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| Confessions of a Serial Entrepreneur |
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Sound bytes from a conversation with Internet guru Ron Lachman.
We spent some time talking to Ron during one of his recent visits to Israel. Here are some of the highlights of a wide-ranging conversation on the state of the Web today and on an uncertain future.
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| On the Big Bang: Survival of the Fittest? |
There were too many Internet companies, all following the same model: grow as fast as you can, consume as much money as you can, and it will all be OK because there's an infinite amount of money available. That bubble has burst and it's the ones that don't run out of money who will survive (not necessarily the better ones). Fundamentally, survival in business depends on having enough cash to pay your next payroll. The simple rule of business is cash flow. And the rife of dotcom failures can be attributed to those who ran out of the cash to play. We've had the stupidest set of instructions given to businesses over the last two or three years: you should hire too many people, you should grow too fast — and when funds dry up and businesses go belly up, the entrepreneurs say: "What happened? I did what you told me to." We forgot about all the rules of business, and it's come back to haunt us. As the fallout continues, it's not necessarily the "fittest" — but the funded — that will continue to survive.
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| What's To Be the Fate — and Fortune — of the I-World? |
Digital Darwinism
We're witnessing a revolution in the evolution of communication — it's one of the more major things to happen in the history of mankind.
— Ron Lachman, Internet guru
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The Internet is as valid as it ever was: it's a utility — as common and important as electricity. You have to remember that the Internet is not just the Web. There are thousands of new applications coming out, new ways to communicate. There are many more Mirablis's to make. But the easy ability to make $300 million dollars in twenty months, is probably gone. The ability to make $25 million dollars in 25 months, however, is certainly not gone (and I'm not trying to make it sound like a walk in the park). There are still many real problems that need to be solved. Whether you call them applications or infrastructure, there is still ample opportunity there.
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| About the Next Big Thing (or Not) |
The world is just not that trendy. The press, the venture capitalists — are that trendy. We had peer to peer, for example, in many ways, 10 years ago. And we'll have it 10 years from now. It was very hot for a while in 2000, now it's not. The Internet is a communication medium. Different entities need to communicate to different entities (Coke machines to vendors). And we have to discover all kinds of different ways to make this happen. But we really don't need to hype things as the "Internet flavor of the month."
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| Bye Bye, Hype |
We're at the end of the era of the over-hyped valuation. The economics of the Internet went through an insane phase. But it's still one of the very best areas to put your money and your effort into. I'm seeing incredible opportunities in the genetic space: where "protein meets silicon," for example. Opportunities lie in many different areas, such as providing programming to give people what they want, when they want it. Making it easy to deploy, making it easy to scale. It's not a question of riding on any particular trend: just look at the problems, look at what people are faced with, look at what's hard, look at what's failing.
There's a need for a better way of doing things.
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| — | Shopping on the Net, for example, still leaves a lot to be desired.
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| — | Better ways of browsing need to be devised.
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| — | The amount of "plumbing" involved in setting up PCs and networks is both tedious and annoying. It's just too darn hard.
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| — | Everything should be made easier. Administration. Networking. Security. Preventing failures.
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| — | Every so often everyone has a "Microsoft moment" and loses their work. That's inexcusable. Every so often you have to get a new computer because you've run out of something you needed.
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| — | There needs to be better integration between various levels of things: your telephone and your PC should be largely interchangeable; they should be better integrated.
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| | Beyond the Numbers: Investment Imperatives |
I'm biased towards brightness, intelligence, hard work, ability, the desire to earn something. I search for, and partner with, people who also want to generate value and worth. Someone who is motivated to find out what it is that people want, what they value. What turns me off is people caring more about themselves than their business. People thinking that they deserve something. I'm turned off by people taking things as opposed to generating worth.
While some people don't equate capitalism with goodness, I see what we do is a source of possibility, education, contributing to society. I look for people who look for solutions to things. Who ask questions. Who can recognize their own faults. Who seek to complement themselves with other people who can fill in what they are missing. Who try to work through teams. Who care about others. It's about basic worth.
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| 2001: A Wired Odyssey |
The future is already upon us. Will today's fiction be tomorrow's reality? Absolutely. Will we like all of it? Probably not. But it won't be an Orwellian future either. We'd do well to remember that what was inconceivable to today's thirty-somethings back in college, is taken for granted today. (Like owning your own PC — and probably more than one.) We're surrounded by high-tech that we simply don't even notice. Technology is neither good nor bad. It's what we do with it, it's how we interpret it. We do have a brave new world. A lot is happening, and there's a wealth of opportunity. What are we going do? It's part of the job of entrepreneurs to find those things that people actually want and are worthwhile. That's the challenge.
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