routing was
in a paper for a class, but not much else.

Key quote: "in a 2002 interview Smith acknowledged that "I don't really
remember what grade I got. I probably didn't get a very good one, though,
because it wasn't a well-thought-out paper.""

~~~
metageek
Thanks.

------
quanticle
The author makes a lot of good points. Its true that a lot of the officials
who claim to be attempting to help entrepreneurs don't have any
entrepreneurial experience themselves and that hurts their ability to help.

Unfortunately, the random bolding of words really detracts from the content of
the author's writing.

~~~
abarrera
hehe, English isn't my first language, but I'll try to keep it to the point
next time :) Thanks for the comment though!! :D

~~~
acangiano
You mean blogese isn't your first language. ;-) The commenter above was
referring to the abuse of <strong> tags.

~~~
abarrera
ah damn, my bad, hehe well, I know a lot of people that do fast reading and
having it in bold makes this easier, but yeah, maybe this time I over exceeded
myself :P

~~~
vietor
Could you clarify what you mean by "fast reading"? I read very quickly and it
was like speedbumps for my eyes. If the article hadn't been short enough to
fit on one screen I think I would have been annoyed enough to not finish it.

~~~
abarrera
<http://www.copyblogger.com/the-10-second-rule/>

Not that I used that, but I'm a diagonal reader myself and I do appreciate the
bold parts. But as I said before, there are 2 things that don't work too well,
which is, the current blog theme isn't great and too much bold parts on my
side.

~~~
vietor
Interesting, thank you. It got me thinking about and paying attention to how I
read things, and that I will read them very differently depending on the
source.

Articles linked from HN fall into the 'fast but linear' category. Maybe if I'd
ran across your article form a source I give less weight to the bold wouldn't
have bothered me ...

------
robfitz
Same deal with folks who introduce themselves as professional startup
advisors. Be wary! The best ones seem to have tons of interesting stuff going
in their lives already and just enjoy helping out young companies when they're
in a position to do so.

~~~
ryanhuff
True. There are people who invest a lot of time proclaiming their
entrepreneurial advocacy in public forums. I have a hard time distinguishing
this advocacy from a routine lead generation strategy, where the entrepreneur
is a sales prospect.

------
kingsidharth
This reminds me of 'TiE' (the Indus Entrepreneurs -
<http://www.tie.org/homepage> )events in India. They have nothing to do with
Entrepreneurs - just businessmen talking to each other about PR, boasting of
some personal numbers and such.

If you see entrepreneurs meeting - it's exciting, energetic and people want to
make things happen. While TiE events are lame, lifeless and hopeless.

Most of what they say - opposite of that is true for entrepreneurs. One dude
was obsessed with his numbers - and suggested that so should every
_entrepreneur_ , his words went something like - your numbers are the value
you add to your customers. Pathetic.

------
joakin
I'm Spanish and I couldn't agree more.

The scene is full of people who don't know anything about real
entrepreneurship and that do this things because of the State subventions on
these matters...

Oh and don't forget about the social media profets that focus more on buzz
that on building things and the banks with abusive credits.

This country is really bad, specially for technology startups. The philosophy
here is 'Can't touch it, no money'. That's why we got the real state bubble,
that's why the government cuts the subventions on I+D, and that's why founding
any kind of enterprise takes much money, time and useless paperwork.

Edit: typos

~~~
metageek
Sorry, what are subventions, and what's I+D?

~~~
joakin
Oops, poor english I have, I didnt stop to think if I+D was the same in
english :p

~~~
hga
It's close enough, I figured out from the context that I (Invention? Latin
inventus -> Spanish invención or English invention) was our R and that
subvention had to be something about transferring money.

And some of the problems you and Vargas relate are hardly unknown in the
entrepreneurial backwaters of the US although it's only in some particularly
obnoxious very political cities where the local governments can really get in
your way. Which of course lends itself to obvious solutions given how mobile
our society is.

Anyway, good luck improving things over there!

------
DevX101
If you ever get a business card from someone at a networking event who calls
themselves a startup advisor, consultant, etc...RUN!!!!

------
dasil003
It's really unfortunate, but I think this is the reality in most places.
Startups and entrepreneurship are now so visible on the internet that everyone
is trying to get a piece. You have wannabe entrepreneurs everywhere now, and
so there is also a cottage industry of snake-oil salesmen and unscrupulous
"VC" operations that spring up to take advantage of the hype.

One of the beautiful things about being in silicon valley (having been here
for 3 out of 12 years of my professional life) is that you inevitably run into
people who know what they're doing and are happy to share their experiences
with you. Once you get a little bit of this under your belt you can spot the
posers and wannabes a mile off.

Even if you aren't in the valley, you can get still get enough information on
the web now to really hit the ground running with a startup. Of course if you
don't know what you're looking for, it's still a crapshoot to understand who's
giving good advice and who's full of shit, but it's a far cry from 20 years
ago, where if you were outside of silicon valley you might not even realize it
was _possible_ to start a tech company from scratch.

------
rahooligan
I found the situation to be similar in north america too (ontario, canada and
michigan to be specific). There are people that show up to these events and
sit on panels and have access to all sorts of funding. They say they can help
entrepreneurs without having a single startup under their belt.

------
lesterbuck
This tracks very well with Andrew's Mixergy interview of Spanish entrepreneur
Juan Dominguez (<http://mixergy.com/redcpa-viajar-juan-dominguez/>), where
Juan mentions that there are really no VCs in Spain, and the money sources
there offer atrocious terms.

~~~
abarrera
Couldn't agree more. Recently I gave a talk about startup financing where I
had to explain some of the most crude clauses of term sheets that "were" used
in the US 10 years ago, but that "are" used by VCs in Spain currently :(

