

An idea whose time has come: Entrepreneurialism has become cool - Mrinal
http://www.economist.com/specialreports/displaystory.cfm?story_id=13216053

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randomwalker
Interesting article overall, but one clueless sentence amused me:

"Meg Whitman grew rich by developing an online marketplace, eBay, where people
could buy and sell without ever meeting."

I recommend the book _Paypal Wars_. It was written by one of the "Paypal
mafia." The book goes into quite a bit of detail about the early Paypal-eBay
story, with an epilogue covering events until 2006. The reality is exactly the
opposite of what the article claims.

Under Pierre Omidyar, eBay was a nimble start-up, and by the time Whitman came
in, had established such a lead that the network effect was sufficient for
them to retain their monopoly in the online auctions space no matter what.
Whitman brought a culture of suits, endless meetings and powerpoint
presentations into the company and quickly transformed it into a beast that
moved at a fraction of its former speed. The new eBay took _years_ to
effectively integrate the payment system BillPoint which they purchased; if
they had moved quicker, Paypal couldn't have survived, since they depended
very heavily on eBay at the time.

The corporate culture-shock that the Paypal employees experienced upon being
acquired by eBay, and their consequent mass exodus is now famous. If there is
one positive thing that came out of the Whitman years at eBay, it is the fact
that the Paypal people dispersed and went on to do great things and truly
change the world :-)

Ironically, it was only around the time Whitman finally departed last year
that it became clear that eBay was ripe for disruption. It amuses me that most
of the business world, knowing none of the back-story, will think of the
Whitman years at eBay as a glorious success.

~~~
tlb
It's unbelievably hard to unseat them. I knew the Yahoo Auctions team well
back in 1998-2001, and they had a better product for free. Sellers and buyers
preferred it. But there weren't many buyers because the sellers weren't there,
and there weren't many sellers because the buyers weren't there. So even with
Yahoo's network and brand they didn't win. (They did win big in Japan where
eBay was slow to localize.)

Auctions have worse lock-in than you'd expect. You might think, if there's a
marketplace with X buyers and another with X/10 buyers, most sellers would
make the effort to list in the X/10 marketplace because they can increase
their sales 10%. But with auctions, the sales price is a strong function of
excess demand. Those extra 10% sales would be at significantly lower prices,
and eBay merchandise tends to have low margins. When sellers lost money they
quickly left.

~~~
zach
It's interesting that eBay does seem to be the first web auctioneer of any
note. As many have pointed out, others sold books on the web before Amazon,
there were many search sites before Google, etc. But eBay basically invented
it and has held onto it.

It has been said that Columbus wasn't the first to discover America, but he
became famous for being the last. After his legend spread, none could again
make that claim credibly to the public.

------
pixelmonkey
I just (voluntarily) left a comfortable job at a behemoth corporation to start
my own company with a friend from college. I thought I was being brave, but
apparently I'm just succumbing to a fad?

I don't think it's that starting a business is "cool"; I mean, I guess it is,
in some sense, although paying for your own health care isn't very cool. For
me, this quote was apt:

"People’s attitudes to security and risk also changed. If a job in a big
organisation can so easily disappear, it seems less attractive. Better to
create your own."

It's not just about job security. After spending two years in a large
corporation, I firmly believe that these shops provide less security, less on-
the-job learning, less valuable experience, less opportunities to improve
society, and in many cases less _pay_ than ambitious young people can achieve
otherwise. IMO, working at a large corporation, now more than ever, is an
excellent way for you to hide, duck for cover, and defensively draw a
paycheck. And mediocre people who take this posture are very clever indeed
about ensuring they won't be laid off.

But if you actually want to do something meaningful with your life and happily
spend your days working on a project you believe in, big corporations will
rarely satisfy your needs.

Although I had a relatively good experience in my two years at my behemoth
corporation (my last day is today, incidentally), the best thing I learned is
how I'd rather not repeat the experience. I also look back on the two years
and think that my most memorable moments (even technical achievements)
happened outside of work.

