This morning a friend of mine asked me if I would be an adviser/investor in a startup he was working on. This friend is talented, intelligent and connected – he could do almost anything. The startup he was working on was in a very small market and was very niche – it will NEVER be a huge business. I gave the following advice:

Entrepreneurs only have a limited number of ‘at bats’. We hear about ‘overnight’ success all of the time, but almost all overnight successes take years to happen. How long does it take to figure out how your HUGE idea will turn out? From my experience it takes three to five years – an average of four years. Assuming you need a year between HUGE ideas this means you might have four ‘at bats’ during your career. Don’t waste 25% of your career on ‘known’ singles and doubles – homeruns change the world – change the world.

BTW: Side businesses are VERY distracting. If you aren’t interested enough in your ‘main’ business/job change your main business/job, don’t start a ‘side business’.

(FYI – the picture connected to this post is an inside joke with my friend)

There are scores of highly educated people who are ready and willing to bring their talents to the US to help create jobs. Why are we keeping them out? Just the other day I read about a startup that had to move to Hong Kong because their visas were expiring. We need to make it easy for entrepreneurs (i.e. job creators) to get to America – they shouldn’t have live on boats just outside international waters. Lets get these people in the country as fast as possible – lets unleash their creativity and let them create the next Google or Facebook.

Note to Peter Thiel and Blueseed: Thank you for doing more to resolve this issue than our leaders are willing to do. Kudos!

I decided to get involved with JA about the same time I saw the 1983 hit Risky Business. You might recall that Joel (played by Tom Cruise) got kicked out of Future Enterprisers (thinly veiled verion of JA), but by the end of the movie his little ‘business’ had actually done very well. The last scene in the move has Joel pretending to present his business to the judges at the Future Enterprisers club, “My name is Joel Goodson. I deal in human fulfillment. I grossed over $8000 in one night. The time of your life, huh, kid?” Of course, I immediately wanted to start my own business – I was hooked. In college I took a few business courses, but I never learned as much as I had in JA. The hands on experience I received in JA gave me the confidence I needed to start my first real business.

More recently I decided to volunteer for the JA program here in Dallas. The first step was to sign up for a training program. The program was excruciatingly boring – I was learning about interviewing skills, checking accounts and mortgages – what did that have to do with starting a business? I soon learned that JA had shifted its focus away from teaching entrepreneurship and free enterprise. The new JA was focused on two primary goals: workforce readiness and financial literacy. No longer does JA help students learn by doing – i.e. creating their own companies. The instructor explained to me that the organization felt that suggesting kids start businesses would be a disservice as very few students in DISD would have the skills to build businesses once they graduated. Instead their hope was to help students become good WORKERS with an understanding of the proper use of checking accounts and credit cards. They even explained the value of labor unions and how collective bargaining was key their financial security. I couldn’t believe what I was hearing. The program SPECIFICALLY designed to help demystify starting a business had given up on its core mission and had been co-opted by big labor.

Horace Moses and Theodore Vail, the co-founders of JA, would turn over in their graves if they new what JA has become. Moses was an entrepreneur who started a paper company in Western Massachusetts – he gave a considerable amount of his life (27 years) and his fortune to help Vail (the founder of AT&T) start Junior Achievement. Moses and Vail were real American entrepreneurs and they were convinced that anyone, with the right tools, could build a business. JA was designed to give kids the tools and inspiration necessary to build their own companies.

Today JA is run by Sean Rush and Jack Kosakowski. Sean Rush is an academic who has spent his entire career focused on education and non-profit work. Little is known about Jack Kosakowski prior to his involvement with JA and there is no evidence that he has any business experience. Given Rush and Kosakowski’s non-business background I guess I shouldn’t be surprised by the direction they have taken the organization.

If you haven’t guessed I am 100% opposed to JAs current mission (i.e. workforce readiness and financial literacy). I think Rush and Kosakowski’s decision to abandon the goal of making entrepreneurship attainable for all is symptomatic of what is wrong with America. Remember the Occupy Wall Street movement? The protesters spent all summer complaining about corporations. These kids grew up without the slightest idea that they could start their own corporations. Why are we surprised they feel left out? They believe corporations are something that OTHER people build – not normal people – i.e. the 99%. But almost 100 years ago Moses and Vail sought to bring the concept of the corporation to the 99%. Rush and Kosakowski gave up on that vision. Shame on them.

