The Rise of Internet Entrepreneurship

The growth of the internet has changed small startups to some of the most influential companies in the world. Behind these companies are more often than not young visionary entrepreneurs who grew up with the internet and now seem best positioned to direct the future of the web. Who are these new entrepreneurs and what drives them? A really great founder seems to be building a groundswell even if there's nothing there. And so he in effect is a magician. He creates something from nothing. You're always kind of just on the edge. your comfort zone and everything you're doing is basically something you're just barely qualified for or not qualified for and it's like jumping off a cliff and having to build your own parachute I think an entrepreneur it's a difficult one how do you define an entrepreneur I think an entrepreneur is a person who dares to have a dream that not that many people have, and even more importantly, dares to chase it, put their money where their mouth is in their time and their career, and dares to take the risk of going out there to realize that vision. Entrepreneurs are some of the craziest people you'll ever meet. They're people who have a dream or an idea. They have something that keeps them awake at night. They get the opportunity to hopefully solve that problem or do something about it. And so the best entrepreneurs are often either solving their own problems, problems or solving some huge thing and they can really change the world. Entrepreneurship at the moment is kind of like the new smoking. It's cool to be creative, it's cool to be making something and I just love that energy. Over the last couple of years, the cost of starting a web-based startup has decreased dramatically. I think over the last couple of years, it's changed dramatically. If you think back to the turn of the century, 2000, what you had was very large companies often creating websites like Yahoo, AOL. These were much bigger companies creating new kinds of products on the internet. With the crash those went away but the internet didn't go away and what actually happened was new innovative, young innovators came along, looked at the web and said we can do this differently. Ten years ago if you want to start up a company you've got to go like pay a lawyer to tell you whether you should do a C-Corp or an LLC. Bam that's a Google search done, free in like five minutes. You know by that time you wouldn't have even gone past the lawyer's section. Secretary 10 years ago. It's really interesting to see what entrepreneurs will look like 10 years from now. You know, before they were managers, maybe a little engineering, and now they're young tech people and hackers. Anybody now with a laptop and a Wi-Fi connection can build anything. Today a lot of people will be able to start companies who never could have before. This applies especially to younger people. They are willing to put in the long, unpaid hours and have nothing to lose. As you get older you get set in your ways and you get certain patterns and you recognize them and you behave a certain way but you know I think the young entrepreneurs see things differently in a way that I think is often times refreshing and therefore groundbreaking. One of the great benefits of starting young in business is that you have less to lose. Once you have four kids and something where you have to remortgage your house in order to finance your company, that's a bigger risk to take than if you come straight out of university. and all you have to choose between is either you take up a job or you start a crazy company to do crazy things and learn. I've met kids out here who are still teenagers and starting companies and all the way down to 16 years old, which is pretty crazy when you think about it. Younger people have been affected by less and they're oftentimes more idealistic and they have bigger dreams and bigger visions because they don't know necessarily better or worse. It doesn't really matter to me. I could be 50 for all I care because I'm not going to be a teenager. removing the age element is really What I think makes the Silicon Valley area so fascinating is that I know so many people that could be really young, could be really old, they still take you seriously. They'll still listen to you. And that's why there's this culture of listening that I think is so conducive to entrepreneurship, which is why this area is so valuable to people. Brian Wong grew up in Vancouver, Canada. At 19, he had raised $4.3 million in funding for his company, Keep, a reward network where you play games on your phone and get real rewards through Keep's network. My parents at one point thought that I was addicted to my computer and wanted to take it away from me, and I'm glad they ended up not doing that. But I spent almost 8 to 10 hours a day on my computer. And this was at the point when I was very addicted to Counter-Strike Source. Which was a first-person shooter game that was extremely popular when I was young and still very much so is and I spent Hours and hours playing that game because I needed to maintain my top of server status I was the top of like three servers and it takes a lot of time to maintain that I Spent a lot of time on Photoshop I taught myself how to design just because I figured it would be pretty fun to learn how to do that and I taught myself through forums and tutorials and all that fun stuff It was all about wanting to create something out of nothing. I studied marketing and I also did a minor in political science. I wanted to study something that was completely unrelated to tech, that was in liberal arts so that I could learn about how people on the other side of the table were thinking. And it was very enlightening. I was able to learn a lot about perspectives around political theory. And one of the things that helped me do was understand power structures, that politics is inherently around power. And then if I could learn how to navigate those power structures, I could be successful in other areas. And so that was what PoliSci really helped me do. I started a web design company, like every other web entrepreneur ends up doing at some point. And I called it the design consultancy, and we basically charged people to make layouts, and it was really me and my buddy hammering out code and then sending it off to someone on a freelance website to make it all work. and then sending it off to that client and charging a lot of money for it. So spending time doing it wasn't work at all. It was just me spending time to have fun, and it happened to pay us well, and we were able to pay most of our college tuition from it, so that was great. But other than that, I really didn't think too much of it. After skipping four grades in school and finishing college at only 18, he decided to move to San Francisco. I realized that if I were to... Do something meaningful for the rest of my life It would have to be in a city that was larger that had more money in it that had more people that I could relate To and I knew that Silicon Valley was the place to be right So I'm gonna go check it out and see with my own eyes. Is it really nerd topia as they call it? Is it is it actually that awesome? And so I I you know flew down and Cold email just people because I figured you know what what's the worst that could happen if I email these people and they say no that's great I wasn't ever going to email them or I wasn't ever going to meet with them in the first place. By emailing people in Silicon Valley, Brian managed to get meetings with some of the world's most respected venture capitalists and entrepreneurs. He got a job at Digg, a popular social content website. Digg had to lay off 40% of their staff and after only a year Brian was fired. I had like $2,000 left in my bank. I was about to go bankrupt. I had to rent for like $1,500. It's not cheap to live in this city. And I remember talking to some of my friends that I made over the last few months and went, you know, hey, I've got this idea. And they're like, hey, you know, I know this VC, Adam. And I met with Adam for coffee. And Adam was like, well, okay, that's cool, you know, cool pitch, blah, blah, blah. Usually you never hear back from them ever again. But then Adam... the next day called me in and said, hey, you want to do a partner's meeting? I didn't even know what a partner's meeting was at the time. Like, what is a partner's meeting? And I realized that it was a very important meeting, clearly, because that was where they were making the decision. And then a week after that, I had a term sheet. And And as a 19-year-old sitting down looking at that many zeros, you're freaking out because this is the most amazing thing you've ever seen in your life. Then I realized that it was my ticket. It was a very chance thing. I got very lucky. True Ventures Investment made Brian able to start the company he had dreamed about. He was 19 years old at the time, which makes him the youngest person to ever receive funding by a venture capital firm, beating founder of Facebook Mark Zuckerberg by one year. The next six months were very clear to me. Beyond that, I couldn't see anything, but I didn't really care because I knew that we had six months or less to prove a lot out. And so it was just a race against time to make things happen. And I was so determined that I would just sit down and be like, I'm not leaving this room until something happens. And this is going to make this world a completely different world in the next few years, and you're going to help me change that. And people were there to be a part of this vision, and I couldn't thank them more. There were a lot of very early supporters that believed in this crazy Asian kid and his random idea around rewards for virtual achievements. It's like, you know, the people who supported me, I thank them and I'm part of their lives even to this day. Being an internet entrepreneur is hard work. The freedom of not having a boss comes with strings attached. Vacations disappear into the mist of long hours, money problems and sleepless nights. Bootstrapping, the art of building a business with little or no money, is the most common way to start a company today. Sometimes I get worried about these young entrepreneurs who spend 10 years trying to be the next Steve Jobs or Mark Zuckerberg and they're sitting in a dark room. coding and they missed out on the best years of their lives. You need to enjoy life as well. When I was not in, I think still now, it was go to sleep late after a long night of coding. You wake up late usually because you just need to sleep. You drink a lot of soda, eat a lot of junk food, you don't dress necessarily that well, and I didn't dress that well, and you kind of just work all the time. It's your entire life. It's always a rollercoaster ride. Every time I hang out with one of my entrepreneur friends, it's almost like, all right, let's just get it out of the way. Are you on a high part of the cycle or are you down in the depths? Because it's pretty much going to dictate a lot of how the dinner or the meeting goes. So a lot of times people are like, oh, we're killing it. We're going to change the world. You talk to them tomorrow. They're like, dude. I don't know why I'm doing this. I should have just been a banker. This is the most manic depressive way you could possibly live life, right? You're never having a good day. You're either having the best day ever or you think you're about to die. I know people who run a startup who manage to, you know, balance things and do other stuff in life as well. I'm not one of those people. Alexander Jung is a CEO and co-founder of SoundCloud, an audio platform that enables anybody to listen to music. to upload sounds onto the web. SoundCloud is one of the fastest growing companies in the music world. The company's headquarters are in Berlin, but because of their fast growth, they have opened an office in San Francisco, so Alexander splits his time between Berlin and Silicon Valley. Alexander grew up in Sweden and went to the Royal Institute of Technology in Stockholm, where he studied human-computer interaction. I didn't have the