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Stanford in the Alley: Tips from VC John Doerr

 

There’s a lot of talk about Silicon Valley vs Silicon Alley. Let’s be honest: New York startups head west for the Silicon Valley investors. Silicon Valley companies open offices here for the access to the wealth of established industries that only New York offers. As for the rivalry: enough already, although one thing that the Valley does have that the Alley doesn’t is Stanford University. In a new spirit of collaboration, AlleyWatch is bringing Stanford East, with a series of videos from classes taught at the esteemed university.

As part of the “View From The Top” program, Stanford Graduate School of Business hosted venture capitalist John Doerr, who is a general partner at Kleiner, Perkins, Caufield and Byers, one of the leading Silicon Valley VC firms.

Doerr began his career at Intel Corporation in 1974, where he eventually became one of Intel’s most successful salespeople. In regards to his time spent there, Doerr said, “It was formative…the most influential thing in my career, other than my father.”

“I went to Intel at a time when it had a couple hundred employees, as a summer student…Even at that time, I could recognize this was a very well-run company—very aggressive, very disciplined,” Doerr added.

He has taken to many of Intel’s business practices, such as their objectives and key results, which Google has also adopted. Doerr highly recommended “High Output Management” by Intel’s own Andrew S. Grove, as one of the best books available on management.

When looking for a career opportunity, Doerr says he sought a place where he could learn and grow.

“I chose to get in on the ground floor of a rapidly growing company that I thought was also well-managed. Rapid growth tends to attract other really great executives, and you’ll strengthen your networks,” he said.

Strengthening one’s networks was a major theme throughout Doerr’s discussion with students. “Always, always network. Every day you want to do more networking—and I don’t mean on Facebook. [Networking means] reaching out to people,” he advised.

For students currently working toward an MBA or other related degree, Doerr suggests entering a field you believe is attractive and with which you have some sort of technological expertise.

Doeer stated it is also important to have a strong foundation of experiences. He advised gaining experience in a variety of fields, if possible.

“Grades aren’t as important as the quality of your networks and your hunger for learning—figuring out how you’re going to make a difference in the world.”

Should entrepreneurs entering a saturated field obsess on the competition instead of on the customer? “No,” says Doerr. “I suggest you do something else. The best way to build a great company is to find a large, underserved market or a displacement market that exists.”

Doerr added, “Now, if the Google guys had followed my advice, they wouldn’t have built yet another search engine. [But] here’s the point: they had a really disruptive technology – the page rank system.”

One of the students mentioned the newly passed JOBS (Jumpstart Our Business Startups) Act, intended to encourage funding of U.S. small businesses. Doerr commented, saying many have predicted abuse of the new legislation “when any entrepreneur can raise a million dollars off the web, essentially.”

Doerr supports the law, however. “I’m glad the act has been passed. Our country ought to have more entrepreneurs, more capital available to entrepreneurs and more innovation… Any corrections that need to be made can be” (and hopefully will be).

According to Doerr, “the next big thing” is the move to cloud computing, which enterprises initially resisted, but are now embracing.

“The estimates are that we will go from zero cloud revenue to $270 billion by 2020—just in services… The cloud will transform how we compute around the world…The opportunities ahead are fantastic,” Doerr contends.

For those of you who would like to be in the venture capital business, Doerr’s advice is to “get really meaningful, successful entrepreneurial experience first…It’s going to help you serve the entrepreneurs you’re working with, help your judgment, help you compete to win the opportunity to advise them. You can’t buy a position on a board of directors; you want to earn the opportunity to do that.”

Doerr closed the discussion, stating, “There has never been a better time than now to start a new company or to be part of a startup… This explosion of technologies…[and] the fact that the market of Internet users is a billion people” makes for a great opportunity.

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About the author: Megan Maneval

Megan is a graduate of Delta State University in Cleveland, Mississippi, where she received a B.A. in Communication Studies with a minor in Business Administration. She has completed internships in business and communications, and was the copy editor for the university student-run paper. Currently at AlleyWatch, Megan plans to pursue a career in copyediting.

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