“deep down you know that you’re part of history, that the things you are building will be written about and thought about forever, then maybe after that good cry after a short sleep under your desk you’ll pull yourself together and remember. That you are a person in the Arena. A Pirate. That you are here to make a dent in the universe.”

If you are like me you read the post and thought, ‘meh…no shit‘, and moved on to the next post on Techmeme. Turns out that Netscape engineer that Mike quoted didn’t appreciate the attribution. He responded with a post titled, “Watch a VC use my name to sell a con.” Jeremy suggests that the entire venture capital system is corrupt – they make money off of your hard work and provide no value whatsoever. Mike responds point by point here. I won’t bother to rehash the points here, but I did want to point out that a LOT of people are starting to get the idea that capital formation is bad – that perhaps capitalism is dead.

I think it all began with the bailout of the investment banks (and mainly AIG). The outrage against the bankers and the insurance companies was well earned and appropriate. More recently that outrage has taken shape as the Occupy Wall Street movement. The general feeling seems to be that capital formation is bad – i.e. accumulating wealth is bad as it allows the rich to get richer. The undertone is that our economic system has failed – that capitalism is somehow dead. Jeremy’s post suggests that VCs don’t actually write any code and as a result any money they make from investing in your startup is somehow ill gotten or as he suggests a ‘con’.

The Left is against capitalism because it’s outcome is by definition unequal. The framers of our Constitution sought to provide a nation of equal opportunity – a nation where a child born of an unwed mother, given up for adoption to a working class family could one day build the most valuable corporation on the planet (his name was Steve Jobs). In America anyone can succeed (and fail) regardless of who their parents were. On the other hand the Left seeks equality of outcome – everyone should be rich or no one should be rich. The Left believes, like Jeremy, that anyone with money must have had some sort of unfair advantage. The formation of capital – i.e. in this case by venture capitalists – is vital to create this equality of opportunity. Without capital how could Steve have built Apple?

Tip One: Make sure you are dissatisfied with your current job before entertaining a meeting with a prospective employer.

Why are you willing to consider another offer? Understanding the ‘why’ is very important. If you are underpaid or under appreciated have you talked to your boss? What would make you happier? Have you discussed these issues with your boss? If not, meet with him and talk about how to get your job back on track before taking a meeting with a new employer. Never make a threat, instead ask your boss for career advice – ask him to help you build a road map for your career at the company.

Tip Two: Before you resign make sure you are ‘sold’ on the new company so that a counter offer won’t persuade you to stay.

If the only reason you are considering making a move is money – I bet you aren’t working hard enough to find the right company to work for. Sure, more money is great, but if your current employer matches or beats the new offer and you are persuaded to stay you are likely committing career suicide. The Capital H Group conducted a study of counteroffers and determined that after accepting a counteroffer the average employee is with the company for less than one year. If you really were dissatisfied with your job more money won’t make you happier. Your dissatisfaction will bleed into every part of your work and personal life. Employees who are dissatisfied with their jobs are 75% less likely to get promoted, are 50% more likely to get a divorce and shorten their lives by an average of seven years. Finally, if you accept a counteroffer your relationships with your coworkers will likely be damaged. They may be envious that you turned in your notice and were rewarded with a raise – they may wonder if you really deserved the raise (this is a good reason companies should not make counteroffers as well). In summary (via):

1. The current employer is attempting to cover their tush. When you quit they lose money. When you quit the manager looks bad. Better to keep you on board until they can find a replacement. If that happens your pink slip will follow in short order.
2. You become a fidelity risk to your current employer. You’ve threatened to quit once. It’s only a matter of time before you do it again, and smart companies won’t allow themselves to be put into this situation. You will never be perceived the same to them once you’ve threatened to quit and decided to stay.
3. Any situation which causes an employee to seek outside offers is suspect. For example, if money is your issue why does it take a full court press for your employer to realize they need to pay you more? If you’re worth more money now, why weren’t you worth it 15 minutes earlier?
4. The reasons for you wanting to quit will still remain, even if they are temporarily shaded.
5. Quality, well-run companies won’t give counteroffers…ever! How would you feel if one of your employees forced you into something? ”If you don’t X, then I’m quitting.” I know I’d be angry. I’d be more than angry. If they don’t like working for you then they should go.