With the means of production well within my grasp as a software engineer, and
with big corporations going into a holding pattern and nixing interesting
projects just to "keep the lights on", it seems like a no-brainer. For me,
entrepreneurship isn't cool -- it's the only rational option.

~~~
davidw
That's what they mean about changing attitudes though... once upon a time,
people got jobs with 'good companies' that made more than a token effort to
take care of them even when things were a bit rough. There's value in that if
you have a family and kids. Nowadays, though, you're right - the big companies
will throw you to the wolves with no second thoughts, so what's the point?

Also, big companies _do_ have a lot of resources that they can bring to bear
on problems that startups will never have. Think of all the cool things
created by ATT and IBM, for instance, in decades past. However, I think those
days are gone, as I am not sure even big companies have the budget to keep
around too many "pure" R&D types any more.

> For me, entrepreneurship isn't cool -- it's the only rational option.

I think I agree with this, but sort of grudgingly/sadly... I'm not sure I am
or really want to be an "entrepreneur". I like to build cool stuff, not run
companies, sell things, bargain with people, and all the businessy things. I
think I can learn those to some degree, but I'll never be someone who lives
for that part of things. So in some ways it's sort of limiting to feel that
"it's the only rational option". I hope that makes sense:-)

~~~
potatolicious
I'm 22 years old and you hit the nail on the head about why I want to go into
business for myself eventually. When I was growing up I was constantly told
that starting your own business was too risky, that a stable job with a big
company is the most secure way to go.

And then for the last 10 years I've seen my father move from job to job, fear
for his employment constantly, and right now is batting down the hatches
because his PHB-dominated company is going through another round of
restructuring because they can't build a product if their lives depended on
it. Yay.

I look at this and wonder how secure a "real job" really is, and given how
little security there is in a job these days, is there a good reason to take
one?

~~~
davidw
I sort of wonder if things won't swing back towards 'stable jobs' a bit. I
don't think a lot of people want to run around taking all the risk on
themselves... it's pretty stressful and can be quite distracting. I could see
a company doing well by _really_ being a good place to work that takes care of
its own.

------
run4yourlives
It's a horrible title really.

Entrepreneurialism has always been cool. Everyone has always envied Bill Gates
or Steve Jobs. Fred Smith's mythical paper is the stuff of business legend.
Nothing has changed here.

But like the article correctly states, what's changed is that
entrepreneurialism has been introduced to the middle class. It's been made so
easy that all those future CEO's and ladder climbers are starting to realize
there is another option. High quality talent sees another way of living life -
and they like it.

Not touched on in the article is the fact that this change in viewpoint from
"climb the corporate ladder to success" to "launch a business and iterate to
success" could be as revolutionary as the printing press. Think about it - the
appeal of being an entrepreneur attracts the same people that would find
getting an MBA and working their way up to C level positions appealing. We
could - in effect - be at the very early stages of an extended "brain drain"
of talent leaving large corporations without the leadership they need to
survive. As the company finds itself less and less attractive to high-end
talent, they struggle to keep up. And the spiral continues.

What we actually may be witnessing is the very early stages of the death of
the corporation as a viable entity - all due primarily to the birth of the
internet. That type of changes is revolutionary - we're talking industrial
revolution scales here.

We're living in amazingly exciting times. I would love to see what the history
books say about us 250 years from now.

------
terpua
I worked for a Fortune 500 out of college for 1 year. That was 1996. I have
been an entrepreneur ever since with some success and lots of failures. I have
been a lone founder to employing 40+ people.

It's hard, lonely (most of the time) work but it's rewarding and invigorating.
And you learn a ton (about business, yourself and life).

I transplanted to Manila (from SV a few years ago) trying to convince young
local hackers to start their own or join my startup (the call of MSFT, IBM,
etc. is strong in these parts). I have infected some young minds and plan to
infect more.

If you are from the Philippines, give me a shout. Startup entrepreneurs are
still hard to come by.

