Entrepreneurship and Abstraction

Back before the tech bubble of the 90s burst the vast majority of startups were founded by “business types” as opposed to engineers, or builders. Sarah Lacy has opined that frothy times brought douchebags to the Valley in the late 90s and that frothy times have brought them back.

I don’t disagree with her arguments, but I also don’t think that all “business types” are douchebags. Maybe I say this simply because I don’t want to be seen myself as a douchebag, but I don’t think all tech company founders have to have engineering or strong technical backgrounds.

The way I view entrepreneurship is that you build a business, much like an engineer builds software. An application is a system that follows certain rules when it’s told to do certain things. A business operates in much the same way. With that in mind I can certainly see how having an engineer’s mind would be helpful in building a business, but being a trained engineer, not necessary.

Some programmers deal with things at a very low level of abstraction that requires knowledge of the computer hardware and where the program is run, whereas some programmers are working with frameworks like Ruby on Rails where the framework does a lot of “magic” that “abstracts” away a lot of the stuff that is happening in the background. Of course if you know what is happening underneath the hood there is a benefit, but at some point there are diminishing marginal returns if your function within a team doesn’t need to dive that deep.

The way I see it there is a minimum threshold that you need to understand at each level of abstraction above and below where you’re working, and the further down or up you go the lower that threshold is. So if I’m a Ruby on Rails programmer I need to know a lot about that framework and everything that it can do, but I don’t need to know much of anything about circuit design (down) or much of anything about venture capital (up).

If your goal is to start your own tech company you don’t need to be a strong programmer yourself, there are no doubt some benefits to this, but the more time you’ve spent becoming a programmer the less time you’ve spent learning about the breadth of things you’ll need to know about as a CEO. Do you think Mark Zuckerberg spends much time programming anymore, if any? If you’re starting an internet software company you need to know a fair bit about programming, design, finance, recruiting, communications, sales/marketing etc, but you don’t need to be capable of being full time in any one of those roles.

I don’t think you need to be a programmer to build an internet software company, but you do need to have a builder’s mind. I think this is where the Sarah Lacy’s of the world get so annoyed with the douchebags that have gone to the Valley at different times. The douchebags aren’t builders. They are vultures, hyenas, scavengers. They’re the same breed of creatures that caused the sub-prime mortgage crisis, and the accounting scandals of Enron. They’re looking for arbitrage opportunities. Buy a struggling company, tear it apart and sell off the pieces for a profit. They’re the ones that saw during the 90s that you could just hype the hell out of a startup, raise more and more money, have an IPO and get the hell out. They don’t care who gets left holding the bag, as long as it’s not them.

So while I think the fear of the douchebags is justified, it doesn’t mean that all business types are douchebags, some of us are builders too. We just work at a different level of abstraction than a programmer or designer does. Instead of spending my days in Sublime Text and the Terminal, or drawing wire frames and Photoshop mockups, I strive to serve those that do.