extinction

The Dumbest Question VCs Ask Startup Founders

The other day I was sitting in a group of “thought leaders,” and I was surprised to hear a Harvard B school educated, “thought leading,” respected startup founder, ask “Thee Question.” I’m talking the dumbest friggin question asked since humankind took to voice. The muy estúpida questionairo. The #1 ranked most bonehead question that founders hear while raising money. A question often raised by freshly minted Ivy B-School Venture Capital associates acting as a first level gate keepers to power. What was it?

“Why won’t Google just move in to your space and crush you?”

I’ll tell you why… because they might or because they might not. That’s why.

I’ll tell you why… for the same reason market gorillas have been crushed since the meteor hit earth and caused the extinction of the dinosaurs.

I’ll tell you why… for the same reason that the mini computer disrupted IBM, and the micro-computer disrupted HP and DEC.

The same reason Yahoo didn’t pivot and crush Google.

The same reason that Blackberry sat and watched the iPhone eat its lunch?

The Facebook to Myspace reason?

The death of Kodak reason.

I can only think of 3 possible reasons why someone would ask Thee Question:

  1. They’re an idiot
  2. They don’t understand business
  3. They think you’re a lab rat and they’re sticking needles in you because they want to see how you’ll react.

The only reason a startup CEO would ever ask such a naïve question is to confirm that they don’t know WTF they’re doing. A VC asking that question is one thing… a founder asking it is something all together different.

You want the answer?

  1. Because that is the nature of things. Slow moving behemoths get disrupted by small agile aggressors.
  2. Because the most dependable secret sauce is flawless execution.
  3. Because big companies have a difficult time focusing their best resources on new small growing niches until small companies have grown big and dominant in a niche that is no longer too small not to matter..
  4. Because if you believe your dopey question deserves an answer you should roll-up in a ball and give up. Nothing will ever change. No new entrant will ever beat an incumbent. Go get a government job.

The next time an entrepreneur asks that question, be happy you’re not invested in him.

The next time a VC asks you that question… answer, “You worry about AngelList, and let me worry about my competitors or maybe what would happen to you if Google entered the VC space…. oh wait…. they did.

Because if you believe that incumbents are not created to be displaced… you might as well stop playing the game.