Monday, May 20, 2024

Steve Blank Is a $100 Million Enough?

This article first appeared in Inc.

Capitalism has been good to me. After serving in the military during Vietnam, I came home and had a career in eight startups. I got to retire when I was 45. Over the last quarter century, in my third career, I helped create the methods entrepreneurs use to build new startups, while teaching 1,000’s of students how to start new ventures. It’s been rewarding to see tech entrepreneurship become an integral part of the economy and tech companies become some of the most valued companies in the world.

What has made this happen is the relentless cycle of innovation and creative destruction of old industries driven by new startups with new tech and new business models (network television replaced by streaming services, Nvidia GPUs versus Intel CPUs, electric cars versus the internal combustion engine, film cameras versus smartphones, programmers versus AI), all fueled by venture capital.

It makes me wonder – are startups still founded by people with a passion for creating something new? Or has the motivation changed to accruing the biggest pile of cash?

When I was an entrepreneur, what got me up in the morning was building something amazing that people wanted to grab out of my hands and use. The thought that I might make a $1 million or even $10 million on the way was always in the back of my head, but that wasn’t why I did it.

I wonder if it’s different for today’s entrepreneurs.

Here’s a thought experiment: What if we told every new entrepreneur that regardless of how successful they were, their total compensation would be capped at $100 million.

How many aspiring entrepreneurs would decide it wasn’t worth starting a company? Would Steve Jobs, Jeff Bezos, Elon Musk, et al have quit earlier? Have picked other careers?

How many would decide it wasn’t worth sticking around after their company was large and successful? (Would that be a bad thing?)

Would entrepreneurship suffer? Would we get less innovation? If so, why?

Would the best and brightest move to other countries?

Then let’s run the same thought experiment with Venture Capitalists. Would they pick other careers? Invest less?

At $100 million would capitalism crumble?  Would we all be, heaven forbid, be “Socialists” or worse, to even have this conversation?

I’m curious what you think.

Should there be any limit?

If so, why?

Or why not.

What would be the consequences?

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