Startups: Effective Innovators Often Have the Wrong Background
Many of the most historically successful entrepreneurs have neither the "right" families, money, connections, or schooling.
An ongoing Twitter debate is whether entrepreneurs who require a paycheck while a new business is building are doomed to be worker bees forever or whether they can be successful entrepreneurs. Let’s look at a few famous examples of both the well-heeled, not so well, and those in-between.
Abandoned & Adopted
Steve Jobs and Jeff Bezos were both adopted, Jobs at birth and Bezos in a stepparent adoption when he was four years old. Both grew up middle-class for their era with supportive but not especially wealthy parents. Bezos’ parents invested about a quarter-million dollars in Amazon. Granted, that is a sizable sum though, in hindsight, looks like a significant portion of their savings and eventually made them fabulously wealthy. Jobs’ parents didn’t seem to financially support Apple but did famously lend him the family garage. Similarly, Oracle founder Larry Ellison was born to a single mom who gave him up for adoption as an infant; he’s now worth about $110 billion.
Immigrants
Elon Musk also came from a split family, immigrating to the US and ending up with six figures of students loans. Sergey Brin’s family were Soviet Jewish refuseniks. Both his parents were fired after applying to leave the Soviet Union working odd jobs to get by. Eventually, the family made it to the US arriving with no money like most Soviet Jews at the time. Ethereum inventor Vitalik Buterin is also a Russian immigrant, landing first in Canada and then moving from Canada to the US (like Substack founder Chris Best). Yahoo co-founder Jerry Yang moved to the US from Taiwan as a young child after the death of his father. Tesla, the man rather than the car, was also a poor immigrant.
Middle Class
Twitter and Square founder Jack Dorsey had a relatively mundane middle-class life until he created two major businesses. Web browser inventor and venture capitalist Marc Andreesen was similarly from a solidly middle-class background, not poor but definitely not rich. Going further back in time, uber venture capitalist Arthur Rock — who funded Intel and Apple (and coined the term venture capital) — was the son of a Brooklyn candy store owner.
Rich Kids
Bill Gates’ father was one of the most prominent attorneys in the US, a fact that no doubt helped him build Microsoft with both connections and advice. Mark Zuckerberg’s mom is a psychiatrist and his dad is a dentist. Similarly, Snapchat founder Evan Spiegel’s dad is a prominent wealthy trial lawyer.
There are countless more founders but the pattern is clear: many do not come from rich families. They scrape a good idea into a good business — building, to paraphrase Paul Graham, something people want — and keep at it. Brian Chesky and Joe Gebbia laid down air mattresses in their San Francisco apartment to cover the rent then charged people to sleep there. That turned into Airbnb, now worth about $110 billion.
I’m not implying it doesn’t help to be wealthy and well connected when starting a new business. After all, raising capital from friends and family money isn’t a thing if they’re all living paycheck-to-paycheck. Still, it’s not impossible to start a business coming from the “wrong” background and countless people do.
More common seems to be a drive to make things happen, to not give up, and to press on when countless people say something can’t be done. Like every entrepreneur, I’ve come across more than my fair share of crooks and creeps, people who steal technology, lie to you or your customers, or insist something is impossible. There’s a certain optimism needed to create something from nothing, an internal drive, that many people don’t have and more than a few are jealous of those that do. Is that sometimes delusional? Sure. Does that matter? Not really; many of the top founders, in hindsight, could probably be described as delusional.
If anything, I’ve found that those from the “right” backgrounds are more likely to be predators than offspring of the proletariat. Bougies, quoting the French, see themselves as entitled to succeed and aren’t especially concerned about ethics, especially when faced with somebody they feel belongs beneath them. Sometimes this turns out well for their investors but not always and it’s rarely a fun ride.
I have the wrong background. First-gen college student, schools nobody’s heard of, and a family that was certainly not poor but wasn’t rich either; my sister and I had separate bedrooms … in opposite ends of the attic.
At one corporate job I had, I was repeatedly told by the MBA crowd not to be disruptive and that “results don’t matter - only following the process matters.” They didn’t imply that; they said those exact words, repeatedly, and it wasn’t one person - a whole cadre of MBAs parroted the line. As a relatively young product developer with a strong success record — having joined the company after selling them a key piece of technology — this attitude was difficult to listen to much less to take seriously. I eventually left and, years later, that business was unsurprisingly sold for scrap.
Technology skills especially seem to be marginalized, especially when obtained by the unwashed masses on their own or at a school with reasonable tuition. For some reason, despite evidence to the contrary, more than a few of the professional-managerial set seem to believe technological competence correlates inversely to management skills. “You just press keys,” one told me, with key pressing, defined by him, being software development and data processing skills. His skill? Thinking, which he clarified anybody who presses keys can’t also possess. That was the last day I helped him despite the still occasional pleas to press more keys.
My entrepreneur example groupings are admittedly anecdotal but, if forced to choose, I’d bet on people with the wrong background. Yes, they need to draw a modest salary to do things like eat while building a business but that’s OK; people who can’t afford to work for free are typically hungrier — both literally and metaphorically — than those who can anyway. Their hunger often translates into building businesses that matter and their background helps enable them better realize what others might and might not actually pay for. People care about results when their family’s ability to fill the fridge depends on them. Investors should care too.