This is a quote, this is one of my favorite quotes I've ever come across. Every book I've read, every great public figure, this is one of my top ten quotes. And this comment was made by a reader on my blog.
And what he said was that entrepreneurship exists in the tiny space between madness and genius. And its journey requires a few cross-border violations across both madness and genius to get to the final destination. I think as Eve points out, you have to be somewhat crazy to be an entrepreneur. But you also have to be a genius there. There has to be something there that is inside your brain that doesn't exist anywhere else.
And so I love this definition of entrepreneurship, and I wanted to start it with it. I saw this tweet the other day. It was pointed out to me by some readers on my blog.
And I thought that last point about the monthly salary was so powerful. This is why. if you're not your own boss, this is why. It's the power of that monthly salary.
And I think it's so hard to walk away from that and the safety that that provides. And so I want to recognize... recognize that up front, that it is a very difficult thing to walk away from that. And I want to talk about some ways that maybe you can think about doing that.
So the first point I want to make is if you want to, you can do it all by yourself. You can be your own boss, and you can be the only employee of your company, and you can do everything. And I use Matt Drudge here as the example of that. Matt Drudge makes... somewhere between a million and two million dollars a year.
He has two homes in Miami, one in a hotel and one in a home. And he creates his product every single day all by himself. So if you are that kind of person, you can do that.
It's a lonely existence and it requires a very unique kind of personality. But it can be done and it can be highly profitable. And I think obviously the web provides much of the platform for what Matt does. And many of the people I know who are one person organizations are using all the tools of the web to be able to do what they do. So that's one way to go.
And it frankly doesn't take a lot of money to be your own boss in this way because you have no employees. You can work out of your home. And so The overhead costs are very low and you get to keep all the money you make.
Adam and Mark are a couple of architects that I work with. My wife and I work with on a couple of projects. And I like them.
They're fun, very creative team. And they're a partnership. And they started their business by themselves.
They have a few people that work with them. Occasionally they... they scale up and scale down as their work demands.
They are a partnership. And the thing that's great about a partnership, and they really define this to me as well as anybody, and that's why I put them up on this chart, is they have very complementary skill sets. And so one of them is more of the business person, is more a detail person, the organization.
The other one is really more of a creative person, comes up with some of the... wild and wacky ideas that they present. But they are good friends. They can finish each other's sentences.
And they are a team. And neither one of them would probably be able to do it on their own, but together they're very successful, and they rely a lot on each other. And they do their business together.
I've never met with them without both of them being in the room. So I see them as a partnership. And And I think that two-person partnership is very, very powerful.
And many businesses start out this way. It's comforting to have somebody else when times are tough. It's also great to have somebody else when the good things happen, someone to celebrate with. And so I would encourage you, if you're thinking about being your own boss, to think about doing it this way.
I think it's, for most people, better than the sole proprietorship. it's a little harder because you got to split the money two ways instead of one and um and There's always that relationship issue and people can stop getting along and lots of issues in and around a partnership. But when they work, they're beautiful.
There's another variation on the partnership, which I think is really important, the husband and wife team. So Daily Lit is a website that was built by my partner, Albert Wenger, and run by his wife, Susan Danziger. And what Daily Lit allows you to do is... You can read a book in short installments. So you subscribe to it via RSS or email, Twitter.
And you can, over the course of a month or two months or three months, read a book on your phone. Albert is technical. And over the course of three or four weeks, he built the web application and handed it off to his wife, who comes out of the publishing industry.
She went out and negotiated the rights to get all the books. And the two of them Own and operate this website largely by themselves. And the husband and wife team is always a fascinating version of the partnership because you're starting with a team that's already a partnership.
And so assuming that the marriage is a good one, you know that the partnership already works. And the other thing that's nice about it is that because you're married, you know, the revenue that comes in is... really just going into one bank account as opposed to two.
And so I see this a lot with software engineers who are married to people who aren't software engineers but have a particular skill set. For example, I've seen a number of fairly creative businesses where maybe a designer was married to a software engineer and together they were able to create a web-based business. And so if... That's your situation. I would consider a husband-wife team.
I think it's very fulfilling to be able to work together with somebody who you're spending your life with. This is us, Union Square Ventures. We're a boutique.
We're six people. We work out of a small office, and we're more than a partnership. We now have three owners of the business, plus three other people, so it's six.
We're very small. And we like to keep it that way. We probably won't grow much from here.
Maybe I could see ourselves being seven or eight people, but I certainly couldn't see ourselves being 10 or 20 people. The power of a boutique is that if you get the right small number of people together, it's a very warm, almost family-like culture that you can create in a boutique. You can't do everything in a boutique. You have to understand that, you know... Your scope of what you can possibly accomplish is relatively limited.