typical like entrepreneur background of you know opening up a lemonade stand and you know selling magazines to the neighborhood but I realized in in hindsight that I was always doing these like intense projects I would come up with an idea and then I would cut out everything else in my world and only focus on that idea. So I think that I was very entrepreneurial in terms of doing projects and creating things, but it wasn't like in a business sense. But I definitely always... had the tendency to go over the top with all projects that I was doing, no matter if it was an installation with interactive shoes that made noises or a ping-pong table that you could make music with or whatever it might be. So I had a strong drive to create things, but I didn't think of it as a business quality or anything like that. Alexander met his co-founder, Eric Wohlfors, in college when they bonded over being the only ones using Mac computers. They both had a background in music and were familiar with the problem of collaborating with other musicians. They decided to create SoundCloud to solve that problem. we were really excited but I think it was we were more excited about it because of like because we wanted this product and we were like oh this has to exist because then we can do this we can do that I think we were so obsessed with what it would do for us that we didn't necessarily see see the full potential of how big of an impact we could actually have on the web and sort of the world outside of it. After graduation in 2007, he and Erik decided to move away from Stockholm to be able to focus totally on the building of the company. They traveled around Europe looking for the best place for a tech startup. We went on a trip to London, Barcelona, Vienna, and Berlin. Berlin was the last stop, and the idea was to sort of just feel out the city a little. bit and see if it was somewhere where we wanted to move and we were in Berlin and we were there for like a day I think and we immediately felt like okay this is the place there's so many like creative people here it's a good tech scene so actually that same evening when we got back to Stockholm we were like you know what screw it we're moving to Berlin next week so we took one week rented our apartments packed a big suitcase and then moved down to Berlin and you know the next week we set up our office at a local cafe there and yeah it turned out to be even better than we thought, so we stayed. You know a lot of people talk about bootstrap startups but that was like should be in the dictionary of bootstrap like I mean we literally we moved over with a rucksack each and that was it. We were in a cafe we went then our next office was a conference room of a friend's startup I think we lived there for a couple of days then they kicked us out and we found our our own office which was this almost like an old abandoned attic where we pulled a cable outside the window to get internet in there. We had five good chairs in Stockholm. We'd gotten them from another entrepreneur for free. So those we decided to bring down from Stockholm to Berlin. So I think we had a friend who took them in his car or something and then we were rolling them around Berlin. The music scene in Berlin is fantastic. On the weekends we would be out clubbing at all these fantastic Berlin clubs, from Friday until Sunday evening, and then back on Monday just coding the whole week through. I think that went on for half a year or something, just no break whatsoever. In October 2008, Soundcloud launched their product after being in private beta for more than a year. When we decided to open the site for the public, We thought, well, we're in Berlin, so the right way to do that is at a club. So we actually threw a launch party at a club that our friends have called Picnic. And we actually launched at 12 o'clock at night at the club. We had Sean, our chief architect, was sitting upstairs in a small room with a laptop deploying the site. And we were like, Eric and I were behind the DJ decks, launching the site on the dance floor. And we were just like... Okay, it's gonna crash, it's gonna crash, but it survived. It survived the whole night, and then the morning after, I was a bit tired, but first thing, you know, we woke up, it was just like, is the site online? It was online, and we started seeing, you know, we'd had sign-ups throughout the night, and from there on, it was open and full-on. Alexander drew attention to his company in a creative way. It involved a leather jacket and some spray paint. Every time I was doing a talk at a conference, I made sure to have some... At some point in the talk I could turn around so that people would see this jacket, the back of it. But it's good, there were pictures of that jacket all over the web and people were talking about it because it looked pretty cool. And I know so many investors that remember that jacket. So that was actually a good thing for us to get the VCs who see tens of new startups every day to actually remember ours. So the jacket was a... some spray paint and a cheap H&M jacket, it was probably a pretty good 50 euro marketing stunt. Soundcloud now has more than 10 million users and 60 million dollars in funding. Their users include such high profile musicians as Rihanna and Kylie Minogue. Almost everybody in the company knew about it. I had this thing where it said that the day that Björk signs up, I'm going to take the day off. Then we're done. And it was probably about six months ago when she signed up in preparation for the new album. Started posting these really awesome little soundbites where she was talking about the new album. And that just made my day. So then I was like, okay, I have to take the day off. And ten minutes later I realized the only thing I wanted to do on my day off was to work. So then I just went back to the computer and actually ended up working that day anyway. To turn an idea into reality, the entrepreneurs often need to meet additional costs. That's where the investors enter the picture. They give the entrepreneurs funding in exchange for a part of their company. Venture capital firms and angel investors are attracted to startups because of their potential to grow rapidly for limited investment. Well, I think angels tend to be private individuals. They tend to be people who... have probably had successful businesses themselves in the past and now they're looking to invest some of their own capital into early-stage companies and they're usually doing it partly to get a return to make some more money but partly also because they enjoy doing it. They see it as a great way of mentoring and working with young people in early-stage companies. A venture capitalist is someone who's really doing that as a job so we've typically raised money from bigger funds like pension funds like government. And we're doing it to basically return money to our shareholders. If I'm loaning money to someone, I kind of want them to succeed, but mostly I just want them to pay me back. In the case of making an investment in a business, I want them to succeed really big. The process for venture capital is either we find you or you find us. And generally, when we're looking for you, that's a good thing. When you come to find us, it's more of a shot in the dark, 50-50. First and second time you start a company it's very difficult to get VC money instantly. You have to know some angels and it's also a very good education to have some angels to help you out who can then take you to the VCs because if you're just fresh out of school... you don't know the VC. You don't even know what a VC means. Maybe you think it's a toilet. You give your pitch and then you meet all of these different investors and visit the venture capitalists at their offices down in Menlo Park. You give maybe a half hour, 45 minute pitch, and you talk to a bunch of different investors, and after a series of more meetings, then they decide to invest or not. We raised about a million dollars, and the feeling until we finished raising was a feeling of fear. Would any investor respond to this, and would we actually be able to raise the money? Jessica Ma is the founder and CEO of Indinero, a company that creates software to help small businesses better track and manage their finances. Jessica has been building businesses since she was 12 years old. She finished high school when she was 15, and at 20 she had raised over a million dollars for her own startup. I was pretty bored in school when I was young, so I was just always trying to find a way to make more money on my own. So I was doing stupid stuff like lemonade stands or going to neighbor houses to try to break their leaves or do anything to make my own money. I got... I got my first computer when I was in the third or fourth grade and I started programming when I was I think 13 years old and I just really wanted to make my own game and my own websites and so I picked up some books from a local bookstore and did that in my spare time. My mom's an entrepreneur so she told me, why not take your programming skills and make a business out of that? And that's when I first started thinking about building my own company. When I was working on my first company when I was 13, I had at least a few hundred customers and all of them were paying me recurring revenue every single month. I was selling stuff on eBay and I was selling my programming services. I made some money, like I didn't make big money, but enough. I was making like high five digits. Jessica went to Berkeley, where she studied computer science. There, she met her co-founder, Andy Hsu. At first, we were just doing homework with each other. But then after we do our homework, we thought, why don't we do other fun things while we're not doing our homework? So we started brainstorming startup ideas and just programming project ideas. And we started building stuff in our spare time. And then that ultimately led way to us wanting to build a real company together. In college, Jessica and Andy started to build what was to become Indinero. Indinero. She and her team lived together in a small apartment in Silicon Valley. I thought it was so much fun to live in an apartment with my co-founder and with our early team because you're just, you're literally eating and sleeping and breathing your startup 24-7 when you do that. And it was just a few of us in a small, tiny room, the living room, and we had our computers there and we'd just wake up, roll out of bed and build our startup. And then we'd cook meals and then just go back to working again. It was... It was a lot of fun. The first version of Indonero was really bad. It was just my co-founder, Annie, and I going to a hackathon. And we had a weekend to build a project and present it to about 100 people. And we didn't really care about code quality or anything. We just programmed all weekend long to build it. Indonero launched in 2009. She and her team needed more money to build the product. She initially set out. to raise $500,000 for the company, but received so much interest that she eventually had to turn investors away. Our launch went really well, and I think it went well because we took our time to build our product, and we didn't just launch it when we felt ready, but we knew we were ready because we demoed it with dozens of entrepreneurs. saw them sign up and we knew which common problems they had, so we knew that it was ready for the public. And then people started offering checks and it all rolled in and then it was a feeling of optimism and excitement and finally when we had all the money we decided to spend it really slowly so we didn't just spend it overnight on random stuff. We were really cautious about it because... I had never seen that much money in my life and although it's not that much for a company it was a lot for for Andy and I. I think about the business almost all the time. I try not to think about it on Saturday but every other day I think if you're not thinking about your startup then you're not doing a good enough job if you're if you're the founder at least because You're going to come up with your best ideas in the most random moments while you're