Sunday, 29 May 2011

Are Bezos and Omidyar too old to succeed in B2C internet markets?

Michael Arrington from TechCrunch reports that Internet Entrepreneurs Are Like Professional Athletes, They Peak Around 25 

“It’s not a guess, this is a data driven observation,” the anonymous VC is reported to have said. While keeping busy on the networking round it looks as though this expert has missed out hearing about the unusual stories of Jeffrey Preston "Jeff" Bezos or Pierre Morad Omidyar. Its well established that rather than looking at the specifics of particular start-ups some VCs effectively carrying out a process of pattern recognition - looking for companies that *look* like other successful start-ups - in name, demographic make-up or plan, rather than having a deep understanding of what is really going on.

In this case the VC is actually basing his investment model on his own selection criteria (e.g. "[we selected companies for] Y Combinator [and] the average age of their founders [we selected] is 26.") not on the actual success of the start-up.  If they looked beyond their own net-loss internal game to the big successes they'd notice that two of the largest revenue earning B2C Internet start-ups, Pierre Omidyar's EBay  and  Jeff Bezos's Amazon were founded by people in their thirties and forties. By following their own internal pet models and creating formulae to turn away founders like these they may be sealing the fate of  their own funds.

1 comment:

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