Kopelman offers insights on entrepreneurship
Amish Jhaveri, WG'05
Issue date: 1/24/05 Section: News
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Josh has been billed a "serial entrepreneur" and has been named one of the most influential people in Philadelphia. After co-founding Infonautics Corporation as an undergraduate at Wharton and taking the company public four years later, he went on to found Half.com. "I asked myself how many people reread books on their shelves. Very few. That's the basic value proposition for Half.com" He launched the company with a now-legendary marketing campaign, which included changing the name of a small town from Halfway, Oregon to Half.com. Oregon. Josh sold Half.com to eBay shortly after the first year of operations for over $300MM.
Following the sale Josh remained with eBay for three years, running the Half.com business unit and growing eBay's Media marketplace to almost half a billion dollars in annual gross merchandise sales. In early 2004, Josh helped to found TurnTide, an anti-spam company that created the world's first anti-spam router. TurnTide was acquired by Symantec just six months later.
Josh's success as an entrepreneur led him to form First Round Capital, a seed-stage venture capital fund. To others planning to follow in his footsteps, Josh offers the following advice:
The power of a simple idea
Josh contends that entrepreneurs often confuse a complex idea for a great one. "If you can't explain it in a few sentences then how are you going to pitch it in an elevator?" In his role as a venture capitalist, Josh continues to seek out simple ideas.
Entrepreneurs do not need to uncover untapped market needs
Josh is especially scornful of the stereotypical business school professor who urges his student to go looking where no one else has gone before. Implicitly, Josh believes that markets are relatively efficient and people are generally smart. If an opportunity in an unchanging market (one which has been static over many years) is present, Josh believes that it is probably for a good reason. Someone may have tried and failed-or there may be something deeper about the industry or the idea that makes it financially infeasible.
Technology costs are dropping quickly...
The cost of starting a technology venture has dropped over the years. This is due to improvements in software development tools, the power of open source software, commodity hardware, the growth of application service providers, offshore development, and more effective marketing and distribution channels. Josh points out that a few years ago, a new venture needed anywhere between $3-5 million in first round financing. Today, he sees several ventures that require an initial capital outlay of under $1,000,000 million.
Corporate America rewards risk averse behavior
Josh believes that one of the worst mistakes an entrepreneur can make is to blindly follow conventional wisdom and not think outside the box. Great ideas are born in an environment that encourages people to take chances. "Basketball players are allowed five fouls in a game - an entrepreneur should be willing to get some fouls too," says Josh.
Be flexible: Always keep your options open!
Josh believes that business plans have at least one thing in common: "They are all wrong." This is not because the entrepreneur is not insightful or inexperienced. It's because too many external variables affect a business, making it virtually impossible to accurately predict what will happen over the next three to five years. Accordingly, Josh thinks it's far more important to be able to adapt to change than try to predict the future.
Being an Entrepreneur: What does it mean?
In Josh's mind, there is a fundamental difference between being an entrepreneur and being entrepreneurial. One does not need to start a company, for example, to consider him/herself entrepreneurial. He suggests that people join a small company if they are concerned about the risks but want the experience of doing something entrepreneurial. As a final note of advice he notes that there is a common misconception that successful entrepreneurs love risk. That is not true according to Josh. Rather, he thinks that successful entrepreneurs are those who seek to reduce risk as quickly as possible.
Josh and his wife created the Kopelman Foundation in 2001, a non-profit organization dedicated to "angel philanthropy" for social entrepreneurs. He remains actively involved with Wharton student life through the entrepreneurship-in-residence program.