A Billion Dollars Would Be Cooler, But a Strong Resume May Have to Do

Many thousands of people have jumped into the startup world in recent years in pursuit of fortune and fame. It’s hard to blame them. Never before has it been easier to launch a company and drum up angel funding for it. Never before have founders been quite so widely celebrated. Never before has it been less acceptable to be critical of an early-stage company without experienced leadership or a revenue model.

Jeffrey Pfeffer, a professor of organizational behavior at Stanford’s Graduate School of Business, blames the “overhyping” of entrepreneurship, which is “now seen as the cool thing to do, even though it’s not.” Pfeffer also sees something broader at play, including with his own students.

“This is a generation where many high school districts have eliminated the position of valedictorian, where everyone at the swim meet gets a ribbon,” notes Pfeffer. “[Many people have now] been raised in a variety of ways that makes them not suited for the world of [traditional] work. Their political skills in terms of playing organizational politics are underdeveloped. And the levels of narcissism and overinflated sense of their own abilities and entitlements make them not perfectly suited in a large organization.”

Whatever is driving the trends, the reality is clear: Most of today’s founders will fail. And ironically, when they do, what they’ll leave with won’t be riches or celebrity but instead a pretty solid resume.

The market is awaiting them with open arms, too.

Says longtime Silicon Valley recruiter Bill Beer of Daversa Partners, “There’s a huge talent shortage right now, [the result of] not just 22-year-olds coming out of college but anyone who worked for Apple for 20 years thinking they were suited to start a company from scratch when they weren’t. Instead of going to work for a 50- or 5,000-person company, people were starting their own and diluting the work force.”

Getting “much of that talent back into the establishment will be a win for everybody,” says Beer, adding: “I don’t want to suggest that anybody with any credentials can get a job at any company. Established companies are and will continue to be hypercompetitive for the best talent. But I don’t know of any [tech] companies that are fully staffed right now.”

Of course, not everyone who fails will concede defeat. Once some founders have worked for themselves, they find it impossible to work for someone else.

For his part, Steve Blank — a serial founder who teaches entrepreneurship to students at Stanford, Berkeley, and Columbia — will be celebrating the hold-outs who keep trying to build their own things. He compares them to the gold miners of the mid 19th century. “Like tens of thousands of people who came to California with their picks and their shovels, 99,000 of them won’t find gold but they may well leave behind a society that’s different and, in many ways, more remarkable than anything built before them.”

With regard to Pfeffer’s theories, Blank adds: “Maybe these kids are smoking dope and watching TV in the basement. But they’re also building stuff.”

Greg Gretsch, a venture capitalist with the Bay Area firm Sigma West, largely agrees with Blank’s assessment, even if he questions the promise of that “stuff.”

“Let’s face it,” says Gretsch. “Most of these people are not real entrepreneurs but people who want to be rich and think being a founder is a hot thing to do right now.”

Still, when it comes to staffing his portfolio companies, Gretsch says “I’d be more apt to hire someone who started something and failed, rather than someone fresh out of school. I don’t think anyone who is truly ‘entitled’ would have the initiative to do a startup; these are smart, energetic people. These aren’t the same people who have a hard time getting out of bed.”

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