Call on the Sherpas: Vinod Khosla likens creating a successful company to climbing Mount Everest
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This book is a breath of fresh air. Which is a perverse description in some ways as it is weighty rather than weightless. If You Really Want to Change the World is a practical guide to creating and expanding a business.

The title refers to the kind of utopian zeal spouted by Silicon Valley entrepreneurs that crumbles between their fingers when probed. If you want to change the world, work hard, research the market, build a product or service customers want and figure out how to expand the business. Good businesses that create jobs and are profitable will change the world. It is as simple and perhaps boring as that.

There is no wafty psychobabble. It has no quick fixes — this is all about understanding the nuts and bolts, how to roll your sleeves up, do the hard work. There is something old fashioned about its message amid a book market that is saturated with take-away ideas that often turn out to be disposable.

At the start the authors, Henry Kressel and Norman Winarsky — experienced technologists, venture capitalists and executives — cite the venture capitalist Vinod Khosla, who said creating a great company can be like climbing Mount Everest. No one would attempt such a feat without studying the routes and the climate, laying out the foundations and being helped by experienced Sherpas. Yet every day, they write, “entrepreneurs attempt to create great companies with only the most rudimentary information. Our book will be your Sherpa — to help you establish your base camp, learn the routes and get to the top of Mount Everest.”

Moreover, they want to counter an idea that has become fashionable in the start-up world: the cult of failure. “The idea seems simple enough: you have a broad venture concept but not a clear understanding of the market and product. You put together a team, start the venture and keep trying to succeed by a process of pivoting (trial and error). Your hope is to get to a state where the product you develop actually meets the market need.” This is a bad business model, they write. This is not a book for creators of fart apps.

This “pivot until you succeed” strategy has appeal for those in love with the technology who want to launch it to find out what their customer base is. “There is a problem with basing your business solely on your love of a piece of technology.” They quote Michael Moritz, the venture capitalist at Sequoia Capital: “Pivot means you’ve failed. It’s not that you shouldn’t have to move on sometimes, but it shouldn’t be a strategy. ‘Fail fast, fail often’ is marketing rubbish.”

The framework the book offers is eight steps. Each is weighty and demands considerable research and graft. As one chapter heading notes: “Market pain = market opportunity. Greater pain = greater opportunity.” In another author’s hands any one of these might have been a full book.

The steps are as follows: identify a large market opportunity; identify a differentiated technology or business solution that trumps the competition; build a team of experienced and committed people; develop a business plan and articulate the company’s value to attract capital; find the right investors and members of the board; build the organisation; manage success and expansion; continue to innovate.

This is not about building tech unicorns with valuations that collapse under scrutiny. The pair write: “One school of thought argues that profitability is not a major objective, at least in the early years. We disagree. Of course, investing in growth is a key necessity, but you should strive for financial viability.” It seems obvious and yet, the point needs to be made. If you are embarking on a venture, pack this book.

Copyright The Financial Times Limited 2017. All rights reserved.
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