

How Scientists and Engineers Got It Right, and VCs Got It Wrong - joshuacc
http://steveblank.com/2011/07/25/how-scientists-and-engineers-got-it-right-and-vc%e2%80%99s-got-it-wrong/

======
vannevar
This is the best definition of the term 'start-up' I have yet seen:

 _startups are a temporary organization designed to search for a scalable and
repeatable business model_

This definition explains why funding is the single best predictor of startup
success: it permits the startup to survive until it can hit upon a successful
product. Because most products fail. Even a product that succeeds depends as
much or more on market context beyond the perception of its creators as it
does on its intrinsic value. People are important, but they can only stick
around as long as there is funding. (Of course, funding depends heavily on
social networks, so in that sense the people are important.) But as the author
acknowledges in the article, the fact that VCs generally don't understand why
one startup succeeds and another fails does not change the fact that they
control the single greatest differentiator: money.

~~~
seats
What would you call a company that from its start uses a well-known scalable
and repeatable business model?

~~~
gojomo
Simply a 'company', or perhaps 'new business'.

I think Blank's distinction is helpful, in emphasizing that the term 'start-
up' implies more model uncertainty and innovation.

(Sure, sometimes 'start-up' is used to describe things like a new laundromat
or small consultancy, but the word is more useful when its connotations of
novelty and discovery are prominent.)

~~~
seats
Best answer I'd say. I wonder how many people think they are running a
'startup' when it is actually just a 'company'?

~~~
jamesbritt
The Phoenix area has been seeing what strikes me as variants of "start-up
porn", with many people and places referring to themselves or their services
as in some way related to start-ups. In some cases it's true, but quite a
number of these "start ups" are, for example, run-of-the-mill (albeit
ambitious) Web design or Web marketing companies.

Now, it's great that people are opting to work for themselves rather than go
join some large, likely boring and cumbersome, existing business, but the
conflation of "start-up" with "business" makes it hard to really know what's
going on here or discuss what people are doing.

Having a reasonably clear and useful definition is valuable.

------
btilly
An interesting read, but I disagree with his take.

First of all the idea that tech startups should be started by tech people goes
back a lot farther than Silicon Valley. For example take a look at the history
of the early automobile industry in Detroit. The founders of the early car
companies were for the most part people like Henry Ford - engineers,
mechanics, and other people who knew the technology rather than management
types. Silicon Valley fits the mold of previous startup hubs.

The more major mistake is that Genetech's IPO in 1980 is cited for getting
researchers involved in commercialization. However most observers cite the
Bayh-Dole act in the same year as being the critical factor. It gave
organizations such as universities the right to intellectual property (such as
patents) arising out of research funded by the US government. This created a
tremendous number of opportunities for commercializing research that simply
had not existed previously.

------
Ronkdar
Linking to this will probably kill this guy's server, but there's an
interesting flow chart of semiconductor company inheritance in the article:
[http://steveblank.files.wordpress.com/2010/08/fairchild-
sili...](http://steveblank.files.wordpress.com/2010/08/fairchild-silicon-
valley-genealogy.jpg)

~~~
wisty
It looks like there's a lot of Japanese and German names on that chart. I'm
guessing they weren't there on H1-Bs.

~~~
Locke1689
American immigration means that last names are not great ways of determining
nationality. My last name is German but I'm 5th or higher generation American.

~~~
Symmetry
Heck, people of German Descent are the majority in most places in the US:
[http://en.wikipedia.org/wiki/File:Census-2000-Data-Top-US-
An...](http://en.wikipedia.org/wiki/File:Census-2000-Data-Top-US-Ancestries-
by-County.svg)

------
bchjam
reminds me of Research-Driven Startups by Brad Cross

[http://measuringmeasures.com/blog/2010/7/2/research-
driven-s...](http://measuringmeasures.com/blog/2010/7/2/research-driven-
startups.html)

------
hung
Unnecessary apostrophe is unnecessary.

~~~
katieben
Grammar offender captured! (: <http://pluralizeit.com>

~~~
hammock
Depending on which style book you are using, an apostrophe can be acceptable
when pluralizing an acronym or number, e.g. the 1990's. My preference is to
omit the apostrophe.

Another possibility is that it's a contraction for "VC has," referring to the
entire category of venture capital. This is less likely given that it destroys
the parallel structure.

