When articles like this creep up you know it’s a slow news day. Or maybe that’s just the type of crap the San Jose Mercury News likes to write when no Valley-area companies are getting bought for billions at the moment.
“As managing director of Garage Technology Ventures, Guy Kawasaki funded all the really smart ideas he could find. None hit it big. So earlier this year the guru of Silicon Valley start-ups decided to fund a really dumb idea that cost as little as possible.”
I’ve written about Kawasaki’s venture before it was launched. This post isn’t about my opinion of Truemors, but the damage that this type of article does for the integrity (*cough*) of venture capitalists and entrepreneurs in the Valley.
It seems that the crux of this article is that if you continually think you’re doing the right thing but are wrong every time, you shouldn’t readjust your initial assumptions, you should simply throw all reason out the window and do whatever you feel like doing since that’s obviously the answer you’ve been looking for. Kawasaki remarked in the article that although he has considered many of his company’s investments to be sound, few (if any) have panned out in any sort of remarkable way. Unfortunately for venture capital firms and the people who provide them with capital to begin with, investments aren’t judged by the uniqueness of the idea, or the founding team, or the technology, they’re judged with how they perform and if an exit strategy occurs yielding profit. Venture capital firms are companies who need to make money to stay afloat, just like any other company. Now does this mean that Garage isn’t a good venture capital firm? No, it simply means that they’re hurting for an exit like starving lion. All their portfolio companies could be happy as pigs in shit, unfortunately that doesn’t make Garage a successful investment firm it just makes them friendly and helpful business partners.
Perhaps their investments are made in good concepts and not good companies, or perhaps they’re investing in the team instead of the execution, I’m not the person to say, but I sure as hell wouldn’t want my investment firm featured in a newspaper piece where the basis of the article is “we thought all our previous investments were smart but we were wrong, so the hell with smart” because that doesn’t do much to bolster the morale of Garage’s current portfolio companies.