Lecture Notes: The Rise of Internet Entrepreneurs

The Evolution of Startups

• Internet growth has transformed small startups into influential companies.
• Young visionary entrepreneurs often lead these companies.
• Entrepreneurs create something from nothing, operating outside their comfort zones.

Defining an Entrepreneur

• A person who dares to dream and chase it, investing time, money, and taking risks.
• Entrepreneurs solve problems, often their own or large-scale issues, significantly impacting the world.
• It's likened to a new trend, akin to the 'new smoking'.

Changes in Startup Landscape

• Costs for starting web-based startups have decreased.
• Previously dominated by large companies (e.g., Yahoo, AOL).
• Today, young tech-savvy individuals and hackers thrive with minimal resources (laptop & Wi-Fi).

Youth and Entrepreneurship

• Younger people have less to lose, more idealism, and fresh perspectives.
• Silicon Valley culture values listening and serious engagement, regardless of age.

Case Study: Brian Wong

• At 19, raised $4.3 million for the company "Keep".
• Emphasized self-learning (e.g., Photoshop, design) and political science for understanding power structures.
• Moved to San Francisco for better opportunities.

Entrepreneurial Life

• Challenges include long hours, financial issues, and an intense lifestyle.
• Bootstrapping is common, building a business with little or no money.
• Entrepreneurs experience high emotional highs and lows.

Case Study: Alexander Jung (SoundCloud)

• Founded SoundCloud, an audio platform, with Eric Wohlfors.
• Moved to Berlin due to its creative scene, starting with minimal resources.
• Successfully launched SoundCloud from a grassroots level.

Funding and Investment

• Venture capitalists and angel investors fund startups in exchange for equity.
• Angel investors usually have a personal investment history; VCs do it professionally.
• Initial fundraising is challenging but crucial.

Case Study: Jessica Ma (Indinero)

• Built businesses from a young age; raised $1 million for Indinero.
• Lived with her team in Silicon Valley, working intensely on the startup.

Entrepreneurial Motivations

• Not solely money-driven; driven by passion for products and problem-solving.
• Entrepreneurs must consider the weight of investors' money and expectations.

Case Study: Leah Culver

• Co-founded Pounce and later Grove.
• Used creative strategies (e.g., laptop ads) to fund her startup endeavors.

Failure in Entrepreneurship

• 90% of startups fail; failure is part of the process and accepted as a learning opportunity.
• Entrepreneurs often continue to try despite failures.

Case Study: Ben Way

• Early dot-com millionaire who lost it all but continued to pursue entrepreneurship.
• Emphasizes learning from failure and the importance of resilience.

Key Ingredients for Success

• Successful startups require a great idea, team, timing, funding, and luck.
• Luck often plays a critical role in success.
• Creating one's own luck through hard work and experimentation.

Case Study: Zach Klein (Vimeo)

• Co-founded Vimeo while also working on College Humor.
• Left Vimeo for personal creative pursuits, seeking fulfillment outside the internet.

Reflections on Entrepreneurship

• Encourages following personal passion and taking concrete steps toward goals.
• Emphasizes that there's no set path; each entrepreneur's journey is unique.
• The importance of starting despite challenges and uncertainties.