Tip Three: Don’t buy an employers threat to sue your or the new company if you quit.

Some employers may skip the counteroffer route and simply threaten to sue you if you take the new offer. First, you don’t really want to work for a company that threatens to sue you. Second, in all likelihood they won’t sue you because they don’t have a case. Here in Texas the law says that the loser pays – it makes it hard to use lawsuits as intimidation. Your employer doesn’t have a case and he knows it and once he realizes that if you call his bluff he will have to pay your legal expenses he will drop the matter. In fact, your new employer will likely cover your legal costs if they are really interested in having you on board (ShopSavvy will).

• -  If you address it to “Public,” it’s a blog post.
• -  If you address it to “Your Circles” it’s a tweet.
• -  If you address it to your “My Customers” Circle it’s a business newsletter.
• -  If you address it to a single person, it can be a letter to your mother.
• -  I’d say this is pretty revolutionary.

Why the change of heart? In the past I made various arguments about why Dallas was a great place for startups, but my reasons for making the arguments were selfish. “I” want founders to start companies here in Dallas so that Dallas can become a great place for startups. This is great for me, but a horrible idea for founders. Why? Because until Dallas actually becomes a great place for startups, founders will spend 90% of their energy trying to make Dallas a great place to start a company and 10% of their energy actually building their companies. On the flip side founders who locate their startups in the Valley can spend 100% of their energy building their startup and 0% trying to build an eco-system for entrepreneurs. The financial and professional delta between the two markets is HUGE.

Putting my own selfish interests aside my advice is simple. If you are single and want to start a company or be part of a startup – move ASAP. If you are married and want to start a company or be a part of a startup – move ASAP. If you are married with kids and want to start a company or be a part of a startup – move ASAP.

If you can’t move (and I would argue you can move) and still want to start a company or be part of a startup you should focus your energy on building a company that can quickly generate profits. Instead of trying to raise capital from investors I would focus on selling services to clients – this will help fund your operations while giving you the validation you need to justify your efforts. Don’t spend a minute comparing your valuation or prospects with a comparable company in the Valley. Don’t make ANY decisions based on what you seeing happening the Valley – those rules don’t apply to you because you chose NOT to live there.

Still not convinced? Need a few reasons WHY you should start your startup in the San Francisco area?

• Time to funding – the average time to funding in the Valley is between 2-4 weeks. This compressed funding window helps founders get instant feedback on their startup idea. Here in the Dallas area it isn’t uncommon for a founder to spend 6-12 months pitching his idea. In the mobile/internet space your idea can be obsolete in weeks – having to wait months to launch will kill your chances of success.
• Experienced co-founders – in the Valley there are lots of co-founders with startup experience. These experienced folks are primed and ready to help you build your startup. They have been there and done that and I can’t stress how important that is early on.
• Validation from Investors (angels and VCs) – This third party validation is important for a number of reasons. Future employees and investors often leverage the fact that a well known angel has invested in your deal when considering entering into employment or investment agreements with your company. Without this third party validation it is VERY hard to figure out if your startup has a chance.
• Number of Acquirers - Who is going to buy your company? It is unlikely it will be a company here in Dallas. ALL of the important internet/mobile acquirers are located in the Valley.

Don’t get me wrong, I really want Dallas to have a vibrant startup community someday, but it is time to admit that today isn’t that day. Say you are an awesome basketball player and instead of growing up in Dallas (the home of the world champion Mavericks) you grew up in Rome. Your high school basketball coach advised you that you could play professionally, but suggested that you move to the U.S. to play college ball. You don’t take his advice and instead play for the Rome Community College. What do you think your chances of playing in the U.S. are? Pretty low. Sure, you might be the one in a million that is recruited by a pro team, but more likely than not you will never get a chance to play with the best. The best startups are in the Valley – go pro, move…