driving in your car or thinking in the shower or just walking to work. And so I think you have to think about it all the time. The lifestyle is hectic. You have to be working long hours and you have to be enjoying that. So why are they doing this? Is it about walking away with millions of dollars? Or is the ultimate goal having satisfied users and a good product? I was supposed to be unemployed. I was supposed to have no money, and here I am. I'm able to eat, sleep, live under a roof, and have an office. And it's already amazing for me. So I could live on sustenance, right, and I could care less. I think a lot of people, it jumps out at them, you know, how wealthy some tech entrepreneurs get. You look at Bill Gates or Larry and Sergey or Larry Ellison and Oracle or, you know, Steve Jobs or Mark Zuckerberg, and you think, oh, it's all about the money. But if you ask them, it's really not. You know, if you talk to those guys or other entrepreneurs, they're not even going to tell you. to make the money. And it turns out if you think about how much you're going to make the money, you might make money, but it's not really a good indicator. So I think the primary motivation really is the best entrepreneurs try and change the world. I think it's always very different, and I think it's sometimes very personal, too, or what drives them. I mean, I think we have certain entrepreneurs who really want to change the world. Others just realize this is an incredible way to build a lot of wealth. And others are really just trying to do it. just passionate about their products. They were really not even thinking about, you know, the business itself. I think too many entrepreneurs are in it for the wrong reasons. I think they're in it for the money, for the fame, for the glory. And a lot of them are going to say they're not in it for any of that. But... but they're just cheating themselves. The first-time entrepreneurs, when they just get funded, they at first are really thrilled that they've gotten funded, and then the weight of the money is on their shoulders, and they say, oh, well, we've really got to do this, and we've got to make sure it works, because we have now raised money from somebody else, from other people. I think a lot of entrepreneurs are spending their 20s working. all the time because there's there's a few different reasons one a lot of them see you know the opportunity for fame and success and but more than that I think you know the best ones really just have these great ideas and they realize that they can do something right now. It's cheap to do it and they can just come out here and do something and potentially really alter the way that the world works. I'm not building software to build a business and make a ton of money and get rich off of it. Leah Culver is the CEO and co-founder of Grove, a real-time group chat service for teams. She started her first company in 2007 when she co-founded a social network site named Pounce, which a year later got her selected as one of the most influential women in web by Fast Company. So I first became interested in programming and sort of doing a little bit more with computers when I was about 15 It was kind of trendy at the time to make your own web pages and everyone wanted to have their own homepage. So I got one of these free AngelFire GeoCities home pages and started learning HTML. I wasn't quite sure that that's what I wanted to do for a job. I think it was kind of always something I thought was was really fun, but I actually wanted to be a graphic designer when I was younger because my mother was a graphic designer. And I think it's easy as a kid to sort of just want to do what your parents do. And my mom always loved her job, so I always thought that would be so cool to love what I was doing. She graduated from college in 2006 and decided to move to San Francisco. After graduating from college, I really wanted to move someplace warm because I grew up in Minnesota, which is very cold. And I got a job at a startup in San Jose. I worked for startups for a little while, and then I realized that I wanted to do my own. I wanted to work on my own projects, because that's why I got into programming, was I wanted to work on, you know, making my own fun things. Leah needed a new laptop, but couldn't afford it. She came up with a unique way to generate enough money to buy a new one when she sold ad space on her computer to several companies by laser-etching their logos on the surface of the computer. So I said, you know, like, buy a space of advertising on this laptop. And I made, like, a corny web page for it and was like, hey, if you buy an ad on my laptop, I'll show it off at all these, like, San Francisco cafes and things. And I didn't actually think anybody would pay any attention to this, like, stupid website. I just did it kind of as, like, a joke and out of the frustration of I didn't have any money. And people ended up actually buying ads on it and paying for these cute little ads. And it was fun. It was a lot of work. to get people to buy the ads, but I ended up getting enough money to buy the laptop and etched it and made a video of it and made the whole thing sort of a production. Tried to really get like the most value for the people that actually did buy the ads, and I felt a little bad. I was like, oh, I want them to get something good out of it. But it was a really interesting experience and probably like a really good lesson in like marketing and sort of following through on a project, so. Leah's first startup began as a hobby, when she started playing around with sending messages and media to her friends. She got two of her friends involved and they turned it into a social network. The site got a lot of attention and at some point invitations to use the service were being sold on eBay. My first startup was actually Pounce. And it's sort of a funny story because most people go through several big failed startups. They're like little failed startups that no one's ever heard of before they end up making a product that's fairly popular. And Pounce was fairly popular for like a first. startup. It's not really the traditional way that startups are built. Like most of the time you'll have some small other startups that don't work out so well but I was lucky enough to work with Kevin Rose on Pounce who's fairly well known and ended up getting a lot of publicity for sort of my first startup. Your first startup is really really exciting right like everything sort of seems like everything's a big deal and everything matters and you get t-shirts and stickers and it's like so exciting to have your sort of your own. Startup. A year later the company was struggling due to lack of revenue. The team decided to sell Pounce to a software company called Six Apart. Two weeks later the site got shut down. How did it feel to sell the company? It was interesting. It's kind of exciting because you're like, oh, someone wants to buy my company. It's exciting. But at the same time it's kind of sad because you lose sort of the independence and the freedom to work on the project. And they ended up shutting down the site, which I wasn't super happy about. So that wasn't a great experience. When things go wrong... Like, you can end up blaming people. You can end up sort of having a lot of fighting when things aren't going super well. And they never go super well. I don't know why anybody thinks that, like, startups are all, you know, rainbows and sunshine. because it's a lot of hard work. I mean, if you want rainbows and sunshine, work a nine to five job and have a hobby on the side because hobbies will always be rainbows and sunshine because when they don't work out, you don't have to work on them. I think there is part of our generation, my generation, where you need to be perfect and good at everything. And part of being an entrepreneur is you will fail. Like you will mess up, you will do things wrong. I mean, even Pounce, like the site got shut down, like acquired and shut down because we ran out of money. Like that's... I mean, that's kind of a failure. But you need to be able to say, like, okay, that's okay, and move on from that. Or like something might not work out the way you expect. And I think that's hard for a lot of people to know that they're going to do something wrong. In the news, we only hear about the successful companies. But what about all the others? 90% of all startups will fail. You can't have everyone be a success. It's just not a tenable situation. And so most startups still do fail. But the good news is that when those startups do fail, it's a great lesson oftentimes for entrepreneurs. And you usually see a lot of them come back and try again. What's really important is to make sure... that I'm not really putting my whole identity in this startup. And I realized that it's just, this might fail. In our experience, about six out of 10 of the investments we make fail, and we lose all our money. And maybe two out of 10 float along, and maybe we make our money back, or maybe two times our money. So it's really one or two out of those ten investments that make it a huge success, that make venture capital worth pursuing. And those are the one or two that make us many, many times our money. Yeah, failure is totally accepted here. It's actually even better if you failed in your profile. People value a lot that you failed and it's totally okay. Yeah, I fail every day, something. The guys who do really well, they're guys who have crashed another company before. And the guys who haven't crashed another company yet, this is the company that they need to crash. I made 30 million dollars when I was 17, and I lost it all by the time I was 20. And that experience really made me realize that in life the most important thing is the people around you. And it's easy to forget that and get caught up in the hype. You only get one life. You've got to live it. Don't forget to actually enjoy it. Ben Way is an English serial entrepreneur. He grew up in England and was early fascinated with building businesses. He started a computer consultancy at age 15. At 17, he had raised $40 million, making him one of the first dot-com millionaires. By 20, he had lost it all. I was always very different at school. I'm severely dyslexic. I was told that... Nine years old that I'd never read or write because I was pretty useless. I still have trouble spelling business and entrepreneur is a word I couldn't even possibly hope to spell. But I was very lucky and one of the reasons why I got into computers and technology was actually I was given a laptop. at nine years old to help me with my dyslexia and that was one I was one of the first I think kids in the whole of the UK to be given a laptop for education. My first semi-proper business was at 12 years old and I bought some chickens and I sold their eggs and I had a proper cash flow where I used to look after the feed and check you know the sale price of the eggs. The eggs have got very good margins at 12 years old. After my chicken business. I started my first computer consultancy on my 15th birthday, charging £10 an hour. And that's really how I started a proper business. I think at that time I was the youngest company director in the country. And it wasn't until a few years later that I raised £25 million to do what was back then the first e-commerce search engine. At 21, after the dot-com crash in 2000, Ben's company went bankrupt. When I failed, I failed in spectacular fashion. So I literally went, I lost 20 million pounds. I lost my car, the girl I loved, my house, everything. I couldn't even buy a tube ticket the same day I was in the rich list. But even after this experience, he decided to continue building businesses. In 2003, he started Rainmakers, an innovation and venture company. So after I failed, it did take me a while to get back on my feet. After losing everything and it was a very hard time in my life, I ended up doing a reality TV show and travelling the world. But entrepreneur is such a deep part of me that it took about 18 months to two years to start my own business again. But never at any second does business leave me. I'm always thinking of