What would you do next if you sold your company to an Internet giant for millions of dollars? Existing examples show 4 different types of Internet millionaires:
Now let's look into each of these types and illustrate them with some famous examples.
Serial entrepreneurs know how to raise money, pick the best people and execute their company towards an acquisition or an IPO. Their fellow investors love them and are ready to give their money to this type of successful entrepreneur, because they are sure that he or she will make it happen again. Note that most serial entrepreneurs are also investors in parallel.
Niklas Zennstrom and Janus Friis
Kazaa, Skype and now Joost. These North European stars haven't stopped disrupting decades-old businesses and changing the way we use our computers, using P2P. Their latest venture, Internet TV service Joost, raised $45 M from high profile VC firms like Sequoia Capital.
Marc Andreesen
He was the founder of Netscape and now he's on the web 2.0 bandwagon with Ning - a network of social networks. Also, keep an eye on his great new blog http://blog.pmarca.com
Joe Kraus
Excite anyone? JotSpot was the second venture of Joe Kraus, and it eventually got acquired by Google for an undisclosed amount of money; Joe is now a Googler, but I suspect that a new idea may flame his passion for founding another startup.
Mark Fletcher
His first success ONEList became a part of Yahoo in 1999, but that was not enough for him - he then founded Bloglines, which eventually got acquired by Ask.
Reid Hoffman
He was a member of the board of directors at Paypal, but he is now preparing for possibly the biggest IPO of the web 2.0 era (unless Facebook does one too) with his professional networking venture, LinkedIn.
Pierre Chappaz
Founder of the shopping comparison engine Kelkoo, which became the biggest hit of Europe after Yahoo bought it, he is now heading Wikio - a mix of Digg and search, focused on Europe.
Dreamers know this business very well, but they choose to pursue bigger dreams and take bigger risks. They usually go out of the web business and run after more scientific projects. As for funding, they are not as lucky as their serial entrepreneur peers - they usually need government grants, since the chances of getting a return is relatively much lower.
Elon Musk
From the web to space. Elon Musk's new ambition is to conquer space with his company SpaceX, which recently accomplished a successful rocket launch to space.
Martin Roscheisen
Co-founder of eGroups, he is now in the green energy business with his solar power company NanoSolar.
Marc Cuban
Started with broadcast.com (acquired by Yahoo for billions) and now heading the NBA team Dallas Mavericks. Well this is not scientific, but definitely a big dream!
Carl Page
The elder brother of Google co-founder Larry Page, Carl not only helped his brother to build Google - he was also one of the co-founders of eGroups, which was acquired by Yahoo. And now he's the CTO of HandHeld Entertainment, a mobile entertainment gadgets company.
Trevor Blackwell
He stated a company called AnyBots, focusing on humanoid robots in his peaceful office in Mountain View. He was a co-founder of Viaweb, which was sold to Yahoo.
Mark Shuttleworth
His new target is Bill Gates and Microsoft. South African Mark Shuttleworth, ex-founder of SSL certificate company Thawte (now Verisign) is currently leading Ubuntu - which recently succeeded in becoming the 1st Linux distribution to be bundled with Dell computers.
Michael Robertson
Similar to Mark Shuttleworth, Michael Robertson is also in the operating systems business. The founder of of mp3.com (which was acquired by French Vivendi Universal), he is now leading a controversial Linux company, Linspire.
Sabeer Bhatia
The founder of Hotmail (acquired by Microsoft for $400 M) is now trying to rebuild Silicon Valley in India - with the name Nano City.
This list is perhaps the most crowded one; because almost every venture capital company contains one or more successful entrepreneurs in the team. However we will limit ourselves with just a few examples. These Midas list members, instead of focusing on a single company and idea, share their experience and money with new entrepreneurs - getting equity in return.
Peter Thiel
Along with Ken Howery and Luke Nosek, the founders of Paypal are now leading the Founders' Fund VC firm, which invested in Facebook, Geni, Powerset and Slide.