~~~
trapper
Why the move to Manila? What is the difference in your opinion? Has it made
success harder?

~~~
terpua
Upsides: Manila is way cheaper to live. I'm bootstrapping so it made/makes
sense. Salaries are also cheap.

If your startup is B2B, Manila is great b/c the businesses here are so cheap.
So you can find out if you are solving a real pain point, not a "nice to
have".

English is an official language so communications is mostly a non-issue.

Apple opened an online store so hackers now have more options without paying
50% over US prices.

Downsides: startup community is non-existent. Graduates tend to flock to MSFT,
IBM, etc. for a chance to go to the states but with the economic downturn and
uncertain job security, that is changing. It's also harder to find the right
kind of hackers for startups.

If you are looking for funding, it's very difficult.

Those are the major trade-offs. All in all, it was worth it for me and I now
have a chance to positively affect the world wide movement towards
entrepreneurship locally.

------
tlb
As usual, the economist is looking for its keys under the lamppost.

In their graph, "Ease of starting a business" is a measure of how long it
takes to process incorporation and tax paperwork. That is not the hard part.
The hard part is finding co-founders and investors willing to invest, and
customers willing to buy from new companies. It's a function of optimism and
risk taking, not on government procedures.

~~~
davidw
> how long it takes to process incorporation and tax paperwork. That is not
> the hard part.

Try it here in Italy and then say that. Sadly, that sort of thing does matter,
when it really shouldn't. We all have different ideas about how much, if any,
taxes people should pay, but it's really stupid to make people pay through the
nose _before they've even managed to start anything_ , let alone made any
money at it.

------
davidw
If it's getting trendy, maybe now is a good time to go work for some huge
behemoth corporation?:-)

~~~
jeremyw
Or start one. The smart contrarian will see early the comeback for corporate
monoliths. And very slowly begin his work. :)

~~~
GavinB
Figuring out how to make big organizations run nimbly is the next big
challenge. Almost all successful start-up businesses will grow into large
ones. Figuroug out how to make that transition gracefully and keep some of the
agility is a key challenge for future entrepreneurs.

It's also the difference between millionaire and billionaire.

------
rjurney
If startups are cool everywhere, is Atlanta still just as hosed as Munich?

~~~
coglethorpe
Not sure what that means. I'm in Atlanta and noticing a startup community
here. I've nothing to compare it to, but I do note at least two exits
(JungleDisk and FireThorn) recently, so somebody's making bank.

~~~
rjurney
I'm in Atlanta too, and there is definitely a startup community, but what I
was referring to was this: <http://www.paulgraham.com/webstartups.html>

"It's cities that compete, not countries. Atlanta is just as hosed as Munich."

Its another PG essay, and well worth a read.

------
miloshh
An optimistic article, but I wonder if entrepreneurialism has become cool only
in very limited circles - like here.

Out in the real world, with the crisis and rising unemployment, it is once
again becoming a sign of life success to land a safe job in a large
corporation. It seems that getting hired by (say) Google is even more
impressive now than a few years ago.

Another thing that worries me is that there are no IPOs anymore, so the only
options for small businesses are to stay small (and unimportant) or sell the
business to a large corporation (making them even stronger). And with more
regulations and bailouts from the government, corporations might just be
getting stronger than ever. I hope it is not true, I'll be happy if you prove
me wrong.

------
puzzle-out
Entrepreneurship has been cool for a while now - and is now a part of the
establishment - all the major universities have jumped on the entrepreneurship
bandwagon, and governments avidly promote their support for entrepreneurs. So
becoming an entrepreneur can now be a socially validated choice. But is this a
good thing? Historically, entrepreneurs have come from the disenfranchised -
religious nonconformists, immigrant communities - people who are forced to
find another way of making money because they could not get on using
traditional social paths. They can change the world because they have always
seen it partly from the forced perspective of an outsider.

------
ddg
What a bunch of fluff. Criteria such as "ease of doing business" are so
subjective they are essentially meaningless. According to the US Bureau of
Labor Statistics as well as the US Small Business Administration,
entrepreneurship has been trending downwards for years:

<http://tinyurl.com/dyh6hs>

I knew this from another article I read awhile ago, and went even further into
debunking this myth, but could not find the link. But it does appear that the
Economist article lacks substance.

------
jcapote
Wait, it wasn't?