business. So even after I failed, I was thinking of ideas and new businesses I could do. Sometimes I wish I could quiet my mind a bit more often, but every second of every day is consumed by trying to make the world slightly better. So it's been a very long and challenging time. I've had some great successes during that time and some great failures also. I just don't fear the failures so much anymore. Even though so many companies fail, entrepreneurs continue to start new businesses in the hopes that theirs will be that 1 in 10 company that succeeds. What does it take to build a successful startup? Successful startups need a lot of things. They need a great idea, they need a great team, they need to be there at the right time, they need the right level of funding, and they need a lot of luck. There's a lot of luck in the success of all the businesses that have succeeded. There were 25 search engines funded before Google was funded. There were, there was Friendster and LinkedIn and MySpace and about 50 others before Facebook became the big winner in that area. There's a little bit of luck that just happens where somebody gets it just right. Now that could be skill, but they've figured out what the user really, really wants. And that's the thing that makes those big businesses. Some of it is just you're at the right place at the right time and you get lucky. I think with any company, there's a lot of luck involved. You can have a great idea and you can work really hard and you can be really smart. But the one thing that's out of your control is the timing. Absolutely. Like team is super important. You know, big market. you know, I don't know. I mean, it's magic. It's totally magic. It's like all of that stuff and nine times out of 10, they fail. And then like the one time that it does work, it happens in a totally unexpected way. Look at Twitter, right? Like how big was microblogging when Twitter started? Look at Facebook. How big was social networking when it started? Those weren't huge, interesting markets, but that's what you hear from all VCs. Like that's the really, that's what we look for in those investments. Like, well, those weren't really big investments then at the time. You know, starting a company often feels like it's a series of miracles, and you have to have one really good thing happen right after the other. So it really does feel like a lot of luck, but at the same time, if you really work hard and try a lot of things that are really experimental, you can create your own luck, and you can make these miracles happen. When I was young, I just didn't know what entrepreneur was. It just, like, I think it was, I understood it as this, like, catch-all word to define... You know, any independent small business person, like that's just what I thought, but it sounded like, it sounded pretentious to me. I don't, I mean, I can't even pinpoint where it all came from, but I just always had the impression that I was going to invent things. Zach Klein is a 27-year-old entrepreneur. He is the co-founder of Vimeo, a popular video sharing site visited by 50 million people each month. He started his career working on a website called College Humor. Two of his friends from college started to post silly pictures of themselves on the internet in 1999. Pretty soon, the site was getting thousands of visitors a week, and Zach joined them while he was still in college. I never thought about quitting college. I loved college. I think it's... You know, the cliche, I thought it was some of the best times in my life. It's just this really nice intersection of innocence and independence, and it was lovely. And I went to school in North Carolina, where I love, and I'd give anything to just have four more years there. After graduation in 2004, he and his three partners moved the company to New York. We were having a hard time being taken seriously by anyone in the industry because we weren't in San Francisco or New York. And I think all of us just sort of were attracted to the romance of moving to New York City, so we just decided to move there instead. The four friends rented an apartment together and ran the website out of their spare bedroom. For the first three or four months, it was just the four of us, and so we sort of got out of bed, walked 20 yards over to our... into our office and just sort of like, you know, worked until we got tired. And then, you know, we'd put on clothes and go get dinner. And so, like, I remember it was like a big shock when we got our first employee and we had to, like, start, like, wearing clothes to work and having normal business hours. In 2005, The New Yorker published an article named The Funny Boys about college humor and the guys behind it. It certainly made clear that this wasn't a fluke, that we were very earnest business. People, very earnest entrepreneurs who thought very carefully about the things that we were making. Within a few months of the article being published, they had a book deal and a movie in the works. Our office grew, I think, until maybe up until like 10 or 12 people. It stayed in our apartment, and then when we could afford it, we got the next floor above our apartment. So we would take an elevator up the building to our office. I don't remember exactly what the count was, but I think we had something like 30 people before we had our first person above 30. And we had to hire that person because we needed an accountant, and that was the youngest accountant we could find. Vimeo started as a side project by Zach and one of the co-founders of College Humor, Jacob Lodwick. After hours, they built the site and began experimenting with uploading short videos for their friends. Vimeo is definitely my proudest work. It's certainly the thing that I spent the most time designing. I actually haven't had really a desire to... to design something since Vimeo. I remember having an office and having a door and just sort of shutting myself off for six months while I just iterated on this constantly. We weren't very sophisticated in making websites then. We didn't have any best practices. We didn't know how we should be building a website collectively. Jake and I still considered it very much... a very personal project and so he gave me a lot of space and time to just make something that I was really proud of. I remember writing letters to my friends and family saying, I'm sorry you don't know me anymore, that sort of thing. I just let all of my relationships go because nothing was as important as this. I remember breaking up I broke up with a girlfriend just because I had no time or interest really. It was more of an interest thing. It's just nothing was as exciting to me as this thing. Knowing that there were tens of thousands of people that were like using the service and in love with it and waiting to see what we could do next. In 2006, IAC, a big internet company, acquired both College Humor and Vimeo. After being a side project for a time in 2007, Zach and Jacob got the go-ahead from IAC. Vimeo became a full-time, fully funded startup. The website's user base was growing steadily, but in 2008 Zach decided to leave the company. You know, I think what it was is that something, there was something, there was the entrepreneurial spirit had sort of been sucked out of the company because we are now owned by such a massive company that was making a lot of decisions for us and I felt myself being squeezed into this role as just a designer and I didn't I didn't really, I learned design because that was the easiest way to make myself useful to the process of building those companies. But I wanted to learn so much more. And I had money for the first time in my life. And I never, ever wanted to work on the Internet just for the sake of working on the Internet. There was lots of things I wanted to do. So I left to do them. Buying some woods and building cabins with my friends here, something that I wanted to spend time doing, and that's what I left to do. Zach now spends most of his time living in the woods, without electricity and unreachable by phone. I've lived in this cabin behind me for a year, for about half the year. I spend three to four days of the week down in New York, because I still am involved in the Internet. And then another three or four days a week I'm here, and I'm usually... There's usually, I don't know, eight to ten people with me, just to sort of make a little place that we all can spend time doing whatever we want to do. I came to this place, I mean, I think, well, primarily because I love the outdoors, I've always wanted a place like this, but I keep coming back because it's like in this place that I feel most creative recently. My entire career has just been spent. Online, pushing pixels around, and there is something very novel and thrilling for me to build with wood and stone with my friends, to iterate with these materials, to make physical things that we can use, that we can be inside of, to see other people look at them. I just, I can't recreate that sense of pleasure working online. I can't explain it, I don't think it's permanent, it's just right now this is... where I'm most inspired. The most interesting place to be is the place that, like, that allows you to become very singularly focused. And when you're that way, I think that you're really at your peak. And I think that's when you're most comfortable with yourself. I think that's when you're most attractive to other people that you're bound to be interested in. And you sort of become magnetized. You just... you find other people who who are also driven to make or to think the same things and It puts you in a really creative place where there's no fear, where people are are just really happy about the things you're making together and it's in this space that I think you achieve the greatest things creatively. Success is what you make of it. I mean I know some of the most successful entrepreneurs I know can be unhappy so I think for me being a successful entrepreneur is both having a work and life balance. You know I want to be very successful but at the same time I still want to live life. Don't be indirect about how you think. Don't take a job to go somewhere else. If you want to be in Silicon Valley and you want to go do a startup, go be in Silicon Valley and go do a startup. And don't let anyone stop you because once you get out here, it's a whole new world of possibilities. So many people have the wrong idea that they have to follow some kind of a path. Do your MVP, build your initial prototype and then pitch it and then have an initial cut. Doesn't matter. Everybody starts a company in a different way. If you were to follow another guy's path, then you're not being a true entrepreneur. The most comforting thing to me, again, was just the fact that all these people that are on magazine covers, like, They started out just like you, you know, in their 20s, no experience, and they're able to figure things out. So that, I think, should give comfort to anybody who's excited about starting a company. You can't teach entrepreneurship. You either are an entrepreneur or you're not. And I think it's said, if you are, you're going to end up doing it, and that's just who you are, right? You can't change that. As long as you have a passion for something, for some fundamental core idea, I think that you should just hone in on that and really do everything you can to explore that. Follow your heart. Follow the thing that really matters to you. If you do that, you will become a big success. There's never ever been a better time to do it than today. And you know you're only young once. You just, you know life is too short to give it up. If you've got the opportunity to do something like this, you know you owe it to yourself, you owe it to the world, you owe it to your children to take it as far as you can. Say you're going to wait until after college or prepare yourself to be an entrepreneur or to take classes even about entrepreneurship, but just to do it while you're still taking classes and to not give any excuses for building a company because no matter what, you could come up with excuses. The hardest thing is just to start.

