1. Focus on real innovation to solve hard problems in needy markets. True innovation is all that matters. Unique products and ideas will always be able to find funding and are less likely to fall victim to boom/bust cycles. Too often, the “incremental, downside protection” or “me too” mentality takes over and you see features masquerading as products trying to be companies, or eight companies going after the same market. Then chances of survival and success drop dramatically. This phenomenon, especially after the tough last 10 years, is fueled at least as much by investors as entrepreneurs.
2. Brace for a long ride. Building great companies takes time. You still need to work like heck to get your first mover/best product out as quickly as possible, but expect it to take 10 years to build a really valuable company. Companies that are successfully going public today, like Ironwood Pharmaceuticals and Athenahealth, have spent the last decade building towards an IPO.
3. It is how you deal with adversity, not avoiding it, that matters. Great success stories rarely evolve in a linear fashion. There will be undoubtedly bumps along the way: realization that the original product concept was not viable, unexpected disruptions in the industry, cycles of boom and bust, and limited availability of capital. It is the difficult times that separate the wheat from the chaff, and the survivors – companies that embrace adversity, press through challenges, learn and adapt to be stronger in the face of the next set of challenges – become large, lasting successes.
[[Editor’s Note: Roberts’ essay is part of a series of guest editorials we are running as part of the launch of Xconomy San Francisco. It was based on the following question, which we posed to technology leaders: “What 3 things can San Francisco and Silicon Valley entrepreneurs and VCs do to foster a more stable environment for innovation in IT, life sciences, and energy, and become less wedded to cycles of boom and bust?”]]
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