Startups Should Start From The Heart

Written By on September 23rd, 2011 | Category: Marketing | 23 Comments

Peanut Butter Cup Heart

Editors note: Anthony Lee is a General Partner at Altos Ventures based in Silicon Valley. Prior to joining Altos, Anthony led marketing for 3 startups and co-founded a few others. He’s also one of the co-founders behind the C100, a network of top Canadian technology leaders dedicated to supporting Canadian entrepreneurs.

Every year as a venture capitalist I see thousands of investment proposals and meet hundreds of entrepreneurs. I basically boil them down to two types: companies that start from the head and companies that start from the heart.

“Start-from-the-head” companies are started by business types, often MBAs, who are motivated primarily by their interest in starting and running a company of some sort. These companies often come in with slick presentations, fancy financial models and detailed business plans. They talk about things like addressable market, segmentation, channels. “Start-from-the-heart” companies are usually started by engineers and tinkerers who have a burning personal passion for solving a problem that they have struggled with – sometimes for years. What they lack in formal plans they make up for in working products, paying customers and real passion.

We have a strong preference for the latter type of company.

That is not to say that MBAs don’t build great companies, but it comes down to a question of motivation. We have found over time that the most enduring and successful companies are the ones created out of a founder’s deep personal conviction around solving a very specific problem. And they’re usually the most fun to work with.

Sometimes these ideas arise from a personal passion. David Baszucki is the founder of an online building world called Roblox. After successfully selling his first startup, Dave chose to build a company that was near and dear to his own passion as a tinkerer (I’ve personally experienced his homemade ziplines and potato cannons). Dave also wanted to build something cool and constructive for his four creative kids. Roblox is now one of the most trafficked kids websites in the entire country.

Jeremiah Grossman was just a teenage computer enthusiast when he hacked Yahoo! and caught the attention of David Filo, who hired him within weeks. Jer eventually left to start Whitehat Security, the world’s foremost web application monitoring company. He’s one of many fortunate founders who’ve turned their hobbies into great companies.

Many huge companies have been started as personal projects or academic inquiries. Sun Microsystems was born after graduate student Andy Bechtolsheim cobbled together the Sun-1 as his personal CAD workstation. Larry Page was fascinated by the mathematical structure of Web links when he wrote his Stanford dissertation and created BackRub, which later became Google. Mark Zuckerberg’s predecessor to Facebook was Facemash, a Hot-or-Not site he hacked while drunk in his dorm one night. I’m pretty sure neither of these guys set out to build global digital advertising behemoths.

And sometimes these ideas literally start at the kitchen table. Challenged by getting our young kids to eat their veggies, my wife Jennifer began playing a dinner game with them – points for eating colourful vegetables and fruits. She eventually created a set of index cards and which turned into a card game that helps kids have fun eating a colourful, healthy plate of food. Fast forward a few months and Crunch a Color has won a “Top 100” toy award, sold out its first production run in a week and been picked up by retailers across North America.

My wife never set out to build a business, but she – like so many founders who start from the heart – might actually end up having a pretty good one.

How about you – what passion/problem drove you to start your startup? Would love to hear from you in the comments below.

Comments.

  • Anonymous

    Hi, Anthony!  Thanks for our chat at AccelerateMTL this past spring, and now this opportunity for a brief on our firm, Space Codesign.  Our product, SpaceStudio, is computer-aided design software (CAD) for chip design that works a higher level, called ESL (Electronic System Level), to reduce complexity and improve productivity in creating embedded electronics hardware and the software that runs on it.  ESL has
    started to take off, at +15% CAGR in 2010.  Using our software to create their designs in ESL, engineers can rapidly evaluate hardware AND software options, at the same time, in parallel, and achieve up to 30% reduction in product development time with improved quality.  (Most of our competitors focus on ESL for hardware design with software as an afterthought.)

    Our technology originates from Ecole Polytechnique de Montreal, so we’re a university technology spin-out.  The company is productizing that work, taking advantage of NRC’s IRAP innovation grant and SRED tax credit programs for pseudo-bootstrapping.  We’re involved in a couple of research projects that we are working to convert into customers, and preparing to enter the general market.

    • http://twitter.com/danmartell Dan Martell

      Gary, why didn’t you email Anthony directly? I’ll leave the comment but looks kind of spammy.

      • Anonymous

        Dan, what would you recommend that I cut out in order to look less ‘spammy’ or pitchy?  I’ve been working on our elevator pitch, applications, etc. so that may be affecting my presentation!

        • http://twitter.com/danmartell Dan Martell

          Instead of leaving a comment that’s unrelated to the post (having your heart in the idea) – just email Anthony directly .. his email is on their website. 

          my2cents

          • Anonymous

            Thanks, Dan!  Sorry for the trouble, I will edit our contribution.  It will be interesting to write about how we feel, since we have been relying on our passion to be expressed through our presentations! :)

    • http://www.Spidvid.com Jeremy Campbell

      I don’t think your comment was from your heart Gary! Great post, I can tell it was written from the heart!

      • Anonymous

        Thank you, Jeremy, but I have modified my comment to better reflect the topic.  This is more personal versus the presentation mode that I have been working in, for the last little while.  Thanks to Dan for his comments and Anthony for his original posting.

  • Nick Barker

    Hummm…. I’ve an MBA. And last time I coded was in 2nd grade! Yeah, I know I should do it again as we are a awesome software startup but its not my passion.

    Armed with an MBA and 20 years of real biz dev experience does that make my passion for building a world beating product any less than a software developer. 

    The thing is, I worked/sold/configured many of the world leading enterprise system monitoring software products and they just don’t delivery what it says on the tin. Yes, I know enterprise software is more than just about features.