A really great founder seems to be building a groundswell even if there's nothing there. And so he in effect is a magician. He creates something from nothing.

You're always kind of just on the edge. your comfort zone and everything you're doing is basically something you're just barely qualified for or not qualified for and it's like jumping off a cliff and having to build your own parachute I think an entrepreneur it's a difficult one how do you define an entrepreneur I think an entrepreneur is a person who dares to have a dream that not that many people have, and even more importantly, dares to chase it, put their money where their mouth is in their time and their career, and dares to take the risk of going out there to realize that vision. Entrepreneurs are some of the craziest people you'll ever meet.

They're people who have a dream or an idea. They have something that keeps them awake at night. They get the opportunity to hopefully solve that problem or do something about it.

And so the best entrepreneurs are often either solving their own problems, problems or solving some huge thing and they can really change the world. Entrepreneurship at the moment is kind of like the new smoking. It's cool to be creative, it's cool to be making something and I just love that energy.

Over the last couple of years, the cost of starting a web-based startup has decreased dramatically. I think over the last couple of years, it's changed dramatically. If you think back to the turn of the century, 2000, what you had was very large companies often creating websites like Yahoo, AOL.

These were much bigger companies creating new kinds of products on the internet. With the crash those went away but the internet didn't go away and what actually happened was new innovative, young innovators came along, looked at the web and said we can do this differently. Ten years ago if you want to start up a company you've got to go like pay a lawyer to tell you whether you should do a C-Corp or an LLC. Bam that's a Google search done, free in like five minutes.

You know by that time you wouldn't have even gone past the lawyer's section. Secretary 10 years ago. It's really interesting to see what entrepreneurs will look like 10 years from now.

You know, before they were managers, maybe a little engineering, and now they're young tech people and hackers. Anybody now with a laptop and a Wi-Fi connection can build anything. Today a lot of people will be able to start companies who never could have before.

This applies especially to younger people. They are willing to put in the long, unpaid hours and have nothing to lose. As you get older you get set in your ways and you get certain patterns and you recognize them and you behave a certain way but you know I think the young entrepreneurs see things differently in a way that I think is often times refreshing and therefore groundbreaking. One of the great benefits of starting young in business is that you have less to lose.

Once you have four kids and something where you have to remortgage your house in order to finance your company, that's a bigger risk to take than if you come straight out of university. and all you have to choose between is either you take up a job or you start a crazy company to do crazy things and learn. I've met kids out here who are still teenagers and starting companies and all the way down to 16 years old, which is pretty crazy when you think about it. Younger people have been affected by less and they're oftentimes more idealistic and they have bigger dreams and bigger visions because they don't know necessarily better or worse.

It doesn't really matter to me. I could be 50 for all I care because I'm not going to be a teenager. removing the age element is really What I think makes the Silicon Valley area so fascinating is that I know so many people that could be really young, could be really old, they still take you seriously. They'll still listen to you. And that's why there's this culture of listening that I think is so conducive to entrepreneurship, which is why this area is so valuable to people.

Brian Wong grew up in Vancouver, Canada. At 19, he had raised $4.3 million in funding for his company, Keep, a reward network where you play games on your phone and get real rewards through Keep's network. My parents at one point thought that I was addicted to my computer and wanted to take it away from me, and I'm glad they ended up not doing that. But I spent almost 8 to 10 hours a day on my computer. And this was at the point when I was very addicted to Counter-Strike Source.

Which was a first-person shooter game that was extremely popular when I was young and still very much so is and I spent Hours and hours playing that game because I needed to maintain my top of server status I was the top of like three servers and it takes a lot of time to maintain that I Spent a lot of time on Photoshop I taught myself how to design just because I figured it would be pretty fun to learn how to do that and I taught myself through forums and tutorials and all that fun stuff It was all about wanting to create something out of nothing. I studied marketing and I also did a minor in political science. I wanted to study something that was completely unrelated to tech, that was in liberal arts so that I could learn about how people on the other side of the table were thinking.

And it was very enlightening. I was able to learn a lot about perspectives around political theory. And one of the things that helped me do was understand power structures, that politics is inherently around power. And then if I could learn how to navigate those power structures, I could be successful in other areas. And so that was what PoliSci really helped me do.

I started a web design company, like every other web entrepreneur ends up doing at some point. And I called it the design consultancy, and we basically charged people to make layouts, and it was really me and my buddy hammering out code and then sending it off to someone on a freelance website to make it all work. and then sending it off to that client and charging a lot of money for it.

So spending time doing it wasn't work at all. It was just me spending time to have fun, and it happened to pay us well, and we were able to pay most of our college tuition from it, so that was great. But other than that, I really didn't think too much of it. After skipping four grades in school and finishing college at only 18, he decided to move to San Francisco. I realized that if I were to...

Do something meaningful for the rest of my life It would have to be in a city that was larger that had more money in it that had more people that I could relate To and I knew that Silicon Valley was the place to be right So I'm gonna go check it out and see with my own eyes. Is it really nerd topia as they call it? Is it is it actually that awesome? And so I I you know flew down and Cold email just people because I figured you know what what's the worst that could happen if I email these people and they say no that's great I wasn't ever going to email them or I wasn't ever going to meet with them in the first place. By emailing people in Silicon Valley, Brian managed to get meetings with some of the world's most respected venture capitalists and entrepreneurs.

He got a job at Digg, a popular social content website. Digg had to lay off 40% of their staff and after only a year Brian was fired. I had like $2,000 left in my bank.

I was about to go bankrupt. I had to rent for like $1,500. It's not cheap to live in this city. And I remember talking to some of my friends that I made over the last few months and went, you know, hey, I've got this idea.

And they're like, hey, you know, I know this VC, Adam. And I met with Adam for coffee. And Adam was like, well, okay, that's cool, you know, cool pitch, blah, blah, blah. Usually you never hear back from them ever again.

But then Adam... the next day called me in and said, hey, you want to do a partner's meeting? I didn't even know what a partner's meeting was at the time. Like, what is a partner's meeting? And I realized that it was a very important meeting, clearly, because that was where they were making the decision.

And then a week after that, I had a term sheet. And And as a 19-year-old sitting down looking at that many zeros, you're freaking out because this is the most amazing thing you've ever seen in your life. Then I realized that it was my ticket.

It was a very chance thing. I got very lucky. True Ventures Investment made Brian able to start the company he had dreamed about. He was 19 years old at the time, which makes him the youngest person to ever receive funding by a venture capital firm, beating founder of Facebook Mark Zuckerberg by one year.

The next six months were very clear to me. Beyond that, I couldn't see anything, but I didn't really care because I knew that we had six months or less to prove a lot out. And so it was just a race against time to make things happen.

And I was so determined that I would just sit down and be like, I'm not leaving this room until something happens. And this is going to make this world a completely different world in the next few years, and you're going to help me change that. And people were there to be a part of this vision, and I couldn't thank them more.

There were a lot of very early supporters that believed in this crazy Asian kid and his random idea around rewards for virtual achievements. It's like, you know, the people who supported me, I thank them and I'm part of their lives even to this day. Being an internet entrepreneur is hard work. The freedom of not having a boss comes with strings attached. Vacations disappear into the mist of long hours, money problems and sleepless nights.

Bootstrapping, the art of building a business with little or no money, is the most common way to start a company today. Sometimes I get worried about these young entrepreneurs who spend 10 years trying to be the next Steve Jobs or Mark Zuckerberg and they're sitting in a dark room. coding and they missed out on the best years of their lives. You need to enjoy life as well. When I was not in, I think still now, it was go to sleep late after a long night of coding.

You wake up late usually because you just need to sleep. You drink a lot of soda, eat a lot of junk food, you don't dress necessarily that well, and I didn't dress that well, and you kind of just work all the time. It's your entire life. It's always a rollercoaster ride.

Every time I hang out with one of my entrepreneur friends, it's almost like, all right, let's just get it out of the way. Are you on a high part of the cycle or are you down in the depths? Because it's pretty much going to dictate a lot of how the dinner or the meeting goes.

So a lot of times people are like, oh, we're killing it. We're going to change the world. You talk to them tomorrow. They're like, dude.

I don't know why I'm doing this. I should have just been a banker. This is the most manic depressive way you could possibly live life, right?

You're never having a good day. You're either having the best day ever or you think you're about to die. I know people who run a startup who manage to, you know, balance things and do other stuff in life as well. I'm not one of those people.

Alexander Jung is a CEO and co-founder of SoundCloud, an audio platform that enables anybody to listen to music. to upload sounds onto the web. SoundCloud is one of the fastest growing companies in the music world.

The company's headquarters are in Berlin, but because of their fast growth, they have opened an office in San Francisco, so Alexander splits his time between Berlin and Silicon Valley. Alexander grew up in Sweden and went to the Royal Institute of Technology in Stockholm, where he studied human-computer interaction. I didn't have the typical like entrepreneur background of you know opening up a lemonade stand and you know selling magazines to the neighborhood but I realized in in hindsight that I was always doing these like intense projects I would come up with an idea and then I would cut out everything else in my world and only focus on that idea.

