Venture Capitalist Kopelman Offers a Pep Talk for RI Entrepreneurs
Two start-up types were stuck searching for a taxi in the rain outside a meeting in Paris a few years back when they struck on a disrupting concept -- Uber, a phone-based app that lets users summon a car for hire in minutes with the metaphorical push of a button. The resulting company has provided a new revenue stream for would-be drivers, demonstrating what Wired calls "a new way of thinking about personal resources and infrastructure."
During a Tuesday morning discussion at the Providence startup incubator Betaspring, Philadelphia-based venture capitalist Josh Kopelman cited Uber as an example of how mobile technology offers fresh opportunities to entrepreneurs and investors.
Early in his hour-long conversation with local tech entrepreneur Angus Davis, Kopelman said he was impressed by the dozens of people who turned out for the talk at Betaspring's Jewelry District office. One of his most memorable notes came in discussing how some public officials pine about wanting to create the next Silicon Valley. While Philadelphia has a pretty good Chinatown, Kopelman said, that doesn't mean it should want to become China. Rather, he says, the focus should be on improving and making more vibrant entrepreneurial communities in particular cities.
Pointing to how former PayPal employees creating a string of successful startups, Kopelman said a single big success can often be a key for sowing a more prosperous local tech landscape.
He noted how PayPal had a better chance of success as a startup than deep-pocketed eBay's competing payment service, since it was more daring and less inhibited about challenging standard approaches. EBay later acquired PayPal.
In Rhode Island, Kopelman recommended that public officials encourage the growth of startups by "reducing friction" and celebrating success stories. With the disastrous experience of 38 Studios looming as an unspoken context for his audience, Kopelman said government should play a role in creating a supportive environment for startups, while eschewing direct involvement in individual enterprises.
In his own business, "We look for heat-seeking missiles," Kopelman said, pointing to companies that are nimble in interpreting data and responding to changing circumstances.
As an example, he pointed to fabulous.com, which started as a gay dating site, before finding far greater success as fab.com, which bills itself as "the world's design store." Yet even if startups resemble a scientific inquiry in their quest for a winning formula, predicting success is more of art than science for investors, said Kopelman.
Although Davis' Swipely is a leading counter-example, the outside VC community hasn't had a superb image of Rhode Island. Yet Kopelman said that even with greater competition for investment among startups, the cost of launching a new tech startup has continually dropped, the knowledge for beginning such new businesses has become widely available outside of entrenched tech hotspots, and most new businesses shouldn't use venture cash, anyway.