Last week saw a flurry of events in this city that was nothing short of dizzying. I’m glad I made it to BMWi’s Born Electric (@BMWi) series of events including their electric car exhibition, a meetup hosted by BMWi Meetup and a BMW’s first-ever hackathon sustainable-eco-minded technology. Spending my weekend talking with designers, coders and BMWi strategists about the future of sustainable technology and real world solutions truly satisfied the Geek in me.
At the BMWi Meetup, venture capitalist Albert Wenger (partner at Union Square Ventures @USV) gave a thought-provoking presentation on the impact of technology (particularly the internet and mobile) on cars. In a post on his blog, Wenger gave a brief summation of the ideas he expounded on in his presentation:
My basic thesis is that cars fulfill at least three separate needs. First of course is on demand transportation from point A to point B, with emphasis on both the “on demand” and the exact locations. Second is fun and self expression broadly speaking, which includes making statements (Hummer versus say Prius). Third — and maybe somewhat controversial — I believe that for a lot of people the car provides the only “alone time” (during the commute).
I’ve heard Wenger speak on a number of topics before. I find his willingness to share ideas and his desire to hear the audience’s thoughts refreshing (he even asked questions of the audience).
But the most interesting part of the evening for me was my brief conversation with him. During his Q&A with the audience, I asked a question that he answered: “With regards to funded startups failing, what is the likelihood and value, if any, of founders and VCs being more transparent about disclosing why the startups fail, what could’ve been done better and what lessons were learned?”
The basis of the question is that failed startups, that have been funded and tested in the market, have much to offer entrepreneurs who seek to propose the same or similar business models (sharing the lessons learned from failing). A perfect example of this, as we discussed at the Meetup last week, is Loosecubes (the funded and popular coworking startup that folded last week leaving a stunned community asking “why? how? what now?”).
His answer was, basically, that there’s a lot of information online about startups that fail that people can refer to for insight. Of course, for me, this wasn’t enough of an answer (though it was polite, it also felt a bit like he was avoiding a deeper, less pleasant answer or problem). We discussed it a bit more after his talk. His answer was a bit more revealing than the one he gave on stage (but not necessarily any more satisfying). Wenger explained that, while he would never stop an entrepreneur from sharing their story about their experience running a startup, he doesn’t see the need for VCs to reveal any of the details behind why a startup in their portfolio fails (more so because they want to protect the privacy of the entrepreneur than anything else). Of course, this makes sense but it’s not the whole story.
VCs would seek to protect their own privacy as well (understandable) — besides, a failure in their portfolio is just as much their failure as it is the failure of the entrepreneur. They wouldn’t want to emphasize their failed ventures, nor would they want to disclose where they may have miscalculated markets and entrepreneurs that led to bad investments. I get it. But there is middle ground here and it’s worth thinking about. How can VCs and entrepreneurs be a bit more transparent for the greater good of the whole community as well as themselves (it’s likely VCs would benefit from being a bit more transparent as well as the entrepreneurs). Or should they be transparent at all? I appreciate his feedback and openness to dialogue.
Would love to various hear thoughts on this.