So I think that I was very entrepreneurial in terms of doing projects and creating things, but it wasn't like in a business sense. But I definitely always... had the tendency to go over the top with all projects that I was doing, no matter if it was an installation with interactive shoes that made noises or a ping-pong table that you could make music with or whatever it might be.

So I had a strong drive to create things, but I didn't think of it as a business quality or anything like that. Alexander met his co-founder, Eric Wohlfors, in college when they bonded over being the only ones using Mac computers. They both had a background in music and were familiar with the problem of collaborating with other musicians.

They decided to create SoundCloud to solve that problem. we were really excited but I think it was we were more excited about it because of like because we wanted this product and we were like oh this has to exist because then we can do this we can do that I think we were so obsessed with what it would do for us that we didn't necessarily see see the full potential of how big of an impact we could actually have on the web and sort of the world outside of it. After graduation in 2007, he and Erik decided to move away from Stockholm to be able to focus totally on the building of the company.

They traveled around Europe looking for the best place for a tech startup. We went on a trip to London, Barcelona, Vienna, and Berlin. Berlin was the last stop, and the idea was to sort of just feel out the city a little.

bit and see if it was somewhere where we wanted to move and we were in Berlin and we were there for like a day I think and we immediately felt like okay this is the place there's so many like creative people here it's a good tech scene so actually that same evening when we got back to Stockholm we were like you know what screw it we're moving to Berlin next week so we took one week rented our apartments packed a big suitcase and then moved down to Berlin and you know the next week we set up our office at a local cafe there and yeah it turned out to be even better than we thought, so we stayed. You know a lot of people talk about bootstrap startups but that was like should be in the dictionary of bootstrap like I mean we literally we moved over with a rucksack each and that was it. We were in a cafe we went then our next office was a conference room of a friend's startup I think we lived there for a couple of days then they kicked us out and we found our our own office which was this almost like an old abandoned attic where we pulled a cable outside the window to get internet in there. We had five good chairs in Stockholm.

We'd gotten them from another entrepreneur for free. So those we decided to bring down from Stockholm to Berlin. So I think we had a friend who took them in his car or something and then we were rolling them around Berlin. The music scene in Berlin is fantastic.

On the weekends we would be out clubbing at all these fantastic Berlin clubs, from Friday until Sunday evening, and then back on Monday just coding the whole week through. I think that went on for half a year or something, just no break whatsoever. In October 2008, Soundcloud launched their product after being in private beta for more than a year. When we decided to open the site for the public, We thought, well, we're in Berlin, so the right way to do that is at a club.

So we actually threw a launch party at a club that our friends have called Picnic. And we actually launched at 12 o'clock at night at the club. We had Sean, our chief architect, was sitting upstairs in a small room with a laptop deploying the site.

And we were like, Eric and I were behind the DJ decks, launching the site on the dance floor. And we were just like... Okay, it's gonna crash, it's gonna crash, but it survived. It survived the whole night, and then the morning after, I was a bit tired, but first thing, you know, we woke up, it was just like, is the site online?

It was online, and we started seeing, you know, we'd had sign-ups throughout the night, and from there on, it was open and full-on. Alexander drew attention to his company in a creative way. It involved a leather jacket and some spray paint. Every time I was doing a talk at a conference, I made sure to have some... At some point in the talk I could turn around so that people would see this jacket, the back of it.

But it's good, there were pictures of that jacket all over the web and people were talking about it because it looked pretty cool. And I know so many investors that remember that jacket. So that was actually a good thing for us to get the VCs who see tens of new startups every day to actually remember ours. So the jacket was a... some spray paint and a cheap H&M jacket, it was probably a pretty good 50 euro marketing stunt.

Soundcloud now has more than 10 million users and 60 million dollars in funding. Their users include such high profile musicians as Rihanna and Kylie Minogue. Almost everybody in the company knew about it.

I had this thing where it said that the day that Björk signs up, I'm going to take the day off. Then we're done. And it was probably about six months ago when she signed up in preparation for the new album.

Started posting these really awesome little soundbites where she was talking about the new album. And that just made my day. So then I was like, okay, I have to take the day off.

And ten minutes later I realized the only thing I wanted to do on my day off was to work. So then I just went back to the computer and actually ended up working that day anyway. To turn an idea into reality, the entrepreneurs often need to meet additional costs. That's where the investors enter the picture.

They give the entrepreneurs funding in exchange for a part of their company. Venture capital firms and angel investors are attracted to startups because of their potential to grow rapidly for limited investment. Well, I think angels tend to be private individuals. They tend to be people who... have probably had successful businesses themselves in the past and now they're looking to invest some of their own capital into early-stage companies and they're usually doing it partly to get a return to make some more money but partly also because they enjoy doing it.

They see it as a great way of mentoring and working with young people in early-stage companies. A venture capitalist is someone who's really doing that as a job so we've typically raised money from bigger funds like pension funds like government. And we're doing it to basically return money to our shareholders.

If I'm loaning money to someone, I kind of want them to succeed, but mostly I just want them to pay me back. In the case of making an investment in a business, I want them to succeed really big. The process for venture capital is either we find you or you find us. And generally, when we're looking for you, that's a good thing. When you come to find us, it's more of a shot in the dark, 50-50.

First and second time you start a company it's very difficult to get VC money instantly. You have to know some angels and it's also a very good education to have some angels to help you out who can then take you to the VCs because if you're just fresh out of school... you don't know the VC.

You don't even know what a VC means. Maybe you think it's a toilet. You give your pitch and then you meet all of these different investors and visit the venture capitalists at their offices down in Menlo Park. You give maybe a half hour, 45 minute pitch, and you talk to a bunch of different investors, and after a series of more meetings, then they decide to invest or not. We raised about a million dollars, and the feeling until we finished raising was a feeling of fear.

Would any investor respond to this, and would we actually be able to raise the money? Jessica Ma is the founder and CEO of Indinero, a company that creates software to help small businesses better track and manage their finances. Jessica has been building businesses since she was 12 years old. She finished high school when she was 15, and at 20 she had raised over a million dollars for her own startup. I was pretty bored in school when I was young, so I was just always trying to find a way to make more money on my own.

So I was doing stupid stuff like lemonade stands or going to neighbor houses to try to break their leaves or do anything to make my own money. I got... I got my first computer when I was in the third or fourth grade and I started programming when I was I think 13 years old and I just really wanted to make my own game and my own websites and so I picked up some books from a local bookstore and did that in my spare time. My mom's an entrepreneur so she told me, why not take your programming skills and make a business out of that? And that's when I first started thinking about building my own company.

When I was working on my first company when I was 13, I had at least a few hundred customers and all of them were paying me recurring revenue every single month. I was selling stuff on eBay and I was selling my programming services. I made some money, like I didn't make big money, but enough. I was making like high five digits. Jessica went to Berkeley, where she studied computer science.

There, she met her co-founder, Andy Hsu. At first, we were just doing homework with each other. But then after we do our homework, we thought, why don't we do other fun things while we're not doing our homework?

So we started brainstorming startup ideas and just programming project ideas. And we started building stuff in our spare time. And then that ultimately led way to us wanting to build a real company together.

In college, Jessica and Andy started to build what was to become Indinero. Indinero. She and her team lived together in a small apartment in Silicon Valley.

I thought it was so much fun to live in an apartment with my co-founder and with our early team because you're just, you're literally eating and sleeping and breathing your startup 24-7 when you do that. And it was just a few of us in a small, tiny room, the living room, and we had our computers there and we'd just wake up, roll out of bed and build our startup. And then we'd cook meals and then just go back to working again.

It was... It was a lot of fun. The first version of Indonero was really bad.

It was just my co-founder, Annie, and I going to a hackathon. And we had a weekend to build a project and present it to about 100 people. And we didn't really care about code quality or anything.

We just programmed all weekend long to build it. Indonero launched in 2009. She and her team needed more money to build the product. She initially set out.

to raise $500,000 for the company, but received so much interest that she eventually had to turn investors away. Our launch went really well, and I think it went well because we took our time to build our product, and we didn't just launch it when we felt ready, but we knew we were ready because we demoed it with dozens of entrepreneurs. saw them sign up and we knew which common problems they had, so we knew that it was ready for the public.

And then people started offering checks and it all rolled in and then it was a feeling of optimism and excitement and finally when we had all the money we decided to spend it really slowly so we didn't just spend it overnight on random stuff. We were really cautious about it because... I had never seen that much money in my life and although it's not that much for a company it was a lot for for Andy and I.

I think about the business almost all the time. I try not to think about it on Saturday but every other day I think if you're not thinking about your startup then you're not doing a good enough job if you're if you're the founder at least because You're going to come up with your best ideas in the most random moments while you're driving in your car or thinking in the shower or just walking to work. And so I think you have to think about it all the time.

The lifestyle is hectic. You have to be working long hours and you have to be enjoying that. So why are they doing this?