    We (me and my tech co-founder) think it can be do so much better – delivery on our promises. So we battle against all the challenges in a startup to find a way it can be done. And now it starting to work well :)

    Please don’t be too hard on non-tech founders – we are passionate and motivated too. And that’s not motivated by money. Afterall there’s more to life than money ;)

    • http://twitter.com/aplee Anthony P. Lee

      Nick and Werner – I’m an MBA too.  I put that in there as a simplifying trope to get the point across.  The point being: passion about the problem matters.

  • http://www.facebook.com/profile.php?id=554910975 Werner Colangelo

    Yup, another MBA here. But I do generally agree with Anthony’s post. From my perspective, without the passion you won’t last through the difficult times. If you made every decision based on what your financial spreadsheet told you, well, not many businesses would continue. As well, I think that most people (even VCs!) are a decent judge of character and can see through founders who are motivated only by external factors (i.e.  wealth, fame).

    Bottom line (pardon the pun): I would guess there is a strong correlation between passion and success (however you define that).

    Ok, back to my spreadsheets…

  • Anonymous

    Love the language in this post. I’ll borrow it to rephrase questions that I chew on regularly: 

    1) Do accelerators inherently produce “start from the head” entrepreneurs? 

    2) Is today’s ‘cult of entrepreneurialism’ and media environment encouraging a generation to ‘build to sell’ rather than ‘build to better’? 

    • http://twitter.com/aplee Anthony P. Lee

      1) There are some but I am worried that all the accelerators out there are churning out quite a number of companies that are in search of a problem (see John’s comment above).  Reminds me of the many incubators in the late 1990s but at least most of these accelerators are populated by hackers.
      2) Yup.  Too many people building companies just for the sake of it.

      But you could argue that 1) and 2) are better than doing nothing.  Bubbles and innovation go together.

  • Carrie

    Anthony, I agree that without passion, there is just not the drive to truly do what it takes to make a new venture fly and be successful.  Where I see a potential roadblock is with the whole ‘pivot’ concept.  What you need to be able to do is find the essence of whatever it is that drives your passion for the product and make sure that the essence remains if you have to pivot or you end up with what seems like the worse of both cases – someone who started from the heart but now has to run something that is only from the head.

    • http://twitter.com/aplee Anthony P. Lee

      I am always trying to help our entrepreneurs understand the “essence” of what they are (or could be) BEST IN THE WORLD at.  So important to be honest about that.  Sometimes the answer is … nothing.  Then the right answer may be to stop.

  • John Ramey

    When I saw the headline I was happy, then got sad when it became a MBA vs engineer thing. That’s a false dichotomy. I’ve seen MBAs do this right and have seen product / engineering masters with past successes do this wrong.

    The real problem, and what you’re trying to get at here, is that far too many companies are started as “solution in search of a problem” or they stumble on generalized problems like “oh, people like to carpool, so lets make carpooling easier than craigslist” – and that’s no way to go about changing the world. 

    • http://twitter.com/aplee Anthony P. Lee

      John – yup.  Fair.  See comment below.

  • Anonymous

    Love it, Anthony!  I have been thinking a lot about this exact topic lately as I study how many successful companies got their starts.  In the end, the passion of an entrepreneur and building things that make a difference are what matter in most cases.  I love being able to be involved in companies with those two characteristics.

  • http://twitter.com/JayAClarke Jay Clarke

    I get the use of the MBA/Engineer break up, as an easy example, though not necessarily a strong one. Aside from that reference tying things up at the start, the article makes a really strong point. I’d argue that it’s more tenacity than passion, but it does drive an entrepreneur from the heart.

    Passion tends to blind entrepreneurs from why they are doing something and focuses them on strictly what they are doing.

  • http://www.eqentia.com William Mougayar

    Great post Anthony. How about companies that start from the heart, but that have it also from the head. In my experience dealing with VC’s they’ll want to see the data that will come from the head, not the heart. 

    Heart will get you a great product and team, but head will get you funded. 

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  • Andrea Shillington

    Thank you for writing this article. I’m currently starting-from-the-heart and needed to read this article. 

    My business is about to launch next month and it’s been a problem, a collection of problems actually, that I’ve thought about for a long time now. I’m finally taking the leap and turning my “ah ha” moment into a business model that’s never been done before. But, I so wish, I had the MBA and access to a team of online gurus, because the online world of business is not that simple anymore. My story in a nut shell… I’ve been a brand consultant working internationally for medium to large companies. When I returned home to BC (the best place on earth) I met a lot of  amazing entrepreneurs with Do Good businesses, and I wanted to help them ALL! But, they couldn’t afford the agency rates. So I’ve been thinking a lot about how to make strategic branding affordable for start up businesses. And I don’t just mean the logo, I mean the whole process! 

    Steve Jobs changed the world with his clarity of purpose and design-led products. I believe every business should have the chance to be born an Apple. 

    If you’ve gotten this far into my rant… thank you for listening who ever is out there! 

  • http://www.facebook.com/people/Sai-Chandra-Shekar/1500522000 Sai Chandra Shekar

    Hey 1 Was this the post i was looking for all these days ?! Trust, had this conundrum ! Solve problem vs Set up Business. Had few critics schooling me with Start from Head mantra !

    I myself have been a huge “Code” hater ! now trying to solve that problem. Just started an initiative called ” Kill Code Phobia” to help students fight the fear/hatred towards coding. We are still not clear on the Business model ! But pretty much sure on how we are gonna solve the problem. Challeneg is to bridge the gap between the problem and product as a business. Good lord ! we came across this post ! for an inspiration not to give up and slow down!

    Cheers
    Sai [ Founder - Kill Code Phobia ]
    http://killcodephobia.com