July 18th, 2013 Startup Grind Hosts Esther Dyson (EDventure Holdings)
On Thursday, July 18, 2013, OLC attended Startup Grind New York City’s event held at ThoughtWorks on Madison Avenue. This fireside chat, featuring Esther Dyson of EDventure Holdings, was packed with eager minds to listen and to probe Dyson’s knowledge in the venture world. Neil Anderson and Brian Park, both Directors of Startup Grind NYC moderated the event.
A journalist, analyst, investor, philanthropist, commentator, all these can be used to describe the legendary Esther Dyson. Focused on innovative technologies ranging from healthcare to space travel, Dyson is truly one of the most influential female investors today.
Neil Anderson: What inspired you to become an investor and travel internationally?
Esther Dyson: I’m an immigrant—born in Switzerland. Until I was 12, I moved to England for a year. I learned a lot and when I was 17, I dropped out of college. I worked in London for six months. My goal was to become a Moscow correspondent for the New York Times or something, but that never happened. I like traveling. I spent a lot of time in India, Russia and China.
NA: You worked with ad agencies quite a lot, no?
ED: I worked with Yandex, which is like the Russian Google. I have a couple of investments in Kenya, Russia and of course, London. I started out in the PC world as a journalist. When I went to Eastern Europe, I invested in companies and I discovered that I liked it.
NA: Where did you publish?
ED: I bought a company from Ben Rosen. He had a conflict of interest, so he sold it to me. He was an analyst for Morgan Stanley. It helps to be with someone you look up to. Ben wasn’t really the mentoring kind. My best bosses gave me a lot of freedom, but a lot of responsibility, too. I worked for Forbes for four years, when they were still a magazine. So journalism to Wall Street—my first company was FedEx, then I ended up doing the tech industry. I really didn’t like the Wall Street culture.
NA: I think Mark Cuban was on a panel and he was emphatic about capital markets—essentially that growth capital isn’t available to technology startups.
ED: I would half agree with him. There are a lot of things that generate money with absolutely no value. In Wall Street, there’s so many superfluous things that make people rich and others poor. I think there’s money for startups, but no scaling. By and large, there’s a shortage of good people to help startups scale. I think it’s good people here and in other markets that can make a difference. The rest are just solving problems that 22 year-olds should be solving.
NA: Do you identify with being a tech investor or a global innovator?
ED: I have a favorite saying: “If I were made, I’d live in a dirty room.” You’re more likely to disrupt if you know the market. I think it takes seasoned entrepreneurs—ones that know their field. As a rule, it’s not so bad to know what you’re doing. When I talk to potential startups, it helps to know that they’ve done one thing and that they’re out disrupting that one thing they know how to do. I’m a fan of informal education. You know the market better this way from talking to people who know the market and you know who to sell to. It doesn’t hurt to hit the ground running.
NA: There’s an opportunity cost related to corporations and startups. You have corporates that want to inject the spirit of entrepreneurship and intrapreneurship. What do you feel about that?
ED: Both are very imperfect.
NA: What about apprenticeship?
ED: That could be a very helpful thing. Work at a company for two months and discover that you like it or not. What could be more helpful than that?
NA: What about when you’re 16 or 17?
ED: You can start a company at 16 and learn a whole lot from that.
NA: Have you invested in gaming?
ED: No, I haven’t. Personally, I think gaming is a waste of time. Gamification, though, is something totally different. It changes our behavior.
NA: What we call gamification here in the United States is called nudge in Great Britain. What about serious gaming?
ED: I think games like World of Warcraft teaches you a great amount, like organizing people, managing people, scheduling and the like.
NA: Any specific industries you were interested in?
ED: Before health and healthcare, I was in Flickr, Delicio.us, all kinds of advertising technology... I was interested in text and content management.
NA: So, why no more China?
ED: They don’t tell you, but I suspect that it’s because I’m on a board for government transparency and I’ve said comments about Google that China didn’t like.
NA: What’s your macro view on competitiveness?
ED: As you can tell, I’m no working through ROI. With the amount of money that I have, one can’t invest in countries. I have strong feelings about being American, but I think that we don’t have a special right getting paid higher wages than people elsewhere. It’s something we need to recognize. We need to recognize that we need to change our education.
NA: Do you take board seats?
ED: I do, but when you do, you need to take the position and the responsibilities seriously.
NA: What do you think of startups getting government funding?
ED: I think we benefitted indirectly. In the end, I trust investors, though. I trust the market. The government is risk-averse. Investors, when they fail, people only remember their successes. When the government fails, everyone remembers.
People focus too much on an idea, not on how they’re going to build a company. What I invest in is the commitment to the market and the ability to build a team, a set of processes... A VC wants to build a company, that’s a very different thing from an app.
VCs also invest in people they know. They do safe investing, and a lot of the times, that leads to failure. They think there’s safety in numbers, but that’s not always the case.