Is it about walking away with millions of dollars? Or is the ultimate goal having satisfied users and a good product? I was supposed to be unemployed.

I was supposed to have no money, and here I am. I'm able to eat, sleep, live under a roof, and have an office. And it's already amazing for me. So I could live on sustenance, right, and I could care less. I think a lot of people, it jumps out at them, you know, how wealthy some tech entrepreneurs get.

You look at Bill Gates or Larry and Sergey or Larry Ellison and Oracle or, you know, Steve Jobs or Mark Zuckerberg, and you think, oh, it's all about the money. But if you ask them, it's really not. You know, if you talk to those guys or other entrepreneurs, they're not even going to tell you. to make the money.

And it turns out if you think about how much you're going to make the money, you might make money, but it's not really a good indicator. So I think the primary motivation really is the best entrepreneurs try and change the world. I think it's always very different, and I think it's sometimes very personal, too, or what drives them.

I mean, I think we have certain entrepreneurs who really want to change the world. Others just realize this is an incredible way to build a lot of wealth. And others are really just trying to do it.

just passionate about their products. They were really not even thinking about, you know, the business itself. I think too many entrepreneurs are in it for the wrong reasons.

I think they're in it for the money, for the fame, for the glory. And a lot of them are going to say they're not in it for any of that. But... but they're just cheating themselves. The first-time entrepreneurs, when they just get funded, they at first are really thrilled that they've gotten funded, and then the weight of the money is on their shoulders, and they say, oh, well, we've really got to do this, and we've got to make sure it works, because we have now raised money from somebody else, from other people.

I think a lot of entrepreneurs are spending their 20s working. all the time because there's there's a few different reasons one a lot of them see you know the opportunity for fame and success and but more than that I think you know the best ones really just have these great ideas and they realize that they can do something right now. It's cheap to do it and they can just come out here and do something and potentially really alter the way that the world works.

I'm not building software to build a business and make a ton of money and get rich off of it. Leah Culver is the CEO and co-founder of Grove, a real-time group chat service for teams. She started her first company in 2007 when she co-founded a social network site named Pounce, which a year later got her selected as one of the most influential women in web by Fast Company. So I first became interested in programming and sort of doing a little bit more with computers when I was about 15 It was kind of trendy at the time to make your own web pages and everyone wanted to have their own homepage.

So I got one of these free AngelFire GeoCities home pages and started learning HTML. I wasn't quite sure that that's what I wanted to do for a job. I think it was kind of always something I thought was was really fun, but I actually wanted to be a graphic designer when I was younger because my mother was a graphic designer.

And I think it's easy as a kid to sort of just want to do what your parents do. And my mom always loved her job, so I always thought that would be so cool to love what I was doing. She graduated from college in 2006 and decided to move to San Francisco.

After graduating from college, I really wanted to move someplace warm because I grew up in Minnesota, which is very cold. And I got a job at a startup in San Jose. I worked for startups for a little while, and then I realized that I wanted to do my own. I wanted to work on my own projects, because that's why I got into programming, was I wanted to work on, you know, making my own fun things.

Leah needed a new laptop, but couldn't afford it. She came up with a unique way to generate enough money to buy a new one when she sold ad space on her computer to several companies by laser-etching their logos on the surface of the computer. So I said, you know, like, buy a space of advertising on this laptop.

And I made, like, a corny web page for it and was like, hey, if you buy an ad on my laptop, I'll show it off at all these, like, San Francisco cafes and things. And I didn't actually think anybody would pay any attention to this, like, stupid website. I just did it kind of as, like, a joke and out of the frustration of I didn't have any money. And people ended up actually buying ads on it and paying for these cute little ads.

And it was fun. It was a lot of work. to get people to buy the ads, but I ended up getting enough money to buy the laptop and etched it and made a video of it and made the whole thing sort of a production. Tried to really get like the most value for the people that actually did buy the ads, and I felt a little bad.

I was like, oh, I want them to get something good out of it. But it was a really interesting experience and probably like a really good lesson in like marketing and sort of following through on a project, so. Leah's first startup began as a hobby, when she started playing around with sending messages and media to her friends.

She got two of her friends involved and they turned it into a social network. The site got a lot of attention and at some point invitations to use the service were being sold on eBay. My first startup was actually Pounce.

And it's sort of a funny story because most people go through several big failed startups. They're like little failed startups that no one's ever heard of before they end up making a product that's fairly popular. And Pounce was fairly popular for like a first.

startup. It's not really the traditional way that startups are built. Like most of the time you'll have some small other startups that don't work out so well but I was lucky enough to work with Kevin Rose on Pounce who's fairly well known and ended up getting a lot of publicity for sort of my first startup.

Your first startup is really really exciting right like everything sort of seems like everything's a big deal and everything matters and you get t-shirts and stickers and it's like so exciting to have your sort of your own. Startup. A year later the company was struggling due to lack of revenue. The team decided to sell Pounce to a software company called Six Apart. Two weeks later the site got shut down.

How did it feel to sell the company? It was interesting. It's kind of exciting because you're like, oh, someone wants to buy my company. It's exciting. But at the same time it's kind of sad because you lose sort of the independence and the freedom to work on the project.

And they ended up shutting down the site, which I wasn't super happy about. So that wasn't a great experience. When things go wrong... Like, you can end up blaming people. You can end up sort of having a lot of fighting when things aren't going super well.

And they never go super well. I don't know why anybody thinks that, like, startups are all, you know, rainbows and sunshine. because it's a lot of hard work.

I mean, if you want rainbows and sunshine, work a nine to five job and have a hobby on the side because hobbies will always be rainbows and sunshine because when they don't work out, you don't have to work on them. I think there is part of our generation, my generation, where you need to be perfect and good at everything. And part of being an entrepreneur is you will fail. Like you will mess up, you will do things wrong.

I mean, even Pounce, like the site got shut down, like acquired and shut down because we ran out of money. Like that's... I mean, that's kind of a failure.

But you need to be able to say, like, okay, that's okay, and move on from that. Or like something might not work out the way you expect. And I think that's hard for a lot of people to know that they're going to do something wrong.

In the news, we only hear about the successful companies. But what about all the others? 90% of all startups will fail.

You can't have everyone be a success. It's just not a tenable situation. And so most startups still do fail. But the good news is that when those startups do fail, it's a great lesson oftentimes for entrepreneurs. And you usually see a lot of them come back and try again.

What's really important is to make sure... that I'm not really putting my whole identity in this startup. And I realized that it's just, this might fail. In our experience, about six out of 10 of the investments we make fail, and we lose all our money. And maybe two out of 10 float along, and maybe we make our money back, or maybe two times our money.

So it's really one or two out of those ten investments that make it a huge success, that make venture capital worth pursuing. And those are the one or two that make us many, many times our money. Yeah, failure is totally accepted here. It's actually even better if you failed in your profile. People value a lot that you failed and it's totally okay.

Yeah, I fail every day, something. The guys who do really well, they're guys who have crashed another company before. And the guys who haven't crashed another company yet, this is the company that they need to crash. I made 30 million dollars when I was 17, and I lost it all by the time I was 20. And that experience really made me realize that in life the most important thing is the people around you. And it's easy to forget that and get caught up in the hype.

You only get one life. You've got to live it. Don't forget to actually enjoy it. Ben Way is an English serial entrepreneur.

He grew up in England and was early fascinated with building businesses. He started a computer consultancy at age 15. At 17, he had raised $40 million, making him one of the first dot-com millionaires. By 20, he had lost it all. I was always very different at school. I'm severely dyslexic.

I was told that... Nine years old that I'd never read or write because I was pretty useless. I still have trouble spelling business and entrepreneur is a word I couldn't even possibly hope to spell.

But I was very lucky and one of the reasons why I got into computers and technology was actually I was given a laptop. at nine years old to help me with my dyslexia and that was one I was one of the first I think kids in the whole of the UK to be given a laptop for education. My first semi-proper business was at 12 years old and I bought some chickens and I sold their eggs and I had a proper cash flow where I used to look after the feed and check you know the sale price of the eggs. The eggs have got very good margins at 12 years old.

After my chicken business. I started my first computer consultancy on my 15th birthday, charging £10 an hour. And that's really how I started a proper business. I think at that time I was the youngest company director in the country. And it wasn't until a few years later that I raised £25 million to do what was back then the first e-commerce search engine.

At 21, after the dot-com crash in 2000, Ben's company went bankrupt. When I failed, I failed in spectacular fashion. So I literally went, I lost 20 million pounds.

I lost my car, the girl I loved, my house, everything. I couldn't even buy a tube ticket the same day I was in the rich list. But even after this experience, he decided to continue building businesses. In 2003, he started Rainmakers, an innovation and venture company. So after I failed, it did take me a while to get back on my feet.

After losing everything and it was a very hard time in my life, I ended up doing a reality TV show and travelling the world. But entrepreneur is such a deep part of me that it took about 18 months to two years to start my own business again. But never at any second does business leave me.