Paul Graham
Paul Graham is helping young entrepreneurs with his funding program Y Combinator. His successful investments include iminlikewithyou, reddit, Scribd and Justin.TV
Josh Kopelman
Founded half.com and sold it to eBay. Now he's heading First Round Capital - a seed stage investment company with a rich portfolio including Wikia, OpenAds, Powerset and Riya.
Magdalena Yesil
This Turkish-Armenian entrepreneur sold her company
CyberCash (a pioneer in eCommerce) to Verisign. Now she's an
angel investor and partner with US Venture Partners (USVP).
Consistents are usually those who succeeded in taking their companies to IPO. For example, Jeff Bezos was the founder of Amazon.com and to this day continues to head his company. Similarly Pierre Omidyar is founder and still chairman of eBay. But the interesting point is they both reinforce their technology passions by investing in younger companies too. For example Jeff Bezos' investment in 37Signals and Omidyar Networks' investment in SocialText.
It's very rare that an acquired company's founder remains committed to their new company. Scott Shambarger, who was with eGroups, is still with Yahoo. Sometimes, as in the case of MySpace, the founders of the acquired company may demand aggressive compensation just to stay with their new company.
None of these entrepreneurs are solely motivated by money. After all, there are safer but still very profitable ways of making more money. I think their continued investments and entrepreneurship can only be explained by the pursuit of new technology and creating things.
Al of these people do what they think they are good at and keep bringing value to our society. That is perhaps the primary condition of being successful at your business; if your motivation is spending your time at the Caribbean, then you may be on the wrong path. It seems that what kept the above entrepreneurs coming back for more, is their passion of technology.
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You'll be a serial entrepreneur, a dreamer, a Midas or a consistent; there's examples of each 4 choices after hitting the jackpot. (Read/Write Web)... Read More
What would you do next if you sold your company to an Internet giant for millions of dollars? Existing examples show 4 different types of Internet millionaires Read More
Written by Emre Sokullu / July 6, 2007 / 23 comments What would you do next if you sold your company to an Internet giant for millions of dollars? Existing examples show 4 different types of Internet millionaires: Serial entrepreneurs - keep doing the s.. Read More
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I would also suggest the main reason for their continued motivation is the buzz generated by the fear of failure and anticipation of success. Clearly none need the money, but all have tasted success.
Posted by: KevinD | July 6, 2007 2:15 AMUnless you are really reckless, I think success begets success. Couple this with abundant money and you are already near the line. Of course what separates these entrepreneurs from other, "off the cuff" entrepreneurs is the zeal to challenge the frontiers and leave an impact on people's lives through innovation, focus and hard work.
Posted by: Amrit Hallan | July 6, 2007 4:48 AMWhat? No women?!
Posted by: Angela | July 6, 2007 5:33 AMGood article, but you're missing "Retirers" :)
Posted by: Peter Cooper | July 6, 2007 6:50 AMYou would think some of these guys would head off to some tropical paradise...Makes you wonder if it is all worth it.
Hmmm...just can't relate....good post though!
Posted by: Adrian Keys | July 6, 2007 7:31 AMSpeaking as one of these people, what happens is that your horizons expand radically once you have sold your startup for the big bucks. You have money, which is not trivial, and beyond that you have a reputation that can attract investors, developers, and business partners. People in the tech industry will return your phone calls. You have learned about how acquisition works, so you want to go back and tweak the levers again.
On top of all that, the real reason to do startups is the adrenaline. It's a thrill ride. Why not get on again?
Posted by: Mr. Example | July 6, 2007 7:48 AMReid is misclassified -- these days he definitely belongs in the Midas group. altho he's done a few ventures that could qualify him as a "serial entrepreneur", he's got his fingers in way more pies than he could possibly oversee directly, and he just hired Dan Nye as LinkedIn CEO while he took over the Chairman role. btw, as a Facebook investor Reid wins either way with Facebook or LinkedIn IPO.
Peter Thiel could also be labeled Dreamer, since after PayPal he founded his hedge fund Clarium Capital, now a multi-billion venture that far outstrips the size of Founders Fund.
Posted by: dave mcclure | July 6, 2007 9:03 AMThanks, I was wondering what to do with these millions I've got sitting around
Posted by: Business Voyuer | July 6, 2007 3:04 PMAs someone who doesn't follow these cyber-celebs, this was a really nice recap on an interesting topic. A good read!
