Entrepreneurs Through the Eyes of a Lawyer (Matt McKinney)
I’m a lawyer based in Boulder. I’ve represented tech companies in the Boulder entrepreneurial community for almost 10 years. This site has many blog posts on why Boulder is special, covering various perspectives. I wanted to share a couple observations from my vantage point as an adviser to tech companies.
I suppose I’m an entrepreneur in some sense of the word – I started my own law firm about 2 years ago – Stack McKinney Law Group – with another lawyer, Michael Stack. However, in the Boulder community, I use term “entrepreneur” sparingly and sheepishly in regards to myself. Forming a law firm is easy. Getting the law degree is the hard part. And that’s not particularly hard with the roughly 200 law schools in the United States. After the degree, you form an LLC and from there you really just need a phone, a computer, and an Internet connection. Voila. A law firm is born.
I suppose that’s a little bit over-simplified. I did take a risk, albeit a fairly calculated one with minimal downside. I quit a job. I put up a bit of my family’s saving. I took a leap of faith that I could sell services, create a brand, gain clients, and ultimately get paid. But compared to the hearty souls I’m proud to call my clients, that was a walk in the park. I had no product development cycle. I waited 45 days to get revenue. I didn’t have to worry about protecting IP. I share this background because every so often a lawyer, or even a non-lawyer, will say “wow, you started your own firm – that sure was risky.” And I say, “thanks, I guess so.” But I think “what I did was nothing compared to the risk and sacrifice of my clients.” This post is a small shout out of admiration and respect to those in the community who really put themselves out there to chase a dream or solve a problem.
The stereotypical tech entrepreneur is the college drop out (see M. Zuckerberg) or recent college grad (see E. Musk) hopped up on Cheetos and Red Bull in a dark basement or garage. Nothing to lose, but everything to gain. Reality, at least in my experience around here, is different. Sure, I’ve seen the stereotype in living color, but I’ve also seen the 2 middle aged family men who gave up comfortable middle management careers to start a software company, bootstrap it themselves, putting retirement and college savings in jeopardy, and finding themselves running a 25 person software company 5 years later. I know at least 2 tech companies started by married couples with kids. They put it all on the line – savings, credit cards, mortgages. Surely there were heartfelt conversations with spouses. They took the plunge. Then the newly married couple who threw caution into the wind and jumped into the entrepreneurial world feet first just weeks after getting married to start their software company. In other words, these entrepreneurs had everything to lose.
So I’m constantly humbled by the risks entrepreneurs take and the choices they make. Many do, in fact, have lots to lose, in term of money, time and family.
While risk-taking and tough decision making define all entrepreneurs, I love seeing their differences. At least in the greater Boulder area, and in my experience, entrepreneurship is not limited or confined by stereotypes or bias: age, gender, ethnicity, country of origin, religion seem to play no role in the greater entrepreneurial community in and around Boulder. What does play a role across all of these founders and entrepreneurs are the innate or learned qualities you’ve surely read elsewhere on this blog: a willingness to identify and fix a problem, and high risk threshold, a visceral perseverance to keep going in the face of and even after defeat. While I’ll be the first to admit that the community could always be more diverse by many measures, I’m impressed by the general inclusiveness of the community. So to the extent I’m an entrepreneur in my own, little way, I’m proud to share that moniker with the truly imaginative, visionary, bighearted founders and entrepreneurs who make this community the wonderful place that it is.
Matt McKinney is a Partner at Stack McKinney Law Group.
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Matt,
I wish you’d talk about more of the truths.
For example.
It’s just about impossible to find financing if you don’t know someone, aren’t young, and didn’t go to the right schools.
The Venture Capital world is increasingly becoming about protecting those inside the circle and keep everyone else — out.
I started in tech 22 years ago. Back then a guy with a dream and some coding skills could make a go of it. Now, those days are just about gone. If you’re not young, didn’t go to Stanford or M.I.T., it’s just about impossible. Can you even get an interview at one of the big tech companies without a referral now?
The VC world is actually hurting innovation. Why is it now, that none of the “sexy” startups make a profit? Why aren’t young people with expensive degrees from the best schools starting businesses that people pay for what they offer? Why is that? All this money spent on fancy schools and the best they can do is come up with businesses that give stuff away for free? Say what? That’s not a business.