I'm always thinking of business. So even after I failed, I was thinking of ideas and new businesses I could do. Sometimes I wish I could quiet my mind a bit more often, but every second of every day is consumed by trying to make the world slightly better.

So it's been a very long and challenging time. I've had some great successes during that time and some great failures also. I just don't fear the failures so much anymore.

Even though so many companies fail, entrepreneurs continue to start new businesses in the hopes that theirs will be that 1 in 10 company that succeeds. What does it take to build a successful startup? Successful startups need a lot of things. They need a great idea, they need a great team, they need to be there at the right time, they need the right level of funding, and they need a lot of luck.

There's a lot of luck in the success of all the businesses that have succeeded. There were 25 search engines funded before Google was funded. There were, there was Friendster and LinkedIn and MySpace and about 50 others before Facebook became the big winner in that area. There's a little bit of luck that just happens where somebody gets it just right.

Now that could be skill, but they've figured out what the user really, really wants. And that's the thing that makes those big businesses. Some of it is just you're at the right place at the right time and you get lucky. I think with any company, there's a lot of luck involved. You can have a great idea and you can work really hard and you can be really smart.

But the one thing that's out of your control is the timing. Absolutely. Like team is super important.

You know, big market. you know, I don't know. I mean, it's magic.

It's totally magic. It's like all of that stuff and nine times out of 10, they fail. And then like the one time that it does work, it happens in a totally unexpected way. Look at Twitter, right? Like how big was microblogging when Twitter started?

Look at Facebook. How big was social networking when it started? Those weren't huge, interesting markets, but that's what you hear from all VCs.

Like that's the really, that's what we look for in those investments. Like, well, those weren't really big investments then at the time. You know, starting a company often feels like it's a series of miracles, and you have to have one really good thing happen right after the other.

So it really does feel like a lot of luck, but at the same time, if you really work hard and try a lot of things that are really experimental, you can create your own luck, and you can make these miracles happen. When I was young, I just didn't know what entrepreneur was. It just, like, I think it was, I understood it as this, like, catch-all word to define... You know, any independent small business person, like that's just what I thought, but it sounded like, it sounded pretentious to me. I don't, I mean, I can't even pinpoint where it all came from, but I just always had the impression that I was going to invent things.

Zach Klein is a 27-year-old entrepreneur. He is the co-founder of Vimeo, a popular video sharing site visited by 50 million people each month. He started his career working on a website called College Humor.

Two of his friends from college started to post silly pictures of themselves on the internet in 1999. Pretty soon, the site was getting thousands of visitors a week, and Zach joined them while he was still in college. I never thought about quitting college. I loved college. I think it's... You know, the cliche, I thought it was some of the best times in my life.

It's just this really nice intersection of innocence and independence, and it was lovely. And I went to school in North Carolina, where I love, and I'd give anything to just have four more years there. After graduation in 2004, he and his three partners moved the company to New York. We were having a hard time being taken seriously by anyone in the industry because we weren't in San Francisco or New York. And I think all of us just sort of were attracted to the romance of moving to New York City, so we just decided to move there instead.

The four friends rented an apartment together and ran the website out of their spare bedroom. For the first three or four months, it was just the four of us, and so we sort of got out of bed, walked 20 yards over to our... into our office and just sort of like, you know, worked until we got tired.

And then, you know, we'd put on clothes and go get dinner. And so, like, I remember it was like a big shock when we got our first employee and we had to, like, start, like, wearing clothes to work and having normal business hours. In 2005, The New Yorker published an article named The Funny Boys about college humor and the guys behind it.

It certainly made clear that this wasn't a fluke, that we were very earnest business. People, very earnest entrepreneurs who thought very carefully about the things that we were making. Within a few months of the article being published, they had a book deal and a movie in the works. Our office grew, I think, until maybe up until like 10 or 12 people.

It stayed in our apartment, and then when we could afford it, we got the next floor above our apartment. So we would take an elevator up the building to our office. I don't remember exactly what the count was, but I think we had something like 30 people before we had our first person above 30. And we had to hire that person because we needed an accountant, and that was the youngest accountant we could find.

Vimeo started as a side project by Zach and one of the co-founders of College Humor, Jacob Lodwick. After hours, they built the site and began experimenting with uploading short videos for their friends. Vimeo is definitely my proudest work. It's certainly the thing that I spent the most time designing. I actually haven't had really a desire to...

to design something since Vimeo. I remember having an office and having a door and just sort of shutting myself off for six months while I just iterated on this constantly. We weren't very sophisticated in making websites then.

We didn't have any best practices. We didn't know how we should be building a website collectively. Jake and I still considered it very much...

a very personal project and so he gave me a lot of space and time to just make something that I was really proud of. I remember writing letters to my friends and family saying, I'm sorry you don't know me anymore, that sort of thing. I just let all of my relationships go because nothing was as important as this. I remember breaking up I broke up with a girlfriend just because I had no time or interest really. It was more of an interest thing.

It's just nothing was as exciting to me as this thing. Knowing that there were tens of thousands of people that were like using the service and in love with it and waiting to see what we could do next. In 2006, IAC, a big internet company, acquired both College Humor and Vimeo.

After being a side project for a time in 2007, Zach and Jacob got the go-ahead from IAC. Vimeo became a full-time, fully funded startup. The website's user base was growing steadily, but in 2008 Zach decided to leave the company.

You know, I think what it was is that something, there was something, there was the entrepreneurial spirit had sort of been sucked out of the company because we are now owned by such a massive company that was making a lot of decisions for us and I felt myself being squeezed into this role as just a designer and I didn't I didn't really, I learned design because that was the easiest way to make myself useful to the process of building those companies. But I wanted to learn so much more. And I had money for the first time in my life. And I never, ever wanted to work on the Internet just for the sake of working on the Internet.

There was lots of things I wanted to do. So I left to do them. Buying some woods and building cabins with my friends here, something that I wanted to spend time doing, and that's what I left to do. Zach now spends most of his time living in the woods, without electricity and unreachable by phone.

I've lived in this cabin behind me for a year, for about half the year. I spend three to four days of the week down in New York, because I still am involved in the Internet. And then another three or four days a week I'm here, and I'm usually...

There's usually, I don't know, eight to ten people with me, just to sort of make a little place that we all can spend time doing whatever we want to do. I came to this place, I mean, I think, well, primarily because I love the outdoors, I've always wanted a place like this, but I keep coming back because it's like in this place that I feel most creative recently. My entire career has just been spent.

Online, pushing pixels around, and there is something very novel and thrilling for me to build with wood and stone with my friends, to iterate with these materials, to make physical things that we can use, that we can be inside of, to see other people look at them. I just, I can't recreate that sense of pleasure working online. I can't explain it, I don't think it's permanent, it's just right now this is...

where I'm most inspired. The most interesting place to be is the place that, like, that allows you to become very singularly focused. And when you're that way, I think that you're really at your peak. And I think that's when you're most comfortable with yourself.

I think that's when you're most attractive to other people that you're bound to be interested in. And you sort of become magnetized. You just...

you find other people who who are also driven to make or to think the same things and It puts you in a really creative place where there's no fear, where people are are just really happy about the things you're making together and it's in this space that I think you achieve the greatest things creatively. Success is what you make of it. I mean I know some of the most successful entrepreneurs I know can be unhappy so I think for me being a successful entrepreneur is both having a work and life balance.

You know I want to be very successful but at the same time I still want to live life. Don't be indirect about how you think. Don't take a job to go somewhere else.

If you want to be in Silicon Valley and you want to go do a startup, go be in Silicon Valley and go do a startup. And don't let anyone stop you because once you get out here, it's a whole new world of possibilities. So many people have the wrong idea that they have to follow some kind of a path. Do your MVP, build your initial prototype and then pitch it and then have an initial cut.

Doesn't matter. Everybody starts a company in a different way. If you were to follow another guy's path, then you're not being a true entrepreneur. The most comforting thing to me, again, was just the fact that all these people that are on magazine covers, like, They started out just like you, you know, in their 20s, no experience, and they're able to figure things out. So that, I think, should give comfort to anybody who's excited about starting a company.

You can't teach entrepreneurship. You either are an entrepreneur or you're not. And I think it's said, if you are, you're going to end up doing it, and that's just who you are, right?

You can't change that. As long as you have a passion for something, for some fundamental core idea, I think that you should just hone in on that and really do everything you can to explore that. Follow your heart. Follow the thing that really matters to you.

If you do that, you will become a big success. There's never ever been a better time to do it than today. And you know you're only young once. You just, you know life is too short to give it up.

If you've got the opportunity to do something like this, you know you owe it to yourself, you owe it to the world, you owe it to your children to take it as far as you can. Say you're going to wait until after college or prepare yourself to be an entrepreneur or to take classes even about entrepreneurship, but just to do it while you're still taking classes and to not give any excuses for building a company because no matter what, you could come up with excuses. The hardest thing is just to start.

Transcript for:The Rise of Internet Entrepreneurship

Transcript for:
The Rise of Internet Entrepreneurship