The End Of Entrepreneurship? A “Lets Build” Special

This story is a little tragic, but it’s all to common these days. Here’s a great idea, with some clever new things behind it that suddenly disappears.  Why?  If you look at the Solidsmack post the reason become obvious.  The person with the startup sold out.  I can understand why.  he was probably pressured by the money people and the offer was too good to refuse.  He probably also thought that he could use the resources to build up the business. Instead the business got absorbed into the collective and the creativity that made it live dried up.

We’ve seen this before.  The same sort of thing happened in the blog post below.  With the same company.  But the problem is bigger than Autodesk’s acquisition department and it’s something that any prospective entrepreneur is going to have to deal with.  How emotionally involved do you get with your startup?  In these times, it’s almost certain that the pressure from the money will be to sell or growth will not be possible without further funding or an IPO, which will be almost impossible.  So in the end any entrepreneur has to expect that he will have to give up his child.

What’s happened to Makerbot is another case in point. In 2009 Makerbot was about the hottest thing around and doing all sorts of creative stuff.  They were also growing by leaps and bounds.  Perhaps too fast.  they were an exciting entry into a new market.  Then the news came that Stratasys was buying Makerbot.

At least in the beginning this seemed like a good idea to most people. Watch to the end as Bre Pettis explained why he sold Makerbot.

But Makerbot seemed to abandon the advantages of being the creative upstart for the usual corporate drone.  If you were looking at what was happening, you could see the changes.  The people and the company became more likely to be a closed shop rather than being part of the open source community.  And more corporate.

As what seems to happen in these things, the creative force that created the drive for the product is quietly moved out of the spotlight and they become either yet another corporate drone.  Or if they are smart, they leave as soon as they can.

Now I had an opportunity to talk to Bre at the 2013 Maker faire.  I was trying to get a feel as to whether or not to apply to MakerBot for a senior engineering position.  Just from my gut, I did not apply.  It looks as if my judgment was correct. Stratasys has gone to looking at short term numbers rather than developing a long term business. Bre doesn’t seem to be as happy now as he was then.  And MakerBot seems to be heading down the tubes.

This was bad for MakerBot, but more importantly it’s just another example of a trend.  It’s obvious that more and more creative quirky startups are being absorbed by larger companies.  The reasons for this are the fact, that for a large company, money is cheap and because of the finance  and employment laws it’s become prohibitively expensive for small creative companies to grow. This makes the temptation to sell our overwhelming.

Jerry Pournelle’s page with mail that paints a bigger picture of the discussion.
Important comment:
“on the end of entrepreneurship

Being a founder of a startup here in silicon valley, I can comment on Spengler’s essay. In the EDA business (Electronic Design Automation) everyone expects to get bought by one of the large EDA companies. No one expects to go IPO. Why? All of those wonderful laws the democrats passed after the fake energy crisis. Once you pass the small business threshold and enter big business, the cost of doing business goes up prohibitively. Further, the extra burdens placed on IPO’s in the last 10 years, make it much harder to go public. The net result is we all (if we are lucky) join the collective. We get paid for our stock or get new company stock, stay the minimum required time and leave. Those of us with the energy, do it all over again. The unintended consequence is we build bigger and fewer large companies. Just what the democrats like. As Amity Shlaes pointed out in “The Forgotten Man”, bigger companies act more like the government and are easier to manipulate. Resistance is futile.”
The Spengler column: … our-hands/
The big problem right now is that we need 100 Facebook IPO’s a year right now just to make good on the recession and we are not going to get them.  We’ve managed to essentially kill our creative entrepreneurs’ ability to actually grow their businesses themselves.  The laws and regulations, as they exist  have made it impossible, or nearly so for people to grow their ideas much past the garage stage.  Or to even rent their property, as Matt Yglesias found out.

The end result of this is to take wealth creation away from the imaginative  creative kinds of people who add  true value and place the ideas in the hands of large bureaucracies, who’s main interest is preserving the bureaucracy and not making disruptive creative new products.   Bureaucracies don’t like surprises. They distract from the important backstabbing, rulemaking and other important activities.

Now how does this effect our little project?  I don’t know.  I do know that like a child, a business has to grow up.  At some point you will have to admit that the business is not yours anymore.  The hardnosed will walk away and never look back.  The believer will keep going after the sale, trying to make a difference in the new corporate state he has attached himself to, not realizing, that in the end, it’s pointless.  I’ve seen it firsthand.  I think that in these times, when it’s almost impossible for a business to stay independent, the hardnosed is right.  No matter how much you’ve given, how much you’ve sacrificed, once the sale goes through, leave and move on. You have the advantage that you are the creative one, not them.  Use that.

The “Let’s Build” Series


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