Business "Voyuer"...you may want to invest 50 bucks or so of your untold wealth in a spellchecker. ;-)
Posted by: Chuck | July 6, 2007 3:46 PMHow about further investing it in to infrastructure of their former company.
Posted by: Online TV | July 6, 2007 4:10 PMProof that women don't have the brains to start something huge.
Posted by: X | July 6, 2007 5:28 PMto X and all sexists; one quick example that comes to my mind is Magdalena Yesil. She was the founder of CyberCash, sold her company and now is an angel investor and partner with US Venture Partners. Perhaps we should quickly add her to the Midas list.
Posted by: Emre Sokullu | July 6, 2007 5:35 PMIs there any room for "chillers" who may decide to pack up their toys and hang it up for a while?
Posted by: Michael Carruth | July 6, 2007 6:15 PMThat's a great list.. very inspiring.
Posted by: MC Media | July 6, 2007 6:28 PMWe added Magdalena Yesil, as per Emre's suggestion.
Posted by: Richard MacManus | July 6, 2007 8:47 PMHey, BV. You might get closer than the bleachers if you spelled your nick right. It's "Voyeur", not "Voyuer". ;p
Posted by: Brian H | July 6, 2007 10:57 PMHi, I always look forward to the weekly wrap up post. Is there any plan to post it this week?
Posted by: Manoj. | July 6, 2007 11:19 PMI learned under a very successful serial entrepreneur in IP and telecom and it's a cool, cool thing. He has built and sold four companies, taught me everything I know. I know it gets a bad wrap to want to do this, but it's a fine skill to really make a successful business from scratch and killer challenge. I like it. I'm on my first company. It has been very very cool
Posted by: Patricia | July 6, 2007 11:41 PM@ 13, there is. they become investors and let somebody else do the work :)
Posted by: Patricia | July 6, 2007 11:52 PMDear Mr. Example :)
Posted by: Emre Sokullu | July 7, 2007 1:24 AMYou're right, that's why I find big similarities between Ocean's Eleven series and the serial entrepreneurs!
There's no better man than Mark Cuban himself. Selling Broadcast.com just in time and making a few billion from it :)
Posted by: JP | July 7, 2007 5:30 AMso sad to see only one woman, at the end of the list...
Posted by: Yuli | July 7, 2007 12:02 PMcan't wait to join her :)
@ Yuli, I disagree. Women have only really been in corporate America since the mid-eighties, and in executive roles a bit later from there. Women are launching more companies than men are statistically, but they're usually in "soft" industries (cleaning, services, etc.). It's only been more recently that women have started launching tech companies so this is actually a good thing that she's listed. It means more evolution and progress than you might think.
Posted by: Patricia | July 7, 2007 2:07 PMHaving a good success history certainly ads to the ability to continue with creating great ideas and raising the right resources to get the job done. Now all I have to do is pitch them on my idea....
Posted by: Stephen Welton | July 8, 2007 8:22 PMEmre, this is an excellent post! It begs for some more, however... :-) I agree with the great suggestion to add a "Chillers" category. There are many of these -- though it stands to reason they're harder to find (which is of course their intent).
Also, several other entrepreneurs could be added. What about guys like Sky Dayton of Earthlink fame, now heading Helio. And Jeff Hawkins of Palm and now Numenta. And, my goodness, how could you leave out Jeff's cofounder in both ventures, Donna Dubinsky -- a great female entrepreneur! Another would be Kim Polese, the Java queen at Sun who later founded Marimba, which was acquired by BMC -- and she now heads SpikeSource.
Oh, we could go on and on! I think a follow-on to this piece would be great.
Posted by: Graeme Thickins | July 11, 2007 6:19 AMI say take another shot at some point and profile a bunch of others... :-) This is great reading.
Why is there a woman on the list? All the others are quality stories, but she was clearly forced to fit in there. Everyone knows that women don't typically found and sell big companies... no need to provide affirmative action in your top list.
Posted by: Rupert Pederson | July 15, 2007 8:33 AM