It seems like a fairy tale from so long ago. A whiz kid fresh out of Stanford University has a great idea for a company and is lucky enough to have friends with enough enthusiasm to help him make it a reality. They visit a few venture capitalists on famed Sand Hill Road in the hills above Silicon Valley, get lots of money, and open a chic office in San Francisco's South of Market area.
Unfortunately, we all know how this fairy tale ended. The company went under, the VCs took a bath, and the young entrepreneur ended up begging for a job at one of the Silicon Valley tech giants where he swore he would never work.
But like the heart of a Boston Red Sox fan at the beginning of a new season, hope feeds on itself in the high-tech industry. A new crop of young entrepreneurs is taking a whack at the American Dream, Silicon Valley-style. Fortunately, this generation of tech entrepreneurs is older, a bit more business-savvy, and quite a bit more cautious than their dot-com brethren.
Beyond the cereal crowd
David Skok, a general partner at the VC firm Matrix Partners in Boston, says most of his investments are being run by people in their early 30s. It's a strange change of pace for Skok, who started his first company, called Skok Systems, in 1977 when he was only 21.
Why the shift toward older founders? "I can only speculate," says Skok. "It's becoming a much harder environment in the tech space to get a company going. More and more people are realizing they need experience to do this." Adds tech startup guru Guy Kawasaki: "Venture capitalists want serial entrepreneurs, not cereal entrepreneurs -- guys still young enough to be eating Cap'n Crunch."
That's why the next generation of entrepreneurs include the likes of Mark Fleury, the 36-year-old founder and chief executive of open-source software maker JBoss. Fleury's first startup went belly up, and he and his family were forced to camp out at his in-laws while he tried to get his second venture off the ground.
On the cheap
There's Ross Mayfield, the 34-year-old founder of Socialtext, which uses its software to help people collaborate online. Mayfield is a repeat entrepreneur whose first job was in Eastern Europe in 1995. He was a $300-a-month special adviser to Lennart Meri, Estonia's first post-Soviet President. He then co-founded RateXChange, a business-to-business Web site.
Like so many other tech startups these days, Socialtext is being done on the cheap. Mayfield's company has so far landed 50 customers while employing just 10 people. In today's collaborative Web environment, employing tons of people to get the job done just isn't necessary.
But are venture capitalists ignoring young entrepreneurs at their peril? Kawasaki worries. After all, his old boss at Apple Computer was a guy named Steve Jobs, a college dropout who founded his company at 21. And a certain Harvard dropout named Bill Gates didn't need much seasoning in the corporate world to found a little outfit that would become Microsoft, the largest software company in the world. "There's a certain chutzpah about those [young] guys," says Skok. "You lose that as you get older." (MSNBC is a Microsoft-NBC joint venture.)
Nonetheless, there's chutzpah aplenty among today's entrepreneurs -- a gray hair or two notwithstanding. Keep an eye on the following five companies and their not-quite-so young entrepreneur founders:
- Fleury is taking open-source software to Corporate America with his JBoss.
- Mayfield's Socialtext uses the collaborative power of the Internet as a whole new way to build technology.
- Svetlozar Nestorov is a computer-science grad who studied data-mining with the founders of Google and last year launched travel search engine Mobissimo.
- Mike Horton is hoping to be the Bill Gates of sensor technology with his company, Crossbow Technology.
- And the youths of the crowd, Hosain Raham and Alex Asseily are trying to change the world of speech and voice technology with their startup, Aliph.
Read on, and get a glimpse into some of the most promising entrepreneurs to come along in years.