But knowing that you're not going to grow allows you to do things that you can't do in a company whose objective is to grow and grow and grow. And so you can build longstanding relationships with people. You can have client relationships that are very strong and very deep. And you can give the kind of attention to those clients. that a big organization largely can't do because you know that you're a boutique and you're never going to do much more than that.
Of course, the word boutique, I think, is often thought of in the sense of a retail store, a boutique store. It's the same idea. You walk into that store.
It's a small store. The reason it's so great is because it's a small store. They only do several things, but they know your name when you walk in the door.
They know what you bought last time. This kind of business does not take much money to operate. Most boutiques are bootstrap businesses. Don't require a lot of capital to get going. Are very fun places to work.
And this is the way that I have chosen to be my own boss. There's an investment bank here in New York called Allen & Company. It's a well-known company, probably best known for their Sun Valley Conference.
This is... Herb Allen, the CEO at their Sun Valley conference. This is where all the big media moguls go during the summer for a week of schmoozing. And what's interesting about Allen & Company is that on the surface, it looks like a company, like a mini Goldman Sachs or something. But the reality of Allen & Company is that everybody is really their own business.
It's a federation. So they share an office, and they share a name on the door, and they share... some shared infrastructure, but the people who come and work at Allen & Company essentially operate their own little P&Ls inside a larger organization. And if you have a good year, you benefit from it.
If you have a bad year, you struggle from it. And there are lots of professional services companies out there that operate in this model. I know architecture firms that operate in this model. I know law firms that operate in this model. I know consulting firms that operate in this model.
Obviously, investment banking firms. It's a very interesting model. You want to be your own boss, but you don't have the capital or you don't quite want to take the risk, but you have a book of business.
You have some clients. You go into a federated model where there's already an existing setup like that. I have a friend who's a lawyer, for example, who made a midlife career change about four or five years ago, left a big law firm, went into a law firm like this.
He's happier than he's ever been. He runs his own little business. He goes home at night.
He doesn't have to worry about, you know, overhead and payroll and all that because he's his own little one-man band inside a federation. So the project, using the example here, Avatar, the project can be your own business. You know, filmmakers are obviously examples of this. Authors are examples of this. To some extent, musicians can do this.
But I think many people can do this. You can be an entrepreneur who goes from project to project to project, and you're always coming up with something new. You do it for that period of time.
That's your business. That's 100%. Then you have some downtime. You get another project. You do that.
It's a very good model for people who have a unique set of skills, who can essentially get work whenever they want. And the thing that's great about the project is that downtime. I know entrepreneurs, for example, who start a company every four or five years, and they sell it.
They take a year off, and then they go do that deep dive for another four or five years, and then they sell it, and they take a year off. And it's those. Those sabbaticals, the downtime where you can sit back and go away or just write or think or whatever, that gets a lot of the creativity that allows you to go then do your next project.
So if you're the kind of person who gets deep into something and it's the only thing you can do, and then you need time off when you get burnt out, this is a great approach to being your own boss. This is probably my favorite of the ten. So Anthony Volodkin is a friend of mine.
He's about 24, 25 years old. He built a website when he was in college at Hunter here in New York City called the Hype Machine. And it's hypem.com.
I'm sure some of you know of it. It's a music website. And what's great about it is it takes all the music that's getting uploaded onto blogs all around the world and kind of aggregates it into a listening experience, a streaming music listening experience. And it's a small business. You know, there's probably a half a million people, maybe a million people a month visit the Hype Machine.
So it's not, you know, it's not one, it's not Pandora or anything like that. But it's a big enough business that Anthony can run it by himself. He brings in enough revenue from advertising and the like to have a nice lifestyle. He has some freelance engineers and designers who he works with, who he pays.
And what Anthony does is he travels around the world. And he runs the business from his laptop. And so I follow Anthony on Twitter.
He's at fascinated. He's fun to follow because I kind of feel a little bit like I can kind of live his life a little bit from afar and enjoy it. So he'll pop up in Berlin.
He'll spend a month in Berlin. And then he'll spend a month in. in Stockholm and then he'll be here in New York for a month.
The next thing I know, he's out in San Francisco. He literally travels around the world, runs his business on a laptop. And so he is a little bit of the sole proprietor like the Matt Drudge, but the difference is that he's also using his business as a way to live the lifestyle he wants to live. He's young, he's not married, and so he's running around the world and having a... a blast doing it.
This is a startup that my wife works with based in Minneapolis. The guy in the middle is Dan. Dan's got a nice job because one guy and six attractive women.
So, anyway, Dan's the software guy, as you might imagine, and he's a pretty talented software engineer. And the two women who are next to... who are next to Dan are Aaron in the white blouse and Renee in the black blouse or dark blue, whatever that is. And Aaron and Renee came up with the idea and they recruited Dan.
