David and I worked together at Watermark. Many of his fundamental beliefs in finding and establishing a trusted network are key to bringing an idea along in the early stages. He went to work for his father when he was 21 and figured out a way to use computers to design the machine tool paper tape. He was hooked on entrepreneurship and has since founded or turned around 4 companies.

Two of them are the marriage of some kind of market understanding domain expertise with a technical understanding if it’s going to be a technical innovation or a business understanding if it’s going to be a business model innovation. It is interesting that a lot of what we’re having to invest in these days is more business model innovation than technical innovation. There’s a lot of new businesses being started around business model innovation, for example, open source is a business model innovation rather than a technical innovation, software as a service, which is what salesforce.com has done is more of a business model innovation than a technical innovation.
 
People that are entrepreneurs have to be both optimists because most of the people they run into the world would say are you crazy, why would you even dream of taking a risk like that, secondly they have to be a little bit delusional, they have to believe to the point, whenever they get all that negative feedback, they still continue to believe and they don’t get put off by it. Because there are an awful lot of people out there who won’t be believers and they’ll try to dissuade them and say no. You just have to be able to plow through that and continue to believe throughout all those difficult times.

I think the surroundings are extremely important and Silicon Valley is the best example you can find of that anywhere. What happens is you need to witness a few things, first off, you need to witness somebody near by you making a lot of money out of stock options to believe it’s a good idea to leave a stable company where you’re being paid a lot of money and take a risk on a start up, secondly you need to see the ability to find skills that you yourself don’t have, that can help you fill in the gaps to help make your thing successful if you are going to start something. So you want experienced people who have been through this before versus trying to be in an environment where no one has ever done this and nobody can bring you that skill and expertise.
 
Another example, when I started Corporate Software which was in London in 85, England was very unentreprenurial in those years—I think it’s improved a lot since—for example you could not persuade a land lord to rent you property unless you signed a minimum of a 25 year lease, there was nobody there who understood what a startup was and that a startup would grow and double its people every 1-2 years, and that you didn’t want to sign anything more than one year. In the end we found places where we could sign a sublease and could get in that way, but it was very tricky to do that because the sublease had to be approved by the master lease, that’s just one example of the many environmental problems you run into if they’re not used to startups and excited and realize that startups can be part of long terms growth and revenue.
 
Venture capital is probably one of the single most important things that has to be in the environment, I mean smart venture capital, even today, venture capital in England is not considered to be smart venture capital, it’s considered to be bad venture capital and they won’t take risks for situations where things are way more certain than is typical than in Boston or Silicon Valley ventures, and there ability to help is far lower too. There ability to add value and help correctly and not panic when things are not going well.