It’s because the VC world feeds a vision, only a vision, built on data mining and big money. If I were to present a plan with modest growth, based on selling something for a profit, I get laughed at. But meanwhile, Instagram gets sold for a billion bucks because when pictures are taken they mine the metadata and sell it to Facebook. Oops. I mean get bought by Facebook.
Do you ever find it odd, that these so-called businesses don’t tell users what the product is really about? Which is giving the user something for free, so they can sell what they gather? I think there’s a case to be made for deceptive trade, don’t you?
If young folks out there are so smart, why don’t they start businesses that make money? It’s because they’re being driven by greed and this idea that selling my information without my consent is how it’s supposed to be. Read the Terms of Use, right? They know as well as I do that no one reads it. They bank on it.
From my keyboard these “brilliant entrepreneurs” lack ethics, show zero respect, and have no idea how to build a profitable business. All they know, is to trick people into using their thing, so they can sell what they gather then flip the company to someone the VC knows. Then it’s on to the next thing that none of us have much use for. If this is the best that Stanford can do, eh, not so smart.
Peter Drucker is rolling over in his grave.
Whoops. “Who’s Peter Drucker”? they ask.
So if the plan isn’t based on data mining, gathering up a bunch of users then flipping the company, tough luck. Don’t believe me? You’d be wrong. Why are 9 out of 10 startups coming out with something that’s free, then? How do they make money, por favor?
If you really want to do some good for our society, you and the VC folks ought to start paying attention to businesses with modest goals, with plans that look further than landing a phat pad on the hill in Palo Alto. Start funding businesses that actually provide a valuable service that people pay for, not, that are based on mining our personal information then selling it to the highest bidder. Start funding businesses with plans designed by people who went to state schools, who couldn’t afford college, that are based on the fundamentals of business such as outstanding service, and who contacted you out of the blue. Start paying attention to those who are older. In tech you’re not cool if you have gray in your beard. Believe it or not there was a time when gray in the beard mattered.
When you do, you’ll be doing society a favor. Until then, you’re just beltway bandits, man. Because all you’re really doing is making it easy for those inside of your world and making it really tough for just about anyone else. What about the poor kid from Detroit with a dream but no degree? How does he make it in tech today?
You all sit around with Brad Feld and celebrate yourselves, talk about how much good you think you’re doing. Really? Privacy and freedom is evaporating and it tracks back to you folk. The gap between the haves and have nots is getting wider and it tracks back to you.
Tech used to be about the little guy who could. Now, it’s anything but that. You ought to go back and take a hard look at yourselves.
The circle that you all seem to be so proud of has done nothing more than convince Americans that “free” is how it’s supposed to be. So the net result of the investments made over the past 20 years is income disparity, the loss of freedom and privacy. You’ve made it harder for the little guy, not easier. Way to go, man. Now, it’s just about impossible to offer something that people pay for — because the VC world you celebrate with each post won’t write a check for anything else – “Huh? Pay for something? Show me something that Google or Facebook will buy”.
I challenge your culture and the “entrepreneurs” out there reading this to start businesses with products that people will pay for. To take a step back and examine what good “free” has really done for our society. Put that education to use.
Matt – I completely share your admiration for entrepreneurs. I’ve done it a few times (in Silicon Valley) and know how difficult it can be. I eventually ended up on the services side, providing support to entrepreneurs.
A few years ago, I came across a Kauffman study of the changing demographics of entrepreneurs. I was surprised by some of the findings. I wrote a short post on the <a href="http://www.caycon.com/blog/2009/06/the-age-of-entrepreneurship/"Age of Entrepreneurship with some observations.
Best,
Akira
Matt,
I completely share your admiration for entrepreneurs. I’ve done it a few times (in Silicon Valley) and know how difficult it can be. I eventually ended up on the services side, providing support to entrepreneurs.
A few years ago, I came across a Kauffman study of the changing demographics of entrepreneurs. I was surprised by some of the findings. I wrote a short post on the Age of Entrepreneurship with some observations.
Best,
Akira
Thanks, Akira. I appreciate the note, and the reference to the Kauffman study which seems to validate some of my own experience here in Boulder.
Matt