Kleiner Perkins’ Randy Komisar: Maybe Web startups don’t need venture capital

Venture capitalist Randy Komisar suggested today that Web startups may not actually need his money — at least, not right away.
Komisar, a partner at Kleiner Perkins Caufield & Byers, reached that conclusion in a roundabout way during a question-and-answer session at the Startup Lessons Learned conference in San Francisco. His main point was a piece of common entrepreneurial advice: To paraphrase Komisar’s new book on the topic, startups need to “get to plan B.” They need to cycle through different ideas with as a little time and money as possible, so they can discover which of their assumptions are wrong. For startups in fields like biotech or cleantech or enterprise technology, that process may take months or years of work, and and it probably requires sizable funding. But at a consumer Internet company, things should be much faster and cheaper.
“So why do we need venture capitalists?” Komisar asked. “They may not be as important.” That means he might tell an early-stage Web startup looking for funding, “You get my money later, at a higher valuation, when you need to accelerate a good idea to a great one.”
Another interesting — and quotable — part of the discussion covered Komisar’s idea of a startup’s “analog” and “antilog.” Every startup idea involves a few “leap of faith” assumptions. As entrepreneurs explore those assumptions, he said they should look for companies that successfully built on those ideas (analogs), as well as companies that used those ideas and failed (antilogs).
But what if your idea is a completely revolutionary breakthrough?
“Every idea is ‘revolutionary,’” Komisar said, laughing. “If I see that word in another pitch. … Everything is derivative and if you don’t think so, examine your idea very, very carefully. Everything is derivative, and that’s not a bad thing.”
Apple chief executive Steve Jobs is the king of the big, disruptive idea, Komisar said, yet Jobs has also said, “We’ve always been shameless about stealing great ideas.” So you can look at a disruptive technology like the iPod, and see that it had an analog in Sony’s Walkman, which established that people are willing to listen to music on headphones in a social setting.
Towards the end of the conversation, Komisar also turned philosophical. For most entrepreneurs, creating a startup is not a good way to make money, he said. But that doesn’t mean you shouldn’t do it.
“It’s a great way to live your life,” he said. “Entrepreneurship is a manifestation of the best things in the human condition: Creativity, creating value, sharing that value. To me, it’s a noble profession.”
Companies: Kleiner Perkins Caufield & Byers
People: Randy Komisar