To help them. And this is, Red Stamp is a place on the web where you can go and get virtual cards that can also be physical cards. And there's a number of services like this.
I'm sure you're all familiar with one or more. It's a fairly crowded space. But they're doing some really interesting, innovative things.
And I like the service very much. And as I said, my wife is an advisor to them. But the thing that I love about this is that it's the quintessential startup.
They're hustling every day. The website changes every day. Dan's very talented. So he decides that they want to do something with Twitter, and the next day they're doing something with Twitter. Or they decide they want to do something with Facebook, and the next day they're doing something with Facebook.
So they're moving fast. And it's a lot of energy. And it's a fun group. And you can see, just based on the smiles, it seems like it's a fun place to work.
And I think it is. Whether they'll be successful or not, Who knows? They have all the challenges. They need to raise some capital. They need more people to use the service.
Hopefully some of you will do that. And maybe they'll be successful, maybe they won't. But they're giving it a shot. This is Foursquare. This is Dennis, who's the founder, right here in the lower right.
And then next to Dennis is Naveen. Naveen and Dennis started the service by themselves. The interesting thing about Foursquare is that Dennis and Naveen wrote all the software. And Dennis really isn't a software engineer, but at the time, they bootstrapped it. In fact, Foursquare was around for six months before we invested.
And then when we went, the day we closed our investment, we said, okay, we've got to wire the money to your checking account. And they said, oh, we don't have a checking account. Well, the reason they never had a checking account was they never bought anything.
It was just, and they had no employees. It was just Dennis and Naveen writing software. So that's an example of, you know, they literally did everything that had to be done, the two of them, and they had raised no money, and they were just working for free.
The first thing they did after they got the money was they hired the guy up there, you know, with sort of the long straggly hair next to the guy with the baseball hat, and that guy's name is Harry. And Harry and Dennis had worked together at Google, and the first thing Dennis said to Harry was, you have to rewrite every line of code I wrote. Because it's horrible, and I'm not a programmer, and it's bad, and you've got to do it. But the reason I tell that story is that Dennis was prepared to write bad code for a period of time because he couldn't afford somebody like Harry, and so that's what they did. They made sacrifices, and they just kind of, by sheer force of will and effort, got it out and got it going and got enough users that got us to invest.
And then enough people used it. About a million people are using it now. I just tweeted via Foursquare before I got up on stage that I was getting up on stage, and so, you know, anyway, that's an example of how I use it. And so they are now breaking out, and they are now off to, I guess, we'll see whether they go from being a startup to being a big company. I'll end with Twitter, and Twitter's an interesting story, too.
So Twitter started out... inside another company. And what happened was that they had this company, Odeo, that was in the podcasting business. And they weren't going anywhere.
And then Apple came out and said, we're going to allow people to download podcasts into iTunes. And then they said, oh, gee, we don't have a business now. What are we going to do?
And so they broke up the company into a bunch of small groups, and they said, everyone go off and come back with an idea. And so Jack, who might be here in the audience, because I know he's going to talk in a bit. And a few other people went out to the playground in South Park and Jack sketched out Twitter.
He said it's kind of this SMS web thing, you know, you do a status update like an IM. They went and they built it, they liked it, they released it. A year later, enough people were using it that they spun it out into a real company. Today it's 175 people.
They announced their revenue model yesterday or the day before. You know, they're a business now. And what's interesting to me about that story was how it was an idea inside another company. And then they built it kind of on a whim. And people liked it.
And it kind of took a life of its own and eventually became something that's now employing 175 people. And people have had a lot of fun with it along the way. That image, by the way, is a Paul Klee painting from 1917 called Twittering Machine. So, Paul Klee obviously had some, you know, crystal ball, I guess.
When he painted that. That's my Twitter background. Probably always will be. So the point of that is that of those 10, two of them, the last two, Twitter and Foursquare, have raised real money.
And all the other ones have bootstrapped to date. Several of them might raise some money. Several of them might not raise some money. But they're all businesses. They're all people working for themselves.
And so you don't have to be Twitter. You don't even have to be Foursquare to be able to be your own boss and do what you love and what you're passionate about. And so what I really want to leave everybody with is a challenge to think about. how you might be able to be your own boss, and how to do it in a way that works for the way you want to work, the way you want to live, the money you need to make, and the people you want to work with. When my partner Brad and I started Union Square Ventures back in 2003, that's all we started with.
We just said, what is the place we want to work in for the next 20 years of our life, for the next 25 years of our life? And we drew that out. And then work backwards to figure out how we were going to get there.
And so we ended up with the boutique. And I challenge all of you to think about that and construct it and figure out how to do it. Thank you.